Personal Group Holdings Plc

Annual Report and Accounts 2023

Overview

01

2023 Highlights

02

Why Invest in Personal Group?

03

Our Business at a Glance

05

Chair’s Statement

08

Chief Executive’s Statement

Governance

36

Corporate Governance

38

Board of Directors

40

Risk and Compliance Committee Report

41

Audit Committee Report

44

Remuneration Committee Report

48

Nominations Committee Report

50

Directors’ Report

51

Statement of Directors’ Responsibilities

Strategic Report

12

Our Business Model

13

Our Strategy in Action

18

Key Performance Indicators

20

Chief Financial Officer’s Statement

25

Risk Management

28

Environmental, Social and Governance

34

Section 172 Statement

Financial Statements

52

Independent Auditor’s Report

60

Consolidated Income Statement

61

Consolidated Balance Sheet

63

Company Balance Sheet

64

Consolidated Statement of Changes

in Equity

65

Company Statement of Changes

in Equity

66

Consolidated Cash Flow Statement

68

Company Cash Flow Statement

69

Notes to the Financial Statements

103

Company Information

Personal Group provides

benefits and services

focused on improving

employee health, wellbeing

and engagement.

Contents

For the latest Investor relations:

www.personalgroup.com/investors

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

Read more in our strategy in action |

Page 13

Record year for new

insurance sales

New annualised insurance

sales of £11.8m (2022: £9.5m).

High policyholder

retention rates

Year on year retention rates

for our insurance products

remained strong at 82.5%

(2022: 81.0%).

Significant new

contracts secured

133 new client wins across

the Group (2022: 101).

High client

retention rates

Strong retention rates

across the Groups SaaS

offerings resulted in an

increased ARR of £6.7m

(2022: £5.6m) as at the

end of the year.

Continued growth

of SME offering

The Sage partnership

continued to grow reaching

over 56,500 paying

employees on the Sage

Employee Benefits (SEB)

platform at the end of 2023.

Internal launch

of Hapi 2.0

The next generation of

our employee benefits

platform was launched

internally in September 23.

2023 Highlights

Group Revenue

£49.7m

(2022 restated*:

£49.8m)

Basic EPS

13.8p

(2022: (23.2p))

Profit/(Loss) before tax

£5.3m

(2022: (£6.8m))

Unique Client Number

555

(2022: 502)

Cash & Deposits

£20.1m

(2022: £18.7m)

No. of Insurance Payers

97,327

(2022: 94,877)

Adjusted EBITDA

£8.1m

(2022: £6.0m)

Dividend Per Share

11.7p

(2022: 10.6p)

Financial

Non-financial

Operational

*

please see page 21

Why Invest in Personal Group?

A progressive, profitable business addressing

a growing market.

The right offering for

today’s world

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 the potential impact of

poor health on people’s ability to maintain

their income and support their families.

Hapi Platform Retention

95%

2022: 95%

Year on Year Insurance Retention

82.5%

2022: 81.0%

See our strategy in action |

Page 13

Unique sales proposition

with high levels of brand

awareness

Our market review has identified that we

are the only affordable insurance offering

delivered via a face to face sales model, and

that this is the sales method that is most

effective in our target markets.

It has also identified that our brand is well

known and liked, providing a fantastic basis

for future growth of our customer base.

Unique Client Numbers

11%

to 555

2022: 502

SME Customers Via SEB

40%

to >3,900

2022: 2,800

See our business model |

Page 12

Strong financial

position

We have achieved strong growth in

profitability, driven by record new insurance

sales and new client wins. We are profitable,

cash generative, debt free with a strong

balance sheet and dividend paying.

We have seen recurring revenue streams

grow in 2023 by 14% to over £38.3m. This

high level of revenue visibility means we

can be confident in our continued growth.

Cash & Deposits of

£20.1m

2022: £18.7m

Dividend Per Share

11.7p

2022: 10.6p

See our CFO statement |

Page 20

Large growth

opportunity

The investments we have made in expanding

our offerings, sales team and partnerships

mean we have a stronger business,

with an increased growth opportunity.

Informed by our market review, the Group

developed a targeted marketing strategy

aimed at specific customer types and the

most appropriate market segments. Our

addressable market is now the majority of

the UK workforce, either addressed directly

or through our partners, such as Sage.

Our market research has shown there are

approximately 9.8m employees in the UK

without or with partial short-term sick pay

support and approximately 2.8m employees

with no short-term support.

Activated Users on Hapi and

Sage Employee Benefits

635,733

2022: 582,733

ARR for SaaS Licences

£6.1m

2022: £5.6m

See our business at a glance |

Page 03

Personal Group Holdings Plc

|

Affordable

Insurance

On weekly or monthly

rolling contracts

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.

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.

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.

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 Saga | 

Page 16

Read about the Merseyrail |

Page 14

Read about Natures Menu | 

Page 15

Read about our business model | 

Page 12

Benefits

Platform

Delivered to employers directly

and through channel partners

Pay & Reward

Consultancy and

software solutions

Other Owned

Benefits

Access to consumer

technology

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.

Our Business at a Glance

Annualised Premium

Income

£31.6m

Benefit Platform ARR

£6.1m

Pay & Reward ARR

£0.6m

Number of orders

17,668

Driving insurance sales

through new and existing 

partners and channels

Our Business at a Glance

continued

Transforming reward and benefits

Accelerating our

SME offer

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

Read about Merseyrail | 

Page 14

See Merseyrail case study | 

Page 14

See Saga case study | 

Page 16

See our business model | 

Page 12

See Sage case study | 

Page 17

Read about Natures Menu and Saga | 

Pages 15 and 16

Read about our partnership with Sage | 

Page 17

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

Enterprise

eg: Royal Mail Group,

Cranswick

Talent-Driven

eg: Skyscanner, Refinitiv

Public Sector

eg: Sandwell & West

Birmingham NHS Trust

SMEs

eg: Any enterprise

with <250 employees

Our markets

Our strategy

Personal Group Holdings Plc

|

Chair’s Statement

“It has been

a year of

continued

progress for

Personal Group”

Martin Bennett

Non-Executive Chair

05

Strategic Report

Governance

Financial Statements

Overview

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

It has been a year of continued progress for Personal Group,

in which we have performed well amidst a challenging

market backdrop, delivering on our financial objectives while

responding positively to a change in leadership.

HR teams across the UK have had to focus their efforts

on dealing with the well-documented market challenges,

such as the decreased availability of labour, and increased

employment costs. We have nonetheless continued to win

customers at a steady rate, supporting the wellbeing of key

workers across the country, a historically underserviced and

growing segment of the UK workforce.

I would like to thank the team for their continued hard work,

with this year’s results again reflecting the quality and

diligence of our people. It is clear to me that we have a solid

foundation on which to grow, bolstered by increasing levels

of revenue visibility for 2024 and beyond. I look forward to

the future with confidence.

A year of change

In August 2023 we welcomed Paula Constant to the Group

as Chief Executive Officer. Paula has brought with her strong

strategic acumen and over 20 years of telecoms, banking, and

outsourcing experience, largely gathered from multinational

organisations. Paula has had a significant impact on the

business in a short period of time, reinforcing my faith in her

to take Personal Group to its next stage of growth.

Under Paula’s leadership, a review of the Group’s strategy

is being undertaken to identify the greatest opportunities

to improve profitability and drive longer term growth in the

business. A detailed analysis of our market has validated the

strength of our insurance offering and the sectors we are

best placed to target. Paula has simplified the organisational

structure of the Group, with the senior leadership team

refreshed by key hires, and introduced new operational KPIs.

With the transitionary period now complete and Paula fully

integrated into day-to-day operations of the business, we look

forward to the Group further progressing under her leadership.

I would like to take this opportunity to thank Deborah Frost for

her contribution to Personal Group, first as a Non-Executive

Director, and then as Chief Executive. Deborah’s stewardship

in successfully navigating the business through the pandemic

was excellent, and it was her work which laid the foundations

for Personal Group to emerge as a stronger business and to

return to a growth trajectory. On behalf of the Board, we wish

her all the very best with her future endeavours.

Solid delivery

We have successfully delivered across our KPIs in the year,

achieving increased revenue and EBITDA in line with market

expectations in all segments except Let’s Connect. We are

strengthened by a robust balance sheet and our highest

ever rate of recurring revenue, providing high levels of

visibility for 2024 and beyond.

Following the reinvigoration of the insurance division

in 2022, I am particularly pleased with the ongoing

momentum gathered across our core Affordable Insurance

offering in 2023, which has gone from strength to strength

in the year, driven by a record level of new sales and high

retention rates amongst existing customers.

Benefits platform revenue has also continued to grow,

delivering increased levels of annual recurring revenue

(“ARR”). We are pleased to have successfully launched the

next generation of our platform, Hapi 2.0, internally. The

initial external launch and migration began in early 2024.

The contribution from Pay & Reward and Other Owned

Benefits remained steady throughout the year, in line with

the Board’s expectations.

Unique client number

555

(2022: 502)

Annualised premium income

31.6m

(2022: 28.0m)

Dividend per share

11.7p

(2022: 10.6p)

Chair’s Statement

continued

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

ESG

A key feature of Personal Group’s business

is the caring attitude towards people and

communities. This is reflected not only in

our aim to improve employee engagement

and support people’s physical, mental, social

and financial wellbeing, but also in how the

business is run.

We remain committed as a Board to

maintaining high standards of ESG and during

the year we made progress in executing

against our ESG strategy. We have worked on

reducing our carbon footprint, continued to

foster an inclusive, progressive and diverse

working environment, while ensuring a

robust corporate governance framework.

We have incorporated ESG success metrics

into our Executive remuneration for the last

few years and from 2024 will be extending

this to the group bonus scheme, applicable

to all employees, to encourage greater

engagement across the entire business.

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.

See our Social section of ESG | 

Page 28

experienced and engaged.

The right team in place

Read more online:

www.personalgroup.com/about-us/

Women on the board

43%

Independent directors

57%

Dividend

I am pleased to announce that the Board has

recommended a final ordinary dividend of

5.85 pence per share which will be paid to

shareholders on 8 May 2024. This makes a

total ordinary dividend for 2023 of 11.7 pence

per share.

Outlook

This has been a year of positive change

for Personal Group. We have continued to

gather momentum, focusing on enhancing

the quality and organisational structure of

the business to exploit our opportunity.

With the first phase of the review of Group’s

product and markets complete, we have

a clearer sense of our positioning, vision

and areas of focus, leaving us well-placed

to maximise value for shareholders. I look

forward to the results of the second phase of

the review and am excited by the opportunity

that lies ahead.

Non-Executive Chair

18 March 2024

Chief Executive’s Statement

“I am confident that

Personal Group has

solid foundations

from which we can

deliver an accelerated

rate of growth.”

Paula Constant

Chief Executive

08

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

Q: Which business leader has

inspired you and why?

There are far too many inspirational

leaders to mention, but my time at BT

was a splendid amalgamation of deep

commercial focus combined with strong

ethics under John Petter, incredible passion,

pace and belief that anything is achievable

under Liv Garfield, and brave commercial

differentiation with Gavin Patterson’s move

into BT Sport. All three have an incredible

ability to get across breadth and detail up

and down an organisation.

Q: What are you most proud

of in your career to date?

Turning around the Business Engineering

performance in Openreach whilst pregnant,

and the incredible pace of shifting work

from physical sales and service channels to

online through Covid at National Australia

Bank have been monumental experiences

involving bottomless resilience and selfless

team work – it was a huge privilege to have

led teams through both periods.

Q: What is your approach/ethos

in running a business?

I bring drive, focus, energy and

determination to each role and I like

to galvanise the organisation to think

ambitiously, act with decision and to be

intolerant of processes, procedures and

ways of working which are unsympathetic

to customers’ needs. I highly value a

forensically analytical fact-based approach

and I am used to running bold and pacey

transformation programmes. I am also a

huge believer in building the team that plays

together, supporting, and taking the time

to develop, each other.

Q: How have you started to apply

that to Personal Group?

We are undertaking forensic analysis up and

down the business to size the market, target

relevant sectors and build out the KPIs that

move our operations forward.

Q: How important is ESG

within that?

Doing the right focused activity is important

to me. For example, we have some real

work to do on the ground: lots of policies to

rewrite, starting with maternity, paternity

and carers’; volunteering in our local

community for causes that align with our

offerings of affordable benefits; increasing

our appeal as a diverse employer. There are

some more challenging priorities which

on the surface are harder to accelerate

because they depend on many external

influences – for example, the future use

of our building space, accelerating a greater

use of electrical charging in our hybrid

fleet when we have various customer

sites with no provision – so we are building

a bolder plan of influence across our

supplier and customer base to improve

our environmental impact.

Q: What are your areas of focus

for the coming months?

We’ve set out our focus this year on

Strategy, Sales and Simplification. We are

thoroughly analysing the role of our

benefits portfolio to determine strategies

for each area of the business. Focusing on

the right activities to accelerate sales across

marketing, account management and

transformational activity is key to unlock

our 3-5 year plan.

There is a lengthy list of simplification

activities, from underpinning every

operational metric in the business,

streamlining our end to end support,

improving our processing times across all

areas, and making our people initiatives and

policies simpler and more meaningful.

Initial reflections

International leader

Held senior positions in the

US, Europe and Asia

Paula Constant CV

International leader

Held senior positions in the US,

Europe and Asia

Track record of delivering innovative

strategic solutions, growth and

shareholder value at:

National Australia Bank, Mitie, BT,

Vodafone, Accenture and most

recently, Woven

Experienced in:

Technology

·

Digital

·

New business

Strategy

·

Banking

·

Product innovation

Sales and marketing

·

M&A

National Awards:

2016 Leader Award Winner, Everywoman

Technology Awards

Years of experience

Children

Employees managed

Q&A with Paula Constant.

I am pleased to report on this positive set of results

delivering strong growth across the core Affordable

Insurance and Benefits Platform offerings. The financial

performance speaks to the quality of both the offerings

and the team, whose efforts have driven a record year of

insurance sales, and an increased proportion of recurring

revenue, despite a testing trading environment.

Since assuming the role of Chief Executive, I have focused

on invigorating the energy of the organisation, our customer

focus, and the pace at which we deliver our services,

preparing the business to build upon its solid foundations.

As part of this process, I initiated an external review of

the Group’s product offering, market position and market

opportunity to inform the strategic direction of the

business and position Personal Group to drive sustainable

long-term growth.

The first phase of this review, which concluded in December

2023, included market mapping and insight into the size

and segmentation of the UK employee benefits landscape

applicable to our core insurance offering. This confirmed

the ongoing relevance of our insurance products and

emphasised the industries which present the largest

opportunities to the Group. The market mapping also

confirmed that Personal Group has a clear competitive

advantage through being the only ‘face to face’ sales-led

offering in its area of the market and that there remains

a large addressable market opportunity. Informed by the

research, we have developed a targeted marketing strategy

aimed at specific customer types and the most appropriate

market segments for our insurance offerings being, in the

first instance, construction, transport and production.

The second phase of the review is nearing completion and

aims to determine the Group’s opportunity in benefits

platform provision and assess success factors across various

market segments.

The initial results of the review have highlighted that the

Group has a strong, repeatable business and currently

operates in the right segments with clear options for

strategic growth available. As the detailed outputs of the

review are digested and assessed, they will serve to inform

and provide focus to our detailed Group strategy update

later in the year, which will also consider the most effective

way to optimise performance in the Pay and Reward and

Let’s Connect segments.

Sales and Operational Review

We made good progress in the year under each of our three

strategic areas of focus: driving our Affordable Insurance

sales, transforming reward & benefits offerings, and

accelerating our SME offering.

Affordable Insurance

Key achievements in 2023 were the improved delivery and

productivity of the face-to-face sales team, helping to deliver

a record year for new annualised insurance sales of £11.8m,

up 24% from 2022. We continued to reduce the time spent

working away from home for the sales team, to improve

their wellbeing, and implemented new tools and operational

enhancements to support FCA Customer Duty and ensure

better outcomes for customers. £6.8m of claims payments

were made to support policyholders in 2023 (2022: £6.4m)

and customer retention rates remained high, demonstrating

the value employees place on the Group’s product offering.

New client wins across the group

133

(2022: 101)

Annualised new business premium

£11.8m

(2022: £9.5m)

Platform annual recurring revenue

£6.1m

(2022: £5.0m)

Chief Executive’s Statement

continued

As a result of all the above, the insurance book increased from

£28.0m in 2022 to £31.6m in Annualised Premium Income at

the end of 2023, setting us up for further success in 2024.

In 2024 we will increase our focus on specific sectors

identified as offering the largest opportunities for growth,

continue to review our insurance product offering, progress

opportunities to partner with other benefits providers to

promote their benefits platforms alongside the sale of

insurance and explore opportunities to partner with third

party providers to offer alternative products that would

benefit our growing client base.

Transforming Reward & Benefits

The internal launch of the next generation of our benefits

platform, Hapi 2.0, and subsequent go live of our first new

client in January 2024 marks a key highlight for the year.

The new and enhanced platform, now with improved

Reward and Recognition functionality, navigation, search

capabilities, onboarding processes, and modularisation for

tiered and self-serve offers, sets the service up well for

sustained success. We won 31 new Benefits clients in 2023

(2022: 22) which helped to drive growth in Hapi related

annual recurring revenue up 29% to £2.5m (2022: £2.0m).

We also secured a place on the Crown Commercial Framework,

providing a new avenue for customer acquisition in 2024.

Our focus for 2024 will be the external launch of the full

functionality of Hapi 2.0 alongside existing client migration.

In addition, we anticipate that the development of a new

‘career pathways’ product, for the Pay & Reward segment,

will provide an opportunity for upsell to our customer base

and increase the attractiveness of our offering.

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Contribution from Pay & Reward, comprising Innecto

and QCG, remained steady in the year with ARR of £0.6m,

despite market demand being affected by wider economic

challenges. The combination of the Innecto and QCG

consultancies was completed in the year, aiming to create

operational efficiencies.

As previously announced, Other Owned Benefits (Let’s

Connect) had a challenging period with the cessation of

a long-term scheme with a major client in March 2023.

Notwithstanding, the business performed resiliently and

performance was in line with management’s expectations.

SME Offering

We have an SME version of Hapi pre-populated, with key

benefits, taken to market through our partnership with

Sage as Sage Employee Benefits (SEB) which now serves

around 4,100 clients and 60,000 employees. Areas of

focus in 2023 were the improved onboarding journey for

both account managed and digitally onboarded clients,

the improvement of the end-to-end customer journey to

improve lifetime value of clients going onto the platform,

and the preparation for launch of SEB 2.0 in 2024. SEB 2.0 is

based on Hapi 2.0 and aims to increase the attractiveness of

the offering and accelerate uptake, with a new look and feel.

We saw steady growth in SEB annual recurring revenues in

the year, to £3.7m (2022: £3.0m).

In early 2024, we began working alongside Sage to migrate

all clients onto SEB 2.0 with this expected to conclude

in the coming months. We are continuing to develop a

premium version of SEB with a wider range of benefits

to attract businesses at the larger end of the SME market

and progress conversations with prospective partners in

different markets to increase the number of routes to the

SME market.

Organisational change

In addition to the Group’s market review, we conducted a

review of our internal operations with a view to enhancing

visibility across the organisation on delivery against our

strategy and to drive profitability. We are in the process of

implementing more granular operational KPIs, particularly

across our sales processes and pipeline, giving greater

visibility into the effectiveness of our lead conversions and

opportunities for process improvements.

As part of our preparation for growth at pace, we have

streamlined the operations of the business, creating a new

senior leadership structure. This has included the hiring,

post-period end, of a new Chief Operations Officer, with

our current Chief Operations Officer moving into a tech

transformation role, and a new interim Chief People Officer,

to ensure the success of this vital piece of our strategy.

Future outlook

I am confident that Personal Group has solid foundations

from which we can deliver an accelerated rate of growth.

Increasing recurring revenues, a compelling offering,

powerful partnerships, and a well-run and expert sales team

that delivers strong results, combine to create an exciting

opportunity for future growth.

Through completion of the market review, we have

validated the strength of our insurance offering and

benefits platform while gaining a fuller understanding of

the large market opportunity that exists for Personal Group.

Equipped with the insight gleaned from the market review

and the strengthened team, I am excited by the fantastic

opportunities that lie ahead for Personal Group.

Paula Constant

Group Chief Executive

18 March 2024

Market Segmentation Analysis -

key findings

The market segmentation analysis found that the

UK workforce overall grew moderately from 2010 to

2020 and is expected to grow by 4% over the next

12-24 months. Importantly, within this moderately

growing overall market, the research found there are

approximately 9.8m employees in the UK without

any, or only partial short-term sick pay support. This

compares to the number of employees accessing our

services of 1.6m people, demonstrating considerable

room for further market penetration.

The research demonstrated the ongoing relevance

of our insurance products, emphasised the industries

which present the largest opportunities to the

Group, and that these sectors remain largely under

penetrated by any offering, with our highest

penetration rate being 12%, demonstrating a

considerable opportunity for growth.

The market mapping also confirmed that Personal

Group has a clear competitive advantage through

being the only ‘face to face’ sales-led offering in its

area of the market and that there remains a large

addressable market opportunity. Informed by the

research, we have developed a targeted marketing

strategy aimed at specific customer types and the

most appropriate market segments for our insurance

offerings being, in the first instance, construction,

transport and production.

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Governance

Financial Statements

11

Strategic Report

Overview

Group Chief Executive’s Statement

continued

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.

Adjusted EBITDA contribution

Affordable insurance

Benefits platform

Pay and Reward

Other owned benefits

We are

improving the lives of the UK workforce.

Pay &

Reward

Affordable

Insurance

Benefits

Platform

Other Owned

Benefits

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.

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.

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.

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.

How we make money

12

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

Our Strategy in Action

Solid performance

against our priorities.

Driving Insurance

Transforming Reward & Benefits

Accelerating our SME offer

1

2

3

Our unique sales approach helps employers communicate their

messages about employee wellbeing and the key benefits they

offer through a face‑to‑face meeting with their employees, both

introducing them to their benefits package and offering them the

chance to buy insurance there and then.

2023 Progress

Delivery and productivity of face-to-face field sales team improved

through ‘New Ways of Working’, resulting in:

–

- Highest ever levels of new insurance sales.

–

- Enhanced leadership capability.

–

-

Improved wellbeing for the field sales team with time working

away from home reduced from 66% to 53%.

Operational enhancements to support FCA Consumer Duty, including:

–

-

Implementation of VOYC, an AI compliance tool which has

enabled full coverage of sales presentations by the field sales

team, ensuring better outcomes for customers.

–

-

Introduction of additional point of sale information to enhance

customer understanding of the product they have bought.

Size of insurance book increased to £31.6m of Annualised Premium

Income (2022: £28.0m).

2024 Aspirations

–

-

Focused targeting of specific sectors identified from the

strategic review as being the largest opportunities for growth.

–

- Review of product set.

–

-

Progress opportunities to partner with other benefit providers to

promote their benefit platforms alongside the sale of insurance.

–

-

Continue to progress opportunities to partner with 3rd-party

providers to offer alternative products suitable for the widening

client base.

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. Alongside this our Pay & Reward division is

able to help clients with pay, recognition or bonus issues alongside

their benefit offering.

2023 Progress

Internal launch of Hapi 2.0 with first external client going live

in January 2024.

31 new clients and won a place on the Crown Commercial Framework.

Continued growth in annual recurring revenue to £3.1m (2022:

£2.5m) across the Hapi platform and Innecto Digital products.

Uplift in commissions for 3rd-party products that sit on the benefits

platform, such as cycle to work, of 25%.

Combined the Innecto and QCG consultancies to create

operational efficiencies.

2024 Aspirations

Full launch of Hapi 2.0 which will result in:

–

- Enhanced reward & recognition functionality.

–

-

A tiered proposition with greater opportunity for self-serve

by clients.

–

- Improved MI for clients.

Migration of all existing Hapi 1.0 clients onto Hapi 2.0.

Develop new Pay & Reward ‘career pathways’ product to launch

with major client which will create an additional software solution

to offer to existing customers.

Our SME version of Hapi enables us to target small businesses

with a standardised product pre‑populated with key benefits.

We currently deliver to this traditionally hard to access market

through our partnership with Sage with our proposition of ‘Sage

Employee Benefits (SEB)’ offered through an initial free trial.

2023 Progress

SEB 2.0 launched in early 2024 for new Sage customers alongside

the refreshed Hapi 2.0 providing improved reward & recognition

functionality alongside a new look and feel.

Continued growth in annual recurring revenue for SEB to £3.7m

(2022: £3.0m).

Improved onboarding journey for both account managed and

digitally onboarded clients.

2024 Aspirations

Migration of all existing SEB 1.0 clients onto SEB 2.0.

Continue development of premium version of SEB with a wider

range of benefits to attract larger clients.

Progress conversations with prospective partners in different

markets to increase number of routes to the SME market.

Continue to improve the end to end customer journey to improve

lifetime value of clients going onto the platform.

13

Posed by model

How was your experience

with Personal Group over

the years?

“ We’ve worked with Personal

Group and Let’s Connect

for over 9 years, and it’s

been a seamless process.

Recommendation – 100%”

Frank Kenwright

Head of Payroll, Merseyrail

Our Strategy in Action

continued

Company:

Merseyrail

Sector:

Transport

Employees:

1,227

Challenge:

Employee Communication, Employee

Engagement, Employee Recruitment and Retention

Challenge

Solution

Outcomes

Conclusion

Personal Group Holdings Plc

|

Employees can now access wellbeing resources

through an online health portal including an

Online GP and 24/7 helpline. Further support is

provided by the Employee Assistance Programme

(EAP) as well as retail discounts and a Cycle to

Work scheme, where employees can save money.

EEEs from Personal Group spent 9 days with

Natures Menu employees in 2023, taking

employees through their benefits and offering

hospital, convalescence and death benefit plans.

This has been popular with the employees and

out of the 30% employees that the EEEs spoke

to, 56% took out policies last year.

Outcomes

This has had a positive impact on the business.

Employees rave about the retailer discounts and

Cycle to Work scheme is great for cost savings

and employee health. Engagement levels sit at

around 60%, which is more than three times the

industry average.

Company:

Natures Menu

Sector:

Food Manufacturing

Employees:

+250

Challenge:

Employee Recruitment,

Retention and Engagement;

Employee Wellbeing

Challenge

Founded in 1981, Natures Menu, a rapidly growing

raw pet food producer, has undergone rapid growth

in the last decade and now employs more than

250 people.

In early 2022, Natures Menu sought to improve

employee engagement and bolster their employee

value proposition through a user-friendly platform.

They wanted to offer employee benefits, an

Employee Assistance Program (EAP), and a discount

marketplace. The initiative supported employee

wellbeing and retaining talent during a time of

rapid expansion.

Solution

Personal Group’s Hapi app helped address many

of the challenges the company faced. By putting

their employees’ entire benefits offering in one

place, employees could access them anytime,

anywhere via an app on their smartphones.

Transforming Reward & Benefits

2

“ We operate within a strict

reward budget, yet Personal

Group enables us to maximise

every penny. An enticing

benefits package and ensuring

its accessibility distinguishes

us from competitors.”

Nicola Sharpe

HR Manager UK, Natures Menu

How is Personal Group

transforming rewards

and benefits?

15

Personal Group Holdings Plc

|

Our Strategy in Action

continued

Transforming Reward & Benefits

2

Company:

SAGA PLC

Sector:

Financial Services, Travel & Leisure

Employees:

4,000

Challenge:

A disjointed reward package

Challenge

Saga PLC, a leading UK provider for individuals over 50, faced

inefficiencies in their benefits proposition despite offering

a comprehensive total reward package to their 4,000 employees.

The benefits were disjointed and lacked clarity, raising concerns

about their value for money and competitiveness.

Solution

Innecto Reward Consultancy, part of the Personal Group family,

conducted a thorough analysis of Saga’s benefits offering. Leveraging

desktop research and sector expertise, they identified overlaps

and areas for improvement. By examining creative initiatives from

other companies, Innecto proposed strategic recommendations

to strengthen Saga’s benefits proposition and align it with the

company’s values and objectives.

Outcomes

Innecto’s review revealed opportunities for Saga to optimise their

benefits package. They recommended streamlining services to

eliminate duplication, such as consolidating multiple mental health

support providers. Additionally, Innecto suggested introducing unique

benefits such as ‘Grandparent Leave’ and leveraging Saga’s insurance

products to enhance the proposition’s appeal.

Conclusion

Mark Powell, Interim Chief People Officer at Saga, praised Innecto

for their insightful recommendations and collaborative approach.

By aligning benefits with Saga’s brand identity and strategic goals,

the proposed changes aim to improve employee satisfaction and

overall company performance.

“ Justine and the team

understood our challenges

and worked closely with us

to concisely articulate the

opportunities we could embrace

that could clearly benefit both

the company’s bottom line and

the employees that work here.”

Mark Powell

Accelerating our SME offer

3

Company:

Sage Group plc

Sector:

Software Development

Serving:

4,841 Sage Employee Benefits Clients

Sage plc is a market leader in accounting, financial,

HR and payroll technology for small and mid-sized

enterprises (SMEs), with an annual revenue of over

£2.1 billion, Sage software is used by millions of

SMEs in the UK.

Across the UK, Sage’s finance, HR and payroll

software is trusted to make work and money

flow. Back in 2017, a strategic partnership

between Personal Group and Sage resulted in the

birth of Sage Employee Benefits, an employee

engagement product designed for SMBs and

integrated into Sage’s product portfolio.

Sage has been a valued Personal Group partner for

more than seven years. A vast number of people in

the UK are paid using a Sage Payroll solution, and

almost 42% of businesses in the private sector use

a Sage Payroll solution to pay their employees.

Many of Sage’s customers typically do not access

this type of employee benefits technology, which

is usually available to larger enterprises. However,

Sage Employee Benefits means that even the

people employed by the smallest businesses

can access an entire benefit offering, which they

can access anytime, anywhere via an app or on

their smartphones.

Sage Employee Benefits delivers benefits that

small businesses and their employees want and

need. They can access unrivalled access to savings

and discounts across hundreds of retailers, salary

sacrifice options, and wellbeing support. Based on

Personal Group’s own proprietary platform named

Hapi, Sage Employee Benefits is optimised for App

delivery, which means that employees can access

and manage their benefit services directly from

their smartphone.

Personal Group’s Sage Employee Benefits teams

provide everything from the onboarding of SMBs

to bespoke marketing for Sage’s clients with a

total of 33,838 activated users on the platform

across 4,841 clients (as of March 2024).

Beth Johnson, Product Marketing Manager

commented:

“Working with Personal Group has been phenomenal

as it’s a true partnership where we collaborate every

day with the same shared objective: to make life

easier and better for small business owners. Since

we started back in 2017, we’ve served thousands

of businesses and their employees who can enjoy

the benefits that are usually only available to large

enterprise businesses.”

The partnership and the app have been a great

success and in particular the usage of retailer

discounts – which has been increasingly valuable

to employees during the cost-of-living crisis.

In total, Sage clients have saved more than £1.1

million by using the benefit. Going forward, Sage

and Personal Group plans to further improve the

customer journey of the app to drive even more

value in its Reward and Recognition programme.

“ The pandemic and the cost-

of-living crisis has had such a

profound impact on SMEs. Being

able to offer peace of mind and

real financial support means

these businesses have truly

benefited from the extra value

that Personal Group and Sage

Employee Benefits brings.”

Beth Johnson,

Product Marketing Manager

How is Personal Group

accelerating your SME offer?

Key Performance Indicators

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

2023

31 December

2022

Unique client number

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

555

502

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.

143

128

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.

1,567,393

1,432,670

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.

635,733

582,733

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.

97,327

94,877

Unique client number

555

Number of insurance payers

Activated users on Hapi

and Sage Employee Benefits

635,733

Strategic Report

Governance

Financial Statements

Overview

2023

£31.6m

2022

2021

2020

2023

2022

2021

2020

2023

2023

2022

2021

2020

2022

2021

2020

2023

2022

2021

2020

2023

2022

2021

2020

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 claims ratio is calculated as claims incurred plus net change in claims provision, less reinsurers share of claims paid as a proportion of insurance income less outward reinsurance premiums.

4. The year on year retention rate is the annual retention rate of policyholders who have held the policy for more than 1 year.

5.

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

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

£31.6m

(2022: £28.0m)

Year on year

insurance retention

4

82.5%

(2022: 81.0%)

Annualised new business premium

2

£11.8m

(2022: £9.5m)

Annualised recurring revenue

for SAAS licences

5

£6.7m

(2022: £5.6m)

Claims ratio

3

27.0%

(2022: 27.7%)

LC orders

17,668

(2022: 34,297)

£28.0m

£24.4m

£27.1m

81.0%

80.7%

80.5%

82.5%

£6.7m

£11.8m

27.0%

27.7%

24.5%

24.4%

£9.5m

17,668

£5.6m

£3.7m

£2.4m

34,297

33,155

27,320

£3.6m

£1.8m

19

Chief Financial Officer’s Statement

“The Group continues

to benefit from an

increasing proportion

of recurring revenues,

providing high levels

of visibility for 2024.”

Sarah Mace

Chief Financial Officer

20

Strategic Report

Governance

Financial Statements

Overview

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Group revenue

Group revenue remained stable at £49.7m (2022: £49.8m).

With the exception of the Other Owned Benefits division (Let’s

Connect), growth was seen across all areas of the business.

Our insurance segment continues to grow as anticipated and

as at 31 December 2023 we had an insurance book of £31.6m

Annualised Premium Income (API) (2022 £28.0m), the majority

of which is renewable on weekly or monthly rolling contracts.

External income from our internally developed Benefits Platform

increased by 28% year on year, following on from the 45% 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 was moderate

as economic challenges continued to impact the market

demand. ARR across all the Group’s digital platforms now

stands at £6.1m (2022: £5.6m).

Sales of technology and other products to employers as part

of their employee benefit provision through the Group’s

subsidiary, Let’s Connect, fell 34% year on year, in line with

expectation, reflecting the loss of its largest customer in Q1.

Other income increased to £1.0m (2022: £0.4m) as a result of

increased rates on the cash deposits held by the insurance

subsidiaries.

The Group continues to benefit from an increasing proportion

of recurring revenues, providing high levels of visibility for 2024

.

Adjusted EBITDA*

Adjusted EBITDA* for the year increased to £8.1m (2022:

£6.0m) reflecting the growth in contribution from the higher

margin insurance segment, in particular where underwriting

profit continued to grow in line with the size of the

insurance book.

The increased EBITDA in the period has been driven by

continued contribution growth (up 33% to £3.8m) from the

Benefits Platform, both through new Hapi platform sales

and the growth in size of the white labelled Sage Employee

Benefits. We saw a stable contribution from our Pay & Reward

businesses, however, the contribution from Other Owned

Benefits fell in line with the loss in top line revenue (down 56%

to 0.4m). Outside of the core segments, Group administration

and central costs increased year on year reflecting the

investment in the Group’s sales and marketing function

alongside inflationary staff and operating expenses.

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

2023

£’000

2022

restated

£’000

Revenue

49,666

49,804

Adjusted EBITDA*

8,126

6,010

Operating profit

5,414

3,835

Profit / (Loss) before tax

5,334

(6,760)

Tax

(1,010)

(493)

Profit / (Loss) for the year

4,324

(7,253)

2023

£’000

2022

£’000

Profit / (Loss) before tax

5,334

(6,760)

Finance costs

79

20

Depreciation

1,135

1,052

Amortisation of acquired

intangibles

273

238

Amortisation (other)

497

548

Goodwill impairment**

–

10,575

Share-based payment expense

169

291

Corporate acquisition costs***

–

46

Restructuring Costs

639

–

Adjusted EBITDA*

8,126

6,010

*

Adjusted EBITDA is defined as earnings before interest,

tax,depreciation, amortisation of intangible assets, goodwill

impairment, share-based payment expenses, corporate acquisition

costs and restructuring costs.

**

Result of impairment review of Let’s Connect in 2022, please see note

13 for further details.

***

Corporate acquisition costs incurred during the acquisition of QCG.

Group revenue

Adjusted EBITDA*

Earnings per share

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

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 judgemental 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. The definition above has

not changed during the year.

Profit before and after tax

Statutory profit before tax for the year was £5.3m (2022:

loss of £6.8m), which includes £0.6m of costs associated

with restructuring the organisation following the change

of Chief Executive. The 2022 loss before tax reflected a

£10.6m impairment charge relating to the goodwill balance

associated with Let’s Connect, excluding the non-cash

impairment charge the profit before tax for 2022 was

£3.8m. The tax charge for the year was £1.0m (2022: £0.5m),

and profit after tax for the year £4.3m (2022: loss of £7.3m).

EPS

Resulting earnings per share were 13.8p (2022: (23.2p)),

excluding the non-cash impairment charge this would have

been 10.6p in 2022. The calculation is detailed in Note 11.

Dividend

The Board has recommended a final ordinary dividend of

5.85 pence per share, making a total ordinary dividend for

2023 of 11.7 pence per share. The Board has considered the

level of dividend in the context of the underlying growth

seen during the year and the continued confidence in the

Group’s business model and prospects.

Chief Financial Officer’s Statement

continued

“Our strong balance

sheet means we remain

well positioned for

future growth.”

Sarah Mace

Chief Financial Officer

Balance sheet

As at 31 December 2023 the Group’s balance sheet remained

strong, with cash and deposits of £20.1m (2022: £18.7m)

and no debt. The Group’s main underwriting subsidiary,

Personal Assurance Plc (PA), continues to maintain a

conservative solvency ratio of 272% (unaudited), with a

£6.8m surplus over its Solvency Capital Requirement of

£4.0m. The Company has consistently maintained a prudent

position in relation to its Solvency II requirement. Personal

Assurance (Guernsey) Limited, the Group’s subsidiary which

underwrites the death benefit policy, also maintained a

healthy solvency ratio of 484% (unaudited), under its

own regime.

22

Personal Group Holdings Plc

|

The Group saw increased contribution from affordable insurance after a record year.

Segment

Description

Income Streams

Affordable

Insurance

A directly owned benefit, provision of simple

insurance products underwritten by Group

subsidiaries.

Insurance income.

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.

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.

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.

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 and 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.

Revenue

Dec-23

£’000

Dec-22

Restated

£’000

Affordable Insurance

28,708

25,406

Benefits Platform

6,685

5,208

Pay & Reward

2,246

2,008

Other Owned Benefits

11,081

16,800

Other

946

382

Total Revenue

49,666

49,804

Adj EBITDA Contribution

Dec-23

£’000

Dec-22

Restated

£’000

Affordable Insurance

11,226

9,032

Benefits Platform

3,837

2,887

Pay & Reward

493

495

Other Owned Benefits

369

664

Group Admin & Central Costs

(8,732)

(7,107)

Other

933

39

Total Adj EBITDA

8,126

6,010

Further information

CE Statement

KPIs

Personal Group Holdings Plc

|

Strategic Report

Governance

Financial Statements

Overview

Affordable insurance

Insurance revenue from the Group’s core insurance business

increased by £3.3m to £28.7m (2022: £25.4m).

The continued opportunity for our face-to-face sales

activity, driven by employers wishing to engage more

effectively with their workforce, has provided the

opportunity to continue to expand the sales team and grow

the insurance book back to levels seen pre-COVID. A record

of £11.8m of new insurance sales were written during the

year (2022: £9.5m) which, together with continued strong

retention rates for existing policyholders, meant that as

at 31 December 2023 we have £31.6m (2022: £28.0m) of

Annualised Premium Income, the majority of which are

renewable on weekly or monthly rolling contracts.

Claims ratios remained stable at 27.0% (2022: 27.7%), as the

NHS continues to address long waiting lists.

Adjusted EBITDA contribution of £11.2m for the year

(2022: £9.0m), reflects the increased underlying profit

arising from increased revenue alongside the stabilisation

of acquisition costs.

Benefits platform

Revenue from digital platform subscriptions and commissions

from third party benefit suppliers which sit on the benefits

platform rose 28% to £6.7m in 2023 (2022: £5.2m).

Subscriptions for our enterprise platform, Hapi, continued

to grow throughout 2023 with ARR on the platform

increasing to £2.5m (2022: £2.0m) during the course of the

year with 31 new clients onboarded.

Our expansion into the SME market also continued to grow,

with Sage Employee Benefits, the Group’s SME proposition

being taken to market through its partner Sage. ARR

increased to £3.7m at the end of the year (2022: £3.0m).

Chief Financial Officer’s Statement

continued

As at 31 December 2023 the ARR from Benefits Platform

subscriptions across all channels stood at £6.1m (2022: £5.0m).

Adjusted EBITDA contribution of £3.8m (2022: £2.9m)

increased in line with increased revenue but also

demonstrates the increased margins available as this area

of the business scales up.

Pay & reward

Whilst economic challenges impacted market demand,

revenue from consultancy income and digital subscription

income from proprietary HR solutions increased to £2.2m

(2022: £2.0m). This reflected a full year’s contribution from

Innecto and QCG. ARR from digital products remained stable

and stood at £0.6m on 31 December (2022: £0.5m).

Towards the end of the year, the operational capabilities of

the two entities were merged which is anticipated to lead

to efficiencies and improved productivity in 2024.

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 £11.1m (2022: £16.8m)

following the loss of a key client in March 2023. Increased

average order values, alongside margin improvements and

operational downsizing helped mitigate the impact on its

EBITDA contribution of £0.4m (2022: £0.7m).

Group administration expenses and

central costs

Group administration and central costs of £8.7m (2022:

£7.1m) reflects an investment in the year building the sales

and marketing function to accommodate for future growth

alongside inflationary cost increases associated with

utilities, Group insurances and other services. Expenses

for the year also reflect additional costs in relation to the

change of Chief Executive during the year.

Sarah Mace

Chief Financial Officer

18 March 2024

24

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

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 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.

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.

Business Area Owner

–

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.

–

Control self-assessment.

Internal Audit (outsourced)

–

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.

Risk Function

–

Risk identification.

–

Developing and oversight of the enterprise risk

management framework.

–

Risk reporting to Risk Forum and to the Risk and

Compliance Committee.

–

Providing advice and guidance to business areas and to the

Senior Leadership Team and Board.

–

Assurance of the effectiveness of policies and procedures.

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 threaten the achievement

of business area objectives.

The risks and the risk appetites are captured on a risk register

where the inherent risk is identified, and the residual risk

rated, after assessing the effectiveness of the 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.

Effective risk management is central to our culture

and key to achieving our strategic objectives.

25

Personal Group Holdings Plc

|

Risk Management

continued

Risk Type

Key risks

(with an impact of £500k+

within the next year)

Current and emerging factors

Mitigating activities

Change in risk

exposure

Strategic

Risk

Products

are not designed

to meet customer/client

requirements.

Risk that we fail to design innovative or desirable

products and services and fail to capitalise

on opportunities, impacting our long-term

sustainability and viability.

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

better MI, improved functionality and greater ability to integrate third-party benefits.

Enhanced engagement with clients to better understand their people agenda and

engagement and wellbeing priorities.

Commission of market study to better understand the demands and needs of the group’s

corporate target market, product research and competitor analysis.

Partnerships with third-party benefits providers to expand product offering.

Increasing

due

to client demand,

new entrants

in the market

and increasing

competition.

Changing demands and needs of consumers in

the personal general insurance market – products

do not align with customer expectations or

are outdated.

Annual product governance review of the group’s personal insurance products which

considers market and product research, customer feedback, design, value, price, build,

testing, and launch and sales channels. Better analysis of MI to help drive product

enhancements and improve supporting customer service.

Relaunch in Q2 2024 of core Convalescence product in response to customer feedback,

value assessment and market research.

Technology

is not an enabler

for the development of

innovative products to meet

clients’ demands and needs.

In-house technological capabilities and/or

external technology solutions do not allow for

agile and robust product development and optimal

product delivery.

Investment in in-house and outsourced technology systems and people, to build, test and

deliver Hapi 2.0.

Increasing

due

to reliance on

technology to

support change

and innovation

and need to make

quick and efficient

business decisions.

Technology

is not an enabler

for informed strategic

business decision making.

Technology infrastructure does not support the

data structures needed for “at your fingertips”

management information to make informed and

consistent decisions at pace.

Investment of resource and in existing third-party solutions to organise and improve data

quality and reporting.

Enhanced team structure drives split between business requirements and technical

requirements as well as design.

Client &

Customer

Retention

Risk

Potential to lose a

client or

Partner

that would impact

the Group’s ability to meet

its strategic objectives.

Loss of existing corporate clients as a result of

ineffective relationship management and failure

to demonstrate and promote the value of the

group’s business proposition.

Relationship management of clients and partners.

Early renewal/extension of key client contracts.

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

wherever possible.

Stable

based on

strength of current

relationships

and MI to help

demonstrate the

value proposition.

Client

concentration risk

.

A subset of the above risk, however the overall

impact on the Group could be significant with the

loss of one or more large clients, i.e., clients that

provide in excess of 20% of revenue.

Decrease in

individual

policyholder

retention rate.

Increased level of policy cancellations by individual

policyholders due to failure to demonstrate and

promote the value of personal insurance products

and lack of a communications strategy to drive

customer loyalty.

B2C communications strategy to promote the value of holding personal insurance

products as well as the value-added benefits of being a policyholder, i.e., access to

Online GP service.

Continued focus on improving supporting customer service.

26

Risk Type

Key risks

(with an impact of £500k+

within the next year)

Current and emerging factors

Mitigating activities

Change in risk

exposure

External

Environment

/Economic

and

Regulatory

Risk

Environmental or economic

change impacts profit.

Inflationary pressures, rising interest rates, tax

rises and increased business overheads impacts

the spending power of clients, leading to them

spending less on the products and services

the Group provides. Higher cost of living for

individuals leading customers having less

discretionary spending for the Group’s personal

insurance products.

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

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

‘value propositions’, alongside wellbeing and employee assistance programmes

offered via Hapi.

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

of their employee benefits programme to help attract and retain staff, thus promoting

the value of the Group’s proposition.

Offer support to financially vulnerable customers where appropriate.

Increasing

overall

due to continued

budget constraints

at clients,

continued cost-

of-living squeeze

on individual

customers and

embedding of

Consumer Duty

arrangements.

Increased business operating costs and cost of

acquisition impacts the profitability of the Group’s

products and services.

P&L reporting, pricing reviews across the Group’s segments and stress and

scenario testing.

Claims uncertainty and volatility – There is a risk

that we are unable to predict our future claims

liability as we see performance deviating from

assumptions and historical norms.

Claims volume monitoring and stress and scenario testing. Where appropriate,

and whilst continuing to offer fair value to consumers, we will reprice our products

to reflect increased operating expenses.

Non-compliance with

regulatory

requirements

leads to regulatory censure

(and ensuing reputational

damage).

The FCA Consumer Duty intends to create a “race

to the top” in terms of the quality and value of

financial products and services, the way firms

interact with customers and the customer service

and support firms provide. The onus is on firms

to demonstrate that their products provide value

relative to the price consumers pay and have

tangible ways of monitoring the effectiveness and

quality of communications and customer service.

The FCA’s approach to the monitoring and

supervision of firms could mean that random

sample checking of firms’ Consumer Duty reports

and value assessments take place, alongside sector

specific supervisory work, targeted multi-firm

work, and thematic reviews, as opposed to the

“risk based” approach previously used. This means

that all firms, regardless of their size, scale and

importance to the financial market need to be

ready to evidence how their business model aligns

with the requirements.

The Group has processes in place to help ensure we remain compliant with regulatory

and legal requirements. We have a robust regulatory horizon scanning process, to ensure

we are able to respond appropriately to current and emerging regulatory changes.

Our key areas of focus continue to be:

>

identifying and supporting vulnerable customers through staff training, monitoring,

use of management information and outcomes reporting;

>

Improving our product governance processes, value assessments and Board reporting; and

>

Improving customer communications, feedback and service.

Sales interactions with customers are 100% monitored through investment in an AI tech

solution, as well as manual quality assurance checks. This ensures that we can respond

quickly to any issues which may arise and remedy them.

Longer term solutions will enhance our ability to test the effectiveness of communications

through improved visibility of click rates, open rates and customers’ responses to key

“calls to action”.

27

Personal Group Holdings Plc

|

Environmental, Social and Governance

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.

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 Group’s ESG strategy is overseen by the Board and

develops 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.

28

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

Governance

Overview

Carbon emissions

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

and are examining further energy efficiency initiatives.

Lower emission CO

2

vehicles were added to our fleets during

the year, and we have already seen the benefits. Most of

the vehicles arrived in the second half of the year, so we

expect to see the full impact on our CO

2

emissions in 2024.

Also, to support this initiative, we installed electric chargers

at our head office.

The use of solar panels at our headquarters continues to

prove successful in significantly lowering our MegaWatt

hours. In 2023, 12.45 MWh of energy was generated

which would power 4.6 homes for a year and equates

to planting 157 trees.

Group Environmental Policy

Our Group Environmental Policy 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.

Task-Force on Climate-Related Financial

Disclosures (TCFD)

Personal Group falls outside the scope of mandatory

disclosures under the Taskforce on Climate-Related

Financial Disclosures (TCFD), though we continue

to monitor the guidance published by the Financial

Stability Board’s TCFD on corporate disclosures to enable

stakeholders to better understand financial exposures

to climate-related risks.

Environmental

While we are a naturally

low emission business,

we

proactively seek

to mitigate the

environmental impact

of our operations and

supply chain.

2021 – 2023 progress

>

Head office energy usage lowered from 14.3 Mwh

/ £m of revenue to 8.2 Mwh / £m before revenue

restatement, as a result of efficiencies in energy

usage and inclusion of solar panels.

>

CO

2

usage of the fleet has fallen by 17%, driven by

replacement of fleet vehicles with lower CO

2

and

hybrid vehicles.

Environmental, Social and Governance

continued

2023 reporting

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

(March 2019).

>

UK office emissions have been calculated using the Defra

2023 issues of the conversion factor repository.

Emissions and energy usage

Energy and carbon disclosures for reporting year. All units tCO

2

e unless otherwise stated.

Emissions source

2023

2022

Variance

Scope 1

Natural gas

97

90

Company and leased cars

365

370

(1%)

Total Scope 1

462

460

0.4%

Scope 2

Electricity

53

52

2%

Scope 2

Company and leased cars

4

Total Scope 2

57

52

10%

Scope 3

Electricity T&D

5

0%

Scope 3

Employee cars

14

11

27%

Total Scope 3

19

16

19%

Total (Market Based)

538

528

2%

Total (Location Based)

538

528

2%

Total Energy Usage (kWh)1

2,380,002

2,277,147

Normaliser 1

tCO

e per FTE

2.0

1.9

0.01%

2023 performance

Our carbon footprint for the 2023 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

tCO

2

e, which represents an average impact of 2.0 tCO

2

e per

full time employee), and on a market basis our emissions are

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 1% reduction in emissions from company

and leased cars, with the introduction of hybrid and electric

company cars in 2023. There has been little variance in

absolute emission between 2022 and 2023, and headcount

has remained the same, resulting in only a 0.01% variance

increase in emissions intensity (tCO

2

e per FTE).

Energy and carbon action

During the reporting period, we have taken the following

actions to reduce our environmental impact:

In 2023 we migrated our fleet of vehicles over to hybrid

with the majority of our car orders with drivers going for

a Plug in hybrid (PHEV) option and updated and installed

additional car charging stations at our head office.

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 2023 to 31st December 2023, using the

reporting period of 1st January 2021 to 31st December 2021

and January 2022 to 31st December 2022 for comparison.

Environmental

continued

Personal Group Holdings Plc

|

Social

We believe our vision, to

create a brighter future

for the UK workforce,

brings a

responsibility

that goes beyond

our clients and their

employees.

Our goal is to ensure that our business has a positive

social impact on the communities in which we trade,

that Personal Group is an employer that strives to offer

opportunities to people of all backgrounds, and that drive

societal change.

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.

We regularly conduct engagement surveys to ensure

we’re focusing on what’s important and giving the most

meaningful support to our employees. Following feedback

from our 2023 Employee Engagement survey, we introduced

a number of employee benefit provisions, including:

>

Days off for a ‘Life Event’ and ‘Birthday’ available for

all colleagues.

>

The removal of our mandated three days leave over the

Christmas period and the ability to carry over three days

to the following calendar year.

>

All employees not already on a commission or bonus

schemes are now eligible for a bonus.

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 will continue to develop our employee

proposition, ensuring that the Group’s benefits remain

competitive and that we remain an employer of choice.

Learning and development

Our Chief People Officer oversees learning and development

amongst staff, with the Group monitoring the training hours

per employee to ensure that all employees have easy access

to enhance their learning.

In 2023 we continued with our ‘Continuous Professional

Development for all’ approach, over 4,000 courses were

accessed via our Learning Management System, ‘Shine’,

with over 4,790 hours of learning completed. During the

year we also expanded our apprenticeship levy use across

the business, with new programmes of learning being

undertaken at Levels 3-7 across a number of departments.

Our plan for 2024 is to continue to offer apprenticeships to

support young people who are new into the workforce, as

well as building capability in our existing workforce.

2021 – 2023 progress

>

The Group has continued its commitment to give

1% of EBITDA to its charity PACT through which

it has maintained its long-standing partnership

with Memusi.

>

Improvements have been made in the equal

representations at salary quartile level by gender

and ethnic mix across the business with an ethnic

employment proportion increasing from 14%

to 18%.

31

Personal Group Holdings Plc

|

Social

continued

Diversity, Equity, Inclusion & Belonging

(“DEIB”)

DEIB 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.

We strive to ensure all our colleagues are treated fairly,

with dignity and feel a sense of belonging. Our 2023

employee survey found that 87% of our people felt

positively that Personal Group was a diverse and inclusive

place to work. Whilst we are a small business, we are

committed to improving our DEIB scores further still. To this

end, we launched a new mandatory learning course for all

colleagues for DEIB, to educate and support our colleagues.

As part of our commitment to being a diverse and inclusive

employer we set up a DEIB strategy group in 2023. Our

focus has been on understanding our data against the

data held by ONS for the Milton Keynes region and have

refreshed our reporting, adding relevant data fields and

choices for self-description, through our new HR system

to include sexual orientation, neurodiversity caring

responsibilities, and religion.

Whilst our current data is broadly in line with the region, one

of our aspirations is to be more reflective of our local area

with our recruitment data for 2023 showing a positive trend

for ethnicity. Our focus areas for 2024 include gender identity

and disability and we have already implemented several new

initiatives to support this.

At the end of 2023 we signed up to be part of the

governments Disability confident scheme, level 1 and are

working toward level 2 in 2024.

To ensure our recruitment process is fair and does not

disadvantage applicants, we have introduced a new

psychometric assessment with additional time for

applications applicants identifying as neurodiverse or

for whom English is a second language. We have also

introduced a gender decoding software, to help make

our advertised roles more inclusive, and showcase

our vacancies on additional job boards to reach a more

diverse pool of candidates and support our drive to

foster an even more equitable, diverse, and inclusive

working environment.

Supporting society

Our holistic offering has been designed to support

and engage employees and their families from all

demographics, including those from lower income groups,

in both work and life. We are particularly aware that

people from lower income groups can find it difficult to

access appropriate financial services products – the FCA

recognise they are an underserved group. Our simple, easy

to buy and low cost products meet a gap for people who

find it difficult to use the internet for financial services

products and we have specifically adapted our products

to meet their needs.

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.

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. The PACT Committee 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 2023 included:

Environmental, Social and Governance

continued

>

Memusi Foundation

– £47k continuing our ongoing

partnership with Memusi we also sent a team of PG

employees to visit and support the school in Kenya which

is funded through PACT.

>

Unity MK (formerly Winter Night Shelter MK)

– £13.5k

to help people in crisis, including rough sleepers, sofa

surfers and those who are vulnerable. This year’s

donation will go towards welfare provision, Mental

Health counselling, preparing guests for work.

>

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.

>

Safety Centre

– Hazard Alley – £10K to help deliver

another year of bespoke knife crime intervention sessions

to 1,200 Year 6 students in Milton Keynes.

>

Worktree

– £10K towards the development of the Virtual

Career Workout which allows volunteers to be interviewed

remotely by school classes around the country.

>

Harry’s Rainbow

– £10K towards supporting children

and young adults who have been bereaved of a parent

or sibling in Milton Keynes and surrounding areas. Our

donation will fund an art project, which will connect

those in similar circumstances and enable a supportive

experience for those suffering from grief.

Group employee breakdown by gender

as at 31 December 2023

Male

Female

Directors

4

3

Managers

23

24

Employers

102

103

129

130

Strategic Report

Governance

Financial Statements

Overview

Our goal is to continue to ensure 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 remain committed to adhering

to the QCA Corporate Governance Code. We continue to

monitor our performance against in line with each of the

10 principles. (see

Page 37

).

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 is carefully selected to ensure

a diverse and varied set of skills, cultures, experiences and

knowledge to promote success within the business.

We are working towards targets 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.

With the Chief Executive succession in August 2023, the

Nominations Committee had a renewed focus. Introduced

in 2021, the committee is 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 Committee Report on

Page 48

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 44

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 36

Governance

Governance is

central to our ethos

of

operating with

integrity.

2021 – 2023 progress

>

Independent directors remain at 57% of the

Board, with a 43% female ratio and a 14% ethnic

proportion, all of which are within the targets set

by the Board.

>

The Chief Executive pay ratio as a proportion of

the median employee has remained in line with

the market averages.

Section 172 Statement

Why we engage with

How we engaged in 2023

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 2023 we continued to expand

our sales channels offering one to many webinars to allow access to our products to a greater

audience, but focused on our, unique in the market, face to face approach where possible. This

allows the greatest ability for potential policyholders to ask questions and have the human

interaction our customers are looking for.

Policyholders who held policies at 31 December 2021 continued to benefit from an additional

outpatient appointment for 2023 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.

As part of our operational improvements to support Consumer Duty we implemented Voyc,

an AI compliance tool which has enabled full coverage of sales presentations by the field sales

team, ensuring better outcomes for customers. We also introduced additional point of sale

information to enhance customer understanding of the products they have bought.

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 2023 our Customer Relations Team took over 60,000 calls and dealt with over 47,000

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

>

Strong 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

>

Becoming a trusted partner

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 2023.

34

Personal Group Holdings Plc

|

Why we engage with

How we engaged in 2023

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

alongside a learning culture and great career opportunities. We continue with our 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.

Following feedback from our 2023 Employee Engagement survey, we introduced a number of

employee benefit provisions which can be seen in detail on page 31. We have also created a DEIB

strategy group in 2023 with a focus on understanding the Groups data against the regions in

which we operate.

>

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.

Whilst 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 & 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 32.

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

2023 we have seen the replacement of most of the Group’s fleet with a range of hybrid and low

CO

2

petrol cars replacing less environmentally friendly cars. We are also taking steps to lessen

commuting for our field sales team, both for their benefit but also for the environmental

impact generated.

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.

With a new Chief Executive the Group will be looking to conduct a series of investor roadshows

to follow the release of the accounts to further articulate the future strategy of the Group.

>

Financial performance

>

Strategy and business model

>

Dividend

>

Long-term growth

>

Reputation of the Group

35

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

Section 172 Statement

The Board continues to have a significant role to play

in establishing the culture of the business.

Corporate Governance

2023 Committee meeting dates

Board

26 Jan

2 Mar

21 Mar

5 May

25 May

22 Jun

20 Jul

12 Sep

6 Nov

30 Nov

Audit

21 Mar

12 Sep

Risk & Compliance

26 Jan

12 Sep

30 Nov

Nominations

26 Jan

Remuneration

26 Jan

21 Mar

30 Nov

Chair’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 Chair’s report earlier in this

document, we have appointed a new Chief Executive, Paula

Constant, during the year with Deborah Frost having chosen

to retire, this has allowed for a review of the senior positions

within the business identifying gaps and any succession

issues which the Board and Executive are currently in the

process of resolving.

The year presented a number of pressures on our workforce

with the increased cost of living and general uncertainty in

the UK. The Senior Leadership Team has worked to ensure

that the employees of the Group are supported against

these pressures by benchmarking roles across the business

to ensure that pay reflects the markets rates and ensuring

that there is support for staff both with regard to their

working environment by virtue of the right equipment

and appropriate hybrid working conditions and with

other, more personal matters, ensuring access to relevant

mental and physical health provisions as part of our staff

benefits package.

In 2023, 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 it departs from

any of the principles of the Code and we continue to

monitor our performance against each of the 10 principles.

We plan to adopt the revised 2023 code from the start of

2025. The Board is able to deliver effective decision making

and subsequent drive of value for shareholders, based on

the quality information which it receives.

During 2023 we have addressed the recommendations

raised in the external board effectiveness review conducted

in 2022, however, the 2023 internal review was postponed

to early 2024 to allow the new Chief Executive to gain

a full picture of the business prior to the review. 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 2023 and the number of meetings

each Director attended can be seen on pages 38 and 39.

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.

Martin Bennett

Independent Non-Executive

Chair

Personal Group Holdings Plc

|

Strategic Report

Governance

Financial Statements

Overview

QCA Code compliance

Principle 1 – Establish a strategy

and business model, which

promote long-term value for

shareholders.

Principle 3 – Take into account

wider stakeholder and social

responsibilities and their

implications for long-term success.

Principle 5 – Maintain the Board

as a well-functioning, balanced

team led by the Chair.

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 4 – Embed effective

risk management, considering

both opportunities and threats,

throughout the organisation.

Principle 6 – Ensure that between

them the Directors have the

necessary up to date experience,

skills and capabilities.

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 12 and on the Group website

(www.personalgroup.com).

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 34 and 35.

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.

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 implemented. Following

the onboarding of the new Chief

Executive an internal review will

be conducted in early 2024.

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 2023 for the Board

and other Committees can be seen

on page 36.

Regular dialogue takes place with

shareholders through initiatives

including the Annual General

Meeting, investor roadshows,

regulatory announcements and the

Report and Accounts. During 2023

our Chief Executive, CFO, Chair and

other Non-Executive Directors

met virtually, and in person, with

key investors. We also hosted

our investor events in March and

September 2023.

An updated QCA Corporate Governance Code was announced on the 13th November 2023. Personal Group will strengthen its understanding and ensure compliance with the changes ahead of the effective

implementation date affecting the 2024 accounts.

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

2023, a risk based internal audit

function was again provided

by RSM. For further details see

page 41.

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 36 there has been

one addition to the Board in the

year with Paula Constant taking up

her role as Chief Executive.

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.

An employee engagement survey

was conducted in June 2023 which

produced strong results but also

some feedback which has been

actioned upon as noted in the ESG

section on page 30.

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.

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

37

Strategic Report

Governance

Financial Statements

Overview

Corporate Governance

continued

Board of Directors

Martin Bennett

Non-Executive Chairman

Appointed January 2021

(previously Non-

Executive Director; appointed Chairman May 2021)

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.

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.

Sarah Mace

Chief Financial Officer

Appointed October 2020

(previously Company

Secretary from April 2014)

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.

Maria Darby-Walker

Senior Non-Executive Director

Appointed June 2019

(Appointed Senior

Non-Executive Director in January 2021)

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.

External appointments

Senior Independent Non-Executive Director

at Redwood Bank Ltd.

10/10

Meetings attended

10/10

Meetings attended

10/10

Meetings attended

Paula Constant

Group Chief Executive

Appointed August 2023

With a career spanning over 20 years in the

fields of telecoms, banking, and outsourcing,

Paula brings a wealth of experience and

expertise to the role. Her executive journey

includes notable positions at renowned

companies such as National Australia Bank,

Mitie, BT, Vodafone, Accenture and most

recently, Woven.

She has a strong track record of delivering growth

through enhancing distribution and improving

customer service in B2C and B2B organisations.

During her time with BT, she delivered substantial

improvements in B2B engineering revenues, in

addition to working with the regulator and over

500 customers to significantly reduce delivery

lead times and complaints.

Skills, personal qualities and capabilities

Paula holds a BA in music and management

studies from the University of Cambridge. In 2016,

she was honoured with a Leader Award from

FDM Everywoman in Technology, showcasing her

leadership and influence in the industry.

3/4

Meetings attended

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

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Bob Head

Non-Executive Director

Appointed November 2016

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

Further to his ACA, ACII and FCIB with an MA

from Oxford, Bob has solid blue-chip experience

with big brands and business and a rich tapestry

of management roles.

External appointments

Non-Executive Director at Alexander Forbes

and Chair of Audit and Remcom committees

at Mirriad.

Andy Lothian

Non-Executive Director

Appointed July 2017

(previously Executive Director,

appointed Non-Executive Director in January 2021)

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.

External appointments

Director of Lothian Property Group.

Damian Kane

Commercial Finance Director and

Company Secretary

Appointed October 2020

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.

10/10

Meetings attended

10/10

Meetings attended

Ciaran Astin

Non-Executive Director

Appointed May 2022

Ciaran is an experienced leader in consumer

services businesses across the insurance,

telecoms and energy sectors. Ciaran is currently

a consultant to businesses in the telecoms and

insurance sectors.

From 2019 to 2023, Ciaran was 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.

10/10

Meetings attended

10/10

Meetings attended

Committee Membership Key

Audit

Committee

Nominations &

SM&CR Committee

Remuneration

Committee

Chair of the

Committee

Risk and Compliance

Committee

Independent

Personal Group Holdings Plc

|

Annual Report and Accounts 2023

Strategic Report

Governance

Financial Statements

Overview

Dear Shareholder

I am pleased to present the Risk and

Compliance Committee Report for the year

ending 31 December 2023.

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.

We then assess whether the risk has been

optimised. We use the word “optimise”

rather than “mitigated” since not all risk can

be economically eliminated – for example,

the economy.

The Committee’s Chair reports formally

to the Board on its proceedings after each

meeting and during the year the Committee

met three times, overseeing significant

Group-wide projects which included:

>

Consideration of the Group’s approach to

the challenging economic outlook which

persisted throughout 2023, 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.

>

Implementation of the FCA Consumer

Duty regime, ensuring that the gap analysis

carried out in 2022 had been appropriately

addressed and ensuring that the Group

was compliant with the new regime.

>

A deep dive into the value in the insurance

products underwritten, and sold, by

Personal Group companies, reviewing

peer-related data in the context of

healthcare cash plans.

>

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

persisted throughout 2023.

>

The regulatory capital is formulaic. We are

also thinking about the capital we need for

our non-regulated businesses.

>

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. We are pleased to note that

we remain certified for ISO27001.

In addition, other work undertaken during the

year included:

>

Ongoing consideration of the Own Risk and

Solvency Assessment (ORSA) for Personal

Assurance Plc to account for current risks

and exposures.

>

The regular review of the group’s exposure

to the risks and threats to the strategic

objectives, setting the risk appetites and

agreeing tolerances.

>

The regular review, consideration and

approval of existing Group policies used

across the business.

>

Consideration of management information

which assesses levels of quality and

compliance, and the effectiveness of the

Information Security Management System.

>

Oversight of the resolution of actions arising

from an external review of our health and

safety regime.

>

Annual appraisal of the insurance products

for value, price and suitability.

Bob Head

Independent Non-Executive Director

18 March 2024

Meetings held

3

Risk and Compliance

Committee members

Meeting Attendance

Bob Head (Chair)

Martin Bennett

Maria Darby-Walker

Andy Lothian

Ciaran Astin

Deborah Frost*

Sarah Mace

Paula Constant*

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 38 and 39.

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.

Two formal meetings were held during

2023 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

2

Audit Committee

members

Meeting Attendance

Bob Head (Chair)

Martin Bennett

Maria Darby-Walker

Ciaran Astin

The meetings of the Committee are

designed to facilitate and encourage

communication among the Committee,

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 2022 Annual

Report and Accounts and 2023 Interim

Results statement.

>

Approval of the Solvency and Financial

Condition Report.

>

Review of internal audits carried out

by RSM.

During 2023 RSM undertook audits, in line

with the agreed scope, over areas including

assurance frameworks, complaints, financial

crime, SMCR. RSM also undertook a follow

up of the marketing effectiveness review to

ensure we had properly covered off the new

regulatory requirements.

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 2023 (and for 2024) 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:

>

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 150% of required regulatory capital.

>

The transition to IFRS 17, including any

changes to the transactional values

and presentation thereof was reviewed

to ensure compliance with the new

standard.

>

Review of the disclosure of voucher

income following a recommendation

from the finance team that the balance

of evidence now supported disclosure as

agency rather than principle.

>

The carrying value of goodwill in the

Group’s financial statements was

reviewed in line with the difficult

trading environment.

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

Personal Group Holdings Plc

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Annual Report and Accounts 2023

42

Strategic Report

Governance

Financial Statements

Overview

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

Carrying value of goodwill and other intangibles

Note 13 & 14

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 that no impairment was needed

on the goodwill of Pay & Reward, and reiterated that 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 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 liabilities for incurred claims

Note 24

In line with IFRS 17 the Group retains a liability for

incurred claims 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.

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.

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

18 March 2024

Personal Group Holdings Plc

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43

Strategic Report

Governance

Financial Statements

Overview

Audit Committee Report

continued

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 including ensuring the

organisation operates in a sustainable

way increasing societal benefit.

In addition, the Committee:

>

Offers the chance for all employees

to participate in share schemes.

>

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 (i.e. beyond simple

regulatory compliance) and ensuring

good customer outcomes.

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 47 for further details).

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 concluded in December 2023.

Meetings held

3

Remuneration Committee

members

Meeting Attendance

Maria Darby-Walker (Chair)

3/3

Martin Bennett

3/3

Bob Head

3/3

Ciaran Astin

3/3

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 three times

in 2023, 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 &

annual bonus

The overall amount of a persons bonus

opportunity which could be paid out

was calculated by the overall EBITDA

performance of the Group for those

not on a sales based target. The total

amount unlocked was 40% of the overall

bonus opportunity.

Given this proportion the bonus was earned

across three elements, Group EBITDA,

a shared objective which was departmental

and personal objectives.

From 2021 to 2023 the ESG targets were

included as part of the performance criteria

of the LTIPs for senior management. From

2024, this will change to annual ESG goals

forming part of the gateway to release bonus

for the year in question for all staff. This will

enable the goals to become more specific

and measurable, as well as becoming more

relevant for the wider business.

Pay increases

The Remuneration Committee approved

a pay increase pot of c.5% for all eligible

employees in January 2023. This reflected

a significant increase from 2022 in

order to support our staff with cost-

of-living increases. During the year we

also conducted reviews of areas of the

business where significant pay inflation

had been seen across certain job types

and adjustments made as required to keep

key employees.

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 Executive

and 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.

The Committee reviewed the outcomes

of the revised remuneration and incentive

programme, introduced in 2022, for the

field sales team to ensure that the changes

had brought about the desired results

in terms of financial reward and in the

context of ensuring good behaviours and

customer outcomes in line with consumer

duty legislation.

The Committee also reviewed the existing

CSOP and LTIP arrangements to ensure that

the method of allocation and criteria were

fair and that it represented an appropriate

incentive for retention and performance.

The year ahead

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.

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.

“

We remain focused on aligning

reward with the business’s long-term

sustainability and growth.

”

Maria Darby-Walker

Independent Non-Executive Director

Personal Group Holdings Plc

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Annual Report and Accounts 2023

45

Strategic Report

Governance

Financial Statements

Overview

Remuneration Committee Report

continued

Share holding of Board Members

At 31 December

2023

At 31 December

2022

Paula Constant

(Chief Executive)

–

–

Sarah Mace

(Chief Financial Officer)

12,275

12,071

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

18,070

Bob Head

(Independent Non-Executive)

–

–

Maria Darby-Walker

(Senior Independent Non-Executive)

5,555

–

Ciaran Astin

(Independent Non-Executive – Appointed May 2022)

–

–

Directors

Remuneration

Salary and

fees

2023

£’000

Bonus

2023

£’000

Share-based

gains on

exercise of

options

2023

£’000

Termination

payment

2023

£’000

Pension

contributions

2023

£’000

Total

2023

£’000

Total

2022

£’000

Deborah Frost *

333

15

–

185

10

543

421

Paula Constant **

146

40

–

–

8

194

–

Sarah Mace

196

86

–

–

15

297

202

Andrew Lothian

43

–

–

–

–

43

41

Bob Head

52

–

–

–

–

52

50

Maria Darby-Walker

52

–

–

–

–

52

51

Martin Bennett

103

–

–

–

–

103

101

Ciaran Astin ***

45

–

–

–

–

45

28

Liam McGrath ****

–

–

–

–

-

–

130

Total

970

141

–

185

33

1,329

1,024

*

Departed the Board in August 2023.

**

Joined the Board as Chief Executive in August 2023.

***

Joined the Board as a Non-Executive Director in May 2022.

**** Departed the business in August 2022.

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 2022 or date

of appointment if later, and 31 December 2023, are shown

in the table to the right.

At 31 December 2023, the mid-market closing share price

was 185.00p per share (31 December 2022: 196.00p).

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 is shown to the right.

Remuneration Committee Report

Strategic Report

Governance

Financial Statements

Overview

Directors’ share options

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 three awards of share options

to date in April 2021, April 2022 and June 2023. A further

scheme is expected to be announced in April 2024.

The performance criteria of the awards are detailed

in Note 20.

In addition to the Executive Directors, members of the

Senior Leadership Team also have awards.

Maria Darby-Walker

Independent Non-Executive Director

18 March 2024

CSOP –

On 31 December 2023 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

Sarah Mace

13,888

216.00

19 June 2026

LTIP –

On 31 December 2023 options outstanding were as follows:

Number

of shares

Exercise price

pence per share

Earliest

exercisable date

Paula Constant

286,574

5.00

01 January 2026

Sarah Mace (2021 award)

62,438

5.00

01 January 2024

Sarah Mace (2022 award)

84,602

5.00

01 January 2025

Sarah Mace (2023 award)

137,858

5.00

01 January 2026

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

Personal Group Holdings Plc

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Annual Report and Accounts 2023

47

Strategic Report

Governance

Financial Statements

Overview

Remuneration Committee Report

Dear Shareholder

I am pleased to present the Nominations

Committee Report for the year ended

31 December 2023. The Committee’s primary

function is to enable focused discussions

around the composition of the Board and the

Group’s requirements around SM&CR.

Objectives

The aims and objectives of the Nominations

Committee are 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 once, 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 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

Paula Constant as Chief Executive replacing

Deborah Frost who retired during the year.

Meetings held

1

Nominations Committee

members

Meeting Attendance

Martin Bennett (Chair)

Maria Darby-Walker

Bob Head

Ciaran Astin

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

Board role

Last AGM

renewal

Up for renewal

at 2024 AGM

Martin Bennett

January 2021

Non-Executive Chairman

AGM 2023

Paula Constant

August 2023

Chief Executive

–

For renewal as

first year

Sarah Mace

October 2020

Chief Financial Officer

AGM 2023

Maria Darby-Walker

June 2019

Senior Non-Executive Director

AGM 2022

For renewal

by rotation

Ciaran Astin

May 2022

Non-Executive Director

AGM 2023

Bob Head

November 2016

Non-Executive Director

AGM 2022

Andy Lothian

July 2017 (previously Executive

Director, appointed NED Jan 2021)

Non-Executive Director

AGM 2021

For renewal

by rotation

Board and Director effectiveness

The Chief Executive receives a formal evaluation of their

performance during the year, which is conducted by the

Chairman. In addition, the Chief Executive 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. An external Board effectiveness

review was conducted in 2022 with development points

having been worked on subsequently. An internal review

is to be conducted in early 2024.

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.

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.

Martin Bennett

Independent Non-Executive Chairman

18 March 2024

“

We remain focused on

aligning reward with the

business’s long-term

sustainability and

growth.

”

Martin Bennett

Independent Non-Executive Chairman

Personal Group Holdings Plc

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Annual Report and Accounts 2023

49

Strategic Report

Governance

Financial Statements

Overview

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 20).

The profit from continuing operations for the year is

£5,334,000 (2022: loss of £6,760,000) before taxation of

£1,010,000 (2022: £493,000). During the year ordinary

dividends of £3,482,000 (2022: £3,310,000) were paid.

Directors

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

set out in the Remuneration Report on pages 44 to 47.

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 (2022: £nil).

Charitable donations

Donations to charitable organisations amounted

to £100,000 (2022: £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 36 and 37.

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 2 May 2024.

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

18 March 2024

The Directors present their report together with the audited

financial statements for the year ended 31 December 2023.

Personal Group Holdings Plc

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Annual Report and Accounts 2023

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Financial Statements

Overview

Statement of Directors’ Responsibilities

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 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.

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.

Personal Group Holdings Plc

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Annual Report and Accounts 2023

51

Strategic Report

Governance

Financial Statements

Overview

Overview

Strategic Report

Governance

Financial Statements

Independent Auditor’s Report to the Members of Personal Group Holdings Plc

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 2023 and of the group’s

profit 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 have been properly prepared in accordance with

UK adopted international accounting standards as applied in accordance with section 408

of the Companies Act; 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 plc (the ‘parent company’)

and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise:

Group

Parent company

Consolidated balance sheet as at 31

December 2023

Balance sheet as at 31 December 2023

Consolidated income statement for the year

then ended

Statement of changes in equity for the year

then ended

Consolidated statement of changes in equity

for the year then ended

Statement of cash flows for the year

then ended

Consolidated statement of cash flows for the

year then ended

Related notes 1 to 31 to the financial

statements including material accounting

policy information

Related notes 1 to 31 to the financial

statements, including material accounting

policy information

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. 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 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:

>

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

obtained management’s assessment which covers 12 months ending 31 March 2025;

>

obtaining 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;

>

performing 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

>

assessing the appropriateness of the going concern disclosures by comparing the

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

reporting requirements.

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Strategic Report

Overview

Governance

Financial Statements

Independent Auditor’s Report

continued

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 will be able

to continue 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 a period ending 31 March 2025.

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 an audit of the complete financial information of 8 components

and audit procedures on specific balances for a further one components.

Full scope audit

>

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)

>

Pay and reward (Innecto People Consulting Limited)

>

Intermediate holding company (Personal Group Limited)

>

Others (Berkeley Morgan Limited and Personal Assurance Services Limited)

Specific scope audit

>

Pay and reward (Quintige Consulting Group Limited)

>

The 9 components where we performed full or specific audit procedures

accounted for 98% of Group profit before tax, 96% of Group revenue and

99% of Group total assets.

Key audit

matters

>

Valuation of Innecto and QCG (Pay and Reward) goodwill

>

Transition to IFRS 17

Materiality

>

Overall group materiality of £266,700 which represents 5% of Group profit

before tax.

An overview of the scope of the parent company and group audits

Tailoring the scope

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

materiality determine our audit scope for each company 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, the potential impact of climate change, changes in the business environment and

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

performed at each company.

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 reporting components of the Group, we selected nine entities, which

represent the principal business units within the Group.

We performed an audit of the complete financial information of eight components

(“full scope components”) which were selected based on their size or risk characteristics.

For the remaining component (“specific scope component”), 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.

The reporting components where we performed audit procedures accounted for 98%

(2022: 98%) of the Group’s Profit before tax, 96% (2022: 97%) of the Group’s Revenue and

99% (2022: 99%) of the Group’s Total assets. For the current year, the full scope components

contributed 98% (2022: 91%) of the Group’s Profit before tax, 95% (2022: 93%) of the Group’s

Revenue and 97% (2022: 97%) of the Group’s Total assets. The specific scope component

contributed 0% (2022: 7%) of the Group’s Profit before tax, 1% (2022: 4%) of the Group’s

Revenue and 2% (2022: 2%) of the Group’s Total assets. 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.

Of the remaining components that together represent 2% of the Group’s Profit before tax,

we performed other procedures, including analytical review to respond to any potential risks

of material misstatement to the Group financial statements.

Personal Group Holdings Plc

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Annual Report and Accounts 2023

Strategic Report

Overview

Governance

Financial Statements

Independent Auditor’s Report

continued

The charts below illustrate the coverage obtained from the work performed

by our audit teams.

Profit before tax

98% Full scope components

0% Specific scope components

2% Other procedures

Total assets

97% Full scope components

2% Specific scope components

1% Other procedures

Revenue

95% Full scope components

1% Specific scope components

4% 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 scoped-in components, audit procedures were performed on

seven full scope and one specific scope directly by the primary audit team, whilst for the

other component (Personal Assurance (Guernsey) Limited) audit procedures were performed

by the component audit team, EY Guernsey.

The primary team interacted regularly with the component teams where appropriate during

various stages of the audit, reviewed relevant working papers and were responsible for

the scope and direction of the audit process. This, together with the additional procedures

performed at Group level, gave us appropriate evidence for our opinion on the Group

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 its operations will be from physical and transition risks of climate change. These are

explained on page 29 in the Task Force for Climate related Financial Disclosures. All of

these procedures 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.

The Group has explained in the Basis of preparation note that they have concluded that

the physical and transition risks of climate change do not have a material impact on the

recognition and measurement of the assets and liabilities in these financial statements.

This is because the assets are reported at fair value under UK adopted international

accounting standards.

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 70 of the financial statements which explain the rationale.

Personal Group Holdings Plc

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Annual Report and Accounts 2023

54

Overview

Strategic Report

Governance

Financial Statements

Independent Auditor’s Report

continued

Climate change

continued

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.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most

significance in our audit of the financial statements of the current period and include the

most significant assessed risks of material misstatement (whether or not due to fraud) that

we identified. These matters included those which had the greatest effect on: the overall

audit strategy, the allocation of resources in the audit; and directing the efforts of the

engagement team. These matters were addressed in the context of our audit of the financial

statements as a whole, and in our opinion thereon, and we do not provide a separate opinion

on these matters.

Risk

Our response to the risk

Key observations

communicated to the

Audit Committee

Valuation of Innecto and QCG

(Pay and Reward) goodwill (2023:

£2.68m, 2022: £2.68m)

Innecto was acquired by PGH

in 2019, and QCG in 2022. Both

businesses are now treated as one

CGU due to the commonality of

their business models and cash

flows, as well as organisational

changes put in place at the end of

2023 which merged the team into

one combined consultancy unit.

As at 31 December 2023 we noted

that the value of the Pay and

Reward goodwill was sensitive

to the discount rate and the

short-term growth rates of digital

sales. The forecasted cash flows

are dependent on the continued

projected growth from digital

and consultancy income. Current

2024 forecasts show a more

positive outlook for the CGU, but

due to economic uncertainty and

inflationary pressures this may

impact the CGU’s ability to generate

new business and maintain its

cost base, which in turn leads to

uncertainty around future cash

flows and a heightened sensitivity

to the applied discount rate.

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.

The risk has remained unchanged

from prior year.

To obtain sufficient and appropriate

evidence to conclude on the valuation of

goodwill at the year end, 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;

>

Assessed the appropriateness of the

identified CGU and attributed cash flows;

>

Challenged the future cash flow

projections of Innecto and QCG to

ensure pipeline business and conversion

rates included in the projections are

appropriate by comparing to prior year

accuracy of forecasting and applying

sensitivity analysis;

>

Engaged our valuation specialists to assess

methodologies and assumptions used in

the analysis including the reasonableness

of the discount rate by considering

Innecto’s and QCG’s specific circumstances

as well as comparable companies;

>

Performed sensitivity analysis to assess

the impact of certain key variables on

levels of headroom, including discount

rate and growth assumptions; 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.

Based on our work

we are satisfied that

the carrying value of

Goodwill in relation

to the acquisition of

Pay Reward is not

materially misstated.

However, there is

inherent uncertainty

within the forecasted

cash flows used in the

impairment model due

to the expected growth

in Pay and Reward CGU

(disclosed in Note 13 of

the financial statements).

These uncertainties

could have a significant

adverse impact on the

future cashflows of the

Pay and Reward CGU

and may affect the

future carrying value

of the goodwill.

We have reviewed the

related disclosures and

concluded that these

appropriately reflect the

uncertainty associated

with the future cash

flows of the Pay and

Reward CGU, as well

as the sensitivities and

key assumptions.

Overview

Strategic Report

Governance

Financial Statements

Independent Auditor’s Report

continued

Risk

Our response to the risk

Key observations

communicated to the

Audit Committee

Transition to IFRS 17

Refer to the IFRS 17 transition

disclosures included in Note 23

of the Consolidated Financial

Statements (pages 94 and 97)

The transition to IFRS 17, the new

insurance accounting standard,

effective for annual reporting

periods beginning on or after

1 January 2023, has resulted in

change to the reporting processes

and to the consolidated financial

statements. This transition,

which includes a number of

key judgements, has required

substantial focus during our audit,

however these areas are not

considered to be significant risks.

We have focused on a number of

transition areas, with the following

being the areas most likely to

result in a material mistatement:

Methodology and implementation

– The risk of management’s

methodology and implementation

not being in compliance with the

requirements of the standard.

Financial statement disclosures –

The risk of disclosures in relation

to the application of IFRS 17 being

insufficient or inappropriate.

>

in line with the positions taken.

This is a new risk in 2023.

To obtain sufficient audit evidence to

conclude on the appropriateness of the

initial application of the new IFRS 17

accounting standard, we have performed

the following procedures:

In conjunction with our actuaries, we

obtained and challenged management’s

methodology papers for compliance

with the IFRS 17 accounting standard and

subsequently assessed management’s

implementation of their methodology.

Tested the IFRS 4 to IFRS 17 bridging of

Shareholders’ equity and result after tax.

Tested management’s IFRS 17 disclosures

in the consolidated financial statements

in relation to transition and restated

comparative periods.

Through the procedures

performed, we

have determined

that management

have appropriately

implemented IFRS 17

within their financial

reporting and this is

appropriately reflected

within the consolidated

financial statements in

all material respects.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the

effect of identified misstatements on the audit and in forming our audit opinion.

Materiality

We determined materiality for the Group to be £266,700 (2022: £195,050), which is 5%

(2022: 5%) of Group’s Profit before tax. We believe that Group Profit before tax is the

appropriate base since the Group is profit-oriented and it is the focus of the users of the

financial statements.

We determined materiality for the Parent Company to be £258,940 (2022: £252,832),

which is 1% (2022: 1%) of the Parent Company equity. We have used the capital based

measure for determining materiality due to the Parent Company being a holding company.

Performance materiality

On the basis of our risk assessments, together with our assessment of the Group’s overall

control environment, our judgement was that performance materiality was 75% (2022: 75%)

of our planning materiality, namely £200,025 (2022: £146,288). We have set performance

materiality at this percentage as we have not identified any significant errors in the prior

year audits.

Audit work at component locations for the purpose of obtaining audit coverage over

significant financial statement accounts is undertaken based on a percentage of total

performance materiality. The performance materiality set for each component is based on

the relative scale and risk of the component to the Group as a whole and our assessment of

the risk of misstatement at that component. In the current year, the range of performance

materiality allocated to components was £30,000 to £200,025 (2022: £21,000 to £146,288).

Overview

Strategic Report

Governance

Financial Statements

Independent Auditor’s Report

continued

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit

differences in excess of £13,335 (2022: £9,753), which is set at 5% of planning materiality,

as well as differences below that threshold that, in our view, warranted reporting on

qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures

of materiality discussed above and in light of other relevant qualitative considerations

in forming our opinion.

Other information

The other information comprises the information included in the annual report set out

on pages 01 to 51, other than the financial statements and our auditor’s report thereon.

The directors are responsible for the other information within the annual report.

Our opinion on the financial statements does not cover the other information and, except

to the extent otherwise explicitly stated in this report, we do not express any form of

assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the

other information is materially inconsistent with the financial statements or our knowledge

obtained in the course of the audit or otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent material misstatements, we are required

to determine whether this gives rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed, we conclude that there is a material

misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies

Act 2006

In our opinion, the part of the Directors’ remuneration report to be audited has been

properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

>

the information given in the strategic report and the directors’ report for the financial

year for which the financial statements are prepared is consistent with the financial

statements; and

>

the strategic report and directors’ report have been prepared in accordance with

applicable legal requirements.

Personal Group Holdings Plc

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Annual Report and Accounts 2023

Overview

Strategic Report

Governance

Financial Statements

Independent Auditor’s Report

continued

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company

and its environment obtained in the course of the audit, we have not identified material

misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the

Companies Act 2006 requires us to report to you if, in our opinion:

>

adequate accounting records have not been kept by the parent company, or returns

adequate for our audit have not been received from branches not visited by us; or

>

the parent company financial statements are not in agreement with the accounting

records and returns; or

>

certain disclosures of directors’ remuneration specified by law are not made; or

>

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 51,

the directors are responsible for the preparation of the financial statements and for being

satisfied that they give a true and fair view, and for such internal control as the directors

determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group

and parent company’s ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless

the directors either intend to liquidate the group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial

statements

Our objectives are to obtain reasonable assurance about whether the financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to

issue an auditor’s report that includes our opinion. Reasonable assurance is a high level

of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)

will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis

of these financial statements.

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Overview

Strategic Report

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Financial Statements

Independent Auditor’s Report

continued

Explanation as to what extent the audit was considered

capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect

irregularities, including fraud. The risk of not detecting a material misstatement due

to fraud is higher than the risk of not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery or intentional misrepresentations,

or through collusion. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with

both those charged with governance of the company and management.

>

We obtained an understanding of the legal and regulatory frameworks that are applicable

to We obtained an understanding of the legal and regulatory frameworks that are

applicable to the group and determined that the direct laws and regulations related to

elements of Company law and tax legislation, and the financial reporting framework.

Our considerations of other laws and regulations that may have a material effect on the

financial statements included permissions and supervisory requirements of the Prudential

Regulation Authority (‘PRA’), the Financial Conduct Authority (‘FCA’) and the Guernsey

Financial Services Commission (‘GFSC’).

>

We understood how the Company is complying with those frameworks by making

enquiries of management, and through discussions with those charged with governance.

We also reviewed correspondence between the Company and the regulatory bodies;

reviewed minutes of the Board and the Risk and Compliance Committee; and gained an

understanding of the Company’s approach to governance, demonstrated by the Board’s

approval of the Company’s governance framework.

>

We assessed the susceptibility of the Group’s financial statements to material

misstatement, including how fraud might occur by considering the controls that the

Company has established to address risks identified by the entity, or that otherwise seek

to prevent, deter or detect fraud. Where fraud risk, including the risk of management

override, was considered to be higher, we performed audit procedures to address each

identified risk. These procedures included:

>

Reviewing estimates for evidence of management bias. Supported by our valuation

specialists, we assessed if there were any indicators of management bias in the

valuation of goodwill.

>

Testing the appropriateness of the revenue transactions for the year ended

31 December 2023 including revenue earned around the cut-off date.

>

Testing the appropriateness of journal entries recorded in the general ledger, with a

focus on manual journals and evaluating the business rationale for significant and/or

unusual transactions.

>

We designed our audit procedures to identify non-compliance with both direct and other

laws and regulations impacting the Company. Our procedures involved: making enquiry

of those charged with governance and senior management for their awareness of any non-

compliance of laws or regulations, inquiring about the policies that have been established

to prevent non-compliance with laws and regulations by officers and employees,

inquiring about the company’s methods of enforcing and monitoring compliance with

such policies, inspecting significant correspondence with the FCA and the PRA.

The Group operates in the insurance industry which is a highly regulated environment.

As such the Senior Statutory Auditor considered the experience and expertise of the

engagement team to ensure that the team had the appropriate competence and

capabilities, which included the use of specialists where appropriate. A further description

of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter

3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we

might state to the company’s members those matters we are required to state to them in

an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone other than the company and the company’s

members as a body, for our audit work, for this report, or for the opinion we have formed.

Robert Bruce (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

18 March 2024

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Annual Report and Accounts 2023

59

Overview

Strategic Report

Governance

Financial Statements

Consolidated Income Statement

for the year ended 31 December 2023

Note

2023

£’000

Restated*

2022

£’000

Insurance revenue

28,708

25,406

Employee benefits and services

20,012

24,014

Other income

139

237

Investment income

6

807

145

Revenue

5

49,666

49,802

Insurance service expenses

7

(14,593)