Personal Group Holdings Plc (PGH) Earnings Call Transcript & Summary

Good morning, and welcome to the Personal Group Holdings plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses when it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand over to the management team. Paula, good morning.

Thank you very much. Welcome, 9:00 Friday, sunny morning in London. What better thing than to join our interim results broadcast. So we've really enjoyed being on the road this week meeting investors and super happy to share our half year results tracking nicely for the end of the year. And as exciting as our results, it's great to formally introduce Matt. He's at the beginning of month 4, practically part of the furniture now, our new CFO. So I will let him do a bit more of an intro after I've rambled through what we do and who we are quickly. So conscious that as exciting as our numbers are, there's an exciting new person for everyone to meet as well. So a quick agenda. I'll talk about who we are, top line, where our results are. Matt will take you through a bit about him, why he joined, what he loves about our business, particularly from an investor perspective. Particularly in Insurance and Benefits and Pay and Reward, of the things that have been brilliant this year and our mark card for the end of the year of the things that we need to do. So I'm sure your questions will address some of that, and I'll try and weave in answers as we go. And Matt will take you through the financial information that I haven't already stolen from his part of the presentation and then over to Q&A. So there you go, what better way to spend 9:00 on a Friday. So moving on, I would have a guess that most people on this call know who we are and what we do. But just as a reminder, we are in the business of helping businesses, employees get happier, healthier and protected, more protected where they already have protection with us. Our heartland is Insurance. It's the bulk of our revenue and our profit. And I think it's wonderful that the policies, the plans that we started out with when the company was created 40-plus years ago are still the things that we sell today. It's a really brilliant indicator that they are relevant. They have remained relevant to people that do not have protection from a company, a group management level, and may not know how to find protection elsewhere. So we sell simple affordable protection, hospital recovery plans that pay out lump sums of cash in the event that you need to go into hospital for anything from a day of blood test to a seriously long stay of up to 2 years. And then we've got a death plan as well. It's not a huge lump sum payout, but it's a meaningful lump sum payout for immediate needs in the event of death, so with a reasonable price of investment. We allow employees to pay weekly or monthly. It's small amounts of cash. So I think on an average GBP 20 a month. And clearly, when things go wrong in life, these policies pay out significantly. We collect from net pay. So it's not a salary sacrifice benefit. We collect via payroll, but also a backup direct debit or direct to direct debit. So different methods there. But critically, what makes our products really great is the fact that we sell them face-to-face. So we are in businesses talking to employees about the broader range of benefits that, that company may provide and then on to the insurance conversation. When we are talking about insurance, we convert around half of those conversations. It's a fantastic conversion rate, but it's not a surprise given the simplicity of our plans and the breadth of cover and the length of cover that they offer. We underwrite the insurance, and we have very little reinsurance. So it's a fantastic proposition for employees. It's a great proposition for businesses wanting to introduce an affordable insurance option into their business, and it's a great business to invest in. So it ticks lots of boxes. And then the other half of our business is Benefits & Reward. The main thrust of revenue and profit here is our white labeled SaaS proposition to Sage. We've been in business with Sage for what must be something like 7 years, probably even longer than that, and I should know, someone from my team will probably correct me. We signed a new contract last year to extend that relationship through for the next number of years. Today, we play in a really big SME segment in the U.K. We've expanded into Ireland. We've got some other segments in the U.K. that we're looking at, and we're, kind of, quite far down the line of weighing up opportunities overseas. Sage upsell our products to their existing base. They onboard the customer. They collect the revenue for us. We provide a light but meaningful wraparound care, which is very low touch, think, kind of, password resets, et cetera. It's a brilliant model, obviously, spurred by brilliant brand of Sage. So we're very proud of that relationship. We sell direct as well. We do that to be relevant in the Insurance space. Obviously, it's fantastic with Insurance customers if they've got the Benefit platform as well. We can talk to people on the ground, activate the platform, show them features and functionality. Typically, when we visit, we see anything from 15% to 25% uplift in the engagement of the platform, and then we go on to the insurance conversation. But equally, we're super versatile. We can demo other people's platforms. We do that with one of our critical insurance customers. We can also talk about other benefits, as I discussed. And as I come on to our new relationship with Simply Health, I can bring that to life for you as well. Also part of that business is Innecto. We're very proud of our Consulting business. You may remember we brought 2 businesses together a few years ago. One was the Innecto brand, which is now the brand for the whole business. We've had a very pleasing H1. We sold well over 60 Innecto contracts this year. We've got some great names that I'll talk you through later. We continue to play really strongly in this space, and we've signed a great new opportunity to increase our data provision there, which makes us extremely relevant. So that's the business in a nutshell and pleasing performance on all fronts. Moving on. The demand for our products could not be greater. It's always been strong. The conditions of cost of living crisis, some of the decisions that have been made through the budgets in the last few years of the Labour government, all of these things mean that people need our benefits more than ever. And the most critical of those would definitely be financial well-being, so I think our Insurance products. I think when we reported our year results back in April, our '25 results, I talked then about the average amount of money anyone has for a rainy day, if you need to go into a hospital, and you're not being paid or you're being paid very little through statutory sick pay. That average number was GBP 500. In fact, 1 in 5 people, and these are probably 100% of the people that we are seeing on the ground have less than GBP 100 in savings either in the bank or home. So if you are in a manufacturing logistics company, the heartland of where we are, a bus driver, et cetera, you've got very little in the way of financial money to plug anything that you might need over statutory sick pay. And even if you're in a company that gives you a reasonable sick pay policy, it probably still doesn't cover the needs of travel, of child care, of everything else that comes in the event of a hospital or a prolonged period of recovery. So we offer a critical lifeline. And I think we're always very proud every year to report back to the companies that we serve. Our bigger companies will pay out kind of north of GBP 2 million of claims. There's always a handful of people that we're paying out 10,000, 20,000, 30,000 because they've obviously had super long stints in hospital. This is an absolute lifeline for people that would never be able to access that amount of money. So the need could be stronger, and we absolutely serve that need. We're often asked if there are alternatives to what we do. There are a couple of digital hospital plans cropping up now because they're sold online, they're not sold face-to-face into businesses where you're talking to people that, by definition, are in business and healthy enough to at least come in to work. They've got far more restrictions and conditions around them online. So there are examples out there that provide no more than 1 to 2 months of cover. They've got a long period of time before you can be eligible. So competition in this space is relatively limited and particularly in what we consider to be our USP and the face-to-face space. There are clearly alternatives such as PMI and even low-cost PMI. These are expensive. We can see that PMI costs are soaring. When we talk to businesses, they might be considering PMI, low-cost PMI. They've certainly been moving away from being able to fund more insurances more widely across the business as HR budgets and other back-office budgets have really suffered over the last few years since the kind of NI increases that Labour imposed a few years ago. So I think that was the clear subsequent impact is that people have had to squeeze budgets elsewhere. So there's clearly demand. People are clearly needing to take out health cash plans, and we remain the clear alternative affordable option to something like PMI. Absence, again, is increasing. People are taking more time off work. Businesses are increasingly worried about absence. Our insurance really gives you permission to go to hospital quickly and get sorted and recover quickly and get back to work because you're not delaying trying to take a day off in the event that you lose money or that you can't afford to fund going to hospitals. So again, all of these examples increase the need for our insurance and the relevance of our insurance to plug that need. And then finally, I think probably when I started 3 years ago and I was looking at the company and looking at the employee benefits industry, coming out of COVID where HR budgets were potentially bigger, they wanted to [ invest ] for the future. They were looking very distinctively at tech features, the need to provision for upsell opportunities. Now we are facing into a, kind of, much starker set of needs for employee benefits. It is cash. It is financial well-being, it's mental health, it's physical health. Discounts and vouchers, which is still important, have eroded in value as the cost of living has clearly tightened the generosity of retail providers. So vouchers that might have been 5% off now are more like 3% or 4% across not just our platform but all platforms. And the ability to have money to pay for extra tech features and functionality is certainly diminishing. So again, we've got the relevant financial well-being and mental health and other aspects through online GP and our employee assistance programs to fulfill those needs. So I think it's great to work in an industry where demand is high, and we have the right relevant products to address that demand. Moving on, I think there are clearly lots of great reasons why you would invest in our company. And I'm super proud again of our results, 90% plus recurring revenues consistently, 80% plus retention rates in insurance, higher than that in our SaaS businesses, 10% up on revenue year-on-year. So great -- really great financial results again. And as I said, tracking as planned to the end of the year. But I think I'll hand over to Matt to give his view on what he thinks makes this business brilliant to invest in.

Thank you, Paula. Good morning, everyone. I just wanted to start by thanking my predecessor, Sarah, for the fantastic job that she did at Personal Group over her 12-year stint, and I just wanted to wish her well for the future, everyone at PG wishes her well. I joined Personal Group 3 months ago, having been at Royal & Sun Alliance, an insurance company as Head of Investor Relations and most recently as CFO of the European operation, and I'm delighted to be here at PG. So just looking at the investment highlights, for me, the earnings power of this business is underpinned by a really strong recurring revenue model. Over 90% of revenues are recurring, and the group has delivered average revenue growth of 10% over the last 5 years, which is really strong. But the opportunity ahead remains significant. Our face-to-face insurance model addresses more than 10 million employees, but we have just over 100,000 paying policyholders today. So a lot of road to run down. Our customer stickiness is really evident across the business. In Insurance, this is reflected in our 2026 Net Promoter Score of plus 67, which versus insurance peers tracks very well. And we have a 48-hour claims processing promise with a 98% success rate, and that has enabled retention rates to consistently be above 80% for insurance year-over-year. In Benefits & Reward, our Hapi platform delivers really good reward and recognition capability, while our Sage partnership and Innecto consultancy practice demonstrate both the strength of the proposition that we have and the diversification being built across our 3 channels. All of this translates into strong profitability and returns with a 25% EBITDA margin, 25% EBITDA margin and a 31% return on tangible equity or RoTE reported for 2025. RoTE is a measure that we've not really spoken about before, but for those unfamiliar, it's effectively how efficiently a business generates profits from its tangible capital base, which is its capital, excluding intangibles and goodwill, and we provide a reconciliation on Page 24 of this report. But the number compared with Banking and General insurance, those benchmarks are about 15% for Banking and 20% for General Insurance. So the Group's performance at around 30% tracks very well. The balance sheet remains strong with GBP 29.4 million of cash and an SCR coverage ratio of over 280%, well above our 150% target. And all of this underpins our 100% dividend payout ratio. Moving on to proven our, kind of, track record of delivery. So over the past 5 years, the business has delivered strong revenue and EBITDA growth while improving efficiency as it scaled. Revenue has grown by 10% per annum on average and EBITDA by 15% per annum on average. Our EBITDA margins have improved by more than 4 percentage points over the period. Adjusted earnings per share has grown on average by 19% a year over the same period. And pleasingly, the business has generated nearly GBP 40 million of cash from operating activities between 2021 and 2025. This is a business with a strong delivery record, but most importantly, as I said before, a significant runway for further growth. I'll now hand back to Paula to cover the first half highlights.

Thank you very much. So I've probably already stolen some of these points. But again, very happy with our half year results. We like to push ourselves above and beyond our budget in the first half year, particularly in Insurance to kind of get ahead for the year ahead. And 9% up year-on-year in Insurance is phenomenal, particularly as you remember, the first full year that I was, in '24 when I brought in my COO, Hywel, with whom I've worked with for many years, managing big operations before. We did a phenomenal 18% and then though, yes, we've set ourselves a bar here to keep climbing on. And then again, a great double-digit performance last year, up again 9% this year. There is still tons to go at in terms of what we call operational grips. So how do we continue to penetrate into our customers and get more effective with great quality, which I'll talk through in a minute. We've been working hard on our end-to-end journey with Sage for the first half of the year before we press into some of the new territories in the U.K. So super proud of the work we've done to, kind of, revamp onboarding journey again, and our retention levels are -- have always been pleasing with Sage, but we're still trying to push for the Nirvana, I think, on that, and that will be a theme that we start to look at again in insurance retention now with Matt's eagle insurance eye. So great kind of forward opportunities there with Sage, but also making inroads into identifying and landing new partnerships. We have just signed a new partnership at the beginning of H2, which we'll be excited to talk about in more detail as that comes to fruition in our full year results. But we said at the beginning of the year that we wanted to look for slightly kind of bigger partnerships with more of a robust brand and leverage. And ideally, if they've already forayed into the benefits market, and they've got a pipeline of customers. So I think we're kind of pleased with the beginning of that progress, but again, more to do. And then we've worked really hard on our digital products. Clearly, face-to-face is our USP, but wouldn't it be fantastic as a first stage of our strategy if we can reach those employees that were never going to visit face-to-face, but also those employees that take our platform directly and won't be right for face-to-face. So I think still, kind of, blue-collar profile, but maybe too small for a face-to-face visit or not uniform to see people consistently, in restaurants, for example. So a bit more to talk about on the next slide. Let me move on. So a bit more on the Insurance detail. And again, I could talk forever on this. So I'm going to rely on -- imagine a little wiggle if I'm boring the audience. He can be my yardstick. Efficiency clearly has been fantastic. We are seeing more people. We are having better conversations and converting. And I think particularly pleasing result, 9% up year-on-year on sales because we have a large chunk of people now that are new employees as a proxy, about 1/3 of our workforce, people that have joined in the last 18 months and quite a lot of those in the last 6 months. We've had a number of recruitment intake since November. And we've totally revamped our process on recruitment. We've never really been super, super analytical on our EEE recruitment. So we call them EEEs employment engagement executives. And I did talk last year that probably the one part of this whole journey was the level of attrition that we had. And it's not an easy job. The numbers are not high, but the profile of the people is difficult. So we've really invested this year. We've put a great AI through our recruitment process we've managed to really sift down a huge number of applications, and that's really always been the pain point in this journey is that in a time of high unemployment, we're swamped with lots of opportunities from people wanting to come and work for us. We've changed up how we've done the academies. We've brought people in fewer numbers for the academy. We've even given kind of one-on-one or 2:1 coaching for the exam that you need to pass at the end of the academy. And we've done face-to-face assessment centers, put people out in the field quicker than we might normally. I could go on and on and on. But I'm really proud of the efforts. The team have worked really, really hard to really change up recruitment and bring in some people that look like they've got the making of being absolute superstars. So we're tracking their performance. We're working hard on bringing new people up to a level of competency because, of course, new people on the park probably perform 40% to 50% of someone right at the top. And understandably so, there's a lot to learn about how the process works as you go through the period of time to competency. So really happy with the result, really happy with the number of field days that we've hit because we've recruited so well and particularly happy because clearly, we have a new cohort of people that won't perform as strongly as our senior people. But moving on to quality measures because they are as important. We've continued to outperform ourselves on all of our quality measures. And this is critical for us to ensure that we're delivering a brilliant service to customers. Our cancellation rates continue to remain at 13% or below. That's for the first month of customers signing up and being able to decide if they still want the policy. I've never managed a business with that kind of performance, and I'm so pleased that the team continued to deliver that every year, particularly with new people on the park. Our customer service levels are exemplary. Our abandon call rates are around 3% less than last year. Our claims handling continues to push to extraordinary heights. We clear most of our claims, 98% of our claims within 2 days and high 80% in 1 day. Our Trustpilot results are great, 4.9. No one's ever come and found a better example for me in the Insurance space. The feedback is consistently really good. And compliance levels, we hold ourselves to the highest standards. So 98% compliance, including, obviously, the performance of new people on the park is a great new high for us and well above what we target ourselves to do. Of course, we record our calls. Every conversation that we have in the field where we're talking about insurance is recorded and it's analyzed from automation perspective, but with a huge amount of manual overlay as well. So we're constantly looking to push that metric to even greater heights. So I'm really, really proud of the team because we deliver exceptional quality. We won this year an award with the Institute of Customer Service for the best performance for customer service and claims handling for a small insurance player. So it's wonderful to be seated around the big insurance players winning some of these awards. So again, very proud of our performance there. All of these efforts, brilliant quality, little breakage, continuing to be more efficient on the park has pushed our penetration to the heady heights of nearly 15%. And I say heady heights because clearly, there's still so much to go at, and that's a joy for us, a big part of the growth for us going forward, albeit continuing to penetrate into our businesses, get more employees signed up and continue to move those penetration levels to at least north on average of 20%. So our top 100 sites that we've talked about quite consistently over the last few years perform at about 20%, 21% and over half of those top 100 sites are between 20% and 30%. So we've been pushing those top 100 sites, and we define those by the biggest number of people on site because clearly, that's going to drive the average. We've been pushing those very hard for 2 years now and looking at lots of different ways by sector, by capability, by site profile. Again, I could go on and on, but the efficiency and the effectiveness and the quality metrics that are required in this space and continuing to get great traction. Our digital offering that we've revamped has certainly proved that we're getting better tailwind at the bottom end of our funnel. So people clicking through our e-mails, people signing up. Our opportunity really is to expand the top of that funnel. And that will be beyond the customers that we have on the platform direct that don't take insurance, which leads me back to our partnerships. So you will remember that we've signed a number of partnerships really to be the face-to-face partner as we walk into these partnerships client base and talk to their customers about our insurance offers. And most exciting, we signed a deal with Simply Health around April time to be their face-to-face partner. So this was a wonderful conversation that arrived on my desk just before Christmas. Simply Health had a super credible face-to-face operation years ago. Their clients are asking if that operation can be resumed. They came to us saying, can you be the partner? We can see that you're doing brilliant work in this space. So we said, yes, of course, because Simply Health have a fantastic array of clients with a sizable number of employees, 3 million employees right in our wheelhouse in terms of where we want to go with insurance. So particularly for face-to-face, but also some brilliant digital opportunities for us. So think NHS Trusts or other big blue-collar industries where we're going to find it difficult to get access to people on mass, but the need will still be the same. So we have started to work through in detail the opportunities starting with the face-to-face. We're well progressed with about 6 clients at the moment in conversations. There are some very sizable opportunities there. If we were of a different mindset, we would be getting excited and heady with the numbers that we could add into our addressable employee base and thinking that the deal was done, but that is not the way I operate. So we are still working every single angle to land new business. And the the 50,000 new employees that we've added into that pot over the last year of going out and talking to clients direct. So without the luxury of a Simply Health partnership with clients on their books that are asking for face-to-face. I think that 50,000 that we've done ourselves just talking to clients directly has been impressive. We have gone live in the last couple of weeks with a great new client of about 10,000 employees. So we're excited to report more progress on that for you at the end of the year and it looks promising so far. We're certainly realizing that there's been typically a long lead time from talking to a client and signing them up to getting access with their site. And we've reorganized to align our account managers closer to our people that book the site visits. So that's now managed all in one organization and will drive more efficiencies and learnings from that. So loads more to go at. It's been a great year so far of understanding how we can squeeze that onboarding time line down and really get out and visit sites more frequently, more quickly. So clearly, loads of opportunity to still push further into our existing customer base to win new business. Our hope and our efforts are going to be into our partnership, Simply Health and of course, the Santé partnership, which also has generated some leads as well. We will continue to look for clients as well directly. And then again, big opportunity for digital is really to open the floodgates at the top for those clients initially that won't look like the face-to-face clients we deliver. So I think you'll all agree that's plenty for us to focus on for the end of the year as we also shore up the number for the FY. Moving on to the Benefit space. So I think slightly different dimensions in the SaaS market. Clearly, the demand for SME remains strong. The demand for super complex direct benefit platform sales at the top end. So I think big, big enterprises are strong, but we don't play in that space, and we've never intended to play in that space, certainly not directly ourselves. But the market for smaller enterprises and SMEs continues to be relatively constrained. And we're happy with the progress that we've made in that space. I think I'm particularly proud of the team because we've stuck really firmly to what we're good at selling this year. And the wins are very uniform, very similar in average order value size are instant to sign and to mobilize. So we've done a really good job selling what we are absolutely brilliant out there and remaining particularly relevant. Our customer retention levels have always been very high. They've increased even further. And we have a separate Trustpilot result actually for Hapi, which is really strong at 4.4. Our NPS in general is 67, which is super high, particularly high for any customers with insurance, but super high anyway. So we've got great feedback from our customers about the fact that our proposition is -- has got lots of elements integrated into one. We don't have a different reward and recognition module that we have to bolt on from a different provider. There's great feedback now on the simplicity of our app now that we are fully good kind of 2 years now through the launch of our product. And I think we're particularly happy because we can see around us that there is clear pressure on our competitors. There are other competitors trying to put platforms together. We're nicely through that now. We're in a nice position of launching small but meaningful additions to our platform. So we've launched 11 new small but effective features this year. So we're enjoying a period of stability. The question for us really as we go forward is if we're going to sell these uniform opportunities directly, and again, we still need to remain relevant directly, what's the right kind of self-serve and cost base that sits behind that? And what more can we do to kind of sweat the back-end technology costs there. So that's again on our mark card to work through either as part of our plan for the next 2 to 3 years or as a, kind of, cost backup layer. So it's good to have the luxury of the options there. Again, on the Innecto side, as I said, a great number of sales, particularly pleasing retention rates, again, super high, well over the 90%. Some brilliant brands, Deliveroo, Newcastle United, Secure Trust Bank, and you remember, we've talked to in other guises with Hapi and Insurance. And the super exciting thing is the contract that we've signed to expand our data with Mercer, who then will become Marsh next year. So they are obviously a top-tier player in this space to be able to access their data to expand our credibility in Innecto is a fantastic step forward and will only really improve the number of leads that come to us that are interested in what we can offer. We've done some great work on our digital products and started to land some direct sales in that space, and we've got some conversations in train to white label those products as well. So lots of opportunity there. And again, our kind of mark card for the rest of this year is really on continuing to get even better lead conversions. I mean our lead conversions are super high in Innecto around the 70% level, for example. But there's more opportunity with more focused marketing and sales activity there always is. So we're always trying to push ourselves on. On Sage, we had an unfortunately, kind of, slow start in January. They had a slow start on a number of fronts, not just with us. So we were playing catch-up. We have been in this position before. It would be nice next year to not have to catch up and try and align our forecast even better, again, one for the mark card for the end of the year. Our financial years are slightly out of sync. That actually really does benefit us with a period of a trial to revenue actually for the end of the year. We've seen better progress in Q2 and Q3, but we have decided to turn our attention to what we can do to improve that retention rate with a great new journey and new products that we have taken out to market with Sage, a simpler, slimmer version of our product and the results have been fantastic. So 4 months does not make a trend as we know too well in this business. But if it does, we've had a nice nudge down of our churn levels, which obviously impacts the bottom line. So again, areas to focus on Sage, new segments now that we've done a lot of this work on the journey. And of course, our intention really is to push harder into the U.K, and not be distracted by any shiny lights abroad, as much as they provide a great opportunity, we want to rinse and repeat in the U.K. where we can. The final thing to announce is we put an announcement last week on a great new app that Simply Health have launched that we are going live within the next few weeks. We're just finishing off the testing with them. This provides access to kind of pay-as-you-go privately funded health interventions. So think an MRI scan that you might want to do on a dodgy knee with or without an online or a physical GP sign-off and referral, and skin cancer, mole treatment, any kind of personal beauty interventions. So lots of options, beautifully presented, ability to look at availability and price across the whole of the U.K. to select the services. It's certainly a first in the industry of the group cash plan space, which is where Simply Health play with the optical and dental plans. This is a really exciting thing for us to launch on the platform. It will be a brilliant retention hook on the platform, but also a great, kind of, commission source for us. So another extension of the opportunity to work together with Simply Health. Okay. I will hand over to Matt to see if there are any numbers left that he can talk about.

Great. Thank you, Paula. So total revenue for the group of GBP 25.7 million grew 10% in the first half, supported by growth in the Insurance book of 11% and growth in the Benefits & Reward portfolio of 9%. Adjusted EBITDA of GBP 6.7 million grew 22% year-on-year, supported by strong contribution from the Insurance portfolio and with lower-than-expected claims. Profit before tax increased 21% to GBP 4.6 million, while basic earnings per share rose 28% to GBP 0.123. The business remains highly cash generative with GBP 6.4 million generated from operating activities in the first half, up 68% year-on-year, and return on tangible equity was 29.6%, up 4 percentage points versus the prior year. Given this strong financial performance, we're pleased to announce an interim 2026 dividend of GBP 0.09 per ordinary share. Our dividend policy remains a 1x EPS payout for the financial year, broadly split 1/3 interim and 2/3 final. Now moving on to the segmental analysis, starting first with a deeper dive on Insurance. As Paula said, we delivered record new Insurance sales of GBP 8.1 million in the first half, supported by investment in the sales team, price increases and stronger penetration of the existing base. Retention remained robust at 81% despite the U.K. cost of living pressures. Annualized premium income was GBP 42.1 million, up 12% year-on-year and loss ratio performance remained in line with historical averages, but slightly better than prior year. We remain encouraged by the Simply Health partnership, which is already generating promising Insurance leads. PG Protect has also been launched to support face-to-face activity with modest early uptake. Moving on to Benefits & Reward. Benefits & Reward, this segment includes Hapi, our direct proposition, Sage Employee Benefits, our white labeling version of Hapi and Sage customers and Innecto, our reward consultancy business. Benefits & Reward grew 9% to GBP 5.7 million with growth in the Benefits platform of 8% and growth in Pay & Reward of 10%. More than GBP 1 million of savings were delivered to employees through discount vouchers supported by GBP 22 million of gross spend. At a time where consumer spending remains under pressure, this delivers meaningful value for Britain's best [ workforce ]. Combined ARR from Hapi and Sage Employee Benefits reached GBP 7.1 million at the half year. Innecto, our Pay and Reward unit grew 10% to GBP 1.3 million with ARR from digital products reaching GBP 0.81 million. And Innecto secured 22 new client wins, as Paula mentioned, including names such as Newcastle, Deliveroo and Secure Trust Bank. Moving on to balance sheet strength. As I said before, the business recorded cash and deposits of GBP 29.4 million with no debt. Our SCR coverage ratio remains very healthy at 284%, well above our target of 150%. And the business generated GBP 6.4 million from operating activities in the first half, up 68% versus the prior year. For context, in the 5 years prior, the business has generated nearly GBP 40 million from operating activities and returned GBP 24 million to shareholders. In the context of our dividend strategy, the business generates enough cash to continue to fund product development and enhancements to deliver the growth required in our plans while also providing market-leading returns to shareholders through 100% dividend payout ratio. M&A continues to remain an option for the business, but any acquisition must be accretive to earnings and accelerate growth. Now handing back to Paula to talk through the outlook and conclude the presentation.

Super. I'll just take a couple of questions. And hopefully, you can still hear, okay. Please do let us know if there are any issues with the quality of the connection. I think there's a few people, just, kind of, messaged in. Just, kind of, going, kind of, end to beginning on the questions. Gavin has asked a question, what number is the field staff for selling insurance these days? Sorry, I obviously admitted to pull that out in my excitement to talk through our insurance plans. We have typically, over the last few years, tried to hold a number of just under 50. We're about 58 as a spot point at the moment. What we decided to do at the beginning of this year as we reshape some of these recruitment drives was probably to take maybe 1 or 2 people over plan, a, to try and deliver our field days because I think I've become a bit tired of trying to present back to our Board on how we hit our number, but it's always with less field days at the beginning of the year through a combination of sick, et cetera, but over delivering our performance on the day. So it's nice to be able to say that we've delivered on all fronts so far this year. And we've obviously got some exciting opportunities in the pipeline. It's a difficult line to walk on because we don't want to hold too much cost, but we want to be ready to go if some of these opportunities land. And in the event, it's forced us again to think even more clearly about are we in sites as frequently as we say we want to be. We really want to go to sites at least twice a year. What we found is that in some cases, we haven't even been visiting once a year. So we've certainly used our people super effectively so far. We will probably hold that number constant unless we land one of these, kind of, huge opportunities in our pipeline. So we could probably accommodate another, let's say, 10,000 employees within our current workforce. But if we've suddenly got an opportunity with, let's say, 100,000 employees, we would look to recruit again. New people would go on to our established work, really experienced people would look at our new opportunities. So we've got lots of alternative plans depending on what work lands. But again, the number in itself is quite small. We haven't had an issue per se with staff turnover. But obviously, we've had this, kind of, this point of recruiting people in and people deciding relatively quickly, it's not the job for them. So we might lose people through the 3-week academy, we might lose people at the beginning. And that's the bit we've been trying to stem the bleed on. So -- and that's not kind of regretted churn, but it would be ideal to not have to even go through the cost of bringing those people in the first place. So that's what the recruitment team and the field team have worked so hard in the last year. So I hope that answers all of those questions. And we have a national team. So it's not about an issue of recruiting in Milton Keynes per se or anywhere else. And actually, the demand is clearly there. I mean we -- in some of these assessment centers, we're sifting through 600 CVs just to get down to 10 people that we want to take through academy or less. So it's not a question of attracting the demand. It's a question of really finding the right people that are going to go the distance and testing that out really thoroughly through the onboarding in that first month of academy in that first month in the field. So that should answer some questions about our staff. There's a question for Matt as we stay on Insurance about what sectors the strongest opportunities where you're gaining the most traction. Manufacturing, buses, logistics, other elements of transport where there are big nucleus of people. And then we cover a lot of the care home, so the element of health care, that's where we are super strong. There are some of those sectors where we are broadly across a lot of companies, buses would be a good example. There are other sectors like manufacturing where we're certainly looking to gain more customers and opportunities. So if you know any good food manufacturers and your investor, we've already tapped up 3 this week for some good intros, we are looking to expand in that space. And clearly, the partnerships that we've done offer some opportunity there as well. I think there's another question on Insurance. Is there some room for kind of looking kind of playing around with premiums? Well, clearly, what we need to do with insurance is always based on customer needs. So we continually refine and look at what is the need and what is fair value. I don't know if you want to add anything to that, Matt, because I know it's a particular passion and a great area of expertise for you. But we are constantly out there talking to our employees and doing research and readdressing the balance of our premium claims.