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

Good afternoon, and welcome to the Personal Group Holdings Plc Full Year Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll and I would now like to hand you over to CEO Paula Constant. Good afternoon to you.

Thank you very much, and welcome, everybody. We are delighted to share our 2024 results. And we will take you through our presentation. Welcome questions at the end and then just conclude with a few final thoughts. So I will start with a snapshot of the year. Sarah will take us through the detail on the financial review. And just before we move to questions, I'll do a refresher of the strategy that we announced at the end of last year and the progress that we've made against our strategy so far. Now I'm assuming that most people have been through the history of Personal Group, what we stand for and what we do. So I will try and summarize these slides quickly. Very happy to come back to them at the end as needed. But essentially, we exist to help businesses positively impact employee happiness, health and protection. And our mission really is to be the unrivaled champion of affordable benefits. We go to market now with 2 clear areas of business, those 2 business units. The first is Insurance. So we pride ourselves on offering affordable insurance. The predominant offerings are the hospital plan, the recovery plan and the death benefit plan. And the way that we go to business is that we engage clients and then we talk to their employees face to face in the main about these insurance policies. And we do that either with just the insurance policies or we talk in conjunction with benefits and rewards, either our solution or in some cases, client's own solution or clients preferred solutions. So there's lots of permutations of how we go to market. Benefits and Rewards. We have our own SaaS benefits platform. We sell direct to clients, the B2B. We also white label via partnerships, the biggest, most predominant partnerships that we are extremely proud of being our relationship with Sage over many years. And we also have a Pay and Reward consultancy. We've merged 2 consultancies over the course of the last year. So we're now going to market as an [ Exo ] consultancy. And we offer a variety of various tours and consultancy, both in person but also a set of digital tools as well to benchmark pay to evaluate jobs, et cetera. There are many reasons that we believe our customers love us, and we're very proud of our ongoing and very long tenured customer relationship. But just I think to summarize a few points, we believe we're the only employee benefit provider that can deliver in person, face-to-face benefit consultation. And of course, we're able to do that because we have a face-to-face insurance team. So we will go into a client's premise and we'll talk to employees first, about the variety of benefit solutions available to them. They may be part of the benefit solution that we provide, but there will be a broader suite of messages that a CPO or an HR benefits department will want to land with the employees. And then we'll go on to also talk about the insurance offers that we have. We get great engagement, great feedback through that face-to-face conversation. And of course, with insurance, we also have a super successful conversion rate. So typically, 50% of the people that we talk to will want to go on and have that insurance conversation past benefits. Of that 50%, 50% of those will convert by 1 or more of the insurance policies. We're super proud of the work that we've just undertaken last year, moving on to Hapi 2, our second iteration of the platform. Bringing 2 platforms together. And we believe that we have the slickest mobile interface now, the best mobile app that we have seen in the market it's brilliant for the deskless workers that we predominantly serve in our insurance base but also transcends across all sectors. I'm particularly proud of our reward and recognition functionality in a social media scroll at the beginning of the application. What really differentiates us in the consulting space is the use of independent data sources that we've finally changed and curtailed but also some of our cutting-edge digital Pay and Reward mechanisms as well. So there's lots of reasons to be excited about working with us and super proud to work with customers of this reputation, who also have huge and exciting transformation journey themselves that we're proud to be part of. This year that's been, we've won some super awards. We're very happy to have won a number of awards in the tech space, the benefit platform. But probably the one that we feel most proud about is the Consumer Duty vulnerable customer win midway through last year. It's brilliant to go to market within an insurance offer that is so relevant to employees and to run a business with a super profitable product, but it's also fantastic to be recognized along with many FTSE 100 and big brands as one of the leaders and in the inaugural Consumer Duty awards. I've shared over the last course of investor presentations that we've done, the real critical work that we've done on understanding the needs that we address. Our strategy is really focused. And those needs could not be more prevalent now in a growing situation with the cost of living, the pressure of various new legislation on businesses and feeding through to employees. So we believe that we are even better set up to address that growing market needs. Looking across a number of areas of research, it's clear that illness and sickness is increasing 41% of adults in the U.K. have at least 1 long-term illness or condition. But also that the cost of living crisis and any drop in income means that funding support becomes even more unobtainable. 27% of U.K. households lack savings to withstand 25% drop of income, 5% of the global population pushed into extreme poverty. Equally, companies that are offering any financial wellness programs, financial support, the kind of policies that we offer with insurance, which predominantly in the case of hospital and recovery plug gaps in fixed pay for employees that work for companies where they may have very little or no sick pay cover and may not benefit from a group-wide management level of health insurance, but also particularly for the discounts and the options that we offer through the benefit platform that really ease the cost of living. So 83% of employees more likely to stay with an employer that provided financial wellness programs and 10% of financially stressed employees needing more time off work with 33% of workers feeling a decline in their productivity when experiencing financial worries. I think it's clear that with the set of offerings, we can address that market need, which is certainly growing more and more year-on-year. We've shared some of the material on this slide before, but really, there are 2 clear points on this slide. On the first slide, on the left-hand side, it illustrates the longevity and the robustness, particularly of our insurance business. I mean, very briefly, the slide shows a client where we were unable to go in for a period of face-to-face because we, like many other providers, were just not allowed into the business in this time. It wasn't about personal group in particular. It shows the decline but the very slow decline of the existing book in the big black bar but also once we're allowed back in to talk to employees, day on day, week on week, how quickly that book of business grows again. So a super robust business with great retention rates, and it would take a very long time for that book to run off. Similarly, on the right-hand side, and we'll talk about this later in our strategy. There's huge growth opportunities for us, not just with new business, but within our existing client base. Last year, I shared the stats that we play across probably only 12% of the addressable market that needs that kind of short-term sick pay cover. And within that 12%, we're only 12% penetrated. We've moved that penetration on now to 13%, but the math still stay the same. We're 13% penetrated at 12% of the market. A huge market opportunity to go after, but also a huge opportunity in our existing base. The graph at the bottom shows our top 100 sites, which is a big focus for us in increasing our penetration today and really shows the variety where we've got certain sites with many more employees and a much lower penetration rate than that average of 12%. So lots of opportunity through forensic analysis to visit more to think more about the conversations that we're having and increase that penetration a couple of percentage points again. On the benefit side, we are extremely proud to have completed the material migration of Hapi 2.0. We have an impressive number of clients both direct but also through our Sage partnership. There are many great things about Hapi 2.0. We have the ability now to go to market with modular functionality, so we can vary what we sell and the price that we might sell that in terms of the functionality that we offer. We didn't have that ability before. We've got some brilliant features and personalization, favoriting, customization. And as well as what you can see as employee, there is some fantastic administrative flexibility and insight in the back end for those HR benefits administrators. We do believe we have a market-leading reward and recognition. We're super excited, and it's been great to hear the feedback from all of our customer base on that. But of course, behind the functionality, we have streamlined from 2 platforms into 1 and 2 sets of code onto 1 set of code as well. So there's some material cost savings for us on a run-the-business basis. Moving forward into the snapshot of the year. So we're very, very happy with the progress that we made last year across all dimensions. And I don't want to steal any of Sarah's thunder as I assure you will be doing by the end of the week. But it's great to be back in double digits of the business on EBITDA. We're up on all of our key financial measures. And I think it just really reinforces a great business with super high levels of annual recurring revenue, ARR, very high retention rates across all of our products and continuing growth in cash with a strengthening balance sheet which Sarah will talk about later. When I started, I set out a clear store to get to real forensic operational grip and get the business units into very stable, straightforward operational run, and I really believe we've delivered that. And the first of the new hires that I'll talk about on the next page. Hywel started early last year. He and I come from very similar operational backgrounds and I'm super impressed with the work that he's put in to deliver the results in insurance. We have great insights. We have great rigor. We have a fantastic management team delivering against this and as well as the results that we've achieved in sales, so up 18% in sales and up 14% in our API. We've also delivered some material quality results to partner with those efficiency results. Our early cancellation rates are down 10%. Our customer retention remains high. We've worked really hard. Our responsiveness on customer service and claims and we genuinely believe that we are leading the insurance market in the rate and the speed that we process our claims. And our Trustpilot results really show the impact of that servicing claims 4.9. We've won some good new clients as well, probably about 3% of our total field days last year were delivered with new client work, which is a really good start for us and across a variety of the key sectors that we would look to target as well. So a good start for further growth again this year. On the benefits side, I've mentioned the migration to Hapi and our ARR up 10%, but as important is the value of each win. So we've really increased the materiality of the value of what we sold. Some really impressive names including the key wins there. And of course, it's brilliant to get the recognition on the technology awards, too. And for anyone that's forgotten our September results, at that point, we've just completed the disposal of Let's Connect. We worked extremely hard. It consumes a lot of time in the business, but it's left us with a very clear way of going to market, repeatable ARR and similar patterns of the way that we work across all of our areas now. And of course, we still sell the brilliant Let's Connect portfolio as part of our offering to the market and by the partner that it now sits with. So we're pleased to have made that move. Lots of work to reorganize and strengthen the team, and I've talked about Hywel joining. So I will just finish by mentioning the other 2 new hires to complement our management team. Arianne joined us, I think, probably 4 weeks ago now, it feels like much longer. And we have a huge plan ahead to build out our B2B sales, and Arianne comes with plenty of experience in that place and working most recently [ CSO ]. So very excited about the energy and the forensic approach Arianne will bring. I have worked with Helen on and off for many years and have been super impressed with her approach to product design and analysis. She's been with us for a number of months now and has really gotten under the skin of what we need to do with our digital product design and insurance and also employer paid group cash plan, which I'll touch on briefly after Sarah has taken us through the financial results. So with that, I'll hand over to Sarah to run through the numbers.

Thanks, Paula. So yes, we're obviously really pleased with the set of results that we've announced today. The results here are from continued operations. So they exclude the results and comparatives of Let's Connect, which as Paula has mentioned here, we disposed of in July 2024. Overall, we saw a really strong year-on-year performance with double-digit growth across all metrics. We had a 13% increase in revenues to GBP 43.8 million, with growth across all areas of the business, and that translated to just under 30% increase in EBITDA to GBP 10 million. That performance has really helped to reinforce what was already a strong balance sheet. We remain highly cash generative, GBP 11.4 million of cash was generated from operation activities aided in year by the removal of the working capital requirement that used to sit with Let's Connect. And the resulting cash and deposits at the end of the year was GBP 27.4 million with no debt. I'm sure you have seen that we've also announced a final dividend today of 10p with the results. That takes the 2024 full year dividend up to 16.5p, 41% increase year-on-year, is a move away from our previous approach of equal to [ half one ] of final dividends, but reflects the increased profitability we've seen in the second half of the year, including the profit on the sale -- disposal of Let's Connect. And the Board has considered the level of the dividend based on that growth in profits and the significantly increased liquidity we've seen as a result of the sale. And whilst that disposal has contributed to this year's enhance return, our policy remains to continue to grow the dividend progressively in line with our earnings, keeping consistent cover, and we remain confident in our forecast to 2025 to enable us to do that. Just moving on to the segmental analysis, we can see here the contribution from the various areas of the business. I think this slide really demonstrates a significant amount of our revenue that now comes from 1 of our recurring revenue streams, be insurance or our SaaS products. And without Let's connect to the mix, 92% of revenue in 2024 came from one of these recurring revenue streams. Overall, we've got an annualized position of GBP 43.4 million at the end of December, which when you combine with the strong retention rates that Paula has already mentioned, across all areas, obviously give us really high level of visibility and confidence in revenue for 2025 and beyond. We'll look at the 2 core segments in little bit more detail in a second, but just to cover off some of the other areas, other income up 37% to GBP 1.3 million, primarily bolstered by the higher interest income on the cash balances with higher interest rates. And obviously, that flows straight through to the bottom line. And then just as a reminder, the segmental results include the direct costs of the segment only. So some of the group admin and central costs, which couples from sales and marketing through discount management through to those core HR finance areas shown separately there, relatively flat year-on-year with just a 2% increase, and that's probably a combination of a few non-repeated costs from 2023 offset by some of the investment we put into the strategy, marketing research and other inflationary increases in 2024. So just moving on to insurance. While we were seeing that continued growth of the insurance book. Paula has already mentioned, the record new insurance sales up GBP 13.9 million, up 18% from 2023, increased number of field days delivered from the growing team, plus increased productivity that Paula has already spoken about, and we saw multiple further best in terms of week, month, quarter in 2024. Year-on-year retention rate of GBP 81.6 million, so it's still well above the 80% mark and the combination of those strong new sales and strong retention rates drove the insurance book up to GBP 36 million at the end of 2024. And just as a reminder, the majority of those policies are on rolling weekly or monthly contracts in line with the employees payroll cycle. The claims ratio of 29.1% at the end of 2024 was down slightly on the half year. I think we spoke about that in the presentation at the interim, slightly front-end loaded in terms of claims costs because some of our outpatient appointments reset from the 1st of January. So we tend to get a bigger bulk of those in the first half of the year. But overall, the rate was up year-on-year, probably in line with the increased level of activity we saw in NHS, but also some of the work we've done aligned with consumer duty to make sure we're making it really easy for people to get the claim. A lot more of our claims now come through an automated route via the website. And we should see the benefit of that coming back through in our retention rates as we move forward. And then finally, the increase in EBITDA for that section up 11% as expenses were held at 5% increase, and that's going to do with the operational efficiencies that we saw in that division, particularly around the acquisition costs. Moving on to benefits platform. Combined ARR at the end of December of GBP 6.7 million across Hapi and Sage, up 10% year-on-year. Revenue was up slightly more than that at 16%, and that reflected increased commissions through some of the third-party products that is on the platform alongside increased setup fees that we've seen from the platforms that came on during the year. And Paula has just spoken about already in terms of we're now on a single platform from the start of 2025 with Hapi and Sage Employee benefits, which will help our EBITDA contribution as we move in to 2025. And whilst it doesn't impact our bottom line, it's always worth a reminder that the savings delivered to our client's employees through the platform, you can see that GBP 60 million of spend in year delivering GBP 2.9 million of savings for those individual employees, obviously, a really strong message for clients for their e employees with cost of living pressures. Small around Pay and Reward. I think Paula has already mentioned [indiscernible] function as 1 group and now going to market just as the next day consulting. ARR from their digital products up slightly at GBP 0.71 million. And obviously, in year benefited from a significant 3-year contract with British Airways that we spoke about at the interim. And finally, going back to our strength of balance sheet, flexibility it gives us to do different activities in the future, GBP 27.4 million of cash, no debt will enable us to continue to grow the insurance book and support resulting in increased capital requirement. As a reminder, we currently hold around GBP 10 million for our existing level of insurance around about double the absolute minimum requirement. It will enable us to continue to invest organically to support [indiscernible] investment in product development and enhancements. And Paula will talk a bit more about proof of concept we're looking at the digital insurance. And then we'll continue to make a regular dividend to make a return to shareholders. Hopefully we are able to deliver a significant increase to full year dividend this time around, but also enable us to consider other options in the future. And then with all of that, we still have considerable headroom to fund any acquisitions to help accelerate our growth. We're currently working with a search partner to help us solve some of those targets. And you can see from the criteria that we're considering on the right-hand table there. So in summary, really pleased with the set of results, confident in our forecast for 2025. And with that strong balance sheet really puts us in a strong position to accelerate that growth. So I'll hand back to Paula for an update on the strategy.

Thanks. I will quickly take you through the strategy, assuming that people remember bits of the strategy that we revealed in September. And again, happy to take more questions at the end. But in summary, we worked hard to set out a 5-year ambitious set of aspirations, all based on organic growth that lead us to some very exciting results. So great to have communicated this externally and also within the company to be working on many elements of the strategy already. As a reminder, we are looking to achieve in excess of GBP 100 million. And on the next slide, I'll take you through some of the other stats as well. For insurance, what this means for us is a big focus on expansion, so winning new customers, but also the penetration that I mentioned to the top 100 accounts and also what we can do around our digital and other offerings. So on the expansion side, it's really getting our digital offering fit for purpose. And we have an offering today that exists. It generates a very small volume of sales because we've never looked at it and exploited it at any level. And the works that Helen has started already has really identified some clear need, a link between face-to-face and coming back to digital for reference within our existing client base, but also clear demand to work with partners expanding as well. So expanding in new areas, in existing areas with face-to-face. But also looking at the potential of our digital offering through a really focused proof of concept for the first half of the year and then a gradual and controlled rollout for the rest of the year. And then we also have the same kind of focus on the group's cash plan at the employer paid level. We spoke before about the big demand in that space. We have tested a number of options based on the research that we finished last year and are working now actively with brokers and partners to understand the potential to sell both the group cash plan and then, of course, the follow-on activity at the employee paid cash plan, which is a real opportunity for us there. So excited to share some of the results of those proof of concepts later in the year. On the Benefits and Rewards side, it's clearly about adoption. We have brilliant adoption in our customer base in general, but we can clearly see that customers take more of our functionality, some of our communications tools, some of the other elements embedded in Hapi and particularly elements like pay we have usage levels in the 80, 90-plus percent. So we have clear forensic focus across all of our base with all of the capability. And the opportunity for us thinking about the work in [ Exo ] to build out the career pathway towards how we industrialize a version of that and surface that to our Hapi platform as well. Partnering is always going to be very key to us. We talked about the huge opportunity in the SME base for Hapi and of course, that builds on the great relationship that we have with Sage. We have signed another new partner in the last few weeks on the Hapi platform. Several weeks ago, we signed a partner to deliver our consulting products as well. That's 2 partnerships that we are excited to be leveraging at the moment with others in the pipeline. And of course, we continue to expand our work with Sage into new areas, new segments and using the new modular capability that we have built as well. I'm very pleased to see the highest number of leads that we have ever seen in our partnership with Sage at the end of last year and coming into this year as well, which will play nicely into this year's results. Just a few more of the dimensions of our ambition. So I've talked about the GBP 100 million of revenue, but we're looking to triple the EBITDA to GBP 30 million. The recurring revenue from the SaaS is also a critical measure for us in excess of GBP 20 million. As you can imagine, we have a detailed model and a set of internal KPIs that we review up and down the organization to understand how we're going to move to this level of ambition over the next 5 years. These are some of the dimensions that we're looking at. So insurance, over time, we need access to 300,000 new employees and premium income needs to be in excess of GBP 70 million and 10% of our EBITDA, eventually we are hoping will come from new insurance products and channels, and that will include the digital and the group cash plan elements that I've spoken about as well as other options that we may build or buy or partner with. On the reward and benefit side, it's about doubling our client base. And the key metric for us is the 8,000 leads per annum which will come from a number of partnerships as well as the continuation of our Sage partnership. So in summary, before we move to questions, we're very pleased with the results. We're very pleased with the double-digit growth and the recurring revenues and retention rate across our business and make this an extremely strong business to continue to grow and develop. We continue to be highly cash generative. We're very pleased to offer the dividends that we have offered. And I think most importantly, we are clearer than ever that we offer the right set of affordable insurance benefit across a large growing and still vastly unpenetrated market. We're still very clear that our strategy is the right strategy for growth. We've started the activity on that. And the strategy is predicated on organic growth that we have the funds and other means to look at inorganic options, which we will be looking at this year. And our aspirations remain, as we've said, revenue in excess of GBP 100 million, EBITDA to GBP 30 million and the recurring revenues. Probably the final thing to finish on, and I mentioned it briefly on the Sage; partnership is we've had great momentum at the end of last year, and that's been in spite of finishing off our Hapi migration. And so fantastic volumes of Sage leads into this year, a really superb December in insurance, which will impact into this year. So the momentum from last year has carried forward into this year. And we're excited to see what this year will bring. Okay. We will move to questions. There's a couple of questions in the chat that I will answer quickly. So I'll just work through them.

We had a question about the impact of AI. And I think this is a multifaceted answer. So we already build elements of AI into our digital consulting tools and Hapi, but that will be a focus for us going forward as well. We are looking to automate and build elements of AI into our support for customer service and claims, for example, knowledge interfaces, et cetera. But I think one thing that really stands out for us as a company is our ability to reach a human. We have a small, but very experienced customer service and claims team and that element of human contact, particularly in the space of insurance, particularly for vulnerable customers who remain a big focus to us. So in summary, it will be a blend of automation for that human experience. I hope that answers that question, but please comment back if more is needed. There was a question on Royal Mail. So the impact of the takeover and the current contracts. So we are halfway through the contracts that we have today. We have a very strong relationship with Royal Mail, and we work very closely with them in terms of benefit messaging. And there was some work and they undertook probably about a year ago now across the whole of their benefit space to improve their benefit strategy, which really emphasize that face-to-face contact to deliver messages is key. And so it's one of our clients that works very hard and the kind of messages that we deliver in the field on the benefits as well as the insurances. So we're looking forward to continuing that work. And our understanding is that all existing contracts will continue as is. So I hope that answers that question. There was a question around demand impacted by the increased employee cost and NI and minimum wage. So I think, if we take insurance first, we've probably seen even more demand for insurance as an impact of the measures brought in by the budget last October, where I think HR departments were looking at supplementing any insurance offerings across their base such as PMI or the further adoption of group cash plans, which can be quite challenging through digital strategies anyway. It's really made the case even stronger for what we offer in Personal Group because the client can introduce us, we can talk to their employees. We can engage with the policies that come out of an employee's payroll or direct debit as endorsed by the company at effectively kind of no cost to the company. And I think if coupled with a benefit platform, which allows employees to save, let's say, GBP 5 a week. That confirmed an average insurance policy. So I think those kind of messages have become even more key when we've been talking to clients, is really one of the only viable options to move forward with insurance at the moment. There's a greater need for discounts and vouchers and cost of living benefits that more than pay for themselves in terms of benefit platforms. So it's clearly still a brilliant cost-effective solution for employers. And for us, the challenge is to thinking about all the relevant partnerships and options that we continue to present through the platform. And we have seen probably a modicum of challenge just at the point that the financial year turns over when people are looking at paying out a kind of set-up fee, et cetera. So we've looked at some of the financials around how we spread cost for customers, et cetera. But the net result is that there's still demand at the price points that we offer. Okay. And we have some new ones in. Do you want to take the first one about the cash generation?

Yes. So the question is with a strong recurring base and cash generation, how does this impact your strategy around capital allocation for reinvestment, returns to shareholders and/or acquisitions? I think I covered that probably briefly in one of the slides back there. I mean, as we start to grow the insurance book, there will be an increase in terms of capital requirements that we need to go alongside of that. But Paula has already mentioned about the growing insurance book from the new product channel perspective as well, that obviously will require investment as we move forward. We're currently looking at the proof-of-concept from those products and investing accordingly to move those forward. But assuming these products are successful, we'll obviously be looking to invest further in the insurance side of things. We will keep going with our progressive dividend [indiscernible] in the Board we're determined we're going to do, but it does give us the opportunity to look at special dividends in the future if we think it's appropriate. And then really, we are early days in terms of our M&A searches as we go to market with that partner. So obviously, we would look to fund any acquisitions initially from our own balance sheet. So really, until we see a little bit further down that journey, we will definitely hold the actions to enable us to do that the opportunity arises. I think that answers that question. A little bit around acquisitions being solely U.K. focused.

Yes. I think, I mean, as Sarah has mentioned, we're just starting to look with a search partner now acquisition opportunities where we're reminded to be very focused on our strict set of criteria. So a level of EBITDA accretive and clearly across both Benefits and Insurance spaces, but the challenge for us is to think strongly about whether build and partner options are more viable then the buy option. So that's the beginning of our exploration predominantly at the moment, we're looking at U.K. but not rolling out anything that might be a wider subsidiary. So I think the critical point is the right kind of acquisition to add. There's a couple of questions around new offerings. So how do you look to test and measure demand for new offerings and cross-sell? So the work that we've done at the moment, particularly on the digital variant of our cash plans, our employees paid cash plans is to go out on to client side and interview the employees that would typically come and talk to us about the face-to-face cash plans. We've done some very extensive interviews. We'd done client interviews. And we've asked a number of questions there around how people buy, the use of digital and face-to-face. The kinds of products and services that they buy from various parties. It's given us a huge set of rich information and really, really identified that within our clients, employees are looking for affirmation online. They may be looking to have face-to-face conversation and then come back to digital. So there's an interesting interweaving of themes. And we have got to the point in our proof of concept, which we tested out over several months of designing a better interface, a better customer journey that will then test for adoption and drop out at various points of our clients. There's a fair amount of kind of user testing to go through, but we're excited with what we've developed so far.

Okay. I think there's a few questions now around claims. So I'll take those ones sort of the related. So do you outsource the claims and medical arrangement operation? Do you use insurer to reduce claims risk? And how do you go about forecasting future claims ratio? So just for clarity, our products pay out fixed sum for every time somebody visits the hospital has an overnight stay in hospital, similarly with death benefit, it's a fixed payout. So we're not subject to the inflationary pressures in terms of medical costs because if somebody goes into hospital on average, there will be a GBP 50 payout that person receives. As a result, historically, our loss ratio has been very predictable, very steady. We don't need reinsurers to reduce the claims risk because we're confident in terms of the ratios that we see. The exception to that is on our death benefit where we do have a concentration risk with the reinsurer, and that's because of the aspect of we've also got lots of policyholders at single sites with some of our clients. So that's the only reinsurance that we have in place. So in time of forecasting the future, claims ratio, obviously, as I say, we've got years and years of history of it being fairly stable, particularly around the hospital plan side, which is the sort of the biggest -- bulk of the business, probably around 70% of the insurance. We obviously look at the NHS activity, and what we're expecting to see there. But also with our pricing, we reprice our plans each year, we'll be predicting what loss ratios we're expecting to see and managing that pricing so that we can get a loss ratio around above the level that we see at the moment. So I think in terms of overall risk, we're fairly comfortable that we can see coming mentioned with an aging population. But again, as a reminder, all -- or majority of the people that we sell our products to are employees who are in work at the point of selling the policy. So definitely with different risks to selling the product to an overall population. [indiscernible].

Yes. So I suppose there's a kind of multifaceted question around access to face-to-face. How long does it take us to arrange those meetings and get access. So let me kick off a few of these points related to the question. I would say from my experience. I'm sure Sarah can back me up with several more years of experience in the business. But where we have interest in face-to-face will be those kind of blue-collar logistics depos, bus depots, trains and some instances of retail health and homes. The kind of businesses where, again, as I said at the beginning, there's no provision for short-term sick pay in the form of hospital convalescent, et cetera, beyond management or not even at management. So it's always extremely attractive to those kinds of businesses. Half of our direct Hapi customers probably in completely different sectors to that. So we'll have universities and we'll have white collar companies that might not need the type of insurances that we sell. I mean they're still brilliant benefits companies. And they are more than likely like in some examples for a digital offering. There will be some clients that we have and that might be the right sector, but they'll simply be too small to visit for an insurance face-to-face visit because we would say we generally need about 200 people on site to make the cost of that investment worthwhile. So I think that gives you an idea that really there's no resistance to clients with the rights and makeup of employees and the right kind of sectors. And in fact be an increasing demand for what we might be able to offer digitally if we can test all the elements of the proof concept out. How long does it take us to arrange those meetings, we can arrange those meetings relatively quickly. Once we signed a contract with the clients, will be immediately introduced to whoever manages site logistics. We've got an excellent planning team that accompanies the field team in-house division that are particularly tenacious at tracking down locations and employees. So that bit, we are very confident works very well. And Hywel and team will plan number of weeks, months, quarters, up to half a year in advance booked site visits. So from the point of signing a new contract, we've got plenty of time to be able to organize and getting into a client quickly. Main risks to the business, I mean we've got high levels of customer retention. We don't see that as a critical risk. We've got through the Hapi migration. So I'm particularly comfortable with that. I think we've done a huge amount of work over estimating claims in the last year as well as beyond that. So our business is beautifully predictable with high levels of ARR and predictable churn. So it will be a lot of the normal elements of the business. And of course, I think we've indicated that even with the changing budgetary requirements, there's still huge demand for what we can offer and in some cases, more so in terms of insurance. So for us, front of mind is ongoing business resilience, cybersecurity and all the things that would remain as key risks for many businesses. I hope I've answered all the sub points of the question. I'm just having a quick look. I think so, but I might just want to have another look through some message online directly. Another question, you set ambitious goal of GBP 100 million revenue, GBP 30 million in EBITDA, et cetera. The key milestones are investments planned over the next 1 to 2 years. I appreciate we shared the kind of 5-year goals there. We have a, I think, a particularly clear exit rate of number of employees. And customers for insurance that would be ideal to land this year, but is very critical for us moving into the next year, but we remain on track to achieve that. And really, it's about getting those partnerships signed up this year with and another one for consultancy that will also lead into Hapi sales. We feel pretty confident in our trajectory for this year as well. [indiscernible] I mean there's another sub point of the question from Michael. Apologies, I didn't quite answer it all that can others simply emulate your strategy of meeting in person, which you said is a key differentiate. So I think for employee benefits providers and it's setting up what we do in insurance, which has taken us many years to kind of fine-tune. It's quite difficult. Many employee benefits providers won't want to play in the same regulated space, but we are actively having conversations and responding to tenders to go to market together with our insurance offering. And actually, in the case of some of our employee benefits competitors, who serve very different sectors, particularly public sector, for example, and that's a brilliant result for us in a situation where it will take us a very long time to win the benefit platform at the end of the contract period. So much more preferable for us go-to-market and partner with insurance in those instances. And it's been exciting to respond to tenders with our own group cash plans and digital and face-to-face employee paid cash funds as well. So that's on the employee side. I think we have competitors on the insurance side that had face-to-face teams and retracted those through COVID and flipped to digital offerings. And we're fortunate that we're in a position to hold on to our face to face, which is -- remains a really key differentiator for us. And then a question around, as we become larger, do you have concerns around competition, who are your main competitors. I think we kind of precision the answer on the employee benefit side. I think we have a great offering for SME and an appetite to explore the SME market with a very practical solution fine-turned to Sage over many years, and it's a space that many of our competitors don't want to play in and haven't played in. So -- and going to market with insurance is key. And the exciting thing for us to test out the potential digital to supplement what we do face to face and see if we can take some of the space in that market.

Fantastic Paula, Sarah. If I may just jump back in there. And thank you for addressing all those questions from investors today. And of course, can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. But before we direct to investors to provide you with their feedback, which is particularly important to the company. Paula, could I please ask you for a few closing comments?

I think I'd just summarize by saying we're very, very happy with the results, and we're confident about the trajectory for our ambitions. And hopefully, we've demonstrated that we're already on track on a number of dimensions this year. So looking forward to sharing our half year results late in September.

Fantastic, Paula, Sarah.. Thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Personal Group Holdings PLC, we'd like to thank you for attending today's presentation, and good afternoon to you.