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Registered number:
For the Year Ended
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Principal Insurance Limited
Company Information
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Principal Insurance Limited
Contents
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Principal Insurance Limited
Strategic Report
For the Year Ended 31 October 2025
The directors present their Strategic Report for the year ended 31 October 2025.
Principal Insurance is an independent intermediary providing general insurance services for clients. It operates across the motor sector, including motorcycles, motorhomes, couriers, fleet, van and car insurance. Income is derived primarily from commission from the insurers as policies are placed; fees from clients upon inception, renewal, Mid-term adjustments ("MTA") or cancellation; and premium finance income in the form of overriders when policies are paid in instalments.
Despite very difficult market conditions resulting in multiple competitors struggling, the Company managed to improve its performance in comparison to the previous year.
Income has increased by 4% to £6.95m. Commission and fees were up slightly, as were overriders due from premium finance providers. Costs were also significantly higher with salaries being the main driving factor (10% higher). Other expenses were £29k higher due to an increased level of legal costs linked to various portfolio acquisition deals. Bad debts are a significant cost to the business also, which is commonplace for our sector - various issues such as fraud, cancellations and debtor failure contribute to the figure. During the year, the Company moved all of its Premium Finance arrangements from a "non-recourse" model, whereby the providers would be liable for any unpaid debts, to a "recourse" model. Despite this, bad debts actually decreased £38k in the current year to £760k. The resulting EBITDA for the business was £710k, a 15% increase on that of the prior year (£618k). Whilst this is behind budget, the results are ahead of the prior year and should be celebrated. On 31 October 2025, the Company acquired the book of Peart Performance Marque Limited (in administration). The Company is to handle the activity of this going forward. Following the year end, on 24 March 2026, the company's parent entity, Principal Group Holdings Limited, acquired the entire share capital of Europa Group Limited and Europa Underwriting Limited. These entities will form part of the group going forward.
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Principal Insurance Limited
Strategic Report (continued)
For the Year Ended 31 October 2025
The company has presented its most significant risks below:
Liquidity and cash flow risk It is important for the Company to manage its cash flows to enable payments to insurers, employees and other suppliers. All insurance monies pass through a specific bank account, and all commissions are extracted from here as they fall due, ensuring that all insurers will be paid promptly. The company also maintains a close relationship with its bank and keeps them informed of expected future cash flows. Debtors are managed carefully and chased where they fall overdue. The Company has a policy of writing off all debts greater than 60 days old. Concentration risk The last two years have seen a significant uplift in the motorhome insurance product, but it is predominantly based with one insurer, which increases exposure to price changes or restriction of underwriting footprint. Management are frequently discussing plans with the insurer in question to be able to best plan ahead for any impending changes. Competition risk The van insurance market is very competitive and the Company currently lacks any significant market differentiator allowing it to increase its market share. Management are currently considering options to address this issue. Regulatory risk The Company abides by the rules of the Financial Conduct Authority (FCA). Some months ago, the FCA started their review of the premium finance market with the aim to provide better value for customers. Management is aware that the FCA is actively monitoring the situation and may at some point want to impose restrictions on lending. Management is watching this closely and planning for potential restrictions.
This report was approved by the board and signed on its behalf.
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Principal Insurance Limited
Directors' Report
For the Year Ended 31 October 2025
The directors present their report and the financial statements for the year ended 31 October 2025.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £812,113 (2024 - £697,137).
No dividends were paid during the year (2024: £Nil). The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
Whilst 2024/2025 EBITDA increased, the overall budget has not been achieved. This was linked to a number of issues around main insurers, increased market competition and slower than expected development of digital trading.
To maintain sustainable growth and ensure 2026 numbers are achievable, we have budgeted based on 2025 actuals, with some assumptions regarding wages, deals in the pipeline and retention rates. As a result, we anticipate steady growth on income, EBITDA and profit in 2026.
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Principal Insurance Limited
Directors' Report (continued)
For the Year Ended 31 October 2025
On 24 November 2025, the board approved the grant of further EMI options over B Ordinary Shares in the parent company to selected employees under the company’s existing EMI share option plan. The options were granted over a total of 30,817 B Ordinary Shares of £0.001 each.
On 24 March 2026, the company's parent entity, Principal Group Holdings Limited, acquired the entire share capital of Europa Group Limited and Europa Underwriting Limited. These entities will form part of the group going forward.
The auditors, Hurst Accountants Limited, were appointed in the year and will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Principal Insurance Limited
Independent Auditors' Report to the Members of Principal Insurance Limited
We have audited the financial statements of Principal Insurance Limited (the 'Company') for the year ended 31 October 2025, which comprise the Statement of Income and Retained Earnings, the Analysis of Net Debt, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard 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.
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.
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 Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained 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 our 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 this other information, we are required to report that fact.
We have nothing to report in this regard.
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Principal Insurance Limited
Independent Auditors' Report to the Members of Principal Insurance Limited (continued)
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 the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the 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.
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Principal Insurance Limited
Independent Auditors' Report to the Members of Principal Insurance Limited (continued)
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 Auditors' 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, and the Financial Conduct Authority ("FCA") Regulations, or those which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Principal Insurance Limited
Independent Auditors' Report to the Members of Principal Insurance Limited (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments; • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
The comparative figures have not been audited, as no audit was required under the provisions of the Companies Act 2006.
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 Auditors' 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 opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
26 May 2026
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Principal Insurance Limited
Statement of Income and Retained Earnings
For the Year Ended 31 October 2025
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Principal Insurance Limited
Registered number: 07623634
Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 28 form part of these financial statements.
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Principal Insurance Limited
Statement of Cash Flows
For the Year Ended 31 October 2025
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Principal Insurance Limited
Analysis of Net Debt
For the Year Ended 31 October 2025
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
The company is limited by shares, incorporated in the United Kingdom. The company's registered office address is Citygate, 2 Cross Street, Sale, Cheshire, United Kingdom, M33 7JR.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has made a profit in the year of £812,113 and now has net assets of £3,764,803, including £2,719,072 due from its ultimate parent company.
The ultimate parent company has net liabilities of £631,176 (2024: £631,176) which includes £2,000,939 (2024: £2,943,939) owing to a shareholder. Management has received a letter of support from the shareholder confirming that this balance will not be recalled to a point which would cause the company to be unable to repay its debts as they fall due. As a result, it is appropriate to prepare these financial statements on a going concern basis.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
2.Accounting policies (continued)
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The most significant judgements and estimates affecting the Company's financial statements are outlined below: Debtor provisions Management regularly review the ageing of the Company's debtors and make appropriate provisions where recovery is considered doubtful. Most commonly, this arises from the default of, or cancellation by, policyholders who are paying via premium credit. The Company is able to make a partial reclaim from the insurer to reduce its liability to the Premium finance company in the event of such defaults. During the year, amounts of £782k (2024: £817k) were impaired based on actual defaults, as disclosed in note 12. Following a review of impairments of debtors held at the balance sheet date, management have deemed that further provisions to account for potential cancellations and defaults would be immaterial. Adjustment for effective dates, cancellations and cooling off periods Under FRS 102, income relating to insurance policies incepted should be recognised at the effective date the policy goes live, rather than the date the policy is taken out (which is how the Company's accounting system reports transactions, as required to enable insurers to be paid promptly). Following a comparison between inception and effective dates, management have deemed that such an adjustment is not necessary on the grounds of materiality. In some cases, policies are cancelled during the term of cover, and as premium finance is on a recourse agreement, there is a risk that some of this commission will be clawed back. Following a review of cancellations, management have deemed that no adjustment is necessary on the grounds of materiality. Under UK law, policyholders have 14 days to cancel a policy after it becomes effective. Following a review of such cancellations, management have deemed that such an adjustment is not necessary on the grounds of materiality. Provisions for payments due to insurers The company operates a delegated scheme with an insurance provider, whereby they must ensure an appropriate claims ratio is not breached. Should this occur, the Company would need to make a payment to the insurer. At the year end, a provision of £40k (2024: £36k) was recognised in these financial statements in relation to this delegated scheme. Deferred tax The company has significant taxable losses available to utilise in future years which would give rise to a deferred tax asset. As the group does not have full sight of the future outlook in the insurance market, the amount of deferred tax asset recognised is restricted to anticipated profits over the next two years. At the year end, deferred tax relating to losses carried forward totalled £948k (2024: £1,122k), of which £400k (2024: £268k) was recognised as a deferred tax asset.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
Page 20
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
Page 21
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
The company has potential deferred tax assets in respect of losses available to carry forward of £948k. Further details of deferred tax assets recognised and unrecognised are set out in Notes 3 and 18.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
Profit and loss account
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
The company is party to a Composite Guarantee and Trust Debenture dated 27 November 2018 in respect of loans provided by the ultimate shareholder. Under the debenture, the company, together with other group companies, has guaranteed the obligations due to the lender and has granted fixed and floating charges over substantially all of its assets and undertaking as security for those obligations.
At the year end, amounts outstanding in the parent company are £2,000,939 (2024: £2,943,939). It is not anticipated that this Guarantee will be called upon at this time and therefore no provision is deemed necessary.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £74,478 (2024: £67,410). Contributions totalling £12,911 (2024: £11,737) were payable to the fund at the balance sheet date and are included in creditors.
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Principal Insurance Limited
Notes to the Financial Statements
For the Year Ended 31 October 2025
On 24 March 2026, the company's parent entity, Principal Group Holdings Limited, acquired the entire share capital of Europa Group Limited and Europa Underwriting Limited. These entities will form part of the group going forward. The controlling party of Principal Group Holdings Limited as at the reporting date was G Squire by virtue of his 88% stake in the voting share capital of the parent company.
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