Asta Managing Agency Ltd 3123

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Syndicate 3123

Annual Report and Accounts for the year ended

31 December 2025

Contents

Directors and administration .................................................................................................. 1

Active Underwriter’s report .................................................................................................... 2

Managing Agent's report ....................................................................................................... 3

Statement of Managing Agent's responsibilities .................................................................... 9

Independent auditor’s report to the members of Syndicate 3123 ......................................... 10

Statement of profit or loss and other comprehensive income .............................................. 14

Statement of financial position ............................................................................................ 16

Statement of changes in Members' balances ...................................................................... 18

Statement of cash flows ...................................................................................................... 19

1. Basis of preparation ..................................................................................................... 20

2. Critical accounting estimates and judgements ............................................................. 20

3. Significant accounting policies ..................................................................................... 22

4. Analysis of underwriting result...................................................................................... 28

5. Technical provisions .................................................................................................... 31

6. Net operating expenses ............................................................................................... 32

7. Auditor’s remuneration ................................................................................................. 32

8. Key management personnel compensation ................................................................. 33

9. Staff numbers and costs .............................................................................................. 33

10. Investment return .................................................................................................... 33

11. Financial Investments .............................................................................................. 34

12. Debtors arising out of direct insurance operations ................................................... 37

13. Debtors arising out of reinsurance operations.......................................................... 37

14. Other debtors .......................................................................................................... 37

15. Creditors arising out of direct insurance operations ................................................. 37

16. Creditors arising out of reinsurance operations ........................................................ 38

17. Other creditors ......................................................................................................... 38

18. Cash and cash equivalents ...................................................................................... 38

19. Related parties ........................................................................................................ 39

20. Disclosure of interests ............................................................................................. 39

21. Funds at Lloyd's ...................................................................................................... 40

22. Off-balance sheet items ........................................................................................... 40

23. Risk management ................................................................................................... 40

24. Post balance sheet events ....................................................................................... 56

Directors and administration

Managing Agent

Asta Managing Agency Ltd (“Asta”)

Directors

P A Jardine (Chairman)*

C V Barley

S Bradbury

E M Catchpole*

L Edmonds (subject to regulatory approval)

S Fisher*

L Harfitt

D A Hopkins

S B Logue

L J M McMaster

A F J Neden*

S D Redmond*

Non-Executive Directors*

Managing Agent's registered office

5th Floor

20 Gracechurch Street

London

EC3V 0BG

Managing Agent's registered number

1918744

Active Underwriter

D O’Connell

Bankers and investment managers

Barclays

Royal Bank of Canada

Citibank

Northern Trust

Registered Auditor

KPMG LLP

Signing Actuary

KPMG LLP

Active Underwriter’s report

During 2025, s3123 has exceeded the original plan of GWP £440m to a final expected GWP

£589m. In part this was due to the fact that we had to submit our initial plan for 2025 YOA

before s3123 had even commenced underwriting in 2024 and therefore there was a high level

of uncertainty associated with the original plan. At that time, we underestimated the scale of

opportunity that existed (and continues to exist) as a result of having access to Lloyd’s paper.

Whilst the level of growth in 2025 has been significant, s3123 has been very deliberate in the

strategy of moving quickly to take advantage of opportunities in classes of business that

remain attractive from a rating perspective and complement the development of a diverse

portfolio. Conversely, for classes with more challenging conditions we have held firm and

reduced our planned income.

A key reason for the premium growth in 2025 has been the success of co-insuring alongside

the Fidelis Insurance Group. Being able to provide clients and brokers with additional capacity

and the flexibility of multiple balance sheets has proven to be advantageous to both entities.

S3123 has, as a result, built a diverse portfolio that will provide us with the required flexibility

and varied business lines to manage our performance through the cycle.

To date, the losses impacting 2025 YOA are limited and we have benefited from a relatively

benign CAT season. Hurricane Melissa was a reminder of the devastating force and

destruction that a CAT 5 Hurricane can deliver. S3123 is currently reserving gross USD 32m

within the D&F portfolio (split USD 1.4m YOA 2024 and the remainder to YOA 2025). It is also

worth noting that this nets to USD 15m. On an accounting basis there is an impact of new

business strain on the result and over time the strength of the underlying business will emerge

in the result.

Looking ahead to 2026, s3123 will be actively monitoring the market conditions so that strategy

can be adjusted accordingly. The diverse portfolio that we have established in 2025 will

provide significant advantages as we seek to plot our path through the cycle.

Managing Agent's report

The Syndicate's Managing Agent is a company registered in England and Wales. The

Directors of the Managing Agent present their report for the year ended 31 December 2025.

The financial statements herein have been prepared using the annual basis of accounting as

required by Statutory Instrument No 1950 of 2008, The Insurance Accounts Directive (Lloyd's

Syndicate and Aggregate Accounts) Regulations 2008 (“Lloyds Regulations 2008”).

Results

The result for calendar year 2025 is a profit of $1,179,087 (2024: loss of $4,496,515).

The Syndicate presents its results under FRS102, the Financial Reporting Standard applicable

in the UK and Republic of Ireland. In accordance with FRS102, the Syndicate has identified its

insurance contracts and accounted for them in accordance with FRS103 Insurance Contracts.

Principal activity and review of the business

The Syndicate’s principal activity is the underwriting of direct insurance and reinsurance

business in the Lloyd’s market.

A further review is included in the Active Underwriter’s report on page 2.

Gross written premium income by class of business for the calendar year was as follows:

2025

$’000

2024

$’000

Aviation and Space

19,502

9,027

Casualty

20,450

Credit

137,028

59,449

Cyber

17,124

Cyber Re and Product Recall

15,466

9,441

Marine and Energy

74,460

18,161

Political Risk

53,120

10,796

Political Violence

4,302

3,215

Property Reinsurance

109,429

13,869

Specialty Property

211,145

42,684

Specialty Reinsurance

57,856

719,882

166,642

Managing Agent’s report continued

The Syndicate's financial key performance indicators during the year were as follows:

2025

$’000

2024

$’000

Gross premiums written

719,882

166,642

Profit/(loss) for the financial year

1,180

(4,497)

Combined ratio*

101.3%

121.9%

*The combined ratio is the ratio of net claims incurred and net operating expenses to net

premiums earned in the calendar year. Lower ratios represent better performance.

The performance of the Syndicate has been assessed by measuring, as a percentage of

underwriting capacity, the 36-month forecasted result on a funded accounting basis for an

individual underwriting year of account (“YOA”). The return on capacity for each underwriting

year is shown below.

2025 YOA

Open

2024 YOA

Open

Capacity ($’000)

437,130

153,495

Forecast result ($’000)

70,828

8,227

Forecast return on capacity (%)

16.2%

5.4%

Principal risks and uncertainties

The Syndicate sets risk appetite annually, which is approved by the Agency as part of the

Syndicate’s business planning and Solvency Capital Requirement (“SCR”) process. The

Agency Risk Committee meets at least quarterly to oversee the risk management framework.

The Syndicate Board, which reports to the Agency Board, reviews the risk profile as reflected

in the risk register, and monitors performance against risk appetite using a series of key risk

tolerances. The principal risk and uncertainties facing the Syndicate are as follows:

Insurance risk

Insurance risk includes the risks that a policy will be written for too low a premium or provide

inappropriate cover (underwriting risk), that the frequency or severity of insured events will be

higher than expected (claims risk), or that estimates of claims subsequently prove to be

insufficient (reserving risk). The Syndicate Board and Underwriting Committee manages

insurance risk through challenge and oversight of the approved business plan, which sets out

Managing Agent’s report continued

targets for volumes, pricing, line sizes and retention by class of business. The Syndicate

Board then monitors performance against the business plan and the aggregation of risk

through exposure management reporting through the year. The Syndicate Board considers

any proposed underwriting that impacts the Syndicate’s Environmental, Social and

Governance (“ESG”) profile to ensure consistency with the agreed ESG approach. Reserve

adequacy is monitored through quarterly review by the Asta Actuarial team and the Reserving

Committee.

Credit risk

The key aspect of credit risk is reinsurance counterparty risk which is the risk of default by one

or more of the Syndicate’s reinsurers or intermediaries. The Syndicate’s policy is to use only

approved reinsurers, supported by collateralisation where required. The Agency Reinsurance

Security Committee sets approval and usage criteria, monitors reinsurer ratings and is required

to approve and oversee the application of the Reinsurer Approval policy. The Syndicate is also

exposed to credit risk, from its premium transactions through brokers. The receivables consist

of a large number of policyholders, spread across diverse industries and geographical areas.

Ongoing evaluation of credit risk is maintained by monitoring of aged debts and is reviewed

regularly by the Syndicate Board.

Market risk

Market risk exposure impacting the Syndicate relates to fluctuations in interest rates or

exchange rates and inflation. The Syndicate is exposed to foreign exchange movements as

a result of mismatches between the currencies in which assets and liabilities are denominated.

The Agency’s policy is to maintain received income or incurred expenditure in the core

currencies in which they were received or paid. Any surplus or deficit in a core currency would

be subject to review by the Syndicate Board.

Liquidity risk

This is the risk that the Syndicate will not be able to meet its liabilities as they fall due, owing

to a shortfall in cash or can meet obligations only at excessive cost. To mitigate this risk the

Syndicate Board reviews cash flow projections regularly and ensures that, where needed, the

Syndicate has liquidity facilities in place or has utilised the option of a cash call from Capital

providers.

The Syndicate has in place an Overdraft and Revolving Credit Facility with Barclays for £20m

and £50m.

Operational risk

This is the risk that errors caused by people, processes, systems and external events lead to

losses to the Syndicate. The Agency seeks to manage this risk through a robust operational

risk and control framework including detailed procedure manuals and a thorough training

programme. This is underpinned by a structured programme of testing of processes and

systems by internal audit, who serve as an independent line of assurance, reporting directly to

the Chair of the Agency Audit Committee. Business continuity and disaster recovery plans

are in place and are regularly updated and tested.

Managing Agent’s report continued

Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to

respond to regulatory change. The Agency is required to comply with the requirements of the

Financial Conduct Authority (FCA), Prudential Regulatory Authority (PRA) and Lloyd’s. Lloyd’s

requirements include those imposed on the Lloyd’s market by overseas regulators. The

Agency has a Compliance Director who manages a function that monitors business activity

and regulatory developments to assess any effects on both the Agency and the Syndicate.

The Syndicate has no appetite for failing to adhere to the requirements of the FCA Consumer

Duty regulations and continues its focus on ensuring that it is treating customers fairly. The

Syndicate manages and monitors consumer duty risk through a suite of risk indicators and

reporting metrics as part of its documented consumer duty risk framework. The consumer duty

risk framework is consistently applied across all Asta syndicates and is overseen by the

Conduct Oversight Group (COG), which is an Agency Board Committee that includes a non-

executive director as a member who fulfils the role of Consumer Duty Champion.

Group and strategic risk

Group Risk is the risk of contagion that arises from being associated with key stakeholders

and the impact that activities and events that occur within other connected or third parties has

on the business.

Strategic risk covers the risks faced by the Syndicate due to changes in underlying strategy of

the business or that of its key stakeholders (including strategic conflicts of interest).

Future developments

The Syndicate will continue to transact the current classes of general direct insurance and

reinsurance business. If opportunities arise to write new classes of business, these will be

investigated at the appropriate time.

The capacity for the 2026 underwriting year is $784.4m (2025 underwriting year: $437.1m).

Sustainability and climate risk

The Syndicate aligns to Asta’s Sustainability Risk Policy, which has been prepared to meet

sustainability-related regulatory expectations across all Asta entity jurisdictions, including

those set by the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA).

The policy is executed through a framework that is integrated within the wider enterprise risk

management framework, ensuring a proportionate response to material exposures arising

from sustainability-related risks. Asta’s Chief Risk Officer, who is a Board member, is

responsible for the Sustainability Risk Policy.

Asta monitors regulatory guidance and expectations on managing the risks and opportunities

arising from sustainability, including the PRA's Supervisory Statement 05/25 on climate risk

management.

The syndicate sets out its strategic ambitions with regards sustainability as part of the annual

business planning exercise and captures this as a standalone set of policy principles, which

are then cascaded throughout the underwriting control framework.

Managing Agent’s report continued

Emerging risks

An emerging risk or opportunity is defined as “a developing issue, triggered externally, with

the potential to have a significant business impact but which may not be sufficiently understood

or accounted for”. The business impact in this case could represent a downside risk or an

upside opportunity. Emerging risks and opportunities include:

• Syndicate insurable risks, as areas of potential future losses or new product offerings;

• Those risks that may affect a syndicate’s ability to carry out normal business operations

and/or lead to unplanned significant costs/income;

• Both new risks and those which are re-emerging in a new context.

The Agency and Syndicate continue to monitor the impact of emerging risks on the Syndicate’s

business, taking into account their impacts on the strategic direction of the Syndicate. Asta

has established a Horizon Scanning Policy, which sets out the varying methods and practices

available for collecting emerging risk and opportunity data, performing deep dive reviews, and

ongoing engagement.

Specific areas of focus over the external environment across the year at Syndicate and Asta

level include:

• Geopolitical risk: The geopolitical landscape continues to remain volatile due to

regional military conflicts and fluctuating trade wars, which have impacted market

stability and supply chain vulnerability.

• Physical Climate Change: Insurance losses from natural catastrophes continue to set

records as they exceed $100bn for the sixth continuous year, whilst insurance

protection gaps continue to grow in most jurisdictions.

• AI Adoption and Novel Technologies: AI adoption continues at a pace that challenges

regulatory oversight, technical capabilities and governance frameworks.

Directors

Details of the Directors of the Managing Agent that were serving at the date of signing these

financial statements are provided on page 1. Changes to Directors from the last report were

as follows:

R P Barke Resigned 30 June 2025

S B Logue Appointed 26 August 2025

D B Jones Resigned 31 December 2025

K Shah Resigned 31 December 2025

D A Hopkins Appointed 9 February 2026

L Edmonds Subject to regulatory approval

Managing Agent’s report continued

Disclosure of information to the auditor

So far as each person who was a Director of the Managing Agent at the date of approving the

report is aware, there is no relevant audit information, being information needed by the

Syndicate auditor in connection with the auditor's report, of which the auditor is unaware.

Having made enquiries of fellow Directors of the Agency and the Syndicate's auditors, each

Director has taken all the steps that he or she ought to have taken as a Director to become

aware of any relevant audit information and to establish that the Syndicate's auditor is aware

of that information.

Auditor

The Managing Agent intends to reappoint KPMG LLP as the Syndicate’s auditor.

Syndicate Annual General Meeting

In accordance with the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the

Managing Agent does not propose holding an annual meeting this year; objections to this

proposal or the intention to reappoint the auditors for a further 12 months can be made by

Syndicate members within 21 days of this notice.

On behalf of the Board

S B Logue

Director

18 February 2026

Statement of Managing Agent's responsibilities

The Managing Agent is responsible for preparing the financial statements in accordance with

applicable law and regulations.

The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations

2008 require the managing agent to prepare financial statements at 31 December each year

in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards and applicable law) including FRS 102 the Financial Reporting

Standard applicable in the UK and Republic of Ireland. The financial statements are required

by law to give a true and fair view of the state of affairs of the Syndicate as at that date and of

its profit or loss for that year.

In preparing the financial statements, the managing agent is required to:

• select suitable accounting policies and then apply them consistently subject to changes

arising on the adoption of new accounting standards in the year;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable Accounting Standards have been followed, subject to any

material departures disclosed and explained in the notes to the Syndicate accounts;

and

• prepare the Syndicate Accounts on the basis that the Syndicate will continue to write

future business unless it is inappropriate to presume that the Syndicate will do so.

The Managing Agent is responsible for keeping adequate accounting records which disclose

with reasonable accuracy at any time the financial position of the Syndicate and enable it to

comply with the Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts)

Regulations 2008. It is also responsible for safeguarding the assets of the Syndicate and

hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The Managing Agent is responsible for the maintenance and integrity of the corporate and

financial information included on the business' website. Legislation in the United Kingdom

governing the preparation and dissemination of financial statements may differ from legislation

in other jurisdictions.

The Managing Agent is responsible for the preparation and review of the iXBRL tagging that

has been applied to the Syndicate Accounts in accordance with the instructions issued by

Lloyd’s, including designing, implementing and maintaining systems, processes and internal

controls to result in tagging that is free from material non-compliance with the instructions,

whether due to fraud or error.

We confirm that to the best of our knowledge the Syndicate Accounts, including the iXBRL

tagging applied to these accounts, comply with the requirements of the Lloyd’s Syndicate

Accounts Instructions version 3.1 as modified by the Frequently Asked Questions version 1.1

issued by Lloyd’s.

On behalf of the Board

S B Logue

Director

18 February 2026

Independent auditor’s report to the members of Syndicate 3123

Opinion

We have audited the Syndicate Annual Accounts of Syndicate 3123 (“the Syndicate”) for the year ended

31 December 2025 which comprise the Statement of profit or loss and other comprehensive income,

Statement of financial position, Statement of changes in members’ balances, Statement of cash flows,

and related notes, including the accounting policies in note 3.

In our opinion the Syndicate Annual Accounts:

• give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2025 and of its

profit for the year then ended;

• have been properly prepared in accordance with UK accounting standards, including FRS 102 The

Financial Reporting Standard applicable in the UK and Republic of Ireland; and

• have been prepared in accordance with the requirements of the Insurance Accounts Directive

(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and Sections 1 and 5 of the

Syndicate Accounts Instructions Version 3.1 issued by the Council of Lloyd’s, as modified by the

Syndicate Accounts Frequently Asked Questions Version 1.1 dated 13 February 2026 issued by

the Council of Lloyd’s (together “the Syndicate Accounts Instructions")

Basis for opinion

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

applicable law, and, under the terms of our engagement letter dated 30 July 2025, the Syndicate

Account Instructions. Our responsibilities are described below. We have fulfilled our ethical

responsibilities under, and are independent of the Syndicate in accordance with, UK ethical

requirements including the FRC Ethical Standard as applied to other entities of public interest. We

believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The directors of the Managing Agent (“the Directors”) have prepared the Syndicate Annual Accounts on

the going concern basis as they do not intend to cease underwriting or to cease its operations, and as

they have concluded that the Syndicate’s financial position means that this is realistic. They have also

concluded that there are no material uncertainties that could have cast significant doubt over its ability

to continue as a going concern for at least a year from the date of approval of the Syndicate Annual

Accounts (“the going concern period”).

In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s

business model and analysed how those risks might affect the Syndicate’s financial resources or ability

to continue operations over the going concern period, including inspecting correspondence with the

Council of Lloyd’s to assess whether there were any known impediments to establishing a further year

of account.

Our conclusions based on this work:

• we consider that the Directors’ use of the going concern basis of accounting in the preparation of

the Syndicate annual accounts is appropriate; and

• we have not identified, and concur with the Directors’ assessment that there is not, a material

uncertainty related to events or conditions that, individually or collectively, may cast significant doubt

on the Syndicate’s ability to continue as a going concern for the going concern period.

However, as we cannot predict all future events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were reasonable at the time they were made, the

above conclusions are not a guarantee that the Syndicate will continue in operation.

Independent auditor’s report continued

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions

that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud.

Our risk assessment procedures included:

• Enquiring of directors and other management and inspection of policy documentation as to the

Syndicate and Managing Agent’s high-level policies and procedures to prevent and detect fraud,

including the internal audit function, and the Syndicate and Managing Agent’s channel for

“whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

• Reading Board, audit committee, and other relevant meeting minutes.

• Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications

of fraud throughout the audit.

As required by auditing standards, and taking into account possible pressures to meet profit targets, we

perform procedures to address the risk of management override of controls, in particular:

• the risk that management may be in a position to make inappropriate accounting entries; and

• the risk of bias in accounting estimates such as valuation of claims outstanding.

Valuation of these liabilities, specifically in respect of the gross incurred but not reported component, is

highly judgmental as it requires a number of assumptions to be made such as initial expected loss ratios

and claim development patterns which carry high estimation uncertainty and are difficult to corroborate

creating opportunity for management to commit fraud.

On this audit we do not believe there is a fraud risk related to revenue recognition because of the limited

estimation involved in estimating premium income.

We did not identify any additional fraud risks.

We performed procedures including:

• Identifying journal entries and other adjustments to test based on risk criteria and comparing the

identified entries to supporting documentation. These included unusual combinations of debits and

credits to IBNR, journal entries posted with a debit or credit to a seldom-used account entries posted

on weekends and bank holidays and entries posted on bank holidays.

• Assessing whether the judgements made in making accounting estimates are indicative of a

potential bias.

Identifying and responding to risks of material misstatement related to compliance with laws and

regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect

on the Syndicate Annual Accounts from our general commercial and sector experience and through

discussion with the directors and other management (as required by auditing standards), and from

inspection of the Syndicate and Managing Agent’s regulatory and legal correspondence and discussed

with the directors and other management the policies and procedures regarding compliance with laws

and regulations.

As the Syndicate is regulated, our assessment of risks involved gaining an understanding of the control

environment including the entity’s procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any

indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the Syndicate annual accounts varies considerably.

Independent auditor’s report continued

Firstly, the Syndicate is subject to laws and regulations that directly affect the Syndicate annual accounts

including financial reporting legislation (such as the Insurance Accounts Directive (Lloyd’s Syndicate

and Aggregate Accounts) Regulations 2008, and the Lloyd’s Syndicate Accounts Instructions), and we

assessed the extent of compliance with these laws and regulations as part of our procedures on the

related Annual return items.

Secondly, the Syndicate is subject to many other laws and regulations where the consequences of

non-compliance could have a material effect on the annual accounts or the Annual return, for instance

through the imposition of fines or litigation or the loss of the Syndicate’s license to operate. We identified

the following areas as those most likely to have such an effect: regulatory capital and liquidity, health

and safety, data protection laws, anti-bribery, employment law, , recognising the financial and regulated

nature of the Syndicate’s activities. Auditing standards limit the required audit procedures to identify

non-compliance with these laws and regulations to enquiry of the directors and other management and

inspection of regulatory and legal correspondences, if any. Therefore, if a breach of operational

regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that

breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected

some material misstatements in the Annual Return, even though we have properly planned and

performed our audit in accordance with auditing standards. For example, the further removed non-

compliance with laws and regulations is from the events and transactions reflected in the Annual Return,

the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

Our audit procedures are designed to detect material misstatement. We are not responsible for

preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and

regulations.

Other information – Report of the Directors of the Managing Agent

The Directors are responsible for the Report of the Directors of the Managing Agent. Our opinion on the

Syndicate Annual Accounts does not cover that report and, accordingly, in this audit report we do not

express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the Report of the Directors of the Managing Agent and, in doing so, consider

whether, based on our Syndicate annual accounts audit work, the information therein is materially

misstated or inconsistent with the Syndicate annual accounts or our audit knowledge. Based solely on

that work:

• we have not identified material misstatements in the Report of the Directors of the Managing Agent;

• in our opinion the information given in the Report of the Directors of the Managing Agent is

consistent with the Syndicate Annual Accounts; and

• in our opinion the Report of the Directors of the Managing Agent has been prepared in accordance

with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate

Accounts) Regulations 2008.

Matters on which we are required to report by exception

Under the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008,

we are required to report to you if, in our opinion:

• adequate accounting records have not been kept on behalf of the Syndicate; or

• the Syndicate annual accounts are not in agreement with the accounting records; or

• certain disclosures of Managing Agent’s emoluments specified by law are not made; or

Independent auditor’s report continued

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

We have nothing to report in these respects.

Responsibilities of the Directors of the Managing Agent

As explained more fully in their statement set out on page 9, the Directors of the Managing Agent are

responsible for: the preparation of the Syndicate Annual Accounts in accordance with the requirements

of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and

the Syndicate Accounts Instructions, and for being satisfied that they give a true and fair view; such

internal control as they determine is necessary to enable the preparation of Syndicate Annual Report

and Accounts that are free from material misstatement, whether due to fraud or error; assessing the

Syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern; and using the going concern basis of accounting unless they either intend to cease operations,

or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the Syndicate Annual Report and

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

our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not

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 aggregate, they could reasonably be expected to influence the economic decisions

of users taken on the basis of the Syndicate annual accounts.

A fuller description of our responsibilities is provided on the FRC’s website at

www.frc.org.uk/auditorsresponsibilities.

The Directors of the Managing Agent are required, under the Syndicate Accounts Instructions, to include

these financial statements within a document to which XBRL tagging has been applied. This auditor’s

report provides no assurance over whether the XBRL tagged document has been prepared in

accordance with those requirements.

The purpose of our audit work and to whom we owe our responsibilities

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

Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the terms of our

engagement letter with the Managing Agent. Our audit work has been undertaken so that we might state

to the Syndicate’s members those matters we are required to state to them in an auditor’s report, and

the further matters we are required to state to them in accordance with the terms agreed with the

Managing Agent, and for no other purpose. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the Syndicate and the Syndicate’s members, as a body, for

our audit work, for this report, or for the opinions we have formed.

Dan Wright (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

1 St Peter’s Square

Manchester

M2 3AE

18 February 2026

Statement of profit or loss and other comprehensive income

Technical account – general business

For the year ended 31 December 2025

Notes

2025

$’000

2024

$’000

Gross premiums written

719,882

166,642

Outward reinsurance premiums

(195,058)

(35,609)

Premiums written, net of reinsurance

524,824

131,033

Changes in unearned premium

Change in the gross provision for unearned premiums

(313,317)

(135,051)

Change in the provision for unearned premiums

reinsurers’ share

69,692

24,056

Net change in provisions for unearned premiums

(243,625)

(110,995)

Earned premiums, net of reinsurance

281,199

20,038

Allocated investment return transferred from the

non-technical account

907

Other technical income, net of reinsurance

Claims paid

Gross amount

(21,500)

(152)

Reinsurers’ share

1,119

Net claims paid

(20,381)

(152)

Changes in the provision for claims

Gross amount

(182,753)

(12,302)

Reinsurers’ share

55,449

1,834

Net change in provisions for claims

(127,304)

(10,468)

Claims incurred, net of reinsurance

(147,685)

(10,620)

Net operating expenses

(137,240)

(13,808)

Balance on the technical account – general

business

(2,819)

(4,372)

All the amounts above are in respect of continuing operations.

The notes on pages 20 to 56 form part of these financial statements.

Statement of profit or loss and other comprehensive income continued

Non-technical account – general business

For the year ended 31 December 2025

	Notes	2025 $’000	2024 $’000
Balance on the technical account – general business		(2,819)	(4,372)
Investment income		614	18
Realised gains/(losses) on investments		-	-
Unrealised gains/(losses) on investments		293	-
Investment expenses and charges		-	-
Total investment return		907	18
Allocated investment return transferred to the general business technical account		(907)	(18)
Gain/(loss) on foreign exchange		3,999	(125)
Profit/(loss) for the financial year		1,180	(4,497)
Other comprehensive income – currency translation gains/(losses)		-	-
Total comprehensive income/(loss) for the financial year		1,180	(4,497)

All the amounts above are in respect of continuing operations.

The notes on pages 20 to 56 form part of these financial statements.

Statement of financial position

As at 31 December 2025

	Notes	2025 $’000	2024 $’000
Assets
Investments
Financial investments	11	101,417	3,625
Deposits with ceding undertakings		-	-
		101,417	3,625
Reinsurers' share of technical provisions
Provision for unearned premiums	5	93,708	24,016
Claims outstanding	5	57,501	1,831
		151,209	25,847
Debtors
Debtors arising out of direct insurance operations	12	145,871	25,870
Debtors arising out of reinsurance operations	13	202,795	72,372
Other debtors	14	17,084	5,333
		365,750	103,575
Other assets
Cash at bank and in hand		33,512	335
Other		7,161	129
		40,673	464
Prepayments and accrued income
Deferred acquisition costs	5	139,176	42,686
Other prepayments and accrued income		1,116	1,289
		140,292	43,975
Total assets		799,341	177,486

The notes on pages 20 to 56 form part of these financial statements.

Statement of financial position continued

As at 31 December 2025

	Notes	2025 $’000	2024 $’000
Members’ balance and liabilities
Capital and reserves
Members’ balances		(4,506)	(4,497)
Total Capital and Reserves		(4,506)	(4,497)
Technical provisions
Provision for unearned premiums	5	456,819	133,172
Claims outstanding	5	195,844	12,262
		652,663	145,434
Creditors
Creditors arising out of direct insurance operations	15	380	-
Creditors arising out of reinsurance operations	16	135,380	27,007
Amounts owed to credit institutions		-	5,313
Other creditors including taxation and social security	17	-	-
		135,760	32,320
Accruals and deferred income		15,424	4,229
Total liabilities		803,847	181,983
Total liabilities, capital and reserves		799,341	177,486

The notes on pages 20 to 56 form part of these financial statements.

The financial statements on pages 14 to 56 were approved by Board of Directors on 17

February 2026 and were signed on its behalf by:

S B Logue

Director

18 February 2026

Statement of changes in Members' balances

For the year ended 31 December 2025

2025

$’000

2024

$’000

Members’ balances brought forward at 1 January

(4,497)

Total comprehensive income/(loss) for the year

1,180

(4,497)

Payments of profit to members’ personal reserve funds

Losses collected on closure of underwriting year

Cash calls on open underwriting years

Members agent fees

(1,189)

Net movement on Funds In Syndicate

Other

Members’ balances carried forward at 31 December

(4,506)

(4,497)

Statement of cash flows

For the year ended 31 December 2025

Notes

Year ended

31 December

2025

$’000

Year ended

31 December

2024

$’000

Cash flows from operating activities

Profit/(loss) for the financial year

1,180

(4,497)

Increase/(decrease) in gross technical

provisions

507,229

145,434

(Increase)/decrease in reinsurers’ share of

technical provisions

(125,362)

(25,847)

(Increase)/decrease in debtors

(262,175)

(103,575)

Increase/(decrease) in creditors

108,753

27,007

Increase/decrease in deposits received from

reinsurers

Movement in other assets/liabilities

(92,154)

(39,895)

Investment return

(907)

(18)

Foreign exchange

(121)

Net cash flows from operating activities

136,443

(1,371)

Cash flows from investing activities

Purchase of equity and debt instruments

Sale of equity and debt instruments

Investment income received

907

Other

Net cash flows from investing activities

907

Cash flows from financing activities

Distribution of profit

Collection of losses (on closed underwriting

year)

Open Year Cash calls made

Net movement of Funds In Syndicate

Other

(1,189)

Net cash flows from financing activities

(1,189)

Net increase/(decrease) in cash and cash

equivalents

136,161

(1,353)

Cash and cash equivalents at the beginning of

the year

(1,353)

Foreign exchange on cash and cash equivalents

121

Cash and cash equivalents at the end of the

year

134,929

(1,353)

Notes to the financial statements

1. Basis of preparation

Statement of compliance

The financial statements have been prepared in accordance with The Insurance Accounts

Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008, applicable

Accounting Standards in the United Kingdom and the Republic of Ireland, including Financial

Reporting Standard 102 (FRS 102), Financial Reporting Standard 103 (FRS 103) in relation

to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions Version 3.1 as

modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.

The financial statements have been prepared on the historical cost basis, with the exception

of financial assets which are measured at fair value through the profit and loss account.

The financial statements are presented in USD, the functional currency of the Syndicate is

USD. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

Going Concern

The Directors of the Managing Agent have assessed the Syndicate’s ability to continue as a

going concern. As part of this assessment, the Directors have considered cash forecasts, the

availability of financial resources, consistency of loss ratios, credit worthiness of reinsurers,

capital support for the existing underwriting years, business plans for future underwriting years

and availability of future capital support. Following this assessment, the Directors consider it

appropriate to adopt the going concern basis in preparing the annual report and financial

statements.

2. Critical accounting estimates and judgements

In preparing these financial statements, the Directors of the Managing Agent have made

judgements, estimates and assumptions that affect the application of the Syndicate’s

accounting policies and the reported amounts of assets, liabilities, income and expenses.

The following critical accounting estimates have been made in applying the Syndicate’s

accounting policies:

• Valuation of claims reserves

The measurement of the provision for claims outstanding involves judgements and

assumptions about the future that have a significant effect on the value recognised in

the financial statements.

The provision for claims outstanding comprises the estimated cost of settling all claims

incurred but unpaid at the balance sheet date, whether reported or not. This is a

judgemental and complex area due to the subjectivity inherent in estimating the impact

of claims events that have occurred but for which the eventual outcome remains

uncertain.

Critical accounting estimates and judgements

Case estimates are generally set by skilled claims technicians applying their

experience and knowledge to the circumstances of individual claims. Critical

judgement is applied when estimating the value of amounts that should be provided for

claims that have been incurred at the reporting date but have not yet been reported

(IBNR) to the Syndicate. This is a source of significant estimation uncertainty.

The ultimate cost of outstanding claims is estimated using a range of techniques

including actuarial and statistical projections, benchmarking, case by case review and

judgement. Statistical techniques assume that past claims development experience

can be used as a basis to project ultimate claims costs. Typical methods employed

include, but are not limited to, the chain ladder method and the Bornhuetter-Ferguson

method, whilst plan and pricing loss ratios are also considered.

The reserving process will disaggregate the insured risks into reserving classes – these

are collections of risks of a similar profile. Each reserving class will be assessed

separately, and corresponding claims development patterns will be selected as bases

against which to forecast expected claims. Judgement is used to assess the extent to

which past trends may not apply in the future. When selecting historic data to use for

claims forecasting purposes, the suitability and reliability of the dataset is considered.

A dataset that most closely resembles the expected risk profile of a given reserving

class will be selected. The benchmark data provided by Lloyd’s is generally used as

reserving development patterns, but these can be substituted by or blended with

additional data, providing that this additional data has an established track record and

is relevant.

Whilst the Directors consider that the claims reserves are fairly stated based on the

information currently available to them, the ultimate liability will vary as a result of

subsequent information and events. Sensitivities relating to this critical judgement have

been assessed in further detail in note 23.

• Estimated premium income (“EPI”)

For the majority of assumed (inwards) reinsurance policies, EPI is initially used as the

basis for reporting gross premiums written. EPI is a measure of expected premium

income over the life of a policy. These estimates, typically supplied by the cedent, are

judgemental and could result in misstatements of revenue recorded in the financial

statements.

• Pipeline premium

Pipeline premium relates to premium that has likely been written as at the report date,

but due to reporting delays through the distribution chain, the premium has not yet

been reported to the Syndicate. Reasons for the reporting delay typically revolve

around a natural lag in receiving the premium bordereaux from brokers or coverholders

– bordereaux are generally produced monthly or quarterly in arrears. Pipeline premium

is included within Gross Premiums Written on the statement of profit of loss.

There is significant uncertainty when estimating pipeline premium. Estimates are

frequently based upon information provided by the business producers, or sometimes

a statistical approach is adopted based on past experience. Given that pipeline

premium relates to hypothetical policies that have been bound just before the balance

sheet date, the vast majority of this premium is usually unearned.

3. Significant accounting policies

The following principal accounting policies have been applied consistently in dealing with items

which are considered material in relation to the Syndicate’s financial statements.

Gross premiums

Gross written premiums comprise the total premiums receivable for the whole period of cover

provided by the contracts entered into during the reporting period, regardless of whether these

are wholly due for payment in the reporting period, together with any adjustments arising in

the reporting period to such premiums receivable in respect of business written in prior

reporting periods. They are recognised on the date on which the policy commences. This is

applicable to both direct premium and assured (inwards reinsurance) premium. Gross written

premiums are stated gross of brokerage payable to intermediaries, and exclude taxes and

duties levied on the policyholder.

Estimated premium income in respect of facility contracts, for example binding authorities and

lines slips, are deemed to be written in a manner that reflects the expected profile of the

underlying business which has been written.

Ceded reinsurance premiums

Reinsurance written premiums comprise the total premiums payable for the whole cover

provided by contracts entered into the period, including portfolio premiums payable, and are

recognised on the date on which the policy incepts. Premiums include any adjustments arising

in the accounting period in respect of reinsurance contracts incepting in prior accounting

periods. They are recognised on the date on which the policy commences.

Provisions for unearned premiums

Unearned premiums are those proportions of premiums written up to the reporting date that

relate to periods of risk after the reporting date. In respect of general insurance business,

written premiums are recognised as earned over the period of the policy on a time

apportionment basis having regard where appropriate, to the incidence of risk. The proportion

attributable to subsequent periods is deferred as a provision for unearned premiums.

Unearned reinsurance premiums are those proportions of ceded premiums written up to the

reporting date that relate to periods of risk after the reporting date. Ceded reinsurance

premiums are earned on the same basis as the inwards business being protected.

Claims incurred

Claims incurred comprise claims and claims handling expenses (both internal and external)

paid in the year and the movement in provision for outstanding claims and settlement

expenses processed in the year. The provision for claims comprises amounts set aside for

claims notified and claims incurred, but not yet reported (IBNR). The Syndicate does not

discount its liability for outstanding claims.

The amount included in respect of IBNR is based on statistical techniques of estimation applied

by actuaries. These techniques generally involve projecting from past experience of the

development of claims over time to form a view of the likely ultimate claims to be experienced,

having regard to variations in the business accepted and the underlying terms and conditions.

The provision for claims also includes amounts in respect of internal and external claims

handling costs. For the most recent years, where a high degree of volatility arises from

projections, estimates may be based in part on output from rating and other models of the

business accepted and assessments of underwriting conditions. An element of IBNR can also

relate to specific large losses.

Significant accounting policies continued

The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding

claims and projections for IBNR, net of estimated irrecoverable amounts, having regard to the

reinsurance programme in place for the class of business and the claims experience for the

year. The Syndicate uses a number of statistical techniques to assist in making these

estimates where relevant.

Accordingly, the two most critical assumptions as regards claims provisions are that the past

is a reasonable predictor of the likely level of claims development and that the rating and other

models used for current business are fair reflections of the likely level of ultimate claims to be

incurred.

The Directors consider that the provisions for gross claims and related reinsurance recoveries

are fairly stated on the basis of the information currently available to them. However, ultimate

liability will vary as a result of subsequent information and events and this may result in

significant adjustments to the amounts provided.

Adjustments to the amounts of claims provisions established in prior years are reflected in the

financial statements for the period in which the adjustments are made. The methods used,

and the estimates made, are reviewed regularly.

Unexpired risks

A provision for unexpired risks is made where claims and related expenses are likely to arise

after the end of the financial period in respect of contracts concluded before that date, are

expected to exceed the unearned premiums and premiums receivable under these contracts,

after the deduction of any acquisition costs deferred.

The provision for unexpired risks is calculated separately by reference to classes of business

which are managed together.

As at 31 December 2025, the Syndicate had a nil net unexpired risk provision, (2024: nil).

Reinsurance assets

The Syndicate cedes insurance risk in the normal course of business. Reinsurance assets

represent balances due from reinsurance companies. Amounts recoverable from reinsurers

are estimated in a manner consistent with the outstanding claims provision including IBNR or

settled claims associated with the reinsurer's policies and are in accordance with the related

reinsurance contract.

Reinsurance assets are reviewed for impairment at each reporting date, or more frequently if

an indication of impairment arises during the reporting year. Impairment occurs when there is

objective evidence as a result of an event that occurred after initial recognition of the

reinsurance asset that the Syndicate may not receive all outstanding amounts due under the

terms of the contract and the event has a reliably measurable impact on the amounts that the

Syndicate will receive from the reinsurer. The impairment loss is recorded in the statement of

profit or loss.

Gains or losses on buying reinsurance are recognised in the statement of profit or loss

immediately at the date of purchase and are not amortised.

Ceded reinsurance arrangements do not relieve the Syndicate from its obligations to

policyholders.

Significant accounting policies continued

Acquisition costs

Acquisition costs comprise costs arising from the conclusion of insurance contracts, such as

intermediary brokerage and commissions. It is not the Syndicate’s policy to reallocate a portion

of indirect costs, such as the advertising costs or the administrative expenses connected with

the processing of proposals and the issuing of policies, to acquisition costs.

The deferred acquisition cost asset represents the proportion of acquisition costs

corresponding to the proportion of gross premiums written that is unearned at the balance

sheet date. Deferred acquisition costs are amortised over the period in which the related

premiums are earned.

Foreign currencies

Transactions denominated in currencies other than the functional currency are initially

recorded in the functional currency at the exchange rate ruling at the date of the transactions.

Monetary assets and liabilities (which include all assets and liabilities arising from insurance

contracts including unearned premiums and deferred acquisition costs) denominated in foreign

currencies are retranslated into the functional currency at the exchange rate ruling on the

reporting date.

Foreign exchange differences are recorded in the non-technical account.

The following currency exchange rates have been used for principal foreign currency

transactions:

2025

2024

Start of

Period Rate

End of

Period Rate

Average

Rate

Start of

Period Rate

End of

Period Rate

Average

Rate

GBP

0.80

0.74

0.76

0.79

0.80

0.78

USD

1.00

CAD

1.44

1.36

1.39

1.32

1.44

1.37

EUR

0.97

0.85

0.89

0.91

0.97

0.92

AUD

1.62

1.50

1.55

1.47

1.62

1.52

JPY

157.52

156.16

149.42

141.54

157.52

151.20

Financial assets and liabilities

In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement

provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use

in the UK).

The accounting classification of financial assets and liabilities determines the way in which

they are measured and changes in those values are presented in the statement of profit or

loss and other comprehensive income. Financial assets and liabilities are classified on their

initial recognition.

The initial classification of a financial instrument shall take into account contractual terms

including those relating to future variations. Once the classification of a financial instrument is

Significant accounting policies continued

determined at initial recognition, reassessment is only required subsequently when there has

been a modification of contractual terms that is relevant to an assessment of the classification.

Financial assets and financial liabilities at fair value through profit and loss comprise financial

assets and financial liabilities held for trading and those designated as such on initial

recognition. Investments in shares and other variable yield securities, units in unit trusts, and

debt and other fixed income securities are designated as at fair value through profit or loss on

initial recognition, as they are managed on a fair value basis in accordance with the

Syndicate’s investment strategy. Other financial assets, principally certain debt and other fixed

income securities are classified as available for sale.

Deposits with credit institutions, debtors, and accrued interest are classified as loans and

receivables.

Financial instruments are recognised when the Syndicate becomes a party to the contractual

provisions of the instrument. Financial assets are derecognised if the Syndicate’s contractual

rights to the cash flows from the financial assets expire or if the Syndicate transfers the

financial asset to another party without retaining control of substantially all risks and rewards

of the asset. A financial liability is derecognised when its contractual obligations are

discharged, cancelled or expired.

Regular way purchases and sales of financial assets are recognised and derecognised, as

applicable, on the trade date, i.e., the date that the Syndicate commits itself to purchase or sell

the asset.

A financial asset or financial liability is measured initially at fair value plus, for a financial asset

or financial liability not at fair value through profit or loss, transaction costs that are directly

attributable to its acquisition or issue.

Financial assets at fair value through profit or loss are measured at fair value with fair value

changes recognised immediately in profit or loss. Net gains or net losses on financial assets

measured at fair value through profit or loss includes foreign exchange gains/losses arising on

their translation to the functional currency but excludes interest and dividend income.

Financial assets classified as available for sale are initially recognised at fair value, which

typically equates to the cost, plus transaction costs directly attributable to its acquisition. After

initial measurement, these assets are subsequently measured at fair value. Interest earned

whilst holding available for sale financial assets is reported as interest income. Impairment

losses and foreign exchange gains or losses are reported in profit or loss. Other fair value

changes are recognised in other comprehensive income. Any gain or loss recognised in OCI

will be recycled to profit and loss on derecognition of the asset.

Loans and receivables and non-derivative financial liabilities are measured at amortised cost

using the effective interest method, except Syndicate Loans to the Central Fund which are

measured at fair value through profit or loss.

Objective evidence that financial assets are impaired includes observable data that comes to

the attention of the Syndicate about any significant financial difficulty of the issuer, or significant

changes in the technological, market, economic or legal environment in which the issuer

operates.

Impairment losses on available for sale financial assets are recognised by reclassifying the

losses accumulated in other comprehensive income to profit or loss. The net cumulative loss

Significant accounting policies continued

that is reclassified from other comprehensive income to profit or loss is the difference between

the acquisition cost, net of any principal repayment, and the current fair value, less any

impairment loss recognised previously in profit or loss. If, in a subsequent period, the fair value

of an impaired available for sale debt security increases and the increase can be related

objectively to an event occurring after the impairment loss was recognised, the impairment

loss is reversed through profit or loss. Otherwise it is reversed through the statement of

comprehensive income.

Financial assets and financial liabilities are offset, and the net amount presented in the balance

sheet when, and only when, the Syndicate currently has a legal right to set off the amounts

and intends either to settle on a net basis or to realise the asset and settle the liability

simultaneously.

Investment return

Investment return comprises investment income and movements in unrealised gains and

losses on financial instruments at fair value through profit or loss, less investment management

expenses, interest expense, realised losses and impairment losses. Investment income

comprises interest income, dividends receivable and realised investment gains.

For the purpose of separately presenting investment income and unrealised gains and losses

for financial assets at fair value through profit or loss, interest income is calculated using the

effective interest method excluding transaction costs that are expensed when incurred. For

investments at fair value through profit or loss, realised gains and losses represent the

difference between the net proceeds on disposal and the purchase price.

Unrealised investment gains and losses represent the difference between the fair value at the

balance sheet date and the fair value at the previous balance sheet date, or purchase price if

acquired during the year. Movements in unrealised investment gains and losses comprise the

increase/decrease in the reporting period in the value of the investments held at the reporting

date and the reversal of unrealised investment gains and losses recognised in earlier reporting

periods in respect of investment disposals of the current period.

Investment return is initially recorded in the non-technical account. The return is transferred in

full to the general business technical account to reflect the investment return on funds

supporting underwriting business.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three

months or less from the acquisition date that are subject to an insignificant risk of changes in

fair value and are used by the Syndicate in the management of its short-term commitments.

Bank overdrafts that are repayable on demand and form an integral part of the Syndicate’s

cash management are included as a component of cash and cash equivalents for the purpose

of the statement of cash flows.

Taxation

Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic

rate income tax from trading income. In addition, all UK basic rate income tax (currently at

20%) deducted from Syndicate investment income is recoverable by managing agents and

consequently the distribution made to members or their members’ agents is gross of tax.

Capital appreciation falls within trading income and is also distributed gross of tax.

Significant accounting policies continued

No provision has been made for any other overseas tax payable by members on underwriting

results or investment earnings. Any payments on account made by the Syndicate during the

year have been included in the balance sheet under the heading ‘other debtors’.

Profit commission

Profit commission is charged by the managing agent at five percent of net profit. Such

commission is recognised when the year of account becomes profitable but does not become

payable until after the appropriate year of account closes normally at 36 months.

Deposits with ceding undertakings

Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate

to settle Part VII claims. These funds are held at amortised cost in the balance sheet.

Operating expenses

Where expenses are incurred by the Managing Agent for the administration of managed

syndicates, these expenses are apportioned using various methods depending on the type of

expense. Expenses which are incurred jointly are apportioned between the Managing Agent

and the Syndicate depending on the amount of work performed, resources used, and volume

of business transacted.

Reinsurers’ commission and profit participation

Reinsurers’ commissions and profit participations, which include reinsurance profit

commission and overriding commission, are treated as a contribution to expenses.

Debtors and creditors

Insurance debtors and creditors include amounts due to and from agents, brokers and

insurance contract holders. These are classified as debt instruments as they are non-derivative

financial assets with fixed or determinable payments that are not quoted on an active market.

Insurance debtors are measured at amortised cost less any provision for impairments.

Insurance creditors are stated at amortised cost. The Syndicate does not have any debtors

directly with policyholders, all transactions occur via an intermediary.

Where permitted under UK GAAP accounting standards, insurance creditors are netted off

against insurance debtors where the legally enforceable right to offset exists.

Reinsurance debtors and creditors include amounts due to and from reinsurers. These are

classified as debt instruments as they are non-derivative financial assets with fixed or

determinable payments that are not quoted on an active market. Reinsurance debtors are

measured at amortised cost less any provision for impairments. Reinsurance creditors are

stated at amortised cost. Reinsurance debtor principally relates to claims recoveries where the

underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily

premiums payable for reinsurance contracts and are recognised as an expense when due.

4. Analysis of underwriting result

An analysis of the underwriting result before investment return is presented in the table below:

2025	Gross premiums written	Gross premiums earned	Gross claims incurred	Gross operating expenses	Reinsurance balance	Underwriting Result
	$’000	$’000	$’000	$‘000	$’000	$’000
Accident and Health	-	-	-	-	-	-
Motor (third party liability)	-	-	-	-	-	-
Motor (other classes)	-	-	-	-	-	-
Marine, aviation, and transport	36,668	24,657	(21,487)	(8,689)	(1,629)	(7,148)
Fire and other damage to property	183,259	106,142	(49,468)	(38,361)	(12,548)	5,765
Third party liability	21,457	12,053	(7,662)	(4,291)	(584)	(484)
Credit and suretyship	245,134	36,975	(16,130)	(10,805)	(5,687)	4,353
Legal expenses	-	-	-	-	-	-
Assistance	-	-	-	-	-	-
Miscellaneous	-	-	-	-	-	-
Life	-	-	-	-	-	-
Total Direct	486,518	179,827	(94,747)	(62,146)	(20,448)	2,486
Reinsurance acceptances	233,364	226,738	(109,506)	(81,730)	(41,714)	(6,212)
Total	719,882	406,565	(204,253)	(143,876)	(62,162)	(3,726)

The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate

the classification of the above segments into the Lloyd’s aggregate classes of business:

2025	Gross premiums written	Gross premiums earned	Gross claims incurred	Gross operating expenses	Reinsurance balance	Underwriting Result
Additional analysis	$’000	$’000	$’000	$‘000	$’000	$’000
Fire and damage to property of which is:
Specialties	3,444	2,060	(902)	(624)	(763)	(229)
Energy	-	-	-	-	-	-
Third party liability of which is:
Energy	-	-	-	-	-	-

Analysis of underwriting result continued

2024	Gross written premiums	Gross premiums earned	Gross claims incurred	Gross operating expenses	Reinsurance balance	Underwriting Result
	$’000	$’000	$’000	$‘000	$’000	$’000
Direct insurance
Accident and Health	-	-	-	-	-	-
Motor (third party liability)	-	-	-	-	-	-
Motor (other classes)	-	-	-	-	-	-
Marine, aviation, and transport	10,469	925	(428)	(398)	(247)	(148)
Fire and other damage to property	10,661	1,962	(791)	(1,021)	(395)	(245)
Third party liability	532	43	(15)	(24)	(7)	(3)
Credit and suretyship	18,349	2,445	(910)	(1,209)	(354)	(28)
Legal expenses	-	-	-	-	-	-
Assistance	-	-	-	-	-	-
Miscellaneous	-	-	-	-	-	-
Life	-	-	-	-	-	-
Total Direct	40,011	5,375	(2,144)	(2,652)	(1,003)	(424)
Reinsurance acceptances	126,631	26,216	(10,310)	(11,156)	(8,716)	(3,966)
Total	166,642	31,591	(12,454)	(13,808)	(9,719)	(4,390)

The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate

the classification of the above segments into the Lloyd’s aggregate classes of business:

2024	Gross premiums written	Gross premiums earned	Gross claims incurred	Gross operating expenses	Reinsurance balance	Underwriting Result
Additional analysis	$’000	$’000	$’000	$‘000	$’000	$’000
Fire and damage to property of which is:
Specialties	2,018	682	(705)	(147)	548	(378)
Energy	-	-	-	-	-	-
Third party liability of which is:
Energy	-	-	-	-	-	-

Analysis of underwriting result continued

The gross premiums written for direct insurance by underwriting location (where contracts

were concluded) is presented in the table below:

	2025	2024
	$’000	$’000
United Kingdom	486,518	40,011
European Union Member States	-	-
US	-	-
Rest of the world	-	-
Total gross premiums written	486,518	40,011

No gains or losses were recognised in profit or loss during the year on buying reinsurance

(2024: nil).

5. Technical provisions

		2025
	Gross provisions $’000	Reinsurance assets $’000	Net $’000
Claims outstanding
Balance at 1 January	12,262	(1,831)	10,431
Claims paid during the year	(21,500)	1,119	(20,381)
Expected cost of current year claims	204,253	(56,568)	147,685
Change in estimates of prior year provisions	-	-	-
Foreign exchange movements	829	(221)	608
Balance at 31 December	195,844	(57,501)	138,343
Unearned premiums
Balance at 1 January	133,172	(24,016)	109,156
Premiums written during the year	719,882	(195,058)	524,824
Premiums earned during the year	(406,565)	125,366	(281,199)
Foreign exchange movements	10,330	-	10,330
Balance at 31 December	456,819	(93,708)	363,111

Deferred acquisition costs
Balance at 1 January	42,686	(2,958)	39,728
Incurred deferred acquisition costs	217,100	(16,322)	200,778
Amortised deferred acquisition costs	(123,763)	6,636	(117,127)
Foreign exchange movements	3,153	-	3,153
Balance at 31 December	139,176	(12,644)	126,532

		2024
	Gross provisions $’000	Reinsurance assets $’000	Net $’000
Claims outstanding
Balance at 1 July	-	-	-
Claims paid during the year	(152)	-	(152)
Expected cost of current year claims	12,454	(1,834)	10,620
Change in estimates of prior year provisions	-	-	-
Foreign exchange movements	(40)	3	(37)
Balance at 31 December	12,262	(1,831)	10,431
Unearned premiums
Balance at 1 July	-	-
Premiums written during the year	166,642	(35,609)	131,033
Premiums earned during the year	(31,591)	11,553	(20,038)
Foreign exchange movements	(1,879)	40	(1,839)
Balance at 31 December	133,172	(24,016)	109,156

Deferred acquisition costs
Balance at 1 July	-	-	-
Incurred deferred acquisition costs	51,034	(3,391)	47,643
Amortised deferred acquisition costs	(7,792)	412	(7,380)
Foreign exchange movements	(556)	21	(535)
Balance at 31 December	42,686	(2,958)	39,728

6. Net operating expenses

	2025	2024
	$’000	$’000
Acquisition costs	217,100	51,034
Change in deferred acquisition costs	(93,337)	(43,242)
Reinsurance commissions and profit participation	(6,636)	(412)
Administration expenses	11,416	3,235
Members’ standard personal expenses	8,697	3,193
Net operating expenses	137,240	13,808

Total commissions for direct insurance business for the year amounted to:

	2025	2024
	$’000	$’000
Total commission for direct insurance business	145,056	14,117

7. Auditor’s remuneration

	2025	2024
	$’000	$’000
Fees payable to the Syndicate’s auditor for the audit of these financial statements	602	305
Fees payable to the Syndicate’s auditor and its associates in respect of other services pursuant to legislation	204	85
Total	806	390

Auditors’ remuneration is included as part of administrative expenses in note 6.

8. Key management personnel compensation

The active underwriter received the following aggregate remuneration charged to the

Syndicate:

2025

2024

$’000

Emoluments

The aggregate emoluments of the Directors and staff of the Asta Group are charged to

companies of the Asta Group in accordance with the proportion of their time associated with

each company. Further disclosures regarding Directors’ emoluments are provided in the

financial statements of Asta Managing Agency Ltd.

No emoluments of the Directors of Asta Managing Agency Ltd were charged directly to the

Syndicate. No other compensation was payable to key management personnel.

The Active Underwriter’s salary was not recharged to the Syndicate during 2025 (2024: nil).

The cost is borne by The Fidelis Partnership.

9. Staff numbers and costs

The Syndicate has no employees beyond the Active Underwriter.

10. Investment return
	2025	2024
From financial assets designated at fair value through profit or loss	$’000	$’000
Interest and similar income	40	2
Dividend income	-	-
Interest on cash at bank	574	16
Gains on the realisation of investments	-	-
Losses on the realisation of investments	-	-
Unrealised gains on investments	293	-
Unrealised losses on investments	-	-
Investment management expenses	-	-
Total investment return	907	18

11. Financial Investments

31 December 2025	Carrying value	Cost
	$’000	$’000
Shares and other variable yield securities and units in unit trusts	101,417	101,417
Debt securities and other fixed income securities	-	-
Loans and deposits with credit institutions	-	-
Syndicate loans to central fund	-	-
Other investments	-	-
Total financial investments	101,417	101,417

31 December 2024	Carrying value	Cost
	$’000	$’000
Shares and other variable yield securities and units in unit trusts	3,625	3,625
Debt securities and other fixed income securities	-	-
Loans and deposits with credit institutions	-	-
Syndicate loans to central fund	-	-
Other investments	-	-
Total financial investments	3,625	3,625

The amounts ascribable to listed investments is nil (prior year: nil).

The table below presents an analysis of financial investments by their measurement

classification:

	2025	2024
	$’000	$’000
Financial assets measured at fair value through profit or loss	101,417	3,625
Financial assets measured at fair value as available for sale	-	-
Financial assets measured at amortised cost	-	-
Total financial investments	101,417	3,625

Financial investments continued

The Syndicate classifies its financial instruments held at fair value in its balance sheet using a

fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1 – financial assets that are measured by reference to published quotes in an

active market. A financial instrument is regarded as quoted in an active market if quoted

prices are readily and regularly available from an exchange, dealer, broker, industry

group, pricing service or regulatory agency and those prices represent actual and

regularly occurring market transactions on an arm’s length basis.

• Level 2 – financial assets measured using a valuation technique based on assumptions

that are supported by prices from observable current market transactions. For

example, assets for which pricing is obtained via pricing services but where prices have

not been determined in an active market, financial assets with fair values based on

broker quotes, investments in private equity funds with fair values obtained via fund

managers and assets that are valued using the Syndicate’s own models whereby the

significant inputs into the assumptions are market observable.

• Level 3 – financial assets measured using a valuation technique (model) based on

assumptions that are neither supported by prices from observable current market

transactions in the same instrument nor are they based on available market data.

Therefore, unobservable inputs reflect the Syndicate's own assumptions about the

assumptions that market participants would use in pricing the asset or liability (including

assumptions about risk). These inputs are developed based on the best information

available, which might include the Syndicate’s own data.

The following table shows financial investments recorded at fair value analysed between the

three levels in the fair value hierarchy.

2025			$’000
	Level 1	Level 2	Level 3	Assets held at amortised cost	Total
Shares and other variable yield securities and units in unit trusts	34,356	67,061	-	-	101,417
Debt securities and other fixed income securities	-	-	-	-	-
Loans and deposits with credit institutions	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-
Other investments	-	-	-	-	-
	-	-	-	-	-
Total	34,356	67,061	-	-	101,417

Financial investments continued

2024

$’000

Level 1

Level 2

Level 3

Assets held at

amortised cost

Total

Shares and other variable yield

securities and units in unit trusts

3,625

Debt securities and other fixed

income securities

Loans and deposits with credit

institutions

Syndicate loans to central fund

Other investments

Total

3,625

Information on the methods and assumptions used to determine fair values for each major

category of financial instrument measured at fair value is provided below.

Debt securities are generally valued using prices provided by external pricing vendors. Pricing

vendors will often determine prices by consolidating prices of recent trades for identical or

similar securities obtained from a panel of market makers into a composite price. The pricing

service may make adjustments for the elapsed time from a trade date to the valuation date to

take into account available market information. Lacking recently reported trades, pricing

vendors will use modelling techniques to determine a security price.

Some government and supranational securities are listed on recognised exchanges and are

generally classified as Level 1 in the fair value hierarchy. Those that are not listed on a

recognised exchange are generally based on composite prices of recent trades in the same

instrument and are generally classified as Level 2 in the fair value hierarchy.

Corporate bonds, including asset backed securities, that are not listed on a recognised

exchange or are traded in an established over the counter market are also valued mainly using

composite prices. Where prices are based on multiple quotes and those quotes are based on

actual recent transactions in the same instrument the securities are classified as Level 2,

otherwise they are classified as Level 3 in the fair value hierarchy.

At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using

valuation techniques based on observable market data. All of the investments categorised as

Level 3 are fair valued based on the inputs to the valuation technique used.

12. Debtors arising out of direct insurance operations

	2025	2024
	$’000	$’000
Due within one year	145,871	25,870
Due after one year	-	-
Total	145,871	25,870

13. Debtors arising out of reinsurance operations

	2025	2024
	$’000	$’000
Due within one year	202,795	72,372
Due after one year	-	-
Total	202,795	72,372

14. Other debtors

2025

2024

$’000

Inter syndicate balances

Other related party balances (non-syndicate)

Amounts due from members

Other

17,084

5,333

Total

17,084

5,333

15. Creditors arising out of direct insurance operations

	2025	2024
	$’000	$’000
Due within one year	380	-
Due after one year	-	-
Total	380	-

16. Creditors arising out of reinsurance operations

	2025	2024
	$’000	$’000
Due within one year	135,380	27,007
Due after one year	-	-
Total	135,380	27,007

17. Other creditors

2025

2024

$’000

Inter syndicate balances

Profit commissions payable

Other related party balances (non-syndicate)

Derivative liabilities

Other liabilities

Total

18. Cash and cash equivalents

	2025	2024
	$’000	$’000
Cash at bank and in hand	33,512	335
Deposits with credit institutions	-	-
Short term debt instruments presented within other financial investments	101,417	3,625
Bank overdrafts	-	(5,313)
Total cash and cash equivalents	134,929	(1,353)

To improve returns on short term surplus cash the Syndicate utilises Money Market Funds

(MMF). These funds are short duration and remain highly liquid allowing for quick access.

Amounts held in such MMFs are reported as shares and variable yield securities within

investments reflecting the underlying assets within the funds and are treated as cash and cash

equivalents for cash flow purposes.

Deposits with credit institutions with maturities of three months or less that are used by the

Syndicate in the management of its short-term commitments are included in cash and cash

equivalents.

Cash and cash equivalents continued

Of the total cash and cash equivalents, the following amount was held in regulated bank

accounts in overseas jurisdictions:

	2025	2024
	$’000	$’000
Total cash and cash equivalents held in regulated accounts in overseas jurisdictions	59,737	3,467

19. Related parties

Asta provides services and support to the Syndicate in its capacity as Managing Agent. During

the year, Managing Agency fees of $3.4 were charged to the Syndicate (2024: $1.8m). Asta

also recharged $3.3m worth of service charges in the year (2024: $1.6m) and as at 31

December 2025 a cumulative amount of $2.2m is owed to Asta in respect of this service (2024:

$0.9m).

The Fidelis Partnership (TFP) has a 9.9% participation in Syndicate 3123 on the 2024 YOA

and 7.5% on the 2025 YOA. TFP charges the Syndicate a fixed commission of 11.5% of GWP

and a 1.7% portfolio management fee. As of 31 December 2025, the charge for the period was

$95.0m

Fidelis Insurance Bermuda Limited (FIBL) is also an investor in the Syndicate. The Syndicate

has purchased a whole account Quota Share reinsurance contract from FIBL, which includes

an 11.5% over-rider commission payable from FIBL to the Syndicate. As of 31 December

2025, the outward RI QS premium written was $89.0m, and the commissions receivable by

the Syndicate were $11.1m.

From time to time, syndicates managed by Asta enter into (re)insurance contracts with one

another. All such transactions are subject to Asta’s internal controls which ensure that all are

compliant with Lloyd’s Related Party Byelaw provisions. All transactions are on an arm’s length

basis.

Asta Capital Ltd, the parent of Asta Managing Agency Ltd, is owned by the Davies Group but

Asta Capital Ltd maintains a level of independence by virtue of separate boards and a separate

governance structure. Other entities within the wider Davies Group provide insurance-related

services to the syndicates under Asta’s management. The provision of these services is

managed by a separate management team distinct from Asta, and these services are provided

at an arm’s length basis.

The ultimate parent company of Asta Managing Agency Ltd is Tennessee Topco Ltd.

20. Disclosure of interests

As at 31 December 2025, Asta was the Managing Agent for the following syndicates on behalf

of third-party capital providers:

• Syndicates 1322, 1609, 1618, 1699, 1892, 1902, 1947, 1984, 1985, 1988, 2525, 2689,

3123 and 4747.

• Syndicates-in-a-Box 1796, 1922, 1966, 2427, 2880, 3456 and 5183.

Disclosure of interests continued

During 2025, Asta took on management of the following syndicates:

• Syndicate 1618 on 1 January 2025

• Syndicate 1984 on 1 April 2025

• Syndicate 1947 on 1 July 2025

On 1 January 2026, Asta took on management of syndicates 1918, 2126 and 2610.

On 1 January 2026, Asta ceased to be the Managing Agent for Syndicate 1966,

During 2025, Asta ceased to be the Managing Agent for the following syndicates:

• Syndicate 2786 on 17 August 2025

• Syndicate 4242 and Special Purpose Arrangement 1416 on 30 December 2025

The Managing Agency also provides administrative services to syndicates and special

purpose arrangements, also undertaking several ancillary roles for other clients.

The Financial Statements of the Managing Agency can be obtained by application to the

Registered Office (see page 1).

21. Funds at Lloyd's

Every member is required to hold capital at Lloyd's which is held in trust and known as Funds

at Lloyd's (“FAL”). These funds are intended primarily to cover circumstances where Syndicate

assets prove insufficient to meet participating members' underwriting liabilities. The level of

FAL that Lloyd's requires a member to maintain is determined by Lloyd's based on PRA

requirements and resource criteria. FAL has regard to a number of factors including the nature

and amount of risk to be underwritten by the member and the assessment of the reserving risk

in respect of business that has been underwritten. Since FAL is not under the management of

the managing agent, no amount has been shown in these financial statements by way of such

capital resources. However, the managing agent is able to make a call on the members' FAL

to meet liquidity requirements or to settle losses.

22. Off-balance sheet items

The Syndicate has not been party to any arrangement, which is not reflected in its statement

of financial position, where material risks and benefits arise for the Syndicate.

23. Risk management

a) Governance framework

The Syndicate's risk and financial management framework aims to protect the Syndicate's

members capital from events that might otherwise prevent the Syndicate from meeting its

policyholder obligations, while maximising the returns to its members. The Directors recognise

the critical importance of having efficient and effective risk management systems in place.

Risk management continued

Asta maintains a risk management function for the Syndicate with clear terms of reference

from the Syndicate Board, its committees and sub-committees.

Asta supplements this with a clear organisational structure with documented delegated

authorities and responsibilities from the main Asta Managing Agency board to the Syndicate

who perform the underwriting activities. Lastly, the Syndicate policy framework sets its risk

management and control and business conduct standards for operations. Asta reviews and

monitors each policy to ensure compliance with the policy throughout the Syndicate.

The Syndicate Board approves the risk management policies and meets regularly to approve

any commercial, regulatory and organisational requirements of such policies. These policies

define the identification of risk and its interpretation to ensure the appropriate quality and

diversification of assets, align underwriting and reinsurance strategy to the Syndicate goals,

and specify reporting requirements.

The Syndicate Board places significant emphasis on the assessment and documentation of

risks and controls, including the articulation of the Syndicate's risk appetite.

b) Capital management objectives, policies and approach

Capital framework at Lloyd's

The Society of Lloyd's (Lloyd's) is a regulated undertaking and subject to the supervision of

the Prudential Regulatory Authority (PRA) under the Financial Services and Markets Act 2000.

Within the supervisory framework, Lloyd's applies capital requirements at member level and

centrally to ensure that Lloyd's complies with Solvency UK capital requirements, and beyond

that to meet its own financial strength, licence and ratings objectives.

Although Lloyd's capital setting processes use a capital requirement set at Syndicate level as

a starting point, the requirement to meet Solvency UK and Lloyd's capital requirements apply

at overall and member level only respectively, not at Syndicate level. Accordingly the capital

requirement in respect of the Syndicate is not disclosed in these financial statements.

Lloyd's capital setting process

In order to meet Lloyd's requirements, each Syndicate is required to calculate its Solvency

Capital Requirement (SCR) for the prospective underwriting year. This amount must be

sufficient to cover a 1 in 200 year loss, reflecting uncertainty in the ultimate run-off of

underwriting liabilities (SCR 'to ultimate'). The Syndicate must also calculate its SCR at the

same confidence level but reflecting uncertainty over a one year time horizon (one year SCR)

for Lloyd's to use in meeting Solvency UK requirements. The SCRs of each Syndicate are

subject to review by Lloyd's and approval by the Lloyd's Capital and Planning Group.

A Syndicate may be comprised of one or more underwriting members of Lloyd's. Each member

is liable for its own share of underwriting liabilities on the Syndicate on which it is participating

but not other members' shares. Accordingly, the capital requirement that Lloyd's sets for each

member operates on a similar basis. Each member's SCR is determined by the sum of the

member's share of the Syndicate SCR 'to ultimate'. Where a member participates on more

than one Syndicate, a credit for diversification is provided to reflect the spread of risk, but

consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200

year loss 'to ultimate' for that member. Over and above this, Lloyd's applies a capital uplift to

the member's capital requirement, known as the Economic Capital Assessment (ECA).

Risk management continued

The purpose of this uplift, which is a Lloyd's not a Solvency UK requirement, is to meet Lloyd's

financial strength, licence and ratings objectives. The capital uplift applied for 2025 was 35%

of the member's SCR 'to ultimate'.

Provision of capital by members

Each member may provide capital to meet its ECA either by assets held in trust by Lloyd's

specifically for that member (funds at Lloyd's), held within and managed within a Syndicate

(funds in Syndicate) or as the member's share of the members' balances on each Syndicate

on which it participates. Accordingly, the ending members balances reported on the Statement

of Financial Position on page 17, represent resources available to meet members' and Lloyd's

capital requirements.

c) Insurance risk

The principal risk the Syndicate faces under insurance contracts is that the actual claims and

benefit payments or the timing thereof, differ from expectations. This is influenced by the

frequency of claims, severity of claims, actual benefits paid and subsequent development of

long-term claims. Therefore, the objective of the Syndicate is to ensure that sufficient reserves

are available to cover these liabilities.

The risk exposure is mitigated by diversification across a large portfolio of insurance contracts

and geographical areas. The variability of risks is also improved by careful selection and

implementation of underwriting strategy guidelines, as well as the use of reinsurance

arrangements.

The Syndicate purchases reinsurance as part of its risk mitigation programme. The Syndicate’s

reinsurance program is predominantly covered by a variable and proportional, whole account

quota-share policy, covering the calendar year. The Syndicate also purchases Excess of Loss

(XoL) reinsurance contracts to provide further protection against significant individual or

aggregate losses. Amounts recoverable from reinsurers are estimated in a manner consistent

with the outstanding claims provision and are in accordance with the reinsurance contracts.

The Syndicate's placement of reinsurance is diversified such that it is neither dependent on a

single reinsurer nor are the operations substantially dependent upon any single reinsurance

contract.

Subcommittees of the Syndicate Board oversee the management of reserving risk. The use of

standardised and internal modelling techniques, as well as benchmarking and the review of

claims development are key in mitigating reserving risk. The purpose of these underwriting,

reinsurance and reserving strategies is to limit exposure to catastrophes or large losses based

on the Syndicate's risk appetite as decided by the Syndicate Board.

The Syndicate uses both its own and commercially available risk management software to

assess catastrophe exposure. However, there is always a risk that the assumptions and

techniques used in these models are unreliable or that claims arising from an un-modelled

event are greater than those arising from a modelled event.

Key assumptions

The principal assumption underlying the liability estimates is that the future claims

development will follow a similar pattern to past claims development experience. This includes

assumptions in respect of average claim costs, claim handling costs, claim inflation factors

and claim numbers for each underwriting year.

Risk management continued

Additional qualitative judgements are used to assess the extent to which past trends may not

apply in the future, for example: one-off occurrence; changes in market factors such as public

attitude to claiming: economic conditions: as well as internal factors such as portfolio mix,

policy conditions and claims handling procedures. Judgement is further used to assess the

extent to which external factors such as judicial decisions and government legislation affect

the estimates.

Other key circumstances affecting the reliability of assumptions include variation in interest

rates, delays in settlement and changes in foreign currency rates.

Sensitivities

The claim liabilities are sensitive to the key assumptions that follow. It has not been possible

to quantify the sensitivity of certain assumptions, such as legislative changes, uncertainty in

the estimation process. The following analysis is performed for reasonably possible

movements in key assumptions with all other assumptions held constant, showing the impact

on net liabilities, profit and members' balances. The correlation of assumptions will have a

significant effect in determining the ultimate claims liabilities, but to demonstrate the impact

due to changes in assumptions, assumptions had to be changed on an individual basis. It

should be noted that movements in these assumptions are non-linear.

The tables below show the sensitivity to adjusting gross and net loss ratios. The amount

disclosed for the impact on claims outstanding – net of reinsurance represents the impact on

both the profit and loss for the year and member balance.

	Sensitivity
General insurance business sensitivities as at 31 December 2025	+5.0% $’000	-5.0% $’000
Claims outstanding – gross of reinsurance	9,792	(9,792)
Claims outstanding – net of reinsurance	6,917	(6,917)

	Sensitivity
General insurance business sensitivities as at 31 December 2024	+5.0% $’000	-5.0% $’000
Claims outstanding – gross of reinsurance	613	(613)
Claims outstanding – net of reinsurance	522	(522)

Risk management continued

Claims development

The tables below show the Syndicate's cumulative incurred claims development, including

both claims notified and IBNR for each underwriting year, together with the cumulative

payments to date on a gross and net of reinsurance basis at the balance sheet date. The

Syndicate has elected to translate estimated claims and claims payments at a consistent rate

of exchange as determined by the balance sheet date.

The uncertainty associated with the ultimate claims experience of an underwriting year is

greatest when the underwriting year is at an early stage of development and the margin for

future experience potentially being more adverse than assumed is at its highest. As claims

develop, and the ultimate cost of the claims becomes more certain, the relative level of margin

should decrease. Due, however, to the uncertainty inherent in the claims estimation process,

initial reserves may not always be in a surplus. This is particularly so for large catastrophe

claims where uncertainly is initially great.

All numbers presented in $’000
Underwriting year	2024	2025
Estimate of cumulative gross claims incurred
At end of first underwriting year	12,671	150,915
One year later	66,597	-
Two years later	-	-
Three years later	-	-
Less cumulative gross claims paid	(13,961)	(7,707)
Total gross claims reserves		195,844
All numbers presented in $’000
Underwriting year	2024	2025
Estimate of cumulative net claims incurred
At end of first underwriting year	10,798	105,224
One year later	53,667	-
Two years later	-	-
Three years later	-	-
Less cumulative net claims paid	(13,158)	(7,390)
Total net claims reserves		138,343

Risk management continued

d) Financial risk

The focus of financial risk management for the Syndicate is ensuring that the proceeds from

its financial assets are sufficient to fund the obligations arising from its insurance contracts.

Credit risk

Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a

contractual obligation. The nature of the Syndicate’s exposures to credit risk and its objectives,

policies and processes for managing credit risk have not changed significantly from the prior

year.

The Syndicate has the following policies and procedures in place to mitigate the exposure to

credit risk:

• Reinsurance is placed with counterparties that have a good credit rating and

concentration of risk is avoided by following policy guidelines in respect of

counterparties' limits. If the counterparty is downgraded or does not have a good credit

rating, then collateral is sought to mitigate any risk. This is monitored by the Syndicate

Board.

• The Syndicate’s credit risk in respect of debt securities is managed by monitoring

concentration risk and by reference to the credit rating of the counterparty. Financial

assets are graded according to current credit ratings issued by rating agencies such

as Standard and Poor’s. The Syndicate has a policy of investing mainly in government

issued and government backed debts, as well as high-grade corporate bonds.

Debtors have been assessed for impairment by considering information such as the

occurrence of significant changes in the counterparty’s financial position, patterns of historical

payment information and disputes with counterparties.

Deferred acquisition costs and reinsurers’ share of provision for unearned premium have

specifically been excluded from management’s assessment of credit risk. This is on the basis

that the unearned balances do not have any intrinsic credit risk.

Risk management continued

The table below provides information regarding the credit risk exposure of the Syndicate at the

reporting date by classifying assets according to independent credit ratings of the

counterparties. AAA is the highest possible rating. Assets have only been rated if they are

neither past due nor impaired.

2025				$’000
	AAA	AA	A	BBB	Other	Not Rated	Total
Shares and other variable yield securities and units in unit trusts	-	67,061	34,356	-	-	-	101,417
Debt securities and other fixed income securities	-	-	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-	-	-
Deposits with ceding undertakings	-	-	-	-	-	-	-
Reinsurers’ share of claims outstanding	-	16,046	28,122	-	-	13,333	57,501
Debtors arising out of direct insurance operations	-	-	-	-	-	118,724	118,724
Debtors arising out of reinsurance operations	-	-	-	-	-	189,370	189,370
Other debtors and accrued interest	-	-	-	-	-	18,200	18,200
Cash at bank and in hand	-	-	33,512	-	-	-	33,512
Other Assets	3,702	312	1,139	459	157	1,392	7,161
Total	3,702	83,419	97,129	459	157	341,019	525,885

Risk management continued

2024				$	’000
	AAA	AA	A	BBB	Other	Not Rated	Total
Shares and other variable yield securities and units in unit trusts	-	-	3,625	-	-	-	3,625
Debt securities and other fixed income securities	-	-	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-	-	-
Deposits with ceding undertakings	-	-	-	-	-	-	-
Reinsurers’ share of claims outstanding	-	94	1,737	-	-	-	1,831
Debtors arising out of direct insurance operations	-	-	-	-	-	25,870	25,870
Debtors arising out of reinsurance operations	-	-	-	-	-	72,372	72,372
Other debtors and accrued interest	-	-	-	-	-	6,622	6,622
Cash at bank and in hand	-	-	335	-	-	-	335
Other Assets	82	7	21	18	1	-	129
Total	82	101	5,718	18	1	104,864	110,784

Risk management continued

An analysis of the carrying amounts of past due or impaired debtors is presented in the table

below:

2025			$’000
	Neither past due nor impaired assets	Past due but not impaired assets	Gross value of impaired assets	Impairment allowance	Total
Shares and other variable yield securities and units in unit trusts	101,417	-	-	-	101,417
Debt securities and other fixed income securities	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-
Deposits with ceding undertakings	-	-	-	-	-
Reinsurers’ share of claims outstanding	57,501	-	-	-	57,501
Debtors arising out of direct insurance operations	118,724	27,147	-	-	145,871
Debtors arising out of reinsurance operations	189,370	13,425	-	-	202,795
Other debtors and accrued interest	18,200	-	-	-	18,200
Cash at bank and in hand	33,512	-	-	-	33,512
Other Assets	7,161	-	-	-	7,161
Total	525,885	40,572	-	-	566,457

Risk management continued

2024			$’000
	Neither past due nor impaired assets	Past due but not impaired assets	Gross value of impaired assets	Impairment allowance	Total
Shares and other variable yield securities and units in unit trusts	3,625	-	-	-	3,625
Debt securities and other fixed income securities	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-
Deposits with ceding undertakings	-	-	-	-	-
Reinsurers’ share of claims outstanding	1,831	-	-	-	1,831
Debtors arising out of direct insurance operations	25,870	-	-	-	25,870
Debtors arising out of reinsurance operations	72,372	-	-	-	72,372
Other debtors and accrued interest	6,622	-	-	-	6,622
Cash at bank and in hand	335	-	-	-	335
Other Assets	129	-	-	-	129
Total	110,784	-	-	-	110,784

Risk management continued

The table below sets out the age analysis of financial assets that are past due but not impaired

at the balance sheet date:

2025			$’000
	0-3 months past due	3-6 months past due	6-12 months past due	Greater than 1 year past due	Total
Shares and other variable yield securities and units in unit trusts	-	-	-	-	-
Debt securities and other fixed income securities	-	-	-	-	-
Syndicate loans to central fund	-	-	-	-	-
Deposits with ceding undertakings	-	-	-	-	-
Reinsurers’ share of claims outstanding	-	-	-	-	-
Debtors arising out of direct insurance operations	15,554	6,480	4,624	489	27,147
Debtors arising out of reinsurance operations	9,913	1,967	1,540	5	13,425
Cash at bank and in hand	-	-	-	-	-
Other debtors and accrued interest	-	-	-	-	-
Other Assets	-	-	-	-	-
Total	25,467	8,447	6,164	494	40,572

Risk management continued

2024

$’000

0-3 months

past due

3-6 months

past due

6-12

months

past due

Greater

than 1 year

past due

Total

Shares and other variable

yield securities and units in

unit trusts

Debt securities and other

fixed income securities

Syndicate loans to central

fund

Deposits with ceding

undertakings

Reinsurers’ share of claims

outstanding

Debtors arising out of direct

insurance operations

Debtors arising out of

reinsurance operations

Cash at bank and in hand

Other debtors and accrued

interest

Other Assets

Total

Risk management continued

Liquidity risk

Liquidity risk is the risk that the Syndicate may not have enough cash to pay insurance claims

and other liabilities. This risk is reduced by reviewing the Syndicate’s expected cash

obligations on a weekly basis and keeping adequate cash on deposit to meet those obligations.

Further, a Liquidity Committee meets monthly to review liquidity strength and forthcoming

liquidity needs on a monthly basis.

The table below summarises the maturity profile of the Syndicate's financial liabilities based

on remaining undiscounted contractual obligations, including interest payable and outstanding

claim liabilities based on the estimated timing of claim payments resulting from recognised

insurance liabilities. Repayments which are subject to notice are treated as if notice were to

be given immediately.

2025			$’000
	No stated maturity	0-1 Year	1-3 Years	3-5 Years	> 5 years	Total
Claims outstanding	-	53,057	95,935	29,511	17,341	195,844
Deposits received from reinsurers	-	-	-	-	-	-
Creditors	-	135,760	-	-	-	135,760
Other credit balances	-	-	-	-	-	-
Total	-	188,817	95,935	29,511	17,341	331,604

2024			$’000
	No stated maturity	0-1 Year	1-3 Years	3-5 Years	> 5 years	Total
Claims outstanding	-	3,670	6,168	1,615	809	12,262
Deposits received from reinsurers	-	-	-	-	-	-
Creditors	-	32,320	-	-	-	32,320
Other credit balances	-	-	-	-	-	-
Total	-	35,990	6,168	1,615	809	44,582

Risk management continued

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument or

insurance contract will fluctuate because of changes in market prices. Market risk comprises

three types of risk: currency risk, interest rate risk and other price risk. Other price risk has

been assessed as negligible, given that the Syndicate does not invest in equities.

The objective of market risk management is to manage and control market risk exposures

within acceptable parameters, while optimising the return on risk.

a) Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will

fluctuate because of changes in foreign exchange rates.

The Syndicate's functional currency is USD and its exposure to foreign exchange risk arises

primarily with respect to transactions in Sterling, Euro, Canadian Dollar and Australian Dollar.

The Syndicate seeks to mitigate the risk by matching the estimated foreign currency

denominated liabilities with assets denominated in the same currency.

The Syndicate matches its currency position, so it holds net assets across a number of

currencies. The Syndicate takes into consideration the underlying currency of the Syndicate's

required capital and invests its assets proportionately across these currencies so as to protect

the solvency of the Syndicate, against variation in foreign exchange rates.

Risk management continued

The following table summarises the exposure of the financial assets and liabilities to foreign

currency exchange risk at the reporting date, as follows, with all numbers reported into

converted USD:

2025				$’000
	GBP	USD	EUR	CAD	AUD	JPY	Other	Total
Investments	-	51,304	14,130	35,983	-	-	-	101,417
Reinsurers’ share of technical provisions	2,124	139,314	5,199	4,050	383	139	-	151,209
Debtors	32,211	237,472	91,932	4,740	(477)	1,009	(1,137)	365,750
Other assets	3,466	12,789	10,699	5,404	6,049	1,025	1,241	40,673
Prepayments and accrued income	8,087	86,820	32,954	11,285	692	454	-	140,292
Total assets	45,888	527,699	154,914	61,462	6,647	2,627	104	799,341
Technical provisions	(40,354)	(422,011)	(137,529)	(47,415)	(3,666)	(1,660)	(28)	(652,663)
Deposits received from reinsurers	-	-	-	-	-	-	-	-
Creditors	270	(136,476)	(57)	503	-	-	-	(135,760)
Accruals and deferred income	-	(15,424)	-	-	-	-	-	(15,424)
Total liabilities	(40,084)	(573,911)	(137,586)	(46,912)	(3,666)	(1,660)	(28)	(803,847)
Total capital and reserves	(5,804)	46,212	(17,328)	(14,550)	(2,981)	(967)	(76)	4,506

Risk management continued

2024				$’000
	GBP	USD	EUR	CAD	AUD	JPY	Other	Total
Investments	-	1,724	-	1,901	-	-	-	3,625
Reinsurers’ share of technical provisions	43	25,497	251	37	17	-	2	25,847
Debtors	3,782	68,566	27,311	2,271	1,727	(28)	(54)	103,575
Other assets	-	-	3	121	98	86	156	464
Prepayments and accrued income	1,197	29,917	10,771	1,574	487	18	11	43,975
Total assets	5,022	125,704	38,336	5,904	2,329	76	115	177,486
Technical provisions	(3,269)	(97,467)	(37,499)	(5,383)	(1,652)	(73)	(91)	(145,434)
Deposits received from reinsurers	-	-	-	-	-	-	-	-
Creditors	(2,711)	(29,609)	-	-	-	-	-	(32,320)
Accruals and deferred income	(1,271)	(2,958)	-	-	-	-	-	(4,229)
Total liabilities	(7,251)	(130,034)	(37,499)	(5,383)	(1,652)	(73)	(91)	(181,983)
Total capital and reserves	2,229	4,330	(837)	(521)	(677)	(3)	(24)	4,497

Sensitivity to changes

The table below gives an indication of the impact on profit of a percentage change in the

relative strength of the functional currency against the value of the US Dollar, Euro, Canadian

Dollar, Japanese Yen and Australian Dollar simultaneously. The analysis is based on the

information as at the reporting date.

Currency risk

Impact on profit and member’s balance

2025

2024

$’000

10 percent strengthening of functional currency

(3,791)

10 percent weakening of functional currency

4,634

(22)

Risk management continued

b) Interest rate risk

Interest rate risk is the risk that the value or future cash flows of a financial instrument will

fluctuate in response to changes in market interest rates.

Floating rate instruments expose the Syndicate to cash flow interest risk, whereas fixed rate

instruments expose the Syndicate to fair value interest risk.

The Syndicate has no significant concentration of interest rate risk.

24. Post balance sheet events

There are no post balance sheet events to report.