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2025 Annual Report and Accounts
Statement of Comprehensive Income
Statement of Financial Position
Current period
1 January 2025 – 31 December 2025
Prior period
1 January 2024 – 31 December 2024
Contents
Underwriter’s Report
1
Directors and Administration
5
Managing Agent’s Report
6
Syndicate Annual Report and Accounts
14
Statement of Managing Agent’s Responsibilities
15
Independent Auditor’s Report
16
Statement of Comprehensive Income
22
Statement of Financial Position
24
Statement of Changes in Members' Balances
26
Statement of Cash Flows
27
Notes to the Syndicate Annual Report and Accounts
28
Underwriter’s Report
Introduction
Insured catastrophe losses in 2025 continued the now
‑
familiar pattern of very high annual
totals. By the end of the first half of the year, global insured losses had already reached $80–
100 billion, driven heavily by non
‑
seasonal wildfires and severe convective storms in the U.S.
and are now predicted to reach $120-125bn.
The defining event of the year was the Los Angeles wildfires, which became the costliest
wildfire event ever recorded, generating $40 billion in insured losses on their own. Even though
the third quarter was described as “abnormally low” in terms of major catastrophes, Melissa
hitting Jamaica being the only Hurricane of note, insured losses for the first nine months still
reached $105 billion, marking the sixth consecutive year in which global insured natural
catastrophe losses exceeded $100 billion. There were also a number of Aviation losses the
most notable being the American Airlines mid-air collision over Washington DC and the Air
India crash.
None of these losses are expected to materially impact the Syndicate as a result of risk
selection and line size, with early signs indicating that 2025 will continue the strong set of
underwriting year results produced since 2022.
This story is, to varying degrees, similar in the wider market. Capital supporting the industry is
robust, boosted by strong results, and has translated into increased supply across nearly all
lines of business. This has had the inevitable impact on pricing, which is under increasing
pressure as these results filter through to balance sheets, and markets battle to maintain their
share of a finite amount of business.
The stamp capacity is £600m for the 2026 Year of Account.
Calendar Year Result
On an annual accounting basis, the result of the Syndicate for the 2025 calendar year is a profit
for the financial year of £79.7m (2024: £55.6m). This represents a combined ratio of 80.9%
(2024: 84.7%) and reflects the favourable trading conditions and low loss activity in the year.
Some £234.4m (2024: £179.1m) of gross premium predominantly attributable to the 2025 Year
of Account is unearned at the Statement of Financial Position date. This will become fully
earned over the next twelve to twenty-four months.
2023 Year of Account
Our stamp capacity was £352 million for the 2023 Year of Account. The makeup of the account
was discussed in last year’s report. We are closing the 2023 Year of Account with a profit of
£73.6m being 21.0% of stamp, which is within the range of estimates we last indicated.
As indicated in prior reports, 2022 marked our first year of profit and 2023 continues this with
a strong result as we reap the rewards of our remedial action and of the strong trading
conditions in all of the markets in which we operated.
1
Underwriter’s Report
(continued)
2024 Year of Account
Our stamp capacity was £400 million for the 2024 Year of Account.
As mentioned last year, the loss activity in 2024 included Hurricanes Helene and Milton
impacting Florida and the Dali Baltimore Bridge collision. We are comfortable with the ultimate
loss estimates that we are currently holding for these events although at a gross level it should
be noted that there is still a level of uncertainty around the market loss that will eventually
materialise from the Dali Baltimore Bridge loss.
It should be noted though that despite the above, 2024 experienced lower loss activity than
prior years in both frequency and severity, which to some extent anticipated the softening
market conditions that became more apparent as we moved into the 2025 Year of Account. As
the prevailing market conditions compressed margins and intensified competition for high
quality risks, our underwriters began to see less opportunities to deploy capacity at the market
high point level of pricing in 2023. This reduction in underwriting prospects began to exert
downward pressure on our top line, a trend that became increasingly pronounced over the
course of the year and continued into 2025.
At this stage, the 2024 Year of Account is developing favourably and is forecast to be profitable
in the range of 10% to 20% of capacity.
2025 Year of Account
Our stamp capacity is £525 million for the 2025 Year of Account.
We increased the stamp capacity of the Syndicate in 2025 to support our growth in our Casualty
and Portfolio Solutions accounts.
I am pleased to say that there was no shortage of opportunities in either of these classes and
that we declined more business than we wrote, testament to the quality of the book that we
believe we have written.
For our other lines of business, we anticipated less opportunities and were forecasting flat or
reduced income projections. This turned out to be true as the market conditions that became
evident in 2024 continued into 2025, driven by increased appetite from retained earnings
across the industry and from new participants.
Despite the worsening market conditions there were still opportunities, and we were able to
attract a number of talented underwriters to boost some of our existing lines of business, all of
whom will be joining us in 2026.
For our Direct Property account, Phil Lawson and Alex Hewlett join us from Scor, bringing multi
decade lead relationships with North American coverholders, strengthening our binder offering.
Chris Prior also joined us in 2025 from Westfield, strengthening our open market book.
2
Underwriter’s Report
(continued)
2025 Year of Account
(continued)
For our Casualty account, Alex Stratten-Thomsett joins us from Amlin. Alex worked with David
Barber at Chaucer and brings much needed support as the book grows into 2026 and 2027.
Finally, Ian Ritchie joins us from the Munich Re syndicate expanding our offering in our
Contingency account to include non – appearance coverage.
All of these hires demonstrate not only our willingness to grasp strong opportunities when they
appear but also the attractiveness that Blenheim offers as an independent underwriting
focused business.
Although early in the development of the year, a lack of meaningful losses and continued
disciplined underwriting means that we are hopeful that the year will be profitable and continue
the strong set of results that the Syndicate has produced.
2026 Year of Account
Our stamp capacity is £600 million for the 2026 Year of Account.
We have increased the stamp for 2026 to cover our growth in our Casualty account and any
growth that may occur from potential new lines of business.
We still believe that there will be opportunities in 2026 but it will be focused on the availability
of talented underwriters with their own franchise rather than us specifically targeting lines of
business in which we have no presence.
Although there will be increasing pressure on pricing on an inwards basis this will also apply to
the reinsurance that we purchase, and that coupled with the high point the market is coming
off means that we believe there is still margin in the accounts that we write.
Concluding Comments
It is now unfortunately apparent that the market finds itself in another softening phase as
plentiful capital following consecutive years of profitability drives prices down.
It will be interesting to note how long this part of the cycle lasts if the relatively benign loss
environment continues, as much is made of the markets adherence to pricing discipline.
We have always prided ourselves on being driven by our underwriting, so our focus will be to
maintain our core portfolio whilst looking for opportunities to grow.
This growth can either come from expanding our offering in our existing lines, as evidenced by
our recent hires or from finding talented underwriters in lines of business that we currently don’t
participate in.
One of the benefits of being independent and a specialist rather than a generalist insurer is the
flexibility this affords through the cycle.
3
Underwriter’s Report
(continued)
Concluding comments
(continued)
We do not have to target our top line and all of our underwriters’ focus on profitability rather
than growth. We believe that this is evident in our recent results and that we can maintain this
through this particular downturn in the market.
Syndicates with the best records have not been driven by constant growth but by recognising
appropriate opportunities. Lloyd’s of London businesses are increasing in size but
fundamentally results will be driven by having the best underwriters who can maintain their
accounts by offering service to their clients and brokers that adds value.
None of this would be achievable without high quality individuals across the whole business. I
would once again like to thank the entire team for all their efforts in driving the business forward
and producing another set of strong results.
N J Destro
Active Underwriter
16 February 2026
4
Directors and Administration
Managing Agent
Directors
Nicholas Joseph Destro
Sharon Julia Ingham
John Anthony Lynch
Tessa Helen Mijatovic
Peter David Scales
David Charles James* (appointed 1 October 2025)
Christopher Norman Clark*
Kenneth Douglas Curtis*
Esther Ruth Felton* (resigned 30 June 2025)
Lawrence Albert Holder (Chair)*
Michael James Leonard*
*Non-Executive Directors
Company Secretary
Shirley Anne Holley
Managing Agent's Registered Office
7th Floor
70 Mark Lane
London
EC3R 7NQ
Managing Agent's Registered Company Number
10254215
Active Underwriter
Nicholas Joseph Destro
Bankers
Barclays Bank Plc
Citibank N.A.
RBC Dexia
Investment Manager
Conning Asset Management Limited
Registered Auditors
Deloitte LLP
2 New Street Square
London
EC4A 3BZ
United Kingdom
5
Managing Agent's Report
The Directors of the Managing Agent present their report for the year ended 31 December
2025.
The Syndicate's Managing Agent is Blenheim Underwriting Limited (“Blenheim”) a company
registered in England and Wales.
Blenheim is a wholly owned subsidiary of White Bear Capital Limited (“WBC”), a company
registered in England and Wales. WBC was incorporated on 8 June 2016 and operates in the
United Kingdom (“UK”) as the holding company of a number of wholly owned subsidiaries (“the
Group”).
Results
The profit for the 2025 financial year is £79.7m (2024: £55.6m) before a loss on currency
translation of £7.7m (2024: gain on currency translation of £1.2m) which equates to a total
comprehensive income of £72.0m (2024: £56.8m). The net combined ratio is 80.9% (2024:
84.7%).
A distribution to members of £72.7m, after members agents fees, will be proposed in relation
to the 2023 closing Year of Account (2024: £28.0m distribution in relation to the 2022 closing
Year of Account).
The Syndicate has presented its results under Financial Reporting Standard 102 – “The
Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland” (“FRS
102”).
In accordance with FRS 102, the Syndicate has identified its insurance contracts and
accounted for them in accordance with Financial Reporting Standard 103 – “Insurance
Contracts” (“FRS 103”).
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. For further narrative, see the Active Underwriter’s Report on
pages 1 to 4.
Gross premiums written income by class of business for the calendar year were as follows:
2025
£m
2024
£m
Property Treaty
0.6
0.3
Direct Property
167.1
185.4
Contingency
10.7
11.1
Accident & Health
19.3
27.3
Specialty Treaty
113.9
120.0
Construction
27.3
13.6
Political Risk
16.5
21.6
Casualty
87.0
7.1
Portfolio Solutions
49.4
7.3
491.8
393.7
6
Managing Agent's Report
(continued)
Principal activity and review of the business
(continued)
The Syndicate's Key Performance Indicators (“KPIs”) during the year were as follows:
2025
£m
2024
£m
Gross premiums written
491.9
393.7
Profit for the financial year
79.7
55.6
Total comprehensive income
72.0
56.8
Net combined ratio
80.9%
84.7%
Gross premiums written have increased in 2025 by £98.2m with growth in the Casualty,
Portfolio Solutions and Construction accounts being offset by the reduction in Direct Property,
Specialty Treaty and Political Risk accounts.
The net combined ratio is the ratio of claims incurred, net of reinsurance and net operating
expenses to earned premiums, net of reinsurance.
These KPIs are used by management to monitor the performance of the Syndicate. Gross
premiums written are a measure of underwriting volume year on year. Total comprehensive
income and net combined ratio are both measures of profitability in the calendar year.
Investments
The total investment return for the calendar year is £17.1m (2024: £13.1m).
U.S. government bonds delivered positive returns in 2025, driven by a 77-basis point decline
in two-year yields as the Federal Reserve eased policy three times in the second half of the
year.
Longer maturity yields remained broadly stable amid ongoing inflation concerns and
fiscal considerations. Volatility spiked in Q2 following the Trump administration’s tariff
announcements but eased after the measures were suspended, supporting credit-related
assets. Inflation moderated overall but saw a pickup in the summer in tariff-sensitive sectors.
Labour market momentum softened, with slower payroll growth, downward revisions, and
easing wage gains prompting rate reductions from the Federal Reserve.
U.S. corporate credit
spreads tightened slightly, by 2 basis points, with media, transport and leisure subsectors
outperforming.
Canadian government bonds also posted positive returns, with two-year yields falling 34 basis
points while longer maturities rose, steepening the yield curve. Economic growth was subdued,
reflecting the dampening effect of ongoing trade-related uncertainties. Labour market
conditions were mixed, with mid-year weakness offset by a partial fourth quarter rebound
concentrated in part-time roles. Inflation remained near the Bank of Canada’s 2% target
throughout the year. In response to soft growth and labour conditions, the Bank of Canada cut
policy rates four times, ending the year at 2.25%, signalling that policy was “about the right
level” while maintaining flexibility. Canadian corporate spreads tightened 17 basis points, with
insurance, technology and real estate subsectors outperforming.
Given our cautious investment risk appetite, the overall investment return for the year (and the
performance of the investment manager) is viewed as being satisfactory.
7
Managing Agent's Report
(continued)
Underwriting Year of Account summary
The table below shows the Syndicate’s actual results for the closed 2023 Year of Account and
the forecast range for the 2024 open Year of Account based on the traditional three year Lloyd’s
basis after charging standard Managing Agent’s fees and Profit Commission but before
charging members’ agents fees.
2024 Year
Forecast
2023 Year
Actual
Capacity (£m)
399.5
350.9
Profit on capacity (%)
10.0 to 20.0
21.0
2023 underwriting year result
The result for the 2023 Year of Account which closed on 31 December 2025 with a total
comprehensive profit before members agents fees of £73.6m on gross premiums written of
£383.5m.
Gross premiums written income by class of business for the Year of Account were as follows:
2023
£m
Property Treaty
56.0
Direct Property
177.4
Contingency
13.1
Accident & Health
23.7
Specialty Treaty
89.8
Construction
3.1
Political Risk
20.4
383.5
The key financial performance indicators for the Year of Account were as follows:
2023
£m
Gross premiums written
383.5
Total comprehensive profit
73.6
Net combined ratio
73.0%
Gross premiums written included growth in the Direct Property, Specialty Treaty, Political
Risk and Accident and Health accounts in 2023 Year of Account. The net combined ratio is
the ratio of claims incurred, net of reinsurance and net operating expenses to earned
premiums, net of reinsurance. The net combined ratio and total comprehensive profit have
been impacted by catastrophe losses including Turkey Earthquake, Hawaiian wildfires,
Baltimore Bridge and Hurricane Helene.
8
Managing Agent's Report
(continued)
2024 underwriting year forecast
The 2024 forecast has been based on the following assumptions:
Future claims development will follow an expected pattern. In particular, the incidence or
development of major or attritional losses or the ability of the Syndicate’s reinsurers to respond
to potential recoveries will not diverge materially from expectations based on developments to
date:
•
No material changes occur in estimates as to ultimate premium levels and future
reinsurance costs;
•
There will be no material reinsurance failure;
•
There will be no material surplus or deficiency arising from the reinsurance to close
(“RITC”) of the 2023 Year of Account;
•
Interest, inflation and exchange rates at 31 December 2026 will not significantly impact
the assumptions taken into account in the forecast; and
•
There will be no significant changes in regulatory or legislative policies which will affect
the activities of the Syndicate.
Principal risks and uncertainties
The Board approves the risk appetite framework annually as part of the Syndicate’s business
planning and Solvency Capital Requirement (“SCR”) process. The Blenheim Risk Committee
(“RiC”), a committee of the Board of Blenheim (“the Board”), meets at least quarterly and has
responsibility for the oversight and monitoring of the Syndicate risk management framework.
The Board reviews the risk profile of the Syndicate as reflected in the Quarterly Risk Reporting,
and monitors performance against risk appetite using tolerance metrics that are calibrated
annually. The principal risks 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 Board manages insurance risk through the approved business
plan, which sets out targets for volumes, pricing, line sizes and retention by class of business.
The Board then monitors performance against the business plan through the year. Reserve
adequacy is monitored through quarterly review by the Reserving Committee (“RC”), a
management committee.
9
Managing Agent's Report
(continued)
Principal risks and uncertainties
(continued)
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 Board’s policy is that the Syndicate
will only reinsure with approved reinsurers, supported by collateralisation where required. The
Reinsurance Security and Broker Committee (“RISBC”), a management committee, sets
approval and usage criteria, monitors reinsurer ratings and is required to approve and oversee
the application of the reinsurer approval policy.
Market risk
Market risk exposure impacting the Syndicate relates to fluctuations in interest rates or
exchange rates. The Syndicate is exposed to foreign exchange movements as a result of
mismatches between the currencies in which assets and liabilities are denominated. The
Blenheim policy is to maintain received income or incurred expenditure in the core currencies
in which they were received or paid.
Exposure to changes in interest rates arises from the Syndicate’s investment portfolio.
Blenheim seeks to minimise this risk through investing in highly liquid financial instruments.
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 only meet obligations at excessive cost. To mitigate this risk, the
Board reviews cash flow projections regularly and ensures that, where needed, the Syndicate
has liquidity facilities in place and may also utilise the option of a cash call from capital
providers. The Syndicate also mitigates its liquidity risk by ensuring it retains adequate assets
in liquid instruments.
Blenheim has also arranged various facilities to help manage the Syndicate’s cash flow.
Further details are set out in Note 22 of the Syndicate Annual Report Accounts.
Operational risk
This is the risk that errors caused by people, processes, systems and external events lead to
losses to the Syndicate. Blenheim seeks to manage this risk through the use of an operational
risk and control framework, detailed procedure manuals, thorough training programmes and a
structured programme of testing of processes and systems by Internal Audit. Business
continuity and disaster recovery plans are in place and are regularly updated and tested.
An important aspect of operational risk is regulatory risk. Regulatory risk is the risk of loss
owing to a breach of regulatory requirements or failure to respond to regulatory change.
Blenheim is required to comply with the requirements of the Financial Conduct Authority
(“FCA”), Prudential Regulatory Authority (“PRA”) and The Society of Lloyd’s (“Lloyd’s”). Lloyd’s
requirements include those imposed on the Lloyd’s market by overseas regulators. Blenheim
has a Compliance Director who manages a function that monitors business activity and
regulatory developments to assess any effects on Blenheim.
10
Managing Agent's Report
(continued)
Principal risks and uncertainties
(continued)
Operational risk
(continued)
The Syndicate promotes and maintains an open and transparent culture which champions and
supports the fair treatment of customers and delivery of good customer outcomes. The
Syndicate has a suite of controls in place to help mitigate this risk and monitors its conduct risk
exposure through a series of key risk indicators and reporting metrics as part of its documented
conduct risk framework.
Future developments
Climate change
In response to the PRA Supervisory Statement in 2019 and a subsequent “Dear Chief
Executive Officer” letter in 2020, Blenheim implemented significant changes to address and
quantify the financial risks of climate change where possible and relevant, in order to meet the
PRA’s requirements. In December 2025, the PRA published another Supervisory Statement,
SS5/25, “Enhancing banks’ and insurers’ approaches to managing climate-related risks”.
Blenheim is currently reviewing the statement and assessing the impact in line with the six-
month review period. We expect our approach to managing the financial risks from climate
change to develop over time.
Blenheim has ensured Board-level engagement and accountability with the PRA’s
requirements, assigning clear responsibilities for managing the financial risks associated with
climate change. The Chief Executive Officer, who is a Board member, is responsible for
identifying and managing financial climate related risks.
Risk management
The Board addresses the financial risks from climate change through the risk management
framework. The Board considers the risks with respect to the current and future impacts to the
business environment in which it operates. The Board assesses the financial risk from climate
change using stress testing developed by the Exposure Management team and has
implemented a Board approved risk appetite of limits for the financial risks from climate change.
The Board has identified two main areas of financial risk arising from climate change that are
applicable in the short and long-term:
Catastrophe risk
A proportion of the underwriting activity relates to (re)insurance which provides cover for
natural catastrophes and man-made events. Therefore, the main focus of Blenheim’s activities
to understand this exposure in relation to underwriting has been on catastrophe modelling and
climate change. The intention has been to ensure we do not overcommit the Syndicate’s capital
at a time when the pattern of natural catastrophes may be altering due to climate change.
Blenheim utilises industry standard catastrophe models for our main peril regions, but we also
have considerable in-house expertise in developing our own catastrophe models both to help
validate the outputs of the former or to address significant peril regions not covered by the
models we licence.
11
Managing Agent's Report
(continued)
Future developments
(continued)
Investment risk
Financial investments are a material asset to the balance sheet which could be exposed to the
financial (physical or transition) risks. As per the Prudent Person Principle, insurers must
diversify their assets to avoid excessive accumulation risk in the investment portfolio.
Therefore, the Blenheim Board has instructed the investment manager to have regard to and
consider the impact of, any climate-related risks where their impact could adversely impact
returns having specific regard to thermal coal, oil sands and arctic energy.
As per SS3/19 the actions taken are proportionate to the nature, scale and complexity of the
Syndicate and we expect the expertise of the Board to manage the financial risks relating to
climate change to evolve over time.
Environmental, Social and Governance (“ESG”)
Blenheim acknowledges and recognises the significance of ESG considerations in delivering
optimum outcomes for all stakeholders, both internal and external, and believes that
appropriate ESG policies and practices support building a sustainable business.
Blenheim, as part of the wider White Bear Group, is committed to ensuring ethical behaviours
in our activities, promoting diversity, equality and inclusion in the workplace, considering our
own impact on the environment, continuing our strong governance work and facilitating ESG
related knowledge sharing throughout the Group.
The White Bear Group, of which Blenheim is a part, has an ESG Committee which is
responsible for developing and recommending ESG strategy to Group companies, including
Blenheim. The ESG Committee includes senior members of Blenheim management including
the Chief Executive Officer, Finance Director, Chief Risk Officer and the Active Underwriter.
The ESG Committee reports on and recommends ESG Policy to the Blenheim Board and
meets regularly to consider progress and develop strategy.
The ESG Committee is focused on
:
•
Communicating ESG policy to employees and providing appropriate training.
•
Taking steps as part of our recruitment practices to widen the pool of talent from which we
draw our workforce, together with supporting volunteering programmes that promote the
London Insurance Market within local communities.
•
Tracking progress in promoting diversity, equality and inclusion in the workplace with a
number relevant KPIs active which are reported regularly to the Group and subsidiary
boards.
•
Operating robust and independent whistleblowing arrangements across the Group that
actively encourage employees to speak up on actual or suspected wrongdoing.
•
Continuing to work towards formalising our approach to reducing the Group’s
environmental footprint.
12
Managing Agent's Report
(continued)
Environmental, Social and Governance (“ESG”)
(continued)
•
Developing a sustainable and consistent underwriting approach to ESG issues and the
associated risk management framework to support this.
•
Developing our catastrophe modelling and scenario testing in respect of climate change
related risks to support underwriting decision making and business planning.
•
Considering impact of any ESG risks within our investment strategies.
Blenheim’s activity will be kept under review to ensure that progress continues to align with,
and is responsive to, new scientific developments, emerging trends and priorities, stakeholder
expectation, legislation, and regulation.
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 Blenheim 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.
Auditors
The Managing Agent intends to reappoint Deloitte LLP as the Syndicate's auditor.
Syndicate Annual General Meeting
As permitted under the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the
Managing Agent does not propose holding a Syndicate Annual General Meeting of the
members of the Syndicate. Members may object to this proposal within 21 days of the issue of
these accounts. Any such objection should be addressed to T Mijatovic, Compliance Director
at the registered office of Blenheim Underwriting Limited.
On behalf of the Board
J A Lynch
Director
16 February 2026
13
2025 Annual Report and Accounts
14
Statement of Managing Agent's Responsibilities
The Managing Agent is responsible for preparing the Syndicate Annual Report and Accounts
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 Syndicate Annual Report and Accounts at 31
December each year in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 and
FRS 103. The Annual Syndicate Accounts 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 Syndicate Annual Report and Accounts, 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 Annual Report
and Accounts; and
•
Prepare the Syndicate Annual Report and 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 the Syndicate Annual Report and Accounts
may differ from legislation in other jurisdictions.
The Directors of the Managing Agent are responsible for the preparation and review of the
iXBRL tagging that has been applied to the Syndicate Annual Report and 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 issued by Lloyd’s, whether due to fraud or error.
We confirm that to the best of our knowledge the Syndicate Annual Report and 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.
S J Ingham
Director
16 February 2026
15
Independent auditor’s report to the members of Syndicate 5886
Report on the audit of the Syndicate Annual Report and Accounts
Opinion
In our opinion the Syndicate Annual Report and Accounts of Syndicate 5886 (the ‘Syndicate’):
•
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 United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 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
as modified by the
Frequently Asked Questions Version 1.1 issued by Lloyd’s (the “Lloyd’s Syndicate
Accounts Instructions”).
We have audited the Syndicate Annual Report and Accounts which comprise:
•
the Statement of Comprehensive Income;
•
the Statement of Financial Position;
•
the Statement of Changes in Members’ Balances;
•
the Statement of Cash Flows; and
•
the related Notes 1 to 25.
The financial reporting framework that has been applied in their preparation is applicable law
and United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The
Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom
Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)), applicable law and the Lloyd’s Syndicate Accounts Instructions. Our responsibilities
under those standards are further described in the auditor's responsibilities for the audit of the
Syndicate Annual Report And accounts section of our report.
We are independent of the Syndicate in accordance with the ethical requirements that are
relevant to our audit of the Syndicate Annual Report and Accounts in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
16
Independent auditor’s report to the members of Syndicate 5886
(continued)
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Managing Agent’s use of the
going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt on
the Syndicate’s ability to continue in operations for a period of at least twelve months from
when the Syndicate financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Managing Agent with respect to going
concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Syndicate Annual Report and
Accounts, other than the Syndicate annual financial statements and our auditor’s report
thereon. The Managing Agent is responsible for the other information contained within the
annual report. Our opinion on the Syndicate Annual Report and Accounts does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the Syndicate Annual Report and Accounts or our
knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Managing Agent
As explained more fully in the Managing Agent’s responsibilities statement, the Managing
Agent is responsible for the preparation of the Syndicate Annual Report and Accounts and for
being satisfied that they give a true and fair view, and for such internal control as the Managing
Agent determines is necessary to enable the preparation of Syndicate Annual Report and
Accounts that are free from material misstatement, whether due to fraud or error.
In preparing the Syndicate Annual Report and Accounts, the Managing Agent is responsible
for assessing the Syndicate’s ability to continue in operation, disclosing, as applicable, matters
related to the Syndicate’s ability to continue in operation and to use the going concern basis
of accounting unless the managing agent intends to cease the syndicate’s operations, or has
no realistic alternative but to do so.
17
Independent auditor’s report to the members of Syndicate 5886
(continued)
Auditor’s responsibilities for the audit of the Syndicate Annual
Report and Accounts
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 an auditor's report that includes our opinion. Reasonable assurance is a high level
of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these Syndicate
Annual Report and Accounts.
A further description of our responsibilities for the audit of the Syndicate Annual Report and
Accounts is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the Syndicate and its control environment and reviewed the
Syndicate’s documentation of their policies and procedures relating to fraud and compliance
with laws and regulations. We also enquired of management, internal audit
and those charged
with governance about their own identification and assessment of the risks of irregularities
.
We obtained an understanding of the legal and regulatory frameworks that the Syndicate
operates in, and identified the key laws and regulations that:
•
had a direct effect on the determination of material amounts and disclosures in the
financial statements. These included the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Accounting Byelaw (no. 8 of 2005), the Lloyd’s Syndicate Accounts Instructions; and
•
do not have a direct effect on the financial statements but compliance with which may
be fundamental to the Syndicate’s ability to operate or to avoid a material penalty.
These included permissions and supervisory requirements of Lloyd’s, The PRA and
the FCA and the requirements of Solvency UK
.
We discussed among the audit engagement team including relevant internal specialists such
as actuarial and IT specialists regarding the opportunities and incentives that may exist within
the organisation for fraud and how and where fraud might occur in the financial statements.
18
Independent auditor’s report to the members of Syndicate 5886
(continued)
Extent to which the audit was considered capable of detecting
irregularities, including fraud
(continued)
As a result of performing the above, we identified the greatest potential for fraud in the following
areas, and our procedures performed to address them are described below:
•
Estimation of pipeline premiums requires significant management judgement and
therefore there is potential for management bias through manipulation of core
assumptions. In response our testing included, for classes associated with significant
risk, on a sample basis, comparing management’s estimates on prior year policies
against actual premiums received as well as to historical experience on similar policies.
•
Valuation of technical provisions in relation to incurred but not reported claims (IBNR)
includes assumptions requiring significant management judgement and therefore there
is potential for management bias. There is also a risk of overriding controls by making
adjustments to the technical provisions. In response to these risks we involved our
actuarial specialists to develop independent estimates of the technical provisions for
classes associated with significant risk and we tested the adjustments made to
technical provisions outside of the normal reserving process. In addition, significant
management judgement is exercised in the valuation of Catastrophe IBNR reserves
given uncertainties in estimating claims emergence relating to event frequency,
,severity and data limitations. We assessed a sample of Catastrophe IBNR reserves
classified as significant risk by inspecting case documentation, challenging
management judgements, and performing benchmarking where possible.
In common with all audits under ISAs (UK), we are also required to perform specific procedures
to respond to the risk of management override. In addressing the risk of fraud through
management override of controls, we tested the appropriateness of journal entries and other
adjustments; assessed whether the judgements made in making accounting estimates are
indicative of a potential bias; and evaluated the business rationale of any significant
transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
•
reviewing financial statement disclosures by testing to supporting documentation to
assess compliance with provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
•
performing analytical procedures to identify any unusual or unexpected relationships
that may indicate risks of material misstatement due to fraud;
•
enquiring of management and internal audit concerning actual and potential litigation
and claims, and instances of non-compliance with laws and regulations; and
•
reading minutes of meetings of those charged with governance, reviewing internal audit
reports and
reviewing correspondence with Lloyd’s, PRA and FCA.
19
Independent auditor’s report to the members of Syndicate 5886
(continued)
Report on other legal and regulatory requirements
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Managing Agent’s report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
•
the Managing Agent’s report has been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Syndicate and its environment obtained
in the course of the audit, we have not identified any material misstatements in the Managing
Agent’s report.
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 in respect of the following matters if, in our opinion:
•
the Managing Agent in respect of the Syndicate has not kept adequate accounting
records; or
•
the Syndicate Annual Report and Accounts are not in agreement with the accounting
records; or
•
we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
20
Independent auditor’s report to the members of Syndicate 5886
(continued)
Use of our report
This report is made solely to the Syndicate’s
members, as a body, in accordance with
regulation 10 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008. 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 for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Syndicate’s
members as a body,
for our audit work, for
this report, or for the opinions we have formed.
As required by the Lloyd’s
Syndicate Accounts Instructions,
these financial statements will form
part of the Electronic Format Annual Syndicate Report and Accounts filed with the Council of
Lloyd’s and published on the Lloyd’s website. This auditors’ report provides no assurance over
whether the Electronic Format Annual Syndicate Report and Accounts have been prepared in
compliance with Section 2 of the Lloyd’s
Syndicate Accounts Instructions.
We have been
engaged to provide assurance on whether the Electronic Format Annual Syndicate Report and
Accounts has been prepared in compliance with Section 2 of the Lloyd’s
Syndicate Accounts
Instructions and will report privately to the directors of the managing agent and the Council of
Lloyd’s on this.
Ben Newton (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
16 February 2026
21
Statement of Comprehensive Income
Technical account – General business
For the year ended 31 December 2025
Note
2025
£’000
2024
£’000
Gross premiums written
4
Outward reinsurance premiums
(89,959 )
(85,644 )
Premiums written, net of reinsurance
Changes in unearned premium
Change in the gross provision for unearned premiums
(67,817 )
(36,064 )
Change in the provision for unearned premiums
reinsurers’ share
Net change in provisions for unearned premiums
5
(60,689 )
(29,196 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the
non-technical account
9
Claims paid
Gross amount
(142,412 )
(138,822 )
Reinsurers’ share
Net claims paid
(107,785 )
(113,142 )
Change in the provision for claims
Gross amount
(40,704 )
(3,169 )
Reinsurers’ share
(4,154 )
Net change in provisions for claims
5
(27,940 )
(7,323 )
Claims incurred, net of reinsurance
(135,725 )
(120,465 )
Net operating expenses
6
(140,265 )
(115,832 )
Balance on the technical account – general
business
All the amounts above are in respect of continuing operations.
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
22
Statement of Comprehensive Income
(continued)
Non-technical account - General business
For the year ended 31 December 2025
Note
2025
£’000
2024
£’000
Balance on the technical account – general business
Investment income
Realised gains on investments
Unrealised gains on investments
Investment expenses and charges
(315 )
(212 )
Total investment return
9
Allocated investment return transferred to the general
business technical account
(17,080 )
(13,111 )
Loss on foreign exchange
(2,582 )
(113 )
Profit for the financial year
Other comprehensive income:
2025
£’000
2024
£’000
Currency translation (losses)/gains
(7,744 )
Total comprehensive income for the year
All the amounts above are in respect of continuing operations.
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
23
Statement of Financial Position
As at 31 December 2025
Note
2025
£’000
2024
£’000
ASSETS
Investments
Financial investments
10
Deposits with ceding undertakings
Investments
Reinsurers' share of technical provisions
Provision for unearned premiums
5
Claims outstanding
5
Reinsurers' share of technical provisions
Debtors
Debtors arising out of direct insurance operations
11
Debtors arising out of reinsurance operations
12
Other debtors
13
Debtors
Other assets
Cash at bank and in hand
17
Other
19
Other assets
Prepayments and accrued income
Accrued interest
Deferred acquisition costs
5
Other prepayments and accrued income
Prepayments and accrued income
Total assets
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
24
Statement of Financial Position
(continued)
As at 31 December 2025
Note
2025
£’000
2024
£’000
Capital and reserves
Members’ balances
Total Capital and Reserves
Technical provisions
Provision for unearned premiums
5
Claims outstanding
5
Technical provisions
Creditors
Creditors arising out of direct insurance operations
14
Creditors arising out of reinsurance operations
15
Other creditors including taxation and social security
16
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, Capital and Reserves
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
The Syndicate Annual Report and Accounts on pages 22 to 27 were approved by the Board of
Directors on 16 February 2026 and were signed on its behalf by:
S J Ingham
Director
16 February 2026
25
Statement of Changes in Members' Balances
For the year ended 31 December 2025
2025
£’000
2024
£’000
Members’ balances brought forward at 1 January
Total comprehensive income for the year
Payments of profit to members’ personal reserve funds
(27,984 )
Losses collected in relation to distribution on closure of underwriting year
Members agent fees
(800 )
(763 )
Members’ balances carried forward at 31 December
All the amounts above are in respect of continuing operations.
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
26
Statement of Cash Flows
For the year ended 31 December 2025
The Notes on pages 28 to 70 form part of these Syndicate Annual Report and Accounts.
Note
2025
£’000
2024
£’000
Cash flows from operating activities
Profit for the financial year
Increase in gross technical provisions
Increase in reinsurers’ share of gross technical provisions
(9,812 )
(3,126 )
Increase in debtors
(61,507 )
(29,704 )
Increase in creditors
Movement in other assets/liabilities
(20,327 )
(4,256 )
Investment return
(17,077 )
(13,111 )
Foreign exchange
(4,312 )
Other
(2,298 )
(215 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(279,380 )
(317,973 )
Sale of equity and debt instruments
Investment income received
Other
(150 )
Net cash flows from investing activities
(129,331 )
Cash flows from financing activities
Distribution of profit
(28,784 )
Collection of losses
Net cash flows from financing activities
(28,784 )
Net increase/(decrease) in cash and cash
equivalents
(50,568 )
Cash and cash equivalents at beginning of the year
Foreign exchange (loss)/gain on opening cash and cash
equivalents
(1,133 )
Cash and cash equivalents at the end of the year
17
27
Notes to the Syndicate Annual Report and Accounts
For the year ended 31 December 2025
1. Basis of preparation
Syndicate 5886 (‘The Syndicate’) comprises a group of members of the Society of Lloyd's that
underwrites insurance business in the London Market. The address of the Syndicate’s
Managing Agent is 7th Floor, 70 Mark Lane, London, EC3R 7NQ.
Statement of compliance
The Syndicate Annual Report and Accounts have been prepared in accordance with the
Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008
and applicable Accounting Standards in the United Kingdom and the Republic of Ireland,
including Financial Reporting Standard 102 (FRS 102). FRS 102 requires the application of
Financial Reporting Standard 103 (FRS 103) in relation to insurance contracts. The annual
report is prepared in accordance with the provisions of Schedule 3 of the Large and Medium-
sized Companies and Groups (Accounts and Reports) Regulations relating to insurance
companies and the Lloyds Syndicate Accounts Instructions Version 3.1 as modified by the
Frequently Asked Question Version 1.1 issued by Lloyds.
The Syndicate Annual Report and Accounts have been prepared on the historical cost basis
except for certain financial instruments, which are measured at fair value. The Syndicate's
functional currency is US Dollars, being the primary economic environment in which it operates.
The accounts have been presented in Sterling (“GBP”), which is the Syndicate’s presentation
currency and rounded to the nearest £'000.
Going concern
The Directors have made the necessary enquiries and have a reasonable expectation that the
Syndicate has adequate resources to continue in operational existence for the foreseeable
future. Therefore, the Directors considered it appropriate to adopt the going concern basis of
accounting in preparing these accounts.
28
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
Significant accounting policies
The following significant accounting policies have been applied consistently in dealing with
items which are considered material in relation to the Syndicate Annual Report and Accounts.
Gross premiums
Gross premiums written 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. Gross premiums
written are stated gross of brokerage payable and exclude taxes and duties levied on them.
Reinstatement premiums are estimated in accordance with the contract terms and recorded
based upon claims provisions.
Profit commissions on contracts are estimated based on underlying profitability and accrued
where the amount can be estimated with reasonable certainty.
Outwards reinsurance premiums
Outwards reinsurance premiums comprise the total premiums payable for the whole cover
provided by contracts entered in 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.
Reinsurance outwards premiums are earned according to the nature of the cover. ‘Losses
occurring during’ policies are earned evenly over the policy period. ‘Risks attaching’ policies
are expensed on the same basis as the inwards business being protected.
29
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
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, including an allowance for the cost of claims incurred by the Statement of Financial
Position date, but not reported until after the year end.
The provision for claims comprises amounts set aside for claims notified and Incurred But Not
Reported (“IBNR”).
The amount included in respect of IBNR is based on a combination of statistical techniques of
estimation applied by the in-house actuaries and a detailed review of losses by management,
further reviewed by external consulting actuaries. The statistical techniques generally involve
projecting from past experience of the development of claims over time (using market data
where Syndicate data is unavailable) to form a view of the likely ultimate claims to be
experienced for more recent underwriting, 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.
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.
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, the
ultimate liability will vary as a result of subsequent information and events and this may result
in significant adjustments to the amounts provided.
Provision for unearned premiums
Unearned premiums are those proportions of premiums written in a year that relate to periods
of risk after the reporting date. Gross premiums written 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.
30
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
Provision for unearned premiums
(continued)
Unearned reinsurance premiums are those proportions of premiums written in a year that relate
to periods of risk after the reporting date. Unearned reinsurance premiums are deferred over
the term of the outwards reinsurance policy based on the underlying direct or inwards
reinsurance business being reinsured.
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 and 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, after taking into account relevant investment return.
Deferred acquisition costs
Acquisition costs comprise costs arising from the conclusion of insurance contracts. They
include both direct costs, such as intermediary commissions or the cost of drawing up the
insurance document or including the insurance contract in the portfolio, and indirect costs, such
as the advertising costs or the administrative expenses connected with the processing of
proposals and the issuing of policies.
Deferred acquisition costs are costs arising from the conclusion of insurance contracts that are
incurred during the reporting period, but which relate to a subsequent reporting period and
which are carried forward to subsequent reporting periods. Deferred acquisition costs are
amortised over the period in which the related premiums are earned.
Profit commission
Profit Commission is charged by the Managing Agent at a rate of 20% of the profit on an earned
Year of Account basis subject to the operation of a two year deficit clause. The Profit
Commission is payable after the appropriate Year of Account closes.
31
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
Reinsurance assets
The Syndicate cedes insurance risk in the normal course of business. Reinsurance assets
represent balances due from reinsurance companies and Lloyd’s syndicates. Amounts
recoverable from reinsurers are estimated in a manner consistent with the outstanding claims
provision 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
when 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. Any impairment loss is recorded in the Statement of
Comprehensive Income, however we do not expect any impairment losses as we maintain
strong monthly controls and reviews over the reinsurance overdue balances to ensure that
balances do not become overdue or are fully collateralised where reinsurers do not meet the
required minimum credit rating. Gains or losses on buying reinsurance are recognised in the
Statement of Comprehensive Income immediately at the date of purchase and are not
amortised.
Ceded reinsurance arrangements do not relieve the Syndicate from its obligations to
policyholders.
Insurance receivables
Insurance receivables are recognised when due and measured on initial recognition at the fair
value of the consideration received or receivable. Subsequent to initial recognition, insurance
receivables are measured at amortised cost. The carrying value of insurance receivables is
reviewed for impairment whenever events or circumstances indicate that the carrying amount
may not be recoverable, with the impairment loss recorded in the Statement of Comprehensive
Income.
32
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
Insurance payables
Insurance payables are recognised when due and measured on initial recognition at the fair
value of the consideration due less directly attributable transaction costs. Subsequent to initial
recognition, they are measured at amortised cost. Insurance payables are derecognised when
the obligation under the liability is settled, cancelled or expired.
Foreign currencies
The Syndicate's functional currency is US Dollars being the primary economic environment in
which it operates. The Syndicate’s presentation currency is Sterling (“GBP”).
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 or
appropriate average rate. 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.
Exchange differences are recorded in the non-technical account.
In translating its results and financial position into the presentational currency, the Syndicate
translates all assets and liabilities at the closing rates of exchange and translates all income
and expense items at average rates, with all resulting exchange gains and losses recognised
in other comprehensive income.
The following Statement of Financial Position rates of exchange have been used in the
preparation of these accounts:
2025
2025
2025
2024
2024
2024
Start of
period rate
Year End
Average rate
Start of
period rate
Year End
Average rate
AUD
CAD
EUR
JPY
USD
GBP
33
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
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 U.K.).
Financial assets and financial liabilities at fair value through the 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.
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 expire.
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.
Initially, financial assets and liabilities are measured at fair value (including transaction costs,
for assets and liabilities not measured at fair value through profit or loss).
Financial assets at fair value through profit or loss are measured at fair value with fair value
changes recognised immediately in the Statement of Comprehensive Income. 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. At each reporting date the Syndicate assesses whether there is
objective evidence that financial assets not measured at fair value through profit or loss are
impaired. Financial assets are impaired when objective evidence demonstrates that a loss
event has occurred after the initial recognition of an asset, and that the loss event has an
impact on the future cash flows on the asset that can be estimated reliably.
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.
34
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
Financial assets and liabilities
(continued)
An impairment loss in respect of a financial asset measured at amortised cost is calculated as
the difference between its carrying amount, and the present value of the estimated future cash
flows discounted at the asset’s original effective interest rate. Individually significant financial
assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
An impairment loss recognised reduces directly the carrying amount of the impaired asset. All
impairment losses are recognised in the Statement of Comprehensive Income. An impairment
loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised.
For financial assets measured at amortised cost the reversal is recognised in the Statement of
Comprehensive Income.
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.
They also comprise collective investment schemes which are invested on a short-term basis.
This excludes Lloyd’s overseas deposits which are included within other assets.
Investment return
Investment return is initially recorded in the non-technical account. A transfer is made from the
non-technical account to the general business technical account to reflect the investment
return on funds supporting underwriting business.
Fair value measurement of investments
Financial instruments that are classified as fair value through the profit or loss account are
assigned a level using a fair value hierarchy that reflects the significance of the inputs used in
these measurements.
The Syndicate uses the following hierarchy for determining the fair value of financial
instruments by valuation technique:
Level 1 financial instruments comprise government bonds that are regularly traded, deposits
with credit institutions and collective investment schemes which comprise Money Market
Funds.
•
Bonds have been valued at fair value using quoted prices in an active market.
•
Deposits with credit institutions are included at cost plus accrued income.
•
Money Market Funds are valued on a stable net asset value (“NAV”) basis. Money Market
Funds are readily convertible into cash, 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.
35
Notes to the Syndicate Annual Report and Accounts
(continued)
2. Accounting policies
(continued)
Fair value measurement of investments
(continued)
Level 2 financial instruments are less regularly traded government and agency bonds,
supranational bonds, corporate bonds, currency derivatives, bond futures, and fund
investments.
•
Bonds are included in the Statement of Financial Position at bid price using prices supplied
by the custodian or by the investment managers, who obtain market data from numerous
independent pricing services. The prices used are reconciled against a common market
pricing source.
•
Currency derivatives and bond futures are included at market price.
•
Investments in regulated collective investment schemes are valued on the NAVs of each
of the individual funds as published publicly by the managers.
•
Investments in pooled investments in unregulated investment schemes (hedge funds) are
valued based on the underlying NAVs of each of the individual funds. Hedge fund NAVs
are provided by the administrators of the schemes.
•
Investments in investment pools are valued on the valuations supplied by the investment
manager (Lloyd’s).
Level 3 financial instruments have a fair value derived from inputs that are not based on
observable market data.
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 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.
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 Statement of Financial Position under the heading ‘Other
debtors’.
Pension costs
The Managing Agent operates a defined contribution scheme. Pension contributions to
Syndicate staff are charged to the Syndicate and included within net operating expenses.
36
Notes to the Syndicate Annual Report and Accounts
(continued)
3. Critical accounting judgements and key sources of estimation
uncertainty
In preparing these Annual Syndicate Report and Accounts, 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.
Critical accounting judgements
There have been no critical accounting judgements made in the process of applying the
Syndicate’s accounting policies, other than those involving estimations that have had a
significant effect on the amounts recognised in the Annual Syndicate Report and Accounts.
Key sources of estimation uncertainty
The key sources of estimation uncertainty at the Statement of Financial Position date that have
a significant risk of causing material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
Gross premiums written
Gross premiums written are a key source of estimation uncertainty as it relies upon the
underwriter’s judgement of pipeline premium at policy level as well as projection of future
premiums at portfolio level based, primarily on the assumption past premium development can
be used to project future premium development.
For certain insurance contracts, premium is initially recognised based on estimates of ultimate
premiums. These estimates, primarily relating to binder business, are judgemental and actual
results could differ significantly from those estimated in the Annual Syndicate Report and
Accounts. £231.3m of pipeline premium is included in gross premiums written. If the pipeline
premium were to change by 5%, this would have £11.6m impact on gross premiums written
(2024: £115.3m of pipeline premium included in gross premiums written. Pipeline premium
change by 5% results in a £5.8m impact on gross premiums written).
37
Notes to the Syndicate Annual Report and Accounts
(continued
)
3. Critical accounting judgements and key sources of estimation
uncertainty
(continued)
Claims outstanding and related reinsurance recoveries
The measurement of the provision for claims outstanding involves assumptions and estimates
about the future that have the most significant effect on the amounts recognised in the
Syndicate Annual Report and Accounts.
The provision for claims outstanding comprises the estimated cost of settling all claims incurred
but unpaid at the Statement of Financial Position 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. In
particular, 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 to the
Syndicate.
The ultimate cost of outstanding claims is estimated using a range of techniques including
actuarial and statistical projections, benchmarking and case by case review. Statistical
techniques assume that past claims development experience can be used as a basis to project
ultimate claims costs. Judgement is used to assess the extent to which past trends may not
apply in the future. Case estimates are generally set by skilled claims technicians applying their
experience and knowledge to the circumstances of individual claims.
Whilst the Directors consider that the gross provision for claims and the related reinsurance
recoveries are fairly stated based on the information currently available to them, the ultimate
liability will vary as a result of subsequent information and events. Please see note 24.
38
Notes to the Syndicate Annual Report and Accounts
(continued)
4. Analysis of underwriting result
An analysis of the underwriting result before investment return is set out below:
2025
Gross premiums
written
Gross premiums
earned
Gross claims
incurred
Gross operating
expenses
Reinsurance
balance
Underwriting
result
Direct Insurance
£’000
£’000
£’000
£’000
£’000
£’000
Accident & Health
(10,946 )
(7,162 )
(829 )
(827 )
Motor (third party liability)
(435 )
(449 )
(98 )
Motor (other classes)
(4,285 )
(2,423 )
(830 )
(366 )
Marine, aviation and transport
(14,447 )
(8,397 )
(962 )
Fire and other damage to Property
(38,899 )
(53,311 )
(27,181 )
Third party liability
(21,978 )
(17,842 )
(2,973 )
(224 )
Credit and suretyship
(4,161 )
(10,613 )
(4,102 )
Legal expenses
(4,079 )
(3,471 )
Total direct insurance
(99,230 )
(103,668 )
(35,484 )
Reinsurance acceptances
(83,886 )
(36,597 )
Total
(183,116 )
(140,265 )
(35,440 )
39
Notes to the Syndicate Annual Report and Accounts
(continued)
4. Analysis of underwriting result
(continued)
Below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into Lloyd’s
aggregate classes of business:
2025
Gross premiums
written
Gross premiums
earned
Gross claims
incurred
Gross operating
expenses
Reinsurance
balance
Underwriting
result
£’000
£’000
£’000
£’000
£’000
£’000
Fire and other damage to
property of which is:
Specialities
(2,932 )
(4,660 )
(4,093 )
Energy
(1,010 )
(261 )
Third party liability of
which is:
Energy
(125 )
(106 )
40
Notes to the Syndicate Annual Report and Accounts
(continued
)
4. Analysis of underwriting result
(continued)
2024
Gross premiums
written
Gross premiums
earned
Gross claims
incurred
Gross operating
expenses
Reinsurance
balance
Underwriting
result
Direct Insurance
£’000
£’000
£’000
£’000
£’000
£’000
Accident & Health
(11,800 )
(8,735 )
(1,385 )
(2,144 )
Motor (other classes)
(5,375 )
(2,847 )
(936 )
(602 )
Marine, aviation and transport
(9,292 )
(4,011 )
Fire and other damage to Property
(48,221 )
(52,812 )
(26,125 )
Third party liability
(1,682 )
(1,162 )
(200 )
(223 )
Credit and suretyship
(9,860 )
(9,918 )
(3,089 )
Legal expenses
(53 )
(97 )
(45 )
Total direct insurance
(86,283 )
(79,582 )
(31,224 )
Reinsurance acceptances
(55,708 )
(36,250 )
(26,026 )
Total
(141,991 )
(115,832 )
(57,250 )
41
Notes to the Syndicate Annual Report and Accounts
(continued
)
4. Analysis of underwriting result
(continued)
Below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into
Lloyd’s aggregate classes of business:
2024
Gross premiums
written
Gross premiums
earned
Gross claims
incurred
Gross operating
expenses
Reinsurance
balance
Underwriting
result
£’000
£’000
£’000
£’000
£’000
£’000
Fire and other damage to property of
which is:
Specialities
(2,246 )
(2,456 )
(5,763 )
(183 )
Energy
(801 )
(736 )
Third party liability of which is:
Energy
(306 )
(84 )
(6 )
(19 )
No gains or losses were recognised in profit or loss during the year on buying reinsurance (2024: £nil).
42
Notes to the Syndicate Annual Report and Accounts
(continued
)
4. Analysis of underwriting result
(continued)
The gross premiums written for direct insurance by location (where the contracts were
concluded) is presented in the table below:
2025
2024
£’000
£’000
United Kingdom
European Union Member States
Total gross premiums written
The comparative balance has been restated in order to show the conclusion of the contracts
rather than the destination of risk.
43
Notes to the Syndicate Annual Report and Accounts
(continued
)
5. Technical provisions
2025
Gross
provisions
£’000
Reinsurance
assets
£’000
Net
provisions
£’000
Claims outstanding
Balance at 1 January
(78,227 )
Claims paid during the year
(142,412 )
(107,785 )
Expected cost of current year claims
(30,014 )
Change in estimates of prior year provisions
(15,123 )
(17,377 )
(32,500 )
Foreign exchange movements
(16,538 )
(10,046 )
Balance at 31 December
(84,499 )
Unearned premiums
Balance at 1 January
(21,778 )
Premiums written during the year
(89,959 )
Premiums earned during the year
(424,057 )
(341,226 )
Foreign exchange movements
(12,496 )
(8,908 )
Balance at 31 December
(25,318 )
Deferred acquisition costs
Balance at 1 January
Incurred acquisition costs
Amortised deferred acquisition costs
(94,786 )
(94,786 )
Foreign exchange movements
(2,554 )
(2,554 )
Balance at 31 December
2024
Gross
provisions
£’000
Reinsurance
assets
£’000
Net
provisions
£’000
Claims outstanding
Balance at 1 January
(81,701 )
Claims paid during the year
(138,822 )
(113,142 )
Expected cost of current year claims
(33,909 )
Change in estimates of prior year provisions
(40,863 )
(28,480 )
Foreign exchange movements
(680 )
(190 )
Balance at 31 December
(78,227 )
Unearned premiums
Balance at 1 January
(15,178 )
Premiums written during the year
(85,644 )
Premiums earned during the year
(357,681 )
(278,905 )
Foreign exchange movements
(1,172 )
(904 )
Balance at 31 December
(21,778 )
Deferred acquisition costs
Balance at 1 January
Incurred deferred acquisition costs
Amortised deferred acquisition costs
(67,834 )
(67,834 )
Foreign exchange movements
(289 )
(289 )
Balance at 31 December
There was no provision for unexpired risks at 31 December 2025 (31 December 2024: £nil).
44
Notes to the Syndicate Annual Report and Accounts
(continued
)
6. Net operating expenses
2025
2024
£’000
£’000
Acquisition costs
Change in deferred acquisition costs
(22,382 )
(8,392 )
Administrative expenses
Members’ standard personal expenses
Net operating expenses
Members' standard personal expenses amounting to £25.8m (2024: £27.9m) are included in
administrative expenses. Members' standard personal expenses include Lloyd's subscriptions,
New Central Fund contributions, Managing Agent's fees and Profit Commission.
Total commissions for direct insurance business for the year amounted to:
Administrative expenses include:
2025
2024
£’000
£’000
Fees payable to the Syndicate’s auditor for the audit of these financial
statements
Fees payable to the Syndicate’s auditor and its associates in respect of
other services pursuant to legislation
575
460
The audit fees were paid to Deloitte LLP.
2025
2024
£’000
£’000
Total commission for direct insurance business
45
Notes to the Syndicate Annual Report and Accounts
(continued
)
7. Staff costs and staff numbers
2025
2024
£’000
£’000
Wages and salaries
Social security costs
Pension costs
The average number of staff working for the Syndicate during the year is as follows:
2025
2024
Underwriting
Claims
Administration and finance
8. Emoluments of the Directors of Blenheim Underwriting Limited
and the Active Underwriter
The aggregate emoluments of the Directors and staff of the Syndicate are met by Blenheim
and subsequently recharged to the Syndicate. These are disclosed within the Statutory report
and accounts of that company.
The Directors received the following aggregate remuneration charged to the Syndicate.
2025
2024
£’000
£’000
Directors’ emoluments
The Active Underwriter received the following aggregate remuneration charged to the
Syndicate.
2025
2024
£’000
£’000
Emoluments
46
Notes to the Syndicate Annual Report and Accounts
(continued
)
9. Investment return
Interest and similar income
From financial assets designated at fair value through profit or loss:
2025
£’000
2024
£’000
Interest and similar income
Interest on cash at bank
13,770
10,880
Other income from investments
From financial assets designated at fair value through profit or loss:
2025
£’000
2024
£’000
Gains on the realisation of investments
Losses on the realisation of investments
(246 )
(7,947 )
Unrealised gains on investments
Unrealised losses on investments
(213 )
(1,869 )
Investment management expenses
(315 )
(212 )
Total investment return
Transferred to the technical account from the non-technical account
47
Notes to the Syndicate Annual Report and Accounts
(continued
)
10. Financial investments
2025
2024
Carrying
value
Cost
Carrying
value
Cost
£’000
£’000
£’000
£’000
Shares and other variable yield
securities and units in unit trusts
Syndicate loans to central fund
Debt securities and other fixed
income securities
Total financial investments
Included in the carrying values above are listed investments as
follows:
2025
2024
£’000
£’000
Listed investments
Amounts included within shares and other variable securities include Collective Investment
Schemes where funds are invested in a single vehicle which invests in investments.
There was no material change in fair value for financial instruments held at fair value
attributable to own credit risk in the current period.
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
Total financial investments
48
Notes to the Syndicate Annual Report and Accounts
(continued
)
10. Financial investments
(continued)
The following table shows financial investments recorded at fair value analysed between the
three levels in the fair value hierarchy.
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
31 December 2025
Shares and other variable yield securities
and units in unit trusts
Syndicate loans to central fund
Debt securities and other fixed income
securities
Total financial investments
Total
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
31 December 2024
Shares and other variable yield
securities and units in unit trusts
Syndicate loans to central fund
Debt securities and other fixed income
securities
Total financial investments
Total
Included in the level 1 category are 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 syndicate, pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm's length basis.
Included in the level 2 category are 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.
49
Notes to the Syndicate Annual Report and Accounts
(continued
)
10. Financial investments
(continued)
Included in the level 3 category, are 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 main asset classes in the level 3 category are unlisted equities, structured bond-type debt
products and interest rate swaps.
•
For unlisted equities, the non-observable inputs relate to assumptions regarding the
price/equity ratio of the investee compared to those of comparable listed entities together
with an illiquidity adjustment which typically ranges between 10-20%.
•
For structured bond-type debt products, these are valued using an internally developed
cash flow model using a discount rate with a non-observable illiquidity adjustment of
between 5-10%.
•
For interest rate swaps, these are valued from broker quotes which include non-observable
discount rates based on the credit rating of the counterparty.
The Syndicate’s level 3 financial investment are in respect of a loan to the Lloyd’s Central Fund.
Lloyd’s considers the loans to meet the criteria to be recognised as a basic financial instrument
under FRS 102 and be classified as level 3 in the fair value hierarchy. These loans are being
valued at cost.
50
Notes to the Syndicate Annual Report and Accounts
(continued
)
11. Debtors arising out of direct insurance operations
2025
2024
£’000
£’000
Due within one year
Due after one year
12. Debtors arising out of reinsurance operations
2025
2024
£’000
£’000
Due within one year
Due after one year
13. Other debtors
2025
2024
£’000
£’000
Amounts due from members
Other
51
Notes to the Syndicate Annual Report and Accounts
(continued
)
14. Creditors arising out of direct insurance operations
2025
2024
£’000
£’000
Due within one year
Due after one year
15. Creditors arising out of reinsurance operations
2025
2024
£’000
£’000
Due within one year
Due after one year
16. Other creditors
2025
2024
£’000
£’000
Other related party balances (non-syndicates)
Profit Commission payable
Other liabilities
Other creditors include £35.2m (2024: £24.0m) due to related undertakings.
52
Notes to the Syndicate Annual Report and Accounts
(continued
)
17. Cash and cash equivalents
2025
2024
£’000
£’000
Cash at bank and in hand
Short term debt instruments presented within other financial
investments
Only 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.
Included within cash and cash equivalents are the following amounts which are not available
for use by the Syndicate because they are held in regulated bank accounts in overseas
jurisdictions:
2025
2024
£’000
£’000
Short term debt instruments presented within other financial
investments
53
Notes to the Syndicate Annual Report and Accounts
(continued
)
18. Analysis of net debt
At 1
January
2025
Cash
flows
Acquired
Fair value
and
exchange
movements
Non-
cash
changes
At 31
December
2025
£’000
£’000
£’000
£’000
£’000
£’000
Cash and cash
equivalents
(1,133 )
Total
(1,133 )
19. Other assets
2025
2024
£’000
£’000
Overseas deposits
17,199
17,221
Overseas deposits are advanced as a condition of conducting underwriting business in certain
countries and therefore are restricted assets.
20. Related parties
Blenheim, Managing Agent of the Syndicate since 6 August 2021 is a wholly owned subsidiary
of WBC.
Blenheim incurs the majority of the Syndicate’s administrative expenses which it then
recharges to the Syndicate without mark-up. Expenses incurred jointly for the Group are
recharged to group companies on a basis representing the nature of the expenses and their
usage by group companies. As at 31 December 2025, amounts owed to Blenheim from the
Syndicate relating to expense recharges totalled £2.5m (2024: £1.8m).
Managing agency fees of £3.9m (2024: £3.0m) were charged by Blenheim to the Syndicate
during 2025. The balance owing as at 31 December 2025 is £nil (2024: £nil). Managing Agent
Profit Commission relating to Blenheim of £1.3m was accrued on the 2025 Year of Account,
£13.1m was accrued on the 2024 Year of Account and £18.4m was accrued on the 2023 Year
of Account (2024: £17.5m on the 2023 Year of Account and £4.7m on the 2022 Year of
Account). The amounts only become payable subject to the Year of Account closing with a
profit.
Blenheim receives fees for acting as a manager of several consortia that are led by the
Syndicate. No fees were charged to the Syndicate by Blenheim for this service.
54
Notes to the Syndicate Annual Report and Accounts
(continued
)
20. Related parties
(continued)
As part of the Group, WBC wholly owns White Bear Corporate Capital Limited, a Lloyd’s
corporate member which participates on Syndicate 5886 on the 2023 Year of Account for
£105.0m, on the 2024 Year of Account for £117.5m and on the 2025 Year of Account for
£154.3m. The Syndicate provided six binding authorities (2024: five binding authorities) to
Blenheim Partnerships Limited (“BPL”) formerly White Bear Managers Ltd, a Lloyd’s
coverholder and member of the Group. During the financial year, BPL had written total fees of
£2.4m (2024: £1.7m) in respect of the services for these binding authorities. Both companies
have common Directors with Blenheim.
All transactions are entered into on an arm’s length basis.
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 Annual Syndicate
Accounts 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. Bank facilities
At the start of the year, the Syndicate had the benefit of a revolving credit facility for US$50.0m
with Barclays Bank Plc. This facility was renewed in December 2025 for the 12 months to 31
December 2026.
The Syndicate utilised US$nil of this facility during the 2025 calendar year.
23. Off-Statement of Financial Position items
As noted in Note 22, during the year, the Syndicate had the benefit of a combined letter of
credit and revolving credit facility of US$50.0m (2024: US$50.0m) with Barclays Bank Plc of
which it utilised US$nil (2024: US$15.0m utilised until February 2024 when the utilisation was
reduced to US$nil) for the purposes of regulated trust funding at 31 December 2025. This
arrangement is considered to be off-Statement of Financial Position as neither the asset nor
the liability are owned by the Syndicate.
55
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk and capital management
This note presents information about the nature and extent of insurance and financial risks to
which the Syndicate is exposed, the Managing Agent’s objectives, policies and processes for
measuring and managing insurance and financial risks, and for managing the Syndicate’s
capital.
a) Risk management 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.
Blenheim maintains a risk management function for the Syndicate with clear terms of reference
from the Board and its committees. The RiC is the predominant committee to consider risk
management within the governance structure. The RiC is a non-executive committee formed
by and at the direction of the Board.
The RiC is intended to act as a governance body for ensuring Blenheim maintains a
comprehensive and up to date risk management framework to enable monitoring of the risks
to which the business and syndicates under management are, or could be exposed to, and the
appropriateness and effectiveness of the strategies and the control environment used to
mitigate them.
The Board, on the recommendation of the RiC, approves Blenheim’s core risk management
policies and any commercial, regulatory and organisational requirements of such policies. The
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
Lloyd's is a regulated undertaking and subject to the supervision of the 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
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 only apply at Lloyd’s overall
and individual member level respectively, not at syndicate level. Accordingly, the capital
requirement in respect of the Syndicate is not disclosed in these Annual Syndicate Report and
Accounts.
56
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
b) Capital management objectives, policies and approach
(continued)
Capital framework at Lloyd's
(continued)
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 participates 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 shall thus be 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”).
The purpose of this uplift is to meet Lloyd's financial strength, licence and ratings objectives.
The capital uplift applied for 2025 was 35% (2024: 35%) of the members’ SCR 'to ultimate'.
Provision of capital by members
Each member may provide capital to meet its ECA by assets held in trust by Lloyd's specifically
for that member (FAL), 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 member’s balances reported on the Statement of Financial Position
on page 25, 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 or
the timing thereof, differ from expectations.
This is influenced by the frequency of claims, severity of claims, actual claims 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. Further details are set out in the Managing Agent’s Report.
The Syndicate purchases reinsurance as part of its risk mitigation strategies. Reinsurance
ceded is placed largely on a non-proportional basis. Non-proportional reinsurance is excess-
of-loss reinsurance designed to mitigate the Syndicate's net exposure to large 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.
57
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
c) Insurance risk
(continued)
The RC, a management committee, oversees 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 Board.
In terms of COVID-19 and Ukraine losses, including Russian related aviation losses,
management have considered all policies exposed and potential coverages. The validity of
each potential claims advice was assessed and any provision made on a case by case basis.
Many issues are yet to be clarified from a legal perspective and to date few cases, particularly
as they relate to reinsurance, have reached either arbitration or court. We believe that the
overall loss reserves are sufficient to reflect the uncertainties of COVID-19 and Ukraine losses.
The Syndicate uses commercially available risk management software and internal modelling
methodologies including specific deterministic realistic disaster scenarios (“RDS”),in
accordance with Lloyd’s franchise guidelines, to enable the quantification and management of
natural and man-made catastrophe portfolio exposures. However, there is always a risk that
claims that arise are greater than those resulting from modelled scenarios depending on the
size, nature and geographic impact of the event or from un-modelled events.
Based on the July 2025 Lloyd’s RDS submission, the largest Gross RDS was a Florida (Miami-
Dade) windstorm event with an industry loss estimate of US$131.0bn. This equates to a loss
to the Syndicate of US$260.5m gross and US$91.6m net of reinsurance recoveries and
reinstatement costs (2024: Florida (Miami-Dade) windstorm event US$192.3m gross and
US$64.6m net of reinsurance recoveries and reinstatement costs).
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. 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 and 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.
58
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
c) Insurance risk
(continued)
Sensitivities
The claim liabilities are sensitive to the key assumptions that follow. It has not been plausible
to quantify the sensitivity of certain assumptions such as legislative changes or 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 gross and 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 can be non-linear.
General insurance business sensitivities as at 31 December 2025
+5.0%
£’000
-5.0%
£’000
Claims outstanding – gross of reinsurance
(17,693 )
Claims outstanding – net of reinsurance
(13,468 )
General insurance business sensitivities as
31 December 2024
+5.0%
£’000
-5.0%
£’000
Claims outstanding – gross of reinsurance
(16,485 )
Claims outstanding – net of reinsurance
(12,573 )
59
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
c) Insurance risk
(continued)
Claims development table gross of reinsurance
The table below and on the following page shows 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 Statement of
Financial Position date. The Syndicate has elected to translate estimated claims and claims payments at a consistent rate of exchange as
determined by the Statement of Financial Position date.
Underwriting Year
Estimate of cumulative
Gross claims incurred:
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
Total
£’000
At end of underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Estimate of gross claims reserve
Less gross claims paid
(144,248 )
(109,603 )
(137,761 )
(160,051 )
(192,548 )
(188,761 )
(62,792 )
(48,271 )
(6,438 )
(1,050,473 )
Gross claims reserve
60
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
c) Insurance risk
(continued)
Claims development table net of reinsurance
The table 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 net of reinsurance basis at the Statement of Financial Position date.
Underwriting Year
Estimate of cumulative
Net claims incurred:
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
Total
£’000
At end of underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Estimate of net claims reserves
Less net claims paid
(75,002 )
(80,005 )
(109,633 )
(115,551 )
(144,768 )
(164,799 )
(58,444 )
(44,445 )
(5,716 )
(798,363 )
Net claims reserve
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. However due to the uncertainty inherent in the claims estimation
process, initial reserves may not always be in a surplus.
61
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. 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.
The goal of the investment management process is to optimise the risk-adjusted investment
income and risk-adjusted total return by investing in a diversified portfolio of securities, whilst
ensuring that the assets and liabilities are managed on a cash flow and duration basis in line
with the investment guidelines.
1. Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss by failing
to discharge an obligation. The following policies and procedures are in place to mitigate the
exposure to reinsurer 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 has no credit rating, then collateral is usually sought to mitigate any risk. This
is monitored by the RISBC, a management committee.
The table below shows the maximum exposure to credit risk (including an analysis of financial
assets exposed to credit risk) for the components of the statement of financial position. The
maximum exposure is shown gross, before the effect of mitigation through collateral
agreements.
31 December 2025
£’000
Neither past due
nor impaired
assets
Past due
but not
impaired
assets
Gross
value of
Impaired
assets
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
Other debtors and accrued
interest
Other assets
17,199
17,199
Cash at bank and in hand
Total
62
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
1. Credit risk
(continued)
31 December 2024
£’000
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
Impaired
assets
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
Other debtors and accrued interest
Other assets
17,221
17,221
Cash at bank and in hand
Total
The table below sets out the age analysis of financial assets that are past due but not impaired at the
Statement of Financial Position date:
£’000
31 December 2025
0-3 months
past due
3-6 months
past due
6-12 months
past due
Greater
than one
year
Total
Debtors arising out of direct
insurance operations
Debtors arising out of
reinsurance operations
Total
63
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
1. Credit risk
(continued)
£’000
31 December 2024
0-3 months
past due
3-6 months
past due
6-12 months
past due
Greater
than one
year
Total
Debtors arising out of direct
insurance operations
Debtors arising out of
reinsurance operations
Total
The table below provides information regarding the credit risk exposure of the Syndicate at 31 December
2025 by classifying assets according to independent credit ratings of the counterparties. AAA is the
highest possible rating. Assets that fall outside the range of AAA to BB are classified as speculative
grade and have not been rated.
31 December 2025
£’000
AAA
AA
A
BBB
Other
Not
Rated
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
Cash at bank and in hand
Debtors arising out of direct
insurance operations
Debtors arising out of
reinsurance operations
Other debtors and accrued
interest
Other assets
5,522
1,653
1,503
1,106
-
7,415
17,199
Total
64
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
1. Credit risk
(continued)
31 December 2024
£’000
AAA
AA
A
BBB
Other
Not
Rated
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
Cash at bank and in hand
Debtors arising out of direct
insurance operations
Debtors arising out of
reinsurance operations
Other debtors and accrued
interest
Other assets
6,126
1,335
1,266
968
600
6,926
17,221
Total
Maximum credit exposure
It is the Syndicate's policy to maintain accurate and consistent risk ratings across its credit
portfolio. This enables management to focus on the applicable risks and the comparison of
credit exposures across all lines of business.
During the year, no credit exposure limits were exceeded.
65
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
2. Liquidity risk
Liquidity risk is the risk that the Syndicate may not have enough cash to pay insurance claims
and other liabilities. The Syndicate tries to reduce this risk by reviewing its expected cash
obligations on a quarterly basis and keeping adequate cash on deposit to meet those
obligations and utilising available banking facilities.
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.
31 December 2025
£’000
Undiscounted net cash flows
No
maturity
stated
0-1 Year
1-3 Years
3-5 Years
More than
5 years
Total
Creditors
Claims outstanding
Total
31 December 2024
£’000
Undiscounted net cash flows
No
maturity
stated
0-1 Year
1-3 Years
3-5 Years
More than
5 years
Total
Creditors
Claims outstanding
Total
66
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
3. 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 risks.
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 US Dollars and its exposure to foreign exchange risk arises primarily with respect to
transactions in Sterling, Euro, Japanese Yen, Canadian Dollars and Australian Dollars.
The table below summarises the exposure of the financial assets and liabilities to foreign
currency exchange risk at the reporting date, as follows:
31 December 2025
CNV £’000
GBP
USD
EUR
CAD
AUD
JPY
Total
Investments
Reinsurers’ share of
technical provisions
Debtors
Other assets
Prepayments and
accrued income
Total Assets
Technical provisions
(44,921 )
(469,704 )
(36,590 )
(18,354 )
(17,673 )
(995 )
(588,237 )
Creditors
(41,030 )
(44,351 )
(6,083 )
(3,285 )
(711 )
(264 )
(95,724 )
Accruals and
deferred income
(210 )
(280 )
(490 )
Total Liabilities
(86,161 )
(514,335 )
(42,673 )
(21,639 )
(18,384 )
(1,259 )
(684,451 )
Total capital and
reserves
(157,523 )
(24,520 )
(1,670 )
(413 )
(131,020 )
67
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
3. Market risk
(continued)
a) Currency risk
(continued)
31 December 2024
CNV £’000
GBP
USD
EUR
CAD
AUD
JPY
Total
Investments
Reinsurers’ share of
technical provisions
Debtors
Other assets
Prepayments and
accrued income
Total Assets
Technical provisions
(32,321 )
(401,516 )
(39,566 )
(18,564 )
(15,829 )
(954 )
(508,750 )
Creditors
(24,527 )
(44,018 )
(4,757 )
(2,880 )
(153 )
(206 )
(76,541 )
Accruals and deferred
income
(1,064 )
(213 )
(1,277 )
Total Liabilities
(57,912 )
(445,747 )
(44,323 )
(21,444 )
(15,982 )
(1,160 )
(586,568 )
Total capital and
reserves
(107,542 )
(25,088 )
(1,644 )
(234 )
(87,814 )
The Syndicate holds assets and liabilities in these six main currencies. The Syndicate for the
most part aims to ensure its assets and liabilities match in currency as closely as possible to
mitigate the currency risk. The currency shortfall in the currencies above is partly driven by the
gross claims being in those currencies and any recoveries being in US Dollars. However, it
should be noted that there is a degree of currency mitigation because the reinsurance
collections made on these losses are based on the gross losses being converted to Sterling at
the prevailing exchange rate to mitigate the currency risk.
68
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
3. Market risk
(continued)
a) Currency risk
(continued)
Sensitivity to changes
The table below gives an indication of the impact on profit of a reasonably possible change in
the relative strength of Sterling (“GBP”) exchange rate (“FX rate”) against the value of the US
Dollar (“USD”), Canadian Dollar (“CAD”), Australian Dollar (“AUD”), Japanese Yen (“JPY”) and
Euro (“EUR”) simultaneously. The analysis is based on the information as at 31 December
2025.
Impact on profit and members’ balance
2025
2024
£’000
£’000
Sterling weakens
10% against other currencies
(16,604)
(11,358)
20% against other currencies
(33,207)
(22,716)
Sterling strengthens
10% against other currencies
16,604
11,358
20% against other currencies
33,207
22,716
69
Notes to the Syndicate Annual Report and Accounts
(continued
)
24. Risk management
(continued)
d) Financial risk
(continued)
3. Market risk
(continued)
b) Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will
fluctuate because of 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 most significant contribution to risk in the fixed income portfolio is interest rate risk:
Impact on
results
before tax
2025
£’000
Impact on
members
balances
2025
£’000
Impact on
results
before tax
2024
£’000
Impact on
members
balances
2024
£’000
50 basis points increase
(2,843 )
(2,843 )
(2,255 )
(2,255 )
50 basis points decrease
The Board, via its appointed Investment Committee, monitors the duration of investments in
order to manage the interest rate risk within the fixed income portfolio. If interest rates fall the
Syndicates fixed income securities fair value will tend to increase and if they rise the fair value
will tend to decrease. The value of Debt securities and other fixed income securities at 31
December 2025 was £299.5m (2024: £302.9m) with an average duration of around 1.69 years
(2024: 1.54 years).
Insurance liabilities are not discounted and therefore not exposed to interest rate risk.
25. Subsequent events
The Syndicate will distribute the 2023 Underwriting Year profit of £72.7m in US Dollars to
members in June 2026. The Syndicate will distribute the 2023 Underwriting Year Managing
Agency Profit Commission of £18.4m in Sterling to Blenheim in March 2026.
70