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Lloyd’s Syndicate
Syndicate 1110
Annual Report and Accounts for the year ended
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
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Contents
Directors and administration
..................................................................................................
2
Managing Agent’s report
.......................................................................................................
3
Statement of Managing Agent’s responsibilities
....................................................................
7
Independent auditor’s report to the member of Syndicate 1110
............................................
8
Statement of profit or loss and other comprehensive income
..............................................
12
Balance sheet – Assets
.......................................................................................................
14
Balance sheet (cont’d) – Liabilities
......................................................................................
15
Statement of changes in member’s balances
......................................................................
16
Statement of cash flows
...................................................................................................
17
Notes to the financial statements…………………………………………………………………..18
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Directors and administration
Managing Agent
Registered office
Grange Park,
Bishop's Cleeve,
Cheltenham, England,
GL52 8YQ
Registered number
03935227
Directors
P D Andrews
M J Bishop (resigned 13 Mar 2025)
I J Bremner*
K D Curtis*
J A Hummerston (resigned 19 Feb 2025)
C E Layton (appointed 3 Jan 2025)
S Minshall
G H J Nokes (appointed 13 Mar 2025)
R M Richardson-Bunbury
M Sebold-Bender*
P R Smith
Z Szalkai
P I Wooldridge
* Independent non-executive director
Company secretary
L Robinson (appointed 6 Oct 2025)
P M Laws (resigned 15 Sep 2025)
Syndicate
Run-off manager
P S Donovan
Bankers
Barclays Bank - London
Citibank NA - London and New York
RBC Investor & Treasury Services - Toronto
Investment manager
Conning Asset Management Limited
Auditors
PKF Littlejohn LLP
Statement of actuarial opinion signing actuary
PricewaterhouseCoopers LLP
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Managing Agent’s report
The Directors of PMA, the Managing Agent for the Syndicate, present their report and the audited financial
statements for the year ended 31 December 2025.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and the Lloyd’s Syndicate Accounts
Instructions V3.1 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (the Syndicate
Accounts Instructions).
Results
The result for the year ended 31 December 2025 is a loss of £7.5m (2024: loss of £54.5m).
Principal activity
The principal activity of Syndicate 1110 was the transaction of reinsurance business in the United Kingdom by
way of reinsurance to close (“RITC”), loss portfolio transfer (“LPT”) or adverse development cover (“ADC”). In
July 2024 the Syndicate was placed into run-off and will no longer transact underwriting.
Management of the Syndicate
Polo Managing Agency Limited (“PMA”) is the Managing Agency for the Syndicate. Until 9 August 2024 the
Syndicate was managed by R&Q Syndicate Management Limited. On 9 August 2024 Polo Managing Agency
Limited (“PMA”) became Managing Agency by way of novation.
The Managing Agent is a wholly owned subsidiary of Marco Capital Holdings (UK) Limited.
Review of financial performance
The key financial indicators for the year ended 31 December 2025 were as follows:
2025
£m
2024
£m
Net claims incurred
(5.7)
(37.3)
Net operating expenses
(9.8)
(22.5)
Investment return
5.7
5.9
Loss
(7.5)
(54.5)
Claims incurred in the current period of £5.7m (2024: £37.3m) were impacted by adverse development of
casualty business, particularly in the US. The prior period was impacted similarly, although on a much higher
scale.
Net operating expenses in 2025 were £9.8m (2024: £22.5m). During the prior year certain assets were impaired
causing expenses to be higher.
Investment return in 2025 was £5.7m (2024: £5.9m). Whilst investments have decreased causing reduced
interest income, movements in interest rate yields have generated an increase in unrealised gains.
An agreement was reached to settle one of the two arbitrations noted in Note 25 of the 31 December 2024
financial statements during the period. The agreed settlement was significantly less than the statement of claim.
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Statement of financial position
Syndicate assets reduced by £155.2m to £328.1m (2024: £483.2m) and total liabilities decreased by £147.8m
to £413.8m (2024: £561.6m).
Assets have decreased with the payment of claims and expenses causing reduced investments of £128.5m
(from £224.8m). Gross claim payments, resulting in reinsurance recoveries, have also reduced the reinsurers
share of technical provisions to £169.3m (from £217.6m).
Liabilities have also decreased with the payment of gross claims reducing technical provisions to £333.8m (from
£434.0m) and also creditors out of reinsurance operations to £78.4m (from £120.7m), due to the funds withheld
nature of the Gibson Re WQS.
Principal risks and uncertainties
The Managing Agent has a Risk Management Function for the Syndicate with clear terms of reference from the
Board of Directors and its committees, including the Audit and Risk Committees. The Board approves the risk
management policies and meets regularly to approve commercial, regulatory and organisational requirements
of such policies. The Board reviews and approves its risk appetite annually.
The Risk Management Function has implemented a Board approved Risk Management Framework to enable
the ongoing identification, assessment and management (mitigation, monitoring and reporting) of risks and is
also responsible for producing the Syndicate’s Own Risk and Solvency Assessment (“ORSA”); recommending
the assessment to the Board for approval.
The principal risks and uncertainties facing the Syndicate are set out below. Additional information regarding
how the Syndicate manages risk, including capital management is disclosed in Note 4 to these financial
statements.
Insurance risk
The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit payments
or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims,
actual benefits paid and subsequent development of long–term claims. The objective of the Syndicate is to
ensure that sufficient reserves are available to cover these liabilities.
The development and potential inadequacy of claims reserves is the key source of insurance risk. Reserve
adequacy is monitored through quarterly review by the Actuarial function which is reviewed by the Reserving
Committee. The reserves are also subject to independent review through the annual test of sufficiency
performed as part of the Lloyd’s Statements of Actuarial Opinion.
Credit risk
Credit risk relates to the risk of default on the settlement of balances receivable by the Syndicate. The
Syndicate’s reinsurers represent the principal sources of this risk. This risk is actively managed by the policies,
procedures and controls overseen by the Syndicate Management Committee. The Syndicate has reinsurance
with highly rated or reputable reinsurers. Where appropriate reinsurance is supported by collateral or funds
withheld. Any new reinsurance requires approval from the Board.
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Market risk
The key aspect of market risk is that the Syndicate incurs losses on foreign exchange movements as a
result of mismatches between the currencies in which assets and liabilities are denominated. Currency
matching is reviewed by Management quarterly. Where there is a significant mismatch, the Managing Agent
seeks to mitigate the risk through buying or selling currency, where this is appropriate.
Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations due to a short-term
shortfall in available funds. This risk is mitigated by the liquid nature of the Syndicate’s investment portfolio. A
number of processes are followed by the Managing Agent to further mitigate against the risk of the Syndicate
being unable to settle its obligations as they fall due.
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. The extent of any price fluctuation is driven by the portfolio duration and
changes in interest rate spreads. The investment portfolio duration is managed so as to be less than the duration
of claims payments and spread risk is mitigated by investment guidelines which place limits on the amounts
that can be invested with different grades of counterparty.
Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate. Risks include
those from information security (including cyber) and technology related activities, legal and regulatory, financial
reporting, and financial crime as well as those from operations, outsourcing and change. The Managing Agent
seeks to manage this risk through its governance structure and internal control framework as well as business
processes (including business continuity and resilience plans).
Regulatory risk
The Managing Agent is required to comply with the requirements of the Prudential Regulation Authority (“PRA”)
and Financial Conduct Authority (“FCA”) and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s
market by overseas regulators, particularly in respect of US situs business. Regulatory risk is the risk of loss
owing to a breach of regulatory requirements or failure to respond to regulatory change.
The Managing Agent has a Compliance Function that monitors regulatory developments and assesses the
impact on the Managing Agent’s policies. The compliance function reports regularly to the Board which has
ultimate responsibility for ensuring compliance with applicable laws and regulations.
Conduct risk
Conduct risk is the risk that the Syndicate fails to pay appropriate regard to the interest of its customers and/or
fails to treat them fairly at all times. Conduct risk is managed through the application of strong internal controls,
compliance policies and procedures, and through the monitoring of various conduct risk metrics.
Future developments
In July 2024 the Syndicate was placed into run-off by Lloyd’s due to the distressed financial position of the
R&Q Group, of which the Syndicate’s corporate member is a subsidiary.
The objectives of the Syndicate going forward are to:
•
honour all policies underwritten by the Syndicate in accordance with their terms and conditions
•
manage all open and new claims in the normal way, paying all valid claims
•
continue to provide a full customer service either directly or via the Syndicate’s agents
Additionally, the Board will seek to reduce risk and explore options to enable the Syndicate to reinsurance to
close.
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Environmental matters
The Syndicate underwrites previously insured risks and is unable to take environmental matters into account
when settling valid claims. However, the Syndicate has discretion to consider environment, social and
governance issues ("ESG") when investing its assets. Investments are monitored against benchmarks on a
regular basis.
Directors
Details of the Directors of the Managing Agent who served during the year and up to the date of signing of the
Syndicate Annual Report and Accounts are provided on page 2 in the Directors and Administration section.
Going concern
In July 2024 the Syndicate was placed into run-off. As a consequence, it is no longer considered a going
concern and a basis of other than going concern has been adopted in preparing the accounts. While these
accounts have not been prepared on a going concern basis, there is no impact on the valuation of the assets
or liabilities of the Syndicate.
The Directors of the Managing Agent have reasonable expectations, having made appropriate enquiries, that
the Syndicate has adequate resources to continue in operational existence through an orderly run-off for the
foreseeable future. The Syndicate is also supported by available capital in Funds at Lloyd’s (“FAL”).
Disclosure of information to the auditors
The Directors of the Managing Agent at the time the report is approved confirm that:
•
So far as each of them is aware, there is no relevant audit information, being information needed by the
Syndicate’s auditor in connection with the auditor’s report, of which the auditor is unaware; and
•
Having made enquiries of fellow directors of the Managing Agency and the Syndicate’s auditor, 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
Pursuant to Section 14 (2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008, PKF Littlejohn LLP will continue in office.
On behalf of the Board
G H J Nokes
Director
17 February 2026
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Statement of Managing Agent’s responsibilities
The Managing Agent is responsible for preparing the Syndicate annual report and accounts in accordance with
applicable laws 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). The Syndicate annual reports and 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 which are applied consistently;
•
Make judgements and estimates that are reasonable and prudent;
•
State whether applicable UK accounting standards have been followed, subject to any material
departures disclosed and explained in the notes to the Syndicate annual accounts;
•
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; and
•
Prepare and review of the iXBRL tagging that has been applied to the Syndicate Accounts in
accordance with the instructions issued by Lloyd’s, including designing, implementing and maintaining
systems, processes and internal controls to result in tagging that is free from material non-compliance
with the instructions issued by Lloyd’s, whether due to fraud or error.
The Managing Agent is responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Syndicate and enable it to ensure that the Syndicate annual
report and accounts 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 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 annual accounts may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge the syndicate accounts, including the iXBRL tagging applied to
these accounts, comply with the requirements of the Lloyd’s Syndicate Accounts Instructions version 3.1 as
modified by the Frequently Asked Questions version 1.1 issued by Lloyd’s
On behalf of the Board
G H J Nokes
Director
17 February 2026
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Independent auditor’s report to the member of Syndicate 1110
Opinion
We have audited the Syndicate Annual Accounts of Syndicate 1110 (the ‘Syndicate’) for the year ended 31
December 2025 which comprise the Statement of profit or loss and other comprehensive income, the Balance
sheet, the Statement of changes in members’ balances, the Statement of cash flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted
Accounting Practice).
In our opinion, the Syndicate Annual Accounts:
•
give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2025 and of its loss
for the year then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
•
have been prepared in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within Lloyd’s 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”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate
Accounts Instructions and other applicable law. Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the Syndicate Annual 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 Accounts in the UK, including 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.
Other Matter
This report may be included within a document to which iXBRL tagging has been applied. This auditor’s report
provides no assurance over whether the iXBRL tagging has been applied in accordance with the Lloyd’s
Syndicate Accounts Instructions.
Emphasis of matter – financial statements prepared on a basis other than going concern
We draw attention to Note 1 to the Syndicate Annual Accounts which explains that the syndicate has
ceased underwriting and therefore the Managing Agent does not consider it to be appropriate to adopt the going
concern basis of accounting in preparing the Syndicate Annual Accounts. Accordingly, the Syndicate Annual
Accounts have been prepared on a basis other than going concern as described in Note 1.
Our opinion is not modified in this respect of this matter.
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Emphasis of matter – uncertainty relating to the outcome of ongoing arbitration procedure
We draw your attention to note 25 in the financial statements which describe the uncertainty surrounding the
outcome of an ongoing arbitration procedure.
The arbitration relates to the potential recovery under a reinsurance contract of £50m in respect of amounts
included within reinsurers’ share of technical provisions and creditors arising out of reinsurance operations.
Our opinion is not modified in this respect of this matter.
Other information
The other information comprises the information included in the Syndicate Annual Report and Accounts, other
than the Syndicate Annual Accounts and our auditor’s report thereon.
The managing agent is responsible for the other information contained within the Syndicate Annual Report and
Accounts. Our opinion on the Syndicate Annual 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 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 in the Syndicate
Annual Accounts 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.
Opinions on other matters prescribed by the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008
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 Syndicate
Annual Accounts are prepared is consistent with the Syndicate Annual Accounts; and
•
the managing agent’s report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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 material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters in relation to which the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you if, in our
opinion:
•
adequate accounting records have not been kept on behalf of the Syndicate; or
•
the Syndicate Annual Accounts are not in agreement with the accounting records and returns; or
•
certain disclosures of managing agent emoluments and other benefits specified by law are not made;
or
•
we have not received all the information and explanations we require for our audit.
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Responsibilities of the managing agent
As explained more fully in the statement of managing agent’s responsibilities, the managing agent is responsible
for the preparation of the Syndicate Annual 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 Accounts that are free from material misstatement, whether due to fraud or error.
In preparing the Syndicate Annual Accounts, the managing agent is responsible for assessing the Syndicate’s
ability to continue to write new business, disclosing, as applicable, matters related to its ability to continue to
operate and using the going concern basis of accounting, unless the managing agent intends to cease to
operate the Syndicate or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Syndicate Annual Accounts
Our objectives are to obtain reasonable assurance about whether the Syndicate Annual 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 Accounts.
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 obtained an understanding of the Syndicate and the insurance sector in which it operates to identify
laws and regulations that could reasonably be expected to have a direct effect on the Syndicate Annual
Accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions. We obtained our understanding in this
regard through discussions with management, industry research and the application of our cumulative audit
knowledge and experience of the insurance sector.
•
We determined the principal laws and regulations relevant to the Syndicate in this regard to be those arising
from the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), Lloyd’s of London
and the Insurance Accounts Directive (Lloyd’s Syndicates and Aggregate Accounts) Regulations 2008, and
the financial reporting framework (UK GAAP).
•
The Syndicate operates in the insurance industry which is a highly regulated environment. As such the
Senior Statutory Auditor considered the experience and expertise of the engagement team to ensure that
the team has the appropriate competence and capabilities to perform the audit.
•
We designed our audit procedures to ensure the audit team considered whether there were any indications
of non-compliance by the Syndicate with those laws and regulations. These procedures included, but were
not limited to:
o
agreement of the Syndicate Annual Accounts disclosures to underlying supporting documentation;
o
enquiries of management and review of minutes of Board, committee and management meetings
throughout the period;
o
understanding the Syndicate’s policies and procedures in monitoring compliance with laws and
regulations;
o
inspection of correspondence with Lloyd’s of London, the PRA and FCA; and
o
reviewing compliance reports and internal audit reports relating to the Syndicate.
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•
We also identified possible risks of material misstatement of the Syndicate Annual Accounts due to fraud;
in particular:
o
We have rebutted the fraud risk over revenue recognition given the Syndicate is no longer writing
or earning material revenue streams since it is in run-off, and consider there is no area of judgement
or subjectivity with respect to revenue.
o
We considered that there was potential for management bias in the reporting of events and
transactions in the Syndicate Annual Accounts relating to the valuation of technical provisions and
the calculation of the reinsurer’s share of technical provisions. To address this, we involved actuarial
experts to assist us in challenging the methods, assumptions and judgements made by
management when auditing those significant accounting estimates. This included performing
independent projections of the most material classes and comparing to management’s reserves.
o
As in all of our audits, we addressed the risk of fraud arising from management override of controls
by performing audit procedures which included, but were not limited to, the testing of journals,
reviewing accounting estimates for evidence of bias and evaluating the business rationale of any
significant transactions that were unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the Syndicate Annual Accounts or non-compliance with laws and
regulations. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the Syndicate Annual Accounts, as we will be less likely to become aware of
instances of non-compliance. This risk is also greater regarding irregularities occurring due to fraud rather than
error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the Syndicate Annual Accounts is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
Use of our report
This report is made solely to the Syndicate’s members, as a body, in accordance with Part 2 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 and the Syndicate's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Cheryl Mason
(Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
17 February 2026
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Statement of profit or loss and other comprehensive income
Technical account – General business
For the year ended 31 December 2025
Note
2025
£000
2024
£000
Gross premiums written
5
Outwards reinsurance premiums
(1,144 )
(907 )
Premiums written, net of reinsurance
(866 )
Earned premiums, net of reinsurance
(866 )
Allocated investment return transferred from the
non-technical account
9
Claims paid
16
Gross amount
(99,099 )
(123,506 )
Reinsurers’ share
Net claims paid
(45,086 )
(45,054
)
Change in the provision for claims
16
Gross amount
Reinsurers’ share
(37,457 )
(31,904 )
Net change in provisions for claims
Claims incurred, net of reinsurance
(5,727 )
(37,320 )
Net operating expenses
6
(9,781 )
(22,535 )
Balance on the technical account – general business
(10,650 )
(53,216 )
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Statement of profit or loss and other comprehensive income (cont.)
Non-technical account – General business
For the year ended 31 December 2025
The accompanying notes from page 18 to 47 form an integral part of these financial statements.
Note
2025
£000
2024
£000
Balance on the technical account – general business
(10,650 )
(53,216 )
Investment income
9
Realised gains on investments
9
Unrealised gains on investments
9
Investment expenses and charges
9
(96 )
(124 )
Total investment return
Allocated investment return transferred to the technical account
(5,724 )
(5,914 )
Gain/(loss) on foreign exchange
(1,267 )
Loss for the financial year
(7,481 )
(54,483 )
Other comprehensive income:
Other recognised gains/(losses)
Total comprehensive loss for the year
(7,481 )
(54,483 )
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Balance sheet – Assets
As at 31 December 2025
Note
2025
£000
2024
£000
Financial investments
11
Deposits with ceding undertakings
Investments
Claims outstanding
Reinsurers’ share of technical provisions
16
Debtors arising out of direct insurance operations
12
Debtors arising out of reinsurance operations
13
Other debtors
14
Debtors
Cash at bank and in hand
Other assets
Other prepayments and accrued income
Prepayments and accrued income
Total assets
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Balance sheet (cont’d) – Liabilities
As at 31 December 2025
Note
2025
£000
2024
£000
Member’s balances
(85,732 )
(78,340 )
Total capital and reserves
(85,732 )
(78,340 )
Claims outstanding
Technical provisions
16
Creditors arising out of direct insurance operations
17
Creditors arising out of reinsurance operations
18
Other creditors including taxation and social security
19
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The Syndicate financial statements on pages 12 to 47 were approved by the board of
Polo Managing Agency
Limited
on 16 February 2026 and were signed on its behalf by;
G H J Nokes
Director
17 February 2026
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Statement of changes in member’s balances
For the year ended 31 December 2025
2025
£000
2024
£000
Member’s balances brought forward at 1 January
(78,340 )
(51,344 )
Total comprehensive loss for the year
(7,481 )
(54,483 )
Losses collected in relation to distribution on closure of
underwriting year
Other
(89 )
Member’s balances carried forward at 31 December
(85,732 )
(78,340 )
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Statement of cash flows
For the year ended 31 December 2025
Note
2025
£000
2024
£000
Cash flows from operating activities
Loss for the financial year
(7,481 )
(54,483 )
Adjustments:
Decrease in gross technical provisions
(75,570 )
(40,176 )
Decrease in reinsurers’ share of gross
technical provisions
Decrease in debtors
Decrease in creditors
(45,747 )
(48,803 )
Investment return
(5,724 )
(5,914 )
Foreign exchange
(1,742 )
Net cash flows from operating activities
(94,369 )
(66,539 )
Cash flows from investing activities
Purchase of debt instruments
(259,261 )
(321,688 )
Sale of debt instruments
Investment income received
Other
(28 )
(98 )
Net cash flows from investing activities
Cash flows from financing activities
Collection of losses
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
(6,785 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(844 )
(2 )
Cash and cash equivalents at the end of the year
20
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Notes to the financial statements – (forming part of the financial statements)
1. Basis of preparation
Syndicate
1110 (“The Syndicate”) comprises a member of the Society of Lloyd's that underwrites insurance
business in the London Market. The address of the Syndicate’s managing agent is 'Grange Park', Bishop's
Cleeve, Cheltenham, England, GL52 8YQ.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and the Lloyd’s Syndicate Accounts
Instructions Version 3.1 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (the
Syndicate Accounts Instructions).
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value
through profit or loss and available for sale that are measured at fair value.
The financial statements are presented in Pound Sterling, which is also the Syndicate’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Going concern
In July 2024 the Syndicate was placed into run-off. As a consequence, it is no longer considered a going
concern and a basis of other than going concern has been adopted in preparing the accounts.
While these accounts have not been prepared on a going concern basis, there is no impact on the valuation
of the assets or liabilities of the Syndicate.
The Syndicate has financial resources to meet its financial needs and manages its portfolio of insurance risk.
The directors have continued to review the business plans, liquidity and operational resilience of the Syndicate
and are satisfied that the Syndicate is well positioned to manage its business risks in the current economic
environment. The Syndicate is also supported by available capital in Funds at Lloyd’s (“FAL”).
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2.
Use of judgements and estimates
In preparing these financial statements, the directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses.
The following critical judgements have been made in applying the Syndicate’s accounting policies:
Contingent liabilities and reinsurance recoverable
At 31 December 2025 there is an arbitration in process which is expected to conclude in September 2026. The
outcome of this arbitration is highly uncertain.
The arbitration, if successful, could result in a reduction of £44m in the reinsurers share of technical provision
and an increase of £6m in the amount due to reinsurers. The net impact on the profit and loss account could be
a loss of £50m.
In providing for possible outcomes of the arbitration hearing in September 2026 management takes into
consideration any available evidence, expert opinion, and guidance from legal firms.
The matter is being vigorously defended. The directors’ current assessment is that there is insufficient evidence
to suggest that this claim is likely to succeed.
These uncertainties are disclosed in note 25.
The Syndicate makes estimates and assumptions concerning the future. The resulting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year
are addressed below.
Insurance contract technical provisions
For insurance contracts, estimates of the claim provisions (referred to as Claims Outstanding in the accounts)
comprise the expected cost of claims incurred and reported at the valuation date (outstanding claims), further
development of these claims (incurred but not enough reported or “IBNER”) and those claims that have been
incurred but not yet reported (“IBNR”) at the valuation date. IBNR and IBNER are commonly referred to
collectively as IBNR. It can take a significant period of time before the ultimate claims cost can be established
with a high degree of certainty and for some types of policies, IBNR claims form the majority of the liability in
the statement of financial position.
The IBNER and IBNR provisions are estimated by using a range of standard actuarial claims projection
techniques together with benchmarking certain books of business to available market data. The main
assumption underlying these techniques is that historical claims development patterns can be used to project
future claims development and hence ultimate claims costs. Where this assumption is not believed to hold,
judgement has been applied to estimate the expected future claims costs based on the latest available
information.
The provision for outstanding claims is assessed on an individual case basis and is based on the estimated
ultimate cost of all claims notified but not settled by the balance sheet date, together with the provision for
related claims handling costs.
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3. 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’s financial statements.
A. Premiums written
Gross premiums written reflect direct and inwards reinsurance business written during the period, gross of
commission payable to intermediaries, and exclude any taxes or duties based on premiums. Premiums written
include estimates for ‘pipeline’ premiums representing amounts due to the Syndicate not yet notified and
adjustments to estimates of premiums written in previous periods.
Estimated premium income in respect of facility contracts, for example binding authorities and lines slips, are
deemed to be written in a manner that reflects the expected profile of the underlying business which has been
written. Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for
the related direct or inwards business being reinsured. The earned proportion of premiums is recognised as
income. Premiums are earned from the date of attachment of risk over the indemnity period based on the pattern
of the risks underwritten.
B. Unearned premiums
The provision for unearned premiums comprises the proportion of gross premiums written which is estimated
to be earned in the following or subsequent financial periods, computed separately for each insurance contract
using the daily pro rata method, adjusted if necessary to reflect any variation in the incidence of risk during the
period covered by the contract. The Syndicate no longer has any unearned premium.
C. Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such
as brokerage and commission, and indirect costs such as administrative expenses connected with the
processing of proposals and the issuing of policies. The deferred acquisition cost asset represents the
proportion of acquisition costs which corresponds to the proportion of gross premiums written that is unearned
at the balance sheet date.
D. Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Premiums and claims on
reinsurance assumed are recognised in the technical account on the same basis as direct business, taking into
account the product classification. Reinsurance premiums ceded and reinsurance recoveries on claims incurred
are included in the respective expense and income accounts. Premiums ceded and claims reimbursed are
presented on a gross basis in the technical account and balance sheet as appropriate.
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.
Reinstatement premiums on both inwards and outwards business are accreted to the technical account on a
pro-rata basis over the term of the original policy to which they relate.
E.
Claims provisions and related reinsurance recoveries
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. The Syndicate does not discount
its liability for outstanding claims nor the reinsurer’s share of outstanding claims.
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Outstanding claims include an allowance for the cost of claims incurred by the balance sheet date but not
reported until after the year end (IBNR). Salvage and subrogation and other recoveries are deducted from the
provision for outstanding claims. The liability for outstanding claims is estimated using the input of assessments
for individual cases reported to the Syndicate and widely accepted actuarial techniques for the claims incurred
but not reported (IBNR). The techniques generally use projections, based on past experience of the
development of claims over time, to form a view on the likely ultimate claims to be experienced and an estimate
of the expected ultimate cost of more complex claims that may be affected by external factors, for example,
court decisions.
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, the claims experience for the year and the current security rating of the
reinsurance companies involved. A number of statistical techniques are used to assist in making these
estimates.
Reinsurance assets are assessed for impairment at each balance sheet date. A reinsurance asset is deemed
impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that the
Syndicate may not recover all amounts due, and that event has a reliably measurable impact on the amount
that the Syndicate will receive from the reinsurer. Impairment losses are recognised in profit or loss in the period
in which the impairment loss is recognised.
F. Unexpired risks provision
Provision is made for unexpired risks arising from general insurance contracts where the expected value of
claims and expenses attributable to the unexpired periods of policies in force at the balance sheet date exceeds
the unearned premiums provision in relation to such policies (after the deduction of any deferred acquisition
costs). The provision for unexpired risks is calculated by reference to classes of business which are managed
together.
G. Foreign currencies
Transactions in foreign currencies are translated to the functional currency using the exchange rates at the date
of the transactions. The Syndicate’s monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the rates of exchange at the balance sheet date. Non-monetary assets
and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Non-monetary items denominated
in foreign currencies that are measured at historical cost are translated to the functional currency using the
exchange rate at the date of the transaction. For the purposes of foreign currency translation, unearned
premiums and deferred acquisition costs are treated as if they are monetary items.
Differences arising on translation of foreign currency amounts relating to the insurance operations of the
Syndicate are included in the non-technical account.
H. Financial assets and liabilities
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions of IAS
39 Financial Instruments: Recognition and Measurement (as adopted for use in the UK).
Overseas deposits, which are lodged as a condition of underwriting business in certain countries, are included
within other investments.
i.
Classification
The accounting classification of financial assets and liabilities determines the way in which they are measured
and changes in those values are presented in the statement of profit or loss and other comprehensive income.
Financial assets and liabilities are classified on their initial recognition.
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The initial classification of a financial instrument shall take into account contractual terms including those relating
to future variations. Once the classification of a financial instrument is determined at initial recognition,
re-assessment is only required subsequently when there has been a modification of contractual terms that is
relevant to an assessment of the classification.
Financial assets and financial liabilities at fair value through profit and loss comprise financial assets and
financial liabilities held for trading and those designated as such on initial recognition. Investments in shares
and other variable yield securities, units in unit trusts, and debt and other fixed income securities are designated
as at fair value through profit or loss on initial recognition, as they are managed on a fair value basis in
accordance with the Syndicate’s investment strategy.
The Syndicate does not hold any non-derivative or derivative financial assets or financial liabilities for trading
purposes.
Deposits with credit institutions, debtors, and accrued interest are classified as loans and receivables.
ii. Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Syndicate’s contractual rights to the cash flows from the
financial assets expire or if the Syndicate transfers the financial asset to another party without retaining control
of substantially all risks and rewards of the asset. A financial liability is derecognised when its contractual
obligations are discharged, cancelled or expired.
Regular way purchases and sales of financial assets are recognised and derecognised, as applicable, on the
trade date, i.e., the date that the Syndicate commits itself to purchase or sell the asset.
iii. Measurement
A financial asset or financial liability is measured initially at fair value plus, for a financial asset or financial liability
not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.
Financial assets at fair value through profit or loss are measured at fair value with fair value changes recognised
immediately in profit or loss.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using the effective
interest method, except Syndicate Loans to the Central Fund, which are measured at fair value through profit
or loss.
iv. Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not 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.
Impairment losses on available for sale financial assets are recognised by reclassifying the losses accumulated
in other comprehensive income to profit or loss. The net cumulative loss that is reclassified from other
comprehensive income to profit or loss is the difference between the acquisition cost, net of any principal
repayment, and the current fair value, less any impairment loss recognised previously in profit or loss. If, in a
subsequent period, the fair value of an impaired available for sale debt security increases and the increase can
be related objectively to an event occurring after the impairment loss was recognised, the impairment loss is
reversed through profit or loss. Otherwise it is reversed through the statement of comprehensive income.
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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 on an amortised cost asset reduces directly the carrying amount of the impaired
asset. All impairment losses are recognised in profit or loss. 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 profit or loss.
v. Off-setting
Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when,
and only when, the Syndicate has a legal right to set off the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
I.
Investment return
Investment return comprises investment income and movements in unrealised gains and losses on financial
instruments at fair value through profit or loss, less investment management expenses, interest expense,
realised losses and impairment losses. Investment income comprises interest income, dividends receivable and
realised investment gains.
Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend
date for equity securities. Interest income on financial assets measured at amortised cost is recognised using
the effective interest method. For the purpose of separately presenting investment income and unrealised gains
and losses for financial assets at fair value through profit or loss, interest income is calculated using the effective
interest method excluding transaction costs that are expensed when incurred. For investments at fair value
through profit or loss, realised gains and losses represent the difference between the net proceeds on disposal
and the purchase price.
For investments measured at amortised cost, realised gains and losses represents the difference between the
net proceeds on disposal and the latest carrying value (or if acquired after the last reporting date, the purchase
price).
Unrealised investment gains and losses represent the difference between the fair value at the balance sheet
date and the fair value at the previous balance sheet date, or purchase price if acquired during the year.
Movements in unrealised investment gains and losses comprise the increase/decrease in the reporting period
in the value of the investments held at the reporting date and the reversal of unrealised investment gains and
losses recognised in earlier reporting periods in respect of investment disposals of the current period.
Investment return is initially recorded in the non-technical account. The return is transferred in full to the general
business technical account to reflect the investment return on funds supporting underwriting business.
J.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and debt instruments 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.
Cash and cash equivalents are carried at amortised cost in the balance sheet.
Bank overdrafts that are repayable on demand and form an integral part of the Syndicate’s cash management
are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
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K. Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax
from trading income. In addition, all UK basic rate income tax (currently at 25%) deducted from Syndicate
investment income is recoverable by managing agents and consequently the distribution made to members or
their member’s 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 United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in
the balance sheet under the heading ‘other debtors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
L. Pension costs
No explicit charge is made for pension contributions relating to staff who act on behalf of the Syndicate.
M. Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate to settle Part
VII claims. These funds are held at amortised cost in the balance sheet.
N. RITC Policy
In the Managing Agent's view, an RITC contract of insurance transfers all known and unknown liabilities relating
to a year (or years) of account from the ceding Lloyd’s syndicate to the reinsuring syndicate. The use of the
term reinsurance is misleading as, for practical purposes, the contract extinguishes the liabilities of the transferor
syndicate. Following the RITC, the transferor is released from its obligations to account for and to report on the
transferring liabilities. This is unlike a conventional reinsurance contract which reinsures the cedant, but does
not transfer the cedant's primary responsibility for the liabilities.
O. Deposits received from reinsurers
Deposits received from reinsurers includes other amounts received in advance from reinsurers against future
claims under the Syndicate's reinsurance arrangements. These funds are held at amortised cost in the balance
sheet.
P. Operating expenses
Operating expenses are taken into account on an accrual basis. The Managing Agent charges an agreed fee
for the administration of the Syndicate.
Q. Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit commission and overriding
commission, are treated as a contribution to expenses.
R. Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract
holders. These are classified as debt instruments as they are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. Insurance debtors are measured at amortised
cost less any provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does
not have any debtors directly with policyholders, all transactions occur via an intermediary.
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Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not quoted
on an active market. Reinsurance debtors are measured at amortised cost less any provision for impairments.
Reinsurance creditors are stated at amortised cost. Reinsurance debtors principally relate to claims recoveries
where the underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily
premiums payable for reinsurance contracts and are recognised as an expense when due.
Where a legal right
of offset exists the reinsurance creditors will be offset by any amounts related to claim recoveries.
Other debtors principally consist of amounts due from members and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to related syndicates and other related entities, profit
commissions payable and other sundry payables. These are stated at amortised cost determined using the
effective interest rate method.
S.
Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument.
All the Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk and
therefore are recognised as insurance contracts.
4.
Risk and capital management
Introduction and overview
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.
Risk management framework
The Board of Directors of the Managing Agent has overall responsibility for the establishment and oversight of
the Syndicate’s risk management framework. The Board has established a Risk Committee to oversee the
operation of the Syndicate’s risk management framework and to review and monitor the management of the
risks to which the Syndicate is exposed. The Risk Committee has delegated oversight of the management of
aspects of insurance risks to the Reserving Committee, which is responsible for developing and monitoring
insurance risk management policies, and the management of aspects of financial risks to the Syndicate
Management Committee, which is responsible for developing and monitoring financial risk management
policies.
The risk management policies are established to identify and analyse the risks faced by the Syndicate, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits.
A. Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities.
As the Syndicate is in run-off, the insurance risk that the Syndicate is exposed to relates to reserve risk.
Reserve risk is the risk that the reserves established in respect of insurance claims incurred are insufficient to
settle the claims and associated expenses in full.
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i.
Management of insurance risk
The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event,
including excess of loss, stop loss and catastrophe reinsurance. Where an individual exposure is deemed
surplus to the Syndicate’s appetite additional facultative reinsurance is also purchased.
Where considered appropriate, and in limited circumstances, the Syndicate may adopt a pro-active approach
to early settling long tail latent disease claims with the contract holder, although each settlement is assessed
on a case-by-case basis to ensure the contract holder is not disadvantaged by such an approach.
The Reserving Committee oversees the management of reserving risk. The use of proprietary and standardised
modelling techniques, internal and external benchmarking, and the review of claims development are all
instrumental in mitigating reserving risk.
The actuarial function performs a reserving analysis on a quarterly basis liaising closely with claims and
reinsurance technicians. The aim of this exercise is to produce a probability-weighted average of the expected
future cash outflows arising from the settlement of incurred claims. These projections include an analysis of
claims development compared to the previous ‘best estimate’ projections. These actuarial results are then
subject to formal annual external peer review, the result of which is a Statement of Actuarial Opinion over the
held reserves being at least as high as a mean best estimate. The statement is provided annually to Lloyd’s.
The Reserving Committee performs a comprehensive review of the projections, both gross and net of
reinsurance. Following this review the Reserving Committee makes recommendations to the Audit Committee,
which is responsible for approving Syndicate reserves quarterly, as delegated by the PMA Board, of the claims
provisions to be established.
The claims development table in note number 15 shows the actual claims incurred compared to previous
estimates for the last 10 years.
ii.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies between the classes of business and the nature of the risk being
underwritten and can arise from developments in case reserving for large losses and catastrophes, or from
changes in estimates of claims IBNR.
The following table presents the profit and loss impact of the sensitivity of the value of insurance liabilities
disclosed in the accounts to potential movements in the assumptions applied within the technical provisions.
Given the nature of the business underwritten by the Syndicate, the approach to calculating the technical
provisions for each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse
risk margin to the total insurance liability. The amount disclosed in the table represents the profit or loss impact
of an increase (+5%) or decrease (-5%) in the insurance liability as a result of applying the sensitivity. The
amount disclosed for the impact on claims outstanding – net of reinsurance represents the impact on both the
profit and loss for the year and member balance, an increase in reserves representing a loss for the Syndicate
and a decrease a profit.
General insurance business sensitivities as at 31 December 2025
Sensitivity
+5.0%
£000
-5.0%
£000
Claims outstanding – gross of reinsurance
(16,690 )
Claims outstanding – net of reinsurance
(8,226 )
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
General insurance business sensitivities as at 31 December 2024
Sensitivity
+5.0%
£000
-5.0%
£000
Claims outstanding – gross of reinsurance
(21,698 )
Claims outstanding – net of reinsurance
(10,817 )
B. 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 matching basis.
a. Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The Syndicate is exposed to credit risk in respect of the following:
•
Debt securities;
•
Reinsurers’ share of claims outstanding;
•
Amounts due from intermediaries;
•
Amounts due from reinsurers in respect of settled claims;
•
Cash and cash equivalents; and
•
Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
i.
Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a single
counterparty, by reference to the credit rating of the counterparty. Financial assets are graded according to
current credit ratings issued by rating agencies such as Standard and Poor’s.
The Syndicate also limits the aggregate amount of a type of debt security that may be held.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored as part of the credit
control processes.
The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating information and by
internal investigations. The impact of reinsurer default is regularly assessed and managed accordingly.
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
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ii.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The following table analyses the credit rating by investment grade of financial investments and debt securities,
reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in
respect of settled claims, cash and cash equivalents, and other debtors and accrued interest.
Year 2025
AAA
£000
AA
£000
A
£000
BBB
£000
Other
£000
Not rated
£000
Total
£000
Shares and other variable yield
securities and units in unit trusts
Debt securities and other fixed
income securities
Loans and deposits with credit
institutions
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims
outstanding
Debtors arising out of direct
insurance operations
Debtors arising out of reinsurance
operations
Cash at bank and in hand
Other debtors and accrued interest
Total
Year 2024
AAA
£000
AA
£000
A
£000
BBB
£000
Other
£000
Not rated
£000
Total
£000
Shares and other variable yield
securities and units in unit trusts
Debt securities and other fixed
income securities
Loans and deposits with credit
institutions
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims
outstanding
Debtors arising out of direct
insurance operations
Debtors arising out of reinsurance
operations
Cash at bank and in hand
Other debtors and accrued interest
Total
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Included in the not rated category in the current year are amounts of £122m (2024: £160m) relating to Gibson
Re WQS. This reinsurance arrangement is a funds withheld agreement that is also supported by collateral.
Currently the funds withheld from Gibson Re, and collateral exceed the amounts owing.
iii.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date.
The Syndicate also has debtors arising from reinsurance operations that are impaired at the reporting date.
These debtors have been individually assessed for impairment by considering information such as the
occurrence of significant changes in the counterparty’s financial position, patterns of historical payment
information and disputes with counterparties.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Gross value
of impaired
assets
Impairment
allowance
Total
2025
£000
£000
£000
£000
£000
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Loans and deposits with credit institutions
Other investments
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
(4,869 )
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance
operations
(2,492 )
Cash at bank and in hand
Other debtors and accrued interest
(14,812 )
Total
(22,173 )
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Gross value
of impaired
assets
Impairment
allowance
Total
2024
£000
£000
£000
£000
£000
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Loans and deposits with credit institutions
Other investments
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
(5,803 )
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance
operations
(2,446 )
Cash at bank and in hand
Other debtors and accrued interest
(11,492 )
Total
(19,741 )
The table below sets out a reconciliation of changes in impairment allowance during the period for each class
of financial asset at the balance sheet date:
1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Foreign
exchange
31 Dec
2025
£000
£000
£000
£000
£000
Reinsurers' share of claims outstanding
(505 )
(429 )
Debtors arising out of reinsurance
operations
(180 )
Other debtors and accrued interest
(852 )
Total
(279 )
(1,461 )
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Foreign
exchange
31 Dec
2024
£000
£000
£000
£000
£000
Reinsurers' share of claims outstanding
(111 )
Debtors arising out of reinsurance
operations
Other debtors and accrued interest
Total
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
b. Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its
insurance contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash
resources mainly from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
Past due but not impaired
0-3 months
past due
3-6 months
past due
6-12 months
past due
Greater than
1 year past
due
Total
2025
£000
£000
£000
£000
£000
Debtors arising out of reinsurance
operations
Total
Past due but not impaired
0-3 months
past due
3-6 months
past due
6-12 months
past due
Greater than
1 year past
due
Total
2024
£000
£000
£000
£000
£000
Debtors arising out of reinsurance
operations
Total
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
i.
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
•
Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance contracts
over the short, medium and long term;
•
The Syndicate purchases assets with durations not greater than its estimated insurance contract outflows;
•
Assets purchased by the Syndicate are required to satisfy specified marketability requirements;
•
The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts; and
•
The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid financial
resources are in place to meet obligations as they fall due in the event of reasonably foreseeable abnormal
circumstances.
ii.
Maturity analysis of syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance and reinsurance contracts, the
contractual maturity is the estimated date when the gross undiscounted contractually required cash flows will
occur. For financial liabilities, it is the earliest date on which the gross undiscounted cash flows (including
contractual interest payments) could be paid assuming conditions are consistent with those at the reporting
date.
Undiscounted net cash flows
Year 2025
No maturity
stated
£000
0-1 yrs
£000
1-3 yrs
£000
3-5 yrs
£000
>5 yrs
£000
Total
£000
Claims outstanding
Creditors
Other creditor balances
Total
Undiscounted net cash flows
Year 2024
No maturity
stated
£000
0-1 yrs
£000
1-3 yrs
£000
3-5 yrs
£000
>5 yrs
£000
Total
£000
Claims outstanding
Creditors
Other creditor balances
Total
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
33
Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
c. 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: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
i.
Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
ii.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio.
The risk of changes in the fair value of these assets is managed by primarily investing in short-duration financial
investments and cash and cash equivalents. The Syndicate Management Committee monitors the duration of
these assets on a regular basis, targeting an investment portfolio duration that, in the event of changes in
interest rates, always maintains the internal capital requirements.
iii. Currency risk
The Syndicate wrote business primarily in Sterling, US dollar, Euro, Canadian dollar, Australian dollar and
Japanese Yen and is therefore exposed to currency risk arising from fluctuations in these exchange rates.
The foreign exchange policy is to maintain assets in the currency in which the cash flows from liabilities are to
be settled in order to hedge the currency risk inherent in these contracts.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Total
2025
£000
£000
£000
£000
£000
£000
£000
Investments
Reinsurers' share of technical
provisions
Debtors
(929 )
(671 )
(1,080 )
Other assets
Prepayments and accrued income
Total assets
Technical provisions
(61,492 )
(254,876 )
(7,077 )
(5,410 )
(4,620 )
(317 )
(333,792 )
Creditors
(17,621 )
(48,580 )
(6,539 )
(4,856 )
(2,528 )
(78,757 )
Accruals and deferred income
(1,200 )
(39 )
(1,239 )
Total liabilities
(80,313 )
(303,495 )
(13,616 )
(10,266 )
(7,148 )
(413,788 )
Total capital and reserves
(903 )
(2,058 )
(2,491 )
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Total
2024
£000
£000
£000
£000
£000
£000
£000
Investments
Reinsurers' share of technical
provisions
Debtors
(1,719 )
(643 )
(484 )
Other assets
Total assets
Technical provisions
(77,327 )
(336,346 )
(8,607 )
(4,126 )
(6,942 )
(609 )
(433,957 )
Creditors
(20,526 )
(88,151 )
(6,245 )
(5,470 )
(3,049 )
(122,014 )
Accruals and deferred income
(5,522 )
(60 )
(5,582 )
Total liabilities
(103,375 )
(424,557 )
(14,852 )
(9,596 )
(9,991 )
(561,553 )
Total capital and reserves
(549 )
(332 )
(735 )
(2,624 )
iv. Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market indices on financial instruments
with all other variables held constant, showing the impact on the result before tax due to changes in fair value
of financial assets and liabilities (whose fair values are recorded in the profit and loss account) and member’s
balances.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
2025
Impact on
results
before tax
£000
2025
Impact on
Member’s
balances
£000
2024
Impact on
results
before tax
£000
2024
Impact on
Member’s
balances
£000
Interest rate risk
+ 50 basis points shift in yield curves
(1,347 )
(1,347 )
(2,747 )
(2,747 )
- 50 basis points shift in yield curves
Currency risk
10% weakening of Sterling against other currencies
4,905
4,905
3,154
3,154
10% strengthening of Sterling against other currencies
(5,995)
(5,995)
(3,855)
(3,855)
A 10% increase (or decrease) in exchange rates and a 50 basis point increase (or decrease) in yield curves
have been selected on the basis that these are considered to be reasonably possible changes in these risk
variables over the following year.
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain
unchanged. However, the occurrence of a change in a single market factor may lead to changes in other market
factors as a result of correlations.
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting
date and may vary at the time that any actual market movement occurs. As investment markets move past
pre-determined trigger points, action would be taken which would alter the Syndicate’s position.
C. Capital management
i.
Capital framework at Lloyd’s
The Society of Lloyd’s (“Lloyd’s”) is a regulated undertaking and subject to supervision by the Prudential
Regulation Authority (“PRA”) under the Financial Services and Markets Act 2000, and in accordance with the
Solvency UK Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s would comply with the Solvency UK requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level
as a starting point, the requirement to meet Solvency UK and Lloyd’s capital requirements apply at overall and
member level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of
Syndicate 1110 is not disclosed in these financial statements.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital Requirement
(“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss,
reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must
also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one
year SCR) for Lloyd’s to use in meeting Solvency UK requirements. The SCRs of each Syndicate are subject
to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
A syndicate may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its
own share of underwriting liabilities on the Syndicates on which it is participating but not other members’ shares.
Accordingly, the capital requirements 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 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, which is a
Lloyd’s not a Solvency UK requirement, is to meet Lloyd’s financial strength, licence and ratings objectives. The
capital uplift applied for 2025 was 35% (2024: 35%) of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that
member (Funds at Lloyd’s, or “FAL”), assets held and managed within a syndicate (Funds in Syndicate, or
“FIS”), or as the member’s share of the members’ balances on each syndicate on which it participates.
Accordingly, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported
on the balance sheet on page 14 and 15, represent resources available to meet members’ and Lloyd’s capital
requirements.
5.
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
2025
Gross
premiums
written
£000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Reinsurance
balance
£000
Underwriting
result
£000
Direct insurance
Accident and health
(650 )
Motor (other classes)
(16 )
Marine, aviation, and
transport
(598 )
(258 )
(335 )
Fire and other damage to
property
(767 )
(332 )
(1,025 )
(2,117 )
Third party liability
(78 )
(78 )
(15,291 )
(6,640 )
(8,459 )
Credit and suretyship
(1,974 )
Total direct insurance
(13,991 )
(6,134 )
(9,642 )
Reinsurance acceptances
(8,292 )
(3,647 )
(6,732 )
Total
(22,283 )
(9,781 )
(16,374 )
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
2024
Gross
premiums
written
£000
Gross
premiums
earned £000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Reinsurance
balance
£000
Underwriting
result
£000
Direct insurance
Accident and health
(3,218 )
(418 )
(810 )
Motor (other classes)
(13 )
(23 )
(8 )
Marine, aviation, and
transport
(239 )
(57 )
(261 )
Fire and other damage to
property
(40 )
(209 )
(94 )
(338 )
Third party liability
(18,344 )
(9,846 )
(12,126 )
Credit and suretyship
(1,831 )
(591 )
(927 )
Total direct insurance
(23,644 )
(11,134 )
(14,470 )
Reinsurance acceptances
(60,224 )
(11,401 )
(44,660 )
Total
(83,868 )
(22,535 )
(59,130 )
The gross premiums written for direct insurance by location (where the contracts were concluded) is presented
in the table below:
2025
£000
2024
£000
United Kingdom
Total gross premiums written
6. Net operating expenses
2025
£000
2024
£000
Acquisition costs
Administrative expenses
Member’s standard personal expenses
Reinsurance commissions and profit participation
(20 )
Net operating expenses
Total commissions for direct insurance business for the year amounted to:
2025
£000
2024
£000
Total commission for direct insurance business
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Administrative expenses include:
2025
£000
2024
£000
Auditors’ remuneration:
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
7.
Key management personnel compensation
Polo Managing Agency Limited did not allocate any directors or run-off manager remuneration to the Syndicate.
No other compensation was payable to key management personnel.
In the prior year the directors of R&Q Syndicate Management Limited were paid by R&Q Central Services Ltd
and a portion of their remuneration was charged to the Syndicate up to the date of novation:
2025
£000
2024
£000
Directors’ emoluments
In the prior year the run-off manager was paid by R&Q Central Services Ltd and a portion of their remuneration
was charged to the Syndicate up to the date of novation:
8.
Staff numbers and costs
All staff are employed by a related company of the managing agent, Polo Commercial Insurance Services
Limited (“PCIS”), having transferred from the managing agent on 1 January 2025. Prior to the novation of the
managing agency on 9 August 2024 staff were employed by R&Q Central Services Ltd.
The average number of persons employed by R&Q Central Services Ltd
,
but working for the Syndicate up until
the novation of the Managing Agency to Polo Managing Agency Limited, analysed by category, was as follows:
Number of employees
2025
2024
Administration and finance
Underwriting support
Claims
Total
2025
£000
2024
£000
Emoluments
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Neither PCIS nor the managing agent allocated any staff costs to the Syndicate. Prior to the novation of the
managing agency on 9 August 2024 the following amounts were recharged by R&Q Central Services Ltd to the
Syndicate in respect of payroll costs:
2025
£000
2024
£000
Wages and salaries
Total
Social security and pension costs were included within the wages and salary recharge from R&Q Central
Services Ltd.
9. Investment return
2025
£000
2024
£000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
Interest on cash at bank
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments
Losses on the realisation of investments
(866 )
(339 )
Unrealised gains on investments
Unrealised losses on the investments
(690 )
(2,849 )
Investment management expenses
(96 )
(124 )
Total investment return
Transferred to the technical account from the non-technical account
Impairment losses on debtors recognised in administrative expenses
The investment return was wholly allocated to the technical account.
10. Distribution and open years of account
The 2022 year of account will remain open in 2026 with the Syndicate having no other open year of account for
it to close into. A collection of £35m will be proposed (2024: £nil).
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
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The table below shows the current reporting year result (total comprehensive loss) of the years of account
remaining open after the three-year period:
2025
£000
2024
£000
2022
(7,481 )
(54,483 )
11. Financial investments
Carrying value
Cost
2025
£000
2024
£000
2025
£000
2024
£000
Shares and other variable yield securities and units in unit
trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Other investments
Total financial investments
Other investments comprise overseas deposits which are lodged as a condition of underwriting business in
certain countries.
The table below presents an analysis of financial investments by their measurement classification:
2025
£000
2024
£000
Financial assets measured at fair value through profit or loss
Total financial investments
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
•
Level 1
– financial assets that are measured by reference to published quotes in an active market. A
financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those
prices represent actual and regularly occurring market transactions on an arm’s length basis.
•
Level 2
– financial assets measured using a valuation technique based on assumptions that are supported
by prices from observable current market transactions. For example, assets for which pricing is obtained
via pricing services but where prices have not been determined in an active market, financial assets with
fair values based on broker quotes, investments in private equity funds with fair values obtained via fund
managers and assets that are valued using the Syndicate’s own models whereby the significant inputs into
the assumptions are market observable.
•
Level 3
– financial assets measured using a valuation technique (model) based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are
they based on available market data. Therefore, unobservable inputs reflect the Syndicate's own
assumptions about the assumptions that market participants would use in pricing the asset or liability
(including assumptions about risk). These inputs are developed based on the best information available,
which might include the Syndicate’s own data.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the
reporting date by its level in the fair value hierarchy:
2025
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Shares and other variable yield securities and units in unit
trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Other investments
Total financial investments
2024
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Shares and other variable yield securities and units in unit
trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Other investments
Total financial investments
Information on the methods and assumptions used to determine fair values for each major category of financial
instrument measured at fair value is provided below.
Shares and other variable securities and units in unit trusts are generally categorised as level 1 in the fair value
hierarchy except where they are not actively traded, in which case they are generally measured at prices of
recent transactions in the same instrument. The Syndicate has no exposure to hedge funds.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will often
determine prices by consolidating prices of recent trades for identical or similar securities obtained from a panel
of market makers into a composite price. The pricing service may make adjustments for the elapsed time from
a trade date to the valuation date to take into account available market information. Lacking recently reported
trades, pricing vendors will use modelling techniques to determine a security price.
Some government and supranational securities are listed on recognised exchanges and are generally classified
as level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are generally based
on composite prices of recent trades in the same instrument and are generally classified as level 2 in the fair
value hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or are traded
in an established over-the-counter market are also mainly valued using composite prices. Where prices are
based on multiple quotes and those quotes are based on actual recent transactions in the same instrument the
securities are classified as level 2, otherwise they are classified as level 3 in the fair value hierarchy.
At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using valuation techniques
based on observable market data. All of the investments categorised as Level 3 are fair valued based on the
inputs to the valuation technique used.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
12. Debtors arising out of direct insurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
13. Debtors arising out of reinsurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
14. Other debtors
2025
£000
2024
£000
Other
Total
15. Claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated
have changed from the first estimates made.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported
for the end of the underwriting year to one year later as a large proportion of premiums are earned in the year
of account’s second year of development.
Balances have been translated at prevailing exchange rates at 31 December 2025 in all cases.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Gross
:
Pure underwriting year
2016
£000
2017
£000
2018
£000
2019
£000
2020
£000
2022
£000
Total
£000
Estimate of gross claims
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
nine years later
Estimate of gross
claims reserve
Provision in respect of
prior years
Less gross claims paid
(166,568 )
(130,630 )
(97,322 )
(153,537 )
(35,216 )
(121,854 )
(705,127 )
Gross claims reserve
Net:
Pure underwriting year
2016
£000
2017
£000
2018
£000
2019
£000
2020
£000
2022
£000
Total
£000
Estimate of net claims
£000
£000
£000
£000
£000
£000
£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
nine years later
Estimate of net claims
reserves
Provision in respect of
prior years
Less net claims paid
(110,000 )
(76,367 )
(56,749 )
(104,235 )
(35,162 )
(24,707 )
(407,220 )
Net claims reserve
The 2021 year of account has not been presented above as the Syndicate did not participate on this year of
account.
No business was underwritten subsequent to the 2022 year of account.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
16. Technical provisions
The table below shows changes in the insurance contract liabilities and assets from the beginning of the period
to the end of the period.
2025
2024
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Claims outstanding
Balance at 1 January
(217,617 )
(246,924 )
Claims paid during the
year
(99,099 )
(45,086 )
(123,506 )
(45,054 )
Change in estimates of
prior year provisions
(16,556 )
(46,548 )
Foreign exchange
movements
(23,349 )
(12,470 )
(2,597 )
Balance at 31
December
(169,281 )
(217,617 )
Refer to Note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the
accounts, to potential movements in the assumptions applied within the technical provisions.
17. Creditors arising out of direct insurance operations
2025
£000
2024
£000
Due within one year
Total
18. Creditors arising out of reinsurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
19. Other creditors
2025
£000
2024
£000
Other related party balances (non-syndicates)
Other liabilities
Total
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
20. Cash and cash equivalents
2025
£000
2024
£000
Cash at bank and in hand
Short term debt instruments presented within other financial investments
Total cash and cash equivalents
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
£000
2024
£000
Short term debt instruments presented within other financial investments
Total cash and cash equivalents not available for use by the syndicate
21. Analysis of net debt
1 Jan
Cash Flows
Fair value
and
Exchange
Movement
31 Dec
£000
£000
£000
£000
Cash and cash equivalents
(6,785 )
(844 )
Total
(6,785 )
(844 )
22. Related parties
These disclosure requirements are in addition to the requirement to disclose key management personnel
compensation. This disclosure is given in note 7
.
Syndicate
The Corporate member of the Syndicate is R&Q Capital No. 1 Limited., which is part of the R&Q Insurance
Holdings Ltd Group (“R&Q Group”). The following transactions occurred with wholly owned subsidiaries of the
R&Q Group:
•
Managing agency fees of £0m (2024: £0.1m) were paid by the Syndicate to R&Q Syndicate Management
Limited, prior to the managing agency being novated to Polo Managing Agency Limited.
•
R&Q Central Services Limited provided management services to the Syndicate. Expenses of £0.1m (2024:
£4.2m), were recharged to the Syndicate.
•
The Syndicate provides services to R&Q Services Bermuda Limited related to the Gibson Re reinsurance
contract. Income of £4.2m (2024: £4.8m) was receivable in the year. Amounts of £4.2m (2024: £11.4m)
were impaired as they are not expected to be recovered.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Managing Agent
Polo Managing Agency Limited’s immediate parent undertaking is Marco Capital Holdings (UK) Limited, a
company incorporated in England and Wales. Registered address is 4
th
Floor, 24 Monument Street, London
EC3R 8AJ. Managing agency fees of £4.5m (2024: £1.8m) were paid by the Syndicate to PMA.
The Managing Agent’s ultimate parent undertaking is Marco Capital Holdings Limited, a company incorporated
in Malta. Registered address is 171 Old Bakery Street, Valletta, VLT1455, Malta.
The Managing Agent’s ultimate controlling party is Brookfield Oaktree Holdings, LLC (formerly known as
Oaktree Capital Group, LLC).
23. Off-balance sheet items
The Syndicate has not been party to any arrangement, which is not reflected in its balance sheet, where material
risks and benefits arise for the Syndicate.
24. Post balance sheet events
There have been no material subsequent events from the balance sheet date until the date of approval of the
financial statements.
25. Uncertainties associated with arbitration procedures
At 31 December 2025 there is an arbitration in process which is expected to conclude in September 2026. The
outcome of this arbitration is highly uncertain.
The arbitration, if successful, could result in a reduction of £44m in the reinsurers share of technical provision
and an increase of £6m in the amount due to reinsurers. The net impact on the profit and loss account could be
a loss of £50m.
In providing for possible outcomes of the arbitration hearing in September 2026 management takes into
consideration any available evidence, expert opinion, and guidance from legal firms.
The matter is being vigorously defended. The directors’ current assessment is that there is insufficient evidence
to suggest that this claim is likely to succeed.
A second arbitration was in process at the previous year end 31 December 2024. An agreement was reached
to settle the arbitration during the period at significantly less than the statement of claim.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
26. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025
2024
Start of
period rate
End of
period
rate
Average
rate
Start of
period rate
End of
period rate
Average rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
27. Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as 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 Prudential Regulation Authority requirements and resource criteria. The determination of FAL
has regard to a number of factors including the nature and amount of risk to be underwritten by the member
and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not
under the management of the Managing Agent, no amount has been shown in these Financial Statements by
way of such capital resources. However, the Managing Agent is able to make a call on the Member’s FAL to
meet liquidity requirements or to settle losses.
Docusign Envelope ID: 47495035-3526-488B-9684-482E55D5AE49