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Classification: Unclassified
Probitas Syndicate 1492
Annual Report and Accounts for the year ended
Contents
3
Directors and Administration
.................................................................................................
4
Report of the Active Underwriter
...........................................................................................
6
Managing Agent's Report……………………………………………………………………………9
Statement of Managing Agent’s responsibilities
..................................................................
18
Independent auditor’s report to the members of Syndicate 1492
.........................................
19
Statement of profit or loss
...................................................................................................
24
Balance sheet – Assets
.......................................................................................................
26
Balance sheet – Liabilities
...................................................................................................
27
Statement of changes in members’ balances
......................................................................
28
Statement of cash flows
......................................................................................................
29
Notes to the financial statements- (forming part of the financial statements)…...……………30
Directors and Administration
4
Managing agent
Syndicate). PMA is a wholly owned subsidiary (indirectly held) of Aviva plc (Aviva).
Directors
Directors who served at PMA during the year or up until the date the Annual Report and Accounts were
signed are as follows:
N C Bacon – Managing Director
(resigned 31 July 2025)
M J Bale – Chief Operations Officer
A M Bathia – Chief Executive Officer
(resigned 31 July 2025)
R J Callan – Non-Executive Director
(appointed 11 August 2025)
A L Dodson – Chief Underwriting Officer
M E L Goddard – Independent Non-Executive Director
D G Marock – Non-Executive Director and Chair (
appointed 1 January 2025)
B Matthews – Chief Financial Officer
R E Taylor Rea – Non-Executive Director
(appointed 7 July 2025)
S F Pond – Non-Executive Director (
resigned 8 July 2025)
M S D Washington
–
Chief Executive Officer (
appointed 1 August 2025
,
previously Non-Executive
Director
)
H J Weaver – Independent Non-Executive Director
Company secretary
F Jaiyeola
Managing agent’s registered office
88 Leadenhall Street
London
England
United Kingdom
EC3A 3BP
Managing agent’s registered number
12242600
Active underwriter
A L Dodson
Directors and Administration (continued)
5
Bankers
Barclays Bank plc
London
Citibank NA
London and New York
RBC Investor & Treasury Services
Toronto
Investment Managers
Conning Asset Management Limited (24 Monument Street, City of London, London, EC3R 8AJ)
Lloyd’s Treasury & Investment Managers (LTIM) (One Lime Street, London, EC3M 7HA)
Payden & Rygel Global Limited (1 Bartholomew Lane, London, EC2N 2AX)
Statutory auditor
Ernst & Young LLP (25 Churchill Place, Canary Wharf, London, E14 5EY)
Statement of actuarial opinion signing actuary
Deloitte LLP
Report of the Active Underwriter (continued)
6
2025 Summary
2025 was another milestone year for Syndicate 1492. Against the backdrop of noticeably tougher
market conditions, GWP grew by over 20% to £381m, we launched seven new classes of business and
delivered a Net Combined Operating Ratio (NCOR) of 89.4%. This was the sixth consecutive year of
sub-90% NCORs and was achieved in conjunction with 20% per annum compound average GWP
growth over the same period.
During the year, further progress was made integrating the operational aspects of the Syndicate within
Aviva’s Global, Corporate & Specialty (GCS) business, including dual-platform capabilities, combined
underwriting teams and a unified leadership structure.
The overall UK GAAP profit was £39m including a distributable profit of £54.8m in respect of the closing
2023 Year of Account. Another praiseworthy financial result delivered by the team in 2025, in addition
to the integration goals achieved in accordance with Aviva Group’s strategic objectives.
2025 Market Conditions
I highlighted tougher trading conditions in my 2024 report, and this has become more acute in 2025.
Overall, the Syndicate’s risk adjusted rate change was -4.4% (2024: +0.5%). Every class experienced
accelerating rate decreases other than Management Liability and Financial Institutions (albeit these
classes still recorded rate reductions on average). As a result, like-for-like premium was broadly flat as
we maintained underwriting discipline. The majority of GWP growth arose from the new Specialty and
Construction classes we began writing in early 2025.
In addition, market placement dynamics continued to evolve with almost all broking houses initiating
new facility structures (both mono-line and cross-class). This contributed to a 1-point increase in net
acquisition ratio as well as pressurising signings in the traditional open market.
Property catastrophe activity within the Syndicate’s exposure footprint also ticked up in 2025. The main
contributor was Hurricane Melissa, which made landfall as a category five storm on the southern coast
of Jamaica. The storm then tracked north, near the major tourist infrastructure in Montego Bay.
Report of the Active Underwriter (continued)
7
For the overall industry, global catastrophe experience was benign. This drove generally softening
conditions in the reinsurance market. As of 1
st
January 2026, the Syndicate exposures are included
within the wider Aviva Group reinsurance treaties. This results in higher net retentions for most classes
written by the Syndicate. However, this approach supports the dual-platform strategy and the Syndicate
benefits from the overall scale of the Aviva Group reinsurance purchases. Several classes are also
reinsured by Aviva Insurance Limited (AIL) to manage Syndicate net retentions to a suitable level.
Strategic Developments
The Syndicate underwriting strategy evolved during the year as seven new classes were added to the
Probitas product suite. These were Construction, Renewables, A&H, Political Violence & Terrorism,
Marine, Contingency and Mergers & Acquisitions, all existing classes written by AIL. These classes
were the major contributors to premium growth in 2025. Latent Defect and High Net Worth classes will
be added during 2026.
As market conditions soften, the Syndicate’s local office network will be critical to offset over-supply in
the London wholesale market, both from an acquisition cost and risk selection perspective. The
Canadian office completed its first full underwriting year and casualty capability was added to the
product suite. The Probitas Sydney office continued to grow in 2025. GWP nearly doubled to AUD39m
(2024: AUD23m) and the number of staff employed by the Australian service company increased to 18
(2024: 12). Australia provides a significant growth opportunity for the Syndicate because of Lloyd’s
licensing access, and the resources Aviva can bring to bear in a comparatively untapped market for the
Group.
2025 was the second year for the AdA SPA Syndicate 2024, writing £83m GWP of business via
Syndicate 1492. This translated to £53m GWP ultimately ceded to SPA Syndicate 2024. For 2026, the
AdA Syndicate will graduate to a full Syndicate, managed by Probitas Managing Agency. Therefore,
new business in respect of the 2026 Year of Account will no longer feature in the Syndicate 1492
financial statements.
2026 Syndicate Business Forecast (SBF)
The Syndicate’s planned gross written premium for the 2026 Year of Account is £400m (2025: £405m
excluding AdA SPA business and at like-for-like exchange rates). This is broadly flat against 2025 and
reflects tougher market conditions, an expectation of reducing premium rates and a surplus of Syndicate
stamp capacity relative to the forecast ultimate 2025 GWP.
Report of the Active Underwriter (continued)
8
Within the 2026 plan, further growth is envisaged in the Specialty classes, including Construction.
However, the overriding priority for the Syndicate will be to maintain underwriting discipline and bottom
line profitability ahead of pure premium growth.
The geographical split of planned income remains broadly unchanged from previous years, with the
UK, Ireland, Australia, Canada and the Caribbean being key regions for the business. Exposure
emanating from the USA is forecast to increase due to the significance of this territory in the new marine
& specialty classes and cyber.
Closing Comments
Overall, I am very pleased that the Syndicate has delivered a UK GAAP 89.4% (2024: 77.9%) net
combined operating ratio for 2025, in the context of more competitive market conditions and integrating
the business within the Aviva Group. With the resources, brand, capacity and scale of Aviva behind us,
we have every opportunity to consolidate Probitas’s position as a top-performing Lloyd’s Syndicate and
grow the business into 2026 and beyond.
Antony Dodson
Active Underwriter, Syndicate 1492
19 February 2026
Managing Agent’s Report
9
The Directors of Probitas Managing Agency Limited (‘PMA’), the managing agent, present their annual
report and audited financial statements for Syndicate 1492 (‘the Syndicate’) for the year ended 31
December 2025.
Basis of Preparation
The annual financial statements have been prepared in compliance with the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the United Kingdom
Accounting Standards, including Financial Reporting Standard 102 (FRS 102), Financial Report
Standard 103 (FRS 103)
in relation to insurance contracts, and the Lloyd's Syndicate Accounts
Instructions Version 3.1, as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd's
(“Instructions”).
The Syndicate
For the 2025 Year of Account, the capital for Syndicate 1492 is provided 100% by Probitas Corporate
Capital Limited (PCCL), a wholly owned Subsidiary of Aviva Insurance Ltd.
For the 2024 and Prior Years of Account, the Syndicate continues to be backed by a mix of corporate
member capital including PCCL.
The Syndicate underwrites across a spectrum of insurance classes, including Property, Casualty,
Specialty and Financial Lines.
The Managing Agent
Probitas Managing Agency Limited (PMA) has been the managing agent of Syndicate 1492 since
1 September 2021.
Probitas Holdings (UK) Limited owns 100% of the share capital of PMA, and Aviva plc is the
ultimate controlling parent.
Geo-political Climate
The current geo-political climate is marked by heightened tensions and shifting alliances, driven by
ongoing conflicts, economic instability and global power competition. This may also lead to major
challenges in international cooperation around issues like climate change, trade wars and energy
security.
Whilst recognising the potential for future impacts of these geo-political uncertainties; from a business
perspective, the Board of PMA does not anticipate direct material impact to the Syndicate business.
Managing Agent’s Report (continued)
10
Overview
The Directors are pleased to report that Syndicate 1492 has delivered a full-year profit of £39.1m (2024:
£62.1m) and a Net Combined Operating Ratio of 89.4% (2024: 77.9%).
Set out below is a summary showing the pure year of account forecast ultimate results as at 31
December 2025:
•
2023 pure year of account ultimate result £57.1m (2024: £47.6m)
•
2024 pure year of account ultimate result £51.8m (2024: £37.9m)
•
2025 pure year of account ultimate result £35.5m
Results
The amounts disclosed for UK GAAP reporting purposes represent the combination of the 2025
calendar year earned movements for the 2025 and 2024 naturally open years of accounts; and the
closing 2023 & prior years of account.
The result for Syndicate 1492 for the year ended 31 December 2025 is a profit of £39.1m
(2024: £62.1m):
Profit attributable to underwriting years of account:
2025
2024
£000
£000
2025
(14,578)
-
2024
39,320
1,731
2023
11,863
37,009
2022
& prior
2,470
23,320
Total
39,075
62,060
Profit for the year ended 31 December 2025 is after investment gains of £14.8m. (2024 Investment
gain: £14m.).
The 2025 YOA loss arising in the year includes all administrative and operating expenses, including
names’ personal expenses, incurred during the year and no deferral of any underwriting or marketing
expenses; only brokerage, commissions and other acquisition costs are deferred in the ordinary course
of business. The profits arising from the 2024 and 2023 & prior years of account, in their second and
third years of development respectively, result from underwriting and investment activities with little
administrative and operating expense impact.
Managing Agent’s Report (continued)
11
Results (continued)
The Syndicate’s key ‘UK GAAP’ financial performance indicators during the year were as follows:
2025
2024
£000
£000
Gross premiums written
381,001
317,205
Gross premiums earned
330,214
289,028
Net premiums earned
228,326
217,933
Net claims incurred
(93,372)
(74,032)
Technical result
24,250
48,078
Profit for the financial period
39,075
62,060
Net Combined Operating Ratio
2025
2024
Net Loss Ratio
40.9%
34.0%
Net Commission Ratio
23.0%
22.0%
Net Expense Ratio
25.8%
21.2%
NCOR (Excluding FX)
89.8%
77.2%
FX impact
(0.4%)
0.7%
NCOR (Including FX)
89.4%
77.9%
The net combined operating ratio (NCOR) is the ratio of claims incurred (net of reinsurance), acquisition
costs, and operating expenses (net of reinsurance) to earned premiums (net of reinsurance).
2026 Underwriting Year Updated and Future Developments
Refer to the Active Underwriters Report for details.
Strategic Update
The Directors recognised achievements in the following areas during 2025
•
Successful partnering with Aviva’s Global Corporate and Specialty (GCS) business to deliver a
broader, dual-platform strategy
•
Retained Lloyd’s designation of an ‘outperforming’ business
•
Launched AdA Syndicate 2024 as a new standalone Syndicate for the 2026 Year of Account
Managing Agent’s Report (continued)
12
More detail on the Strategic developments of the Syndicate can be found in the Active Underwriters
Report.
Investment Performance Review
Consistent with the PMA investment strategy’s core principles of preservation of capital and maintaining
high liquidity, Syndicate 1492 funds were invested at various points during the year with Coning, Lloyd’s
Treasury & Investment Management (LTIM) and Payden & Rygel.
Principal Activities
The principal activity of Syndicate 1492
is the transaction of general insurance and reinsurance
business.
The Syndicate underwrites a range of classes written on both a direct and facultative reinsurance basis.
The gross written premium by class of business can be found in the notes.
It is planned that the developing underwriting portfolio will continue to be focused on Property and
Casualty classes of business with growing contributions from the new Aviva-sourced classes.
Principal Risks and Uncertainties
The major risks and uncertainties that the Syndicate faces are presented below.
The PMA Board sets
the risk appetite for each of these via risk appetite statements, adherence to which is closely monitored.
Insurance Risk:
Insurance risk can be viewed as comprising three main elements: underwriting, claims and reserving.
Each of these can be defined as:
Underwriting Risk:
An underwriting risk includes the risk that an insurance policy might be written for insufficient premium
and/or provide inappropriate cover.
The Syndicate’s underwriting models, aggregation tools and policy wordings do not prevent unplanned
concentrations of risk, either in geographical regions or types of policy, or from a changing exposure
profile. Consequently, various risk management and loss mitigation techniques have been developed
to manage and reduce this risk.
Managing Agent’s Report (continued)
13
The Syndicate competes against major international groups and there will be occasions when some of
these groups may choose to underwrite for cash flow or market share purposes and at prices that
sometimes fall short of the Syndicate’s minimum acceptable technical price, accentuated by the current
soft market.
In common with all insurers, the Syndicate is exposed to this potential price volatility.
Any
extended periods of low premium rating levels and/or high levels of competition in the insurance markets
are likely to have a negative impact on the Syndicate’s ability to write business profitably and
consequently its financial performance.
Therefore, the Syndicate monitors pricing levels and is
committed to rejecting any business that is unlikely to generate a positive underwriting result over time.
Claims And Reserving, Gross And Net Of Reinsurances, Risk:
Insurance risk includes the risks that the frequency or severity of insured events will be higher than
expected (claims risk), or that estimates of claims subsequently prove to be insufficient (reserving risk).
The PMA Board manages these risks through the approved business plan, which sets out expectations
for volumes, pricing, line sizes and retention by class of business. The PMA Board then monitors
performance against the business plan throughout the year. Reserve adequacy is monitored through
quarterly review by the Syndicate actuary, the Reserving Committee and the Audit Committee. It is also
reviewed by an independent firm of actuaries (Deloitte) as part of their work in providing the Syndicate’s
Statement of Actuarial Opinion (SAO).
Operational Risk:
Operational Risk is the risk that errors caused by people, processes and/or systems might lead to
financial losses to the Syndicate. PMA manages this risk by reference to and use of a risk register,
including a regular review process with those executives who have authority and responsibility for
identifying, assessing and controlling operational risks effectively.
PMA has developed and implemented a risk reporting and risk governance system to ensure that
effective risk management of operational risk is embedded.
Management receives regular operational
risk updates, and the Risk Committee reviews the operational risk dashboard at least on a quarterly
basis.
PMA has entered into a number of outsourcing arrangements, the performance of which are overseen
by the Outsourcing Business Working Group with critical or important outsourcing arrangements being
a matter reserved for the PMA Board.
It is critical for the Syndicate that the key resources required to support its underwriting and other
essential business activities continue to be available.
Contingency plans are in place to mitigate against
any loss of key resources from disrupting the ongoing operations of the Syndicate.
Managing Agent’s Report (continued)
14
PMA has been actively evaluating Operational Resilience of Important Business Services in line with
UK regulatory requirements for the market.
Market Risk (Including Interest Rate And Currency):
This is the risk of financial loss which arises from any fluctuations in market factors, including:
1.
The value of investment holdings.
2.
Movements in interest rates.
3.
Movements in foreign exchange rates.
As the Syndicate develops, its exposure is likely to increase in respect of each of the above.
PMA will
seek to mitigate any such exposure and therefore reduce any associated risk by reviewing investment
performance on a regular basis and seeking to reduce as far as is practicable any currency assets /
liabilities mismatches which arise. The Syndicate mitigates foreign exchange risks through the use of
currency hedging particularly with respect to the regulatory requirements for Canadian Trust Fund
assets.
Credit Risk:
This is the risk of financial loss if another party fails to honour its financial obligations, including failing
to meet them in a timely manner. Credit risk can arise from the failure to receive inwards premium and
the failure to collect outwards reinsurance claims recoveries. Syndicate premium receivable balances
are reported on an ongoing basis to enable the PMA Executive committee to assess their recoverability.
Bad debts are provided for where information is available to suggest that that debts may not be settled
to the Syndicate, such as previous payment patterns.
The Syndicate purchases reinsurance protection to contain exposure from single claims and the
aggregation of claims from catastrophic events.
If a reinsurer fails to pay a claim for any reason, the
Syndicate remains liable for the payment to the policyholder. The creditworthiness of reinsurers is
therefore regularly reviewed throughout the year. The Syndicate currently has no actual or direct
experience of bad debt losses arising from its reinsurance arrangements. The Syndicate makes use of
PMA’s Broker and other intermediary vetting process & its own Reinsurance Security policy.
Other areas of exposure to credit risk include:
1.
Amounts due from insurance intermediaries;
2.
Counterparty risk due to currency hedging arrangements; and,
3.
Counterparty risk with respect to investments and other deposits.
PMA seeks to actively manage and reduce the Syndicate’s exposure to this risk by introducing limits
on its exposure to either a single counterparty, or groups of counterparties, and to geographical and
industry segments wherever practicable or considered appropriate.
Such limits will continue to be
subject to an annual or more frequent review as appropriate.
It is considered that the current levels of
Managing Agent’s Report (continued)
15
concentration of credit risk are acceptable given the Syndicate’s short period of operation.
This area of
risk will continue to be monitored closely.
Liquidity Risk:
Liquidity risk arises where cash may not be available to enable the Syndicate to pay its obligations as
they fall due and at a reasonable cost.
The Syndicate is exposed to daily cash demands on its available
cash resources, including the settlement of claims, the payment of reinsurance premiums and also
various operating and Names’ personal expenses.
PMA’s core investment strategy principles are the
preservation of capital and the maintenance of high liquidity. During the year the Syndicate retained a
shock loss trade loan facility to provide additional liquidity in the event that a major loss creates a liquidity
strain.
Regulatory And Compliance Risk:
This is the risk of a financial loss owing to a breach of regulatory requirements and/or a failure to respond
to a regulatory change.
Management receives frequent regulatory and compliance risk updates and
the Risk Committee reviews and monitors these risks on a quarterly basis.
The Syndicate is required to comply with the requirements of the Financial Conduct Authority (FCA),
Prudential Regulation Authority (PRA) and Lloyd’s.
Lloyd’s requirements include those imposed on the
Lloyd’s market by overseas regulators, particularly in respect of US and Canadian Situs business.
Reinsurance
The Syndicate’s gross claims exposures are protected by effective and efficient treaty reinsurance
programs which provide significant levels of both vertical and sideways coverage with high quality
security. This is further complemented by a specific reinsurance protection to significantly de-risk the
Syndicate’s gross exposures to Atlantic windstorm and Mexico Pacific windstorm risks, as well as some
significant facultative reinsurance coverages for specific accounts or classes of business
.
Directors
Directors who served at PMA until the date on which the Report & Accounts were signed can be seen
on page 4.
Environment, Social & Governance (ESG)
Environmental, Social, and Governance (ESG) matters continue to represent a key emerging risk that
is driving change in the insurance markets that the Syndicate operates in, as well as PMA’s own
corporate strategy.
Managing Agent’s Report (continued)
16
The impact of climate change is becoming more apparent directly in the risks and claims that the
business takes on and is exposed to. This in turn impacts the results of catastrophe and capital
modelling and exposure monitoring, consequently influencing the price and availability of outwards
reinsurance which ultimately makes the business model viable. It is therefore of paramount importance
that the business continues to monitor and manage these exposures appropriately and effectively.
Changes in the legal and regulatory environment relating to corporate social responsibility and
corporate governance agendas represent further systemic threats. The business recognises the
importance of staying abreast of the latest developments in managing its exposure to the changing
landscape of its financial risks with respect to matters relating to poor corporate behaviours in these
areas.
The consideration of ESG risks are an important part of the underwriting process of every risk that
Probitas underwrites both in terms of risk pricing and risk acceptance.
Alongside the direct relevance to insurance carriers of the changing nature of the insurance exposure
to climate and other ESG risks, the business recognises the need to establish its position on climate
transition in relation to its own operations in order to move towards
Task Force on Climate-related
Financial Disclosures
(TCFD) reporting created by the
Financial Stability Board
. This will drive change
within the organisation to meet agreed targets relating to managing that transition. Of particular
relevance is the management of the investment portfolio, where opportunities for diversification are
likely to decrease.
Reputational risk, particularly around environmental and social issues, is becoming an important
consideration in the underwriting of certain risks, especially having to adopt parts of Aviva’s ESG policy
since their acquisition of Probitas. PMA has seen evidence of market dislocations as companies move
to protect ESG strategies by refusing to offer terms on certain risks, or portfolios.
PMA’s ESG policy enables PMA to manage its position in relation to ESG risks and the development
of improved portfolio reporting around ESG related matters. This policy aims to ensure that the
Company carries out its business:
•
In a socially responsible manner
•
With due regard to its impact on the environment; and,
•
In a manner that is consistent with the UN Declaration of Human Rights and the Modern Slavery
Act 2015.
In so doing, we ensure that our business makes a positive contribution to society at large.
Syndicate Annual General Meeting
PMA does not propose to hold an annual general meeting of members of the Syndicate. Members are
asked to note that any objections to this proposal should be submitted, in writing, to the PMA
Compliance Officer within 21 days of this notice.
Managing Agent’s Report (continued)
17
Disclosure of Information to the Auditor
The Directors of the managing agent who held office at the date of approval of this managing agent’s
report confirm that, so far as they are each aware, there is no relevant audit information of which the
Syndicate’s auditor is unaware; and each director has taken all the steps that they ought to have taken
as a director to make themselves aware of any relevant audit information and to establish that the
Syndicate’s auditor is aware of that information.
Auditor
In accordance with section 14(2) of schedule 1 of the Lloyd's Regulations 2008, the auditors, Ernst and
Young LLP, will be deemed to be reappointed and therefore continue in office.
Directors’ and officers’ liability insurance
The Company has maintained insurance to cover directors’ and officers’ liability during the period and
up to the date of these financial statements as defined by section 236 of the Company Act 2006.
Going concern
Having considered the risks and uncertainties, and the performance of the Syndicate, the Managing
Agent has a reasonable expectation that Syndicate 1492 will continue to write business for the
foreseeable future.
The 2026 SBF has been approved by Lloyd’s and all necessary capital lodged to
support underwriting. Accordingly, the financial statements have been prepared on the going concern
basis.
Approved by the Board of Directors.
M S D Washington
Chief Executive Officer
19 February 2026
Statement of Managing Agent’s responsibilities
Classification: Unclassified
The Managing Agent and its Directors are responsible for preparing the Syndicate annual report and
financial statements in accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (‘the
2008 Regulations’) require the managing agent to prepare Syndicate annual accounts for each financial
year. Under that law the managing agent has elected to prepare the financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law). The Syndicate annual 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 accounts, the managing agent is required to:
1.
Select suitable accounting policies which are applied consistently, subject to changes arising
on the adoption of new accounting standards in the year,
2.
make judgements and estimates that are reasonable and prudent,
3.
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements, and
4.
prepare the annual accounts on the basis that the Syndicate will continue to write future
business unless it is inappropriate to presume the Syndicate will do so.
5.
Ensure the preparation and review of the iXBRL tagging that has been applied to the Syndicate
Accounts in accordance with the instructions issued by Lloyd’s, including designing,
implementing and maintaining systems, processes and internal controls to result in tagging that
is free from material non-compliance with the instructions 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 accounts comply with the 2008 Regulations.
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.
Legislation in the UK governing the preparation and dissemination of financial statements 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 V3.1 as modified by the Frequently Asked Questions version 1.1 issued by Lloyd’s.
Signed on behalf of the board.
M S D Washington
Chief Executive Officer
19 February 2026
Independent auditor’s report to the members of
Syndicate 1492
19
Opinion
We have audited the syndicate annual accounts of Syndicate 1492 (‘the syndicate’) for the year ended
31 December 2025 which comprise the Statement of profit and loss and other comprehensive income,
the Statement of changes in members’ balances, the Balance sheet, the Statement of cash flows and
the related notes 1 to 29, including a summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law including 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 Section 1
of 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’).
In our opinion, the syndicate annual accounts:
give a true and fair view of the syndicate’s affairs as at 31 December 2025 and of its profit for
the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the 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
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 as applied to other entities of public interest, 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.
Conclusions relating to going concern
In auditing the syndicate annual accounts, we have concluded that the managing agent’s use of the
going concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
Independent auditor’s report to the members of
Syndicate 1492
20
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability
to continue as a going concern for a period of 12 months from when the syndicate annual accounts are
authorised for issue.
Our responsibilities and the responsibilities of the directors of the managing agent with respect to going
concern are described in the relevant sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee as to the syndicate’s ability to continue
as a going concern.
Other information
The other information comprises the information included in the annual report, other than the syndicate
annual accounts and our auditor’s report thereon. The directors of the managing agent are responsible
for the other information contained within the annual report.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the
extent otherwise explicitly stated in this 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 the 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 in 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.
Independent auditor’s report to the members of
Syndicate 1492
21
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 where The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you, if in our
opinion:
the managing agent in respect of the syndicate has not kept adequate accounting records; or
the syndicate annual accounts are not in agreement with the accounting records; or
certain disclosures of the managing agent’s emoluments specified by law are not made; or
we have not received all the information an explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities page 18, the directors
of the managing agent are 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 they determine is
necessary to enable the preparation of the syndicate annual accounts that are free from material
misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the directors of the managing agent are responsible for
assessing the syndicate’s ability to continue in operation, disclosing, as applicable, matters related to
its ability to continue in operation and using the going concern basis of accounting unless the directors
of the managing agent either 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.
Independent auditor’s report to the members of
Syndicate 1492
22
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed
below. However, the primary responsibility for the prevention and detection of fraud rests with both
those charged with governance of the managing agent and management.
Our approach was as follows:
o
We obtained a general understanding of the legal and regulatory frameworks that are applicable
to the syndicate and determined that the most significant are direct laws and regulations related
to elements of Lloyd’s Byelaws and Regulations, and the financial reporting framework (UK
United Kingdom Generally Accepted Accounting Practice), and requirements referred to by
Lloyd’s in the Syndicate Accounts instructions. Our considerations of other laws and regulations
that may have a material effect on the syndicate annual accounts included permissions and
supervisory requirements of Lloyd’s of London, the Prudential Regulation Authority (‘PRA’) and
the Financial Conduct Authority (‘FCA’).
o
We obtained a general understanding of how the syndicate is complying with those frameworks
by making enquiries of management, internal audit, and those responsible for legal and
compliance matters of the syndicate. In assessing the effectiveness of the control environment,
we also reviewed significant correspondence between the syndicate, Lloyd’s of London and
other UK regulatory bodies; reviewed minutes of the Board and Risk Committee of the
managing agent; and gained an understanding of the managing agent’s approach to
governance.
o
For direct laws and regulations, we considered the extent of compliance with those laws and
regulations as part of our procedures on the related syndicate annual accounts’ items.
o
For both direct and other laws and regulations, our procedures involved: making enquiries of
the directors of the managing agent and senior management for their awareness of any non-
compliance of laws or regulations, enquiring about the policies that have been established to
prevent non-compliance with laws and regulations by officers and employees, enquiring about
the managing agent’s methods of enforcing and monitoring compliance with such policies, and
inspecting significant correspondence with Lloyd’s, the PRA and the FCA.
o
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
Independent auditor’s report to the members of
Syndicate 1492
23
team to ensure that the team had the appropriate competence and capabilities, which included
the use of specialists where appropriate.
o
We assessed the susceptibility of the syndicate’s annual accounts to material misstatement,
including how fraud might occur by considering the controls that the directors of the managing
agent have established to address risks identified by them, or that otherwise seek to prevent,
deter or detect fraud. We also considered areas of significant judgement, complex transactions,
performance targets, economic or external pressures and the impact these have on the control
environment. Where this risk was considered to be higher, we performed audit procedures to
address each identified fraud risk. These procedures included testing manual journals and were
designed to provide reasonable assurance that the syndicate annual accounts were free from
fraud or error.
A further description of our responsibilities for the audit of the annual accounts is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these
syndicate annual accounts, and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. 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.
Heidi Burton (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
19 February 2026
Statement of profit or loss and other
comprehensive income:
24
Technical account – General business
For the year ended 31 December 2025
Note
2025
£000
2024
£000
Gross premiums written
6
Outwards reinsurance premiums
(138,788 )
(86,759 )
Premiums written, net of reinsurance
Changes in unearned premium
18
Change in the gross provision for unearned premiums
(50,787 )
(28,177 )
Change in the provision for unearned premiums reinsurers’ share
Net change in provisions for unearned premiums
(13,887 )
(12,513 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
10
Other technical income, net of reinsurance
Claims paid
18
Gross amount
(41,337 )
(32,981 )
Reinsurers’ share
(479 )
Net claims paid
(39,979 )
(33,460 )
Change in the provision for claims
18
Gross amount
(111,072 )
(81,996 )
Reinsurers’ share
Net change in provisions for claims
(53,393 )
(40,572 )
Claims incurred, net of reinsurance
(93,372 )
(74,032 )
Net operating expenses
7
(111,601 )
(94,237 )
Other technical charges, net of reinsurance
Balance on the technical account – general business
Statement of profit or loss and other
comprehensive income: (continued)
25
Non-technical account – General business
For the year ended 31 December 2025
All operations relate to continuing activities. There is no other comprehensive income.
The accompanying notes from page 30 to 59 form an integral part of these financial statements.
Note
2025
£000
2024
£000
Balance on the technical account – general business
Investment income
10
Realised gains on investments
10
Unrealised gains on investments
10
Investment expenses and charges
10
(244 )
(300 )
Total investment return
Allocated investment return transferred to the technical account
(14,825 )
(13,982 )
Profit/(Loss) on foreign exchange
(1,586 )
Profit for the financial year
Total comprehensive income for the year
Balance sheet – Assets
26
As at 31 December 2025
Note
2025
£000
2024
£000
Financial investments
12
Deposits with ceding undertakings
Investments
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
18
Debtors arising out of direct insurance operations
13
Debtors arising out of reinsurance operations
14
Other debtors
15
Debtors
Cash at bank and in hand
22
Other
24
Other assets
Deferred acquisition costs
16
Other prepayments and accrued income
Prepayments and accrued income
Total assets
Balance sheet – Liabilities
27
As at 31 December 2025
Note
2025
£000
2024
£000
Members’ balances
Total capital and reserves
Provision for unearned premiums
Claims outstanding
Technical provisions
18
Creditors arising out of direct insurance operations
19
Creditors arising out of reinsurance operations
20
Other creditors including taxation and social security
21
Creditors
Accruals and deferred income
25
Total liabilities
Total liabilities, capital and reserves
These Syndicate financial statements on pages 24 to 59 were approved by the board of Probitas
Managing Agency Limited on 16 February 2026 and were signed on its behalf by;
M S D Washington
Chief Executive Officer
19 February 2026
Statement of changes in members’ balances
28
For the year ended 31 December 2025
2025
£000
2024
£000
Members’ balances brought forward at 1 January
Total comprehensive income for the year
Payments of profit to members’ personal reserve funds
(59,444 )
(45,568 )
Other
(799 )
(298 )
Members’ balances carried forward at 31 December
Statement of cash flows
29
For the year ended 31 December 2025
Note
2025
£000
2024
£000
Cash flows from operating activities
Profit for the financial year
Adjustments:
Increase in gross technical provisions
(Increase) in reinsurers’ share of gross
technical provisions
(88,023 )
(57,640 )
(Increase) in debtors
(44,000 )
(41,088 )
Increase in creditors
Movement in other assets/liabilities
(14,642 )
(10,822 )
Investment return
(14,825 )
(13,982 )
Foreign exchange
Other
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(56,144 )
(275,696 )
Sale of equity and debt instruments
Investment income received
Other
Net cash flows from investing activities
(23,278 )
(43,027 )
Cash flows from financing activities
Distribution of profit
(59,444 )
(45,568 )
Net cash flows from financing activities
(59,444 )
(45,568 )
Net increase/(decrease) in cash and cash equivalents
(6,460 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(527 )
(456 )
Cash and cash equivalents at the end of the year
22
Notes to the financial statements –
(forming part of the financial statements)
30
1. Statement of Compliance
The financial statements have been prepared in
accordance
with
the
Insurance
Accounts
Directive (Lloyd’s Syndicate and Aggregate
Accounts)
Regulations
2008,
applicable
Accounting Standards in the United Kingdom
and the Republic of Ireland, including Financial
Reporting Standard 102 (FRS 102), Financial
Reporting Standard 103 (FRS 103) in relation to
insurance contracts, and the Lloyd’s Syndicate
Accounts Instructions Version V3.1.
The financial statements are prepared under the
historical cost convention except for certain
financial instruments which are measured at fair
value through the Statement of Profit or Loss.
2. Basis of preparation
The financial statements for the year ended 31
December 2025 were authorised for issue by the
Board of Directors on 16 February 2026 and
signed 19 February 2026. The address of the
Syndicate’s
managing
agent,
Probitas
Managing Agency Limited, is 88 Leadenhall
Street, London, England, EC3A 3BP.
The financial statements are prepared in £
Sterling
which
is
the
functional
and
presentational currency of the Syndicate and
rounded to the nearest £000.
Going concern
Having considered the risks and uncertainties,
and the performance of the Syndicate as
disclosed in the report of the directors, the
Managing Agent has a reasonable expectation
that the Syndicate will continue to write business
for the foreseeable future, and the 2026 YOA is
now open. Moreover, the Managing Agent
expects that continued capital support will be in
place to do so. Accordingly, the financial
statements have been prepared on the going
concern basis.
3.
Use of judgements and estimates
The preparation of the financial statements
requires management to make judgements,
estimates and assumptions that affect the
carrying value of assets and liabilities that are
not readily available from other sources. There
are only critical accounting judgements in
relation to estimates (which are dealt with
separately below), in the process of applying the
Syndicate’s accounting policies. Estimates and
underlying assumptions are regularly reviewed
and revisions to these are recognised in the
period in which the change in estimate is
recognised and all future periods affected.
The following are the Syndicate’s key sources of
estimation uncertainty, where a risk of causing
material misstatement to the carrying value of
assets and liabilities within the next financial
year may exist.
Key sources of estimation uncertainty
: Claim
reserves
For insurance contracts, estimates are made
both for the expected ultimate cost of claims
reported and for the expected ultimate cost of
claims incurred but not reported (IBNR), at the
reporting date. It can take a significant period
before
the
ultimate
claims
cost
can
be
established with certainty.
The ultimate cost of outstanding claims is
estimated by using a range of standard actuarial
claims projection techniques, such as the Chain
Ladder
method
and
Bornhuetter-Ferguson
methods.
The main assumption underlying these standard
actuarial claims projection techniques is that
past claims development experience can be
used to project future claims development and
hence ultimate claims costs. The provision for
claims outstanding 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. The
provision also includes the estimated cost of
Notes to the financial statements (continued)
31
claims IBNR at the balance sheet date based on
statistical methods.
The reserving uncertainty will be greatest for
liability business which is described as long-tail,
reflecting the time it takes for losses to be
identified by claimants and settled. Long-tail
classes make up approximately two thirds of the
business written.
These methods generally involve projecting
from past experience of the development of
claims over time to form a view of the likely
ultimate claims to be experienced for more
recent underwriting, having regard to variations
in the business accepted and the underlying
terms and conditions. For the most recent years,
where a high degree of volatility arises from
projections, estimates may be based in part on
output from rating and other models of the
business
accepted
and
assessments
of
underwriting conditions. Managerial judgement
is applied when setting the initial expected loss
ratio, gross claims’ development patterns and
the
proportion
of
reinsurance
recoverable
thereon.
These judgements are based on a
combination of Syndicate specific and market
benchmarks where available. The amount of
salvage
and
subrogation
recoveries
is
separately
identified
and
when
material,
reported as an asset. Further details are
provided in Note 18.
Key sources of estimation uncertainty
:
Premium income binder accrual
Premium estimates are made in respect of
binder accruals, Gross Written Premium 2025:
£74.83m
(2024:
£41.27m).
Estimates
are
necessary where bordereaux containing actual
written premiums have not been received on a
timely basis. The estimate is determined with
reference to the previous years binders or
contracts and their submission patterns, the
Estimated Premium Income (EPI) for the binder
and discussions with the Underwriters about
how much additional premium is expected to be
reported.
An estimate is made for premium earnings with
reference to binder inception and expiry dates
and expected earning patterns. Gross Earned
Premium 2025: £32.03m (2024: £19.08m). The
amount on the Balance Sheet relating to the
premium income binder accrual is 2025:
£55.56m (2024: £31.35m).
4. 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. Insurance contracts: product
classification
Insurance contracts are those contracts when
the
Syndicate
(the
insurer/reinsurer)
has
accepted significant insurance risk from another
party (the policyholder/reinsured) by agreeing to
compensate the policyholder if a specified
uncertain future event (the re/insured event)
adversely affects the policyholders. As a general
guideline, the Syndicate determines whether it
has significant insurance risk, by comparing
benefits paid with benefits payable if the insured
event did not occur. Insurance contracts can
also transfer financial risk.
Once a contract has been classified as an
insurance contract, it remains an insurance
contract for the remainder of its lifetime, even if
the insurance risk reduces significantly during
this period, unless all rights and obligations are
extinguished or expire.
B. Premiums written
Gross written premiums comprise the total
premiums receivable for the whole period of
cover provided by the contracts entered into
during the reporting period, regardless of
whether these are wholly due for payment in the
reporting period, together with any adjustments
arising in the reporting period to such premiums
receivable in respect of business written in prior
reporting periods. They are recognised on the
date on which the policy commences. Additional
or return premiums are treated as a re-
measurement of the initial premium. Gross
written premiums are stated gross of brokerage
payable and other relevant deductions.
Under some policies, written premiums are
adjusted retrospectively in the light of claims
experience or when the risk covered cannot be
Notes to the financial statements (continued)
32
assessed accurately at the commencement of
cover. When written premiums are subject to an
increase retrospectively, recognition of any
potential increase is deferred until the additional
amount can be ascertained with reasonable
certainty. When written premiums are subject to
a reduction, a re-measurement taking account of
such a reduction is made as soon as there is an
obligation to the cover-holder.
Gross written premiums in respect of insurance
contracts underwritten under facilities such as
binding authorities or lineslips are recognised on
a written declaration or bordereaux received
basis. Where material, and provided a reliable
estimate can be determined, a premium accrual
is made to account for delays in receipt of
bordereaux at quarter and year ends. Such
accruals are estimated based on information
provided by the broker, past underwriting
experience and prevailing market conditions.
Any
such
estimates
are
reviewed
for
subsequent actual experience and updated as
appropriate.
C. Deferred Acquisition costs
Acquisition costs can comprise costs arising
from the conclusion of insurance contracts,
including direct costs, such as intermediary
commissions and indirect costs, such as the
administrative expenses connected with the
processing of proposals and the issuing of
policies. Deferred acquisition costs are costs
arising from conclusion of insurance contracts
that are incurred during the reporting period, but
which relate to a subsequent reporting period
and which are carried forward to subsequent
reporting periods. Deferred acquisition costs are
amortised over the period in which the related
premiums are earned. The reinsurers’ share of
deferred acquisition costs is amortised in the
same
manner
as
the
underlying
asset
amortisation is recorded in the Statement of
Profit or Loss income statement. Commissions
receivable on outwards reinsurance contracts
are deferred and amortised on a straight-line
basis over the term of the expected premiums
payable.
D. Reinsurance
Reinsurance written premiums comprise the
total premiums payable for the whole cover
provided by contracts entered into the period,
including portfolio premiums payable, and are
recognised on the date on which the policy
incepts. Premiums include any adjustments
arising in the accounting period in respect of
reinsurance
contracts
incepting
in
prior
accounting periods.
Under some policies, reinsurance premiums
payable are adjusted retrospectively in the light
of claims experience or where the risk covered
cannot
be
assessed
accurately
at
the
commencement
of
cover.
When
written
premiums
are
subject
to
an
increase
retrospectively, recognition of any potential
increase is recognised as soon as there is an
obligation to the policyholder.
Outwards reinsurance premiums are accounted
for and earned in the same accounting period as
the premiums for the related direct or inwards
business being reinsured.
E. Reinstatement premiums
Reinstatement premiums may arise on both
inwards and outwards policies when a loss has
been incurred on a policy and there is a clause
which requires the reinstatement of the policy
with the payment of a further premium by the
policyholder. These amounts are generally
recognised as written and earned in full, at the
date of the event giving rise to the reinstatement
premium. Outwards reinstatement premiums
payable, in the event of a claim being made, are
generally charged to year of account in the same
proportions as that to which the recovery is
credited.
Reinstatement premiums are accrued in respect
of IBNR reserves as well as in respect of actual
claims incurred.
F. Claims
Claims include all claims occurring during the
year, whether reported or not, related internal
and external claims handling costs that are
directly related to the processing and settlement
of claims and any adjustments to claims
outstanding from previous years.
Reinsurance claims are recognised when the
related gross insurance claim is recognised
according to the terms of the relevant contract.
Notes to the financial statements (continued)
33
G. Technical provisions
Technical
provisions
comprise
claims
outstanding
and
provisions
for
unearned
premiums.
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 reinsurance share of
outstanding claims.
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).
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.
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.
H.
Provisions for unearned premiums
Unearned premiums are those proportions of
premiums written in a year that relate to periods
of risk after the reporting date. In respect of
general insurance business, written premiums
are recognised as earned over the period of the
policy on a time apportionment basis having
regard, where appropriate, to the incidence of
risk. The proportion attributable to subsequent
periods is deferred as a provision for unearned
premiums.
Unearned reinsurance premiums are those
proportions of premiums written in a year that
relate to periods of risk after the reporting date.
Unearned reinsurance premiums are deferred
over the term of the underlying direct insurance
policies for risks-attaching contracts and over
the term of the reinsurance contract for losses-
occurring contracts.
I.
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. The
provision was 2025: £Nil (2024: £Nil).
J. Foreign currencies
The
Syndicate’s
functional
and
reporting
currency is £ Sterling.
Transactions denominated in currencies other
than the functional currency are initially recorded
in the functional currency at the exchange rate
ruling at the date of the transactions. The
Statement of Profit or Loss is revalued to
functional currency using year to date average
exchange rates, whilst the Balance Sheet is
converted using closing exchange rates.
K.
Financial assets and liabilities
As permitted by FRS 102, the Syndicate has
elected
to
apply
the
recognition
and
measurement provisions of IAS 39 Financial
Instruments: Recognition and Measurement in
place of Sections 11 and 12 of FRS 102 to
account for all of its financial instruments.
i.
Classification
The
Syndicate
classifies
its
financial
investments as either financial assets at fair
value through profit or loss or loans and
receivables or available for sale. The Syndicate
determines the classification of its financial
assets at initial recognition. Financial assets are
initially recognised at fair value plus, in the case
Notes to the financial statements (continued)
34
of instruments not at fair value through profit or
loss, directly attributable transaction costs.
The classification depends on the purpose for
which
the
investments
were
acquired
or
originated. In general, financial assets are
classified as fair value through profit or loss as
the
Syndicate’s
documented
investment
strategy is to manage financial investments
acquired on a fair value basis.
ii.
Recognition
Purchases and sales of financial assets are
recognised on the trade date, i.e. the date the
Syndicate commits to purchase or sell the asset.
Regular way purchases or sales of financial
assets require delivery of assets within the time
frame generally established by regulation or
convention in the marketplace.
iii. Measurement
Financial assets at fair value through profit or
loss has two sub-categories, namely financial
assets held for trading and those designated at
fair value through the profit or loss at inception.
All the Syndicate’s financial assets are held for
trading. These investments are initially recorded
at fair value. Subsequently to initial recognition,
these investments are re-measured at fair value
at each reporting date. Fair value adjustments
and realised gains and losses are recognised in
the income statement.
iv. Derivative financial instruments
Derivative financial instruments are measured at
cost for initial recognition, and subsequently at
fair value, with changes recognised in the
Statement of Profit or Loss. Transaction costs
incurred in buying and selling derivative financial
instruments are recognised in profit or loss when
incurred. When derivatives are liabilities, they
are reported with other creditors in the Balance
Sheet.
v.
Identification and measurement of
impairment
For financial assets not held at fair value
through profit or loss, the Syndicate assesses at
each reporting date whether the financial asset
or group of financial assets is impaired. The
Syndicate first assesses whether objective
evidence of impairment exists for financial
assets. If it is determined that no objective
evidence of impairment exists for an individually
assessed financial asset, the asset is included in
a group of financial assets with similar credit risk
characteristics and that group of financial assets
is collectively assessed for impairment. Assets
that are individually assessed for impairment
and for which an impairment loss is or continues
to be recognised are not included in the
collective assessment of impairment.
If an available for sale financial asset is
impaired, an amount comprising the difference
between its cost (net of any principal repayment
and amortisation) and its current fair value, less
any impairment loss previously recognised in
the Statement of Profit or Loss, is transferred
from other comprehensive income in members’
balance to the Statement of Profit or Loss.
Impairment losses recognised in the Statement
of Profit or Loss in respect of an equity
instrument are not subsequently reversed
through the Statement of Profit or Loss.
Reversals
of
impairment
losses
on
debt
instruments classified as available for sale are
reversed through the Statement of Profit or Loss,
if the increase in the fair value of the instruments
can be objectively related to an event occurring
after the impairment losses were recognised in
the Statement of Profit or Loss.
vi.
De-recognition of financial assets
A financial asset or, when applicable, a part of a
financial asset is derecognised when:
The rights to the cash flows from the asset have
expired; or
The Syndicate retains the right to receive cash
flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
‘pass through’ arrangement and either (a) the
Syndicate has transferred substantially all the
risks and rewards of the asset; or (b) the
Syndicate has neither transferred nor retained
substantially all the risks and rewards of the
asset, but has transferred control of the asset.
vii. Off-setting
Financial assets and financial liabilities are off-
set and the net amount is reported in the
statement of financial position if, and only if:
Notes to the financial statements (continued)
35
•
There is a currently enforceable legal right
to offset the recognised amounts; and
•
There is an intention to settle on a net basis,
to realise the assets and settle the liabilities
simultaneously.
viii. Financial liabilities
The Syndicate’s financial liabilities include trade
and other payables, borrowings and insurance
payables. All financial liabilities are recognised
initially at fair value and, in the case of loans and
borrowings,
net
of
directly
attributable
transaction costs.
Financial assets and financial liabilities are
offset, and the net amount presented in the
balance sheet when, and only when, the
Syndicate currently has a legal right to set off the
amounts and intends either to settle on a net
basis or to realise the asset and settle the liability
simultaneously.
L. Investment return
Investment return comprises all investment
income, realised investment gains and losses
and movements in unrealised gains and losses,
net of investment expenses, charges and
interest.
Realised
gains
and
losses
on
investments are calculated as the difference
between sale proceeds and purchase price.
Unrealised gains and losses on investments
represent the difference between the valuation
at the Balance Sheet date and their valuation at
the previous Balance Sheet date, or purchase
price, if acquired during the financial year,
together with the reversal of unrealised gains
and losses recognised in earlier financial years
in respect of investment disposals in the current
financial year.
Investment return is initially recorded in the non-
technical account. A transfer is made from the
non-technical account to the technical account -
general business. Investment return has been
wholly allocated to the technical account as all
investments relate to the technical account.
M. Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet
comprise cash at banks and in hand and short-
term deposits with an original maturity date of
three months or less. For the purpose of the
cash flow statement, cash and cash equivalents
consist of cash and cash equivalents as defined
above. Overdrafts are reported separately in
creditors.
N. Taxation
Under schedule 19 of the Finance Act 1993,
Managing Agents are not required to deduct
basic rate income tax from trading income. In
addition, all UK basic-rate income tax deducted
from
Syndicate
investment
income
is
recoverable
by
managing
agents
and
consequently the distribution made to members
or their members’ agents is gross of tax. Capital
appreciation falls within trading income and is
also distributed gross of tax.
No provision has been made for any United
States
Federal
Income
Tax
payable
on
underwriting results or investment earnings. Any
payments on account made by the Syndicate
are included in the statement of financial position
under the heading ‘other debtors’. No provision
has been made for any overseas tax payable by
members on underwriting results.
O. Pension costs
Probitas Managing Agency Limited operates a
defined
contribution
scheme.
Pension
contributions relating to staff who act on behalf
of the Syndicate are charged to the Syndicate
and included within net operating expenses.
P. Profit Commission
Profit commission is charged by the managing
agent at a rate of 22.5% (2024: 22.5%) on profits
and is subject to a one-year deficit clause. This
amount is shared between the managing agent
and
Probitas
1492
Services
Limited
in
accordance with the relevant contracts.
Profit commission is charged to the Syndicate as
incurred on the result and is presented within
Members’ Personal expenses.
Amounts due in respect of the profit commission
are payable in instalments at each of 12, 24 and
36 months of development of each year of
account
Q. Deposits with ceding undertakings
Deposits with ceding undertakings are funds
held by Lloyd’s Europe on behalf of the
Notes to the financial statements (continued)
36
Syndicate to settle Part VII claims. These funds
are held at amortised cost in the balance sheet.
R. Operating expenses
Where expenses are incurred by the Managing
Agent for the administration of the Syndicate,
these expenses are apportioned appropriately
based on type of expense. Expenses that are
incurred jointly are apportioned between the
Managing Agent and the Syndicate on bases
depending on the amount of work performed,
resources used, and the volume of business
transacted.
S.
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.
T.
Debtors and creditors
Insurance receivables are recognised when due
and measured on initial recognition at the fair
value
of
the
consideration
received
or
receivable. Subsequent to initial recognition,
insurance
receivables
are
measured
at
amortised cost, using the effective interest rate
method. The carrying value of insurance
receivables
is
reviewed
for
impairment
whenever events or circumstances indicate that
the carrying amount may not be recoverable,
with the impairment loss recorded in the income
statement.
Insurance receivables are de-recognised when
the de-recognition criteria for financial assets
have been met.
Reinsurance assets are reviewed for impairment
at each reporting date, or more frequently, when
an indication of impairment arises during the
reporting year. Impairment occurs when there is
objective evidence as a result of an event that
occurred
after
initial
recognition
of
the
reinsurance asset that the Syndicate may not
receive all outstanding amounts due under the
terms of the contract and the event has a reliably
measurable impact on the amounts that the
Syndicate will receive from the reinsurer. The
impairment loss is recorded in the Statement of
Profit or Loss.
Ceded reinsurance arrangements do not relieve
the
Syndicate
from
its
obligations
to
policyholders.
Insurance payables are recognised when due
and measured on initial recognition at the fair
value of the consideration received less directly
attributable transaction costs.
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.
U. Bad debts
Bad
debts are provided for only where
information is available to suggest that that a
debtor may be unable or unwilling to settle its
debt to the Syndicate.
5.
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 (‘the Board’) of the
Managing Agent has overall responsibility for
the
establishment
and
oversight
of
the
Syndicate’s risk management framework. The
Board has established an Audit committee and
a Risk committee which oversee the operation
of the of the Syndicate Risk Management
Framework and reviews and monitors the
management of risks.
The primary objective of the Syndicate’s risk
management framework is to protect the
Syndicate’s members from events that hinder
the
sustainable
achievement
of
financial
performance objectives, including failing to
exploit
opportunities.
Key
management
recognises the critical importance of having
Notes to the financial statements (continued)
37
efficient and effective risk management systems
in place.
The Managing Agent has established a risk
management function for the Syndicate with
clear terms of reference from the Board of
Directors, its committees, and the associated
executive management committee. This is
supplemented
with
a
clear
organisational
structure with documented delegated authorities
and responsibilities from the board of directors
to
executive
working
groups
and
senior
managers. Lastly, a Syndicate policy framework
which sets out the risk profiles for the Syndicate,
risk management, control and business conduct
standards for the Syndicate’s operations has
been put in place. Each policy has a member of
senior management charged with overseeing
compliance with the policy throughout the
Syndicate.
The Board of Directors approves the risk
management policies and meets regularly to
approve
any
commercial,
regulatory,
and
organisational requirements of such policies.
These policies define the identification of risk
and its interpretation to ensure the appropriate
quality and diversification of assets, align
underwriting and reinsurance strategy to the
Syndicate business plan, and specify reporting
requirements. Significant emphasis is placed on
assessment and documentation of risks and
controls, including the articulation of ‘risk
appetite’. The Syndicate regularly undertakes a
process known as ‘Own Risk & Solvency
Assessment’ (ORSA) which is reviewed by the
Risk Committee and finally approved by the
Board.
A. Insurance risk
The principal risk the Syndicate faces under
insurance contracts is that the actual claims and
benefit payments or the timing thereof, differ
from expectations. This is influenced by the
frequency of claims, severity of claims, actual
benefits paid and subsequent development of
long–term claims. Therefore, the objective of the
Syndicate is to ensure that sufficient reserves
are available to cover these liabilities.
The risk exposure is mitigated by diversification
across a portfolio of insurance contracts and
geographical areas. The variability of risks is
also
improved
by
careful
selection
and
implementation
of
underwriting
strategy
guidelines, as well as the use of reinsurance
arrangements.
The Syndicate purchases reinsurance as part of
its risks’ mitigation programme. Reinsurance
ceded may be placed on both a proportional and
non–proportional basis. The majority of any
proportional reinsurance which might be ceded
is likely to be quota–share reinsurance which
would be taken out to reduce the overall
exposure to certain classes of business.
Non–proportional
reinsurance
is
primarily
excess of loss reinsurance and is usually
designed to mitigate the Syndicate’s net
exposure to catastrophe losses. Retention limits
for the excess of loss reinsurance will vary by
product line and territory.
Amounts
recoverable
from
reinsurers
are
estimated in a manner consistent with the
outstanding
claims
provision
and
are
in
accordance with the reinsurance contracts.
Although
the
Syndicate
has
reinsurance
arrangements, it is not relieved of its direct
obligations to its policyholders and thus a credit
exposure
exists
with
respect
to
ceded
insurance, to the extent that any reinsurer is
unable to meet its obligations assumed under
such reinsurance agreements. The Syndicate’s
placement of reinsurance is diversified such that
it is neither dependent on a single reinsurer nor
are the operations substantially dependent upon
any single reinsurance contract.
The Syndicate principally issues the following
types of general insurance contracts: Property,
Casualty and Energy risks usually covering
twelve months’ duration.
The Syndicate’s most significant risks arise from
natural disasters. For longer tail casualty claims
that take some years to settle, there is also
inflation risk.
Variability in claims and hence profits is a
significant risk to the Syndicate. This is
mitigated by writing a diverse range of products
including diversification by industry sector and
geography.
The Syndicate has an agreed
maximum and normal line size for each
underwriting team. It also has a reinsurance
strategy and purchasing plan to mitigate the
Notes to the financial statements (continued)
38
effects
of
individual
large
losses
and
events.
The pricing of the business includes the
consideration of inflation and other economic
factors. Operational risk can also increase the
volatility of profits. This risk is mitigated by strict
claim
handling
procedures
and
frequent
investigation of possible fraudulent claims.
PMA has a number of Board level risk appetite
statements governing the Syndicate's appetite
to
Insurance,
Reserving,
Investment
(and
Liquidity), Credit, and Operational Risks. These
are further sub-divided to provide greater clarity
to the business of the parameters within which it
is permitted to operate. One example is the
appetite for natural catastrophe risk, which is
expressed in terms of potential losses relative to
the reinsurance protections purchased, and
monitored using proprietary loss modelling tools.
The Syndicate uses commercially available
proprietary risk management software to assess
catastrophe exposure. However, there is always
a risk that the assumptions and techniques used
in these models are unreliable or that claims
arising from an un-modelled event are greater
than those arising from a modelled event.
Reserves have been assessed across the whole
underwriting portfolio on an entirely assumed
basis using the Lloyd’s approved Syndicate
business plan loss ratios.
Key assumptions:
The principal assumption underlying the liability
estimates is that the future claims development
will follow a similar pattern to past claims
development
experience.
This
includes
assumptions in respect of average claim costs,
claim handling costs, claim inflation factors and
claim numbers for each underwriting year.
Additional qualitative judgements are used to
assess the extent to which past trends may not
apply in the future, for example: one–off
occurrence; changes in market factors such as
public attitude to claiming: economic conditions:
as well as internal factors such as portfolio mix,
policy
conditions
and
claims
handling
procedures. Judgement is further used to
assess the extent to which external factors such
as judicial decisions and government legislation
affect the estimates.
Other key circumstances affecting the reliability
of assumptions include variation in interest
rates, delays in settlement and changes in
foreign currency rates.
i.
Sensitivity to insurance risk
The claim liabilities are sensitive to the key
assumptions that follow. It has not been possible
to quantify the sensitivity of certain assumptions
such as legislative changes or uncertainty in the
estimation process.
The Syndicate has limited historical experience
on
which
to
base
statistical
projections
particularly in respect of the longer-tail lines of
business. Benchmark data has therefore been
used on a selective basis in the reserving
process.
For illustrative purposes the following table
indicates the impact of various percentage
changes to the booked reserves.
The calculations have been carried out on a
linear
basis
and
without
any
actuarial
adjustments or application of expert judgement.
Positive changes in assumptions represent a
decrease of the liability; negative changes in
assumptions represent an increase in the
liability.
Notes to the financial statements (continued)
Classification: Confidential
39
General insurance business sensitivities as at 31 December 2025
Sensitivity
+5.0%
£000
-5.0%
£000
Claims outstanding – gross of reinsurance
(21,108 )
Claims outstanding – net of reinsurance
(13,999 )
General insurance business sensitivities as at 31 December 2024
Sensitivity
+5.0%
£000
-5.0%
£000
Claims outstanding – gross of reinsurance
(15,815 )
Claims outstanding – net of reinsurance
(11,428 )
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 that one party to a financial
instrument will cause a financial loss to the
other party by failing to discharge an obligation.
A credit risk policy describes the assessment
and determination of what constitutes credit risk
for the Syndicate. Compliance with the policy is
monitored and exposures and any breaches
are reported internally. Emphasis is currently
placed
on
reinsurer
security
premium
receivable from intermediaries. The policy is
reviewed at least annually.
Management performs an assessment of
creditworthiness of both reinsurers and brokers
and
updates
the
reinsurance
purchase
strategy,
while
also
considering
suitable
allowance for impairment.
The Syndicate’s maximum exposure to credit
risk is represented by the carrying values of
monetary assets and reinsurance assets.
Reinsurance is placed with counterparties that
have a good credit ratings and concentration of
risk is avoided by following policy guidelines in
respect of counterparties’ limits which are
subject to regular reviews. The Syndicate does
not use credit derivatives or other products to
mitigate maximum credit risk, but collateral may
be requested to be held against these assets.
The tables on the next page
show the
maximum exposure to credit risk (including an
analysis of financial assets exposed to credit
risk) for the components of the statement of
financial position.
The
tables
on
the
next
page
provides
information regarding the credit risk exposure of
the Syndicate at 31 December by classifying
assets per Standard & Poor’s credit ratings of
the counterparties. AAA is the highest possible
rating. Assets that fall outside the range of AAA
to BBB are classified as speculative grade and
have not been rated.
ii.
Maximum credit exposure
It is the Syndicate’s policy to maintain accurate
and consistent risk ratings across its credit
portfolio. This enables management to focus on
the applicable risks and the comparison of
credit exposures across all lines of business,
geographic regions and products. The rating
system is supported by a variety of financial
analytics combined with processed market
information to provide the main inputs for the
measurement of counterparty risk. All internal
risk
ratings
are
tailored
to
the
various
categories and are derived in accordance with
the Syndicate’s rating policy. The attributable
risk
ratings
are
assessed
and
updated
regularly.
Notes to the financial statements (continued)
40
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
Participation in investment pools
Derivative assets
Other assets
29,773
6,268
7,313
3,656
-
5,223
52,233
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
Participation in investment pools
Derivative assets
Syndicate loans to central fund
Other assets
24,737
5,642
5,208
3,906
1,736
2,170
43,399
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
i.
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.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
Notes to the financial statements (continued)
41
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
Participation in investment pools
Derivative assets
Other assets
52,233
-
-
-
52,233
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Total
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
Participation in investment pools
Other assets
43,399
-
-
-
43,399
Derivative assets
Syndicate loans to central fund
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Total
The Reinsurers’ share of claims outstanding is net of a bad debt provision of £541k (2024:£434k).
Notes to the financial statements (continued)
42
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
associated with financial instruments. In respect
of catastrophic events there is also a liquidity risk
associated with the timing differences between
gross cash out-flows and expected reinsurance
recoveries.
A liquidity risk policy exists that sets out the
assessment
and
determination
of
what
constitutes liquidity risk. Compliance with the
policy
is
the
responsibility
of
the
PMA
Investment Committee. The policy is regularly
reviewed for pertinence and for changes in the
risk environment.
iii.
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
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
2025
£000
£000
£000
£000
£000
Debtors arising out of direct insurance
operations
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 direct insurance
operations
Debtors arising out of reinsurance
operations
Total
Notes to the financial statements (continued)
43
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
Total
c. Market risk
Market risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate
because of changes in market prices. Market
risk includes:
i.
Interest rate risk
ii.
Currency risk
iii.
Fair value estimation
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.
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.
i.
Interest rate risk
Interest rate risk is the risk that the value or
future cash flows of a financial instrument will
fluctuate because of changes in market interest
rates. Floating rate instruments expose the
Syndicate to cash flow interest risk, whereas
fixed rate instruments expose the Syndicate to
fair value interest risk.
The Syndicate holds no derivatives or financial
assets whose values might be impacted by a
change in interest rates nor does it have any
other significant concentration of interest rate
risk. Insurance liabilities are not discounted and
therefore not exposed to interest rate risk.
As a result of the Syndicate’s current situation,
no analysis has been disclosed to illustrate
possible movements in interest rates with all
other variables held constant, which would show
the impact on the result and members’ balance
of the effects of changes in interest rates since
the Syndicate has only immaterial financial
assets and liabilities.
The Syndicate is not
exposed to equity price risk.
ii.
Currency risk
A market risk policy exists that sets out the
assessment
and
determination
of
what
constitutes market risk for the Syndicate. As the
Syndicate develops, compliance with the policy
will be monitored and any exposures and
breaches arising will be reported to the
Investment committee. The policy is reviewed
regularly for pertinence and for changes in the
risk environment.
Currency risk is the risk that the fair value or
future cash flows of a financial instrument will
fluctuate
because
of
changes
in
foreign
exchange rates. The Syndicate’s functional
currency is Sterling and its exposure to foreign
exchange risk arises primarily with respect to
transactions in US, Canadian and Australian
Dollars and Euros. The Syndicate seeks to
mitigate the risk by looking to match the
estimated
foreign
currency
denominated
liabilities with assets denominated in the same
currency.
Notes to the financial statements (continued)
44
The table below summarises the exposure of the
financial assets and liabilities to foreign currency
exchange risk at the reporting date, by reporting
currency, as follows:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Total
2025
£000
£000
£000
£000
£000
£000
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
(15,993 )
(4,143 )
Prepayments and
accrued income
Total assets
Technical provisions
(224,670 )
(179,768 )
(77,790 )
(59,317 )
(83,918 )
(625,463 )
Creditors
(32,150 )
(95,433 )
(256 )
(5,489 )
(132,926 )
Accruals and deferred
income
(26,848 )
(2,112 )
(88 )
(60 )
(21 )
(29,129 )
Total liabilities
(283,668 )
(277,313 )
(77,476 )
(59,633 )
(89,428 )
(787,518 )
Total capital and
reserves
(19,527 )
(30,193 )
(53,909 )
(78,203 )
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Total
2024
£000
£000
£000
£000
£000
£000
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
(26,568 )
(10,420 )
Prepayments and
accrued income
Total assets
Technical provisions
(176,948 )
(119,973 )
(50,123 )
(57,252 )
(67,798 )
(472,094 )
Creditors
(826 )
(56,055 )
(2,925 )
(59,440 )
Accruals and deferred
income
(24,920 )
(1,470 )
(16 )
(42 )
(4 )
(26,452 )
Total liabilities
(202,694 )
(177,498 )
(50,021 )
(57,046 )
(70,727 )
(557,986 )
Total capital and
reserves
(10,874 )
(25,125 )
(31,604 )
(52,942 )
(99,371 )
The non-Sterling denominated net assets of the
Syndicate may lead to a reported loss
(depending on the mix relative to the liabilities),
should
Sterling
strengthen
against
these
currencies. Conversely, reported gains may
arise should Sterling weaken.
The Syndicate looks to match its currency
position wherever practicable and so holds net
assets across a number of currencies. The
Syndicate
takes
into
consideration
the
underlying currency of the Syndicate’s required
Notes to the financial statements (continued)
45
capital and invests its assets proportionately
across these currencies to protect the solvency
of the Syndicate against variation in foreign
exchange rates. As a result, the Syndicate
holds a significant proportion of its assets in
foreign currencies.
iii.
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 or loss account) and
members’ balances.
2025
Impact on
result
s
before tax
£000
2025
Impact on
members’
balances
£000
2024
Impact on
results
before tax
£000
2024
Impact on
members’
balances
£000
Interest rate risk
+ 50 basis points shift in yield curves
(2,146 )
(2,146 )
(1,848 )
(1,848 )
- 50 basis points shift in yield curves
Illustrative impact on result, if relative to the year-end rates:
2025
£000
2024
£000
Sterling was to strengthen against other settlement currencies by:
10%
(9,106)
(9,135)
Sterling was to weaken against other settlement currencies by:
10%
9,106
9,135
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 the supervision of
the Prudential Regulatory Authority (PRA)
under the Financial Services and Markets Act
2000 and in accordance with the Solvency II
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 II requirements, and
beyond that to meet its own financial strength,
licence and ratings objectives.
Although Lloyd’s capital setting processes use
a capital requirement set at Syndicate level as
a starting point, the requirement to meet
Solvency II and Lloyd’s capital requirements
apply at overall and member level only
respectively,
not
at
Syndicate
level.
Notes to the financial statements (continued)
46
Accordingly, the capital requirement in respect
of Syndicate 1492 is not disclosed in these
financial statements.
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 II
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 comprise one or more
underwriting
members
of
Lloyd’s.
Each
member is liable for its own share of
underwriting liabilities on the Syndicate on
which it is participating but not other members’
shares. Accordingly, the capital requirement,
that Lloyd’s sets for each member, operates on
a similar basis. Each member’s SCR shall thus
be determined by the sum of the member’s
share of the Syndicate SCR ‘to ultimate’. Where
a member participates on more than one
Syndicate, a credit for diversification is provided
to reflect the spread of risk, but consistent with
determining an SCR which reflects the capital
requirement to cover a 1 in 200 year loss ‘to
ultimate’ for that member. Over and above this,
Lloyd’s applies a capital uplift to the members’
capital requirement, known as the Economic
Capital Assessment (ECA).
The purpose of this uplift, which is a Lloyd’s not
a Solvency II requirement, is to meet Lloyd’s
financial
strength,
licence
and
ratings
objectives. The capital uplift applied for each of
the years 2021 to 2025 was 35% of the
members’ 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),
held within and managed within a Syndicate
(Funds in Syndicate) or as the member’s share
of the members’ balances on each Syndicate
on which it participates.
Accordingly, all of the assets less liabilities of
the Syndicate, as represented in the members’
balances reported on the statement of financial
position, represent resources available to meet
members’ and Lloyd’s capital requirements.
6.
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
(1,917 )
(1,888 )
(913 )
Marine, aviation, and
transport
(11,970 )
(9,859 )
(6,075 )
Fire and other damage to
property
(12,511 )
(24,593 )
(18,562 )
Third party liability
(69,106 )
(41,899 )
(2,925 )
Credit and suretyship
(3 )
(3 )
(1 )
Total direct insurance
(95,507 )
(78,242 )
(28,476 )
Reinsurance acceptances
(56,902 )
(36,930 )
(10,805 )
Total
(152,409 )
(115,172 )
(39,281 )
Notes to the financial statements (continued)
47
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the
classification of the above segments into the Lloyd’s aggregate classes of business:
2025
Gross
premiums
written
£000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Reinsurance
balance
£000
Underwriting
result
£000
Additional analysis
Fire and damage to property of
which is:
Specialities
(445 )
(459 )
Energy
(2,738 )
(5,158 )
Third party liability of which is:
Energy
(333 )
(3,332 )
(6,857 )
(871 )
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
Marine, aviation, and transport
(5,054 )
(3,380 )
(809 )
Fire and other damage to
property
(15,367 )
(22,710 )
(6,917 )
Third party liability
(53,318 )
(45,170 )
(19,066 )
Total direct insurance
(73,739 )
(71,260 )
(26,792 )
Reinsurance acceptances
(41,238 )
(24,453 )
(1,882 )
Total
(114,977 )
(95,713 )
(28,674 )
Notes to the financial statements (continued)
48
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the
classification of the above segments into the Lloyd’s aggregate classes of business:
2024
Gross
premiums
written
£000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Reinsurance
balance
£000
Underwriting
result
£000
Additional analysis
Fire and damage to property of
which is:
Specialities
(172 )
(225 )
(78 )
Energy
(1,115 )
(1,647 )
(502 )
Third party liability of which is:
Energy
(721 )
(611 )
(258 )
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
7. Net operating expenses
2025
£000
2024
£000
Acquisition costs
Change in deferred acquisition costs
(10,466 )
(5,517 )
Administrative expenses
Members’ standard personal expenses
Reinsurance commissions and profit participation
(3,570 )
(1,476 )
Net operating expenses
Total commissions for direct insurance business for the year amounted to:
2025
£000
2024
£000
Total commission for direct insurance business
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
Notes to the financial statements (continued)
49
2025
£000
2024
£000
Other assurance services:
statement of actuarial opinion
137
127
8.
Key management personnel compensation
The directors of Probitas Managing Agency Limited received the following aggregate remuneration
charged to the Syndicate:
2025
£000
2024
£000
Directors’ emoluments
Fees
The active underwriter received the following aggregate remuneration charged to the Syndicate.
9.
Staff numbers and costs
The Syndicate has no employees of its own, all of the personnel employed in the Syndicate’s business
are employed by other entities within the Aviva group, with the majority being employed by Aviva
Employment Services Ltd (AES):
Number of employees
2025
2024
Administration and finance
Underwriting
Claims
Total
PMA received a Managing Agent’s fee of £3.88m (2024: £3m) which was charged to the Syndicate.
Total emoluments of all PMA directors for the year to 31 December 2025 were £1.8m of which £1.09m
was charged to Syndicate 1492 (31 December 2024 comparatives were £2.22m and £1.42m
respectively).
2025
£000
2024
£000
Emoluments
Notes to the financial statements (continued)
50
The following amounts were recharged by the service company to the Syndicate in respect of payroll
costs:
2025
£000
2024
£000
Wages and salaries
Social security costs
Other pension costs
Total
10. 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
Unrealised gains on investments
Unrealised losses on investments
(767 )
(567 )
Investment management expenses
(244 )
(300 )
Total investment return
Transferred to the technical account from the non-technical account
11. Distribution
A distribution to members of £54.79m will be proposed in relation to the closing year of account (2023)
(2024: £59.44m distribution in relation to the closing year of account 2022).
Notes to the financial statements (continued)
51
12. 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
Participation in investment pools
Derivative assets
Syndicate loans to central fund
Total financial investments
Included in the carrying values above are listed investments as follows:
2025
£000
2024
£000
Listed investments
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 tables above include accrued interest due on Investment balances of £3.0m (2024 £2.88m)
The table below analysis the derivative assets and liabilities by type:
2025
Notional amount
£000
2025
Fair value
£000
2024
Notional amount
£000
2024
Fair value
£000
Foreign exchange forward contracts
Total
The Syndicate uses the following hierarchy for determining the fair value of financial instruments
by valuation technique:
•
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
•
Level 2: other techniques for which all inputs which have a significant effect on the recorded
fair value are observable, either directly or indirectly.
•
Level 3: techniques which use inputs which have a significant effect on the recorded fair value
that are not based on observable market data.
Notes to the financial statements (continued)
52
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
Assets
held at
amortis
ed
cost
Total
£000
Shares and other variable yield
securities and units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Derivative assets
Total financial investments
Total
2024
Level 1
£000
Level 2
£000
Level 3
£000
Assets
held at
amortised
cost
Total
£000
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Derivative assets
Syndicate loans to central fund
Total financial investments
Total
Information on the methods and assumptions used to determine fair values for each major category of
financial instrument measured at fair value is provided below.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors
will often determine prices by consolidating prices of recent trades for identical or similar securities
obtained from a panel of market makers into a composite price. The pricing service may make
adjustments for the elapsed time from a trade date to the valuation date to take into account available
market information. Lacking recently reported trades, pricing vendors will use modelling techniques to
determine a security price.
Some government and supranational securities are listed on recognised exchanges and are generally
classified as level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are
generally based on composite prices of recent trades in the same instrument and are generally
classified as level 2 in the fair value hierarchy.
Corporate bonds, including asset backed securities, are listed on a recognised exchange.
The derivative assets and liabilities held at the reporting date comprise over-the-counter US Dollar
forward foreign exchange contracts with a notional amount of £22.76m (2024: £46.17m). These
derivatives are valued using information received from financial institutions and are classified as level 1.
Notes to the financial statements (continued)
53
13. Debtors arising out of direct insurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
14. Debtors arising out of reinsurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
15. Other debtors
2025
£000
2024
£000
Inter syndicate balances
Other related party balances (non-syndicate)
Other
Total
16. Deferred acquisition costs
The table below shows changes in deferred acquisition costs assets from the beginning of the period
to the end of the period:
2025
2024
Gross
£000
Reinsurance
£000
Net
£000
Gross
£000
Reinsurance
£000
Net
£000
Balance at 1 January
(1,545 )
Incurred deferred acquisition
costs
(3,497 )
(1,512 )
Amortised deferred acquisition
costs
(25,943 )
(24,431 )
(20,147 )
(20,147 )
Foreign exchange movements
(417 )
(292 )
(503 )
(33 )
(536 )
Balance at 31 December
(3,405 )
(1,545 )
17. Claims development
The following table shows the estimates of cumulative incurred claims, including both claims notified
and IBNR for each successive underwriting year at each reporting date, together with cumulative
Notes to the financial statements (continued)
54
payments to date. The cumulative claim estimates and cumulative payments are translated to £ Sterling
at the rate of exchange prevailing at 31 December 2025 in all cases.
Gross:
Net:
Pure underwriting year
2019
2020
2021
2022
2023
2024
2025
Total
£000
£000
£000
£000
£000
£000
£000
£000
Estimate of net 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
Estimate of net claims reserves
Provision in respect of prior years
-
-
-
-
-
-
-
Less net claims paid
(29,564 )
(21,317 )
(20,636 )
(20,959 )
(20,352 )
(9,540 )
(5,450 )
(127,818 )
Net claims reserve
In setting claims provisions the Syndicate gives consideration to the probability and magnitude of future
experience being more adverse than assumed and exercises a degree of caution in setting reserves
where there is considerable uncertainty. In general, the uncertainty associated with the ultimate claims
experience in an underwriting year is greatest when the underwriting year is at an early stage of
development and the surplus necessary to provide the necessary confidence in the provision’s
adequacy is relatively at its highest. As claims develop, and the ultimate cost of claims becomes more
certain, the relative level of surplus maintained should decrease. However, due to the uncertainty
inherent in the estimation process, the actual overall claim provision may not always be in surplus.
Pure underwriting year
2019
2020
2021
2022
2023
2024
2025
Total
£000
£000
£000
£000
£000
£000
£000
£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
Estimate of gross claims reserve
Provision in respect of prior years
-
-
-
-
-
-
-
Less gross claims paid
(30,141 )
(21,418 )
(21,789 )
(29,186 )
(21,141 )
(10,097 )
(5,478 )
(139,250 )
Gross claims reserve
Notes to the financial statements (continued)
55
18. 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
(87,756 )
(46,881 )
Claims paid during the
year
(41,337 )
(39,979 )
(32,981 )
(479 )
(33,460 )
Expected cost of current
year claims
(40,459 )
(53,050 )
Change in estimates of
prior year provisions
(18,578 )
(44,907 )
(32,802 )
Foreign exchange
movements
(5,219 )
(1,968 )
(5,851 )
(5,302 )
Balance at 31
December
(142,184 )
(87,756 )
2025
2024
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Unearned premiums
Balance at 1 January
(40,538 )
(24,264 )
Premiums written during
the year
(138,788 )
(86,759 )
Premiums earned during
the year
(330,214 )
(228,326 )
(289,028 )
(217,933 )
Foreign exchange
movements
(3,271 )
(2,793 )
(610 )
(3,403 )
Balance at 31 December
(74,133 )
(40,538 )
Refer to Note 5 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.
Notes to the financial statements (continued)
56
19. Creditors arising out of direct insurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
20. Creditors arising out of reinsurance operations
2025
£000
2024
£000
Due within one year
Due after one year
Total
21. Other creditors
2025
£000
2024
£000
Other related party balances (non-syndicates)
Other liabilities
Total
22. 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
23. Analysis of net debt
At 1
January
2025
Cash
flows
Acquired
Fair value and
exchange
movements
Non-
cash
changes
At 31
December
2025
Cash and cash
equivalents
(527 )
Derivative financial
liabilities
Other
Total
(527 )
Notes to the financial statements (continued)
57
24. Other
This balance consists entirely of the Overseas’ deposits, managed by Lloyd’s Treasury and Investment
Services (LTIM) £52.2m 2025 (£43.4m 2024).
25. Accruals and deferred income
2025
2024
£000
£000
Expense Accruals including Managing Agency Profit Commission Payable
25,724
24,907
Deferred Reinsurance Acquisition costs
3,405
1,545
Total
29,129
26,452
26. Related parties
The following entities are referred to by their abbreviation throughout this note:
Probitas Group subsidiaries and associates:
1
Probitas Corporate Capital Limited
PCCL
2
Probitas 1492 Services Limited
PSL
3
Probitas Holdings (UK) Limited
PHUK
4
Probitas 1492 Services Mexico SA De CV
PMex
5
Probitas Managing Agency Limited
PMAL
6
Probitas 1492 (Europe) SRL
PBE
7
Probitas 1492 (Pacific) Pty Ltd
PPPL
8
Probitas 1492 (Canada) Inc
PCL
9
AdA Risk Holding Co Limited
ADA
10
AdA Underwriters Limited
ADAU
Probitas Managing Agency Limited (PMA) is the managing agent of Probitas Syndicate 1492. PMA is
a wholly owned subsidiary (indirectly held) of Aviva plc.
PMA has charged a managing agency fee of £3.88m to Syndicate 1492 for the period ending 31
December 2025 (2024: £3.60m).
Disclosed below are those transactions or arrangements entered into on behalf of, or otherwise
concerning the member of, the Syndicate in which any related company of PMA has, directly or
indirectly, a material interest:
PMA's immediate direct holding company is PHUK.
PMA holds a Secondment & Services agreement with PSL for the provision of underwriting and other
related technical underwriting, claims, reinsurance and administration staff, services and
accommodation for Syndicate 1492.
Notes to the financial statements (continued)
58
During the reporting period £0.43m (2024: £0.38m) was charged to Syndicate 1492 in respect of
management services provided by PSL. Amounts outstanding at each reporting period end were
£0.54m due from PSL (2024: £0.76m).
During the reporting period £0.27m (2024: £0.29m) was charged to Syndicate 1492 in respect of
management services provided by PMex.
During the reporting period £0.52m (2024: £0.48m) was charged to Syndicate 1492 in respect of
management services provided by PBE.
During the reporting period £2.84m (2024: £2.96m) was charged to Syndicate 1492 in respect of
management services provided by PPPL. Amounts outstanding at each reporting period end were
£0.19m due from PPPL (2024: £0,32m).
During the reporting period £0.66m (2024: £0.16m) was charged to Syndicate 1492 in respect of
management services provided by PCL. Amounts outstanding at each reporting period end were
£0.29m due from PCL (2024: £0.09m).
The transactions are settled with cash transfers in a timely manner.
27. Post balance sheet events
There have been no post balance sheet events impacting the syndicate’s underwriting performance or
investment portfolios.
28. Foreign exchange rates
Exchange differences are recorded in the non-technical account
The following currency exchange rates have been used for principal foreign currency transactions:
2025
2024
Start of
period
rate
End of period
rate
Average
rate
Start of
period
rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Notes to the financial statements (continued)
59
29. Funds at Lloyd’s
Every member is required to hold capital at Lloyd's which is held in trust and known as Funds at Lloyd's
(FAL). These funds are intended primarily to cover circumstances where Syndicate assets prove
insufficient to meet participating underwriting members' underwriting liabilities.
The level of FAL that Lloyd's requires a member to maintain is determined by Lloyd's based on PRA
requirements and resource criteria.
Generally, FAL has regard to a number of factors including the
nature and amount of risk to be underwritten by the member and the assessment of the reserving risk
in respect of business that has been underwritten. Since FAL is not under the management of the
managing agent, no amount has been shown in these annual accounts by way of such capital
resources.
However, the managing agent can make a call on the member’s FAL to meet liquidity
requirements or to settle losses.