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ANNUAL REPORT AND ACCOUNTS
2
2025 Syndicate 4141 Annual Report and Accounts
Annual Report and Accounts
Syndicate 4141
HCC Underwriting Agency Ltd
Year ended 31 December 2025
ANNUAL REPORT AND ACCOUNTS
2
2025 Syndicate 4141 Annual Report and Accounts
CONTENTS
Page
Directors and Administration
3
Report of the directors of the managing agent
4
Independent auditors’ report to the member of Syndicate 4141
11
Statement of Profit or Loss and other comprehensive income
15
Balance Sheet
17
Statement of Changes in Member’s Balance
19
Statement of Cash Flows
20
Notes to the Annual Accounts
21
DIRECTORS AND ADMINISTRATION
3
2025 Syndicate 4141 Annual Report and Accounts
Directors and advisors
Managing Agent:
Registered Office:
St Botolph Building
138 Houndsditch
London EC3A 7BT
Registered No:
4632146
Directors:
K L Barnes (appointed 23 May 2025)
D S Burke
S A Button
B J Cook (Non-executive)
N Dattilo (Non-executive)
P Engelberg (Non-executive)
T J G Hervy (Chief Executive Officer)
D Inoue (Non-executive) (resigned 1 May 2025)
J Isherwood (Non-executive) (appointed 19 January 2026)
N C Marsh (Non-executive Chair) (resigned 31 December 2025)
M Nomoto (Non-executive) (appointed 1 September 2025)
J M O’Neill (appointed 12 March 2025)
C A Scarr (Non-executive) (appointed Chair 3 February 2026)
K Takahiro
G R A White
Syndicate:
Syndicate 4141
Active Underwriter:
S A Button
Company Secretary:
D R Feldman
J L Holliday
Investment Manager:
New England Asset Management Ltd
Independent Auditors:
Deloitte LLP
Chartered Accountants and Statutory Auditors
1 New Street Square
London EC4A 3HQ
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
4
2025 Syndicate 4141 Annual Report and Accounts
Report of the directors of the managing agent
The directors of HCC Underwriting Agency Ltd (‘HCCUA’), the Managing Agent, present their Annual Report and
Accounts of Syndicate 4141 (‘the Syndicate’) for the year ended 31 December 2025 (the ‘Annual Accounts’).
The annual accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United Kingdom
and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard
103 (FRS 103) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions Version 3.1 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
Directors
Desmond Burke, Simon Button, Barry Cook, Nadia Dattilo, Peter Engelberg, Thibaud Hervy, Craig Scarr, Kazuya
Takahiro and Graham White served as directors throughout the year. Jean O’Neill, Karen Barnes and Masamitsu
Nomoto were appointed during the year on 12 March 2025, 23 May 2025 and 1 September 2025, respectively.
Nick Marsh served as Non-Executive Chair until his resignation on 31 December 2025, with Craig Scarr being
appointed Non-Executive Chair on 3 February 2026. Jonathan Isherwood was appointed on 19 January 2026.
Strategic Report
Principal Activities
The Syndicate is managed by HCCUA which is authorised by the Prudential Regulation Authority (‘PRA’) and
regulated by both the Financial Conduct Authority (‘FCA’) and the PRA. The principal activity of the Syndicate is
the transaction of general insurance and reinsurance business in the United Kingdom and it operates solely
within the Lloyd’s market from its offices in London. The Syndicate trades through Lloyd’s worldwide licences
and benefits from the Lloyd’s brand. Lloyd’s has an A+ (Superior) rating from A.M. Best, AA- (Very Strong) rating
from Fitch Ratings and AA- (Very strong) from Standard & Poor’s Financial Services LLC.
The Syndicate is part of HCC Insurance Holdings Inc. (‘HCC’) whose ultimate holding company is Tokio Marine
Holdings, Inc. (‘Tokio Marine’). Tokio Marine is a leading international insurance group headquartered in Tokyo,
Japan that has a worldwide network throughout 44 countries/regions, which undertake non-life and life
insurance and operate within the financial and general business sector (including consulting and real estate).
As of 31 December 2024 , Tokio Marine had total assets of ¥30.5 trillion and shareholders’ equity of ¥2.92 trillion.
Standard & Poor’s Financial Services LCC (S&P) has given Tokio Marine and a number of its major insurance
companies a financial strength rating of A+ (Stable).
The Syndicate is part of TMHCC International which is the HCC operating segment of Tokio Marine outside of
the US. TMHCC International underwrites business on four different insurance platforms: the Syndicate; HCC
International Insurance Company plc, its wholly owned subsidiary, Tokio Marine Europe S.A. (‘TME’), which is a
Luxembourg-based insurance company and Houston Casualty Company (UK Branch). The platform used is based
on prescribed rules and client choice if licensing permits.
Lines of business underwritten by the Syndicate include Marine, Energy and Renewables (including Marine,
Energy and GX (Renewables, Power Generation & GXB)), Treaty and Accident & Health (‘A&H’) (which includes
Property Treaty reinsurance, Travel Medical and International A&H and Disability), Casualty (including Financial
Lines, Professional Indemnity and General Liability) , Property (which includes Property Direct and Facultative
(‘Property D&F’) and the UK Delegated Property portfolio), and Other (Contingency and Credit.) Travel Medical
business was written exclusively by the Syndicate on behalf of Tokio Marine’s wholly owned agency, HCC
Medical Insurance Services (trading as ‘WorldTrips’). This was not renewed by the Syndicate and, with effect
from 30 June 2025, the Syndicate ceased to write the business. The Syndicate’s capital is provided by Nameco
(No. 808) Limited (‘Nameco’), another Tokio Marine affiliate within HCC.
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
5
2025 Syndicate 4141 Annual Report and Accounts
Strategy and Market Conditions
Market conditions for the Syndicate have been mixed, with favourable conditions on certain lines, offset by
continued softening market conditions elsewhere. The Syndicate’s underwriting is concentrated in specifically
defined lines of business where underwriting profit is expected to be achieved. The Syndicate’s underwriting
strategy focuses on risk selection to achieve an underwriting profit, our underwriters only writing business
where we believe the pricing is sufficient to justify the business being written.
Business growth in 2025 was impacted by softening market conditions across most business lines, a reduced
top line in the Treaty and Accident and Health following the non-renewal of the WorldTrips business, as well as
limited growth in the Canadian General Liability portfolio. These were partially offset by growth in Financial
Lines and additional expansion of new Renewables initiatives.
Business Review
Key Performance Indicators (KPIs)
The Managing Agent monitors a number of KPIs for the business:
2025
2024
USD’m
USD’m
Gross written premiums
260.8
289.5
Underwriting profit (excluding investment return)
38.1
51.1
Profit for the financial year
50.8
66.6
Net loss ratio
32.8%
29.6%
Net combined ratio
80.4%
77.1%
Investment return
17.1
8.4
Overall, the directors are satisfied with the financial position of the Syndicate as at the year end.
Results and Performance
The Syndicate made a profit for 2025 of $50.8m (2024: $66.6m) driven by operating profits and strong
investment return. The balance on the technical account totalled $49.1m (2024: $62.0m) and reflects a net
combined ratio, excluding investment return, of 80.4% (2024: 77.1%), with 2025 reflecting positive underwriting
results across most lines of business, and demonstrating underlying underwriting expertise and discipline
despite softening market conditions. This was partially offset by losses in the Property sub-segment, primarily
due to adverse market conditions impacting top line.
Investment return increased by $8.7m in 2025 to a total gain of $17.1m (2024: $8.4m), largely due to unrealised
gains of $6.1m (2024: $2.6m unrealised losses) reflecting interest rate decreases.
The average exchange rate in 2025 for both Sterling and Euro respectively was $1 = £0.77 (2024: £0.79) and $1
= €0.90 (2024: €0.93).
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
6
2025 Syndicate 4141 Annual Report and Accounts
Gross Written Premium
Syndicate 2025 gross written premium for its principal lines of business are presented below:
Gross written premium (“GWP”) for 2025 totalled $260.8m compared to $289.5m for 2024, a decrease of
$28.7m primarily driven by the reductions in Treaty and A&H ($44.4m) predominantly WorldTrips ($42.6m),
General Liability ($4.2m) and Contingency ($3.3m), partially offset by increase in Financial Lines ($12.3m),
Marine, Energy and Renewables ($4.8m) and other classes ($6.1m).
Marine, Energy and Renewables
Marine and Energy comprises Marine Hull, Marine Cargo, Marine & Energy Liability and Marine Specialty Risk
together with Offshore and Onshore Energy. The Renewables business combines Renewables, Power
Generation and GXB.
Total GWP across all Marine, Energy and Renewables business lines of $100.3m was $4.8m (5.0%) ahead of
prior year of $95.5m. This year-on-year growth was achieved through additional offerings in the Renewables
line of business and growth of new initiatives such as Power Generation and GXB offset by the impact of
softening market conditions predominantly in established Marine and Energy lines.
Treaty and Accident and Health
Treaty and A&H comprises Treaty Reinsurance business, International A&H as well as A&H Travel Medical
business, marketed as ‘WorldTrips’.
The increase in Treaty Reinsurance GWP from $15.3m to $17.0m delivered 10.9% year on year growth
predominantly from the Property CAT segment. This was offset by lower premium in the other two A&H classes
following challenging market conditions. Total A&H GWP was $39.6m, $46.1m (53.7%) below prior year of
$85.7m due to the non-renewal of the WorldTrips business.
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
7
2025 Syndicate 4141 Annual Report and Accounts
Financial Lines
GWP of $35.3m was $12.3m (53.2%) ahead of prior year of $23.0m, mainly from growth in new business in both
Core Financial Lines and Transaction Risk Insurance.
General Liability
General Liability comprises Employers and Public Liability business. Continued Canadian Market softening and
imposition of stricter binder controls has led to a decrease in GWP of $4.2m (16.1%) from $25.9m in 2024 to
$21.7m in 2025.
Professional Indemnity
GWP of $14.9m was $3.8m (34.2%) above prior year of $11.1m following an increase in new business in the
current year compared to prior.
Contingency
GWP has decreased by $3.3m (18.4%) from $18.1m to $14.8m, with challenging market conditions leading to a
fall of renewals in the current year compared to prior.
Property
Property includes Property Direct and Facultative (‘D&F’) and Delegated Property. GWP decreased by $0.8m
(7.0%) from $12.3m to $11.5m due to market conditions affecting on Property D&F.
Reinsurance
Reinsurance to cover catastrophe exposed lines is purchased by line of business across the TMHCC International
insurance platforms, and reinsurance premiums for excess of loss programmes are allocated across the
platforms based on gross written premiums of the underlying business. Reinsurance recoveries are allocated
based on the share of gross claims suffered by each entity. In addition, the Syndicate purchases quota share
and facultative reinsurance to balance line size and premium where it is prudent to do so. The Syndicate also
purchases excess of loss reinsurance across all lines of business from an affiliate (see Note 25 Related Parties
(b)).
Investment Policy and Management
The investment function is overseen by the Investment Committee, which operates under terms of reference
set by the Board. The Committee is responsible for reviewing, in conjunction with the Syndicate’s Investment
Managers, the investment policy and recommending any material changes to the Board for approval. It is also
responsible for monitoring investment performance and recommending the appointment of Investment
Managers.
The Syndicate maintains funds in US Dollars, Sterling, Canadian Dollars, Euros and Australian Dollars. Certain
national regulators have requirements for funds to be held and controlled either domestically or by Lloyd’s. The
remaining funds are referred to as unregulated funds and their investment is under the Syndicate’s control
within the framework laid down by the PRA. Investments held as Funds at Lloyd’s are managed in accordance
with Lloyd’s investment guidelines, asset eligibility criteria and applicable Solvency UK requirements.
New England Asset Management Ltd is the Investment Manager for the non-Lloyd’s controlled regulated funds
and unregulated funds. Each fund consists primarily of a portfolio of highly rated Corporate Bonds which are
rated BBB and above, including Bonds guaranteed by the Canadian government. The average duration of the
aggregate funds at the year-end was 1.86 years (2024: 1.30 years).
Review of Financial Position
The balance sheet of the Syndicate shows total assets of $661.4m (2024: $584.9m). Of the total assets, $344.3m,
52.1% (2024: $308.2m, 52.7%) was represented by financial investments and cash at bank, the increase in the
assets reflecting underwriting profitability and favourable claims experience partially offset by profit
distributions.
The Syndicate has a Member's balance of $63.4m as at 31 December 2025 (2024: $76.1m). The decrease is
due to the distribution of profits to NameCo of $63.5m on the 2022 closed year of account offset by profits of
$50.8m.
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
8
2025 Syndicate 4141 Annual Report and Accounts
The directors of the Managing Agent have prepared the accounts on a going concern basis which recognises the
intention of NameCo to continue to provide capital to support future underwriting activities. Member’s Funds
at Lloyd’s are further explained in Note 30 Funds at Lloyd’s. In the unlikely event that the Syndicate might not
be able to meet its obligations as they fall due, the Lloyd’s chain of security would provide support to ensure
that any remaining obligations would be met.
Future Outlook
TMHCC International continues to consider profitable opportunities in complementary and new lines of
business, through expansion of teams, venturing into new territories and potential acquisitions. The Syndicate
continues to be an important platform within TMHCC International which helps facilitate these opportunities.
The business portfolio is diverse and not overly reliant on one line of business.
The Syndicate continues to monitor developing risk events. These include: 1) actual or potential geopolitical
tensions, for example Russia-Ukraine and US Global relations; and 2) the increasing speed of technological
advancement, such as the rising profile surrounding generative AI. The Syndicate’s cautious investment
strategy, long-term focus and a general policy of holding investments to maturity mean that current market
volatility is unlikely to cause any material long-term issues from an investment perspective. Other indirect
exposures are limited by the Syndicate’s robust operational frameworks.
Principal Risks and Uncertainties
The Board sets risk appetite as part of the Syndicate’s business planning and capital assessment process. The
Managing Agent regularly reviews and updates the risk register and monitors performance against risk appetite
using a series of key risk indicators, which are categorised as Insurance; Strategic, Regulatory and Group;
Market; Operational; Credit; and Liquidity. The risk indicators are considered in detail in Note 5 to the accounts.
Directors
The directors of the Managing Agent, who were in office during the year and up to the date of signing the
accounts were:
K L Barnes (appointed 23 May 2025)
D S Burke
S A Button
B J Cook (Non-executive)
N Dattilo (Non-executive)
P Engelberg (Non-executive)
T J G Hervy (Chief Executive Officer)
J Isherwood (Non-executive) (appointed 19 January 2026)
N C Marsh (Non-executive Chair) (resigned 31 December 2025)
M Nomoto (Non-executive) (appointed 1 September 2025)
J M O’Neill (appointed 12 March 2025)
C A Scarr (Non-executive) (appointed Chair 3 February 2026)
K Takahiro
G R A White
Directors’ Interests
No director participated in the Syndicate.
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
9
2025 Syndicate 4141 Annual Report and Accounts
Financial Information on HCC Underwriting Agency Ltd
Summary financial information of the Syndicate’s Managing Agent, HCCUA, is set out below:
2025
2024
$’000
$’000
(unaudited)
(audited)
Managed capacity
297,000
288,000
Fee income
198
192
Commission income
1
161
Expenses net of recharges
(83)
(108)
Other income and expenses
27
31
FX (loss)/gain
(46)
22
Profit before tax
97
298
Net assets
2,564
2,314
The decrease in Profit before tax is driven by reduction in commission income following the non-renewal of the
WorldTrips business and foreign exchange losses. A copy of the Managing Agent’s accounts will be available for
inspection at its registered office.
Post Balance Sheet Events
There are no significant post balance sheet events to be disclosed.
Statement of managing agent’s responsibilities in respect of the annual report and accounts
The managing agent is responsible for preparing the annual report and accounts in accordance with applicable
law and regulation.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (‘2008
Regulations’) requires the managing agent to prepare annual report and accounts for each financial year in
accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”),
and Financial Reporting Standard 103 Insurance Contracts (“FRS 103”). The annual report and accounts are
required by law to give a true and fair view of the state of affairs of the Syndicate as at that date and of its profit
or loss for that year.
In preparing the Syndicate’s annual report and accounts, the managing agent is required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS 102 and FRS 103 have
been followed, subject to any material departures disclosed and explained in the annual report and
accounts;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the annual report and accounts on the going concern basis unless it is inappropriate to
presume that the Syndicate will continue in business.
The managing agent is responsible for the preparation and review of the iXBRL tagging that has been applied to
the Syndicate Accounts in accordance with the instructions issued by Lloyd’s, including designing, implementing
and maintaining systems, processes and internal controls to result in tagging that is free from material non-
compliance with the instructions issued by Lloyd’s, whether due to fraud or error.
The managing agent is responsible for safeguarding the assets of the Syndicate and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
10
2025 Syndicate 4141 Annual Report and Accounts
The managing agent is also responsible for keeping adequate accounting records that are sufficient to show and
explain the Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of
the Syndicate and enable them to ensure that the annual reports and accounts comply with the 2008
Regulations.
The managing agent is responsible for the maintenance and integrity of the corporate and financial information
included on its website. Legislation in the United Kingdom governing the preparation and dissemination of
annual report and accounts may differ from legislation in other jurisdictions.
The Directors of the managing agent confirm that they have complied with the above requirements in preparing
the Syndicate’s annual report and accounts.
Disclosure of Information to the Auditors
so far as the director is aware, there is no relevant audit information of which the Syndicate's auditors
are unaware; and
the director has taken all the steps that he/she ought to have taken as a director in order to make
himself/herself aware of any relevant audit information and to establish that the Syndicate's auditors
are aware of that information.
Change in Presentational Currency
During the year, the Syndicate changed its presentational currency from Sterling (GBP) to United States Dollars
(USD), following the change in Lloyd’s requirements effective from 2024, which permit Syndicates to adopt an
alternative presentational currency in their accounts. The change aligns the Syndicate’s presentational currency
with its functional currency to be consistent with the currency used to manage the business.
Comparative information has been restated in USD, and the change affects only the currency of presentation,
with no impact on the underlying results or net assets previously reported.
Independent Auditors
Deloitte LLP were appointed as auditors in 2025 to replace PricewaterhouseCoopers LLP who resigned as
auditors to certain companies within TMHCC International as part of auditor rotation requirements. Deloitte
LLP have expressed their willingness to continue in office as the Syndicate’s auditors.
Annual General Meeting
The directors do not propose to hold a Syndicate Annual General Meeting during 2026, as permitted under the
Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000).
The capacity provider may object to the matter set out above within 21 days of the issue of these accounts. Any
such objection should be addressed to J L Holliday, Company Secretary, at the registered office.
Approved for and on behalf of HCC Underwriting Agency Ltd.
T J G Hervy
Director
19 February 2026
Independent auditor’s report to the members of Syndicate 4141
11
2025 Syndicate 4141 Annual Report and Accounts
Report on the audit of the syndicate annual accounts
Opinion
In our opinion the syndicate annual accounts of Syndicate 4141 (the ‘syndicate’):
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2025 and of
its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”; and
have been prepared in accordance with the requirements of The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and sections 1 and 5
of the Syndicate Accounts Instructions Version 3.1
as modified by the Frequently Asked
Questions Version 1.1 issued by Lloyd’s (the “Lloyd’s Syndicate Accounts Instructions”).
We have audited the syndicate annual accounts which comprise:
the statement of profit or loss and other comprehensive income;
the balance sheet;
the statement of changes in members’ balances;
the statement of cash flows; and
the related notes 1 to 31.
The financial reporting framework that has been applied in their preparation is applicable law and
United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted
Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)),
applicable law and the Lloyd’s Syndicate Accounts Instructions. Our responsibilities under those
standards are further described in the auditor's responsibilities for the audit of the syndicate annual
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 Financial Reporting Council’s (the
‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the accounts, we have concluded that the managing agent’s use of the going concern basis
of accounting in the preparation of the accounts is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s
ability to continue in operations for a period of at least twelve months from when the syndicate
accounts are authorised for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report.
Independent auditor’s report to the members of Syndicate 4141
12
2025 Syndicate 4141 Annual Report and Accounts
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 managing agent is 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 our report,
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the syndicate annual accounts or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of managing agent
As explained more fully in the managing agent’s responsibilities statement, the managing agent is
responsible for the preparation of the syndicate annual accounts and for being satisfied that they give
a true and fair view, and for such internal control as the managing agent determines is necessary to
enable the preparation of syndicate annual accounts that are free from material misstatement,
whether due to fraud or error.
In preparing the syndicate annual accounts , the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s
ability to continue in operation and to use the going concern basis of accounting unless the managing
agent intends to cease the syndicate’s operations, or has no realistic alternative but to do so.
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 .
A further description of our responsibilities for the audit of the syndicate annual accounts is located on
the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our
auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Independent auditor’s report to the members of Syndicate 4141
13
2025 Syndicate 4141 Annual Report and Accounts
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s
documentation of their policies and procedures relating to fraud and compliance with laws and
regulations. We also enquired of management and internal audit, about their own identification and
assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in,
and identified the key laws and regulations that:
had a direct effect on the determination of material amounts and disclosures in the accounts
These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005), the Lloyd’s
Syndicate Accounts Instructions and
do not have a direct effect on the accounts but compliance with which may be fundamental
to the syndicate’s ability to operate or to avoid a material penalty. These included the
requirements of Solvency UK.
We discussed among the audit engagement team including actuarial and IT specialists regarding the
opportunities and incentives that may exist within the organisation for fraud and how and where fraud
might occur in the accounts.
As a result of performing the above, we identified the greatest potential for fraud in the following areas,
and our procedures performed to address them are described below:
Estimation of pipeline premiums requires significant management judgement and therefore
there is potential for management bias through manipulation of core assumptions. In
response, our testing included, on a sample basis, analysing management’s accuracy of
estimates through the performance of a test of details.
The valuation of gross technical provisions involves significant management judgement and a
high degree of estimation in the derivation of underlying assumptions, and therefore there is
potential for management bias. In response to these risks, we involved our actuarial specialists
to develop independent best estimates of significant classes of technical provisions and
performed review of assumptions relating to technical provisions.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override. In addressing the risk of fraud through management
override of controls, we tested the appropriateness of journal entries and other adjustments; assessed
whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluated the business rationale of any significant transactions that are unusual or outside the normal
course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
reviewing accounts disclosures by testing to supporting documentation to assess compliance
with provisions of relevant laws and regulations described as having a direct effect on the
accounts;
performing analytical procedures to identify any unusual or unexpected relationships that
may indicate risks of material misstatement due to fraud;
enquiring of management, internal audit and in-house legal counsel concerning actual and
potential litigation and claims, and instances of non-compliance with laws and regulations;
and
Independent auditor’s report to the members of Syndicate 4141
14
2025 Syndicate 4141 Annual Report and Accounts
reading minutes of meetings of those charged with governance, reviewing internal audit
reports, and reviewing correspondence with Lloyd’s, the Prudential Regulation Authority
(PRA) and the Financial Conduct Authority (FCA).
Report on other legal and regulatory requirements
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the managing agent’s report for the financial
year for which the accounts are prepared is consistent with the accounts ; and
the strategic report and the managing agent’s report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the syndicate and its environment obtained in the
course of the audit, we have not identified any material misstatements in the strategic report or the
managing agent’s report.
Matters on which we are required to report by exception
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008
we are required to report in respect of the following matters if, in our opinion:
the managing agent in respect of the syndicate has not kept adequate accounting records; or
the syndicate annual accounts are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with regulation 10 of
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our
audit work has been undertaken so that we might state to the syndicate’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the syndicate’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Lloyd’s Syndicate Accounts Instructions, these accounts will form part of the
Electronic Format Annual Syndicate Accounts filed with the Council of Lloyd’s and published on the
Lloyd’s website. This auditors’ report provides no assurance over whether the Electronic Format Annual
Syndicate Accounts have been prepared in compliance with Section 2 of the Lloyd’s Syndicate Accounts
Instructions.
We have been engaged to provide assurance on whether the Electronic Format Annual
Syndicate Accounts has been prepared in compliance with Section 2 of the Lloyd’s Syndicate Accounts
Instructions and will report privately to the directors of the managing agent and the Council of Lloyd’s
on this.
Adam Ely, FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
19 February 2026
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME:
TECHNICAL ACCOUNT – GENERAL BUSINESS
For the year ended 31 December 2025
15
2025 Syndicate 4141 Annual Report and Accounts
Profit and Loss Account: Technical Account
Note
2025
USD’000
2024
USD’000
Gross premiums written
6
Outwards reinsurance premiums
(69,899 )
(61,470 )
Premiums written, net of reinsurance
Changes in unearned premium
Change in the gross provision for unearned premiums
19
(2,532 )
(6,596 )
Change in the provision for unearned premiums reinsurers’
share
19
Net change in provisions for unearned premiums
(4,525 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the
non-technical account
Claims paid
Gross amount
6,19
(97,871 )
(104,056 )
Reinsurers’ share
19
Net claims paid
(79,819 )
(60,835 )
Change in the provision for claims
Gross amount
6,19
(25,429 )
Reinsurers’ share
19
(8,298 )
Net change in provisions for claims
(5,352 )
Claims incurred, net of reinsurance
(63,626 )
(66,187 )
Net operating expenses
7
(92,390 )
(106,250 )
Balance on the technical account - general business
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONT’D):
NON-TECHNICAL ACCOUNT
For the year ended 31 December 2025
16
2025 Syndicate 4141 Annual Report and Accounts
The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
accompanying notes from page 21 to 52.
All amounts relate to continuing operations
.
Note
2025
USD’000
2024
USD’000
Balance on the technical account – general business
Investment income
10
Realised losses on investments
10
(761 )
(1,437 )
Unrealised gains/(losses) on investments
10
(2,551 )
Investment expenses and charges
10
(306 )
(262 )
Total investment return
Allocated investment return transferred to the general business technical
account
10
(11,042 )
(10,921 )
(Loss)/gain on foreign exchange
(4,412 )
Profit for the financial year
Total comprehensive income for the year
BALANCE SHEET
As at 31 December 2025
17
2025 Syndicate 4141 Annual Report and Accounts
ASSETS
Note
2025
USD’000
2024
USD’000
Investments
Financial investments
12
Deposits with ceding undertakings
Reinsurers’ share of technical provisions
Provision for unearned premiums
19
Claims outstanding
19
Debtors
Debtors arising out of direct insurance operations
14
Debtors arising out of reinsurance operations
15
Other debtors
16
Other assets
Cash at bank and in hand
23
Prepayments and accrued income
Accrued interest and rent
Deferred acquisition costs
17
Total assets
The Balance Sheet should be read in conjunction with the accompanying notes from page 21 to 52.
BALANCE SHEET
As at 31 December 2025
18
2025 Syndicate 4141 Annual Report and Accounts
LIABILITIES
Note
2025
USD’000
2024
USD’000
Capital and reserves
Members’ balances
Total Capital and reserves
Technical provisions
Provision for unearned premiums
19
Claims outstanding
19
Creditors
Creditors arising out of direct insurance
operations
20
Creditors arising out of reinsurance operations
21
Other creditors including taxation and social security
22
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The Balance Sheet should be read in conjunction with the accompanying notes from page 21 to 52.
The Syndicate accounts on pages 15 to 52 were approved by the Board of HCC Underwriting Agency Ltd and
signed on its behalf by
J M O’Neill
Director
19 February 2026
STATEMENT OF CHANGES IN MEMBER’S BALANCE
For the year ended 31 December 2025
19
2025 Syndicate 4141 Annual Report and Accounts
Statement of Changes In ember’s Balance
2025
USD’000
2024
USD’000
Member’s balance brought forward at 1 January
Total comprehensive income for the year
Payments of profit to member’s personal reserve funds
(63,495 )
(59,839 )
Member’s balance carried forward at 31 December
The Statement of Changes in Member’s balance should be read in conjunction with the accompanying notes
from page 21 to 52.
STATEMENT OF CASH FLOWS
20
2025 Syndicate 4141 Annual Report and Accounts
Note
2025
USD’000
2024
USD’000
Cash flows from operating activities
Profit for the financial year
Adjustments:
Increase/(decrease) in gross technical provisions
(2,365 )
(Increase)/decrease in reinsurers’ share of gross technical
provisions
(49,933 )
Decrease/increase) in debtors
(24,600 )
Increase/(decrease) in creditors
Movement in other assets/liabilities
(7,872 )
Investment return
(17,146 )
(8,370 )
Foreign exchange
(5,172 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(156,899 )
(49,112 )
Sale of equity and debt instruments
Investment income received
Net cash flows from investing activities
(18,548 )
Cash flows from financing activities
Distribution of profit
(63,495 )
(59,839 )
Net cash flows from financing activities
(63,495 )
(59,839 )
Net increase/(decrease) in cash and cash equivalents
(2,153 )
(234 )
Cash and cash equivalents at the beginning of the year
23
Cash and cash equivalents at the end of the year
23
The Statement of Changes in Member’s balance should be read in conjunction with the accompanying notes
from page 21 to 52.
NOTES TO THE ANNUAL ACCOUNTS
21
2025 Syndicate 4141 Annual Report and Accounts
Notes to The Accounts
1.
GENERAL INFORMATION
Syndicate 4141 (‘the Syndicate’) is a fully aligned Syndicate managed by HCCUA which is authorised by the
PRA and regulated by both the FCA and the PRA. The principal activity of the Syndicate remains the
transaction of general insurance and reinsurance business in the United Kingdom and it operates solely
within the Lloyd’s market from its offices in London. HCCUA is a private company limited by shares and is
incorporated in England. The address of its registered office is St Botolph Building, 138 Houndsditch, London
EC3A 7BT.
2.
STATEMENT OF COMPLIANCE
These annual accounts have been prepared in accordance with Regulation 5 of The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and Accounting Standards in the
United Kingdom, including Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in
the United Kingdom and the Republic of Ireland’ (FRS 102) and Financial Reporting Standard 103, ‘Insurance
Contracts’ (FRS 103). The general result is determined on an annual basis of accounting.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these accounts are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
a.
Basis of preparation
The annual accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United
Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial
Reporting Standard 103 (FRS 103) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts
Instructions Version 3.1 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
The preparation of accounts in conformity with FRS 102 and FRS 103 requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
the Syndicate’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the accounts are disclosed in Note 4.
The accounts are prepared under the historical cost convention, as modified by the recognition of
financial instruments at fair value.
b.
Going concern
As part of the preparation of these accounts the directors of HCCUA have considered whether the
Syndicate will be able to continue to be a going concern for at least 12 months from the date that these
accounts are approved.
Consideration was given to the adequacy of the Syndicate’s capital and liquidity based on the 2026
Syndicate Business Forecast and included stress testing and reverse stress testing as part of the ORSA
process as well as stress tests performed by the Syndicate’s investment managers.
In the light of the
above the Board concluded that there were no material uncertainties that would cast doubt on the
ability of the Syndicate to continue as a going concern for at least 12 months from the date of approval
of these accounts.
NOTES TO THE ANNUAL ACCOUNTS
22
2025 Syndicate 4141 Annual Report and Accounts
c.
Change of presentational currency
With effect from 2024 Lloyd’s permits Syndicates to change their presentational currency in their
accounts. Accordingly, the presentational currency of these accounts has been changed from Sterling
(GBP) to United States Dollar (USD) which is consistent with its functional currency. This change has been
applied retrospectively, and the comparative information has been restated in USD. The change affects
only the currency of presentation and has no impact on the underlying results or net assets previously
reported.
d.
Foreign currency
Functional and presentation currency
Foreign currency transactions are recorded using the spot exchange rates at the dates of the transactions
into the functional currency. At each period end, foreign currency monetary assets and liabilities are
revalued using the closing rate. For this purpose, all assets and liabilities arising from insurance contracts
(including unearned premiums, deferred acquisition costs and unexpired risks provisions) are considered
to be monetary items.
Differences arising on the revaluation of foreign currency amounts to the functional currency are
recognised in the non-technical Profit and Loss Account. The foreign currency exchange arising upon
translation from functional currency to presentational currency is recognised in other comprehensive
income.
e.
Insurance contracts
i.
Classification of insurance and investment contracts
The Syndicate issues insurance contracts that transfer significant insurance risk. The Syndicate does
not issue investment contracts that transfer financial risk.
ii.
Insurance contracts
Results are determined on an annual basis whereby the incurred cost of claims, commission and
related expenses are charged against the earned proportion of premiums, net of reinsurance, as
follows:
a.
Premiums written
Premiums written relate to business incepted during the year, together with adjustments made
in the year to premiums written in prior accounting periods. Premiums are shown gross of
brokerage payable and exclude taxes and duties levied on them. Estimates are made for
unreported, or pipeline, premiums representing amounts due to the Syndicate not yet notified.
b.
Unearned premiums
Unearned premiums represent the proportion of premiums written in the year that relate to
unexpired terms of policies in force at the balance sheet date, calculated on a time
apportionment/risk profile basis.
c.
Acquisition costs
Acquisition costs, which represent commission and other related expenses, are deferred over
the period in which the related premiums are earned. No profit commission is incurred by the
Managing Agent.
d.
Claims incurred
Claims incurred comprise claims and related expenses paid in the year and changes in the
provisions for outstanding claims, including provisions for claims incurred but not reported and
related expenses, together with any other adjustments to claims from previous years.
NOTES TO THE ANNUAL ACCOUNTS
23
2025 Syndicate 4141 Annual Report and Accounts
e.
Claims provisions and related reinsurance recoveries
Provision is made at the year-end for the estimated cost of claims incurred but not settled at
the balance sheet date, including the cost of claims incurred but not yet reported to the
Syndicate. The estimated cost of claims includes expenses to be incurred in settling claims. The
Syndicate takes all reasonable steps to ensure that it has appropriate information regarding its
claims exposures. However, given the uncertainty in establishing claims provisions, it is likely
that the final outcome will prove to be different from the original liability established. Gross
claims provisions are calculated gross of any reinsurance recoveries.
The estimate of claims incurred but not reported (‘IBNR’) is generally subject to a greater
degree of uncertainty than the estimate of the cost of settling claims already notified to the
Syndicate, where more information about the claim event is generally available. Claims IBNR
often may not be apparent to the insured until many years after the event giving rise to the
claim has happened. Classes of business where the IBNR proportion of the total reserve is high
will typically display greater variations between initial estimates and final outcomes because of
the greater degree of difficulty of estimating these reserves. Classes of business where claims
are typically reported relatively quickly after the claim event tend to display lower levels of
volatility. In calculating the estimated cost of unpaid claims, the Syndicate uses a variety of
estimation techniques, generally based upon statistical analysis of historical experience, which
assumes that the development pattern of the current claims will be consistent with past
experience. Allowance is made for changes or uncertainties which may create distortions in the
underlying statistics, or which might cause the cost of unsettled claims to increase or reduce
when compared with the cost of previously settled claims including:
changes in Syndicate processes which might accelerate or slow down the development
and/or recording of paid or incurred claims compared with the statistics from previous
periods;
changes in the legal environment;
the effects of inflation;
changes in the mix of business;
the impact of large claims; and
movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified
but not paid claims. In estimating the cost of these, the Syndicate has regard to the claim
circumstance as reported, any information available from loss adjusters and information on
the cost of settling claims with similar characteristics in previous periods.
Large claims impacting each relevant business class are generally assessed separately, being
measured on a case by case basis and projected separately, in order to allow for the possible
distortive effect of the development and incidence of these large claims.
Where possible, the Syndicate adopts multiple techniques to estimate the required level of
provisions. This assists in giving greater understanding of the trends inherent in the data being
projected. The projections given by the various methodologies also assist in setting the range
of possible outcomes. The most appropriate estimation technique is selected taking into
account the characteristics of the business class and the extent of the development of each
accident year.
Reinsurance
Reinsurance to cover catastrophe exposed lines or lines with unbalanced line size to premium
is purchased on a shared basis for the international insurance entities. Reinsurance premiums
on excess of loss programmes are allocated across TMHCC International platforms based on
gross written premiums. Reinsurance recoveries are allocated based on the share of gross
claims suffered by each carrier. Reinsurance to cover catastrophe exposed lines is purchased
by line of business across the TMHCC International insurance platforms, and reinsurance
premiums for excess of loss programmes are allocated across the platforms based on gross
written premiums of the underlying business. Reinsurance recoveries are allocated based on
NOTES TO THE ANNUAL ACCOUNTS
24
2025 Syndicate 4141 Annual Report and Accounts
the share of gross claims suffered by each entity. Purchases of the shared reinsurance
programme are advised to both Lloyd’s and the PRA. In addition, the Syndicate purchases
quota share and facultative reinsurance to balance line size and premium where it is prudent
to do so. Since the beginning of 2021, the Syndicate has purchased excess of loss reinsurance,
across all lines of business, from an affiliate.
The reinsurers’ share of claims incurred in the Profit and Loss Account reflects the amounts
received or receivable from reinsurers in respect of those claims incurred during the year.
Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are
recognised in the Profit and Loss Account as “outwards reinsurance premiums”.
Unexpired risks provision
Provisions are made for any deficiencies arising when unearned premiums, net of associated
acquisition costs, are insufficient to meet expected claims and expenses after taking into
account future investment return on the investments supporting the unearned premiums
provision and unexpired risks provision. The expected claims are calculated based on
information available at the balance sheet date including events covered by the Syndicate’s in
force event cancellation policies that were due to take place after that date that had already
been cancelled or postponed resulting in a loss to the policyholder.
Unexpired risk surpluses and deficits are offset where business classes are managed together,
and a provision is made if an aggregate deficit arises. The unexpired risks provision would be
included within ‘Other technical provisions’.
Subrogation and salvage
Recoveries arising out of subrogation or salvage are estimated on a prudent basis and included
within ‘Other debtors’.
f.
Taxation
Under Schedule 19 of the Finance Act 1993, the Syndicate is not a taxable entity. Corporation tax is
accounted for and payable by the Syndicate’s corporate member, Nameco (No. 808) Limited (‘Nameco’).
For US tax purposes, no provision has been made for any United States Federal Income Tax payable on
underwriting results or investment earnings. Any tax payments made or suffered by the Syndicate
during the year are transferred to Nameco.
g.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts,
when applicable, are shown within borrowings in current liabilities.
Cash and cash equivalents are carried at amortised cost in the balance sheet.
h.
Provisions
Provisions are recognised when:
the Syndicate has a present legal or constructive obligation as a result of past events;
it is probable that an outflow of resources will be required to settle the obligation; and
the amount of the obligation can be estimated reliably.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item included in the same class of obligations might
be small. Provisions for levies are recognised on the occurrence of the event identified by legislation that
triggers the obligation to pay the levy.
i.
Financial instruments
The Syndicate has adopted FRS 102 relating to fair value hierarchy disclosures and applied the recognition
and measurement provisions of IAS 39 (as adopted for use in the UK) and the disclosure requirements of
FRS 102 in respect of financial instruments.
NOTES TO THE ANNUAL ACCOUNTS
25
2025 Syndicate 4141 Annual Report and Accounts
j.
Financial assets
The Syndicate classifies its financial assets into the following categories:
Shares and other variable yields securities and units in unit trusts – at fair value through profit or
loss;
Debt securities and other fixed-income securities – at fair value through profit or loss; and
Loans and receivables.
Management determines the classification of its investments at initial recognition and re-evaluates this at
each reporting date.
Financial assets designated at fair value through profit and loss at inception are those that are managed
and whose performance is evaluated on a fair value basis. Information about these financial assets is
provided internally on a fair value basis to the Syndicate’s key management personnel. The Syndicate’s
investment strategy is to invest in fixed and variable interest rate debt securities and units in unit trusts.
The fair values of financial instruments traded in active markets are based on quoted bid prices on the
balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service or regulatory agency; and those prices
represent actual and regularly occurring market transactions on an arm’s length basis.
The fair values of financial instruments that are not traded in an active market (for example, corporate
bonds), are established by the directors using valuation techniques which seek to arrive at the price at
which an orderly transaction would take place between market participants. Net gains or losses arising
from changes in the fair value of financial assets at fair value through profit or loss are presented in the
Profit and Loss Account within ‘Unrealised gains on investments’ or ‘Unrealised losses on investments’ in
the period in which they arise.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market, other than those that the Syndicate intends to sell in the short term or
that it has designated at fair value through profit or loss. Loans and receivables are subsequently
measured at amortised cost using the effective interest rate method. Receivables arising from insurance
contracts are also classified in this category and are reviewed for impairment as part of the impairment
review of loans and receivables. This basis of valuation is viewed by the directors as having prudent regard
to the likely realisable value.
k.
Impairment of financial assets
For financial assets not at fair value, the Syndicate assesses at each balance sheet date whether there is
objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group
of financial assets is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that have occurred after the initial recognition of the asset
(a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the
financial asset or group of financial assets that can be reliably estimated. Objective evidence that a
financial asset or group of assets is impaired includes observable data that comes to the attention of the
Syndicate about the following events:
significant financial difficulty of the issuer or debtor;
a breach of contract such as a default or delinquency in payments;
it becoming probable that the issuer or debtor will enter bankruptcy or other financial
reorganisation;
the disappearance of an active market for that financial asset because of financial difficulties; or
observable data indicating that there is a measurable decrease in the estimated future cash flow from
a group of financial assets since the initial recognition of those assets, although the decrease cannot
yet be identified with the individual financial assets in the group, including:
o
adverse changes in the payment status of issuers or debtors in the group; or
o
national or local economic conditions that correlate with defaults on the assets in the
Syndicate.
NOTES TO THE ANNUAL ACCOUNTS
26
2025 Syndicate 4141 Annual Report and Accounts
The Syndicate first assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant. If the Syndicate determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, then it includes
the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them
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 a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred on loans and receivables the
amount of the loss is measured as the difference between the asset carrying amount and the present
value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The
carrying amount of the asset is reduced and the amount of the loss is recognised in the Profit and Loss
Account for the period. As a practical expedient, the Syndicate may measure impairment on the basis of
an instrument’s fair value using an observable market price.
For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of
similar credit risk characteristics (i.e. on the basis of the Syndicate’s grading process that considers asset
type, industry, geographical location, past-due status and other relevant factors). Those characteristics
are relevant to the estimation of future cash flows for groups of such assets by being indicative of the
issuer’s ability to pay all amounts due under the contractual terms of the debt instrument being evaluated.
If in a subsequent period the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as improved credit rating),
the previously recognised impairment loss is reversed through the Profit and Loss Account for the period.
l.
Financial liabilities
Creditors are financial liabilities and are recognised initially at fair value, net of directly attributable
transaction costs. Long-term creditors are subsequently stated at amortised cost, using the effective
interest method.
m.
Investment return
Interest income is recognised using the effective interest rate method. Investment expenses are
accounted for on an accruals basis.
Realised gains and losses on investments carried at fair value through profit and loss are calculated as the
difference between net sales proceeds and purchase price. Movements in unrealised gains and losses on
investments represent the difference between the fair value at the balance sheet date and their purchase
price and their fair value at the last balance sheet date, together with the reversal of unrealised gains and
losses recognised in earlier accounting periods in respect of investment disposals in the current period.
Investment return is initially recorded in the Non-Technical Account and then earned investment return
is transferred to the Technical Account.
n.
Distributions to Member
Distributions to the Syndicate’s Member are made in the year following the year a reporting year of
account closes, which is generally three years after inception of the Reporting Year of Account.
o.
Related party transactions
The Syndicate discloses transactions with related parties. Where appropriate, transactions of a similar
nature are aggregated unless, in the opinion of the directors, separate disclosure is necessary to
understand the effect of the transactions on the Syndicate’s accounts.
NOTES TO THE ANNUAL ACCOUNTS
27
2025 Syndicate 4141 Annual Report and Accounts
4.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY
Judgements and estimates are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Significant estimates
Estimation of the ultimate net claims incurred from the issuance of insurance contracts involves assumptions
concerning the future, and the resulting accounting estimates will, by definition, seldom equal the related
actual results. The assumptions used in making estimates that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
i.
The ultimate liability arising from claims made under insurance contracts
The estimate of the ultimate liability arising from claims made under insurance contracts is the
Syndicate’s most critical accounting estimate. The carrying amount of the claims outstanding, net of
reinsurance, is $153.9m (2024: $164.1m), see Note 19 Technical Provisions for net claims outstanding.
There are many sources of uncertainty that need to be considered in the estimate of the liability that the
Group will ultimately pay for such claims. The level of provision has been set on the basis of the
information that is currently available, including potential outstanding loss advice, experience of
development of similar claims, historical experience, case law and legislative and judicial actions.
Full analyses of reserves take place at least annually. During the full analyses, attritional claims and large
losses gross and net of reinsurance are projected to ultimate using the following four standard actuarial
methods: Paid Chain Ladder, Incurred Chain Ladder, Incurred Bornhuetter-Ferguson and Loss Ratio
method. The method selected depends on the accident or underwriting year, gross or net of reinsurance
perspective and the line of business. Generally, for more developed years, the Incurred Chain Ladder is
used and for less developed years, the Incurred Bornhuetter-Ferguson method is used. For the years
where the Incurred Bornhuetter-Ferguson or Loss Ratio method is used, the ultimate claim projected is
sensitive to the Initial Expected Ultimate Loss Ratio assumption (also referred to as the ‘prior loss ratio’
assumption).
The most significant assumptions made relate to the level of future claims, the level of future claims
settlements and the legal interpretation of insurance policies. Whilst the directors consider that the gross
provision for claims and the related reinsurance recoveries are fairly stated on the basis of the information
currently available to them, the ultimate liability will vary as a result of subsequent information and events
and may result in significant adjustments to the amount provided. Adjustments to the amounts of
provision are reflected in the accounts for the period in which the adjustments are made. The methods
used and the estimates made are reviewed regularly. Additional qualitative judgement is used to assess
the extent to which past trends may not apply in the future in order to arrive at a point estimate for the
ultimate cost of claims that represents the likely outcome. See Note 18 Claims Development for loss
development triangles.
ii.
Fair value of financial instruments
The fair value of financial instruments traded in active markets is based on quoted bid prices at the balance
sheet date. Where quoted prices are not available, fair value is determined using observable market
inputs, including quoted prices for similar instruments and market-corroborated pricing data. The carrying
value of these instruments is $285.6m (2024: $259.1m), see Note 13 Fair Value Estimation for pricing
basis. The Syndicate uses its judgement to select a variety of methods and make assumptions that are
mainly based on market conditions existing at the end of each reporting period.
iii.
Pipeline premium
The Syndicate makes an estimate of premiums written on a policy by policy basis. Pipeline premium is the
difference between estimated premium and booked premium. For the majority of lines written, premium
is adjusted to equal booked premium two years post expiry. Pipeline premium is recorded within gross
written premium and an assessment is made of the related unearned premium provision and an estimate
of claims incurred but not reported in respect of the earned element. The pipeline premium included
within gross written premium is $52.5m (2024: $53.9m).
NOTES TO THE ANNUAL ACCOUNTS
28
2025 Syndicate 4141 Annual Report and Accounts
5.
RISK AND CAPITAL MANAGEMENT
The Syndicate has identified the risks arising from its activities and has established policies and procedures
to manage these risks in accordance with its risk appetite. The Syndicate categorises its risks into seven
areas: Insurance; Strategic, Regulatory and Group; Market; Operational; Credit, Liquidity and Sustainability.
The sections below outline the Syndicate’s risk appetite and explain how it defines and manages each
category of risk.
5.1
Insurance risk
The Syndicate’s insurance business assumes the risk of loss from persons or organisations that are
themselves directly exposed to an underlying loss. Insurance risk arises from this risk transfer due to
inherent uncertainties about the occurrence, amount and timing of insurance liabilities. The four key
components of insurance risk are underwriting including delegated authorities, reinsurance purchasing,
claims management and reserving. Each element is considered below.
i.
Underwriting risk
Underwriting risk relates to the potential claims arising from inadequate underwriting. There are four
elements that apply to all insurance products offered by the Syndicate:
cycle risk – the risk that business is written without full knowledge as to the (in)adequacy of rates, terms
and conditions;
event risk – the risk that individual risk claims or catastrophes lead to claims that are higher than
anticipated in plans and pricing;
pricing risk – the risk that the level of expected loss is understated in the pricing process; and
expense risk – the risk that the allowance for expenses and inflation in pricing is inadequate.
The Syndicate manages and models these four elements in the following three categories; attritional
claims, large claims and catastrophe events.
The Syndicate’s underwriting strategy is to seek a diverse and balanced portfolio of risks in order to limit
the variability of outcomes. This is achieved by accepting a spread of business over time, segmented
between different products, geographies and sizes.
To manage underwriting exposures, the Syndicate has developed limits of authority and business plans
which are binding upon all staff authorised to underwrite and are specific to underwriters, classes of
business and industry.
These authority limits are enforced through a comprehensive sign-off process for underwriting
transactions including an escalation process for all risks exceeding individual underwriters’ authority
limits. Exception reports are also run regularly to monitor compliance and a rigorous peer and external
review process are in place.
Rate monitoring, including risk adjusted rate change and adequacy against benchmark rates, are
recorded and reported.
The annual Syndicate Business Forecast (‘SBF’) incorporates the Syndicate’s underwriting strategy by line
of business and sets out the classes of business, the territories and the industry sectors in which business
is to be written. The SBF is approved by the directors.
The underwriters calculate premiums for risks written based on a range of criteria tailored specifically to
each individual risk. These factors include, but are not limited to, the financial exposure, loss history, risk
characteristics, limits, deductibles, terms and conditions and acquisition expenses using rating and other
models.
The Syndicate also recognises that insurance events are, by their nature, random and the actual number
and size of events during any one year may vary from those estimated using established statistical
techniques.
To address this, the Syndicate sets out its risk appetite (expressed as Probable Maximum Loss estimates
(‘PML’) and modelled return period events) in certain territories as well as a range of events such as
NOTES TO THE ANNUAL ACCOUNTS
29
2025 Syndicate 4141 Annual Report and Accounts
natural catastrophes and specific scenarios which may result in large industry claims. As part of the
Lloyd’s market, this is monitored through regular calculation and reporting of Realistic Disaster Scenarios
(‘RDS’) to Lloyd’s. Additionally, the aggregated position is monitored at the time of underwriting a risk
and reports are regularly produced to highlight the key aggregations to which the Syndicate is exposed.
The Syndicate uses a number of modelling tools to monitor its exposures against the agreed risk appetite
set and to simulate catastrophe claims in order to measure the effectiveness of its reinsurance
programmes. Stress and scenario tests are also run using these models.
One of the largest types of event exposure relates to natural catastrophe events such as windstorms or
earthquakes. Where possible, the Syndicate measures geographic accumulations and uses its knowledge
of the business, historical loss behaviour and commercial catastrophe modelling software to assess the
expected range of claims at different return periods. Upon application of the reinsurance coverage
purchased, the key gross and net exposures are calculated on the basis of extreme events at a range of
return periods.
The Syndicate’s catastrophe risk appetite set by the directors is limited to a gross PML aggregate of no
more than 200% of Capital and for a probability of gross catastrophe event exceeding 50% of Capital of
less than 1%. Additionally, the appetite for non-modelled risk and other potential non-natural
catastrophe perils is included within the catastrophe appetites noted above.
The Syndicate continues to monitor developing risk events. These include: 1) actual or potential
geopolitical tensions, for example Russia-Ukraine and US Global relations; and 2) the increasing speed of
technological advancement, such as the rising profile surrounding generative AI and the use of deepfakes
being used to spread misinformation which raises global security threat levels in an already volatile
geographical climate. The rapid adoption of AI may also lead to potential competitive disadvantage if
emerging technologies are not leveraged effectively. Regarding the current conflicts, the impact on the
Syndicate continues to be limited with only a few classes of business having direct exposure. The main
indirect exposure has been market volatility driven by the continuing economic impacts arising from
these situations, However, the Syndicate’s cautious investment strategy, long-term focus and a general
policy of holding investments to maturity mean that the current market volatility is unlikely to cause any
material long-term issues from an investment perspective. Other indirect exposures are limited by the
Syndicate’s robust operational frameworks. The impact of the conflicts on future business is expected to
remain limited.
ii.
Reinsurance risk
Reinsurance risk arises where reinsurance contracts:
do not perform as anticipated;
result in coverage disputes; or
prove inadequate in terms of the vertical or horizontal limits purchased.
Failure of a reinsurer to pay a valid claim is considered a credit risk which is detailed in the credit risk
section (see Note 5.5).
The purchase of reinsurance is a key tool utilised to manage underwriting risk. The Syndicate’s
reinsurance programme is comprised predominantly of excess of loss cover. Prior to placement of the
programme, it is modelled against significant historic and modelled events across the peak exposure
areas. The programme is purchased on a class of business basis, modelling catastrophe, large and
attritional claims separately. Since 2021, the Syndicate has also purchased excess of loss reinsurance,
across all lines of business, from an affiliate.
Consideration is given to a number of factors when setting minimum retention including the Annual
Aggregate Loss (‘AAL’) for catastrophe exposed lines. Where market opportunity allows, additional
reinsurance is purchased. Quota share and facultative reinsurance is also utilised where considered
appropriate. The Tokio Marine HCC Reinsurance Security Policy Committee examines and approves all
reinsurers to ensure that they possess suitable security. The Syndicate’s reinsurance team ensures that
these guidelines are followed, undertakes the administration of reinsurance contracts and monitors and
NOTES TO THE ANNUAL ACCOUNTS
30
2025 Syndicate 4141 Annual Report and Accounts
instigates our responses to any erosion of the reinsurance programmes.
iii.
Claims management risk
Claims management risk may arise within the Syndicate in the event of inaccurate or incomplete case
reserves and claims settlements, poor service quality or excessive claims handling costs. These risks may
damage the Syndicate brand and undermine its ability to win and retain business or incur punitive
damages. These risks can occur at any stage of the claim life cycle.
The Syndicate’s claims teams are focused on delivering quality, reliability and speed of service to both
internal and external clients. Their aim is to adjust, and process claims in a fair, efficient and timely
manner, in accordance with the policy’s terms and conditions, the regulatory environment and the
business’ broader interests. Prompt and accurate case reserves are set for all known claims liabilities,
including provisions for expenses, as soon as a reliable estimate can be made of the claims liability.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the
claims arising. This level of uncertainty varies between the classes of business and the nature of the risk
being underwritten and can arise from developments in case reserving for large losses and catastrophes,
or from changes in estimates of claims IBNR.
The following table presents the sensitivity of the value of insurance liabilities disclosed in the accounts
to potential movements in the assumptions applied within the technical provisions. Given the nature of
the business underwritten by the Syndicate, the approach to calculating the technical provisions for each
class can vary and as a result the sensitivity performed is to apply a beneficial and adverse risk margin to
the total insurance liability.
General insurance business sensitivities as at 31 December 2025
Sensitivity
+5.0%
USD’
000
-5.0%
USD’
000
Claims outstanding
–
gross of reinsurance
(15,349 )
Claims outstanding
–
net of reinsurance
(7,697 )
General insurance business sensitivities as at 31 December 2024
Sensitivity
+5.0%
USD’
000
-5.0%
USD’
000
Claims outstanding
–
gross of reinsurance
(13,670 )
Claims outstanding
–
net of reinsurance
(8,204 )
iv.
Reserving risk
Reserving risk occurs within the Syndicate where established insurance liabilities are
insufficient through inaccurate forecasting, or where there is inadequate allowance for expenses and
reinsurance bad debts.
The objective of the Syndicate’s reserving policy is to produce accurate and reliable estimates that are
consistent over time and across classes of business. The Syndicate’s reserving process is governed by the
IBNR Committee, a subcommittee of the Board, which meets on a quarterly basis (more frequently if
catastrophic events require). The membership of the IBNR Committee is comprised of executives,
actuarial, claims and finance representatives. A fundamental part of the reserving process involves
information from and recommendations by each underwriting team for each underwriting year and
reserving class of business. These estimates are compared to the actuarial estimates and management’s
best estimate of IBNR is recorded. It is the policy of the Syndicate to carry, at a minimum, the actuarial
best estimate. It is not unusual for management’s best estimate to be higher than the actuarial best
estimate.
The actuarial reserving team uses a range of recognised techniques to project current paid and incurred
claims and monitors claim development patterns. This analysis is then supplemented by a variety of tools
NOTES TO THE ANNUAL ACCOUNTS
31
2025 Syndicate 4141 Annual Report and Accounts
including back testing, scenario testing, sensitivity testing and stress testing. In particular, high level
sensitivity testing on the impact of changes in future inflation rates has been carried out. An external
independent actuary also performs an annual review to produce a statement of actuarial opinion. The
actuarial analysis considers information drawn from across TM HCC International, allowing the Syndicate
to benefit, where appropriate, from the use of a larger pool of data than is available from its portfolio in
isolation. This mitigates the potential for volatility and data sparseness from considering solely the
comparatively small Syndicate portfolio, noting that there is a common business operating model across
all TM HCC International subsidiary companies.
Gross and net development triangles of the estimate of ultimate claim cost for claims notified in a given
year of account (YoA) are presented in Note 18 - Claims Development and give an indication of the
accuracy of the Syndicate’s estimation technique for claims payments. Data has been translated using
31 December 2025 foreign exchange rates throughout the triangle.
5.2
Strategic, regulatory and group risk
The Syndicate manages strategic, regulatory and group risk together. Each element is considered below.
i.
Strategic risk
This is the risk that the Syndicate’s strategy is inappropriate or that the Syndicate is unable to
implement its strategy. Where an event exceeds the Syndicate’s strategic plan, this is escalated at the
earliest opportunity through the Syndicate’s monitoring tools and governance structure to the Board.
On a day-to-day basis, the Syndicate’s management structure encourages organisational flexibility and
adaptability, while ensuring that activities are appropriately coordinated and controlled. By focusing
on the needs of customers and demonstrating both progressive and responsive abilities, staff,
management and outsourced service providers are expected to excel in service and quality. Individuals
and teams are also expected to transact their activities in an open and transparent way. These
behavioural expectations reaffirm low risk tolerance by aligning interests to ensure that routine
activities, projects and other initiatives are implemented to benefit and protect resources of both local
business segments and the Syndicate as a whole.
ii.
Regulatory risk
Regulatory risk is the risk arising from not complying with regulatory and legal requirements. The
operations of the Syndicate are subject to legal and regulatory requirements within the jurisdictions
in which it operates, and the Syndicate’s finance and compliance functions are responsible for ensuring
that these requirements are adhered to. Regulatory risk includes capital management risk.
Capital
The Lloyd’s of London (Lloyd’s) is a regulated undertaking and subject to supervision by the PRA under
the Financial Services and Markets Act 2000, and in accordance with the Solvency UK Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally
to ensure that Lloyd’s complies with Solvency UK requirements, and beyond that to meet its own
financial strength, licence and ratings objectives. Although, as described below, Lloyd’s capital setting
processes use a capital requirement set at Syndicate level as a starting point, the requirement to meet
Solvency UK and Lloyd’s capital requirements apply at overall Society level. Accordingly, the capital
requirement at Syndicate level is not disclosed in these accounts.
In order to meet Lloyd’s requirements, the Syndicate is required to calculate its Solvency Capital
Requirement (‘SCR’) for the prospective underwriting year. This amount must be sufficient to cover a
1 in 200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to
ultimate’). The Syndicate must also calculate its SCR at the same confidence level but reflecting
uncertainty over a one year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency UK
requirements. The SCR of the Syndicate is subject to review by Lloyd’s and approval by the Lloyd’s
Capital and Planning Group. Syndicate 4141 is wholly aligned and Nameco does not participate on any
other Syndicate; therefore, the SCR for Nameco is equal to that of the Syndicate.
NOTES TO THE ANNUAL ACCOUNTS
32
2025 Syndicate 4141 Annual Report and Accounts
Over and above the SCR, Lloyd’s applies capital uplift to the member’s capital requirement, known as
the Economic Capital Assessment (‘ECA’). The purpose of this uplift, which is a Lloyd’s rather than
Solvency UK requirement, is to meet Lloyd’s financial strength, licencing and ratings objectives. The
capital uplift applied for 2025 was 35% (2024: 35%) of the member’s SCR ‘to ultimate’. Nameco
provides the capital to meet its ECA by way of a Third-Party Deposit Trust which was set up in 2023 to
provide Tier 1 capital plus Syndicate held Tier 1 assets required by Lloyd’s.
iii.
Group risk
Group risk occurs where business units fail to consider the impact of other parts of a group on the
Syndicate, as well as the risks arising from these activities. There are two main components of group
risk which are explained below.
a)
Contagion
Contagion risk is the risk arising from actions of one part of a group which could adversely affect
any other part of the group. The Syndicate is a member of Tokio Marine and therefore may be
impacted by the actions of any other group company. This risk is managed by operating with clear
and open lines of communication across the group to ensure all group entities are well informed
and working to common goals.
b)
Reputation
Reputation risk is the risk of negative publicity as a result of Tokio Marine’s contractual
arrangements, customers, products, services and other activities. The Syndicate’s preference is to
minimise reputation risks but, it is not possible or beneficial to avoid them, as the benefits of being
part of the group brand are significant.
Reputational risk is considered as an impact on all risk events in the Risk Register, but not as a risk
in its own right.
5.3
Market risk
Market risk arises where the value of assets and liabilities or future cash flows change as a result of
fluctuations in economic variables, such as movements in foreign exchange rates, interest rates and market
prices.
Managing investment risk as a whole is fundamental to the operation and development of our investment
strategy key to the investment of Syndicate assets.
The investment strategy is developed by reference to an investment risk budget, reviewed annually by the
directors as part of the overall risk budgeting framework of the business. In 2025, the investment risk
budget was maintained at a level such that the amount of an investment loss, at the 1-in-200 Tail Value at
Risk (TVaR) level, was limited to the Syndicate’s excess capital (above the regulatory minimum). The
investment risk budget will be at a similar level in 2026.
Investment strategy is consistent with this risk appetite and investment risk is monitored on an ongoing
basis. The internal model includes an asset risk module, which uses an Economic Scenario Generator (‘ESG’)
to simulate multiple simulations of financial conditions, to support stochastic analysis of investment risk.
This is supplemented by bespoke analysis from our investment consultants. Internal model output is used
to assess potential investment downsides, at different confidence levels, including ‘1 in 200’ year event,
which reflects Solvency UK modelling requirements. In addition, management undertakes regular scenario
tests (which look at shock events such as yield curve shifts, credit spread widening, or the repeat of historic
events) to assess the impact of potential investment losses.
NOTES TO THE ANNUAL ACCOUNTS
33
2025 Syndicate 4141 Annual Report and Accounts
ESG outputs are regularly validated against actual market conditions, but (as noted above) management
also uses a number of other qualitative measures to support the monitoring and management of
investment risk.
i.
Foreign exchange risk
The Syndicate’s functional currency and its presentational currency are both US Dollar. The effect of
this on foreign exchange risk is that the Syndicate’s profit for the financial year is mainly exposed to
fluctuations in exchange rates for non-US dollar denominated transactions upon revaluation of
monetary assets and liabilities.
Although net assets in the balance sheet are relatively small, comprising the Member’s balance on the
open Years of Account which are distributed when the YoA closes, foreign exchange risk arises if net
assets in individual foreign currencies are not matched.
The Syndicate operates in six main currencies: US Dollars; Sterling; Canadian Dollars; Australian
Dollars; Swiss Francs and Euros. Transactions in all non-US Dollar currencies are converted to the US
Dollar functional currency on initial recognition with any balances on monetary items at the reporting
date being translated at the US Dollar closing spot rate.
In 2025, the Syndicate managed its foreign exchange risk by periodically assessing its non-US Dollar
exposures and rebalancing where appropriate.
The following table summarises the carrying values of total assets and total liabilities, categorised by the
Syndicate’s main currencies:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Swiss Franc
Total
2025
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
Prepayments and accrued
income
Total assets
Technical provisions
(35,188 )
(224,363 )
(7,653 )
(136,837 )
(19,921 )
(447 )
(424,409 )
Creditors
(26,568 )
(124,937 )
(1,313 )
(9,214 )
(2,302 )
(369 )
(164,703 )
Accruals and deferred
income
(399 )
(6,351 )
(120 )
(1,344 )
(688 )
(10 )
(8,912 )
Total liabilities
(62,155 )
(355,651 )
(9,086 )
(147,395 )
(22,911 )
(826 )
(598,024 )
Total Capital and reserves
(95,031 )
(761 )
(63,386 )
NOTES TO THE ANNUAL ACCOUNTS
34
2025 Syndicate 4141 Annual Report and Accounts
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Swiss Franc
Total
2024
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
Prepayments and accrued
income
Total assets
Technical provisions
(31,265 )
(216,631 )
(3,220 )
(122,386 )
(11,205 )
(458 )
(385,165 )
Creditors
(7,117 )
(105,652 )
(7,604 )
(1,127 )
(621 )
(115,559 )
Accruals and deferred
income
(772 )
(6,135 )
(35 )
(871 )
(338 )
(26 )
(8,177 )
Total liabilities
(39,154 )
(328,418 )
(130,861 )
(12,670 )
(1,105 )
(508,901 )
Total Capital and reserves
(2,361 )
(1,428 )
(18,664 )
(54,201 )
(304 )
(76,065 )
Sensitivity analysis
Interest rate risk
Some of the Syndicate’s financial instruments, including cash and certain financial assets at fair value, are
exposed to movements in market interest rates. Changes in interest rates also impact the present values of
estimated Syndicate liabilities, which are used for solvency calculations. Our investment strategy reflects the
matching principle of our liabilities, and the combined market risk of investment assets and estimated liabilities
is monitored and managed within specified limits.
2025
Impact on
results before
tax
USD’000
2025
Impact on
members’
balances
USD’000
2024
Impact on
results before
tax
USD’000
2024
Impact on
members’
balances
USD’000
Interest rate risk
+ 50 basis points shift in yield curves
(1,630 )
(1,630 )
(1,160 )
(1,160 )
- 50 basis points shift in yield curves
5.4
Operational risk
Operational risk arises from the risk of losses due to inadequate or failed internal processes, people, systems,
service providers or external events. Operational risk includes conduct risk.
The Syndicate actively manages and minimises operational risks where appropriate. This is achieved by
implementing and communicating guidelines and detailed procedures and controls for staff and other third
parties. The Syndicate regularly monitors the performance of its controls and adherence to procedures through
the risk management reporting process. Key components of the Syndicate’s operational control environment
include:
modelling of operational risk exposure and scenario testing;
management review of activities;
documentation of policies and procedures;
preventative, directive and detective controls within key processes;
contingency planning; and other systems’ controls.
NOTES TO THE ANNUAL ACCOUNTS
35
2025 Syndicate 4141 Annual Report and Accounts
Addressing Conduct Risk has always been treated as a priority irrespective of the regulatory emphasis on the
selling of financial products, including insurance products, to consumers. The Syndicate’s primary objective is
that all policyholders should receive fair treatment throughout the product lifecycle, which requires the
effective management of Conduct Risk, including the recent requirements of Fair Value and Consumer Duty
regulations. However, Conduct Risk is not limited to the fair treatment of customers, and the Conduct Risk Policy
broadly defines Conduct Risk as “…the risk that detriment is caused to the Syndicate, our customers, clients or
counterparties because of the inappropriate execution of our business activities.”
As a result, business activities are conducted in a manner that is not only fair, honest and transparent but that
also complies fully with applicable UK and International laws and regulations and internal policies and
procedures. This is clearly communicated from the Board downwards to all members of staff and oversight is
provided throughout the governance structure, primarily by way of the Product Governance and Distribution
Committee. Day-to-day responsibility for monitoring the fair treatment of customers and broader aspects of
Conduct Risk resides with the International Compliance Department which undertakes scheduled reviews as
part of a comprehensive Compliance Monitoring schedule.
Operational resilience
The Operational Resilience Office, established in October 2022, continues to coordinate enterprise-wide efforts
and reports quarterly to the Operational Risk Group. TMHCC International met all regulatory requirements
ahead of the 31 March 2025 deadline, with the Board approving the annual self-assessment in April 2025 and
submission to the PRA completed with all supporting documentation.
5.5
Credit risk
Credit risk arises where counterparties fail to meet their financial obligations in full as they fall due. The
primary sources of credit risk for the Syndicate are:
reinsurers – whereby reinsurers may fail to pay valid claims against a reinsurance contract held by
the Syndicate;
brokers and coverholders – whereby counterparties fail to pass on premiums or claims collected or
paid on behalf of the Syndicate;
investments – whereby issuer default results in the Syndicate losing all or part of the value of a
financial instrument; and
financial institutions holding cash.
The carrying amount of financial assets and liabilities represents the maximum credit risk exposure.
The Syndicate’s core business is to accept insurance risk and the appetite for other risks is low. This protects
the Syndicate’s solvency from erosion from non-insurance risks so that it can meet its insurance liabilities.
The Syndicate limits exposure to a single counterparty or a group of counterparties and analyses the
geographical locations of exposures when assessing credit risk.
An approval system exists for all new brokers and coverholders and their performance is carefully
monitored. Regular exception reports highlight trading with non-approved brokers, and the Syndicate’s
credit control function frequently assesses the ageing and collectability of debtor balances. Any large, aged
items are prioritised and where collection is outsourced incentives are in place to support these priorities.
The Investment Committee has established comprehensive guidelines for the Syndicate’s Investment
Manager regarding the type, duration and quality of investments acceptable to the Syndicate to ensure
credit risk relating to the investment portfolio is kept to a minimum. The performance of our Investment
Manager is regularly reviewed to confirm adherence to these guidelines.
NOTES TO THE ANNUAL ACCOUNTS
36
2025 Syndicate 4141 Annual Report and Accounts
The Syndicate has developed processes to formally examine all reinsurers before entering into new business
arrangements. New reinsurers are approved by the reinsurance approval group, which also reviews
arrangements with all existing reinsurers at least annually. Vulnerable or slow-paying reinsurers are examined
more frequently. To assist in the understanding of credit risks, A.M. Best, Moody’s and Standard & Poor’s (‘S&P’)
ratings are used. The Syndicate’s concentrations of credit risk have been categorised by these ratings as follows:
Year 2025
AAA
USD’000
AA
USD’000
A
USD’000
BBB
USD’000
Other
USD’000
Not
rated
USD’000
Total
USD’000
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Loans and deposits with credit institutions
Deposits with ceded 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
The tables include all assets excluding Reinsurers’ share of technical provisions - provision for unearned premiums and
Deferred acquisition costs.
Year 2024
AAA
USD’000
AA
USD’000
A
USD’000
BBB
USD’000
Other
USD’000
Not
rated
USD’000
Total
USD’000
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
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
The Syndicate’s largest counterparty exposure at 31 December 2025 is $46.0m (2024 $49.5m) of Canadian
government securities. The Debtors arising out of direct insurance operations have been represented as Not
rated.
NOTES TO THE ANNUAL ACCOUNTS
37
2025 Syndicate 4141 Annual Report and Accounts
Insurance receivables and other receivable balances held by the Syndicate have not been impaired based
on available evidence, and no impairment provision has been recognised in respect of these assets. An aged
analysis of the Syndicate’s insurance and reinsurance receivables that are past due at the reporting date is
presented below:
Neither past
due nor
impaired assets
Past due but
not impaired
assets
Gross value of
impaired assets
Impairment
allowance
Total
2025
USD’000
USD’000
USD’000
USD’000
USD’000
Shares and other variable yield securities and units
in unit trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
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
Neither past due
nor impaired
assets
Past due but
not impaired
assets
Gross value of
impaired assets
Impairment
allowance
Total
2024
USD’000
USD’000
USD’000
USD’000
USD’000
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Loans and deposits with credit institutions
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
NOTES TO THE ANNUAL ACCOUNTS
38
2025 Syndicate 4141 Annual Report and Accounts
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
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
USD’000
USD’000
USD’000
USD’000
USD’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
USD’000
USD’000
USD’000
USD’000
USD’000
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Total
5.6
Liquidity risk
Liquidity risk arises where cash may not be available to pay obligations when due at a reasonable cost. The
Syndicate is exposed to daily calls on its available cash resources, principally from claims arising from its
insurance business. In the majority of cases, these claims are settled from premiums received.
The Syndicate’s approach is to manage its liquidity position so that it can reasonably survive a significant
individual or market loss event (see Note 5.1.i). This means that the Syndicate maintains sufficient liquid assets,
or assets that can be readily converted into liquid assets at short notice, to meet expected cash flow
requirements. These liquid funds are regularly monitored using cash flow forecasting to ensure that surplus
funds are invested to achieve a higher rate of return. The Syndicate can also draw on group funds to bridge
short-term cash flow requirements.
The following table is an analysis of the contractual cash outflows based on all the liabilities held at 31 December
2025 and 2024:
6
Undiscounted net cash flows
Year 2025
Carrying
amount
USD’000
No
maturity
stated
USD’000
0-1 yrs
USD’000
1-3 yrs
USD’000
3-5 yrs
USD’000
>5 yrs
USD’000
Total
USD’000
Claims outstanding
306,977
Creditors
164,703
Total
471,680
NOTES TO THE ANNUAL ACCOUNTS
39
2025 Syndicate 4141 Annual Report and Accounts
Undiscounted net cash flows
Year 2024
Carrying
amount
USD’000
No
maturity
stated
USD’000
0-1 yrs
USD’000
1-3 yrs
USD’000
3-5 yrs
USD’000
>5 yrs
USD’000
Total
USD’00
0
Claims outstanding
273,427
Creditors
115,559
Total
388,986
5.7
Sustainability Risk
Sustainability risk is concerned with the considerations made to environmental, social and ethical factors of
performing our insurance business. It is divided into Environmental Risk, Social Risk and Governance Risk.
i.
Environmental Risk
This is the financial risk arising from climate change, nature and biodiversity loss with a particular focus on
how the Syndicate understands the impact of the physical, transitional and liability aspects of climate change
within its underwriting and investment portfolios Environmental Risk also includes the operational aspects
of climate responsibility including the potential for operations to negatively impact the environment as well
as the risk of operational disruption due to environmental factors. The primary drivers of this risk are climate
change, pollution, resource depletion, waste, and ecological footprint.
ii.
Social Risk
This is the risk of jeopardising the achievement of safety and security of the communities that the Syndicate
works with and its employees. The primary drivers of this risk are working conditions, supply chains, health
and safety, employee engagement, diversity and inclusion and customer relations.
iii.
Governance Risk
This is the risk of jeopardising the commitment of the Syndicate to carrying out its business activities fairly,
honestly, transparently and in accordance with applicable legal and regulatory requirements and high
ethical standards. The drivers of this risk include executive pay, corruption & bribery, Board diversity and
conduct regulations.
The Sustainability risk framework has continued to be refined during 2025. Risk appetites and risk metrics
to monitor them, continue to be scoped. Those relating to investments are most advanced, with some
having started to be measured in 2025. Work on potential quantitative impacts of climate change continues.
The Group’s sustainability approach has continued to be embedded into policies such as the travel and
expense policy which has been updated to embed a Carbon Footprint Policy.
5.8
Other Current Risks
This section identifies risks that have the potential to materially impact the existing risk profiles. It should be
noted that, in addition to monitoring the Syndicate’s existing and established principal risks, the risk
management framework is designed to support the identification of developing and emerging risks; those which
have the potential to impact, or require a review of, the existing strategic objectives. Risks which are more
imminently likely to crystallise are also monitored.
NOTES TO THE ANNUAL ACCOUNTS
40
2025 Syndicate 4141 Annual Report and Accounts
Procurement and Outsourcing
Procurement and Outsourcing is a key focus for the Syndicate, in light of greater reliance on cloud service
providers to ensure system/data back-up capabilities and increased use of coverholders. Strong risk governance
in this area is vital to ensure uninterrupted service to both external and internal stakeholders. It is also a sub-
component of Supply Chain risk, which is an area subject to increased scrutiny with regulatory focus on insurers
and their ability to demonstrate their operational resilience in this regard. Against a backdrop of increased
digitalisation of the insurance market and escalating cyber-security threats, robust supply chain management
is paramount. The control framework continues to develop and improve to ensure that it remains
comprehensive and robust to appropriately mitigate the risk. The current risk framework includes the
Procurement and Outsourcing policy; Procurement and Outsourcing procedures, and; Third Party Vendor Risk
policy. Over the course of 2025, the newly implemented Contract Management system went live as part of the
BAU process for supplier onboarding, which is used across TMHCC International, streamlining the risk
assessment and resulting due diligence checks on suppliers whilst maintaining an auditable record of activity.
Resilience standards are also in the process of being developed to ensure that any disruption experienced by
the Syndicate’s material outsourcers does not impact the service they provide to the Syndicate.
Geopolitical Risk
The geopolitical landscape remains volatile. The key areas of concern remain Russia/Ukraine, China/Taiwan and
US Global relations. The impacts for TMHCC International could come from both direct and indirect exposures.
Management have continued to monitor and review potential direct exposures across the impacted regions
with underwriters and appropriate exclusions (e.g. war exclusion) and notice of cancellation are issued where
appropriate. There are several types of indirect impact, including secondary impacts, legal risks, and security
risks.
Technological Advancements
Technological progress continues to accelerate, creating both significant opportunities and emerging risks for
the business. The rapid rise of artificial intelligence is an example of this duality. On one hand, AI offers
substantial benefits, such as automating manual data collection and analysis tasks, improving efficiency, and
enabling deeper insights. On the other hand, the same technologies may be exploited by malicious actors,
increasing exposure to threats such as cyber-attacks and deepfakes.
Failure to adopt and leverage these advancements effectively could also lead to competitive disadvantage. To
capture the full value of AI while managing the associated risks, safeguards against misuse will continue to be
strengthened. At the same time, investment in talent and capabilities will be expanded to ensure the
organisation remains agile and well equipped to adapt to fast evolving technological change.
6.
ANALYSIS OF UNDERWRITING RESULT
The analysis of the underwriting result set out below applies the Lloyd’s reporting class categories which are
not entirely consistent with the line of business analysis used in managing and monitoring of the business, as
referred to in the Business Review (Pages 5 to 8).
NOTES TO THE ANNUAL ACCOUNTS
41
2025 Syndicate 4141 Annual Report and Accounts
2025
Gross
premiums
written
USD’000
Gross
premiums
earned
USD’000
Gross
claims
incurred
USD’000
Gross
operating
expenses
USD’000
Reinsurance
balance
USD’000
Underwriting
result
USD’000
Direct insurance
Accident and health
(18,007 )
(24,836 )
Marine, aviation, and transport
(26,843 )
(23,982 )
(4,793 )
Fire and other damage to
property
(2,531 )
(6,944 )
Third party liability
(32,546 )
(26,370 )
Miscellaneous
(6,123 )
(2,544 )
(9,393 )
(806 )
(86,050 )
(84,676 )
(3,245 )
Reinsurance acceptances
(37,250 )
(7,714 )
(1,241 )
(4,705 )
Total
(123,300 )
(92,390 )
(4,486 )
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
USD’000
Gross
premiums
earned
USD’000
Gross
claims
incurred
USD’000
Gross
operating
expenses
USD’000
Reinsurance
balance
USD’000
Underwriting
result
USD’000
Additional analysis
Fire and damage to property of which
is:
Specialities
Energy
(1,617 )
Third party liability of which is:
Energy
2024
Gross
premiums
written
USD’000
Gross
premiums
Earned
USD’000
Gross
claims
incurred
USD’000
Gross
operating
expenses
USD’000
Reinsurance
balance
USD’000
Underwriting
result
USD’000
Direct insurance
Accident and health
(31,511 )
(44,285 )
Marine, aviation, and transport
(42,395 )
(22,030 )
(72 )
Fire and other damage to property
(2,392 )
(5,545 )
(5,112 )
Third party liability
(20,260 )
(27,434 )
(1,724 )
Miscellaneous
(242 )
(15,442 )
(91,601 )
(99,536 )
(21,802 )
Reinsurance acceptances
(9,509 )
(6,714 )
(2,674 )
Total
(101,110 )
(106,250 )
(24,476 )
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:
NOTES TO THE ANNUAL ACCOUNTS
42
2025 Syndicate 4141 Annual Report and Accounts
2024
Gross
premiums
written
USD’000
Gross
premiums
earned
USD’000
Gross
claims
incurred
USD’000
Gross
operating
expenses
USD’000
Reinsurance
balance
USD’000
Underwriting
result
USD’000
Additional analysis
Fire and damage to
property of which is:
Specialities
Energy
(224 )
Third party liability of
which is:
Energy
No gains or losses were recognised in the profit and loss account during the year on buying reinsurance (2024:
nil).
The direct gross premiums written by underwriting location of risk is presented in the table below:
2025
USD’000
2024
USD’000
United Kingdom
European Union Member States
US
Rest of the world
Total direct gross premiums written
7.
NET OPERATING EXPENSES
2025
USD’000
2024
USD’000
Acquisition costs
Change in deferred acquisition costs
(1,556 )
Administrative expenses
Member’s standard personal expenses
Reinsurance commissions and profit participation
(16,191 )
(14,612 )
Net operating expenses
Total commissions for direct insurance business for the year amounted to:
2025
USD’000
2024
USD’000
Total commission for direct insurance business
NOTES TO THE ANNUAL ACCOUNTS
43
2025 Syndicate 4141 Annual Report and Accounts
Administrative expenses include:
2025
USD’000
2024
USD’000
Auditors’ remuneration:
fees payable to the Syndicate’s auditor for the audit of these annual accounts
fees payable to the Syndicate’s auditor and its associates in respect of other services
pursuant to legislation
8.
KEY MANAGEMENT PERSONNEL COMPENSATION
The directors of HCCUA received the following aggregate remuneration recharged to the Syndicate by HCC
Service Corporation (UK). These costs are included in net operating expenses.
2025
USD’000
2024
USD’000
Directors’ emoluments
The active underwriter received the following aggregate remuneration charged to the Syndicate.
9.
STAFF NUMBERS AND COSTS
The average number of direct underwriting staff (excluding directors) working for the Syndicate during the year
was twenty eight (2024: twenty six).
Number of employees
2025
2024
Underwriting
All staff are employed by HCC Service Company Inc. (UK branch). The disclosure for headcount above relates
to underwriting staff only.
The following amounts relating to underwriting staff were recharged by the service company to the Syndicate
in respect of payroll costs:
2025
USD’000
2024
USD’000
Wages and salaries
Social security costs
Other pension costs
Total
The costs of staff providing central services for group entities (including claims and underwriting support staff)
are allocated and recharged to the Syndicate as a management fee. This staff information is not included in
2025
USD’000
2024
USD’000
Emoluments
NOTES TO THE ANNUAL ACCOUNTS
44
2025 Syndicate 4141 Annual Report and Accounts
salary costs and average staff numbers as it is not practical to allocate them to the underlying entities to which
the staff provide services.
10.
INVESTMENT RETURN
2025
USD’000
2024
USD’000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
Other income from investments
From financial assets designated at fair value through profit or loss
Losses on the realisation of investments
(761 )
(1,437 )
Unrealised gains/(losses) on investments
(2,551 )
Investment management expenses
(306 )
(262 )
Total investment return
Transferred to the technical account from the non-technical account
11.
DISTRIBUTION AND OPEN YEARS OF ACCOUNT
A distribution of $56.3m to members will be proposed in relation to the closing year of account 2023 (2024:
$63.5m was paid in relation to the closing year of account 2022).
12.
FINANCIAL INVESTMENTS
Carrying value
Cost
2025
USD’000
2024
USD’000
2025
USD’000
2024
USD’000
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Total financial investments
Of the above, $53.2m (2024: $38.4m) is listed on a recognised exchange (see Note 13 Level 1).
The table below presents an analysis of financial investments by their measurement classification.
2025
USD’000
2024
USD’000
Financial assets measured at fair value through profit or loss
Total financial investments
NOTES TO THE ANNUAL ACCOUNTS
45
2025 Syndicate 4141 Annual Report and Accounts
13.
FAIR VALUE ESTIMATION
The following table presents the Syndicate’s financial investments measured at fair value at 31 December 2025
and at 31 December 2024 categorised into levels 1, 2 and 3, reflecting the criteria specified in FRS 102.
2025
Level 1
USD’000
Level 2
USD’000
Level 3
USD’000
Total
USD’000
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Total
2024
Level 1
USD’000
Level 2
USD’000
Level 3
USD’000
Total
USD’000
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Loans and deposits with credit institutions
Total
FRS 102 defines fair value hierarchies as described in Note 3.i as follows:
Level 1
– quoted prices in an active market.
These financial instruments are traded in active markets whose fair value is based on quoted bid prices at the
balance sheet date.
Level 2
– recent transactions in an identical asset in the absence of quoted prices in active markets at the
balance sheet date.
These use observable prices for recent arm’s length transactions for an identical asset that are available directly
as prices or indirectly from prices. Determining whether a market is active requires the exercise of judgement
and is determined based upon the facts and circumstances of the market for the instrument being measured.
The Syndicate has chosen to classify all securities other than Sovereign and overseas deposits as Level 2
securities; and
Level 3
– use of a valuation technique where there is no active market of other transactions which are a good
estimate of fair value.
These comprise financial instruments where it is determined that there is no active market or that the
application of criteria to demonstrate such as Level 2 securities is impractical. FRS102 requires that fair value is
established through the use of a valuation technique which incorporates relevant information to reflect
appropriate adjustments for credit and liquidity risks and maximises the use of observable market data where
it is available and relies as little as possible on entity specific estimates. The relative weightings given to differing
sources of information and the determination of non-observable inputs to valuation models can require the
exercise of significant judgement. The Syndicate does not hold any Level 3 securities at 31 December 2025.
No markets for investments were judged to be inactive at year end and as a result there were no adjustments
to the prices or quotes provided by the independent pricing services, third party investment managers as of 31
December 2025 or 31 December 2024.
NOTES TO THE ANNUAL ACCOUNTS
46
2025 Syndicate 4141 Annual Report and Accounts
14.
DEBTORS ARISING OUT OF DIRECT INSURANCE OPERATIONS
2025
USD’000
2024
USD’000
Due within one year
Total
15.
DEBTORS ARISING OUT OF REINSURANCE OPERATIONS
2025
USD’000
2024
USD’000
Due within one year
Total
16.
OTHER DEBTORS
2025
USD’000
2024
USD’000
Other
Total
17.
DEFERRED ACQUISITION COSTS
2025
2024
Gross
USD’000
Reinsurance
USD’000
Net
USD’000
Gross
USD’000
Reinsurance
USD’000
Net
USD’000
Balance at 1 January
(7,186 )
(6,506 )
Incurred deferred
acquisition costs
(17,329 )
(14,917 )
Amortised deferred
acquisition costs
(73,715 )
(57,495 )
(90,559 )
(76,428 )
Foreign exchange
movements
(133 )
(481 )
(375 )
Balance at 31 December
(8,428 )
(7,186 )
The 2024 gross and reinsurance comparatives for incurred and amortised deferred acquisition costs have been represented by $64.8m,
$(64.8m), $(21.0m) and $19.4m respectively with no impact on the 2024 balance.
NOTES TO THE ANNUAL ACCOUNTS
47
2025 Syndicate 4141 Annual Report and Accounts
18.
CLAIMS DEVELOPMENT
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated
have changed from the first estimates made.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported
for the end of the underwriting year to one year later as a large proportion of premiums are earned in the year
of account’s second year of development.
Balances have been translated at exchange rates prevailing at 31 December 2025 in all cases.
Gross
All in USD’000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
Pure underwriting
year
Estimate of gross claims
at end of underwriting
year
one year later (*)
two years later
three years later
four years later
five years later
six years later
seven years later
eight years later
nine years later
Estimate of gross
claims reserve
Provision in respect
of prior years
Less; cumulative
gross paid claims
Gross claims reserve
(5,595 )
* The significant increase in the estimate of ultimate claims one year later reflects the earning patterns of in-force policies
beyond the first calendar year.
NOTES TO THE ANNUAL ACCOUNTS
48
2025 Syndicate 4141 Annual Report and Accounts
Net
All in USD’000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
Pure underwriting
year
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
eight years later
nine years later
Estimate of net
claims reserve
Provision in respect
of prior years
Less; cumulative net
paid claims
Net claims reserve
(6,619 )
(5,401 )
(2,978 )
* The significant increase in the estimate of ultimate claims one year later reflects the earning patterns of in-force policies
beyond the first calendar year.
19.
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
USD’000
Reinsurance
assets
USD’000
Net
USD’000
Gross
provisions
USD’000
Reinsurance
assets
USD’000
Net
USD’000
Loss reserves
Balance at 1 January
(109,330 )
(114,173 )
Claims paid during the year
(97,871 )
(79,819 )
(104,056 )
(60,835 )
Expected cost of current year
claims
(28,085 )
(37,155 )
Change in estimates of prior
year provisions
(31,589 )
(23,760 )
(35,590 )
(33,358 )
Effect of movements in
exchange rate
(2,092 )
(3,947 )
(3,455 )
(7,402 )
Balance at 31 December
(153,044 )
(109,330 )
The 2024 comparatives for claims paid during the year, expected cost of current year claims and change in estimates of prior year provisions
have been represented by $(208.1m), $80.0m and $128.1m respectively for Gross provisions and by $86.4m, $(29.0m) and $(57.4m) for
reinsurance assets with no impact on the 2024 balance.
NOTES TO THE ANNUAL ACCOUNTS
49
2025 Syndicate 4141 Annual Report and Accounts
2025
2024
Gross
provisions
USD’000
Reinsurance
assets
USD’000
Net
USD’000
Gross
provisions
USD’000
Reinsurance
assets
USD’000
Net
USD’000
Unearned premiums
Balance at 1 January
(23,376 )
(21,852 )
Premiums written during
the year
(69,899 )
(61,470 )
Premiums earned during
the year
(258,258 )
(194,098 )
(282,948 )
(223,549 )
Effect of movements in
exchange rate
(480 )
(2,068 )
(1,521 )
Balance at 31 December
(29,595 )
(23,376 )
Refer to Note 5.1 (iii) 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.
20.
CREDITORS ARISING OUT OF DIRECT INSURANCE OPERATIONS
2025
USD’000
2024
USD’000
Due within one year
Total
21.
CREDITORS ARISING OUT OF REINSURANCE OPERATIONS
2025
USD’000
2024
USD’000
Due within one year
Total
22.
OTHER CREDITORS INCLUDING TAXATION AND SOCIAL SECURITY
2025
USD’000
2024
USD’000
Other related party balances (non-syndicate)
Total
All amounts are due within one year. Amounts owed to group undertakings are short-term, unsecured, interest
free and have no fixed date of repayment.
NOTES TO THE ANNUAL ACCOUNTS
50
2025 Syndicate 4141 Annual Report and Accounts
23.
CASH AND CASH EQUIVALENTS
2025
USD’000
2024
USD’000
Cash at bank and in hand
Total cash and cash equivalents
Of the total cash and cash equivalents, the following amount was held in regulated bank accounts in overseas
jurisdictions:
2025
USD’000
2024
USD’000
Total cash and cash equivalents not available for use by the syndicate
24.
ANALYSIS OF NET DEBT
2025
At 1 January
2025
USD’000
Cash
flows
USD’000
Acquired
USD’000
Fair value and
exchange
movements
USD’000
Non-cash
changes
USD’000
At 31
December
2025
USD’000
Cash at bank and in hand
(3,078 )
Total
(3,078 )
2024
At 1
January
2024
USD’000
Cash
flows
USD’000
Acquired
USD’000
Fair value and
exchange
movements
USD’000
Non-cash
changes
USD’000
At 31
December
2024
USD’000
Cash at bank and in hand
(20 )
(214 )
Total
(20 )
(214 )
25.
RELATED PARTIES
The Syndicate’s capital is provided by Nameco (No. 808) Limited (‘Nameco’). Nameco’s ultimate parent
company is Tokio Marine Holdings, Inc. (‘TMHD’). TMHD is incorporated in Japan and listed on the Tokyo
Stock Exchange. The consolidated accounts of TMHD can be obtained from its website at
http://www.tokiomarinehd.com/en/ir/library/annual_report/index.html.
a.
The Syndicate incurred managing agency fees of $0.2m (2024: $0.2m) from its Managing Agent, HCCUA.
HCCUA is a wholly owned subsidiary of HCC Intermediate Holdings Inc. An amount of $0.0m (2024:
$0.0m) was due to HCCUA at the balance sheet date. In addition, $17.2m (2024: $26.6m) was paid to
HCC Service Company Inc. (UK branch) for expenses paid during the year on behalf of the Syndicate and
an amount of $24.9m was due to (2024: $7.0m) HCC Service Company Inc. (UK branch) at the balance
sheet date. Profit related remuneration for the Syndicate’s underwriting staff is charged to the
Syndicate. The Syndicate has a balance due to HCC Service Company Inc. of $35.4m (2024; $35.4m) in
respect of short-term funding.
b.
The Syndicate shares a reinsurance programme with the other TMHCC International carriers. Reinsurance
premiums are pro-rated across TMHCC International platforms according to their respective gross written
premiums. Reinsurance recoveries are pro-rated based on the share of gross claims suffered by each
carrier. The balance due from HCCII in respect of reinsurance and short-term funding was $8.7m (2024:
$2.0m due to) at the balance sheet date. Reinsurance is also purchased from affiliate entities comprising:
NOTES TO THE ANNUAL ACCOUNTS
51
2025 Syndicate 4141 Annual Report and Accounts
i.
A whole account Excess of Loss cover was arranged in 2025 with HCCII with a coverage of $19m
excess of $1m (2024: $19m excess of $1m) and premium payable of $5.5m (including reinstatement
premiums of $2.3m) (2024: $3.0m, nil reinstatement premiums).
ii.
An aggregate Excess of Loss cover arranged with HCL for Contingency losses on the 2019 and 2020
years. The balance due from HCL in respect of reinsurance and short-term funding was $11.5m
(2024: $20.7m) at the balance sheet date.
iii.
A proportional quota share arranged with Houston Casualty Company Inc. with premium payable
of $7.2m (2024: $3.4m). The balance due at the end of the year was $nil (2024: $nil).
iv.
Quota share and facultative reinsurance cover arranged with Tokio Marine & Nichido Fire insurance
Company Ltd (TMNF) and Tokio Marine Kiln Syndicate 0510 (Kiln) with premium payable of $1.6m
(2024: $0.3m) and $2.4m (2024: $1.7m), respectively. The balances due at the end of the year for
TMNF and Kiln were $1.1m (2024: $0.6m) and $1.9m (2024: $1.6m), respectively.
c.
Nameco provides the entire capacity of Syndicate 4141. The immediate controller of Nameco and its sole
shareholder is HCC Intermediate Holdings Inc. and the ultimate controller is TMHD. An amount of $29.8m
was due to NameCo (2024: $1.8m due from) at the balance sheet date.
d.
The Syndicate has a balance due to Tokio Marine Europe S.A. of $10.0m (2024; $7.7m) in respect of short-
term liquidity funding.
e.
The Syndicate has a balance due to Houston Casualty Company, Inc of $4.0m (2024; $0.4m) in respect of
US Casualty business written.
f.
The Syndicate transacts business with agencies and coverholders that are owned by the Houston Casualty
Company Inc. Full delegated underwriting authorities have been provided to the following entities;
i.
HCC Medical Insurance Services.
YTD
2025
YTD
2024
USD’000
USD’000
Premium income (World Trips)
27,976
70,590
Net Commission expense
7,612
33,087
Balance due to/(from) the Syndicate at year end
514
(130)
ii.
HCC Global Financial Products LLC.
YTD
2025
YTD
2024
USD’000
USD’000
Premium income (Financial Lines)
2,929
2,391
Net Commission expense
336
247
Balance due to the Syndicate at year end
-
-
g.
The Syndicate transacts business with the following Tokio Marine entities: Lloyd’s Syndicate 1880; Tokio
Marine Brasil Seguradora and Tokio Marine Kiln Group ltd. These arrangements have produced:
YTD
2025
YTD
2024
USD’000
USD’000
Gross premium written
84
35
Acquisition costs
(16)
(10)
h.
At 31 December 2025 HCCI Insurance Holdings Inc. had deposited $213m (2024: $104m) in a Third-Party
Deposit Trust with Lloyd’s of London as part of the member’s FAL (see Note 30).
NOTES TO THE ANNUAL ACCOUNTS
52
2025 Syndicate 4141 Annual Report and Accounts
26.
POST BALANCE SHEET EVENTS
The directors confirm that there are no significant post balance sheet events requiring disclosure.
27.
PENSION COMMITMENTS
HCC Service Company Inc. (UK branch) operates a Group Self Invested Personal Pension Scheme. The assets
of the pension scheme are held separately from those of the Group’s international operations in an
independently administered fund. The pension cost charged to the Syndicate Profit and Loss Account for
the year was $463k (2024: $388k). The accrued pension cost outstanding as at 31 December 2025 was $nil
(2024: $nil).
28.
CONTINGENCES AND COMMITMENTS
The directors confirm that there are no significant contingencies and commitments requiring disclosure.
29.
FOREIGN EXCHANGE RATES
The following currency exchange rates have been used for principal foreign currency transactions;
2025
2024
Start of
period rate
End of period
rate
Average
rate
Start of
period rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
30.
FUNDS AT LLOYD’S
Every member is required to hold capital at Lloyd’s which is held in the form of a trust and known as ‘Funds
at Lloyd’s’ (‘FAL’). These funds are intended primarily to cover circumstances where the Syndicate’s assets
prove insufficient to meet participating members’ underwriting liabilities.
The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA
requirements and resource criteria. FAL has regard to a number of factors including the nature and amount
of risk to be underwritten by the member and the assessment of the reserving risk in respect of business
that has been underwritten (see Note 5.2 (ii) Regulatory risk). Since FAL is not under the management of
the Managing Agent, no amount has been shown in these accounts by way of such capital resources.
However, the Managing Agent is able to make a call on the member’s FAL
to meet the Syndicate’s liquidity
requirements or to settle its claims.
As at the balance sheet date the FAL was being provided by an affiliate in the form of a Third-Party Deposit
Trust. At 31 December 2024, the FAL comprised both Third party Deposit Trust investments and
investments held by NameCo.
31.
ULTIMATE CONTROLLING PARTY AND PARENT UNDERTAKING OF WHICH THE RESULTS OF THE
SYNDICATE ARE INCLUDED
Nameco provides 100% of the capital to support the underwriting of the Syndicate and the principal activity
of Nameco is to monitor and support the operations of the Syndicate.
The Syndicate is managed by HCC Underwriting Agency Ltd which is authorised by the Prudential
Regulation Authority (‘PRA’) and regulated by both the Financial Conduct Authority and the Prudential
Regulation Authority.
The results of the Syndicate are reported both within those of Nameco and the larger Tokio Marine HCC
Insurance Holdings, Inc. group. The ultimate parent company of both the Syndicate and of Nameco is Tokio
Marine Holdings, Inc. (TMHD). TMHD’s head office is located in Tokyo, Japan. TMHD is a leading
international insurance group with offices worldwide.