Important information about Syndicate Reports and Accounts
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Syndicate 2357
Annual Report and Financial Statements
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Syndicate 2357
Annual Report and Financial Statements
31 December 2025
For Tagging convenience:
Profit & Loss
Balance Sheet
Current Period
01 January 2025 – 31 December 2025
31 December 2025
Prior Period
01 January 2024 – 31 December 2024
Contents
Directors and administration
3
Managing agent’s report
4
Statement of managing agent’s responsibilities
9
Independent Auditor’s report
10
Profit and loss account
14
Statement of changes in member’s balances
15
Balance sheet
16
Statement of cash flows
18
Notes to the financial statements
19
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2025 Annual Report and Financial Statements
Directors and administration
Managing agent
Executive directors
A G Beatty
J A H G Cartwright
S G Drysdale
A J Wilkinson
Non-executive directors
R J S Bucknall
W A Guffey
T A Riddell
J E Street
L Taylor
Managing agent’s registered office
Walsingham House
35 Seething Lane
London
EC3N 4AH
Managing agent’s registered number
11103467
Active underwriter
S G Drysdale
Bankers
Citibank N.A.
Investment managers
Amundi UK Limited
77 Coleman Street
London
EC2R 5BJ
Registered auditor
Deloitte LLP
1 New Street Square
London
EC4A 3HQ
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2025 Annual Report and Financial Statements
Managing agent’s report
Introduction
The directors of Nephila Syndicate Management Limited (“NSML”) present their annual report, which
incorporates the strategic review, together with the audited financial statements for the year ended 31
December 2025.
The audited financial statements are prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulation 2008 and FRS 102 and FRS 103, being applicable Accounting
Standards in the United Kingdom and the Republic of Ireland, and in accordance with the provisions of
Schedule 3 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
relating to insurance companies.
Principal activity and review of the business
NSML is the managing agent for Syndicate 2357 (“the Syndicate”), whose principal activity is underwriting
general insurance and reinsurance business at Lloyd’s of London (“Lloyd’s”).
The Syndicate writes worldwide property reinsurance and MGA insurance business, primarily in the United
States.
Significant events
i.
Reinsurance commutation (2023 & prior YOAs)
Effective 12 August 2025, the Syndicate commuted its outwards reinsurance agreement which had provided
70% quota share protection over the Climate book of business in respect of the 2023 and prior Years of
Account.
ii.
Retroactive Loss Portfolio Transfer (LPT)
Immediately following the commutation, effective 12 August 2025 the Syndicate entered into a retroactive
loss portfolio transfer agreement (“LPT”) – together the “legacy transactions”. The LPT provides reinsurance
cover for 100% of the losses relating to the 2023 and prior Years of Account. Upon placement, the Syndicate
recognised outwards reinsurance premiums of $239.4m as written and earned and reinsurance recoveries of
$220.4m in respect of covered losses. The agreement was placed on a funds withheld basis. In line with the
contractual terms of the agreement, provision has been made, and recorded within the Syndicate’s
investment expenses, to compensate the reinsurer for the investment income generated on these funds.
The legacy transactions have had a material impact on the presentation of the financial statements and
the key performance indicators as outlined below.
iii.
External reinsurance-to-close (RITC) after year end
Effective immediately after the balance sheet date 31 December 2025, the Syndicate entered into an
external reinsurance to close (“RITC”) transaction, in respect of the 2023 and prior Years of Account, thereby
transferring all related insurance assets and liabilities to the reinsurer as at that date. In accordance with FRS
102, Section 32 (Events after the end of the reporting period), this constitutes a non-adjusting post balance
sheet event; accordingly, the 31 December 2025 financial statements do not reflect the effects of this
transaction.
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2025 Annual Report and Financial Statements
Managing agent’s report
- continued
Results
The Syndicate reported a profit of $235.6m for the 2025 financial year (2024: profit of $159.0m). The calendar
year combined ratio, excluding the distorting impact of the legacy transactions, was 29.5% (2024: 72.7%).
After allowance for these, the combined ratio for the year was (79.1)%. The negative ratio arises as a
consequence of the reinsurance recoveries generated on the LPT being in excess of the calendar year net
incurred claims.
With the exception of the Californian Wildfires in January 2025, the 2025 calendar year benefited from benign
catastrophe experience particularly relating to US windstorms resulting in a net loss ratio, excluding the legacy
transactions impact, of 5.6%. The 2024 calendar year results included the impact of Hurricanes Helene and
Milton.
Gross premiums written by class of business for the calendar year were as follows:
2025
$’000
2024
$’000
Reinsurance
237,121
564,773
Marine, aviation, and transport
(138)
1,094
Fire and other damage to property
227,654
43,653
Total
464,637
609,520
The Syndicate's key performance indicators for the financial year were as follows:
2025
Including
Legacy
Transactions
$’000
2025
Excluding
Legacy
Transactions
$’000
2024
$’000
Gross premiums written
464,637
464,637
609,520
Net earned premium
117,101
323,538
472,005
Net incurred claims
169,888
(18,217)
(280,584)
Net operating expenses
(77,235)
(77,235)
(62,420)
Profit for the financial year
235,576
262,273
159,023
Loss ratio
(145.1)%
5.6%
59.5%
Expense ratio
66.0%
23.9%
13.2%
Combined ratio
(79.1)%
29.5%
72.7%
The combined ratio is the ratio of net claims incurred and net operating expenses to net premiums earned.
Lower ratios represent better performance. The Legacy Transactions reduced net earned premiums and
improved net incurred claims thus distorting the key ratios for 2025. The increase in the ‘normalised’ expense
ratio in 2025 from 2024 follows an increase in underwriting on the MGA class which carries higher acquisition
costs.
The Syndicate’s underwriting year of account results for the 2023 closed year of account and the forecast
result for the 2024 year of account are as follows:
2023
YOA
Closed
2024
YOA
Open
2025
YOA
Open
Capacity
1
($’000)
513,000
584,550
445,500
Result/forecast ($’000)
195,921
161,953
*
Return on capacity (%)
38.2%
27.7%
*
1
Capacity, a GBP measure, has been converted to USD at the 2025 year end foreign exchange rate.
*
A formal forecast for the 2025 year of account is not released at the time of publishing these financial statements.
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2025 Annual Report and Financial Statements
Managing agent’s report
–
continued
Principal risks and uncertainties
The NSML Board has overall responsibility and accountability for the establishment and oversight of the
Syndicate’s risk management framework.
The Board has responsibility for identifying and assessing all material
risks and reviewing the Syndicate’s actual risk exposure against stated risk appetite on a regular basis. The
principal risks and uncertainties to which the Syndicate is exposed are set out below.
Insurance risk
Insurance risk includes the risk associated with inaccurate or inadequate pricing of insurance policies,
inappropriate or poorly controlled underwriting guidelines or authority limits (underwriting risk), higher
frequency or severity of claims experience (claims risk), or inadequate or insufficient loss reserving (reserving
risk).
The NSML Board manages insurance risk through the approved business plan, which sets out targets for
volumes, pricing, line sizes and exposure metrics by class of business. The Board has in place controls and
governance processes designed to monitor performance against the business plan through the year.
Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual
obligation. The notable exposure for the Syndicate is reinsurance counterparty risk which is the risk of default
by one or more of the Syndicate’s reinsurers and intermediaries.
NSML’s policy is that the Syndicate will
reinsure with approved reinsurers, either of high credit rating (rating of A- or better from an external credit
rating agency) or supported by collateralisation, where required. Where a reinsurer does not meet these
criteria, the Syndicate Management Committee is required to approve them individually before business can
be placed with them.
Market risk
The Syndicate is exposed to market risk through fluctuations in interest rates or exchange rates. Exposure to
foreign exchange movements arises where there are mismatches between assets and liabilities within the
currencies in which the Syndicate transacts. NSML’s policy is to maintain, where possible, income and
expenditure in the core currencies in which they are received or paid. Any surplus or deficit arising as a result
of this policy is subject to review by the Executive Committee and where required currency trades are
performed with the aim of eliminating currency mismatches.
The Syndicate’s exposure to changes in interest rates arises through its investment portfolio. NSML seeks to
minimise this risk by investing only in fixed interest securities or high-quality floating rate notes.
Liquidity risk
Liquidity risk is the risk that the Syndicate will not be able to meet its obligations as they fall due, owing to a
shortfall in cash.
To mitigate this risk, all funds are held in cash or in highly liquid money market funds or short
duration US treasury bills. Cash flow projections, under both normal and stressed conditions, are reviewed on
a regular basis to identify potential liquidity strains to allow timely remedial action to be taken.
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Managing agent’s report
– continued
Principal risks and uncertainties
– continued
Operational risk
This is the risk that errors caused by people, processes, systems and external events lead to losses to the
Syndicate.
NSML seeks to manage this risk using an operational risk and control framework throughout the
Syndicate, documented policies and processes and a structured programme of testing of processes and
systems by Internal Audit.
Business continuity and disaster recovery and succession plans are in place and
are regularly updated.
The Syndicate has articulated its climate risk appetite and there are clear tolerances in place to actively
manage exposures; these are monitored by and reported to the Executive Committee and the Board
regularly. The impact of climate risk is an important part of our underwriting risk assessment and pricing for
our underwriting portfolio.
Regulatory risk is the risk that regulatory requirements are not identified and/or implemented or are
misinterpreted and/or not complied with resulting in regulatory penalties. NSML is required to comply with the
requirements of the Financial Conduct Authority (FCA), Prudential Regulatory Authority (PRA) and Lloyd’s.
Lloyd’s requirements include those imposed on the Lloyd’s market by overseas regulators, particularly in
respect of US situs business.
NSML’s Director of Risk and Compliance is responsible for monitoring business
activity and regulatory developments and assesses any impact on NSML.
To ensure the Syndicate’s products and services deliver good outcomes for customers, it manages and
monitors its conduct risk through a suite of metrics as part of its documented conduct risk framework.
Group / Strategic risks
Group Risk is the risk of contagion that arises from being associated with key stakeholders and the impact that
activities and events that occur within other connected or third parties have on the business.
Strategic risk covers the risks faced by the Syndicate due to changes in underlying strategy of the business or
that of its key stakeholders (including strategic conflicts of interest). These risks are mitigated through robust
challenge of business plans and ongoing monitoring of the Syndicate’s performance and operations by the
Board and its sub-committees.
Environment, Social & Governance: Climate change
The Syndicate is exposed to both climate related risk and opportunities. The two major categories of risk being
physical risk and transition risk.
Physical risks are those relating to the physical impacts of climate change such
as increased frequency and severity of climate related events or longer-term shifts in climate patterns.
Transition risks are those relating to the transition to a lower carbon economy and include risks such as policy
and legal risk, technology risk and reputation risk. The Syndicate underwrites a portfolio of natural catastrophe
risks and is therefore more significantly impacted by physical risk. The syndicate has limited exposure to
transition risk from an underwriting perspective. Transition risk exposures on the asset side of the Syndicate’s
balance sheet from climate change is limited given the composition of the Syndicate’s investment portfolio.
The Syndicate’s underwriting operations consider the impact of climate change and manage this risk
effectively by validating and calibrating catastrophe risk models through an in-house data and research
team, making adjustments to catastrophe risk models to reflect Nephila’s view of the potential impacts of
climate change and risks that are not captured in vendor models.
The Syndicate has developed a Sustainability Framework, which outlines NSML’s approach to the
management of Sustainability impacts whilst considering relevant stakeholders, namely employees,
customers and the communities where it operates and transacts business.
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Managing agent’s report
– continued
Principal risks and uncertainties
– continued
Future developments
The Syndicate will continue to transact the current classes of general direct insurance and reinsurance
business. If opportunities arise to write new classes of business, these will be investigated at the appropriate
time.
The capacity for the 2026 year of account is $675.0m (£500.0m).
Post balance sheet events
Details of post balance sheet events are disclosed in note 21 of the financial statements.
Going concern
In assessing going concern for the Syndicate, the Directors reviewed the budgets and forecasts as well as the
available sources of capital and the uses of that capital and associated cash flow for the Syndicate. After
consideration of these factors, the Directors have concluded that there are no material uncertainties that
could cast significant doubt over the Syndicate’s ability to continue as a going concern for at least twelve
months from the date of signing the Syndicate annual accounts. Accordingly, they continue to adopt the
going concern basis of accounting when preparing the Syndicate annual accounts.
Directors
Details of the Directors of the Managing Agent that were serving at the year end and up to the date of signing
of the Syndicate annual accounts are provided on page 3.
Disclosure of information to the auditor
So far as each person who was a director of the Managing Agent at the date of approving the report is
aware, there is no relevant audit information, being information needed by the Syndicate auditor in
connection with the auditor's report, of which the auditor is unaware. Having made enquiries of fellow
directors of the Managing Agent and the Syndicate's auditor, each director has taken all the steps that he or
she ought to have taken as a director to become aware of any relevant audit information and to establish
that the Syndicate's auditor is aware of that information.
Auditor
Deloitte LLP has indicated its willingness to continue in office as the syndicate’s auditor. The managing agent
hereby gives formal notification of a proposal to reappoint Deloitte LLP as auditor of syndicate 2357 for a
further year.
Syndicate Annual General Meeting
As permitted under the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the Managing Agent
does not propose holding an annual meeting this year.
Approved by and signed on behalf of the Board:
A G Beatty
CEO
23 February 2026
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2025 Annual Report and Financial Statements
Statement of managing agent’s responsibilities
The managing agent is responsible for preparing the Syndicate annual accounts in accordance with
applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the
Regulations”) require the managing agent to prepare Syndicate annual financial statements as at 31
December each year in accordance with the United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law) including FRS 102 and FRS 103, the Financial
Reporting Standard applicable in the UK and Republic of Ireland. The Syndicate annual accounts are
required by law to give a true and fair view of the state of affairs of the Syndicate as at that date and of its
profit or loss for that year.
In preparing the Syndicate annual financial statements, the managing agent is required to:
–
select suitable accounting policies, which are applied consistently, subject to changes arising on the
adoption of new accounting standards in the year;
–
make judgements and accounting estimates that are reasonable and prudent;
–
state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
–
prepare the annual financial statements on the going concern basis unless it is inappropriate to presume
that the Syndicate will continue in business.
The managing agent is responsible for keeping adequate accounting records which disclose with reasonable
accuracy at any time the financial position of the Syndicate and enable it to comply with the Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. It is also responsible for
safeguarding the assets of the Syndicate and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities. Similarly, 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 the maintenance and integrity of the corporate and financial
information included on the business' website. Legislation in the United Kingdom governing the preparation
and dissemination of annual accounts may differ from legislation in other jurisdictions.
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2025 Annual Report and Financial Statements
Independent Auditor’s report to the member of Syndicate 2357
Report on the audit of the syndicate annual financial statements
Opinion
In our opinion the Annual Report and Financial Statements of Syndicate 2357 (the ‘syndicate’):
-
give a true and fair view of the state of the syndicate’s affairs as at 31/12/2025 and of its profit for the
year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland”; and
-
have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and sections 1 and 5 of the Syndicate
Accounts Instructions Version 3.1
as modified by the Frequently Asked Questions Version 1.1 issued by
Lloyd’s (the “Lloyd’s Syndicate Accounts Instructions”).
We have audited the syndicate Annual Report and Financial Statements which comprise:
-
the profit and loss account;
-
the balance sheet;
-
the statement of changes in members’ balances;
-
the cash flow statement;
-
the statement of accounting policies; and
-
the related notes 1 to 22.
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 financial statements 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 financial statements 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 financial statements, we have concluded that the managing agent’s use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue
in operations for a period of at least twelve months from when the syndicate financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report.
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Independent Auditor’s report to the member of Syndicate 2357
- continued
Other information
The other information comprises the information included in the annual report, other than the syndicate
annual financial statements and our auditor’s report thereon. The managing agent is responsible for the other
information contained within the annual report. Our opinion on the syndicate annual financial statements
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 financial statements 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 financial statements 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 financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the syndicate annual financial statements, 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 financial statements
Our objectives are to obtain reasonable assurance about whether the syndicate annual financial statements
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 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 financial statements.
A further description of our responsibilities for the audit of the syndicate annual financial statements is located
on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s
documentation of their policies and procedures relating to fraud and compliance with laws and regulations.
We also enquired of management, internal audit,
those charged with governance and inhouse legal counsel
about their own identification and assessment of the risks of irregularities.
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Independent Auditor’s report to the member of Syndicate 2357
- continued
Extent to which the audit was considered capable of detecting irregularities, including fraud
- continued
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and
identified the key laws and regulations that:
-
had a direct effect on the determination of material amounts and disclosures in the financial
statements. These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005), the Lloyd’s
Syndicate Accounts Instructions; and
-
do not have a direct effect on the financial statements but compliance with which may be
fundamental to the syndicate’s ability to operate or to avoid a material penalty. These included
permissions and supervisory requirements of Lloyd’s of London, The Prudential Regulation Authority
(PRA) and the Financial Conduct Authority (FCA) and the requirements of Solvency UK.
We discussed among the audit engagement team including relevant internal specialists such as actuarial
and IT specialists regarding the opportunities and incentives that may exist within the organisation for fraud
and how and where fraud might occur in the financial statements.
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:
-
The recognition of gross earned premiums involves complex methodologies, reliance on advanced
models and significant management judgement. Premiums are allocated into different components
with distinct earning patterns, and seasonality curves are applied to reflect the underlying risk profile,
which increases the potential for error or management bias. In response, we obtained an updated
understanding of the end-to-end process, evaluated the design and implementation of key controls,
and tested the completeness and accuracy of the underlying data. We involved actuarial specialists
to assess the appropriateness of the earning methodologies and key assumptions, and recalculated
earned premiums on a sample basis to verify the accuracy of the earning pattern and revenue
recognised.
-
Valuation of technical provisions includes assumptions and methodology requiring significant
management judgement and involves complex calculations, and therefore there is potential for
management bias. There is also a risk of overriding controls by making late adjustments to the
technical provisions. In response to these risks, we involved our actuarial specialists to develop
independent estimates of the technical provisions and we tested the late journal entries 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 financial statement disclosures by testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on
the financial statements;
-
performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
-
enquiring of management, internal audit, those charged with governance and in-house
legal
counsel concerning actual and potential litigation and claims, and instances of non-compliance with
laws and regulations; and
-
reading minutes of meetings of those charged with governance
,
reviewing internal audit reports and
reviewing correspondence with Lloyd’s, the FCA and the PRA.
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Independent Auditor’s report to the member of Syndicate 2357
- continued
Report on other legal and regulatory requirements
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions
-
In our opinion, based on the work undertaken in the course of the audit:
-
the information given in the managing agent’s report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
-
the managing agent’s report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the syndicate and its environment obtained in the course
of the audit, we have not identified any material misstatements in the managing agent’s report.
Matters on which we are required to report by exception
-
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 we are required to report in respect of the following matters if, in our opinion:
-
the managing agent in respect of the syndicate has not kept adequate accounting records; or
-
the syndicate annual financial statements 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 financial statements 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.
Geeta Joshi (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
23 February 2026
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Profit and loss account
For the year ended 31 December 2025
Technical account – general business
Notes
2025
$’000
2024
$’000
Gross premiums written
4
Outward reinsurance premiums
(335,720 )
(108,080 )
Premiums written, net of reinsurance
Change in provision for unearned premiums
– gross amount
14
(14,356 )
(40,148 )
– reinsurers’ share
14
Change in provision for unearned premiums, net of reinsurance
(11,816 )
(29,435 )
Earned premiums, net of reinsurance
Claims paid
– gross amount
(258,858 )
(267,492 )
– reinsurers’ share
Claims paid, net of reinsurance
(174,403 )
(167,893 )
Change in the provision for claims:
– gross amount
14
(38,964 )
– reinsurers’ share
14
(73,727 )
Change in provision for claims paid, net of reinsurance
(112,691 )
Claims incurred, net of reinsurance
(280,584 )
Net operating expenses
5
(77,235 )
(62,420 )
Balance on the technical account – general business
The notes 1 to 22 form an integral part of these financial statements.
15
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46
2025 Annual Report and Financial Statements
Profit and loss account
– continued
For the year ended 31 December 2025
Non-technical account
Notes
2025
$’000
2024
$’000
Balance on the technical account – general business
Investment income
Unrealised gains on investments
Investment expenses and charges
(5,710 )
(609 )
Total Investment Return
Loss on foreign exchange
(1,037 )
(6,358 )
Profit for the financial year
Other
Total Comprehensive Income for the financial year
All of the amounts above are in respect of continuing operations.
The notes 1 to 22 form an integral part of these financial statements.
Statement of changes in member’s balances
For the year ended 31 December 2025
Notes
2025
$’000
2024
$’000
Balance at start of year
Total comprehensive income for the year
Payments of profit to members’ personal reserve funds
(285,193 )
(206,366 )
Balance at end of year
The notes 1 to 22 form an integral part of these financial statements.
16
of
46
2025 Annual Report and Financial Statements
Balance sheet
As at 31 December 2025
Assets
Notes
2025
$’000
2024
$’000
Investments - financial investments
8, 17
Reinsurers' share of provision for unearned premiums
14
Reinsurers' share of claims outstanding
14
Reinsurers' share of technical provisions
Debtors arising out of direct insurance operations
9
Debtors arising out of reinsurance operations
10
Other debtors
11
Debtors
Cash at bank and in hand
17
Other assets
Deferred acquisition costs
12
Other prepayments and accrued income
Prepayments and accrued income
Total assets
The notes 1 to 22 form an integral part of these financial statements.
17
of
46
2025 Annual Report and Financial Statements
Balance sheet
– continued
As at 31 December 2025
Liabilities
Notes
2025
$’000
2024
$’000
Member’s balances
Total capital and reserves
Provision for unearned premiums
14
Claims outstanding
14
Technical provisions
Creditors arising out of reinsurance operations
15
Other creditors
16
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The notes 1 to 22 form an integral part of these financial statements.
These financial statements were approved by the Board of Nephila Syndicate Management Limited on
23 February 2026 and signed on its behalf by:
J A H G Cartwright
Finance Director
18
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46
2025 Annual Report and Financial Statements
Statement of cash flows
For the year ended 31 December 2025
Notes
2025
$’000
2024
$’000
Cash flows from operating activities
Profit for the financial year
Adjustments for:
(Decrease) / increase in gross technical provisions
(226,883 )
(Increase) / decrease in reinsurers’ share of gross technical provisions
(98,777 )
Decrease / (increase) in debtors
(23,213 )
Increase / (decrease) in creditors
(13,869 )
(Increase) / decrease in other assets / liabilities
(10,669 )
(5,240 )
Exchange (losses)/ gains
Investment return
(32,155 )
(39,845 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(606,979 )
(572,170 )
Sale of equity and debt instruments
Investment income received
Net cash flows from investing activities
(11,555 )
Cash flows from financing activities
Distribution of profit
(285,193 )
(206,366 )
Net cash flows from financing activities
(285,193 )
(206,366 )
Net decrease in cash and cash equivalents
(106,105 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(2,962 )
(7,794 )
Cash and cash equivalents at the end of the year
17
19
of
46
2025 Annual Report and Financial Statements
Notes to the financial statements
1.
Basis of preparation
Statement of compliance
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United
Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial
Reporting Standard 103 (FRS 103) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts
Instructions Version 3.1 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s. These
being applicable UK GAAP accounting standards, and in accordance with the provisions of Schedule 3 of
the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations relating to
insurance companies.
The principal accounting policies are summarised below. They have all been applied consistently throughout
the year and the preceding year.
Having taken into account the risks and uncertainties and the performance of the Syndicate as disclosed in
the managing agent’s report, which incorporates the strategic report, and after making inquiries, the directors
have a reasonable expectation that continued capital support will be in place such that the Syndicate will
continue to write business for at least twelve months after signing the Syndicate annual accounts. Accordingly,
the financial statements continue to adopt the going concern basis of accounting.
The financial statements are prepared under the historical cost convention except for certain financial
instruments which are measured at fair value.
The financial statements are prepared in US dollars which is the functional and presentational currency of the
Syndicate and rounded to the nearest $'000.
Syndicate 2357 is comprised of one member of the Society of Lloyd’s that underwrites insurance business in
the London Market. The address of the Syndicate’s managing agent is Walsingham House, 35 Seething Lane,
London EC3N 4AH.
20
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
2.
Accounting policies
Critical accounting judgements and key sources of estimation uncertainty
In the preparation of the financial statements, the directors of NSML have made judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the accounts, and the reported amounts of income and expenses during the reporting
period. Actual results may differ from those estimates.
Critical judgements in applying the syndicate’s accounting policies
There are no critical judgements, apart from those involving estimations in the process of applying the
syndicate’s accounting policies.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed below.
i.
Provision for claims outstanding
The provision for claims comprises amounts set aside for reported claims and incurred but not reported (‘IBNR’)
claims. The estimate of IBNR is subject to a greater degree of uncertainty than reported claims as it is based
on statistical techniques of estimation applied by actuaries as outlined below. Provision for claims outstanding
is disclosed in note 14.
ii.
Premium earning patterns (provision for unearned premium)
Premiums written are recognised as earned over the period of the policy on a time apportionment basis
having regard to the incidence of risk. A degree of estimation is required in determining the earning profile of
a policy where the incidence of risk is non-linear. Unearned premium is disclosed in note 14.
Significant accounting policies
The following principal accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Syndicate’s annual accounts.
Premiums
Premiums written comprise premiums on contracts incepted during the financial year.
Premiums are shown
gross of brokerage payable and exclude taxes and duties levied on them. Estimates are made for pipeline
premium, representing amounts due to the syndicate not yet notified.
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct inwards business. Outwards reinsurance premiums in relation to loss portfolio transfers and other
reinsurance contracts covering losses from prior accident years are recognised in full at inception, when the
contract transfers significant insurance risk to the reinsurer.
21
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
2.
Accounting policies
- continued
Unearned premiums
Premiums written are recognised as earned over the period of the policy on a time apportionment basis
having regard to the incidence of risk. In some cases, a non-linear earnings pattern is considered appropriate
due to the timing in incidence of risk. Unearned premiums represent the proportion of premiums written in the
year that relate to the unexpired period of policies in force at the balance sheet date.
Unearned reinsurance premiums are deferred over the term of the underlying policies for risks-attaching
contracts and over the term of the reinsurance contract for losses-occurring contracts.
Claims
Claims incurred represent the cost of claims and settlement expenses paid during the financial year, together
with the movement in provisions for outstanding claims and claims incurred but not reported ('IBNR').
Reinsurance recoveries are accounted for in the same period as the incurred claims for the related business.
The provision for claims comprises amounts set aside for claims notified and IBNR. The amount included in
respect of IBNR is based on statistical techniques of estimation applied by actuaries, on a best estimate basis,
and reviewed annually by external consulting actuaries.
These techniques generally use projections, based
on past experience of the development of claims over time, to form a view of the likely ultimate claims to be
experienced.
For the most recent years, where a high degree of volatility arises from projections, estimates
may be based in part on output from rating and other models of the business accepted and assessments of
underwriting conditions.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and
projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme
in place for the class of business and the claims experience for the year.
The Syndicate uses a number of
statistical techniques to assist in making these estimates.
Accordingly, the two most critical assumptions as regards claims provisions are that the past is a reasonable
predictor of the likely level of claims development and that the rating and other models used for current
business are fair reflections of the likely level of ultimate claims to be incurred.
The directors consider that the provisions for gross claims and related reinsurance recoveries are fairly stated
on the basis of the information currently available to them.
However, ultimate liability will vary as a result of
subsequent information and events, and this may result in significant adjustments to the amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in the financial
statements for the period in which the adjustments are made.
The methods used, and the estimates made,
are reviewed regularly.
Sensitivities of claims incurred and claims development table are included in note 3 and 13 of the financial
statements.
Deferred acquisition costs
Acquisition costs comprise the direct expenses of concluding insurance contracts written during the financial
year. Acquisition costs are accrued over a period equivalent to that over which the underlying business is
underwritten and are charged to the accounting periods in which the related premiums are earned. Deferred
acquisition costs represent the proportion of acquisition costs incurred in respect of unearned premiums at
the balance sheet date.
22
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
2.
Accounting policies
- continued
Liability adequacy testing
At each reporting date, liability adequacy tests are performed to ensure the adequacy of the claims liabilities
net of deferred acquisition costs and unearned premium reserves. If that assessment shows that the carrying
amount of insurance liabilities is inadequate in the light of estimated future cash flows, the entire deficiency
is immediately recognised in the profit and loss account.
A provision for unexpired risks is made where anticipated claims and related expenses arising after the end
of the financial year in respect of contracts concluded before that date, are expected to exceed the
unearned premiums under these contracts, after the deduction of any deferred acquisition costs. The
provision for unexpired risks is calculated separately by reference to classes of business which are managed
together, after taking into account relevant investment return.
At 31 December 2025 and 31 December 2024 the Syndicate did not have an unexpired risk provision.
Reinsurance assets
The Syndicate cedes insurance and reinsurance risk in the normal course of business. Reinsurance assets
represent balances due from reinsurers. Amounts recoverable from reinsurers are estimated in a manner
consistent with the outstanding claims provision or settled claims associated with the reinsurer's policies and
are in accordance with the related reinsurance contract.
Reinsurance assets arising from the placement of a loss portfolio transfer represent the ceded portion of
technical provisions and are recognised at inception, when significant insurance risk is transferred to the
reinsurer. Such reinsurance assets are measured on a basis consistent with the underlying gross reserves.
Reinsurance assets are reviewed for impairment at each reporting date, or more frequently, when an
indication of impairment arises during the reporting year. Impairment occurs when there is objective evidence
as a result of an event that occurred after initial recognition of the reinsurance asset that the Syndicate may
not receive all outstanding amounts due under the terms of the contract and the event has a reliably
measurable impact on the amounts that the Syndicate will receive from the reinsurer. The impairment loss is
recorded in the profit and loss account.
Gains or losses on buying reinsurance are recognised in the profit and loss account immediately at the date
of purchase and are not amortised.
Ceded reinsurance arrangements do not relieve the Syndicate from its obligations to policyholders.
Insurance and reinsurance receivables
Insurance and reinsurance receivables are recognised when due and measured on initial recognition at the
fair value of the consideration received or receivable. Subsequent to initial recognition, insurance and
reinsurance receivables are measured at amortised cost, using the effective interest rate method. The
carrying value of insurance and reinsurance receivables is reviewed for impairment whenever events or
circumstances indicate that the carrying amount may not be recoverable, with the impairment loss recorded
in the profit and loss account.
Insurance and reinsurance receivables are not recognised when the derecognition criteria for financial assets
have been met.
Insurance payables
Insurance payables are recognised when due and measured on initial recognition at the fair value of the
consideration received less directly attributable transaction costs. Subsequent to initial recognition, they are
measured at amortised cost using the effective interest rate method. Insurance payables are derecognised
when the obligation under the liability is settled, cancelled or expired.
23
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
2.
Accounting policies
- continued
Investment return
All investment return is recognised in the non-technical account. Investment return comprises all investment
income, realised investment gains and losses and movements in unrealised gains and losses, net of investment
expenses, charges and interest. Realised gains or losses represent the difference between the net sales
proceeds and purchase price. Unrealised gains and losses represent the difference between the valuation of
investments held at the balance sheet date and their purchase price.
The movement in unrealised gains and
losses therefore includes the reversal of previously recognised unrealised gains and losses on investments
disposed of in the current year.
Investments
All financial assets are designated as fair value through the profit or loss account upon initial recognition
because they are managed and their performance is evaluated on a fair value basis. These financial assets
are initially recognised at fair value with any transaction costs being expensed through the profit and loss
account.
For quoted investments where there is an active market, the fair value is the quoted bid price at the balance
sheet date. For quoted investments where there is no active market, the fair value is determined by reference
to prices for similar assets in active markets. For investments where there is no active market and no similar
assets in active markets, a fair value is derived from inputs that are not based on observable market data.
Realised and unrealised gains and losses arising from changes in the fair value of financial assets at fair value
through profit and loss are included in the profit and loss account in the period in which they arise.
Cash and cash equivalents
Cash and cash equivalents represent cash balances, money market deposits with banks and other short-term
highly liquid investments purchased within three months of maturity.
Financial liabilities
The Syndicate's financial liabilities include trade and other payables, borrowings and insurance payables,
where applicable. All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings, net of directly attributable transaction costs.
A financial liability is derecognised when the obligation under the liability is discharged or expires.
Foreign currencies
Foreign currency transactions are converted to the presentational and functional currency of the Syndicate
(US dollar) using the exchange rates prevailing at the date of the transactions. Assets and liabilities
denominated in foreign currency are revalued to functional currency at year end exchange rates and the
resultant differences are recognised as gains and losses in the non-technical account.
The currency exchange rates that have been used for principal foreign currency transactions are available
in note 22.
Tax
Under Schedule 19 of the Finance Act 1993, managing agents are not required to deduct basic rate income
tax from trading income. In addition, all UK basic rate income tax deducted from syndicate investment
income is recoverable by managing agents and consequently the distribution made to the member is gross
of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any other overseas tax payable by members on underwriting results or
investment earnings.
Profit commission
NSML does not charge the Syndicate a profit commission.
24
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3.
Risk management
Governance framework
The NSML Board is responsible for managing the risks of the Syndicate and has a comprehensive governance
structure and risk management framework in place.
The risk management framework enables risks to be
identified, assessed, managed and reported.
The Board also has a suite of comprehensive risk appetite
statements which reflect the Syndicate’s risk profile, business strategy and financial goals.
The Board is also responsible for ensuring that the Syndicate’s Internal Model is embedded in the operation
of its business and that the model is used to improve both the understanding of risk and the quality of the
decision making at all levels across the business.
Risk management is an integral part of the Syndicate’s decision-making and routine management and is
incorporated within the strategic and operational planning processes. As part of the risk management
framework, NSML has comprehensive policies and procedures in place which outline controls and business
conduct standards for day to day operations. Employees are expected to manage risk as defined through
their roles. This ensures that an assessment of risk remains central to decision-making.
The Governance, Risk and Compliance Function maintains the risk and governance frameworks and this
includes investigation and challenge around issues and events which may affect the Syndicate’s
understanding or management of risk.
Risk assessments are conducted on new projects, processes, systems and commercial activities to ensure that
these are aligned with the Syndicate’s objectives and goals. Any risks or opportunities arising from these
assessments are identified, analysed and reported to the Board or appropriate committee.
Capital management objectives, policies and approach
Capital framework at Lloyd’s
The Society of Lloyd's (Lloyd's) is a regulated undertaking and subject to the supervision of the Prudential
Regulatory Authority (PRA) under the Financial Services and Markets Act 2000.
Within the supervisory framework, Lloyd's applies capital requirements at member level and centrally to ensure
that Lloyd's complies with Solvency UK capital requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although Lloyd's capital setting processes use a capital requirement set at Syndicate level as a starting point,
the requirement to meet Solvency UK and Lloyd's capital requirements apply at overall and member level
only respectively, not at Syndicate level. Accordingly, the capital requirement in respect of Syndicate 2357 is
not disclosed in these financial statements.
25
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3.
Risk management –
continued
Capital management objectives, policies and approach - continued
Lloyd's capital setting process
In order to meet Lloyd's requirements, each Syndicate is required to calculate its Solvency Capital
Requirement (“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200
year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR 'to ultimate'). The
Syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one year
time horizon (one year SCR) for Lloyd's to use in meeting Solvency UK requirements. The SCRs of each
Syndicate are subject to review by Lloyd's and approval by the Lloyd's Capital and Planning Group.
A Syndicate may be comprised of one or more underwriting members of Lloyd's. Each member is liable for its
own share of underwriting liabilities of the Syndicate on which it is participating but not on other members’
shares. Accordingly, the capital requirement that Lloyd's sets for each member operates on a similar basis.
Each member's SCR shall thus be determined by the sum of the member's share of the Syndicate SCR 'to
ultimate'. Where a member participates on more than one Syndicate, a credit for diversification is provided
to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to
cover a 1 in 200 year loss 'to ultimate' for that member. Over and above this, Lloyd's applies a capital uplift to
the member's capital requirement, known as the Economic Capital Assessment (“ECA”). The purpose of this
uplift, which is a Lloyd's not a Solvency UK requirement, is to meet Lloyd's financial strength, licence and ratings
objectives. The capital uplift applied for 2025 was 35% (2024: 35%) of the member's SCR 'to ultimate'.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd's specifically for that
member (funds at Lloyd's), held within and managed within a Syndicate (funds in Syndicate) or as the
member's share of the member’s balances on each Syndicate on which it participates.
Insurance risk
The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit
payments or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity
of claims, actual benefits paid and subsequent development of long-term claims. Therefore, the objective of
the Syndicate is to ensure that sufficient reserves are available to cover these liabilities.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and
geographical areas. The variability of risks is also improved by careful selection and implementation of
underwriting strategy guidelines, as well as the use of reinsurance arrangements.
The Syndicate purchases reinsurance as part of its risk mitigation programme. From time to time, the Syndicate
purchases index-based reinsurance. The Syndicate also has proportional reinsurance arrangements in place.
Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims
provision and are in accordance with the reinsurance contracts.
The Reserve Committee oversees the management of reserving risk. The use of standardised and internal
modelling techniques, as well as benchmarking and the review of claims development are key in mitigating
reserving risk.
The purpose of these underwriting, reinsurance and reserving strategies is to limit exposure to catastrophes or
large losses based on the Syndicate's risk appetite as decided by the Board.
The Syndicate uses both its own and commercially available risk management software to assess catastrophe
exposure.
However, there is always a risk that the assumptions and techniques used in these models are unreliable or
that claims arising from an unmodelled event are greater than those arising from a modelled event.
26
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3. Risk management
– continued
Key assumptions
The principal assumption underlying the liability estimates is that the future claims development will follow a
similar pattern to past claims development experience. This includes assumptions in respect of average claim
costs, claim handling costs and claim numbers for each underwriting year.
Additional qualitative judgements are used to assess the extent to which past trends may not apply in the
future, for example: one-off occurrence, changes in market factors such as public attitude to claiming,
economic conditions, claim inflation factors, as well as internal factors such as portfolio mix, policy conditions
and claims handling procedures. Judgement is further used to assess the extent to which external factors such
as judicial decisions and government legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include variation in interest rates, delays in
settlement and changes in foreign currency rates.
Sensitivities
The claim liabilities are sensitive to the key assumptions that follow. It has not been possible to quantify the
sensitivity of certain assumptions such as legislative changes or uncertainty in the estimation process.
The following analysis is performed for reasonably possible movements in key assumptions with all other
assumptions held constant, showing the impact on gross and net liabilities, profit and member’s balances.
The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to
demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual
basis.
It should be noted that movements in these assumptions are non-linear
and that the level of reinsurance
recoveries arising from changes in gross claims will not be proportional to the gross losses.
General insurance business sensitivities as at 31
December 2025
Sensitivity
+5.0%
-5.0%
$’000
$’000
Claims outstanding - gross of reinsurance
(20,804 )
Claims outstanding - net of reinsurance
(8,418 )
General insurance business sensitivities as at 31
December 2024
Sensitivity
+5.0%
-5.0%
$’000
$’000
Claims outstanding - gross of reinsurance
(32,876 )
Claims outstanding - net of reinsurance
(25,301 )
The method used for deriving sensitivity information and significant assumptions did not change from the
previous period.
27
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46
2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3. Risk management
– continued
Credit risk
Credit risk is the risk of loss if a counterparty fails to meet its contractual obligations resulting in a financial loss
to the Syndicate. The Syndicate is exposed to credit risk primarily through its investment and insurance
activities.
The following policies and procedures are in place to mitigate the exposure to credit risk:
–
Investment guidelines are established setting out the quality of investments to be included within the
Syndicate’s portfolio. The policy is monitored by the Executive Committee.
–
Reinsurance is placed with counterparties that either have a credit rating of ‘A-’ or better from an external
credit rating agency or, where reinsurance is placed with unrated reinsurers, exposure is required to be
100% collateralised through the depositing of funds held in trust to the Syndicate. Concentration of risk is
avoided by following policy guidelines in respect of counterparties' limits. If the counterparty is
downgraded or does not have the required credit rating, then collateral is sought to mitigate any risk
where required. This is monitored by the Syndicate Management Committee, which may approve
exceptions in certain circumstances.
The tables below show the maximum exposure to credit risk (including an analysis of financial assets exposed
to credit risk) for the components of the balance sheet. The maximum exposure is shown gross, before the
effect of mitigation through collateral agreements.
As at 31 December 2025
Neither past
due or impaired
Past due
Impairment
allowance
Total
2025
2025
2025
2025
$’000
$’000
$’000
$’000
Shares and other variable yield securities and units in unit trusts
-
-
Debt securities and other fixed income securities
-
-
Syndicate loans to central fund
-
-
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 assets
1
-
-
As at 31 December 2024
Neither past
due or impaired
Past due
Impairment
allowance
Total
2024
2024
2024
2024
$’000
$’000
$’000
$’000
Shares and other variable yield securities and units in unit trusts
-
-
Debt securities and other fixed income securities
-
-
Syndicate loans to central fund
-
-
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 assets
1
-
-
1
Total assets excludes non-monetary items including deferred acquisition costs and reinsurers' share of unearned premiums.
28
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2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3.
Risk management
– continued
Credit risk – continued
Financial risk
The tables below provide information regarding the credit risk exposure of the Syndicate by classifying assets
according to independent credit ratings of the counterparties. AAA is the highest possible rating. Assets that
fall outside the range of AAA to BBB have not been rated.
As at 31 December 2025
AAA
AA
A
BBB
Other
Not
Rated
Total
2025
2025
2025
2025
2025
2025
2025
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Syndicate loans to central fund
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 assets
1
As at 31 December 2024
AAA
AA
A
BBB
Other
Not Rated
Total
2024
2024
2024
2024
2024
2024
2024
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Syndicate loans to central fund
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 assets
1
1
Total assets excludes non-monetary items including deferred acquisition costs and reinsurers' share of unearned premiums.
29
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2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
3. Risk management
– continued
Credit risk – continued
Maximum credit exposures
It is the Syndicate's policy to maintain accurate and consistent risk ratings across its credit portfolio. This
enables management to focus on the applicable risks and the comparison of credit exposures across all lines
of business.
Liquidity risk
Liquidity risk is the risk that cash may not be available, or that assets cannot be liquidated at a reasonable
price, to pay obligations when they fall due. The Syndicate is exposed to daily calls on its available cash
resources mainly from claims arising through insurance and reinsurance contracts. In respect of business
underwritten in certain international regions there is a requirement to collateralise exposure through regulated
trust funds in respect of gross insurance liabilities. This puts an additional burden on the Syndicate’s liquidity.
The Syndicate tries to reduce this risk by reviewing its expected cash obligations on a quarterly basis and
keeping adequate cash on deposit to meet those obligations.
The tables below summarise the maturity profile of the Syndicate's financial liabilities based on remaining
undiscounted contractual obligations, including interest payable and outstanding claim liabilities based on
the estimated timing of claim payments resulting from recognised insurance and reinsurance liabilities.
Repayments which are subject to notice are treated as if notice were to be given immediately.
No maturity
stated
Within 1
year
1-3 years
3-5 years
Over 5
years
Total
As at 31 December 2025
$’000
$’000
$’000
$’000
$’000
$’000
Claims outstanding
(181,833 )
(142,686 )
(54,613 )
(36,946 )
(416,078 )
Creditors
(294,594 )
(294,594 )
Total
(476,427 )
(142,686 )
(54,613 )
(36,946 )
(710,672 )
No maturity
stated
Within 1
year
1-3 years
3-5 years
Over 5
years
Total
As at 31 December 2024
$’000
$’000
$’000
$’000
$’000
$’000
Claims outstanding
(354,037 )
(190,113 )
(91,431 )
(21,938 )
(657,519 )
Creditors
(179,666 )
(179,666 )
Total
(533,703 )
(190,113 )
(91,431 )
(21,938 )
(837,185 )
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Notes to the financial statements
– continued
3. Risk management
– continued
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates.
The Syndicate transacts insurance business in Pound Sterling, Euro, US Dollar, Australian Dollar, Canadian Dollar,
Japanese Yen and New Zealand Dollar.
Assets are held in each of these currencies to generally match the
corresponding liabilities.
The Syndicate is exposed to movements in foreign exchange where there is a mismatch between assets and
liabilities in any of these currencies representing profits or losses recognised from the Syndicate’s insurance
operations.
When a mismatch occurs the Syndicate looks to limit this mismatch exposure, wherever possible.
The following tables summarise the exposure of the financial assets and liabilities to foreign currency
exchange risk at the reporting date.
As at 31 December 2025
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
2025
2025
2025
2025
2025
2025
2025
2025
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Investments
Reinsurers’ share of
technical provisions
(1,281 )
Debtors
(1,416 )
Other assets
Prepayment and accrued
income
Total assets
Technical provisions
(10,560 )
(526,995 )
(17,466 )
(119 )
(8,936 )
(1,111 )
(564,197 )
Creditors
(297,024 )
(294,594 )
Accruals and deferred
income
(6,559 )
(6,559 )
Total liabilities
(9,744 )
(830,578 )
(15,947 )
(54 )
(8,911 )
(1,108 )
(865,350 )
Total capital and reserves
(6,038 )
(424,914 )
(17,040 )
(13,234 )
(914 )
(17,160 )
(1,805 )
(481,105 )
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Notes to the financial statements
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3. Risk management
– continued
Currency risk - continued
As at 31 December 2024
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
2024
2024
2024
2024
2024
2024
2024
2024
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Investments
Reinsurers’ share of
technical provisions
Debtors
(206 )
(1,866 )
Other assets
Prepayment and accrued
income
Total assets
Technical provisions
(9,148 )
(752,780 )
(18,827 )
(542 )
(9,641 )
(1,318 )
(791,080 )
Creditors
(179,666 )
(179,666 )
Accruals and deferred
income
(1,314 )
(1,314 )
Total liabilities
(9,148 )
(933,760 )
(18,827 )
(542 )
(9,641 )
(1,318 )
(972,060 )
Total capital and reserves
(508,021 )
(13,454 )
(158 )
(7,637 )
(5,359 )
(530,722 )
Sensitivity to changes in foreign exchange rates
The tables below give an indication of the impact on profit of a percentage change in the relative strength
of US Dollar against the value of the Syndicate’s settlement currencies simultaneously. The analysis is based
on the information as at 31st December 2025.
Net assets
Net profit
2025
2024
2025
2024
$’000
$’000
$’000
$’000
US Dollar strengthens 10%
(5,619)
(2,270)
(5,619)
(2,270)
US Dollar strengthens 20%
(11,238)
(4,540)
(11,238)
(4,540)
A weakening of US Dollar against the above currencies at 31 December 2025 would have had an equal but
opposite effect to the amounts shown above, on the basis that all other variables remain constant.
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– continued
3. Risk management
– continued
Interest rate risk
Interest rate risk is the risk that the value of future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. Floating rate instruments expose the Syndicate to cash flow interest risk,
whereas fixed rate instruments expose the Syndicate to fair value interest risk.
The Syndicate has no significant concentration of interest rate risk. Insurance liabilities are not discounted and
therefore are not exposed to interest rate risk.
Impact on members’
balances
Impact on results
before tax
2025
2024
2025
2024
$’000
$’000
$’000
$’000
+ 50 basis points shift in yield curves
- 50 basis points shift in yield curves
(366 )
(397 )
(366 )
(397 )
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Notes to the financial statements
– continued
4.
Analysis of underwriting result
Segmental information is presented in respect of reportable segments. These are based on the Syndicate’s
management and internal reporting structures. All business is concluded in the UK. An analysis of the
underwriting result before investment return is set out below.
For the year ended 31
December 2025:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balances
Underwriting
Result
$’000
$’000
$’000
$’000
$’000
$’000
Marine, aviation and
transport
(138 )
(147 )
(116 )
Fire and other damage to
property
(15,535 )
(45,152 )
(44,728 )
Total direct insurance
(15,682 )
(45,268 )
(44,644 )
Reinsurance acceptances
(30,268 )
(106,488 )
Total
(13,859 )
(75,536 )
(151,132 )
For the year ended 31
December 2024:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balances
Underwriting
Result
$’000
$’000
$’000
$’000
$’000
$’000
Marine, aviation and transport
(375 )
(301 )
(241 )
(83 )
Fire and other damage to
property
(9,690 )
(9,779 )
Total direct insurance
(9,991 )
(10,020 )
Reinsurance acceptances
(319,435 )
(54,081 )
(59,823 )
Total
(306,456 )
(64,072 )
(69,843 )
The gross premiums written received from four customers (2024: two customers) were individually greater than
10 per cent of the total gross premiums written.
The reinsurance balance is the aggregate total of all those items included in the technical account of the
profit and loss account which relate to reinsurance.
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Notes to the financial statements
– continued
4.
Analysis of underwriting result
- continued
The gross premiums written for direct insurance by location (where the contracts were concluded) is
presented in the table below:
2025
2024
$’000
$’000
Rest of World
Total gross premiums written
5.
Net operating expenses
2025
2024
$’000
$’000
Acquisition costs
Change in deferred acquisition costs
(14,742 )
(4,467 )
Reinsurance commissions and profit participation
(1,652 )
Administrative expenses
Members’ standard personal expenses
Total net operating expenses
Member’s standard personal expenses comprise member subscriptions, new central fund contributions and
managing agent fees.
Total commissions for direct insurance business for the year amounted to:
2025
2024
$’000
$’000
Total commission for direct insurance business
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Notes to the financial statements
– continued
5.
Net operating expenses
- continued
Administrative expenses include:
2025
2024
$’000
$’000
Auditors’ remuneration:
Fees payable to the syndicate’s auditor for the audit of these financial
statements
Fees payable to the syndicate’s auditor and its associates in respect of other
services pursuant to legislation
Fees payable to the syndicate’s auditor and its associates in respect of other services pursuant to legislation
includes a Statement of Actuarial Opinion on the technical provisions of the Syndicate.
Fees payable to Deloitte LLP for the audit of the annual accounts of Nephila Syndicate Management Limited
are $37.2k (2024: $30.8k). Fees payable for audit-related assurance services provided to the managing agent
are $4.1k (2024: $7k). There were no other fees payable for the provision of other non-audit services.
6.
Key management personnel compensation
The aggregate emoluments of the Directors and staff of the Managing Agent are met by Nephila
Management Services Ltd. and are disclosed within the financial statements of that company.
The Syndicate’s active underwriter, S G Drysdale, received emoluments in respect of the role of active
underwriter for the Syndicate through Nephila Syndicate Services Limited. The active underwriter received
the following aggregate remuneration charged to the syndicate:
2025
2024
$’000
$’000
Emoluments
No other compensation was payable to key management personnel.
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2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
7.
Investment return
2025
2024
$’000
$’000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
Interest on cash at bank
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
Unrealised gains on investment
Investment management expenses
(5,710 )
(609 )
Total investment Return
Investment return includes amounts contractually attributable to the reinsurer under the funds withheld loss
portfolio transfer arrangement. Under this agreement, investment income earned on assets held by the
syndicate is partly payable to the reinsurer in accordance with the contractual terms. A charge of $5.3m
(2024: $0.0m) representing amounts due to the reinsurer has been included within investment management
expenses.
8.
Financial investments
Cost
Cost
Carrying value
Carrying value
2025
2024
2025
2024
$’000
$’000
$’000
$’000
Shares and other variable yield securities and
units in unit trusts
Syndicate loans to central fund
Debt securities and other fixed income
securities
Total financial investments
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– continued
8.
Financial investments
– continued
The table below presents an analysis of financial investments by their measurement classification:
2025
2024
$’000
$’000
Financial assets measured at fair value through profit or loss
Total
All investment return arises from investments designated as fair value through profit and loss.
There was no material change in fair value for financial instruments held at fair value attributable to own
credit risk in the current or comparative period.
Financial investments are classified using the fair value hierarchy in accordance with the FRS 102.
The levels within the fair value hierarchy are defined as follows:
–
Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity
can access at the measurement date;
–
Level 2 – inputs other than quoted prices included within level 1 that are observable (i.e. developed using
market data) for the asset or liability, either directly or indirectly;
–
Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Level 1
$’000
Level 2
$’000
Level 3
$’000
Assets
held at
amortised
cost
Total
$’000
2025
Shares and other variable yield securities and units in unit
trusts
Syndicate loans to central fund
Debt securities and other fixed income securities
Total financial investments
Level 1
$’000
Level 2
$’000
Level 3
$’000
Assets
held at
amortised
cost
Total
$’000
2024
Shares and other variable yield securities and units in unit
trusts
Syndicate loans to central fund
Debt securities and other fixed income securities
Total financial investments
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2025 Annual Report and Financial Statements
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9.
Debtors arising out of direct insurance operations
2025
2024
$’000
$’000
Due within one year
Due after one year
Total
10.
Debtors arising out of reinsurance operations
2025
2024
$’000
$’000
Due within one year
Due after one year
Total
11.
Other debtors
2025
2024
$’000
$’000
Other
Total
12.
Deferred acquisition costs
2025
2024
Gross
Reinsurance
Net
Gross
Reinsurance
Net
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 January
(57 )
(309 )
Incurred deferred acquisition costs
(1,673 )
Amortised deferred acquisition costs
(64,245 )
(62,546 )
(51,277 )
(1,652 )
(52,929 )
Foreign exchange movements
(18 )
(18 )
Other
Balance at 31 December
(31 )
(57 )
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Notes to the financial statements
– continued
13.
Claims development
Claims development table
The following tables show the Syndicate's cumulative incurred claims development, including both claims
notified and IBNR for each underwriting year, together with the cumulative payments to date on a gross and
net of reinsurance basis at the balance sheet date.
Claims development is expected when the underwriting year is at an early stage of development as the
premiums to which the claims relate are earned.
The Syndicate has elected to translate estimated claims and claims payments at a consistent rate of
exchange as determined at the balance sheet date.
The uncertainty associated with the ultimate claims experience of an underwriting year is greatest when the
underwriting year is at an early stage of development and when the risk margin for future experience
potentially being more adverse than has been assumed is at its highest. As claims develop, and the ultimate
cost of the claims becomes more certain, the relative level of margin should decrease. Due, however, to the
uncertainty inherent in the claims estimation process, initial reserves may not always be in a surplus.
Claims development table gross of reinsurance
Pure underwriting year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Estimate of gross claims
at end of
underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Estimate of gross
claims reserve
Provision in
respect of prior
years
Less gross claims
paid
(52,897 )
(462,117 )
(556,536 )
(374,582 )
(479,375 )
(479,810 )
(210,623 )
(148,977 )
(174,641 )
(7,733 )
(2,947,291 )
Gross claims
reserve
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2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
13.
Claims development
- continued
Claims development table net of reinsurance
Pure underwriting year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Estimate of net claims
at end of
underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Estimate of net
claims reserve
Provision in
respect of prior
years
Less net claims
paid
(47,940 )
(310,903 )
(337,120 )
(239,634 )
(162,596 )
(83,562 )
(132,052 )
(71,238 )
(171,104 )
(7,733 )
(1,563,882 )
Net claims reserve
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2025 Annual Report and Financial Statements
Notes to the financial statements
– continued
14.
Technical provisions
The gross liabilities for claims reported, loss adjustment expenses and claims incurred but not reported are net
of expected recoveries from salvage and subrogation. The amounts for salvage and subrogation at the end
of the current and prior year are not material.
2025
2024
Gross
Provisions
Reinsurance
assets
Net
Gross
Provisions
Reinsurance
assets
Net
Claims Outstanding
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 January
(151,490 )
(225,217 )
Claims paid during the year
(258,858 )
(174,403 )
(267,492 )
(167,893 )
Expected cost of current year
claims
(38,836 )
Change in estimates of prior year
provisions*
(71,572 )
(186,835 )
(258,407 )
(80,123 )
(67,159 )
Foreign exchange movements
Balance at 31 December
(247,728 )
(151,490 )
2025
2024
Gross
Provisions
Reinsurance
assets
Net
Gross
Provisions
Reinsurance
assets
Net
Unearned Premiums
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 January
(45,044 )
(34,331 )
Premiums written during the year
(335,720 )
(108,080 )
Premiums earned during the year
(450,281 )
(117,101 )
(569,372 )
(472,005 )
Foreign exchange movements
(239 )
(239 )
Balance at 31 December
(47,583 )
(45,044 )
*During the year, the Syndicate entered into a loss portfolio transfer (LPT) agreement providing reinsurance protection for 100% of the net
claims reserves relating to the 2023 and prior years of account. On inception, the Syndicate recognised outward reinsurance premiums
of $239.4m, which were fully written and earned, together with reinsurance recoveries of $220.4m in respect of covered losses.
The placement of the contract, which was structured on a funds-withheld basis, resulted in the recognition of a reinsurance recoverable
asset and a reinsurance premium payable creditor. Provision has been made for the investment return generated on the withheld funds
which, under the terms of the LPT agreement, is payable to the reinsurer. Recoveries under the contract are first offset against the funds-
withheld balance.
Subsequent to 31 December 2025, the Syndicate entered into an external reinsurance to close transaction covering all business of the
2023 and prior years of account.
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Notes to the financial statements
– continued
15.
Creditors arising out of reinsurance operations
2025
2024
$’000
$’000
Due within one year
Due after one year
Total
16.
Other creditors
2025
2024
$’000
$’000
Other liabilities
Total
All amounts are expected to be payable within one year.
17.
Cash and cash equivalents
2025
2024
$’000
$’000
Cash at bank and in hand
Short term debt instruments presented within other financial investments
Total cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the
Syndicate in the management of its short-term commitments are included in cash and cash equivalents.
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Notes to the financial statements
– continued
18.
Related parties
NSML is the Managing Agent of Syndicate 2357. The total fees charged for provision of services and support
to Syndicate 2357 in 2025 were managing agent fees of $5.6m (2024: $6.3m). The address of the Syndicate’s
managing agent is Walsingham House, 35 Seething Lane, London EC3N 4AH.
The immediate parent undertaking of Nephila Syndicate Management Limited is Nephila Syndicate
Management Holdings Ltd. (NSMH), a company incorporated and registered in the United Kingdom. The
ultimate parent and controlling party is Markel Group Inc., a company incorporated and registered in the
United States of America. Group financial statements for Markel Group Inc. are available from 4521
Highwoods Parkway, Glen Allen, Virginia 23060-6148, USA.
Syndicate 2357’s dedicated capital provider is Nephila 2357 Ltd., whose ultimate parent is Nephila Syndicate
Holdings Ltd., a company incorporated and registered in Bermuda. Syndicate 2357 benefits from
collateralised reinsurance provided by Demeter Re Ltd., a class III Bermuda reinsurer.
During 2025, no business was ceded to Demeter Re Ltd. (2024: $14.7m was ceded to Demeter Re Ltd.). The
amount outstanding to Demeter Re Ltd. at 31 December 2025 was $1.8m (31 December 2024: $9.3m due
from Demeter Re Ltd.).
Nephila Syndicate Holdings Ltd. and Demeter Re Ltd. are managed by Nephila Capital Ltd., a company
incorporated in Bermuda.
19.
Funds at Lloyd’s
Every member of Lloyd’s is required to hold capital at Lloyd’s. This capital is held in trust and is known as Funds
at Lloyd’s (‘FAL’). The funds are intended primarily to cover circumstances where Syndicate assets prove
insufficient to meet participating member’s underwriting activities.
The level of FAL that Lloyd’s requires a member to maintain is ultimately determined by Lloyd’s taking account,
inter alia, of a number of factors including the nature and amount of underwriting risk assumed by the
member and the assessment of the reserving risk in respect of business that has already been underwritten.
FAL is not under the management of the managing agent, so no amounts have been shown in these financial
statements to reflect it. The managing agent is able to make a call on member’s FAL to meet liquidity
requirements and to settle losses should this be required.
20.
Off balance sheet items
The Syndicate has not been party to any arrangement which is not reflected on the balance sheet, where
material risks and benefits arise for the Syndicate.
21.
Post balance sheet events
Immediately following the balance sheet date of 31 December 2025, the 2023 Year of Account closed by
way of an external Reinsurance to Close(‘RITC’). The Syndicate entered into the RITC agreement on 20
February 2026, thereby transferring all remaining liabilities of the 2023 Year of Account to the reinsurer with
effect from 1 January 2026.
The RITC premium payable of $3.5m was met by the net assets of the closing year after allowance for the
closing result distribution of $195.9m. The distribution is payable to the member in May 2026.
As the agreement was concluded after the reporting date, it is treated as a non-adjusting post balance sheet
event in accordance with FRS 102 Section 32 Events after the end of the reporting period. Accordingly, the
financial statements do not reflect the impact of this transaction.
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Notes to the financial statements
– continued
22.
Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025
2024
Start of period
rate
End of period
rate
Average
rate
Start of period
rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
New Zealand dollar
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