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Argenta Syndicate Management Limited
Syndicate 2121
Report, Annual Accounts
and Underwriting Year Accounts
as at 31 December 2025
Argenta Syndicate 2121
1
Company Information
Directors
Paul Wilson
Nicholas J Moore
Graham K Allen
Sven Althoff
Shawn Baggs
Rosemary F Beaver
Ralph M Beutter
Ian Burford
Miriam C Goddard
Nigel S Meyer
Niranjan Nathan
Anne-Kathrin Saake
Registered office
5th Floor
70 Gracechurch Street
London EC3V 0XL
Registered in England number 3632880
Independent auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Syndicate bankers
Barclays Bank PLC
1 Churchill Place
Canary Wharf
London E14 5HP
Citibank N.A.
Citigroup Centre
33 Canada Square
Canary Wharf
London E14 5LB
Royal Trust Corporation of Canada
Royal Trust Tower
Toronto
Ontario M5W 1P9
Syndicate actuaries
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Managing agency independent auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
2
Contents of Report and Accounts
Page
Managing Agent’s Report 3
Annual Accounts
Statement of managing agent’s responsibilities 19
Independent auditors’ report 20
Income statement: technical account – general business 25
Income statement: non-technical account 26
Statement of changes in members’ balances 27
Statement of financial position 28
Statement of cash flows 30
Notes to the accounts 31
2023 Underwriting Year Accounts
Statement of managing agent’s responsibilities 79
Independent auditors’ report 80
Income statement for the 2023 year of account: technical account – general business 83
Income statement for the 2023 year of account: non-technical account 84
Statement of changes in members’ balances 85
Statement of financial position 86
Statement of cash flows 87
Notes to the accounts 88
Argenta Syndicate 2121
3
Managing Agent’s Report
The directors of Argenta Syndicate Management Limited (“ASML”), a company registered in England and Wales, present
their report for the year ended 31 December 2025.
The annual accounts are prepared using the annual basis of accounting as required by Statutory Instrument No. 1950 of
2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008
Regulations”). They are also prepared in accordance with Lloyd’s Syndicate Accounts Instructions version 3.1 as modified by
the Frequently Asked Questions version 1.1 issued by Lloyd’s.
A separate set of underwriting year accounts has been prepared on the traditional three year accounting basis in
accordance with the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005). These relate to the 2023 year of account which
has been reinsured to close with effect from 31 December 2025.
The financial reporting framework that has been applied is United Kingdom Generally Accepted Accounting Practice
(“UK GAAP”) including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and
Republic of Ireland’ (“FRS 102”) and Financial Reporting Standard 103 ‘Insurance Contracts’ (“FRS 103”).
Principal activity
There has been no change during the year to the syndicate’s principal activity which continues to be the transaction of
general insurance and reinsurance business.
Overview of business
Syndicate 2121 continues to operate within the Lloyd’s insurance market from its principal office in London and through
a service company, Argenta International Limited (“AIL”) which is also domiciled in the UK. AIL has a branch in
Tuggerah, north of Sydney in Australia and underwrites a niche property account, predominantly in the New South
Wales region, on behalf of Syndicate 2121.
The business written by AIL was, until 30 June 2025, underwritten through Argenta Underwriting Asia Pte Ltd (“AUA”).
AUA, which is domiciled in Singapore and also had a branch office in Sydney. Syndicate 2121 stopped underwriting
through the Sydney office in 2024, and the branch has now been closed. The business continues to run-off, with all
remaining policies expiring during 2026.
The Syndicate ceased underwriting via the Lloyd’s Asia platform in Singapore in 2022 and there are no remaining live
underwriting exposures.
Syndicate 2121 underwrites a well balanced portfolio of both insurance and reinsurance business across a broad selection
of marine and non-marine classes. The tail characteristics of the syndicate continue to be roughly two-thirds short-tail
and one-third long-tail.
The portfolio underwritten can be broken down into seven main areas, as follows:
·
Property (including terrorism)
·
Energy (offshore, utilities and liability)
·
Marine (liability, cargo and specie)
·
Specialty (political risks, cyber, warranty and indemnity)
·
Worldwide property treaty reinsurance
·
Casualty (insurance and reinsurance)
·
Financial lines and professional indemnity
4
Managing Agent’s Report
continued
Overview of business
continued
Overall, the portfolio has a worldwide spread and comprises business assumed through single risk writings, reinsurance
treaties, Lloyd’s market consortia and coverage provided through third party delegated underwriting authorities.
The composition of the overall book remains stable, with a significant account being the direct and facultative property
book. This is built around a number of long-standing relationships with managing general agents from across the world
with a particular focus on the USA, written alongside a property open market account with a similar geographical focus.
The syndicate continues to write a relatively modest sized worldwide property treaty account split between catastrophe
excess of loss and a small book of risk excess business.
The energy book, which offers a wide range of cover including utilities, exploration, production and distribution risks,
continues to perform well and is adapting to the new technologies and processes being developed by its clients.
The marine book consists of the traditional Lloyd’s classes including cargo, specie, fine art and liability exposures, both in
conjunction with physical damage lines and on a standalone basis.
The cyber portfolio, written predominantly through participation on Lloyd’s approved consortia and binding authorities,
focuses on trading partners with like-minded businesses that put profitability above volume. This account has avoided
the recent high-profile losses that have affected this sector.
The political risk team is seeing an increased demand for its products as a result of the continuing worldwide geopolitical
instability. This environment creates uncertainty, leading to an increased interest by banks, traders and the like in
purchasing political risk and/or credit insurance to help cover their trading positions.
The syndicate’s casualty account, written predominantly via binding authorities given to US specialist underwriting
agencies, has grown to a point where it now accounts for just over a quarter of the overall gross premium income
written by the syndicate.
Stamp capacity for the 2025 year of account was £800 million, the same as 2024. Whilst the planned utilisation for the
year was 83.6%, the syndicate is forecast to have ultimately written 82.7% of stamp capacity. The modest reduction in
utilised capacity arose as the syndicate reacted to the rapidly changing, and challenging, trading environment during the
year, as well as not achieving a few planned-for opportunities that did not materialise as expected.
Review of underwriting activities
Back in May 2025, the US National Oceanic and Atmospheric Administration (“NOAA”) predicted that the upcoming
hurricane season would be “above average” for activity, meaning they expected there to be an increased frequency of
intensely powerful hurricanes during 2025, when compared to prior years. The Atlantic hurricane season, which runs
broadly from 1 June until 30 November, has now run its course without a major hurricane hitting the US mainland; the
first time this has happened in a decade. The most notable windstorm of the year, named Melissa, devastated Jamaica
making landfall as a Category 5 storm on 28 October. Whilst the syndicate did not have significant losses from this event,
sadly, the island of Jamaica was not well prepared for such an intense storm, the worst to strike the island since
Hurricane Gilbert in 1988, and 45 people lost their lives.
Overall, hurricane activity in the Atlantic basin was material, as predicted, with 13 named storms, three of which became
Category 5 on the Saffir-Simpson scale of intensity. The fact that the US was spared any direct hurricane activity means
that the only major catastrophe of the year to affect the mainland began on 7 January when an incredibly wealthy area
Argenta Syndicate 2121
5
Review of underwriting activities
continued
in California, known as the Palisades, hit the headlines and news channels. A wildfire broke out, moving quickly through
the area driven by wind speeds near to hurricane force. This fire was unique in many ways; not only did it affect a
coastal region, many miles away from known wildfire topography, it also destroyed the homes of many well-known film
and music artists. Unsurprisingly the Palisades fire, along with a smaller yet equally destructive fire to the north called
Eaton that happened around the same time, are together the most catastrophically expensive wildfires in history, with a
current estimated market loss of around US$40 billion. There was also a very active tornado season in the US, with the
first EF5 rated tornado (Enhanced Fujita scale, rating tornados from 1, the weakest, to 5, the strongest) forming since
2013. The overall season, that broadly runs from February to May, was notably violent with eight tornados registering as
EF4, again not seen since 2013.
Market conditions remained favourable even though the trading environment was challenging as the syndicate faced
the strengthening headwinds of a softening market. It was fortuitous that an active hurricane season passed without any
of the storms making landfall on the US mainland, but that means many businesses will be able to release the claims
reserve budgets they hold for such losses, exacerbating the speed of the softening in rates in some lines. Overall, at the
syndicate level, risk adjusted rate change for the year closed at 0.5% down, relatively close to the plus 0.1% estimate the
syndicate had in the 2025 business plan. This is, however, masking very aggressive behaviour from some in the market
who are cutting rates unnecessarily to gain market share. The energy, open market property and power and utility units
are under particular pressure, working hard to maintain a good rate adequacy yet having to face reductions of up to,
and sometimes beyond, 20% to remain competitive. This is not sustainable and, hopefully those aggressors will soon see
sense. The syndicate remains focussed on long term pricing adequacy and is prepared to walk away from inadequately
priced business if the required margins are not present.
It is pleasing that the syndicate is able to declare a profit of £99.6 million for the year with a net combined ratio of
91.4%.
The table below summarises the capacity, premium volumes and performance of Syndicate 2121 for 2025 alongside
comparative numbers for 2024. Other than in respect of capacity, the numbers shown are on an annually accounted
basis. The table is followed by further detailed comments in relation to each of the years on an annually accounted basis
and also on an underwriting year of account basis.
Key performance indicators 2025 2024
Capacity (underwriting year) £800 million £800 million
Premiums written gross of commission £797 million £835 million
Net premiums earned £544 million £570 million
Profit for the year £100 million £106 million
Claims ratio (net)
(i)
50.5% 48.1%
Combined ratio
(ii)
91.4% 88.0%
(i)
Ratio of net claims incurred to net premiums earned.
(ii)
Ratio of net claims incurred, commissions and expenses (excluding exchange differences) to net premiums earned.
6
Managing Agent’s Report
continued
Review of underwriting activities
continued
2023 year of account
During the year, work that began in 2022 to re-profile the underwriting portfolio continued, by closing the UK insurance
unit and putting the class into an orderly run-off.
In comparison to 2022, the storm activity during the year was relatively modest, with most losses coming from the
extreme tornado activity seen in the early part of the year. It was, however, the fourth year in a row that overall natural
peril insured losses exceeded the US$100 billion mark, with the previous ten year average being just under that
threshold.
The year will be remembered for the awful events of 7 October 2023 when Hamas launched an attack on Israel. The
world is still living with the seismic effects of this act of hostility, having to navigate an ever-changing geopolitical
climate exacerbated by this attack, but already heightened as a result of Russia’s invasion of Ukraine that continues to
this day.
Overall market conditions, however, remained favourable and the syndicate was able to achieve a healthy rate increase
across the book averaging plus 8.0%, in addition to the rate increases already achieved in 2022.
This year of account has been closed with a healthy return on capacity of 15.2%.
2024 year of account
On 26 March 2024, a large containership, Dali, struck the Francis Scott Key Bridge in Baltimore, causing the bridge to
collapse and sadly taking the lives of six highway workers. As expected with a large loss as complex as this, the claims
adjustment and settlement process is taking a long time to reach a conclusion. Whilst this could possibly be the largest
ever marine claims incident, Syndicate 2121 had very little exposure and the loss incurred by the syndicate was not
material.
The Palisades and Eaton wildfire losses that occurred in January 2025, referred to earlier, have impacted the 2024 year of
account. As expected for a large catastrophic loss such as this, the syndicate’s comprehensive reinsurance programme has
attached, meaning that the net retained loss has been reduced to a more manageable level.
The trading conditions for 2024 continued to be favourable, building on the momentum from 2023. As a result, the
forecast profit for this year of account is between 4.5% and 12.5% of capacity.
2025 year of account
As indicated above, major loss activity in the year started early with the largest wildfire event in recorded history that
began on 7 January 2025, devastating a high-profile and incredibly wealthy area of the Californian coastline. Whilst a
loss such as this was unprecedented, it has given the syndicate the opportunity to review its activities in the classes
affected and improve the overall underwriting of the wildfire peril and the associated aggregation strategies. There
were some positives to take from the syndicate’s involvement in paying claims to those affected by both the Palisades
and Eaton wildfires. With the syndicate writing a predominantly homeowners account in the area, the claims team was
able to proactively review the homes affected using satellite imagery and, due to the severity of the losses involved,
settle claims quickly without the need for a long drawn out adjustment process. Put simply, these homes were destroyed
to the point that only the concrete base slabs remained, meaning most of the claims were settled within six weeks of the
loss occurring. It is also a reminder that insurance plays a critical role in helping society manage risk, rebuild lives and
maintain resilience in an increasingly volatile world.
Argenta Syndicate 2121
7
Review of underwriting activities
continued
As mentioned earlier, market catastrophic loss activity for the year was relatively light when compared to 2024 (which is
estimated to be around USD140 billion) with the 2025 estimate being around USD107 billion (according to a major
reinsurer based in Switzerland). This is the sixth consecutive year in which the catastrophe loss activity has passed the
US$100 billion mark.
Trading conditions for 2026
Trading conditions for 2025 were good. There were, however, pockets of challenging market behaviour. As the syndicate
enters a new year of account, the rate adequacy remains good in all the lines it writes, but in some segments the
pressure to reduce prices intensified dramatically throughout 2025. There were areas, such as the casualty portfolio,
which continued to see modest rate increases throughout 2025, whereas the shorter-tail account, and in particular the
classes mentioned previously being energy, property open market and power and utility, have had to react to a rapidly
declining rating environment throughout the year. To reiterate, price adequacy is good as the syndicate looks forward to
2026, and in these shorter-tail classes, the current adequacy can still be categorised as very good, meaning the syndicate
is able to tolerate most of the reductions being seen. The market will reach a point, however, where tough decisions will
need to be made, meaning the syndicate declining an increasing amount of under-priced business. That point has not yet
been reached, and may not be in 2026. The syndicate, however, will not drop its guard as it works hard to maintain
profitability.
The syndicate’s appetite for catastrophe exposure remains consistent with that adopted in previous years and the risk
metrics for major US and International perils are expected to remain in line with previous years at a whole account level.
The syndicate continues to purchase a comprehensive reinsurance programme for all relevant lines of business.
Finally, and as in previous years, further new classes of business will continue to be considered but only where they
complement the syndicate’s existing portfolio and provide for either the recruitment of individuals or teams who offer
experience, expertise and a proven track record, or through further support of leading market practitioners on Lloyd’s
approved consortia or MGA arrangements.
Sustainability strategy
ASML is committed to developing a sustainable business and considers this to be one of the long-term measures of
success. In this regard, ASML will consider the impact of the company’s activities on the environment, both operationally
and in respect of its underwriting and investment strategies, and the wellbeing of its clients, employees, suppliers and
society more generally. In this regard, ASML will assess its performance in the key areas of environmental, social and
governance (“ESG”) impacts.
Environmental
ASML seeks to protect the environment and to address through its actions, the challenges presented by climate
change, energy demands, scarcity of resources, pollution and waste. It will work with its clients and other
stakeholders to develop solutions to these environmental challenges. ASML aspires to be a net zero business by 2050,
across its underwriting and investment porfolios. Operationally, ASML is committed to reducing its carbon emissions
and implementing appropriate measures to achieve as far as possible, over time, carbon neutrality. In areas where
this is not possible, ASML will seek to offset its calculated CO2 emissions through participation in carbon offset
schemes or carbon capture projects.
8
Managing Agent’s Report
continued
Sustainability strategy
continued
Social
ASML recognises its social responsibilities and the importance of its contribution to improving social outcomes for all. In
doing so, ASML will take action through its initiatives in human rights, health, safety and wellbeing, diversity and
inclusion and through its community engagement work. ASML seeks to maintain a strong ethical foundation in all of its
activities, acting with integrity, treating all people with respect and taking care to avoid any business which may have an
adverse impact on human rights, examples being, forced labour, land grabbing or resettlement of indigenous
communities and controversial weapons.
ASML also provides a safe and healthy working environment, recognising the importance of the health and wellbeing of
its employees. ASML is committed to working towards creating a more diverse business, promoting equality of
opportunity and empowering people from all backgrounds to develop their talents within the organisation. ASML’s
community engagement aims to support, at a community level, its diversity and inclusion initiatives and to contribute
with its time and resources to improving the lives and opportunities of those around it.
Governance
Argenta Holdings Limited (“AHL”) sets policies and directions for the group companies, with each subsidiary responsible
for the development and implementation of their detailed plans, appropriate for their business and for meeting their
specific legal, regulatory and compliance obligations.
ASML maintains a robust governance structure, in which its sustainability strategy is embedded at all levels, with clear
lines of accountability across its business. This enables ASML to meet its strategic objectives and regulatory obligations.
The ASML board retains responsibility for the development of the sustainability framework and sustainability strategy
and oversight of its implementation with regular monitoring delegated to sub-committees of the board.
Day to day responsibility for implementation of the sustainability strategy rests with the executive committee, including
the active underwriter and finance director, and the risk management and compliance functions as appropriate.
As part of the development of its sustainability governance, the board and senior management will identify the most
effective metrics and management information which enables the board to measure the delivery of the sustainability
strategy and the degree of sustainability integration within the business and to also ensure that ASML can meet its
current and future reporting obligations.
Argenta Syndicate 2121
9
ASML business structure
ASML is the Lloyd’s managing agency subsidiary of AHL, a private company with diversified interests in the Lloyd’s
insurance market. AHL is wholly owned by Hannover Rück SE (“Hannover Re”) whose immediate parent undertaking is
Talanx AG, a leading global insurance group. Hannover Re has for some time supported Syndicate 2121 as both a
traditional reinsurer and with the provision of capital.
As the managing agency of Syndicate 2121, ASML has maintained a strategy of steadily growing the syndicate where
market conditions permit. For 2023, capacity increased to £800 million from £660 million in 2022 and was held at that
level for both the 2024 and 2025 years of account. The capacity of the syndicate for the 2026 year of account has been
increased slightly to £820 million. The growth strategy has been achieved by the selective addition over the years of new
classes of business to complement the existing portfolio, as well as continued organic growth in a number of areas.
The syndicate underwrites a broad cross section of classes including marine, property, energy and utility on a
predominantly short tail basis; and financial lines, casualty, marine and energy liability and elements of the specialty class
with longer tail characteristics. In June 2023, the syndicate ceased to underwrite the UK insurance class first introduced to
the syndicate in 2015.
The syndicate underwrites business on a global basis primarily from London and until recently, via an Australian branch
of AUA. In June 2024 the syndicate ceased to underwrite new or renewal business from the AUA branch office in Sydney
although the branch office in Tuggerah remained actively underwriting. With effect from 1 July 2025, the business
underwritten by the Tuggerah branch was transferred to AIL a newly established UK domiciled service company owned
by AHL.
ASML manages a Special Purpose Arrangement, Syndicate 6134, which operates alongside Syndicate 2121. Syndicate
6134, sponsored and capitalised by the Hannover Re group, underwrites quota share reinsurances of specific classes of
business written by Syndicate 2121 as the host syndicate. Syndicate 2121 retains at least 10% of the business introduced
by the sponsor.
A strategy of growth has also been adopted in respect of Syndicate 6134. In respect of the 2023 year of account, the
syndicate underwrote gross net written premium of £80.8 million and it is estimated to increase to £98.9 million and
£93.6 million for the 2024 and 2025 years of account respectively. The forecast gross net written premium for the 2026
year of account is £93.3 million.
Syndicate 2121 receives an overriding commission in respect of these arrangements. The quota share contracts are being
underwritten on a funds withheld basis. However, amounts may be advanced if needed to enable Syndicate 6134 to
finance its standalone obligations or in the event that Syndicate 2121 makes an interim profit release to supporting
capital on an open year of account.
10
Managing Agent’s Report
continued
Directors
Paul Wilson –
Non-executive Chairman from 1 July 2025 (appointed as non-executive Director on 26 February 2025)
John LP Whiter –
Non-executive Chairman (resigned 1 July 2025)
Nicholas J Moore –
Director
Graham K Allen –
Director
Sven Althoff –
Non-executive Director
Shawn Baggs –
Director
Rosemary F Beaver –
Non-executive Director
Ralph M Beutter –
Non-executive Director (appointed 1 June 2025)
Ian Burford –
Director and Active Underwriter Syndicates 2121 and 6134
Carol-Ann Burton –
Company Secretary
Miriam C Goddard –
Non-executive Director
Nigel S Meyer –
Non-executive Director
Niranjan Nathan –
Director
Gary A Powell –
Non-executive Director (resigned 31 December 2025)
Anne-Kathrin Saake –
Non-executive Director
Risk management
As an underwriting business Syndicate 2121 is exposed to a variety of financial and non-financial risks. These risks, which
shape the risk management strategy adopted by ASML, are integral to the capital setting process that is undertaken to
ensure there is an appropriate level of capital held in respect of the insurance liabilities to which Syndicate 2121 is
exposed. The Own Risk and Solvency Assessment (“ORSA”) undertaken in respect of Syndicate 2121 reflects the risk
profile of the business as well as the business strategy. Risks are managed through the risk management framework in
order to ensure that the risk profile of the business is fully understood and can be monitored against the agreed risk
appetite. Further information in respect of this is also disclosed in Note 25 to the Annual Accounts.
ASML is committed to risk management as an integral part of management and governance best practice, and has
developed a risk management strategy to protect the financial and non-financial assets of Syndicate 2121 and to
minimise its losses and liabilities.
The risks to the business are grouped under various categories, each of which is the subject of a risk policy that sets out
ASML’s approach to the management of the risk in conjunction with the overarching risk management framework and
risk strategy. ASML groups risks into the following key categories:
Insurance risk
Insurance risk is the risk that arises from the inherent uncertainties in the occurrence, amount and timing of insurance
liabilities. The underwriting profile of Syndicate 2121 is such that it is likely that claims will arise on the business
underwritten. An expected level of claims in relation to attritional, large and catastrophe type losses has, therefore, been
included in the business planning process. Other mitigating measures, in the form of internal controls, are used to
preserve the syndicate’s performance by limiting the exposure to wider underwriting, claims and reserving risks, such as:
·
Adverse catastrophe loss experience;
·
Adverse large and attritional loss experience;
·
Poor or inappropriate risk selection;
·
Inadequate reinsurance placement; and
·
Final claims costs deviating materially from estimated earned reserves due to the inherent variability of the business.
ASML manages these risks against an agreed risk appetite. The framework of systems and controls is designed to reduce
the likelihood of such risks occurring and to mitigate their impact, as far as possible, on the overall business of the syndicate.
Argenta Syndicate 2121
11
Risk management
continued
Operational risk
Operational risk is defined as the risk of loss resulting from people, processes, systems or from external events. Control
procedures are used to proactively address the risks associated with ASML’s business processes, systems and other
resources that might otherwise be detrimental to overall performance. Business continuity is considered key and ASML
has developed plans to recover all important business services within impact tolerances, and all business services within
24-48 hours.
The retention of key staff is also fundamental to the success of the business and the strategy adopted by ASML is
designed to ensure that the terms and conditions offered to employees, as part of their overall remuneration package,
remain competitive with the rest of the London market insurance industry.
As a regulated business, ASML is fully aware of its regulatory obligations to the UK Financial Conduct Authority (“FCA”),
the Prudential Regulation Authority (“PRA”), Lloyd’s and other overseas regulators. The procedures adopted by ASML in
this regard rigorously monitor compliance with the regulatory standards and, through continuous assessment, highlight
any developments that might impact the business.
Capital risk
Capital risk is defined as the risk to the syndicate of losses arising from inappropriate levels or sources of capital.
Syndicate 2121 is supported by third-party capital providers whose ongoing support is important to the syndicate
continuing to trade forward. ASML is committed to the controlled growth of the syndicate and discussions with current
and prospective capital providers are an ongoing process.
Liquidity risk
Liquidity risk is the risk that the syndicate will not have sufficient cash resources to be able to meet its liabilities as they
fall due. The liquidity of the syndicate is influenced by a number of factors that have the potential to arise from across
the business. Management information is used to enable the effective monitoring of the liquidity risk framework in line
with the agreed procedures and governance arrangements. Robust procedures are in place for the monitoring of cash
flow and effective credit control. Claims activity is closely scrutinised and the movement of existing claims is reported at
regular intervals.
Credit risk
Credit risk is inherent to the business conducted with brokers, coverholders, reinsurers and other counterparties. The
potential for losses arising from a counterparty failing to fulfil its contracted payment obligations is managed by strict
control procedures. Aged debt in respect of the payment of premiums and reinsurance recoveries is monitored and
actively managed. The ASML third party management group approves the brokers, coverholders and reinsurers with which
the syndicate may conduct its business. There is no appetite to deal with counterparties who have not been approved.
Financial market risk
Financial market risk is concerned with the loss resulting from adverse movements in the financial markets. The risks are
partly mitigated by following a predominantly fixed income investment strategy that is designed to perform in line with a
specific target benchmark. The outsourced professional investment managers have the ability to use interest rate futures
to mitigate exposure to potential losses from the movement in interest rates or inflation. The business has a low appetite
for market risk and as such the investment portfolio primarily holds investment grade fixed income investments. Assets
are also held in cash and high quality, highly liquid short term money market instruments. ASML may also invest in highly
diversified collective investment schemes, absolute return funds or funds of hedge funds, which serve to mitigate the
impact of movements in the wider investment market. ASML also periodically seeks to match assets with liabilities in the
syndicate’s principal reporting currencies, to the extent that funds permit, to mitigate exposure to exchange rate
movements.
12
Managing Agent’s Report
continued
Risk management
continued
Emerging risk
In addition to monitoring the individual risk categories outlined above, ASML has in place an emerging risks process to
review risks that may impact the business in the future, and to ensure that any such risks are understood and mitigated
where possible.
Conduct risk
ASML defines conduct risk as any activities undertaken by the business that give rise to poor customer outcomes and has
in place a mechanism for identifying, monitoring, reporting and mitigating its exposure to conduct related issues. This
includes monitoring and reporting on a wide range of conduct management information and risk appetite metrics to the
ASML board, risk framework and capital committee and product oversight group.
Investment managers and policy
During 2025, Insight Investment Management (Global) Limited (“Insight”) has been responsible for investing most of the
syndicate’s US dollar assets within a fixed income portfolio. In November 2025, Insight was also appointed to manage a
segregated euro fixed income portfolio for the syndicate. The syndicate’s Canadian dollar assets held in regulated trust
funds are managed by the Lloyd’s treasury team and Fiera Capital Corporation (“Fiera Capital”) within fixed income
portfolios.
The returns achieved on these portfolios are measured with reference to appropriate benchmarks. Surplus funds held in
addition to these portfolios are invested in a combination of unitised liquidity funds and bank deposits.
Insight
The US dollar fixed income portfolio return net of fees was 6.2%, which was aligned with the target benchmark of 6.2%.
The Federal Reserve (“the Fed”) continued with the interest rate reduction cycle in 2025 and three further 0.25% cuts
were made in September, October and December 2025 reducing the Fed funds rate down from 4.5% to 3.75%. Insight
achieved a good return in 2025.
The outlook for fixed income markets is positive from a yield perspective in 2026 as investment markets are only
anticipating between one and three further 25 basis points (bp) cuts, with the neutral rate forecast to be between 3.0%
to 3.5%, although it must be acknowledged that the overall return in 2026 is likely to be lower than this year as interest
rates move towards the lower central bank neutral point. Market valuations will remain sensitive to inflation and
geopolitical events. Insight reports on 2025 as follows:
“US Government bond yields were volatile during the year but overall were driven lower by the Fed reducing interest
rates. Over the period, 10-year US treasury yields ranged between 4.0% and 4.8% but finished the year 40 bp lower
than they started at 4.2%.
Returns from credit markets generally outperformed government bonds over the year as spreads tightened overall.
Credit spreads widened during the early part of the year as investors digested the announcements of the new US
tariffs and speculated what that might mean for the corporate sector. They continued widening until April; however,
over the course of the next few months these moves were reversed before settling into a relatively narrow range for
the rest of the year. The spread on the investment grade Bloomberg US Corporate Index was relatively stable over
the whole year, tightening by 4bp to 78bp.
Argenta Syndicate 2121
13
Investment managers and policy
continued
Global economic growth is believed to be stabilising overall, as suggested by the modestly positive Purchasing
Managers Index. Inflation remains stubbornly above target in many countries, but a meaningful acceleration is not
expected in the US. A slow return to target levels is Insight’s base case, with the eurozone having already achieved
that objective. Real rates are declining, but there are unlikely to be many further rate cuts from major developed
market central banks, with only the Fed and the Bank of England expected to ease again in 2026. Markets are
believed to be exiting a period of mid-cycle slowdown and the most likely forward path of growth is to eventually
see some acceleration, though that may not be evident in data releases for a long time. This is seen as supportive for
risk assets generally, but uncertainties remain. Fiscal positions are tenuous in many countries and if they deteriorate
further, this could put upward pressure on yields and slow growth. Geopolitical risks remain a central theme, with
the Russia/Ukraine war still unresolved.
It is anticipated the US will register further steady growth in 2026. The labour market is expected to continue
softening, which could keep consumer expenditure under pressure, but real wage growth is likely to remain positive
for now. The imposition of tariffs will likely depress imports more than the reverse effect on exports, which means
the external sector will likely provide a positive impulse to US growth. Forward-looking indicators do not currently
suggest an acceleration in manufacturing activity is likely but increasing amounts of AI-related infrastructure
spending have been widely presented as a significant supportive influence on the US and global economy. Some risks
remain that inflation may rebound but that is not Insight’s central belief. Inflation is expected to move broadly
sideways, but with some volatility, and to end 2026 just below 3%. Insight’s view is the Fed will continue to reduce
interest rates, reaching a terminal level of 3.25% during 2026. The 10-year, and 30-year treasury yields are expected
to be close to current levels in 12 months’ time, at around 4.1% and 4.8% respectively, though volatility is possible,
particularly as the mid-term elections approach.
Recent corporate earnings have reaffirmed Insight’s view of the strong corporate fundamentals, underpinned by
resilient profit growth. It is expected 2026 will be affected by borrowing for capital expenditure and merger and
acquisition activity, driving a significant increase in issuance, most notably from AI-related expenditure. While this
supply dynamic is now well telegraphed and is unlikely to surprise markets, it is anticipated that spreads could
continue to edge wider and settle into a higher trading range early in the year as corporates return to the market in
size. If supply disappoints and investor demand remains high, then spreads should tighten. One trend that is being
closely monitored is high-quality US corporate issuance in euro-denominated debt, seeking to take advantage of
lower coupon rates. This may present opportunities for those with global mandates or flexibility to invest off
benchmark. It is believed investor demand will remain robust in 2026 as investment grade credit offers a meaningful
yield pickup over cash, and in Insight’s view, spreads offer attractive returns when compared to fundamental default
risks. Demand for corporate bonds is expected to remain high, with a focus on security selection and relative value
trades.”
Lloyd’s Treasury
The Canadian dollar portfolio fixed income fund generated a gross return of 3.8% for the calendar year, marginally
outperforming the benchmark return of 3.6%.
Fiera Capital
Since its inception on 1 May 2025, the Fiera Capital Canadian dollar portfolio fixed income fund generated a net return of
2.3%, outperforming the benchmark of 2.0% over the same period.
14
Managing Agent’s Report
continued
Investment managers and policy
continued
Custodians
Citibank and RBC Investor & Treasury Services served as custodians for the syndicate’s fixed income portfolios managed by
Insight, Lloyd’s treasury and Fiera Capital.
Investment objectives
The overall investment objective is to maximise total pre-tax returns over time, subject to appropriate investment
guidelines. A diversified portfolio is selected that meets the syndicate’s capital preservation and liquidity requirements,
while operating within the risk constraints set by its risk appetite and the regulatory framework of the Prudential
Regulation Authority, Lloyd’s and relevant overseas regulators. The outlook for fixed income bond markets in 2026 is
positive from a yield perspective; however, as central banks continue to reduce interest rates, overall investment returns
are expected to be lower than those achieved in 2025.
Investment performance
Funds for investment were primarily held in US dollars. The investment return for the year and the average funds
available for investment were as follows:
Average amount of syndicate funds available for investment during the year:
2025
’000
2024
’000
United States dollars 867,650 779,001
Sterling and other currencies 209,722 217,582
Canadian dollars 131,199 121,397
Euros 70,040 70,266
Combined in sterling 999,727 955,703
Net aggregate investment return for the calendar year in sterling 52,725 40,396
Net calendar year investment yield: 2025 2024
United States dollars 6.1% 3.9%
Sterling and other currencies 4.3% 4.9%
Canadian dollars 3.5% 5.2%
Euros 1.8% 3.7%
Combined in sterling 5.3% 4.2%
Research and development
The syndicate has not participated in any research and development activity during the year.
Disclosure of information to the auditors
In the case of each of the persons who are directors of the managing agent at the time the report is approved:
·
So far as the director is aware, there is no relevant audit information, being information needed by the syndicate’s
auditors in connection with the auditors’ report, of which the auditors are unaware; and
·
Having made enquiries of fellow directors of the agency and the syndicate’s auditors, each director has taken all the
steps that he or she ought to have taken as a director to become aware of any relevant audit information and to
establish that the syndicate’s auditors are aware of that information.
Argenta Syndicate 2121
15
Independent auditors
PricewaterhouseCoopers LLP (“PwC”) continue to act as the auditors of the syndicate annual accounts and underwriting
year accounts, and also as the auditors of ASML. Lloyd’s approval for this arrangement under the relevant provisions of
the Audit Arrangements Byelaw (No. 7 of 1988) was granted following notification to syndicate members and their
non-objection to the arrangement. Notice is hereby given that it is intended to continue with this arrangement unless
objections to this proposal are received from syndicate members. Any such objection should be made in writing to the
registered office of ASML, within 21 days of receipt of this statement.
Under the 2008 Regulations, the auditors are deemed reappointed in subsequent years if there is no objection. PwC has
signified its willingness to continue in office as the independent auditors to the syndicate and it is proposed that the
appointment remains in force.
Annual general meeting of syndicate members
In accordance with the provisions of the 2008 Regulations, it is not intended to hold an annual general meeting of the
members of Syndicate 2121, unless objections to this proposal or to the deemed reappointment of the auditors are
received from syndicate members. Any such objection should be made in writing to the registered office of ASML, within
21 days of receipt of this statement.
Nicholas J Moore
Managing Director
Approved by the board of Argenta Syndicate Management Limited on 18 February 2026.
16
S Y N D I C A T E
2121
ANNUAL ACCOUNTS 2025
18
Argenta Syndicate 2121
19
Statement of Managing Agent’s Responsibilities
The managing agent is responsible for preparing the syndicate annual accounts in accordance with applicable law and
regulation.
The 2008 Regulations require the managing agent to prepare syndicate annual accounts as at 31 December each year in
accordance with UK accounting standards and applicable law (UK GAAP). The syndicate annual accounts are required by
law to give a true and fair view of the state of affairs of the syndicate at that date and its profit or loss for that year.
The managing agent is also responsible for preparing the accounts in accordance with the Lloyd’s Syndicate Accounts
Instructions version 3.1 as modified by the Frequently Asked Questions version 1.1 issued by Lloyd’s, which includes the
preparation and review of the iXBRL tagging that has been applied to the syndicate annual accounts.
In preparing the syndicate annual accounts, the managing agent is required to:
·
select suitable accounting policies and then apply them consistently;
·
state whether applicable United Kingdom accounting standards have been followed, subject to any material
departures disclosed and explained in the notes to the syndicate annual accounts;
·
make judgements and accounting estimates that are reasonable and prudent; and
·
prepare the syndicate annual accounts on the basis that the syndicate will continue to write future business unless it
is inappropriate to presume the syndicate will do so.
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.
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 it to ensure that the syndicate annual accounts comply with the 2008 Regulations.
The managing agent is responsible for the maintenance and integrity of the company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of syndicate annual accounts may differ from legislation in other
jurisdictions.
20
Independent Auditors’ Report to the Members of Syndicate 2121
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 2121’s syndicate annual accounts:
·
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2025 and of its profit and cash flows
for the year then ended;
·
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”, and applicable law); and
·
have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate Accounts Instructions
version 3.1 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the Lloyd’s Syndicate
Instructions”).
We have audited the syndicate annual accounts included within the Report and Annual Accounts and Underwriting Year
Accounts (the “Annual Report”), which comprise: the Statement of financial position as at 31 December 2025; the Income
Statement: technical account – general business, the Income statement: non-technical account, the Statement of cash
flows, and the Statement of changes in members’ balances for the year then ended; and the notes to the syndicate
annual accounts, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of
the syndicate annual accounts section of our report. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of
public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in note 4, we have provided no non-audit services to the syndicate in the period under audit.
Argenta Syndicate 2121
21
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going concern for a
period of at least twelve months from when the syndicate annual accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern basis
of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual accounts
and our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the
syndicate annual accounts does not cover the other information and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the syndicate annual accounts, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Managing Agent’s Report (the “Managing Agent’s Report”), we also considered whether the
disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008
have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.
Managing Agent’s Report
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 year ended 31 December 2025 is consistent with the syndicate annual accounts and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit,
we did not identify any material misstatements in the Managing Agent’s Report.
22
Independent Auditors’ Report to the Members of Syndicate 2121
continued
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of Managing Agent’s Responsibilities, the Managing Agent is responsible for the
preparation of the syndicate annual accounts in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The Managing Agent is also responsible for such internal control as they determine 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 as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless it is intended for the syndicate to cease operations, or it has no realistic alternative but to do so.
Auditors’ 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 auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation
Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered the
extent to which non-compliance might have a material effect on the syndicate annual accounts. We also considered those
laws and regulations that have a direct impact on the syndicate annual accounts such as The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Instructions. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the syndicate annual accounts (including the
risk of override of controls), and determined that the principal risks were related to the risk of fraud in revenue
recognition, the risk of inequitable treatment in relation to the closing year of account and the risk of management
override of controls, including the potential for management bias in significant accounting estimates, particularly in
relation to insurance contract technical provisions, estimates of future premiums and reinsurance to close premium. Audit
procedures performed by the engagement team included:
·
Discussions with the Board, management and compliance function of the Managing Agent, including consideration
of known or suspected instances of fraud and non-compliance with laws and regulations;
Argenta Syndicate 2121
23
·
Reviewing relevant meeting minutes, including those of the Board and Audit Committee of the Managing Agent,
and correspondence with regulatory authorities, including Lloyd’s of London, the Prudential Regulation Authority
and the Financial Conduct Authority;
·
Testing and challenging where appropriate the assumptions and judgements made by management in their
significant accounting estimates, particularly in relation to insurance contract technical provisions and the estimates
of future premiums;
·
Identifying and testing journal entries based on risk criteria;
·
Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and
·
Assessing the appropriateness of the closing the 2023 year of account, including testing and challenging the equity of
reinsurance to close premium charged.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
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 auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s members as a body in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for no
other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent
in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required to
report to you if, in our opinion:
·
we have not obtained all the information and explanations we require for our audit; or
·
adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
·
certain disclosures of Managing Agent remuneration specified by law are not made; or
·
the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
24
Independent Auditors’ Report to the Members of Syndicate 2121
continued
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been
applied. This auditors’ report provides no assurance over whether the iXBRL tagging has been applied in accordance with
section 2 of the Lloyd’s Syndicate Instructions version 3.1.
Deepti Vohra (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
18 February 2026
Argenta Syndicate 2121
25
Income Statement: Technical account – general business
for the year ended 31 December 2025
2025 2024
£’000 £’000 £’000 £’000
Notes
Earned premiums, net of reinsurance
Gross premiums written 2 796,649 835,197
Outward reinsurance premiums (221,959 ) (242,111 )
Net premiums written 574,690 593,086
Change in the provision for unearned premiums
Gross amount (28,732 ) (26,806 )
Reinsurers’ share (1,815 ) 3,333
Change in the net provision for unearned premiums (30,547 ) (23,473 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the
non-technical account 8 52,725 40,396
Claims incurred, net of reinsurance
Claims paid
Gross amount (334,596 ) (283,806 )
Reinsurers’ share 134,824 93,175
Net claims paid (199,772 ) (190,631 )
Change in the provision for claims
Gross amount (74,259 ) (99,958 )
Reinsurers’ share (615 ) 16,780
Change in the net provisions for claims (74,874 ) (83,178 )
Claims incurred, net of reinsurance
(274,646 ) (273,809 )
Net operating expenses 4 (222,512 ) (227,368 )
Balance on the technical account for general business 99,710 108,832
All items relate only to continuing operations.
26
Income Statement: Non-technical account
for the year ended 31 December 2025 continued
2025 2024
£’000 £’000
Notes
Balance on the general business technical account 99,710 108,832
Investment income 8 38,808 38,083
Realised gains on investments 8 4,280 3,746
Unrealised (losses)/gains on investments 8 10,314 (766 )
Investment expenses and charges 8 (677 ) (667 )
Total investment return 52,725 40,396
Allocated investment return transferred to the general business technical account (52,725 ) (40,396 )
Exchange losses (148 ) (3,270 )
Profit for the financial year 99,562 105,562
Total comprehensive income for the period 99,562 105,562
There is no other comprehensive income in the accounting period other than that dealt with in the technical and
non-technical accounts. Accordingly, a separate statement of comprehensive income has not been presented.
Argenta Syndicate 2121
27
Statement of Changes in Members’ Balances
for the year ended 31 December 2025
2025 2024
£’000 £’000
Notes
At 1 January 149,424 102,244
Profit for the financial year 99,562 105,562
Members’ agents’ fees (1,314 ) (1,327 )
Payments of profit to members’ personal reserve funds 15 (83,961 ) (57,331 )
Other 147 276
At 31 December 163,858 149,424
28
Statement of Financial Position
as at 31 December 2025
2025 2024
£’000 £’000 £’000 £’000
Notes
ASSETS
Investments
Financial investments 10 995,188 937,234
Deposits with ceding undertakings 213 1,608
Reinsurers’ share of technical provisions
Provision for unearned premiums 11 98,970 105,223
Claims outstanding 11 373,053 391,938
Debtors
Debtors arising out of direct insurance operations 12 315,992 299,504
Debtors arising out of reinsurance operations 13 181,409 191,246
Other debtors 4,101 6,076
Cash and other assets
Cash at bank and in hand 13,369 12,074
Other assets 14 55,219 60,490
Prepayments and accrued income
Accrued interest 8,693 7,575
Deferred acquisition costs 11 114,860 110,301
Other prepayments and accrued income 5,380 5,631
TOTAL ASSETS 2,166,447 2,128,900
Argenta Syndicate 2121
29
Statement of Financial Position
as at 31 December 2025 continued
2025 2024
£’000 £’000 £’000 £’000
Notes
MEMBERS’ BALANCES AND LIABILITIES
Members’ balances 163,858 149,424
Total capital and reserves 163,858 149,424
Technical provisions
Provision for unearned premiums 11 419,099 409,555
Claims outstanding 11 1,111,809 1,088,127
Creditors
Creditors arising out of direct insurance operations 16 9,067 5,613
Creditors arising out of reinsurance operations 17 384,788 403,901
Other creditors 18 8,825 3,896
Accruals and deferred income 19 69,001 68,384
Total liabilities 2,002,589 1,979,476
TOTAL MEMBERS’ BALANCES AND LIABILITIES 2,166,447 2,128,900
The syndicate annual accounts on pages 25 to 76 were approved by the board of Argenta Syndicate Management Limited
on 18 February 2026 and were signed on its behalf by
Nicholas J Moore
Managing Director
30
Statement of Cash Flows
for the year ended 31 December 2025
2025 2024
£’000 £’000
Notes
Profit on ordinary activities 99,562 105,562
Increase/(decrease) in unearned premiums and outstanding claims 99,495 127,995
(Increase)/decrease in reinsurers’ share of unearned premiums and outstanding claims 2,803 (20,257 )
(Increase)/decrease in debtors (41,186 ) (116,623 )
Increase/(decrease) in creditors 5,768 52,718
Investment return (52,725 ) (40,396 )
Movements in other assets/liabilities 17,097 1,781
Exchange differences 15,502 3,222
Net cash inflow/(outflow) from operating activities 146,316 114,002
Investing activities
Investment income received 39,549 38,719
Purchases of debt and equity instruments (765,892 ) (672,821 )
Sales of debt and equity instruments 597,352 624,692
Purchases of derivatives (45,049 ) (11,351 )
Sales of derivatives 43,369 11,345
Other 7,860 14,295
Net cash inflow/(outflow) from investing activities (122,811 ) 4,879
Financing activities
Payments of profit to members’ personal reserve funds (43,975 ) (34,231 )
Open year profit release (39,986 ) (23,100 )
Other (1,314 ) (1,328 )
Net cash inflow/(outflow) from financing activities (85,275 ) (58,659 )
Increase/(decrease) in cash and cash equivalents (61,770 ) 60,222
Cash and cash equivalents at 1 January 266,274 212,463
Exchange differences on opening cash and cash equivalents 744 (6,411 )
Cash and cash equivalents at 31 December 20 205,248 266,274
Argenta Syndicate 2121
31
Notes to the Accounts
1. Accounting policies
1.1 Statement of compliance
The financial statements have been prepared in compliance with the 2008 Regulations and FRS 102 and FRS 103,
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 2008 relating to insurance
companies. They are also prepared in accordance with Lloyd’s Syndicate Accounts instructions version 3.1 as
modified by the Frequently Asked Questions version 1.1 issued by Lloyd’s.
The financial statements are prepared under the historical cost convention except for certain financial
instruments which are measured at fair value.
1.2 Basis of preparation
The financial statements for the year ended 31 December 2025 were approved for issue by the board of directors
on 18 February 2026.
The financial statements are prepared in sterling which is the functional and presentational currency of the
syndicate and rounded to the nearest £’000.
As permitted by FRS 103 the syndicate continues to apply the existing accounting policies that were applied prior
to this standard for its insurance contracts.
1.3 Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the amounts reported for assets and liabilities as at the year-end date and the
amounts reported for revenues and expenses during the year. However, the nature of estimation means that
actual outcomes could differ from those estimates. The syndicate’s key sources of estimation uncertainty are
as follows:
Insurance contract technical provisions
For insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at
the reporting date and for the expected ultimate cost of claims incurred but not yet reported (“IBNR”) at the
reporting date. It can take a significant period of time before the ultimate claims cost can be established with
certainty and for some types of policies, claims IBNR form the majority of the liability in the statement of
financial position.
The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection
techniques, such as the Chain Ladder and Bornhuetter-Ferguson methods.
The main assumption underlying these techniques is that past claims development experience can be used to
project future claims development and hence ultimate claims costs. The provision for claims outstanding is
based on the estimated ultimate cost of all claims notified but not settled by the year-end date assessed on an
individual case basis, together with the provision for related claims handling costs. The provision also includes
the estimated cost of claims IBNR at the year-end date based on statistical methods.
32
Notes to the Accounts
continued
1. Accounting policies
continued
A split between notified claims and claims IBNR at the year-end is provided in note 11.
These methods generally involve projecting from past experience the development of claims over time to form
a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations
in the business accepted and the underlying terms and conditions. For the most recent years, where a high
degree of volatility arises from projections, estimates may be based in part on output from rating and other
models of the business accepted and assessments of underwriting conditions. The amount of salvage and
subrogation recoveries is separately identified and, where material, reported as an asset.
Similar judgements, estimates and assumptions are employed in the assessment of adequacy of provisions for
unearned premiums. Judgement is also required in determining whether the pattern of insurance service
provided by a contract requires amortisation of unearned premiums on a basis other than time apportionment.
Estimates of future premiums
For certain insurance contracts, premium is initially recognised based on estimates of ultimate premiums. These
estimates are judgemental and could result in misstatements of revenue being recorded in the financial
statements.
The main assumption underlying these estimates is that past premium development can be used to project
future premium development.
Fair value of financial assets and derivatives determined using valuation techniques
Where the fair values of financial assets and financial liabilities recorded on the statement of financial position
cannot be derived from active markets, they are determined using a variety of valuation techniques that include
the use of discounted cash flow models and/or mathematical models. The inputs to these models are derived
from observable market data where possible, but where observable market data is not available, judgement is
required to establish fair values. The judgements include considerations of liquidity risk, credit risk and model
inputs such as estimated future cash flows based on management’s best estimates and discount rates.
For discounted cash flow analysis, estimated future cash flows and discount rates are based on current market
information and rates applicable to financial instruments with similar yields, credit quality and maturity
characteristics. Estimated future cash flows are influenced by factors such as economic conditions (including
country specific risks), concentrations in specific industries, types of instruments or currencies, market liquidity and
financial conditions of counterparties. Discount rates are influenced by risk free interest rates and credit risk.
Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Further details are given in note 25.
1.4 Significant accounting policies
Financial investments
As permitted by FRS 102, the syndicate has elected to apply the recognition and measurement provisions of
sections 11 and 12 in full to account for all of its financial instruments.
Financial assets and financial liabilities are recognised when the syndicate becomes a party to the contractual
provisions of the instrument.
Argenta Syndicate 2121
33
1. Accounting policies
continued
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except
for those financial assets classified as at fair value through profit or loss, which are initially measured at fair
value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a
financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial
liability is measured at the present value of the future payments discounted at a market rate of interest for a
similar debt instrument.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled
or expires.
Derivative financial instruments
The syndicate uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate
movements. The syndicate does not hold or issue derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in
profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which
event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash at banks and in hand and
short term deposits with an original maturity date of three months or less, net of outstanding bank overdrafts.
Fair value of financial assets
The syndicate uses the following hierarchy for determining the fair value of financial instruments by valuation
technique:
·
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.
See note 10 for details of financial instruments classified by fair value hierarchy.
Impairment of financial assets
For financial assets not held at fair value through profit or loss, the syndicate assesses at each reporting date
whether the financial asset or group of financial assets is impaired. The syndicate first assesses whether
objective evidence of impairment exists for financial assets. If it is determined that no objective evidence of
impairment exists for an individually assessed financial asset, the asset is included in a group of financial assets
with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is or continues to be
recognised are not included in the collective assessment of impairment.
34
Notes to the Accounts
continued
1. Accounting policies
continued
Derecognition of financial assets
A financial asset or, when applicable, a part of a financial asset is derecognised when:
·
The rights to the cash flows from the asset have expired; or
·
The syndicate retains the right to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement and
either (a) the syndicate has transferred substantially all the risks and rewards of the asset; or (b) the
syndicate has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the syndicate has transferred its right to receive cash flows from an asset or has entered into a
pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards nor
transferred control of the asset, the asset is recognised to the extent of the syndicate’s continuing involvement
in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration that the
syndicate could be required to repay. In that case, the syndicate also recognises an associated liability.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial
position if, and only if:
·
There is a currently enforceable legal right to offset the recognised amounts; and
·
There is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Financial liabilities
The syndicate’s financial liabilities include trade and other payables, borrowings, insurance payables and
derivative financial instruments, 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.
Trade and other payables and loans and borrowings are subsequently measured at amortised cost using the
effective interest rate (“EIR”) method. Gains and losses are recognised in the income statement when the
liabilities are derecognised as well as through the EIR method amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that
are an integral part of the EIR. The EIR amortisation is included in investment return in the profit or loss.
Derivative financial liabilities are subsequently measured at fair value through profit or loss. A financial liability
is derecognised when the obligation under the liability is discharged or expires. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of the
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective amounts is
recognised in profit or loss.
Argenta Syndicate 2121
35
1. Accounting policies
continued
Investment return
Dividends are recognised when the investments to which they relate are declared ‘ex-dividend’. Interest income
is recognised on a time proportionate basis taking into account effective interest yield.
Unrealised and realised gains and losses on financial investments are recognised based on the appropriate
classification of financial investments and are covered in detail under the accounting policy for financial
investments.
An allocation of actual investment return on investments supporting the general insurance technical provisions
and associated members’ balance is made from the non-technical account to the technical account. Investment
return related to non-insurance business and members’ balance is attributed to the non-technical account.
Investment return has been wholly allocated to the technical account as all investments relate to the technical
account.
Insurance contracts – product classification
Insurance contracts are those contracts when the syndicate (the insurer/reinsurer) has accepted significant
insurance risk from another party (the policyholder/reinsured) by agreeing to compensate the
policyholder/reinsured if a specified uncertain future event (the re/insured event) adversely affects the
policyholder/reinsured. As a general guideline, the syndicate determines whether it has significant insurance
risk, by comparing benefits paid with benefits payable if the re/insured event did not occur. Insurance
contracts can also transfer financial risk.
Once a contract has been classified as an insurance contract, it remains an insurance contract for the
remainder of its lifetime, even if the insurance risk reduces significantly during this period, unless all rights
and obligations are extinguished or expire.
Any separable embedded derivatives within an insurance contract are separated and accounted for in
accordance with sections 11 and 12 of FRS102 unless the embedded derivative is itself an insurance contract
(i.e. the derivative is not separated if the policyholder benefits from the derivative only when the insured
event occurs).
Gross premiums
Gross written premiums comprise the total premiums receivable for the whole period of cover provided by
the contracts entered into during the reporting period, regardless of whether these are wholly due for
payment in the reporting period, together with any adjustments arising in the reporting period to such
premiums receivable in respect of business written in prior reporting periods. They are recognised on the
date on which the policy commences. Additional or return premiums are treated as a remeasurement of the
initial premium. Gross written premiums are stated gross of brokerage payable and exclude taxes and duties
levied on them.
Written premiums include an estimate for pipeline premiums (i.e. premiums written but not reported to the
syndicate by the reporting date) relating only to those underlying contracts of insurance where the period of
cover has commenced prior to the reporting date. The most significant assumption in this estimate is that
current experience will be consistent with prior year experience.
36
Notes to the Accounts
continued
1. Accounting policies
continued
Under some policies, written premiums are adjusted retrospectively in the light of claims experience or where
the risk covered cannot be assessed accurately at the commencement of cover. Where written premiums are
subject to an increase retrospectively, recognition of any potential increase is deferred until the additional
amount can be ascertained with reasonable certainty. Where written premiums are subject to a reduction, a
remeasurement taking account of such a reduction is made as soon as there is an obligation to the policyholder.
Reinsurance premiums
Reinsurance written premiums comprise the total premiums payable for all of the cover provided by contracts
entered into in the period, including portfolio premiums payable, and are recognised on the date on which the
policy incepts. Premiums include any adjustments arising in the accounting period in respect of reinsurance
contracts incepting in prior accounting periods.
Under some policies, reinsurance premiums payable are adjusted retrospectively in the light of claims experience
or where the risk covered cannot be assessed accurately at the commencement of cover. Where written
premiums are subject to an increase retrospectively, recognition of any potential increase is recognised as soon
as there is an obligation to the reinsurer.
Outwards reinsurance premiums are accounted for and earned in the same accounting period as the premiums
for the related direct or inwards business being reinsured.
Profit commission
Profit commission is charged by the managing agent at a standard rate of 15% of the profit on a year of
account basis subject to the operation of a deficit clause; the profit commission standard rate increases from
15% to 17.5% if an average profit measure exceeds 7.5% of capacity. There are some bespoke agreements
under which a capital provider pays profit commission at a level above the standard rate. Profit commission is
charged to the syndicate as incurred but does not become payable until after the appropriate year of account
closes, normally at 36 months, although the managing agent may receive payments on account of anticipated
profit commissions in line with interim profits released to members.
Claims
Claims include all claims occurring during the year, whether reported or not; related internal and external
claims handling costs that are directly related to the processing and settlement of claims; a reduction for the
value of salvage and other recoveries; and any adjustments to claims outstanding from previous years.
Reinsurance claims are recognised when the related gross insurance claim is recognised according to the terms
of the relevant contract.
Technical provisions
Technical provisions comprise claims outstanding, provisions for unearned premiums and provisions for
unexpired risks.
Claims outstanding
The outstanding claims provision is based on the estimated ultimate cost of all claims incurred but not settled at
the reporting date, whether reported or not, together with related claims handling costs and reduction for the
Argenta Syndicate 2121
37
1. Accounting policies
continued
expected value of salvage and other recoveries. Delays can be experienced in the notification and settlement of
certain types of claims, therefore the ultimate cost of these cannot be known with certainty at the reporting
date. The liability is calculated at the reporting date using a range of standard actuarial claim projection
techniques, based on empirical data and current assumptions that may include a margin for adverse deviation.
The liability is not discounted for the time value of money.
Provisions for unearned premiums
Unearned premiums are those proportions of premiums written in a year that relate to periods of risk after the
reporting date. In respect of general insurance business, written premiums are recognised as earned over the
period of the policy on a time apportionment basis having regard, where appropriate, to the incidence of risk.
The proportion attributable to subsequent periods is deferred as a provision for unearned premiums.
Unearned reinsurance premiums are those proportions of premiums written in a year that relate to periods of
risk after the reporting date. Unearned reinsurance premiums are deferred over the term of the underlying
direct insurance policies for risks attaching contracts and over the term of the reinsurance contract for losses
occurring contracts.
Unexpired risks
A liability adequacy provision (the unexpired risks provision) is made where the cost of claims and expenses
arising after the end of the financial year from contracts concluded before that date is expected to exceed the
provision for unearned premiums, net of deferred acquisition costs.
The assessment of whether a provision is necessary is made by considering separately each category of business
on the basis of information available at the reporting date, after offsetting surpluses and deficits arising on
products which are managed together. Investment income is taken into account in calculating the provision.
At 31 December 2025 and 31 December 2024 the syndicate did not have an unexpired risks provision.
Deferred acquisition costs
Acquisition costs comprise costs arising from the conclusion of insurance and reinsurance contracts. They include
both direct costs, such as intermediary commissions or the cost of drawing up the insurance document or
including the insurance contract in the portfolio, and indirect costs, such as the advertising costs or the
administrative expenses connected with the processing of proposals and the issuing of policies.
Deferred acquisition costs are costs arising from the conclusion of insurance and reinsurance contracts that are
incurred during the reporting period, but which relate to a subsequent reporting period, and which are carried
forward to subsequent reporting periods.
Deferred acquisition costs are amortised over the period in which the related premiums are earned.
The reinsurers’ share of deferred acquisition costs is amortised in the same manner as the underlying asset
amortisation is recorded in the income statement.
Commissions receivable on outwards reinsurance contracts are deferred and amortised over the same period in
which the related gross premiums are earned.
38
Notes to the Accounts
continued
1. Accounting policies
continued
Reinsurance assets
The syndicate cedes insurance risk in the normal course of business for all of its areas of operation. Reinsurance
assets represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated
in a manner consistent with the outstanding claims provision or settled claims associated with the reinsurer’s
policies and are in accordance with the related reinsurance contract.
Reinsurance assets are reviewed for impairment at each reporting date, or more frequently when an indication
of impairment arises during the reporting year. Impairment occurs when there is objective evidence as a result
of an event that occurred after initial recognition of the reinsurance asset that the syndicate may not receive all
outstanding amounts due under the terms of the contract and the event has a reliably measurable impact on
the amounts that the syndicate will receive from the reinsurer. The impairment loss is recorded in the income
statement.
Gains or losses on buying reinsurance are recognised in the income statement immediately at the date of
purchase and are not amortised. There were no such gains or losses recognised in 2025 or 2024.
Ceded reinsurance arrangements do not relieve the syndicate from its obligations to policyholders.
Insurance receivables
Insurance receivables are recognised when due and measured on initial recognition at the fair value of the
consideration received or receivable. Subsequent to initial recognition, insurance receivables are measured at
amortised cost, using the EIR method. The carrying value of insurance receivables is reviewed for impairment
whenever events or circumstances indicate that the carrying amount may not be recoverable, with the
impairment loss recorded in the income statement.
Insurance receivables are derecognised 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 EIR method. Insurance payables are derecognised when the obligation
under the liability is settled, cancelled or expired.
Foreign currencies
The syndicate’s functional currency and presentational currency is sterling. Transactions denominated in
currencies other than the functional currency are initially recorded in the functional currency at the exchange
rate ruling at the date of the transactions or at an approximate average rate.
Monetary assets and liabilities (which include all assets and liabilities arising from insurance contracts including
unearned premiums and deferred acquisition costs) denominated in foreign currencies are retranslated into the
functional currency at the exchange rate ruling on the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction and are not subsequently restated. Non-monetary items
denominated in a foreign currency, measured at fair value, are translated into the functional currency using the
exchange rate ruling at the date when the fair value was determined.
Exchange differences are recorded in the non-technical account.
Argenta Syndicate 2121
39
1. Accounting policies
continued
Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax
from trading income. In addition, any UK basic rate income tax deducted from syndicate investment income is
recoverable by managing agents and consequently the distribution made to members or their members’ agent
is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the syndicate are included in the statement of financial
position under the heading ‘other debtors’.
No provision has been made for any overseas tax payable by members on underwriting results.
Pension costs
Pension contributions relating to a defined contribution scheme and charged to the syndicate are included
within net operating expenses.
Consortia share of expenses
The syndicate participates as leader in various underwriting consortia. Under the terms of each consortia
agreement, third party participants are required to pay fees to the syndicate in consideration for business
written on their behalf. These fees represent a contribution towards the expenses incurred by the syndicate in
underwriting and administering the consortia.
Consortium fee income is recognised in the income statement in line with the pattern of underwriting activity
for each consortium and is measured in accordance with the specific contractual arrangements in place. Fee
income is accrued as it is earned.
Accrued consortium fees are presented as a credit within administrative expenses.
40
Notes to the Accounts
continued
2. Particulars of business written
Type of business
An analysis of the technical account balance before investment return is set out below:
2025
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses*
£’000
Reinsurance
balance
£’000
Underwriting
result
£’000
Direct insurance:
Accident and health – – – – – –
Motor (third-party liability) – – – – – –
Motor (other classes) 3,172 4,220 (2,764 ) (1,692 ) 18 (218 )
Marine, aviation and transport 71,432 62,235 (24,893 ) (22,417 ) (9,517 ) 5,408
Fire and other damage to property 242,830 250,084 (123,968 ) (88,905 ) (11,066 ) 26,145
Third-party liability 205,916 223,639 (87,275 ) (91,934 ) (26,800 ) 17,630
Credit and suretyship 31,488 23,745 (10,348 ) (7,202 ) (2,326 ) 3,869
Legal expenses – – – – – –
Assistance – – – – – –
Miscellaneous – – – – – –
Total direct insurance 554,838 563,923 (249,248 ) (212,150 ) (49,691 ) 52,834
Reinsurance acceptances 241,811 203,994 (159,607 ) (58,058 ) 7,822 (5,849 )
Total 796,649 767,917 (408,855 ) (270,208 ) (41,869 ) 46,985
2025
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses*
£’000
Reinsurance
balance
£’000
Underwriting
result
£’000
Additional analysis
Fire and other damage to property of
which is:
Specialities 22,177 22,035 (14,802 ) (9,818 ) 800 (1,785 )
Energy 42,171 59,659 (41,734 ) (9,399 ) 2,192 10,718
Third-party liability of which is:
Energy 20,202 21,996 (10,262 ) (4,818 ) (2,690 ) 4,226
Argenta Syndicate 2121
41
2. Particulars of business written
continued
2024
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses*
£’000
Reinsurance
balance
£’000
Underwriting
result
£’000
Direct insurance:
Accident and health 376 627 (118 ) (258 ) (94 ) 157
Motor (third-party liability) 4,504 3,802 (2,808 ) (1,400 ) 27 (379 )
Motor (other classes) 10,546 8,150 (3,318 ) (3,517 ) 243 1,558
Marine, aviation and transport 56,356 57,143 (34,142 ) (20,330 ) (2,702 ) (31 )
Fire and other damage to property 265,753 253,177 (102,002 ) (88,595 ) (30,108 ) 32,472
Third-party liability 206,793 208,316 (109,927 ) (89,247 ) (14,142 ) (5,000 )
Credit and suretyship 39,142 25,053 (15,129 ) (7,988 ) (1,798 ) 138
Legal expenses – – – – – –
Assistance – – – – – –
Miscellaneous – – – – – –
Total direct insurance 583,470 556,268 (267,444 ) (211,335 ) (48,574 ) 28,915
Reinsurance acceptances 251,727 252,123 (116,320 ) (73,254 ) (23,028 ) 39,521
Total 835,197 808,391 (383,764 ) (284,589 ) (71,602 ) 68,436
2024
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses*
£’000
Reinsurance
balance
£’000
Underwriting
result
£’000
Additional analysis
Fire and other damage to property of
which is:
Specialities 11,006 10,694 (1,070 ) (5,330 ) (8,467 ) (4,173 )
Energy 7,684 5,710 (2,620 ) (2,747 ) 2,885 3,228
Third-party liability of which is:
Energy 271 250 (346 ) (110 ) 90 (116 )
*Net operating expenses shown in the income statement include an amount of £47.7 million (2024: £57.2 million) in
respect of commissions on outward reinsurance that have been set off from the gross operating expenses but are
included in the reinsurance balance above.
42
Notes to the Accounts
continued
2. Particulars of business written
continued
Geographical analysis of direct insurance by underwriting location
Gross written premiums
| 2025 | 2024 | |
| £’000 | £’000 | |
| UK | ||
| US | ||
| Other | | |
| |
3. Movement in prior year’s provision for claims outstanding
An overall improvement of £2.3 million on prior years’ provisions was experienced during the year. Improvements of
£3.4 million on third party liability and £2.9 million on credit and suretyship were partially offset by deteriorations of
£1.9 million on fire and other damage to property, £1.6 million on marine, aviation and transport, £0.3 million on
reinsurance accepted and £0.2 million on motor (other classes).
(2024: An overall improvement of £8.1 million on prior years’ provisions was experienced during the year.
Improvements of £13.9 million on fire and other damage to property and £13.2 million on reinsurance accepted
were partially offset by deteriorations of £4.8 million on marine, aviation and transport, £11.4 million on third
party liability and £2.8 million on credit and suretyship).
Argenta Syndicate 2121
43
4. Net operating expenses
| 2025 | 2024 | |
| £’000 | £’000 | |
| Acquisition costs | ||
| Change in deferred acquisition costs | ( | |
| Administrative expenses | | |
| Members’ standard personal expenses | | |
| Gross operating expenses | 270,208 | 284,589 |
| Reinsurance commissions and profit participation | ( | ( |
| Net operating expenses |
Administrative expenses include:
| 2025 | 2024 | |
| £’000 | £’000 | |
| Auditors’ remuneration – audit of the syndicate accounts | | |
| – other services pursuant to regulations and Lloyd’s byelaws | | |
Members’ standard personal expenses include Lloyd’s subscriptions, New Central Fund contributions, managing
agent’s fees and profit commission.
Total commissions for direct insurance business for the year amounted to:
| 2025 | 2024 | |
| £’000 | £’000 | |
| Total commission for direct insurance business | |
5. Staff numbers and costs
The following amounts were recharged by the managing agency to the syndicate in respect of payroll costs:
| 2025 | 2024 | |
| £’000 | £’000 | |
| Wages and salaries | | |
| Social security costs | | |
| Other pension costs | | |
| Other short term incentive costs | | |
The average number of employees employed by the managing agency but working for the syndicate during the
year was as follows:
| 2025 | 2024 | |
| Number | Number | |
| Administration and finance | | |
| Underwriting and underwriting support | | |
| Claims | | |
| Investments | | |
| |
The staff numbers exclude employees providing services by way of a cross charge from other group companies.
44
Notes to the Accounts
continued
6. Emoluments of the directors of ASML and the active underwriter
ASML charged the syndicate the following amounts in respect of emoluments paid to its directors, including the
active underwriter of the syndicate:
| 2025 | 2024 | |
| £’000 | £’000 | |
| Emoluments | |
No advances or credits granted by ASML to any of its directors subsisted during the year.
7. Active underwriter emoluments
The following aggregate remuneration was charged to the syndicate in respect of the active underwriter:
| 2025 | 2024 | |
| £’000 | £’000 | |
| Emoluments | | |
8. Investment return
| 2025 | 2024 | |
| £’000 | £’000 | |
| Interest and similar income | ||
| Net gains on realisation of investments | ||
| – designated at fair value through profit and loss | | |
| Total investment income | 43,088 | 41,829 |
| Net unrealised gains/(losses) on investments | ||
| – designated at fair value through profit and loss | | ( |
| Investments expenses and charges | ( | ( |
| Total investment return |
9. Distribution
A final distribution to members of £80.0 million will be settled in relation to the 2023 closing year of account
(2022 year of account: £44.0 million).
During 2025, £40.0 million early release of profit was also made in respect of the 2023 year of account as reported in
note 15 (2022 year of account: £23.1 million).
Argenta Syndicate 2121
45
10. Financial investments
31 December 2025
Carrying
value
Purchase
price Listed
£’000 £’000 £’000
Shares and other variable yield securities and units in unit trusts
– designated at fair value through profit or loss 213,358 212,955 69,515
Debt securities and other fixed income securities
– designated at fair value through profit or loss 747,860 743,414 –
Participation in investment pools 33,969 32,769 –
Syndicate loans to central fund – – –
Deposits with credit institutions held at fair value – – –
Loans secured by mortgages held at fair value – – –
Derivative assets held at fair value 1 – –
31 December 2024
Carrying
value
Purchase
price Listed
£’000 £’000 £’000
Shares and other variable yield securities and units in unit trusts
– designated at fair value through profit or loss 254,191 254,191 121,400
Debt securities and other fixed income securities
– designated at fair value through profit or loss 637,633 640,515 –
Participation in investment pools 38,891 37,010 –
Syndicate loans to central fund 6,519 6,519 –
Deposits with credit institutions held at fair value – – –
Loans secured by mortgages held at fair value – – –
Derivative assets held at fair value – – –
The shares and other variable yield securities and units in unit trusts relate to holdings in highly diversified collective
investment schemes.
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.
There have been no day one profits recognised in respect of financial instruments designated at fair value through
profit or loss.
The syndicate’s investment managers are permitted to directly purchase derivative financial instruments (interest rate
futures) to hedge the syndicate’s interest rate risks. These derivatives are classified as trading instruments.
46
Notes to the Accounts
continued
10. Financial investments
continued
The following table shows financial investments recorded at fair value analysed between the three levels in the fair
value hierarchy.
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
31 December 2025
Shares and other variable yield securities and units
in unit trusts 213,358 – – 213,358
Debt securities and other fixed income securities – 747,860 – 747,860
Participation in investment pools – 33,969 – 33,969
Syndicate loans to central fund – – – –
Deposits with credit institutions held at fair value – – – –
Loans secured by mortgages held at fair value – – – –
Derivative assets 1 – – 1
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
31 December 2024
Shares and other variable yield securities and units
in unit trusts 254,191 – – 254,191
Debt securities and other fixed income securities – 637,633 – 637,633
Participation in investment pools 8 38,883 – 38,891
Syndicate loans to central fund – – 6,519 6,519
Deposits with credit institutions held at fair value – – – –
Loans secured by mortgages held at fair value – – – –
Derivative assets – – – –
Included in the level 1 category are financial assets that are measured by reference to published quotes in an active
market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry syndicate, pricing service or regulatory agency and those prices
represent actual and regularly occurring market transactions on an arm’s length basis.
Included in the level 2 category are financial assets measured using a valuation technique based on assumptions that
are supported by prices from observable current market transactions. For example, assets for which pricing is
obtained via pricing services but where prices have not been determined in an active market, financial assets with
fair values based on broker quotes, investments in private equity funds with fair values obtained via fund managers
and assets that are valued using the syndicate’s own models whereby the significant inputs into the assumptions are
market observable.
Argenta Syndicate 2121
47
10. Financial investments
continued
Included in the level 3 category are financial assets measured using a valuation technique (model) based on
assumptions that are neither supported by prices from observable current market transactions in the same
instrument nor based on available market data. Therefore, unobservable inputs would reflect the syndicate’s own
assumptions about the assumptions that market participants would use in pricing the asset or liability (including
assumptions about risk). These inputs would be developed based on the best information available, which might
include the syndicate’s own data.
The asset in the level 3 category at 31 December 2024 was a syndicate loan with Lloyd’s introduced in 2019, as part
of Lloyd’s capital structure, with further tranches added in 2020. These amounts were settled during the year.
11. Technical provisions
Claims outstanding
2025
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 1,088,127 (391,938 ) 696,189
Claims incurred during the year 413,272 (136,277 ) 276,995
Change in prior year provisions (4,417 ) 2,068 (2,349 )
Claims paid during the year (334,596 ) 134,824 (199,772 )
Foreign exchange (50,577 ) 18,270 (32,307 )
At 31 December 1,111,809 (373,053 ) 738,756
Claims reported 302,153 (107,123) 195,030
Claims incurred but not reported 809,656 (265,930) 543,726
At 31 December 1,111,809 (373,053) 738,756
2024
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 991,495 (376,707 ) 614,788
Claims incurred during the year 386,529 (104,596 ) 281,933
Change in prior year provisions (2,765 ) (5,359 ) (8,124 )
Claims paid during the year (283,806 ) 93,175 (190,631 )
Foreign exchange (3,326 ) 1,549 (1,777 )
At 31 December 1,088,127 (391,938 ) 696,189
Claims reported 297,763 (100,332) 197,431
Claims incurred but not reported 790,364 (291,606) 498,758
At 31 December 1,088,127 (391,938) 696,189
48
Notes to the Accounts
continued
11. Technical provisions
continued
Provision for unearned premiums
2025
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 409,555 (105,223 ) 304,332
Premiums written in the year 796,649 (221,959 ) 574,690
Premiums earned in the year (767,917 ) 223,774 (544,143 )
Foreign exchange (19,188 ) 4,438 (14,750 )
At 31 December 419,099 (98,970 ) 320,129
2024
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 384,994 (102,661 ) 282,333
Premiums written in the year 835,197 (242,111 ) 593,086
Premiums earned in the year (808,391 ) 238,778 (569,613 )
Foreign exchange (2,245 ) 771 (1,474 )
At 31 December 409,555 (105,223 ) 304,332
Argenta Syndicate 2121
49
11. Technical provisions
continued
Deferred acquisition costs
2025
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 110,301 (28,780 ) 81,521
Incurred deferred acquisition costs 225,219 (47,991 ) 177,228
Amortised deferred acquisition costs (216,324 ) 47,696 (168,628 )
Foreign exchange (4,336 ) 1,175 (3,161 )
At 31 December 114,860 (27,900 ) 86,960
2024
Gross
Reinsurers’
share Net
£’000 £’000 £’000
At 1 January 111,455 (30,863 ) 80,592
Incurred deferred acquisition costs 234,116 (55,335 ) 178,781
Amortised deferred acquisition costs (234,461 ) 57,164 (177,297 )
Foreign exchange (809 ) 254 (555 )
At 31 December 110,301 (28,780 ) 81,521
12. Debtors arising out of direct insurance operations
| 2025 | 2024 | |
| £’000 | £’000 | |
| Amounts falling due within one year – intermediaries | | |
| Amounts falling due after one year – intermediaries | | |
| |
50
Notes to the Accounts
continued
13. Debtors arising out of reinsurance operations
| 2025 | 2024 | |
| £’000 | £’000 | |
| Amounts falling due within one year | | |
| Amounts falling due after one year | | |
| |
14. Other assets
2025 2024
£’000 £’000
Overseas deposits
Amounts advanced in the following locations as a condition of carrying on
business there:
Australia 22,703 25,065
Hong Kong, South Africa, Switzerland and other countries 18,200 22,027
Canada 14,029 12,972
USA 287 426
55,219 60,490
15. Reconciliation of members’ balances
Members participate on syndicates by reference to years of account and their ultimate result, assets and liabilities
are assessed with reference to policies incepting in that year of account in respect of their membership of a
particular year.
Payments of profit to members’ personal reserve funds relates to distributions of £44.0 million in respect of the 2022
year of account and £40.0 million early release of profit in respect of the 2023 year of account (2024: payments of
profit of £34.2 million in respect of the 2021 year of account and £23.1 million early release of profit in respect of
the 2022 year of account).
Members’ results on closed years of account are determined without reference to whether they are earned.
16. Creditors arising out of direct insurance operations
| 2025 | 2024 | |
| £’000 | £’000 | |
| Amounts falling due within one year | | |
| Amounts falling due after one year | | |
| |
Argenta Syndicate 2121
51
17. Creditors arising out of reinsurance operations
| 2025 | 2024 | |
| £’000 | £’000 | |
| Amounts falling due within one year | | |
| Amounts falling due after one year | ||
| |
18. Other creditors
| 2025 | 2024 | |
| £’000 | £’000 | |
| Other related party balances | | |
| Other liabilities | | |
| |
19. Accruals and deferred income
Accruals and deferred income includes £30.3 million (2024: £27.4 million) in respect of profit commission accruals
and £27.9 million (2024: £28.8 million) in respect of deferred reinsurance commissions.
20. Cash and cash equivalents
| 2025 | 2024 | |
| £’000 | £’000 | |
| Cash at bank and in hand | | |
| Short-term deposits with financial institutions | | |
| |
The syndicate holds £213.4 million (2024: £254.2 million) in highly liquid assets, invested in unitised money market
funds that provide daily liquidity.
21. Off balance sheet items
The syndicate has not been party to an arrangement which is not reflected in its statement of financial position,
where material risks or benefits arise for the syndicate.
52
Notes to the Accounts
continued
22. Foreign exchange rates
The following currency exchange rates have been used for transactions in principal foreign currencies:
2025 2024
Start of
period
rate
End of
period
rate
Average
rate
Start of
period
rate
End of
period
rate
Average
rate
Sterling 1.00 1.00 1.00 1.00 1.00 1.00
US dollar 1.26 1.35 1.32 1.27 1.26 1.28
Canadian dollar 1.81 1.85 1.84 1.69 1.81 1.75
Australian dollar 2.02 2.01 2.05 1.87 2.02 1.94
Euro 1.21 1.15 1.17 1.15 1.21 1.18
Japanese yen 198.45 210.53 197.91 179.93 198.45 193.10
23. Related parties
Argenta Holdings Limited
ASML manages syndicates 2121 and 6134 and is a wholly owned subsidiary of AHL, which owns 100% of the voting
and economic rights of ASML. AHL is regarded by ASML as its immediate parent undertaking. Copies of the financial
statements for AHL and ASML can be obtained from Companies House.
AHL is wholly owned by Hannover Re, which is the smallest group to consolidate the financial statements of ASML.
Its financial statements can be obtained from its registered office address at Karl-Wiechert-Allee 50, 30625
Hannover, Germany. The parent undertaking of Hannover Re is Talanx AG which holds a 50.2% interest in the
company. The principal shareholder in Talanx AG is HDI Haftpflichtverband der Deutschen lndustrie. V.a.G. (“HDI”)
which holds 76.7% of Talanx AG’s issued share capital.
AHL and its related parties provide certain underwriting, administrative, accounting, human resources, information
technology, risk management, compliance, legal and internal audit services to ASML. These services are provided on
a non-profit making basis by way of inter-group cross charges and direct salary charges.
Argenta Private Capital Limited (“APCL”), an AHL group company, provides taxation services to the syndicate in
respect of which it receives a fee. Fees are agreed on a commercial basis and the profit to APCL generated from
providing these services is less than £1,000 (2024: less than £1,000).
AUA, a service company originally approved by Lloyd’s and the Monetary Authority of Singapore (“MAS”), is a
subsidiary of AHL and was established to underwrite business on the Lloyd’s Asia platform in Singapore. AUA ceased
underwriting such business in 2022 and was de-registered from the MAS in April 2025. AUA had two branch offices
in Australia; one located in Sydney and the other on the Central Coast north of Sydney, in Tuggerah, trading under
the name of MHIA. In June 2024, the syndicate ceased to underwrite business from the Sydney office which has
been closed. The Tuggerah branch of AUA continued to underwrite on behalf of the syndicate until 30 June 2025.
With effect from 1 July 2025, the business underwritten from the office in Tuggerah was transferred to a new UK
service company owned by AHL, AIL. Such services relating to business written in Singapore were provided at cost
plus a small profit margin of 5% mainly for tax purposes. The total value of the margin in 2025 is less than £100,000
(2024: less than £100,000).
Argenta Syndicate 2121
53
23. Related parties
continued
The commissions retained by AUA for business attaching during 2025 under coverholder agreements underwritten in
Sydney by the Australian branch prior to cessation, on behalf of Syndicate 2121, were charged at a rate of original
acquisition cost plus up to 3%, capped at a maximum commission of 32.5% unless otherwise agreed. Business
underwritten by MHIA on behalf of Syndicate 2121 during 2025 was charged commissions of 22.5%. These
commissions covered original acquisition costs, branch office expenses and processing costs. The total commissions
payable were £3.4 million (2024: £10.2 million). These arrangements are in line with other Australian facilities
currently supported by the syndicate.
A profit commission was also payable to AUA in respect of the business underwritten by both the AUA Sydney office
and by MHIA. The total profit commission charged in relation to the Sydney office and MHIA for 2025 was £1.4
million (2024: nil) and £0.7 million (2024: nil) respectively.
Mr Graham Allen, Mr Sven Althoff, Mr Ian Burford and Mr Nicholas Moore are all directors of AHL. Mr Paul Wilson
was appointed a director of AHL on 11 February 2025. Mr John Whiter was a director of AHL until his retirement on
1 July 2025. Mr Nicholas Moore is a director of APCL and Mr Graham Allen and Mr Shawn Baggs are both directors
of AUA. Mr Nicholas Moore, Mr Graham Allen and Ms Carol-Ann Burton are directors of AIL.
Other than by virtue of directorship fees, salaries and other related remuneration in respect of their employment by
either AHL or its related parties none of the directors, officers or related parties concerned, derive any personal
benefit from the arrangements that exist.
Business transactions
Hannover Re
Hannover Re and certain of its subsidiaries and joint ventures have, in the past, provided, and are likely to provide in
the future, traditional types of reinsurance protection to Syndicate 2121.
Syndicate 2121 has in the past provided insurance or reinsurance cover to Hannover Re and its subsidiaries and may
do so in the future.
ASML manages a Special Purpose Arrangement, Syndicate 6134, to operate alongside Syndicate 2121 as the host
syndicate. Syndicate 6134 is sponsored and capitalised by the Hannover Re group through its corporate member
Inter Hannover (No.1) Ltd (“IH1”).
Syndicate 6134 writes quota share reinsurances across specific classes of business within the underwriting capability
of the host syndicate. These include elements of the property, terrorism, specialty, cyber, political risks, marine hull
and war, marine and energy liability, marine cargo and specie and casualty treaty accounts as well as financial lines
business consisting of professional indemnity, financial institutions, and SME specialty liability accounts. In respect of
the 2023 year of account, the ultimate gross net written premium of Syndicate 6134 was £80.8 million. The
estimated ultimate gross net written premium of the syndicate for the 2024 year of account is £98.9 million, for the
2025 year of account it is £93.6 million and for the 2026 year of account the expectation is that the gross net written
premium will be £93.3 million.
Syndicate 2121 charges Syndicate 6134 an overriding commission in relation to these arrangements. For the 2023 to
2025 years of account, other than in respect of political risks business, this commission is charged at a rate of
between 2% and 11% of gross net written premium. In respect of political risks, the overrider is charged at a rate of
between 25.5% and 30.0% of gross written premium, although Syndicate 6134 is not charged its share of original
acquisition costs for this class. The commission charged is in line with similar facilities currently operating in the
Lloyd’s market.
At 31 December 2025 creditors included an amount of £190.5 million (2024: £201.8 million) owed to Syndicate 6134.
54
Notes to the Accounts
continued
23. Related parties
continued
All such business underwritten and reinsurances purchased have in the past been, and will continue to be,
transacted on an arm’s length commercial basis with no personal benefit derived by the directors, officers or related
parties concerned, other than by virtue of directorship fees, salaries and related remuneration in respect of their
employment or by virtue of any increase in capital value arising on shareholdings.
ASML Directors
Mr Sven Althoff is a member of the Executive Board of Hannover Re and a director of other Hannover Re group
companies. He is also a director of HDI Global Specialty SE (“HGS”).
Mr Shawn Baggs and Mr Niranjan Nathan were appointed as executive directors of ASML on 19 March 2024 and 18
October 2024 respectively.
Ms Rosemary Beaver is a non-executive director of Newline Underwriting Management Limited and Newline
Insurance Company Limited and is a Lloyd’s Enforcement board member.
Mr Ralph Beutter was appointed as a non-executive director of ASML on 1 June 2025. Mr Beutter is a former
chairman of HGS and a former non-executive of HDI Re (Ireland).
Ms Carol-Ann Burton resigned as an executive director of ASML on 12 November 2024. Ms. Burton remains with the
company as company secretary.
Mr Gary Powell resigned as a non-executive director on 31 December 2025.
Mrs Miriam Goddard was appointed as a non-executive director of ASML on 24 April 2024. Mrs Goddard is a former
joint active underwriter of Syndicate 1967 and former chief underwriting officer for WR Berkely Corporation. Mrs
Goddard joined the LMA Nominations Committee in June 2025.
Mr Nigel Meyer holds non-executive directorships with First Central Insurance Management Limited, an insurance
broker; Amtrust Specialty Limited, an insurance company; and is an executive director of Heydon Consulting Limited,
a consultancy providing mergers and acquisitions advisory services to the insurance sector. Mr Meyer owns 50% of
the shares of Heydon Consulting Limited.
Ms Anne-Kathrin Saake was appointed as a non-executive director of ASML on 27 November 2024. Ms Saake is the
managing director of the UK and Ireland, Aviation and Marine division within Hannover Re.
Mr Jens Schäfermeier was previously the managing director of the UK and Ireland, Aviation and Marine division
within Hannover Re. Mr Schäfermeier resigned from the Board of ASML on 27 August 2024.
Mr Paul Wilson was appointed as a non-executive director of ASML on 26 February 2025. Mr Wilson is also a director
of Unigestion (UK) Limited.
Mr John Whiter was a director of ASML until his retirement on 1 July 2025. Mr Whiter was a non-executive director
of Continuum Advisory Partners Limited from 16 January 2023 until his resignation on 31 March 2025.
The above entities may in the past have transacted business with syndicates managed by ASML and may do so in the
future. Any such business, however, has been, and will continue to be, conducted on an arm’s length commercial
basis with no involvement, either directly or indirectly, from the individuals above.
Other than directorship fees, salaries and other related remuneration and any increase in capital value arising on
shareholdings, no personal benefit is derived by the individuals concerned from these arrangements.
Argenta Syndicate 2121
55
23. Related parties
continued
ASML
Total fees payable to ASML in respect of services provided to the syndicate amounted to £6.0 million (2024: £6.0
million). Profit commission is only due on closure of the year of account although ASML may receive payments on
account of anticipated profit commissions in line with interim profits released to members. During 2025, £18.2
million of profit commission was charged to Syndicate 2121 (2024: £19.0 million). Accruals and deferred income at
the year-end include amounts accrued in respect of profit commission due to ASML of £30.3 million (2024: £27.4
million) including £14.6 million in relation to the 2023 closed year of account payable in 2026.
In addition to this, £44.7 million (2024: £38.4 million) was recharged by ASML for expenses paid on behalf of the
syndicate. Creditors at the year-end include amounts due to ASML of £1.0 million (2024: £3.1 million) relating to
these.
Capital support for Syndicate 2121
For a fee, Hannover Re provides capital support to Argenta Underwriting No. 2 Limited (“AU2”) and Argenta
Underwriting No. 3 Limited (“AU3”) for the 2023 year of account by way of excess participation agreements.
IH1, a wholly owned subsidiary of the Hannover Re group, participates on Syndicate 2121 for the 2023 to 2026 years
of account. Mr Allen and Mr Moore are directors of IH1. Mr Schäfermeier was appointed a director of IH1 on 26
January 2024 and resigned on 31 December 2024.
APCL allocates capacity to Syndicate 2121 for the 2023 to 2026 years of account.
Mr Moore is a director of AU2 and AU3. Mr Allen was a director of AU2 and AU3 until he resigned on 1 September
2025.
AU2 and AU3 participate on Syndicate 2121 for the 2023 to 2026 years of account. AU2 and AU3 are subsidiaries of
AHL.
HDI Corporate Member Limited will participate on Syndicate 2121 for the 2026 year of account.
Other than by virtue of directors’ fees, salaries and other related remuneration in respect of their employment and
any increase in capital value arising on shareholdings, none of the directors, officers or related parties concerned
derive any personal benefits from the arrangements that exist.
For the 2025 and prior years of account all capital providers who underwrite on Syndicate 2121 are charged
managing agency fees and profit commission on a standard basis, apart from where the charges are less
advantageous, as disclosed in the Register of Underwriting Agency Charges.
There are no other transactions or arrangements to be disclosed.
24. Funds at Lloyd’s
In case syndicate assets prove insufficient to meet members’ underwriting liabilities, every member is required to
hold additional capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (“FAL”).
The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA requirements
and resource criteria according to the nature and the amount of risk to be underwritten by the member and the
assessment of the reserving risk in respect of business that has been underwritten. FAL is not hypothecated to any
specific syndicate participation by a member and therefore, there are no specific funds available to a syndicate
which can be precisely identified as its capital. As such, no amount has been shown in these annual accounts by way
of FAL. However, the managing agent is able to make a call on the members’ FAL to meet liquidity requirements or
to settle losses.
56
Notes to the Accounts
continued
25. Risk management
(a) Governance framework
The primary objective of the syndicate’s risk management framework is to protect the syndicate’s members from
events that hinder the sustainable achievement of financial performance objectives, including failing to exploit
opportunities. ASML recognises the critical importance of having efficient and effective risk management
systems in place.
The managing agent has established a risk management function for the syndicate with clear terms of reference
from the board of directors and its sub-committees. This is supplemented with a clear organisational structure
with documented delegated authorities and responsibilities from the board of directors to executive
management committees and senior managers. Lastly, a syndicate policy framework that sets out the risk
profiles for the syndicate, risk management, control and business conduct standards for the syndicate’s
operations has been put in place. Each policy has a member of senior management charged with overseeing
compliance with the policy throughout the syndicate.
The board of directors approves the risk management policies and meets regularly to approve any commercial,
regulatory and organisational requirements of such policies. These policies define the identification of risk and
its interpretation to ensure the appropriate quality and diversification of assets; align underwriting and
reinsurance strategy to the syndicate’s objectives; and specify reporting requirements. Significant emphasis is
placed on assessment and documentation of risks and controls, including the articulation of ‘risk appetite’.
(b) Capital management objectives
Capital framework at Lloyd’s
Lloyd’s is a regulated undertaking and subject to the supervision of the PRA under the Financial Services and
Markets Act 2000.
Within the supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s complies with solvency capital requirements, and beyond that to meet its own financial strength,
licence and ratings objectives.
With effect from 31 December 2025, Lloyd’s is required to adopt Solvency UK replacing the previous Solvency II
framework. The PRA granted Lloyd’s a rule modification deferring the application of Solvency UK until
31 December 2025.
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 2121 is not
disclosed in these financial statements.
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.
Argenta Syndicate 2121
57
25. Risk management
continued
A syndicate may comprise one or more underwriting members of Lloyd’s. Each member is liable for its own
share of underwriting liabilities on the syndicate on which it participates but not other members’ shares.
Accordingly, the capital requirement that Lloyd’s sets for each member operates on a similar basis. For a
member participating on a single syndicate, its SCR is determined by the member’s share of the syndicate SCR
‘to ultimate’. Where a member participates on more than one syndicate a credit for diversification is included to
reflect the spread of risk. The credit given is consistent with determining a 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 an
uplift to the member’s SCR to determine the overall level of capital required. This is known as the member’s
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 (“FAL”), held within and managed within a syndicate (funds in syndicate) or as the member’s share of
the members’ balances on each syndicate on which it participates (the latter being adjusted to reflect their
value on a Solvency UK basis).
Accordingly, all of the assets less liabilities of the syndicate, as represented in the members’ balances reported
on the statement of financial position on page 29, represent resources available to meet members’ and Lloyd’s
capital requirements.
(c) Insurance risk
(1) General
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. References to insurance business
should, as appropriate, be understood to include the equivalent reinsurance business underwritten by the
syndicate.
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. Reinsurance ceded is placed on
both a proportional and non–proportional basis. The majority of proportional reinsurance is quota share
reinsurance which is taken out to reduce the overall exposure to certain classes of business. Non–proportional
reinsurance is primarily excess of loss reinsurance designed to mitigate the syndicate’s net exposure to
catastrophe losses and large individual risk losses. Retention limits for the excess of loss reinsurance vary by
product line and territory.
58
Notes to the Accounts
continued
25. Risk management
continued
Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims
provision and are in accordance with the reinsurance contracts. Although the syndicate has reinsurance
arrangements, it is not relieved of its direct obligations to its policyholders and thus a credit exposure exists
in respect of ceded insurance, to the extent that any reinsurer is unable to meet its obligations assumed
under such reinsurance agreements. The syndicate’s placement of reinsurance is diversified such that it is
neither dependent on a single reinsurer nor are the operations substantially dependent upon any single
reinsurance contract.
The syndicate principally issues the following types of general insurance contracts: fire and other damage to
property; marine, aviation and transport; energy; and third-party liability. Risks usually cover twelve months
duration.
The most significant risks arise from natural disasters, terrorist activities, cyber attacks, large risk losses and
adverse attritional claims experience. For longer tail claims that take some years to settle, there is also
inflation risk.
The variability of risks is improved by careful selection and implementation of underwriting strategies, which
are designed to ensure that risks are diversified in terms of type of risk and level of insured benefits. This is
largely achieved through diversification across industry sectors and geography. Furthermore, strict claim review
policies to assess all new and ongoing claims, regular detailed review of claims handling procedures and
frequent investigation of possible fraudulent claims are all policies and procedures put in place to reduce the
risk exposure of the syndicate. The syndicate further enforces a policy of actively managing and promptly
pursuing claims, in order to reduce its exposure to unpredictable future developments that can negatively
impact the business. Inflation risk is mitigated by taking expected inflation into account where appropriate
when estimating insurance contract liabilities.
The syndicate has also limited its exposure by imposing maximum claim amounts on certain contracts as well as
the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g. hurricanes,
earthquakes and flood damage).
The underwriting and reinsurance strategies include limiting exposure to catastrophes based on risk appetites
set and approved by the ASML Board. The following tolerances detail the maximum exposure to Natural
Catastrophes (“Cat”) and Man-made Cat ASML is prepared to accept. The board may decide to increase or
decrease the maximum tolerances based on market conditions and other factors.
Argenta Syndicate 2121
59
25. Risk management
continued
Man-made Cat
·
Largest gross man-made realistic disaster scenario (“RDS”) loss should not exceed 25% of the
ECA-plus-profit
·
Cyber RDS size does not exceed 15% of ECA-plus-profit
·
Liability RDS size – should not exceed 8% of ECA-plus-profit
·
Terrorism RDS size – should not exceed 7% of ECA-plus-profit
·
Political Risk RDS size – should not exceed 7% of ECA-plus-profit
Natural Cat
·
Whole world final net annual aggregate Natural Cat risk exposure (aggregate exceedance probability
(“AEP”) 1:30) – should not exceed 45% of ECA-plus-profit
·
Gross Natural Cat risk exposure (AEP 1:30) – should not exceed 90% of ECA-plus-profit
·
Net US Windstorm (AEP 1:30) – should not exceed 30% of ECA-plus-profit
·
Gross US Windstorm (AEP 1:30) – should not exceed 65% of ECA-plus-profit
·
Net Lloyd’s Catastrophe Model five peak perils (“LCM5”) (1:200) – should not exceed 60% of
ECA-plus-profit
The syndicate uses both its own and commercially available proprietary risk management software to assess
catastrophe exposure. However, there is always a risk that the assumptions and techniques used in these models
are unreliable or that claims arising from an unmodelled event are greater than those arising from a modelled
event.
As a further guide to the level of catastrophe exposure written by the syndicate, the following table shows
forecast claims arising from various hypothetical catastrophe events for the 2026 year.
These include RDS events, as well as annual aggregate losses in respect of natural catastrophe events that would
be expected to occur once every 30 years (30-year loss).
Figures are consistent with the 2026 Syndicate Business Forecast (“SBF”) approved by Lloyd’s, therefore are
based on expected risk exposures estimated for the 2026 year.
Catastrophe event
Estimated
gross loss
Estimated
final net loss
£m £m
30-year loss – Whole world natural catastrophe 253 122
30-year loss – US windstorm 178 79
Cyber – Ransomware contagion 69 47
30-year loss – US & Canada earthquake 75 36
Sydney earthquake 64 36
60
Notes to the Accounts
continued
25. Risk management
continued
The table below sets out the concentration of outstanding claim liabilities and unearned premiums by type of
contract:
Gross
liabilities
Net
liabilities
Gross
liabilities
Net
liabilities
£’000 £’000 £’000 £’000
Direct insurance:
Accident and health – – 1,794 1,025
Motor (third-party liability) – – 6,278 4,547
Motor (other classes) 5,277 5,249 6,443 5,589
Marine, aviation and transport 92,456 78,756 93,385 71,733
Fire and other damage to property 317,863 238,104 326,528 251,370
Third-party liability 548,724 352,485 539,716 319,261
Credit and suretyship 65,426 32,447 74,034 35,810
Total direct insurance 1,029,746 707,041 1,048,178 689,335
Reinsurance acceptances 501,162 351,844 449,504 311,186
1,530,908 1,058,885 1,497,682 1,000,521
Argenta Syndicate 2121
61
25. Risk management
continued
The geographical concentration of the outstanding claim liabilities and unearned premiums is noted below. The
disclosure is based on the domicile of counterparties. The analysis is not expected to be materially different if
based on the countries in which the risks are situated.
31 December 2025 31 December 2024
Gross
liabilities
Net
liabilities
Gross
liabilities
Net
liabilities
£’000 £’000 £’000 £’000
UK 769,717 533,144 502,130 319,510
US 357,219 244,664 486,634 326,602
EU 146,766 95,297 98,588 54,120
Other 257,206 185,780 410,330 300,289
1,530,908 1,058,885 1,497,682 1,000,521
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 claims indemnity
costs, claims handling costs and claims inflation for each underwriting year. For more recent years of account, ‘a
priori’ loss ratio selections are also key assumptions in determining the reserves, which are themselves based on
historical experience as well as judgements to reflect current underwriting conditions.
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; economic conditions; as well as internal
factors such as portfolio mix, policy conditions and claims handling procedures. Judgement is further used to
assess the extent to which external factors such as judicial decisions and government legislation affect the
estimates.
Other key circumstances affecting the reliability of assumptions include the occurrence of large losses, 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, the result and members’ balances.
The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to
demonstrate the impact due to changes in each assumption, assumptions had to be changed on an individual
basis. It should be noted that movements in these assumptions are non–linear.
62
Notes to the Accounts
continued
25. Risk management
continued
31 December 2025
Change in
assumptions
Impact on
gross
liabilities
£’000
Impact on
net liabilities
£’000
Impact on
result
£’000
Impact on
members’
balance
£’000
‘A priori’ loss ratios +5% 47,352 32,596 (28,658) (28,658)
Incurred claims development
patterns
Recede
development
by 1 month 30,202 22,009 (19,514) (19,514)
31 December 2024
Change in
assumptions
Impact on
gross
liabilities
£’000
Impact on
net liabilities
£’000
Impact on
result
£’000
Impact on
members’
balance
£’000
‘A priori’ loss ratios +5% 44,076 29,067 (25,941) (25,941)
Incurred claims development
patterns
Recede
development
by 1 month 30,171 21,397 (19,258) (19,258)
The method used for deriving sensitivity information and the significant assumptions are the same for both
periods.
Claims development table
The following tables show the estimates of cumulative incurred claims, including both claims notified and IBNR
for each successive underwriting year at each reporting date, together with cumulative payments to date. The
cumulative claims estimates and cumulative payments are translated to sterling at the rate of exchange that
applied at 31 December 2025.
In setting claims provisions the syndicate gives consideration to the probability and magnitude of future adverse
experience. Due to the uncertainty inherent in the estimation process, the actual overall claim provision may not
always be in surplus.
Argenta Syndicate 2121
63
25. Risk management
continued
Gross insurance contract outstanding claims provision as at 31 December 2025:
Underwriting
year
Before
2016
£’000
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
Total
£’000
Estimate of cumulative claims
incurred:
At end of underwriting year 65,702 114,853 117,863 106,290 162,631 161,313 167,194 138,866 173,520 165,041
12 months later 161,393 208,427 282,349 311,921 331,258 376,819 327,340 308,548 392,337
24 months later 183,708 247,452 332,623 319,408 360,929 398,593 334,684 307,422
36 months later 202,173 247,895 324,974 307,045 341,748 403,955 344,314
48 months later 200,078 258,038 338,796 308,059 335,649 426,748
60 months later 207,020 270,747 348,780 302,917 332,275
72 months later 202,604 274,043 360,032 297,530
84 months later 207,038 285,210 353,319
96 months later 209,881 285,611
108 months later 209,634
Current estimate of
cumulative claims incurred 209,634 285,611 353,319 297,530 332,275 426,748 344,314 307,422 392,337 165,041 3,114,231
Cumulative payments to date (190,502 ) (254,754 ) (311,497 ) (264,535 ) (248,438 ) (304,774 ) (209,172 ) (130,343 ) (88,889 ) (16,800 ) (2,019,704 )
Gross outstanding claims
provision at 31 December
2025 per the statement of
financial position 17,282 19,132 30,857 41,822 32,995 83,837 121,974 135,142 177,079 303,448 148,241 1,111,809
64
Notes to the Accounts
continued
25. Risk management
continued
Net insurance contract outstanding claims provision as at 31 December 2025:
Underwriting
year
Before
2016
£’000
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
Total
£’000
Estimate of cumulative claims
incurred:
At end of underwriting year 54,139 62,808 79,024 64,533 81,405 103,674 99,345 104,778 133,848 123,850
12 months later 118,160 160,123 176,117 197,407 171,501 253,451 223,126 223,626 277,679
24 months later 133,322 179,723 202,434 203,003 200,478 258,762 225,390 218,016
36 months later 137,760 178,309 204,060 204,401 192,105 259,854 229,089
48 months later 136,737 184,603 210,777 205,178 193,328 271,440
60 months later 139,634 182,094 215,746 199,989 193,779
72 months later 138,273 186,034 219,265 195,411
84 months later 139,277 191,567 215,645
96 months later 141,623 191,250
108 months later 141,624
Current estimate of
cumulative claims incurred 141,624 191,250 215,645 195,411 193,779 271,440 229,089 218,016 277,679 123,850 2,057,783
Cumulative payments to date (131,525 ) (175,403 ) (190,196 ) (166,236 ) (153,318 ) (197,044 ) (148,363 ) (94,392 ) (60,901 ) (13,184 ) (1,330,562 )
Net outstanding claims
provision at 31 December
2025 per the statement of
financial position 11,535 10,099 15,847 25,449 29,175 40,461 74,396 80,726 123,624 216,778 110,666 738,756
The estimate of cumulative claims incurred on an underwriting year will increase whilst premium continues to
be earned. This will naturally give rise to an increase in incurred claims in the period up to 24 months beyond
the underwriting year.
Syndicate 2121 has material exposure to losses from the Russia-Ukraine conflict. However this exposure does not
lead to a material increase in the uncertainty of the syndicate’s total reserves in an adverse direction.
Argenta Syndicate 2121
65
25. Risk management
continued
(d) Financial risk
(1) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by
failing to discharge an obligation.
The following policies and procedures are in place to mitigate the exposure to credit risk:
·
A credit risk policy setting out the assessment and determination of what constitutes credit risk for the
syndicate. Compliance with the policy is monitored and exposures and breaches are reported to the
risk framework and capital committee. The policy is regularly reviewed for pertinence and for changes
in the risk environment.
·
Net exposure limits are set for each investment counterparty or syndicate of counterparties, with
minimum credit quality requirements at a portfolio level.
·
Reinsurance is placed with counterparties that have a good credit rating and concentration of risk is
avoided by following policy guidelines in respect of counterparties’ limits that are set by the third
party management group and are subject to regular reviews. At each reporting date management
performs an assessment of creditworthiness of reinsurers, ascertaining a suitable allowance for
impairment.
·
Guidelines determine when to obtain collateral and guarantees.
·
The credit risk in respect of customer balances, incurred on non-payment of premiums or contributions,
will only persist during the grace period specified in the policy document or trust deed until expiry,
when the policy is either paid up or terminated. Commission paid to intermediaries is netted off
against amounts receivable from them to reduce the risk of doubtful debts.
The following tables show the maximum exposure to credit risk (including an analysis of financial assets
exposed to credit risk) for the components of the statement of financial position. The maximum exposure is
shown gross, before the effect of mitigation through collateral agreements and the use of credit
derivatives.
66
Notes to the Accounts
continued
25. Risk management
continued
31 December 2025
Neither past
due nor
impaired Past due Impaired Total
£’000 £’000 £’000 £’000
Financial investments
– Debt securities and other fixed income
securities 747,860 – – 747,860
– Shares and other variable yield
securities and units in unit trusts 213,358 – – 213,358
– Participation in investment pools 33,969 – – 33,969
– Loans secured by mortgages – – – –
– Derivative assets 1 – – 1
– Deposits with credit institutions – – – –
– Syndicate loans to central fund – – – –
Deposits with ceding undertakings 213 – – 213
Reinsurers’ share of claims outstanding 373,053 – – 373,053
Debtors arising out of direct insurance
operations 279,125 36,867 – 315,992
Debtors