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Syndicate 1416
Annual Report and Accounts for the year ended
Contents
Contents
Directors and Administration
1
Managing Agent’s report
2
Statement of Managing Agent’s responsibilities
8
Independent auditor’s report to the Members of Syndicate 1416
9
Statement of profit or loss and other comprehensive income
13
Statement of Financial Position
15
Statement of changes in Members’ balances
17
Statement of cash flows
18
Notes to the financial statements – (forming part of the financial statements)
19
1
Directors and administration
Managing Agent
Directors
P Allen *
C Bulmer
P Chubb *
A Cunningham
S Fordham
A Ganger
I Harman **
H Marsden **
J Scofield
K Shah *
Independent Non-Executive Directors *
Group Non-Executive Director **
Managing Agent's registered office
The Hallmark Building
2
nd
Floor
52-56 Leadenhall Street
London
EC3A 2BJ
Managing Agent's registered number
16059213
Active Underwriter
A Cunningham
Registered Auditor
Ernst & Young LLP
Signing Actuary
Ernst & Young LLP
2
Managing Agent's report
The Special Purpose Arrangement’s (SPA) Managing Agent is a company registered in
England and Wales. The Directors of the Managing Agent present their report for the year
ended 31 December 2025.
The financial statements herein have been 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 (Lloyd’s Regulations 2008).
Results
The result for calendar year 2025 is a profit of $8.4m (2024: profit of $3.4m).
The SPA presents its results under FRS102, the Financial Reporting Standard applicable in
the UK and Republic of Ireland. In accordance with FRS102, the SPA has identified its
insurance contracts and accounted for them in accordance with FRS103 Insurance Contracts.
Principal activity and review of the business
The SPA was established in October 2021 to underwrite a variable quota share of certain
classes of business from Syndicate 4242 (Host Syndicate) for risks incepting from 1 October
2021.
The 2022 underwriting year was the first full year of member participation. On 1 January 2025,
the Host Syndicate externally Reinsured-to-Close the 2022 and prior underwriting years to
Syndicate 3500, managed by Riverstone Managing Agency Limited.
The SPA has a fixed 20% quota share for the 2023 and subsequent years across all classes
of business underwritten by the Host Syndicate, operated on a Funds Withheld basis. The
quota share percentage is stated as a percentage of underwriting facilities and open market
policies (as the case may be) incepting during the year.
The Syndicate's financial key performance indicators during the year were as follows:
2025
2024
Change
$'000
$'000
Gross written premiums
76,959
78,448
-2%
Profit for the financial year
8,424
3,407
147%
Net Loss Ratio
45.9%
55.8%
-10%
Net Combined Ratio
86.4%
98.0%
-12%
*The net loss ratio is the ratio of net claims incurred to net premiums earned in the calendar
year. The combined ratio is the ratio of net claims incurred and net operating expenses to net
premiums earned in the calendar year. Lower ratios represent better performance.
The performance of the SPA has been assessed by measuring, as a percentage of
underwriting capacity, the 36-month forecasted result on a funded accounting basis for an
individual underwriting year of account (YOA). The return on capacity for each underwriting
year is shown below.
Note that the 2023 underwriting year is now closed.
3
Managing Agent’s report continued
2025
2024
2023
YoA
YoA
YoA
Open
Open
Closed
Capacity ($'000) (at 31.12.25 closing rates)
74,250
81,000
87,750
Forecast ($'000)
5,542
4,485
9,937
Forecast result on capacity (%)
7.5%
5.5%
11.3%
Principal risks and uncertainties
The SPA sets risk appetite annually, which is approved by the Agency as part of the SPA’s
business planning and Solvency Capital Requirement (SCR) process. The SPA is closely
aligned to the Host Syndicate’s risk appetite given the quote share arrangement. When
considering the items described below as the Host Syndicate, the SPA is also considered at
the same time. The Agency Risk and Compliance Committee meets at least quarterly to
oversee the risk management framework. The Syndicate Board, an Executive committee
charged with overseeing the Syndicate, reviews the risk profile as reflected in the risk register,
and monitors performance against risk appetite using a series of key risk indicators. Other
Syndicate-level committees oversee specific aspects of business operations and report into
the Syndicate Board. The principal risk and uncertainties facing the Syndicate are as follows:
Insurance risk
Insurance risk includes the risks that a policy will be written for too low a premium or provide
inappropriate cover (underwriting risk), that the frequency or severity of insured events will be
higher than expected (claims risk), or that estimates of claims subsequently prove to be
insufficient (reserving risk). The Syndicate Board and Underwriting Committee manages
insurance risk through challenge and oversight of the approved business plan, which sets out
targets for volumes, pricing, line sizes and retention by class of business. The Syndicate
Board then monitors performance against the business plan and the aggregation of risk
through exposure management reporting through the year. The Syndicate Board considers
any proposed underwriting that impacts the Syndicate’s Environmental, Social and
Governance (ESG) profile to ensure consistency with the agreed ESG approach. Reserve
adequacy is monitored through quarterly review by the Claims and Reserving Committee.
Credit risk
The key aspect of credit risk is reinsurance counterparty risk which is the risk of default by one
or more of the SPA’s reinsurers and intermediaries. The Host Syndicate’s policy is to only use
approved reinsurers, supported by collateralisation where required. The Syndicate
Reinsurance Committee sets approval and usage criteria, monitors reinsurer ratings and is
required to approve and oversee the application of the reinsurer approval policy. The
Syndicate may also be exposed to broker credit risk, in particular where risk transfer
arrangements are in place. Aged debt reporting for premiums is reviewed in the Syndicate
Board.
4
Managing Agent’s report continued
Market risk
Market risk exposure impacting the SPA relates to fluctuations in interest rates or exchange
rates and inflation. The SPA is exposed to foreign exchange movements as a result of
mismatches between the currencies in which assets and liabilities are denominated. The
Agency’s policy is to maintain received income or incurred expenditure in the core currencies
in which they were received or paid. Any surplus or deficit in a core currency would be subject
to review by the Syndicate Board.
Investments are monitored through investment managers with quarterly Investment and
Liquidity Committees that review the performance, duration and ESG ratings for the
investments. The SPA is exposed to market risk and takes its share of investment return from
the Host Syndicate.
Liquidity risk
This is the risk that the SPA will not be able to meet its liabilities as they fall due, owing to a
shortfall in cash or can only meet obligations at excessive cost. To mitigate this risk the
Syndicate Board and Investment and Liquidity Committee review cash flow projections
regularly and ensure that, where needed, the Host Syndicate has liquidity facilities in place or
has utilised the option of a cash call from capital providers.
Operational risk
This is the risk that errors caused by people, processes, systems and external events lead to
losses to the SPA. The Agency seeks to manage this risk through a robust operational risk
and control framework including detailed procedure manuals and a thorough training
programme. This is underpinned by a structured programme of testing of processes and
systems by internal audit, who serve as an independent line of assurance, reporting directly to
the Chair of the Agency Audit and Conflicts Committee. Business continuity and disaster
recovery plans are in place and are regularly updated and tested.
Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to
respond to regulatory change. The Agency is required to comply with the requirements of the
Financial Conduct Authority (FCA), Prudential Regulatory Authority (PRA) and Lloyd’s. Lloyd’s
requirements include those imposed on the Lloyd’s market by overseas regulators. The
Agency has a Compliance Director who manages a function that monitors business activity
and regulatory developments to assess any effects on both the Agency and the SPA.
The Host Syndicate has no appetite for failing to adhere to the requirements of the FCA
Consumer Duty regulations and continues its focus on ensuring that it is treating customers
fairly. The Host Syndicate manages and monitors consumer duty risk through a suite of risk
indicators and reporting metrics as part of its documented Customer Outcomes Policy. This
Policy is applied across the Syndicate and is overseen by the Agency Board.
5
Managing Agent’s report continued
Group and strategic risk
Group risk is the risk of contagion that arises from being associated with key stakeholders and
the impact that activities and events that occur within other connected or third parties has on
the business.
Strategic risk covers the risks faced by the Host Syndicate and SPA due to changes in
underlying strategy of the business or that of its key stakeholders (including strategic conflicts
of interest).
Going concern
The Directors of the Managing Agent have prepared the Annual Accounts on a going
concern basis. In adopting the going concern basis, the SPA’s current and forecast solvency
and liquidity positions for the next 12 months have been reviewed. As part of the
consideration of the appropriateness of adopting the going concern basis, the Directors used
scenario analysis to assess the robustness of the SPA’s solvency and liquidity positions. See
note 1 for further information.
Future developments
The Host Syndicate will continue to transact the current classes of general direct insurance
and reinsurance business. If opportunities arise to write new classes of business, these will be
investigated at the appropriate time.
The capacity for the 2026 underwriting year is $74.25m (£55.0m) (2025 underwriting year:
$74.25m, £55.0m).
Environmental, Social and Governance (ESG) and sustainability
The Host Syndicate has documented a position with regard to ESG and sustainability, which
is submitted annually to Lloyd’s as part of business planning. The position has been developed
in alignment with Lloyd’s principles and expectations, broader regulatory requirements, and to
support the Syndicate’s strategic objectives. Lloyd’s published an updated version of its
“Insuring the Transition” Roadmap as well as its principles for doing business regarding
sustainability, and the Syndicate continues to ensure its approach aligns with those
expectations.
The Agency has built a climate change framework, applicable to the Host Syndicate, covering
physical, transition and liability climate change risks, based on the underlying business written
by each syndicate. The Host Syndicate accepts climate change risk where it is an inherent
part of an insurance business model, providing it is understood, managed, and controlled
and/or compensated. There is no appetite for uncontrolled, unmanaged exposure to the
financial risks of climate change.
The framework ensures board-level engagement and accountability with Lloyd’s and PRA’s
requirements and expectations, assigning clear responsibilities for managing the financial risks
associated with climate change. The Agency’s Chief Risk Officer is responsible for the climate
change framework, including identifying and managing financial climate related risks.
Statera monitors regulatory guidance and expectations on managing the financial risks of
climate change.
6
Managing Agent’s report continued
Emerging risks
An emerging risk or opportunity is defined as “a developing issue, triggered externally, with
the potential to have a significant business impact but which may not be sufficiently understood
or accounted for”. The business impact in this case could represent a downside risk or an
upside opportunity. Emerging risks and opportunities include:
• The SPA’s insurable risks, as areas of potential future losses or new product offerings;
• Those risks that may affect an SPA’s ability to carry out normal business operations
and/or lead to unplanned significant costs/income;
• Both new risks and those which are re-emerging in a new context.
The Agency and SPA continue to monitor the impact of emerging risks on the SPA’s business,
taking into account their impacts on the strategic direction of the SPA. Monitoring takes place
in various forums, including the Emerging Risks Forum which meets quarterly and considers
emerging risks and opportunities from both an internal and external lens. Specific areas of
focus over the external environment across the year at SPA and Agency level include:
• The geopolitical landscape from a tension and broader political risk impact, including
any exposures stemming from regional conflicts (e.g. Russia – Ukraine conflict).
• The operational and insurance implications of artificial intelligence.
Directors
Details of the Directors of the Managing Agent that were serving at the date of signing these
financial statements are provided on page 1. Changes to directors during 2025 were as
follows:
P Allen Appointed 23 October 2025
C Bulmer Appointed 23 October 2025
P Chubb Appointed 23 October 2025
A Ganger Appointed 23 October 2025
H Marsden Appointed 23 October 2025
J Scofield Appointed 23 October 2025
K Shah Appointed 9 December 2025
7
Managing Agent’s report continued
Disclosure of information to the auditor
So far as each person who was a director of the Managing Agent at the date of approving the
report is aware, there is no relevant audit information, being information needed by the
Syndicate auditor in connection with the auditor’s report, of which the auditor is unaware.
Having made enquiries of fellow directors of the Agency and the SPA’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 SPA’s auditor is aware of that
information.
Auditor
The Managing Agent intends to reappoint Ernst & Young LLP as the SPA’s auditor.
Syndicate Annual General Meeting
In accordance with the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the
Managing Agent does not propose holding an annual meeting this year; objections to this
proposal or the intention to reappoint the auditors for a further 12 months can be made by
Syndicate members within 21 days of this notice.
On behalf of the Board,
Director
20 February 2026
8
Statement of Managing Agent’s responsibilities
The Managing Agent is responsible for preparing the financial statements in accordance with
applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 require the managing agent to prepare financial statements at 31 December each year
in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law) including FRS 102 the Financial Reporting
Standard applicable in the UK and Republic of Ireland. The financial statements are required
by law to give a true and fair view of the state of affairs of the Syndicate as at that date and of
its profit or loss for that year.
In preparing the financial statements, the managing agent is required to:
• select suitable accounting policies and then apply them consistently subject to changes
arising on the adoption of new accounting standards in the year;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable Accounting Standards have been followed, subject to any
material departures disclosed and explained in the notes to the Syndicate accounts;
and
• prepare the Syndicate accounts on the basis that the Syndicate will continue to write
future business unless it is inappropriate to presume that the Syndicate will do so.
The Managing Agent is responsible for keeping adequate accounting records which disclose
with reasonable accuracy at any time the financial position of the Syndicate and enable it to
comply with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008. It is also responsible for safeguarding the assets of the Syndicate and
hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Managing Agent is responsible for the maintenance and integrity of the corporate and
financial information included on the business’ website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
We confirm that to the best of our knowledge the Syndicate accounts, including the iXBRL
tagging applied to these accounts, comply with the requirements of the Lloyd’s Syndicate
Accounts Instructions version 3.1 as modified by the Frequently Asked Questions version V1.1
issued by Lloyd’s.
9
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SYNDICATE 1416
Opinion
We have audited the syndicate annual accounts of syndicate 1416 (‘the syndicate’) for the year
ended 31 December 2025 which comprise the Income Statement, the Statement of Comprehensive
Income, the Statement of Members’ Balances, the Statement of Financial Position, the Statement of
Cash Flows and the related notes 1 to 20 including a summary of significant accounting policies. The
financial reporting framework that has been applied in their preparation is applicable law including The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, United
Kingdom Accounting Standards including FRS 102 ‘The Financial Reporting Standard applicable in
the UK and Republic of Ireland’ and FRS 103 ‘Insurance Contracts’ (‘United Kingdom Generally
Accepted Accounting Practice’), and Section 1 of the Lloyd’s Syndicate Accounts Instructions V3.1 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (‘the Syndicate Accounts
Instructions’).
In our opinion, the syndicate annual accounts:
– give a true and fair view of the syndicate’s affairs as at 31 December 2025 and of its profit for
the year then ended;
– have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
– have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Syndicate Accounts
Instructions.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the
Syndicate Accounts Instructions, and other applicable law. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the syndicate annual accounts
section of our report. We are independent of the syndicate in accordance with the ethical requirements
that are relevant to our audit of the syndicate annual accounts in the UK, including the FRC’s Ethical
Standard as applied to other entities of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Conclusions relating to going concern
In auditing the syndicate annual accounts, we have concluded that the managing agent’s use of the
going concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s
ability to continue as a going concern for a period of 12 months from when the syndicate annual
accounts are authorised for issue.
10
Our responsibilities and the responsibilities of the directors of the managing agent with respect to
going concern are described in the relevant sections of this report. However, because not all future
events or conditions can be predicted, this statement is not a guarantee as to the syndicate’s ability to
continue as a going concern.
Other information
The other information comprises the information included in the annual report, other than the
syndicate annual accounts and our auditor’s report thereon. The directors of the managing agent are
responsible for the other information contained within the annual report.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the
extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the syndicate annual accounts or our knowledge obtained in
the course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the syndicate annual accounts themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the managing agent’s report for the financial year in which the syndicate
annual accounts are prepared is consistent with the syndicate annual accounts; and
– the managing agent’s report has been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the syndicate and its environment obtained in the
course of the audit, we have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters where The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you, if in our
opinion:
– the managing agent in respect of the syndicate has not kept adequate accounting records; or
– the syndicate annual accounts are not in agreement with the accounting records; or
– certain disclosures of the managing agent’s emoluments specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
Responsibilities of the directors of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities set out on page 8 the
directors of the managing agent are responsible for the preparation of the syndicate annual accounts
and for being satisfied that they give a true and fair view, and for such internal control as they
determine is necessary to enable the preparation of the syndicate annual accounts that are free from
material misstatement, whether due to fraud or error.
11
In preparing the syndicate annual accounts, the directors of the managing agent are responsible for
assessing the syndicate’s ability to continue in operation, disclosing, as applicable, matters related to
its ability to continue in operation and using the going concern basis of accounting unless the directors
of the managing agent either intends to cease to operate the syndicate, or has no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these syndicate annual accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed
below. However, the primary responsibility for the prevention and detection of fraud rests with both
those charged with governance of the managing agent and management.
Our approach was as follows:
• We obtained a general understanding of the legal and regulatory frameworks that are applicable
to the syndicate and determined that the most significant are direct laws and regulations related
to elements of Lloyd’s Byelaws and Regulations, and the financial reporting framework (UK
United Kingdom Generally Accepted Accounting Practice), and requirements referred to by
Lloyd’s in the Syndicate Accounts instructions. Our considerations of other laws and regulations
that may have a material effect on the syndicate annual accounts included permissions and
supervisory requirements of Lloyd’s of London, the Prudential Regulation Authority (‘PRA’) and
the Financial Conduct Authority (‘FCA’).
• We obtained a general understanding of how the syndicate is complying with those frameworks
by making enquiries of management, internal audit, and those responsible for legal and
compliance matters of the syndicate. In assessing the effectiveness of the control environment,
we also reviewed significant correspondence between the syndicate, Lloyd’s of London and other
UK regulatory bodies; reviewed minutes of the Board and Risk Committee of the managing
agent; and gained an understanding of the managing agent’s approach to governance. We also
performed procedures to understand the culture of compliance and governance including the
obtainment and review of the code of conduct, employee handbook and whistleblowing policy.
Furthermore in order to assess the internal views of risks and their likelihoods, we have reviewed
the risk register and risk event summary for the syndicate.
• For direct laws and regulations, we considered the extent of compliance with those laws and
regulations as part of our procedures on the related syndicate annual accounts’ items.
• For both direct and other laws and regulations, our procedures involved: making enquiries of the
directors of the managing agent and senior management for their awareness of any non-
compliance of laws or regulations, enquiring about the policies that have been established to
prevent non-compliance with laws and regulations by officers and employees, enquiring about
the managing agent’s methods of enforcing and monitoring compliance with such policies, and
inspecting significant correspondence with Lloyd’s, the PRA and the FCA.
• The syndicate operates in the insurance industry which is a highly regulated environment. As
such the Senior Statutory Auditor considered the experience and expertise of the engagement
12
team to ensure that the team had the appropriate competence and capabilities, which included
the use of specialists where appropriate.
• We assessed the susceptibility of the syndicate’s annual accounts to material misstatement,
including how fraud might occur by considering the controls that the directors of the managing
agent have established to address risks identified by them, or that otherwise seek to prevent,
deter or detect fraud. We also considered areas of significant judgement, complex transactions,
performance targets, economic or external pressures and the impact these have on the control
environment. Where this risk was considered to be higher, on the valuation of net IBNR reserves
and estimated premium income, we performed audit procedures to address each identified fraud
risk. These procedures included testing manual journals and were designed to provide
reasonable assurance that the syndicate annual accounts were free from fraud or error.
A further description of our responsibilities for the audit of the annual accounts is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these
syndicate annual accounts, and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has
been undertaken so that we might state to the syndicate’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the syndicate and the syndicate’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Robert Bruce (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
20 February 2026
13
Statement of profit or loss and other comprehensive income
Technical account – general business
For the year ended 31 December 2025
Notes
2025
2024
$'000
$'000
Gross premiums written
4
Outwards reinsurance premiums
(24,176 )
(24,905 )
Premiums written, net of reinsurance
Change in unearned premium
Gross amount
(4,446 )
Reinsurers' share
Net change in provisions for unearned
premiums
5
(1,747 )
Earned premiums, net of reinsurance
Allocated investment return transferred
from the non-technical account
Claims Paid
Gross amount
(13,808 )
(16,678 )
Reinsurers' share
Net claims paid
5
(11,531 )
(14,150 )
Changes in the provision for claims
Gross amount
(15,736 )
(24,196 )
Reinsurers' share
Net change in provisions for claims
(11,883 )
(18,297 )
Claims incurred, net of reinsurance
(23,414 )
(32,447 )
Net operating expenses
6
(20,656 )
(24,542 )
Balance on technical account - general
business
All the amounts above are in respect of continuing operations.
The notes on pages 19 to 43 form part of these financial statements.
14
Statement of profit or loss and other comprehensive income continued
Non-technical account – general business
For the year ended 31 December 2025
Notes | 2025 | 2024 | |
$'000 | $'000 | ||
Balance on technical account - general business | |||
Investment Income | |||
Gains on the realisation of investments | |||
Unrealised gains/ (losses) on investments | ( | ||
Investment management charges | ( | ( | |
Total investment return | 10 | ||
Allocated Investment return | ( | ( | |
Gain/ (loss) on foreign exchange | ( | ( | |
Profit for the financial year |
There were no recognised gains and losses in the year other than those reported in the
statement of profit or loss, and hence no statement of other comprehensive income has been
presented.
All the amounts above are in respect of continuing operations.
The notes on pages 19 to 43 form part of these financial statements.
15
Statement of financial position
As at 31 December 2025
Notes | 2025 | 2024 | |
ASSETS | $'000 | $'000 | |
Investments | |||
Other financial investments | |||
Deposits with ceding undertakings | |||
Total Investments | |||
Reinsurers' share of technical provisions | |||
Provision for unearned premiums | 5 | ||
Claims outstanding | 5 | ||
Debtors | |||
Debtors arising out of insurance operations | |||
Debtors arising out of reinsurance operations | 12 | ||
Other debtors | |||
Other assets | |||
Cash at bank and in hand | |||
Other | |||
Prepayments and accrued income | |||
Deferred acquisition costs | 5 | ||
Other prepayments and accrued interest | |||
Total Assets |
The notes on pages 19 to 43 form part of these financial statements.
16
Statement of financial position continued
As at 31 December 2025
Notes
2025
2024
MEMBERS' BALANCE AND LIABILITIES
$'000
$'000
Capital and reserves
Members' balances
Total capital and reserves
Technical provisions
Provision for unearned premiums
5
Claims outstanding
5
Creditors
Creditors arising out of insurance operations
Creditors arising out of reinsurance
operations
13
Other creditors including taxation and social
security
14
Accruals and deferred income
Total Liabilities
Total liabilities, capital and reserves
The notes on pages 19 to 43 form part of these financial statements.
The financial statements on pages 13 to 18 were approved by Board of Directors on 18
February 2026 and were signed on its behalf by:
Director
20 February 2026
17
Statement of changes in Members' balances
For the year ended 31 December 2025
2025
$'000
$'000
Members' balances brought forward at 1 January
Total recognised gains / (losses) for the year
Payments of profit to Members' personal
reserve funds
(4,921 )
(1,535 )
Losses collected in relation to distribution on
closure of underwriting year
Cash calls on open underwriting years
Members agent fees
Net movement on funds in syndicate
Other
Members' balances carried forward at 31 December
18
Statement of cash flows
| For the year ended 31 December 2025 | |||
Notes | 2025 | 2024 | |
Cash flows from operating activities | $'000 | $'000 | |
Profit/(loss) for the financial year | |||
Adjustments | |||
Increase/(decrease) in gross technical provisions | ( | ||
(Increase)/decrease in reinsurers’ share of technical provisions | ( | ( | |
(Increase)/decrease in debtors | ( | ||
Increase/(decrease) in creditors | ( | ( | |
Increase/(decrease) in deposits received from reinsurers | |||
Movement in other assets/liabilities | ( | ||
Foreign exchange | |||
Investment return | ( | ( | |
Net cash flows from operating activities | ( | ||
Cash flows from investing activities | |||
Purchase of equity and debt instruments | |||
Sale of equity and debt instruments | |||
Investment income received | |||
Net cash flows from investing activities | |||
Cash flows from financing activities | |||
Distribution of profit | ( | ( | |
Collection of losses | |||
Other | | ||
Net cash flows from financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | |||
Cash and cash equivalents at the beginning of the year | |||
Foreign exchange on cash and cash equivalents | |||
Cash and cash equivalents at the end of the year | 18 |
19
Notes to the financial statements
1. Basis of preparation
Statement of compliance
The financial statements have been prepared in accordance with The Insurance Accounts
Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008, applicable
Accounting Standards in the United Kingdom and the Republic of Ireland, including Financial
Reporting Standard 102 (FRS 102), Financial Reporting Standard 103 (FRS 103) in relation
to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions Version 3.1 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
The financial statements have been prepared on the historical cost basis, with the exception
of certain financial assets which are measured at fair value through the profit and loss account.
The financial statements are presented in USD, the functional currency of the Syndicate. All
amounts have been rounded to the nearest thousand, unless otherwise indicated.
Going Concern
The Directors of the Managing Agent have assessed the Syndicate’s ability to continue as a
going concern. As part of this assessment, the Directors have considered cash forecasts, the
availability of financial resources, consistency of loss ratios, credit worthiness of reinsurers,
capital support for the existing underwriting years, business plans for future underwriting years
and availability of future capital support. Following this assessment, the Directors consider it
appropriate to adopt the going concern basis in preparing the annual report and financial
statements.
2. Critical accounting estimates and judgements
In preparing these financial statements, the Directors of the Managing Agent have made
judgements, estimates and assumptions that affect the application of the SPA’s accounting
policies and the reported amounts of assets, liabilities, income and expenses.
The following critical accounting estimates have been made in applying the SPA’s accounting
policies:
• Valuation of claims reserves
The measurement of the provision for claims outstanding involves judgements and
assumptions about the future that have a significant effect on the value recognised in
the financial statements.
The provision for claims outstanding comprises the estimated cost of settling all claims
incurred but unpaid at the balance sheet date, whether reported or not. This is a
judgemental and complex area due to the subjectivity inherent in estimating the impact
of claims events that have occurred but for which the eventual outcome remains
uncertain.
20
Critical accounting estimates and judgements continued
Case estimates are generally set by skilled claims technicians applying their experience and
knowledge to the circumstances of individual claims. Critical judgement is applied when
estimating the value of amounts that should be provided for claims that have been incurred at
the reporting date but have not yet been reported (IBNR) to the SPA. This is a source of
significant estimation uncertainty.
The expected cost of future liabilities (best estimate reserves) is estimated using a range of
techniques using actuarial and statistical projections, benchmarking against market data,
case by case review and judgement. Statistical techniques assume that past claims
development experience can be used as a basis to project ultimate claims costs for each
underwriting year. Typical methods employed include, but are not limited to, the chain ladder
method and the Bornhuetter-Ferguson method, whilst plan and pricing loss ratios are also
considered.
The reserving process groups the insured risks into reserving classes based on homogeneity
– these are collections of risks of a similar profile. When selecting historic data to use for
claims forecasting purposes, the suitability and reliability of the dataset is considered. The
underlying claims data for each reserving class is triangulated and supplemented with the
benchmark data provided by Lloyd’s and used to arrive at claims development patterns.
Each reserving class will be assessed separately, and corresponding claims development
pattern selected and used to forecast expected claims. These in addition to plan loss ratios
are used to estimate future best estimate reserves. Different approaches are followed for
specific large claims and catastrophes which require additional input from claims for
estimation.
Whilst the Directors consider that the claims reserves are fairly stated based on the information
currently available to them, the ultimate liability will vary as a result of subsequent information
and events.
Sensitivities relating to this critical judgement have been assessed in further detail in note 24.
• Estimated premium income (EPI)
For the majority of assumed (inwards) reinsurance policies, EPI is initially used as the
basis for reporting gross premiums written. EPI is a measure of expected premium
income over the life of a policy. These estimates, typically supplied by the cedant, are
judgemental and could result in misstatements of revenue recorded in the financial
statements.
• Pipeline premium
Pipeline premium relates to premium that has likely been written as at the report date,
but due to reporting delays through the distribution chain, the premium has not yet
been reported to the SPA. Reasons for the reporting delay typically revolve around a
natural lag in receiving the premium bordereaux from brokers or coverholders –
bordereaux are generally produced monthly or quarterly in arrears. Pipeline premium
is included within Gross Premiums Written on the statement of profit of loss.
21
Critical accounting estimates and judgements continued
There is significant uncertainty when estimating pipeline premium. Estimates are frequently
based upon information provided by the business producers, or sometimes a statistical
approach is adopted based on past experience. Given that pipeline premium primarily relates
to policies that have been bound just before the balance sheet date, the vast majority of this
premium is usually unearned.
3. Significant accounting policies
The following principal accounting policies have been applied consistently in dealing with items
which are considered material in relation to the SPA’s financial statements.
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. This is
applicable to both direct premium and assumed (inwards) reinsurance premium. Gross written
premiums are stated gross of brokerage payable to intermediaries, and exclude taxes and
duties levied on the policyholder.
Estimated premium income in respect of facility contracts and long-term policies, for example
binding authorities and lineslips, are deemed to be written in a manner that reflects the
expected profile of the underlying business which has been written.
Ceded reinsurance premiums
Reinsurance written premiums comprise the total premiums payable for the whole cover
provided by contracts entered into the period, including portfolio premiums payable, and are
recognised on the date on which the policy incepts. Premiums include any adjustments arising
in the accounting period in respect of reinsurance contracts incepting in prior accounting
periods. They are recognised on the date on which the policy commences.
Reinstatement premiums (RIPs)
Reinstatement premiums arise on certain non-proportional inwards and outwards reinsurance
contracts when losses exceed specified levels and cover is reinstated. RIPs that are
contractually due and/or invoiced at the reporting date are recognised as written and earned
premium and are presented within debtors or creditors arising out of reinsurance operations.
Expected or future RIPs cash flows arising on in-force contracts, including those associated
with incurred but not reported losses, are reflected within technical provisions (and the
reinsurers’ share of technical provisions) as part of claims outstanding.
Provisions for unearned premiums
Unearned premiums are those proportions of premiums written up to the reporting date 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.
22
Significant accounting policies continued
Unearned reinsurance premiums are those proportions of ceded premiums written up to the
reporting date that relate to periods of risk after the reporting date. Ceded reinsurance
premiums are earned on the same basis as the inwards business being protected.
Claims incurred
Claims incurred comprise claims and claims handling expenses (both internal and external)
paid in the year and the movement in provision for outstanding claims and settlement
expenses processed in the year. The provision for claims comprises amounts set aside for
claims notified and claims incurred but not yet reported (IBNR). The SPA does not discount its
liability for outstanding claims.
The amount included in respect of IBNR is based on statistical techniques of estimation applied
by actuaries. These techniques generally involve projecting from past experience of the
development of claims over time to form a view of the likely ultimate claims to be experienced,
having regard to variations in the business accepted and the underlying terms and conditions.
The provision for claims also includes amounts in respect of internal and external claims
handling costs. 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. An element of IBNR can also
relate to specific large losses.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding
claims and projections for IBNR, net of estimated irrecoverable amounts, having regard to the
reinsurance programme in place for the class of business and the claims experience for the
year. The SPA uses a number of statistical techniques to assist in making these estimates
where relevant.
Accordingly, the two most critical assumptions with regards to claims provisions are that the
past is a reasonable predictor of the likely level of claims development and that the rating and
other models used for current business are fair reflections of the likely level of ultimate claims
to be incurred.
The Directors consider that the provisions for gross claims and related reinsurance recoveries
are fairly stated on the basis of the information currently available to them. However, ultimate
liability will vary as a result of subsequent information and events, and this may result in
significant adjustments to the amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in the
financial statements for the period in which the adjustments are made. The methods used,
and the estimates made, are reviewed regularly.
Unexpired risks
A provision for unexpired risks is made where claims and related expenses are likely to arise
after the end of the financial period in respect of contracts concluded before that date, are
expected to exceed the unearned premiums and premiums receivable under these contracts,
after the deduction of any acquisition costs deferred.
The provision for unexpired risks is calculated separately by reference to classes of business
which are managed together.
As at 31 December 2025, the SPA had a nil net unexpired risk provision (2024: nil).
23
Reinsurance assets
The SPA cedes insurance risk in the normal course of business. Reinsurance assets represent
balances due from reinsurance companies. Amounts recoverable from reinsurers are
estimated in a manner consistent with the outstanding claims provision including IBNR 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 if
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 SPA may not receive all outstanding amounts due under the terms
of the contract and the event has a reliably measurable impact on the amounts that the
Syndicate will receive from the reinsurer. The impairment loss is recorded in the statement of
profit or loss.
Gains or losses on buying reinsurance are recognised in the statement of profit or loss
immediately at the date of purchase and are not amortised.
Ceded reinsurance arrangements do not relieve the SPA from its obligations to policyholders.
Acquisition costs
Acquisition costs comprise costs arising from the conclusion of insurance contracts, such as
intermediary brokerage and commissions. It is not the SPA’s policy to reallocate a portion of
indirect costs, such as the advertising costs or the administrative expenses connected with the
processing of proposals and the issuing of policies, to acquisition costs.
The deferred acquisition cost asset represents the proportion of acquisition costs
corresponding to the proportion of gross premiums written that is unearned at the balance
sheet date. Deferred acquisition costs are amortised over the period in which the related
premiums are earned.
Foreign currencies
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.
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.
Foreign exchange differences are recorded in the non-technical account.
24
Significant accounting policies continued
The following currency exchange rates have been used for principal foreign currency
transactions:
| 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
Start of Period Rate | End of Period Rate | Average Rate | Start of Period Rate | End of Period Rate | Average Rate | |
GBP | ||||||
| USD | ||||||
| CAD | ||||||
| EUR | ||||||
| AUD | ||||||
JPY |
Financial assets and liabilities
In applying FRS 102, the SPA has chosen to apply the recognition and measurement
provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use
in the UK).
The accounting classification of financial assets and liabilities determines the way in which
they are measured and changes in those values are presented in the statement of profit or
loss and other comprehensive income. Financial assets and liabilities are classified on their
initial recognition.
The initial classification of a financial instrument shall take into account contractual terms
including those relating to future variations. Once the classification of a financial instrument is
determined at initial recognition, reassessment is only required subsequently when there has
been a modification of contractual terms that is relevant to an assessment of the classification.
Financial assets and financial liabilities are classified at initial recognition as either fair value
through profit and loss or designated at amortised cost. Investments in shares and other
variable yield securities, units in unit trusts, and debt and other fixed income securities are
designated as at fair value through profit or loss on initial recognition, as they are managed on
a fair value basis in accordance with the Host Syndicate’s investment strategy.
Deposits with credit institutions, debtors, and accrued interest are classified as loans and
receivables.
Financial instruments are recognised when the SPA becomes a party to the contractual
provisions of the instrument. Financial assets are derecognised if the SPA’s contractual rights
to the cash flows from the financial assets expire or if the SPA transfers the financial asset to
another party without retaining control of substantially all risks and rewards of the asset. A
financial liability is derecognised when its contractual obligations are discharged, cancelled or
expired.
Regular way purchases and sales of financial assets are recognised and derecognised, as
applicable, on the trade date, i.e., the date that the Syndicate commits itself to purchase or sell
the asset.
25
Significant accounting policies continued
A financial asset or financial liability is measured initially at fair value plus, for a financial asset
or financial liability not at fair value through profit or loss, transaction costs that are directly
attributable to its acquisition or issue.
Financial assets at fair value through profit or loss are measured at fair value with fair value
changes recognised immediately in profit or loss. Net gains or net losses on financial assets
measured at fair value through profit or loss includes foreign exchange gains/losses arising on
their translation to the functional currency but excludes interest and dividend income.
A financial asset initially measured at the transaction price and subsequently measured at
amortised cost uses the effective interest method. The interest rate used is generally that as
stated in the loan agreement/bond (if applicable) or a standard market rate for a similar
product. The unwinding of the associated discount is subsequently recognised in the
statement of profit or loss.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost
using the effective interest method, except Syndicate Loans to the Central Fund which are
measured at fair value through profit or loss.
Objective evidence that financial assets are impaired includes observable data that comes to
the attention of the SPA about any significant financial difficulty of the issuer, or significant
changes in the technological, market, economic or legal environment in which the issuer
operates.
Impairment losses on available for sale financial assets are recognised by reclassifying the
losses accumulated in other comprehensive income to profit or loss. The net cumulative loss
that is reclassified from other comprehensive income to profit or loss is the difference between
the acquisition cost, net of any principal repayment, and the current fair value, less any
impairment loss recognised previously in profit or loss. If, in a subsequent period, the fair value
of an impaired available for sale debt security increases and the increase can be related
objectively to an event occurring after the impairment loss was recognised, the impairment
loss is reversed through profit or loss. Otherwise, it is reversed through the statement of
comprehensive income.
Financial assets and financial liabilities are offset, and the net amount presented in the balance
sheet when, and only when, the SPA currently has a legal right to set off the amounts and
intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Investment return
Investment return comprises investment income and movements in unrealised gains and
losses on financial instruments at fair value through profit or loss, less investment management
expenses, interest expense, realised losses and impairment losses. Investment income
comprises interest income, amortisation of assets held at amortised cost and realised
investment gains.
For the purpose of separately presenting investment income and unrealised gains and losses
for financial assets at fair value through profit or loss, interest income is calculated using the
effective interest method excluding transaction costs that are expensed when incurred. For
investments at fair value through profit or loss, realised gains and losses represent the
difference between the net proceeds on disposal and the purchase price.
26
Significant accounting policies continued
Unrealised investment gains and losses represent the difference between the fair value at the
balance sheet date and the fair value at the previous balance sheet date, or purchase price if
acquired during the year. Movements in unrealised investment gains and losses comprise the
increase/decrease in the reporting period in the value of the investments held at the reporting
date and the reversal of unrealised investment gains and losses recognised in earlier reporting
periods in respect of investment disposals of the current period.
Investment return is initially recorded in the non-technical account. The return is transferred in
full to the general business technical account to reflect the investment return on funds
supporting underwriting business.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three
months or less from the acquisition date that are subject to an insignificant risk of changes in
fair value and are used by the SPA in the management of its short-term commitments.
Cash and cash equivalents are carried at amortised cost in the statement of financial position.
Bank overdrafts that are repayable on demand and form an integral part of the SPA’s cash
management are included as a component of cash and cash equivalents for the purpose of
the statement of cash flows.
Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic
rate income tax from trading income. In addition, all UK basic rate income tax (currently at
20%) deducted from SPA investment income is recoverable by managing agents and
consequently the distribution made to Members or their Members’ agents is gross of tax.
Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any other overseas tax payable by Members on underwriting
results or investment earnings.
Profit commission
Profit commission is charged by the managing agent at 5%. Such commission is recognised
when the year of account becomes profitable but does not become payable until after the
appropriate year of account closes normally at 36 months.
Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the SPA to
settle Part VII claims. These funds are held at amortised cost in the balance sheet.
Operating expenses
Where expenses are incurred by the Managing Agent for the administration of managed
syndicates, these expenses are apportioned using various methods depending on the type of
expense. Expenses which are incurred jointly are apportioned between the Managing Agent
and the SPA depending on the amount of work performed, resources used, and volume of
business transacted.
27
Significant accounting policies continued
Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit
commission and overriding commission, are treated as a contribution to expenses.
Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and
insurance contract holders. These are classified as debt instruments as they are non-derivative
financial assets with fixed or determinable payments that are not quoted on an active market.
Insurance debtors are measured at amortised cost less any provision for impairments.
Insurance creditors are stated at amortised cost. The SPA does not have any debtors directly
with policyholders, all transactions occur via an intermediary.
Where permitted under UK GAAP accounting standards, insurance creditors are netted off
against insurance debtors where the legally enforceable right to offset exists.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are
classified as debt instruments as they are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. Reinsurance debtors are
measured at amortised cost less any provision for impairments. Reinsurance creditors are
stated at amortised cost. Reinsurance debtor principally relates to claims recoveries where the
underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily
premiums payable for reinsurance contracts and are recognised as an expense when due.
Bad Debt
Bad debts are provided for only where specific information is available to suggest a debtor
may be unable or unwilling to settle its debt to the SPA. The provision is calculated on a
case-by-case basis.
Reinsurance-to-close (RITC)
The net reinsurance to close premium is determined based on estimated outstanding
liabilities and related claims settlement costs (including claims IBNR), net of estimated
collectible reinsurance recoveries, relating to the closed year of account and all previous
years of account reinsured therein. The estimate of claims outstanding is assessed on an
individual case basis and is based on the estimated ultimate cost of all claims notified but not
settled by the balance sheet date. It also includes the estimated cost of claims IBNR at the
balance sheet date. The reinsurer share is based on the amounts of outstanding claims and
projections for IBNR, net of estimated irrecoverable amounts, having regard to the
reinsurance programme in place. Statistical methods are used to assist in making these
estimates. The Directors consider that the estimates of gross claims and related reinsurance
recoveries are fairly stated based on the information currently available to them.
28
4. Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
| 2025 | Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting result |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
Total Direct | ||||||
Reinsurance Acceptances | ( | ( | ( | |||
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into the Lloyd’s aggregate classes of business: | ||||||
| 2025 | Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting result |
Additional analysis | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Fire and damage to property of which | ||||||
is: | ||||||
Specialties | ||||||
Energy | ||||||
Third party liability of | ||||||
which is: | ||||||
Energy | ||||||
| 2024 | Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting result |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
Total Direct | ||||||
Reinsurance Acceptances | ( | ( | ( | |||
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into the Lloyd’s aggregate classes of business: | ||||||
| 2024 | Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting result |
Additional analysis | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Fire and damage to property of which | ||||||
is: | ||||||
Specialties | ||||||
Energy | ||||||
Third party liability of | ||||||
which is: | ||||||
Energy | ||||||
No gains or losses were recognised in profit or loss during the year on buying reinsurance
(2024: nil).
29
5. Technical provisions
Gross Provisions
Reinsurance
Assets
Net
2025
$'000
$'000
$'000
Claims Outstanding:
Balance at 1 January
(16,238 )
Claims paid during the year
(13,808 )
(11,531 )
Expected cost of current year claims
(6,155 )
Other
(23,637 )
(18,372 )
Foreign exchange movements
(1,810 )
(1,193 )
Balance at 31 December
(14,234 )
Unearned premiums
Balance at 1 January
(12,703 )
Premiums written during the year
(24,176 )
Premiums earned during the year
(72,513 )
(51,036 )
Other
Foreign exchange movements
Balance at 31 December
(15,402 )
Deferred acquisition costs | |||
Balance at 1 January | |||
Incurred deferred acquisition costs | |||
Amortised deferred acquisition costs | ( | ( | |
Foreign exchange movements | |||
Balance at 31 December |
30
Technical Provisions continued
Gross Provisions
Reinsurance
Assets
Net
2024
$'000
$'000
$'000
Claims Outstanding:
Balance at 1 January
(10,445 )
Claims paid during the year
(16,678 )
(14,149 )
Expected cost of current year claims
(8,428 )
Other
Foreign exchange movements
(622 )
(515 )
Balance at 31 December
(16,238 )
Unearned premiums
Balance at 1 January
(9,375 )
Premiums written during the year
(24,905 )
Premiums earned during the year
(79,717 )
(58,139 )
Other
Foreign exchange movements
(576 )
(1 )
(577 )
Balance at 31 December
(12,703 )
Deferred acquisition costs | |||
Balance at 1 January | |||
Incurred deferred acquisition costs | |||
Amortised deferred acquisition costs | ( | ( | |
Foreign exchange movements | ( | ( | |
Balance at 31 December |
‘Other’ includes the external Reinsurance-to-Close of the 2022 and prior underwriting years to
Syndicate 3500, managed by Riverstone Managing Agency Limited.
During 2025 the SPA refined its presentation of reinstatement premiums so that expected or
future RIPs cashflows on in-force contracts are included within claims outstanding (gross
provisions and reinsurance assets). RIPs that are contractually due and/or invoiced at the
reporting date continue to be presented within debtors or creditors.
Prior year comparatives have not been restated as the impact on 2024 balances was not
material.
6. Net Operating Expenses
| 2025 | 2024 | |
$'000 | $'000 | |
Acquisition Costs | ||
Change in deferred acquisition costs | ( | |
Reinsurance commissions and profit participation | ( | ( |
Administration expenses | ||
Net operating expenses |
31
7. Auditor remuneration
| 2025 | 2024 | |
Auditors' remuneration: | $'000 | $'000 |
fees payable to the Syndicate's auditor for the audit of these financial statements | ||
fees payable to the Syndicate's auditor and its associates in respect of other services pursuant to legislation | ||
| 247 | 164 |
8. Key management personnel compensation
The active underwriter did not charge any remuneration directly to the SPA (2024: nil).
No emoluments of the Directors of Asta Managing Agency Ltd were directly charged to the
Syndicate.
No emoluments of the Directors of Statera were charged to the syndicate post the Managing
Agency novation.
9. Staff Costs
Staff costs are recharged to the Host Syndicate from various service companies. Staff costs
are included as part of administrative expenses. Total administrative costs incurred by the
Host Syndicate are used at the relevant quota share percentage and form part of note 6
administrative expenses rather than being broken down in its constituent parts.
10. Investment return
| 2025 | 2024 | |
$'000 | $'000 | |
Interest and similar income | ||
From financial assets designated at fair value through profit or loss | ||
Interest and similar income | ||
From financial assets at amortised cost | ||
Interest and similar income | ||
Other income from investments | ||
From financial assets designated at fair value through profit or loss | ||
Gains on realisation of investments | ||
Losses on realisation of investments | ( | ( |
Unrealised gains on investments | ||
Unrealised losses on investments | ( | ( |
From financial assets at amortised cost | ||
Gains on realisation of investments | ||
Investment management expenses | ( | ( |
Total investment return | ||
32
11. Distribution and open years of account
A distribution to members of $9.9m will be proposed in relation for the closing year of account
(2023 Underwriting Year) (2024: $4.9m).
| 2025 | 2024 | |
$'000 | $'000 | |
| 2025 | ( | |
| 2024 | ( | |
| 2023 | ||
| 2022 |
12. Debtors arising out of reinsurance operations
| 2025 | 2024 | |
$'000 | $'000 | |
Due within one year | ||
Due after one year | ||
Total |
13. Creditors arising out of reinsurance operations
| 2025 | 2024 | |
$'000 | $'000 | |
Due within one year | ||
Due after one year | ||
Total |
14. Other creditors
| 2025 | 2024 | |
$'000 | $'000 | |
Profit commissions payable | ||
Other liabilities | ||
Total |
33
15. Related parties
Asta provided service and support to the SPA in its capacity as Managing Agent until 29
th
December 2025. During that period, the following fees were charged to the syndicate
2025
2024
$'000
$'000
Managing Agency fees on insurance capacity
(494)
(527)
Service Fees
(340)
(421)
Recharges
(5)
(5)
Profit Commissions
(280)
(497)
Total
(1,119)
(1,450)
From 30
th
December 2025, Statera Managing Agency became the Managing Agent for the
SPA. No fees were charged in the year.
Statera Managing Agency Ltd is a subsidiary of Octave Specialty Group, Inc. a company listed
on the New York Stock Exchange. Beat Syndicate Services Ltd, a company registered in
England and Wales, is a member of the Group that provides services to Host Syndicate 4242.
Expenses were not charged directly to the SPA 1416 during 2025.
16. Disclosure of interests
During 2025, Asta was the Managing Agent for the following syndicates on behalf of third-party
capital providers:
• Syndicates 1322, 1609, 1618, 1699, 1892, 1947, 1984, 1985, 1988, 2525, 2689, 3123,
4242 and 4747,
• Special Purpose Arrangement 1416,
• Syndicates-in-a-Box 1796, 1902, 1922, 1966, 2427, 2880, 3456 and 5183.
During 2025, Asta took on management of the following syndicates:
• Syndicate 1618 on 1 January 2025
• Syndicate 1984 on 1 April 2025
• Syndicate 1947 on 1 July 2025
34
Disclosure of interests continued
During 2025, Asta ceased to be the Managing Agent for the following syndicates:
• Syndicate 2786 on 1 July 2025
• Syndicate 4242 on 29 December 2025
• Special Purpose Arrangement 1416 on 29 December 2025
Asta also provides administrative services to syndicates and special purpose arrangements,
also undertaking several ancillary roles for other clients.
The financial statements of Asta Managing Agency can be obtained by application to the
Registered Office at 5th Floor, 20 Gracechurch Street, London, EC3V 0BG.
From the 30
th
December, the Managing Agency of the SPA changed from Asta to Statera
Managing Agency who is also the managing agent for the Host Syndicate 4242.
Alcor Underwriting London Ltd., Alcor Underwriting Bermuda Limited, Brace Underwriting Ltd.,
Tegron Specialty Ltd., Satinwood Underwriting Ltd., Chord Reinsurance Ltd., Munitus
Insurance Ltd., Redriff Underwriting Ltd., Convergence Credit Ltd. and Horace Underwriting
Ltd. are all majority owned entities of the Octave Group providing coverholder services to the
Host Syndicate.
Alitus Intermediaries Ltd. provides reinsurance management services to the SPA and capital
management services to the Managing Agency.
All transactions between these entities are on normal commercial terms.
There are certain individuals that are part of Octave Specialty Group who participate on the
Host Syndicate 4242 as a capital provider.
17. Funds at Lloyd's
Every member is required to hold capital at Lloyd's which is held in trust and known as Funds
at Lloyd's (FAL). These funds are intended primarily to cover circumstances where Syndicate
assets prove insufficient to meet participating members' underwriting liabilities. The level of
FAL that Lloyd's requires a member to maintain is determined by Lloyd's based on PRA
requirements and resource criteria. FAL has regard to a number of factors including the nature
and amount of risk to be underwritten by the member and the assessment of the reserving risk
in respect of business that has been underwritten. Since FAL is not under the management of
the managing agent, no amount has been shown in these financial statements by way of such
capital resources. However, the managing agent is able to make a call on the members' FAL
to meet liquidity requirements or to settle losses.
35
18. Off-balance sheet items
The SPA has not been party to any arrangement, which is not reflected in its statement of
financial position, where material risks and benefits arise for the SPA. As at 31 December
2024, the Host syndicate had a $25m trade loan facility with Barclays Bank PLC (Barclays).
Nothing was drawn down during the year. This expired on 31 December 2024 and has not
been renewed in 2025.
19. Risk management
a) Governance framework
The SPA's risk and financial management framework aims to protect the SPA's members
capital from events that might otherwise prevent the Syndicate from meeting its policyholder
obligations, while maximising the returns to its members. The Directors recognise the critical
importance of having efficient and effective risk management systems in place.
Statera maintains a risk management function for the Agency and its managed Syndicates
with clear terms of reference from the Agency Board, its committees and sub committees.
Statera supplements this with a clear organisational structure with documented delegated
authorities and responsibilities from the main Statera Managing Agency Board to the Syndicate
who perform the underwriting activities. Lastly, the SPA policy framework sets its risk
management and control and business conduct standards for operations. Statera reviews and
monitors each policy to ensure compliance with the policy throughout the SPA.
The Agency Risk and Compliance Committee 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 SPA goals, and specify reporting requirements. The Agency Board places significant
emphasis on the assessment and documentation of risks and controls, including the
articulation of the SPA's risk appetite.
b) Capital management objectives, policies and approach
Capital framework at Lloyd's
The Society of Lloyd's (Lloyd's) is a regulated undertaking and subject to the supervision of
the Prudential Regulatory Authority (PRA) under the Financial Services and Markets Act 2000.
Within the supervisory framework, Lloyd's applies capital requirements at member level and
centrally to ensure that Lloyd's complies with UK capital requirements, and beyond that to
meet its own financial strength, licence and ratings objectives.
Although Lloyd's capital setting processes use a capital requirement set at Syndicate level as
a starting point, the requirement to meet Solvency UK and Lloyd's capital requirements apply
at overall and member level only respectively, not at Syndicate level. Accordingly the capital
requirement in respect of the SPA is not disclosed in these financial statements.
36
Risk management continued
Lloyd's capital setting process
In order to meet Lloyd's requirements, each Syndicate is required to calculate its Solvency
Capital Requirement (SCR) for the prospective underwriting year. This amount must be
sufficient to cover a 1 in 200 year loss, reflecting uncertainty in the ultimate run-off of
underwriting liabilities (SCR 'to ultimate'). The Syndicate must also calculate its SCR at the
same confidence level but reflecting uncertainty over a one-year time horizon (one year SCR)
for Lloyd's to use in meeting Solvency UK requirements. The SCRs of each Syndicate are
subject to review by Lloyd's and approval by the Lloyd's Capital and Planning Group.
A Syndicate may be comprised of one or more underwriting members of Lloyd's. Each member
is liable for its own share of underwriting liabilities on the Syndicate on which it is participating
but not other members' shares. Accordingly, the capital requirement that Lloyd's sets for each
member operates on a similar basis. Each member's SCR shall thus be determined by the
sum of the member's share of the Syndicate SCR 'to ultimate'. Where a member participates
on more than one Syndicate, a credit for diversification is provided to reflect the spread of risk,
but consistent with determining an SCR which reflects the capital requirement to cover a 1 in
200 year loss 'to ultimate' for that member. Over and above this, Lloyd's applies a capital uplift
to the member's capital requirement, known as the Economic Capital Assessment (ECA). The
purpose of this uplift, which is a Lloyd's not a Solvency UK requirement, is to meet Lloyd's
financial strength, licence and ratings objectives. The capital uplift applied for 2025 was 35%
(2024:35%) of the member's SCR 'to ultimate'.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd's
specifically for that member (funds at Lloyd's), held within and managed within a Syndicate
(funds in Syndicate) or as the member's share of the members' balances on each Syndicate
on which it participates. Accordingly, the ending members balances reported on the Statement
of Financial Position on page 15, represent resources available to meet members' and Lloyd's
capital requirements.
c) Insurance risk
The principal risk the SPA 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 SPA is to ensure that sufficient reserves are
available to cover these liabilities.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts
and geographical areas. The variability of risks is also improved by careful selection and
implementation of underwriting strategy guidelines, as well as the use of reinsurance
arrangements.
The SPA jointly with the Host Syndicate purchases reinsurance as part of a combined risk
mitigation programme. The SPA’s reinsurance program is predominantly covered by a whole
account, non-proportional losses occurring during policy which covers the calendar year.
Amounts recoverable from reinsurers are estimated in a manner consistent with the
outstanding claims provision and are in accordance with the reinsurance contracts. The
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.
37
Risk management continued
Sub committees of the Board oversee the management of reserving risk. The use of
standardised and internal modelling techniques, as well as benchmarking and the review of
claims development are key in mitigating reserving risk. The purpose of these underwriting,
reinsurance and reserving strategies is to limit exposure to catastrophes or large losses based
on the SPA's risk appetite as decided by the Board.
The SPA uses both its own and commercially available risk management software to assess
catastrophe exposure. However, there is always a risk that the assumptions and techniques
used in these models are unreliable or that claims arising from an un-modelled event are
greater than those arising from a modelled event.
Key assumptions
The principal assumption underlying the liability estimates is that the future claims
development will follow a similar pattern to past claims development experience. This includes
assumptions in respect of average claim costs, claim handling costs, claim inflation factors
and claim numbers for each underwriting year. Additional qualitative judgements are used to
assess the extent to which past trends may not apply in the future, for example: once-off
occurrence; changes in market factors such as public attitude to claiming: economic
conditions: as well as internal factors such as portfolio mix, policy conditions and claims
handling procedures. Judgement is further used to assess the extent to which external factors
such as judicial decisions and government legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include variation in interest
rates, delays in settlement and changes in foreign currency rates.
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, 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 net liabilities, profit 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 assumptions, assumptions had to be changed on an individual basis. It
should be noted that movements in these assumptions are non-linear.
The tables below show the sensitivity to adjusting gross and net loss ratios. The amount
disclosed for the impact on claims outstanding – net of reinsurance represents the impact on
both the profit and loss for the year and member balances.
General insurance business sensitivities as at 31 December 2025 | 5.00% | -5.00% |
$'000 | $'000 | |
| Claims outstanding – gross of reinsurance | ( | |
| Claims outstanding – net of reinsurance | ( |
General insurance business sensitivities as at 31 December 2024 | 5.00% | -5.00% |
$'000 | $'000 | |
| Claims outstanding – gross of reinsurance | ( | |
| Claims outstanding – net of reinsurance | ( |
38
Risk management continued
Claims development
The tables below show the SPA's cumulative incurred claims development, including both
claims notified and IBNR for each underwriting year, together with the cumulative payments to
date on a gross and net of reinsurance basis at the balance sheet date.
The SPA has elected to translate estimated claims and claims payments at a consistent rate
of exchange as determined by the balance sheet date.
Underwriting Year | 2023 | 2024 | 2025 |
Estimate of ultimate gross claims | |||
At end of first underwriting year | |||
One Year Later | |||
Two Years Later | |||
Less cumulative gross paid | ( | ( | ( |
Gross claims reserves |
Underwriting Year | 2023 | 2024 | 2025 |
Estimate of ultimate net claims | |||
At end of first underwriting year | |||
One Year Later | |||
Two Years Later | |||
Less cumulative gross paid | ( | ( | ( |
Net claims reserves |
During 2025 the SPA refined its presentation of reinstatement premiums so that expected or
future RIPs cashflows on in-force contracts are included within claims outstanding (gross
provisions and reinsurance assets). RIPs that are contractually due and/or invoiced at the
reporting date continue to be presented within debtors or creditors.
The uncertainty associated with the ultimate claims experience of an underwriting year is
greatest when the underwriting year is at an early stage of development and the margin for
future experience potentially being more adverse than assumed is at its highest. As claims
develop, and the ultimate cost of the claims becomes more certain, the relative level of margin
should decrease. Due, however, to the uncertainty inherent in the claims estimation process,
initial reserves may not always be in a surplus. This is particularly so for large catastrophe
claims where uncertainly is initially great.
39
Risk management continued
d) Financial risk
The focus of financial risk management for the SPA is ensuring that the proceeds from its
financial assets are sufficient to fund the obligations arising from its insurance contracts.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss by failing
to discharge an obligation. The SPA has the following policies and procedures in place to
mitigate the exposure to credit risk:
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. If the
counterparty is downgraded or does not have a good credit rating, then collateral is sought to
mitigate any risk. This is monitored by the Agency Board.
The tables below show the maximum exposure to credit risk (including an analysis of financial
assets exposed to credit risk) for the components of the statement of financial position. The
maximum exposure is shown gross, before the effect of mitigation through collateral
agreements and the use of credit derivatives.
Neither
past due
or
impaired
Past
due
Impaired
Total
2025
2025
2025
2025
$'000
$'000
$'000
$'000
Other financial investments
-
-
Reinsurers share of claims outstanding
-
-
Insurance debtors
-
-
Reinsurance debtors
-
-
Other Debtors
-
-
Cash and cash equivalents
-
-
Total
-
-
Neither
past due
or
impaired
Past
due
Impaired
Total
2024
2024
2024
2024
$'000
$'000
$'000
$'000
Other financial investments
-
-
Reinsurers share of claims outstanding
-
-
Insurance debtors
-
-
Reinsurance debtors
-
-
Other Debtors
-
-
Cash and cash equivalents
-
-
Total
-
-
40
Risk management continued
The table below provides information regarding the credit risk exposure of the SPA at the
reporting date by classifying assets according to independent credit ratings of the
counterparties. AAA is the highest possible rating.
Credit Risk Ratings
2025
AAA
AA
A
BBB
BBB
or less
NR
Total
Shares and other
variable yield securities
Debt Securities
Loans with credit
institutions
Overseas Deposits
-
-
-
-
-
-
-
Deposits with ceding
undertakings
Reinsurers share of
claims outstanding
Reinsurance debtors
Cash and cash
equivalents
Total
2024
AAA
AA
A
BBB
BBB
or less
NR
Total
Shares and other
variable yield securities
Debt Securities
Loans with credit
institutions
Overseas Deposits
-
-
-
-
-
-
-
Deposits with ceding
undertakings
Reinsurers share of
claims outstanding
Reinsurance debtors
Cash and cash
equivalents
Total
41
Risk management continued
Maximum credit exposure
It is the Syndicate's policy to maintain accurate and consistent risk ratings across its credit
portfolio. This enables management to focus on the applicable risks and the comparison of
credit exposures across all lines of business.
During the year, no credit exposure limits were exceeded.
Liquidity risk
Liquidity risk is the risk that the SPA may not have enough cash to pay insurance claims and
other liabilities. This risk is reduced by reviewing the SPA’s expected cash obligations on a
weekly basis and keeping adequate cash on deposit to meet those obligations. Further, an
Investment and Liquidity Committee meets to review liquidity strength and forthcoming liquidity
needs on a quarterly basis.
mated timing of claim payments resulting from recognised insurance liabilities. Repayments
which are subject to notice are treated as if notice were to be given immediately.
No | ||||||
stated | ||||||
maturity | 0-1 Year | 1-3 Years | 3-5 Years | 5 Years+ | Total | |
| 2025 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Claims outstandings | ||||||
Creditors | ||||||
Total |
No | ||||||
stated | ||||||
maturity | 0-1 Year | 1-3 Years | 3-5 Years | 5 Years+ | ||
| 2024 | $'000 | $'000 | $'000 | $'000 | $'000 | Total |
Claims outstandings | ||||||
Creditors | ||||||
Total |
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or
insurance contract will fluctuate because of changes in market prices. Market risk comprises
three types of risk: currency risk, interest rate risk and other price risk. Other price risk has
been assessed as negligible, given that the SPA does not invest in equities.
The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return on risk.
42
Risk management continued
a) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates.
The SPA's functional currency is US Dollar and its exposure to foreign exchange risk arises
primarily with respect to transactions in Sterling, Euro, Canadian Dollar and Australian Dollar.
The Syndicate seeks to mitigate the risk by matching the estimated foreign currency
denominated liabilities with assets denominated in the same currency.
The Host Syndicate matches its currency position, so it holds net assets across a number of
currencies. The Host Syndicate takes into consideration the underlying currency of the
Syndicate's required capital and invests its assets proportionately across these currencies so
as to protect the solvency of the Host Syndicate and SPA, against variation in foreign
exchange rates.
The following table summarises the exposure of the financial assets and liabilities to foreign
currency exchange risk at the reporting date, as follows, with all numbers reported in converted
US Dollars:
2025 $'000 | GBP | USD | EUR | CAD | Total |
Investments | |||||
Reinsurers' share of technical provisions | |||||
Debtors | ( | ||||
Other assets | |||||
Prepayments and accrued income | |||||
Total Assets | ( | ||||
Technical provisions | ( | ( | ( | ( | ( |
Creditors | ( | ( | ( | ( | |
Accruals and deferred income | ( | ( | ( | ||
Total Liabilities | ( | ( | ( | ( | ( |
Total capital and reserve | ( | ( | ( | ( |
2024 $'000 | GBP | USD | EUR | CAD | Total |
Investments | |||||
Reinsurers' share of technical provisions | |||||
Debtors | ( | ||||
Other assets | |||||
Prepayments and accrued income | |||||
Total Assets | |||||
Technical provisions | ( | ( | ( | ( | ( |
Creditors | ( | ( | ( | ( | |
Accruals and deferred income | ( | ( | ( | ||
Total Liabilities | ( | ( | ( | ( | ( |
Total capital and reserve | ( | ( | ( | ( |
43
Risk management continued
Sensitivity to changes
The table below gives an indication of the impact on profit of a percentage change in the
relative strength of the US Dollar against the value of Sterling, Euro, Canadian Dollar and
Australian Dollar simultaneously. The analysis is based on the information as at the reporting
date.
2025
2024
$'000
$'000
USD Weakens
10% against other currencies
826
379
20% against other currencies
1,653
758
USD Strengthens
10% against other currencies
(826)
(379)
20% against other currencies
(1,653)
(758)
b) Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will
fluctuate in response to changes in market interest rates.
Floating rate instruments expose the Syndicate to cash flow interest risk, whereas fixed rate
instruments expose the Syndicate to fair value interest risk.
The analysis below is performed for reasonably possible movements in market interest rates
with all other variables held constant, showing the impact on the result before tax due to
changes in fair value of financial assets (whose fair values are recorded in the profit and loss
account) and Members’ balances.
| 2025 | 2024 | |
$'000 | $'000 | |
Interest rate risk | ||
Impact of 50 basis point increase on result | ( | ( |
Impact of 50 basis point decrease on result | ||
Impact of 50 basis point increase on net assets | ( | ( |
Impact of 50 basis point decrease on net assets |
Insurance liabilities are not discounted and therefore are not exposed to interest rate risk.
20. Post balance sheet events
The Syndicate will distribute the 2023 underwriting year profits to Members during 2026. The
Directors evaluated other events after the balance sheet date through to 20 February, the date
the Syndicate issued these annual accounts and no adjusting or significant non-adjusting
events have been identified that require disclosure in these accounts.
