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Lloyd’s Syndicate
Syndicate 2025
Annual Report and Accounts for the year ended
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
Contents
Directors and Administration
.................................................................................................
2
Managing Agent’s Report
......................................................................................................
3
Statement of Managing Agent’s Responsibilities
...................................................................
7
Independent Auditor’s Report to the Member of Syndicate 2025
...........................................
8
Statement of profit or loss and other comprehensive income
..............................................
12
Balance sheet – Assets
.......................................................................................................
14
Balance sheet (cont’d) – Liabilities
......................................................................................
15
Statement of changes in members’ balances
......................................................................
16
Statement of cash flows
......................................................................................................
17
Notes to the financial statements
........................................................................................
18
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
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Directors and administration
Managing Agent
Registered office
Grange Park,
Bishop's Cleeve,
Cheltenham, England,
GL52 8YQ
Registered number
03935227
Directors
P D Andrews
M J Bishop (resigned 13 Mar 2025)
I J Bremner*
K D Curtis*
J A Hummerston (resigned 19 Feb 2025)
C E Layton (appointed 3 Jan 2025)
S Minshall
G H J Nokes (appointed 13 Mar 2025)
R M Richardson-Bunbury
M Sebold-Bender*
P R Smith
Z Szalkai
P I Wooldridge
* Independent non-executive director
Company secretary
L Robinson (appointed 6 Oct 2025)
P M Laws (resigned 15 Sep 2025)
Syndicate
Active Underwriter
N Meynell
Bankers
Barclays Bank - London
Auditors
PKF Littlejohn LLP
Statement of actuarial opinion signing actuary
PKF Littlejohn LLP
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
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Managing Agent’s report
The Directors of PMA, the Managing Agent for the Syndicate, present their report and the audited financial
statements for the year ended 31 December 2025.
The financial statements have been prepared in accordance with 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 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).
Results
The result for the year ended 31 December 2025 is a loss of $3.3m.
This is the first year of operation for the Syndicate.
Principal activity
The Syndicate primarily writes credit insurance to European global banks, with the underlying obligors
principally being non-financial institutions. The business predominantly originates directly from clients and not
via brokers.
Management of the Syndicate
Polo Managing Agency Limited (“PMA”) is the Managing Agency for the Syndicate.
The Managing Agent is a wholly owned subsidiary of Marco Capital Holdings (UK) Limited.
Review of financial performance
The key financial indicators for the year ended 31 December 2025 were as follows:
Key performance indicators
2025
$’000
Gross premiums written
38,653
Net premium written
9,894
Net premiums earned
558
Net claims incurred
(205)
Net operating expenses
(3,680)
Loss for the financial year
(3,336)
Net annual accounting ratios
2025
%
Claims ratio
36.7%
Expense ratio
659.5%
Combined ratio
696.2%
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This is the first year of operation for the Syndicate, so it is not possible to compare its performance with the
previous year.
The gross written premium of $38.7m attached primarily in the second half of the end of the year, which meant
that earned premium for the year was lower than anticipated. The vast majority of the business is protected by
a 75% quota share reinsurance treaty.
With no claims notified in the year, net claims incurred of $0.2m consists solely of IBNR calculated using the
planned loss ratios from the 2025 year of account Syndicate Business Forecast.
The loss for the year is attributable to the expenses incurred, which are in line with expectations, and the
longer-term nature of the underwritten business, which means that policies are typically earned over multiple
years. As the Syndicate builds premium volume in future periods, the earned premium is expected to more
than cover expenses.
Statement of financial position
The balance sheet is comprised mainly of gross premium debtors from policies recently written ($38.5m), along
with the related reinsurance creditors ($19.0m) and gross ($37.0m) and ceded ($27.6m) unearned premium.
Principal risks and uncertainties
The Managing Agent has a Risk Management Function for the Syndicate with clear terms of reference from
the Board of Directors and its committees, including the Audit and Risk committees. The Board approves the
risk management policies and meets regularly to approve commercial, regulatory and organisational
requirements of such policies. The Board reviews and approves its risk appetite annually.
The Risk Management Function has implemented a Board approved Risk Management Framework to enable
the ongoing identification, assessment and management (mitigation, monitoring and reporting) of risks and is
also responsible for producing the Syndicate’s Own Risk and Solvency Assessment (‘ORSA’); recommending
the assessment to the Board for approval.
The principal risks and uncertainties facing the Syndicate are set out below. Additional information regarding
how the Syndicate manages risk, including capital management is disclosed in Note 4 to these financial
statements.
Insurance risk
The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit payments
or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims,
actual benefits paid and subsequent development of long–term claims. The objective of the Syndicate is to
ensure that sufficient reserves are available to cover these liabilities.
The Board manages insurance risk by agreeing its appetite for these risks annually through the business plan,
which sets out targets for volumes, pricing, line sizes and retention. The Syndicate purchases reinsurance as
part of its risk mitigation programme.
The Syndicate Management Committee (“SMC”) monitors performance against the business plan on a quarterly
basis. Reserve adequacy is monitored through quarterly review by the Syndicate Actuary and the Reserving
and Syndicate Management Committees.
Credit risk
Credit risk relates to the risk of default on the settlement of balances receivable by the Syndicate. The
Syndicate’s reinsurers represent the principal source of this risk. This risk is actively managed by the policies,
procedures and controls overseen by the SMC. The Syndicate has reinsurance with highly rated or reputable
reinsurers. All debtors are considered to be 100% recoverable.
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Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations due to a short-term
shortfall in available funds. A number of processes, including obtaining working capital from Awbury group
entities, are followed by the Managing Agent to mitigate against the risk of the Syndicate being unable to settle
its obligations as they fall due.
Market risk
The key aspect of market risk is that the Syndicate incurs losses on foreign exchange movements as a result
of mismatches between the currencies in which assets and liabilities are denominated. Currency matching is
reviewed by Management quarterly. Where there is a significant mismatch, the Managing Agent seeks to
mitigate the risk through buying or selling currency, where this is appropriate.
Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate. Risks include
those from information security (including cyber) and technology related activities, legal and regulatory, financial
reporting, and financial crime as well as those from operations, outsourcing and change. The Managing Agent
seeks to manage this risk through its governance structure and internal control framework as well as business
processes (including business continuity and resilience plans).
Regulatory risk
The Managing Agent is required to comply with the requirements of the Prudential Regulation Authority (“PRA”)
and Financial Conduct Authority (“FCA”) and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s
market by overseas regulators, particularly in respect of US situs business. Regulatory risk is the risk of loss
owing to a breach of regulatory requirements or failure to respond to regulatory change.
The Managing Agent has a Compliance Function that monitors regulatory developments and assesses the
impact on the Managing Agent’s policies. The compliance function reports regularly to the Board which has
ultimate responsibility for ensuring compliance with applicable laws and regulations.
Conduct risk
Conduct risk is the risk that the Syndicate fails to pay appropriate regard to the interest of its customers and/or
fails to treat them fairly at all times. Conduct risk is managed through the application of strong internal controls,
compliance policies and procedures, and through the monitoring of various conduct risk metrics.
Future developments
The Syndicate will continue with its strategy to write profitable business into the 2026 year of account, with a
planned increase in premium volume over 2025. The Syndicate however will not simply grow the top line at the
expense of long-term profitability. The Managing Agent continues to review the operating model and cost
structure to ensure it can control the cost base on the assumption that current market conditions persist, but
also to ensure it is well positioned for favourable developments in market conditions.
In January 2026, Awbury Technical Services LLC injected $1.5m for the Syndicate to use as working capital.
Environmental matters
The Managing Agent does not consider its business to have a large adverse impact upon the environment. As
a result, the agent does not manage its underwriting business by reference to any environmental key
performance indicators. The Managing Agent takes a responsible approach in the management of assets by
striving to invest in institutions that do no harm to the environment.
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Directors
Details of the Directors of the Managing Agent who served during the year and up to the date of signing of the
Syndicate Annual Report and Accounts are provided on page 2 in the Directors and Administration section.
Disclosure of information to the auditors
The Directors of the Managing Agent at the time the report is approved confirm that:
•
So far as each of them is aware, there is no relevant audit information, being information needed by the
Syndicate’s auditor in connection with the auditor’s report, of which the auditor is unaware; and
•
Having made enquiries of fellow directors of the Managing Agency and the Syndicate’s auditor, each
director has taken all the steps that he or she ought to have taken as a director to become aware of
any relevant audit information and to establish that the Syndicate’s auditor is aware of that information.
Auditors
PKF Littlejohn LLP has been appointed as the Syndicate’s auditor and pursuant to Section 14 (2) of Schedule
1 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, PKF
Littlejohn LLP will continue in office.
On behalf of the Board
G H J Nokes
Director
17 February 2026
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Statement of Managing Agent’s responsibilities
The Managing Agent is responsible for preparing the Syndicate annual report and accounts in accordance with
applicable laws and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the
Managing Agent to prepare Syndicate annual report and accounts at 31 December each year in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). The Syndicate annual reports and accounts are required by law to give a true and fair view of
the state of affairs of the Syndicate as at that date and of its profit or loss for that year.
In preparing the Syndicate annual report and accounts, the Managing Agent is required to:
•
Select suitable accounting policies which are applied consistently;
•
Make judgements and estimates that are reasonable and prudent;
•
State whether applicable UK accounting standards have been followed, subject to any material
departures disclosed and explained in the notes to the Syndicate annual accounts;
•
Prepare the Syndicate annual report and 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; and
•
Prepare and review of the iXBRL tagging that has been applied to the Syndicate Accounts in
accordance with the instructions issued by Lloyd’s, including designing, implementing and maintaining
systems, processes and internal controls to result in tagging that is free from material non-compliance
with the instructions issued by Lloyd’s, whether due to fraud or error.
The Managing Agent is responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Syndicate and enable it to ensure that the Syndicate annual
report and accounts 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 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 annual accounts 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 1.1 issued by Lloyd’s.
On behalf of the Board
G H J Nokes
Director
17 February 2026
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
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Independent auditor’s report to the member of Syndicate 2025
Opinion
We have audited the Syndicate Annual Accounts of Syndicate 2025 (the ‘Syndicate’) for the year ended 31
December 2025 which comprise the Statement of profit or loss and other comprehensive income, the Balance
sheet, the Statement of changes in members’ balances, the Statement of cash flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted
Accounting Practice)
and FRS 103 “Insurance Contracts” (United Kingdom Generally Accepted Accounting
Practice), 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 Syndicate Accounts Instructions).
In our opinion, the 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 loss
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 requirements within Lloyd’s Syndicate
Accounts Instructions Version 3.1 as modified by the Frequently Asked Questions Version 1.1 issued
by Lloyd’s (the “Lloyd’s Syndicate Accounts Instructions”).
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
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, 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.
Other Matter
This report may be included within a document to which iXBRL tagging has been applied. This auditor’s report
provides no assurance over whether the iXBRL tagging has been applied in accordance with the Lloyd’s
Syndicate Accounts Instructions.
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 upon 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.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are described
in the relevant sections of this report.
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Other information
The other information comprises the information included in the Syndicate Annual Report and Accounts, other
than the Syndicate Annual Accounts and our auditor’s report thereon.
The managing agent is responsible for the other information contained within the Syndicate Annual Report and
Accounts. Our opinion on the Syndicate Annual Accounts does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the Syndicate Annual Accounts or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the Syndicate
Annual Accounts themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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 for 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 in relation to which the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you if, in our
opinion:
•
adequate accounting records have not been kept on behalf of the Syndicate; or
•
the Syndicate Annual Accounts are not in agreement with the accounting records and returns; or
•
certain disclosures of managing agent emoluments and other benefits specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
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 and for being satisfied that they give a true and fair view
and for such internal control as the managing agent determines is necessary to enable the preparation of
Syndicate Annual Accounts that are free from material misstatement, whether due to fraud or error.
In preparing the Syndicate Annual Accounts, the managing agent is responsible for assessing the Syndicate’s
ability to continue to write new business, disclosing, as applicable, matters related to its ability to continue to
operate and using the going concern basis of accounting, unless the managing agent intends to cease to
operate the Syndicate or has no realistic alternative but to do so.
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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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
•
We obtained an understanding of the Syndicate and the insurance sector in which it operates to identify
laws and regulations that could reasonably be expected to have a direct effect on the Syndicate Annual
Accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions. We obtained our understanding in this
regard through discussions with management, industry research and the application of our cumulative audit
knowledge and experience of the insurance sector.
•
We determined the principal laws and regulations relevant to the Syndicate in this regard to be those arising
from the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), Lloyd’s of London
and the Insurance Accounts Directive (Lloyd’s Syndicates and Aggregate Accounts) Regulations 2008, and
the financial reporting framework (UK GAAP).
•
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 team to ensure that
the team has the appropriate competence and capabilities to perform the audit.
•
We designed our audit procedures to ensure the audit team considered whether there were any indications
of non-compliance by the Syndicate with those laws and regulations. These procedures included, but were
not limited to:
o
agreement of the Syndicate Annual Accounts disclosures to underlying supporting documentation;
o
enquiries of management and review of minutes of Board, committee and management meetings
throughout the period;
o
understanding the Syndicate’s policies and procedures in monitoring compliance with laws and
regulations;
o
inspection of correspondence with Lloyd’s of London, the PRA and FCA; and
o
reviewing compliance reports and internal audit reports relating to the Syndicate.
•
We also identified possible risks of material misstatement of the Syndicate Annual Accounts due to fraud;
in particular:
o
We considered that there is a rebuttable presumption that there is a significant fraud risk over
revenue recognition. We did not consider fraud over the accuracy of revenue to be a significant risk
for transactions that have been processed during the period.
o
We considered that there was potential for management bias in the reporting of events and
transactions in the Syndicate Annual Accounts relating to the valuation of technical provisions and
the calculation of the reinsurer’s share of technical provisions. To address this, we involved actuarial
specialists to assist us in challenging the assumptions and judgements made by management when
auditing those significant accounting estimates.
o
As in all of our audits, we addressed the risk of fraud arising from management override of controls
by performing audit procedures which included, but were not limited to, the testing of journals,
reviewing accounting estimates for evidence of bias and evaluating the business rationale of any
significant transactions that were unusual or outside the normal course of business.
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Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the Syndicate Annual Accounts or non-compliance with laws and
regulations. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the Syndicate Annual Accounts, as we will be less likely to become aware of
instances of non-compliance. This risk is also greater regarding irregularities occurring due to fraud rather than
error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the Syndicate Annual Accounts is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
Use of our report
This report is made solely to 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.
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.
Cheryl Mason
(Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
17 February 2026
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Statement of profit or loss and other comprehensive income
Technical account – General business
For the year ended 31 December 2025
Note
2025
$000
Gross premiums written
5
Outwards reinsurance premiums
(28,759 )
Premiums written, net of reinsurance
Changes in unearned premium
12
Change in the gross provision for unearned premiums
(36,526 )
Change in the provision for unearned premiums reinsurers’ share
Net change in provisions for unearned premiums
(9,336 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
9
Change in the provision for claims
12
Gross amount
(822 )
Reinsurers’ share
Net change in provisions for claims
(205 )
Claims incurred, net of reinsurance
(205 )
Net operating expenses
6
(3,680 )
Balance on the technical account – general business
(3,325 )
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Statement of profit or loss and other comprehensive income (cont.)
Non-technical account – General business
For the year ended 31 December 2025
The accompanying notes from page 18 to 35 form an integral part of these financial statements.
Note
2025
$000
Balance on the technical account – general business
(3,325 )
Investment income
9
Total investment return
Allocated investment return transferred to the technical account
(2 )
Loss on foreign exchange
(11 )
Loss for the financial year
(3,336 )
Other comprehensive income:
Currency translation losses
(76 )
Total comprehensive loss for the year
(3,412 )
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Balance sheet – Assets
As at 31 December 2025
Note
2025
$000
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
12
Debtors arising out of direct insurance operations
10
Debtors
Cash at bank and in hand
Other assets
Total assets
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Balance sheet (cont’d) – Liabilities
As at 31 December 2025
Note
2025
$000
Members’ balances
(3,412 )
Total capital and reserves
(3,412 )
Provision for unearned premiums
Claims outstanding
Technical provisions
12
Creditors arising out of reinsurance operations
13
Other creditors including taxation and social security
14
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The Syndicate financial statements on pages 12 to 35 were approved by the board of
Polo Managing Agency
Limited
on 16 February 2026 and were signed on its behalf by;
G H J Nokes
Director
17 February 2026
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Statement of changes in members’ balances
For the year ended 31 December 2025
2025
$000
Members’ balances brought forward at 1 January
Total comprehensive loss for the year
(3,412 )
Members’ balances carried forward at 31 December
(3,412 )
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Statement of cash flows
For the year ended 31 December 2025
Note
2025
$000
Cash flows from operating activities
Loss for the financial year
(3,336 )
Adjustments:
Increase in gross technical provisions
Increase in reinsurers’ share of gross technical provisions
(28,202 )
Increase in debtors
(38,493 )
Increase in creditors
Investment return
(2 )
Foreign exchange
(76 )
Net cash flows from operating activities
Cash flows from investing activities
Investment income received
Net cash flows from investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
15
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Notes to the financial statements – (forming part of the financial
statements)
1. Basis of preparation
Syndicate
2025 (‘The Syndicate’) comprises a member of the Society of Lloyd's that underwrites insurance
business in the London Market. The address of the Syndicate’s managing agent is 'Grange Park', Bishop's
Cleeve, Cheltenham, England, GL52 8YQ.
The financial statements have been prepared in accordance with 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 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).
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value
through profit or loss and available for sale that are measured at fair value.
The financial statements are presented in US dollars. The functional currency of the Syndicate is Pounds
Sterling, as most of the Syndicate’s expenses are incurred in Pounds Sterling. The presentational currency is
different from the functional currency of the Syndicate as the Syndicate has elected to use a presentational
currency aligned with the presentational currency of its ultimate parent company.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Going concern
The Syndicate has financial resources to meet its financial needs and manage its portfolio of insurance risk.
The Directors have continued to review the business plans, liquidity and operational resilience of the Syndicate
and are satisfied that the Syndicate is well positioned to manage its business risks in the current economic
environment. The Syndicate has sufficient capital in its Funds at Lloyd’s (“FAL”). The Syndicate 2026 year of
account has opened and the Directors have concluded that the Syndicate has sufficient resources to, and a
reasonable expectation that it will, open a 2027 year of account. There is no intention to cease underwriting or
cease the operations of the Syndicate.
To support the Syndicate’s liquidity position, Awbury Technical solutions LLC injected $2.4m in 2025 ($1.1m in
April, $0.6min in July and $0.7m in October) and $1.5m (£1.1m) in January 2026 for the Syndicate to utilise as
working capital.
Accordingly, the Directors of the Managing Agent continue to adopt the going concern basis in preparing the
interim report and financial statements.
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2.
Use of judgements and estimates
In preparing these financial statements, the Directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses.
The Syndicate makes estimates and assumptions concerning the future. The resulting estimates will, by
definition, seldom equal the related actual results. The following significant estimates have been made in
applying the Syndicate’s accounting policies:
Gross and ceded premium earnings
As the Syndicate writes policies that can have a varying limit of liabilities over the life of the policy, the Managing
Agent has employed an earnings methodology that uses the limit of liability to allow for periods of higher risk to
earn a greater amount of premium than periods were exposure levels are lower.
Insurance contract technical provisions
For insurance contracts, estimates of the claim provisions (referred to as Claims Outstanding in the accounts)
comprise the expected cost of claims incurred and reported at the valuation date (outstanding claims), further
development of these claims (incurred but not enough reported or “IBNER”) and those claims that have been
incurred but not yet reported (“IBNR”) at the valuation date. IBNR and IBNER are commonly referred to
collectively as IBNR. It can take a significant period of time before the ultimate claims cost can be established
with a high degree of certainty and for some types of policies, IBNR claims form the majority of the liability in
the statement of financial position.
The IBNER and IBNR provisions are estimated by using a range of standard actuarial claims projection
techniques together with benchmarking certain books of business to available market data. The Syndicate uses
Initial Expected Loss Ratios (“IELR”) as the main assumption when calculating likely ultimate claims cost. IELRs
are based on Awbury’s market experience of the development of claims over time.
The provision for outstanding claims is assessed on an individual case basis and is based on the estimated
ultimate cost of all claims notified but not settled by the balance sheet date, together with the provision for
related claims handling costs.
Similar judgements, estimates and assumptions are employed in the assessment of adequacy of provisions for
unearned premium. Judgement has also been used in determining that the pattern of insurance service provided
by a contract requires amortisation of unearned premium on a basis that utilises levels of exposure to compute
a weighted earning pattern that takes account of varying incidence of risk over the life of each individual policy.
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3. Significant accounting policies
The following significant accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Syndicate’s financial statements.
A. Premiums written
Gross premiums written reflect direct and inwards reinsurance business written during the period, gross of
commission payable to intermediaries, and exclude any taxes or duties based on premiums. Premiums written
include estimates for ‘pipeline’ premiums representing amounts due to the Syndicate not yet notified.
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct business being reinsured. The earned proportion of premiums is recognised as income. Premiums
are earned from the date of attachment of risk over the indemnity period based on the pattern of the risks
underwritten.
B. Unearned premiums
The provision for unearned premiums comprises the proportion of gross premiums written which is estimated
to be earned in the following or subsequent financial periods, computed separately for each insurance contract
using a method that allows for any variation in the incidence of risk during the period covered by the contract to
be reflected in the earnings patterns.
C. Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such
as brokerage and commission, and indirect costs such as administrative expenses connected with the
processing of proposals and the issuing of policies. The deferred acquisition cost asset represents the
proportion of acquisition costs which corresponds to the proportion of gross premiums written that is unearned
at the balance sheet date.
D. Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Premiums and claims on
reinsurance assumed are recognised in the technical account on the same basis as direct business, taking into
account the product classification. Reinsurance premiums ceded and reinsurance recoveries on claims incurred
are included in the respective expense and income accounts. Premiums ceded and claims reimbursed are
presented on a gross basis in the technical account and balance sheet as appropriate.
Reinsurance outwards premiums are earned on the same basis as the inwards business being protected.
E.
Claims provisions and related reinsurance recoveries
Claims incurred comprise claims and claims handling expenses (both internal and external) paid in the year and
the movement in provision for outstanding claims and settlement expenses. The Syndicate does not discount
its liability for outstanding claims nor the reinsurance share of outstanding claims.
Outstanding claims include an allowance for the cost of claims incurred by the balance sheet date but not
reported until after the year end (IBNR). Salvage and subrogation and other recoveries are deducted from the
provision for outstanding claims. The liability for outstanding claims is estimated using the input of assessments
for individual cases reported to the Syndicate and widely accepted actuarial techniques for the claims incurred
but not reported (IBNR). The techniques generally use IELRs and benchmark data from Awbury to form a view
on the likely ultimate claims to be experienced and an estimate of the expected ultimate cost of more complex
claims that may be affected by external factors, for example, court decisions.
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The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and
projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in
place for the class of business, the claims experience for the year and the current security rating of the
reinsurance companies involved. A number of statistical techniques are used to assist in making these
estimates.
Reinsurance assets are assessed for impairment at each balance sheet date. A reinsurance asset is deemed
impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that the
Syndicate may not recover all amounts due, and that event has a reliably measurable impact on the amount
that the Syndicate will receive from the reinsurer. Impairment losses are recognised in profit or loss in the period
in which the impairment loss is recognised.
F. Unexpired risks provision
Provision is made for unexpired risks arising from general insurance contracts where the expected value of
claims and expenses attributable to the unexpired periods of policies in force at the balance sheet date exceeds
the unearned premiums provision in relation to such policies (after the deduction of any deferred acquisition
costs). The provision for unexpired risks is calculated by reference to classes of business which are managed
together.
G. Foreign currencies
Transactions in foreign currencies are translated to the functional currency using the exchange rates at the date
of the transactions. The Syndicate’s monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the rates of exchange at the balance sheet date. Non-monetary assets
and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Non-monetary items denominated
in foreign currencies that are measured at historical cost are translated to the functional currency using the
exchange rate at the date of the transaction. For the purposes of foreign currency translation, unearned
premiums and deferred acquisition costs are treated as if they are monetary items.
Differences arising on translation of foreign currency amounts relating to the insurance operations of the
Syndicate are included in the non-technical account.
H. 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
Syndicate in the management of its short-term commitments.
Cash and cash equivalents are carried at amortised cost in the balance sheet.
Bank overdrafts that are repayable on demand and form an integral part of the Syndicate’s cash management
are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
I.
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 25%) deducted from syndicate
investment income is recoverable by managing agents and consequently the distribution made to members or
their members’ agents is gross of tax. Capital appreciation falls within trading income and is also distributed
gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in
the balance sheet under the heading ‘other debtors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
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J. Pension costs
No explicit charge is made for pension contributions relating to staff who act on behalf of the Syndicate.
K. Deposits received from reinsurers
Deposits received from reinsurers includes other amounts received in advance from reinsurers against future
claims under the Syndicate's reinsurance arrangements. These funds are held at amortised cost in the balance
sheet.
L. Operating expenses
Operating expenses are taken into account on an accrual basis. The Managing Agent charges an agreed fee
for the administration of the Syndicate.
M. 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.
N. 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 Syndicate does
not have any debtors directly with policyholders, all transactions occur via an intermediary.
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 debtors principally relate 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.
Other debtors principally consist of amounts due from members and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to related syndicates and other related entities, profit
commissions payable and other sundry payables. These are stated at amortised cost determined using the
effective interest rate method.
O. Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk, it is classified as a financial instrument.
All of the Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk
and therefore are recognised insurance contract.
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4.
Risk and capital management
Introduction and overview
This note presents information about the nature and extent of insurance and financial risks to which the
Syndicate is exposed, the Managing Agent’s objectives, policies and processes for measuring and managing
insurance and financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Board of Directors of the Managing Agent has overall responsibility for the establishment and oversight of
the Syndicate’s risk management framework. The Board has established a Risk Committee to oversee the
operation of the Syndicate’s risk management framework and to review and monitor the management of the
risks to which the Syndicate is exposed. The Risk Committee has delegated oversight of the management of
aspects of insurance risks to the Reserving Committee, which is responsible for developing and monitoring
insurance risk management policies, and the management of aspects of financial risks to the Syndicate
Management Committee, which is responsible for developing and monitoring financial risk management
policies.
The Risk Committee reports regularly to the Board of Directors on its activities. The Underwriting and Reserving
Committee report regularly to the Risk Committee on their activities.
The risk management policies are established to identify and analyse the risks faced by the Syndicate, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits.
A. Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities.
The insurance risk the Syndicate is exposed can be separated into underwriting risk and reserve risk.
i.
Underwriting risk
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future insurance losses
and associated expenses. This includes the risks that the premium is set too low, provides inappropriate levels
of cover, or that the actual frequency or severity of claims events will be significantly higher than was expected
during the underwriting process.
ii.
Reserve Risk
Reserving risk is the risk of exposure to the financial consequences of material uncertainty in ultimate claim
payments and expenses.
iii.
Management of insurance risk
A key component of the management of underwriting risk for the Syndicate is a disciplined underwriting strategy
that is focused on writing quality business and not writing for volume. Product pricing is designed to incorporate
appropriate premiums for each type of assumed risk. The underwriting strategy includes underwriting limits on
the Syndicate’s total exposure to specific risks together with limits on geographical and industry exposures. The
aim is to ensure a well-diversified book is maintained with no over exposure in any one geographical region or
industry.
Contracts can contain a number of features which help to manage the underwriting risk such as the use of
deductibles, or capping the maximum permitted loss, or number of claims (subject to local regulatory and
legislative requirements).
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The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event.
The SMC, Underwriting and Reserving Committees oversee the management of reserving risk. The use of
proprietary and standardised modelling techniques, internal and external benchmarking, and the review of
claims development are all instrumental in mitigating reserving risk.
The Syndicate Managing Agent’s actuaries perform a reserving analysis on a quarterly basis liaising closely
with underwriters, claims and reinsurance technicians. The aim of this exercise is to produce a probability -
weighted average of the expected future cash outflows arising from the settlement of incurred claims. These
projections include an analysis of claims development compared to the previous ‘best estimate’ projections. The
output of the reserving analysis is reviewed by external consulting actuaries. The Underwriting and Reserving
Committee performs a comprehensive review of the projections, both gross and net of reinsurance. Following
this review the Underwriting and Reserving Committee makes recommendations to the Risk Committee and
the Managing Agent’s Board of Directors of the claims provisions to be established.
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 manages
insurance risk through the approved business plan, which sets out targets for volumes, pricing, line sizes and
retention by class of business. The Syndicate monitors performance against the business plan through the year
and reviews pricing on an ongoing basis depending on market conditions. Reserve adequacy is monitored
through quarterly review by the PMA Actuarial team and SMC, which meets quarterly.
The claims development table in note number 11 shows the actual claims incurred.
iv.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies between the nature of the risk being underwritten and can arise from
developments in case reserving for large losses and catastrophes, or from changes in estimates of claims IBNR.
The following table presents the profit and loss impact of the sensitivity of the value of insurance liabilities
disclosed in the accounts to potential movements in the assumptions applied within the technical provisions.
Given the nature of the business underwritten by the Syndicate, the approach to calculating the technical
provisions for each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse
risk margin to the total insurance liability. The amount disclosed in the table represents the profit or loss impact
of an increase (+5%) or decrease (-5%) in the insurance liability as a result of applying the sensitivity. 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 balance.
General insurance business sensitivities as at 31 December 2025
Sensitivity
+5.0%
$000
-5.0%
$000
Claims outstanding – gross of reinsurance
(42 )
Claims outstanding – net of reinsurance
(10 )
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B. Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets
are sufficient to fund the obligations arising from its insurance contracts. The goal of the investment
management process is to optimise the risk-adjusted investment income and risk-adjusted total return by
investing in a diversified portfolio of securities, whilst ensuring that the assets and liabilities are managed on a
cash flow and duration matching basis.
a. Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The Syndicate is exposed to credit risk in respect of the following:
•
Amounts due from intermediaries;
•
Cash and cash equivalents; and
•
Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
i.
Management of credit risk
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored as part of the credit
control processes.
The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating information and by
internal investigations. The impact of reinsurer default is regularly assessed and managed accordingly.
ii.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The following table analyses the credit rating by investment grade of financial investments and debt securities,
reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in
respect of settled claims, cash and cash equivalents, and other debtors and accrued interest.
Year 2025
AAA
$000
AA
$000
A
$000
BBB
$000
Other
$000
Not
rated
$000
Total
$000
Reinsurers’ share of claims outstanding
Debtors arising out of direct insurance
operations
Cash at bank and in hand
Total
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iii.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance operations that are past due but not impaired at the
reporting date.
These debtors have been individually assessed for impairment by considering information such as the
occurrence of significant changes in the counterparty’s financial position, patterns of historical payment
information and disputes with counterparties.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
Neither
past due
nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
2025
$000
$000
$000
$000
$000
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance operations
Cash at bank and in hand
Total
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12 months
past due
Greater
than 1
year past
due
Total
2025
$000
$000
$000
$000
$000
Debtors arising out of direct insurance
operations
Total
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b. Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its
insurance contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash
resources mainly from claims arising from insurance contracts.
i.
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
•
Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance contracts
over the short, medium and long term;
•
The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts; and
•
The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid financial
resources are in place to meet obligations as they fall due in the event of reasonably foreseeable abnormal
circumstances.
ii.
Maturity analysis of syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance and reinsurance contracts, the
contractual maturity is the estimated date when the gross undiscounted contractually required cash flows will
occur. For financial liabilities, it is the earliest date on which the gross undiscounted cash flows (including
contractual interest payments) could be paid assuming conditions are consistent with those at the reporting
date.
Undiscounted net cash flows
Year 2025
No
maturity
stated
$000
0-1 yrs
$000
1-3 yrs
$000
3-5 yrs
$000
>5 yrs
$000
Total
$000
Claims outstanding
Creditors
Other creditor balances
Total
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c. 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: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
i.
Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
ii.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate has limited exposure to interest rate risk, as it currently only holds cash.
iii. Currency risk
The Syndicate wrote business primarily in Sterling, US dollar and Euro and is therefore exposed to currency
risk arising from fluctuations in these exchange rates.
The foreign exchange policy is to maintain assets in the currency in which the cash flows from liabilities are to
be settled in order to hedge the currency risk inherent in these contracts.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Sterling
US dollar
Euro
Total
2025
$000
$000
$000
$000
Reinsurers' share of technical provisions
Debtors
Other assets
Total assets
Technical provisions
(4,066 )
(22,545 )
(11,266 )
(37,877 )
Creditors
(4,690 )
(11,195 )
(5,875 )
(21,760 )
Accruals and deferred income
(2,491 )
(5,758 )
(3,052 )
(11,301 )
Total liabilities
(11,247 )
(39,498 )
(20,193 )
(70,938 )
Total capital and reserves
(447 )
(10 )
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iv.
Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market indices on financial instruments
with all other variables held constant, showing the impact on the result before tax due to changes in fair value
of financial assets and liabilities (whose fair values are recorded in the profit and loss account) and members’
balances.
2025
Impact on
results
before tax
$000
2025
Impact on
members’
balances
$000
Interest rate risk
+ 50 basis points shift in yield curves
- 50 basis points shift in yield curves
Currency risk
10% weakening of Sterling against other currencies
42
42
10% strengthening of Sterling against other currencies
(51)
(51)
A 10% increase (or decrease) in exchange rates and a 50 basis point increase (or decrease) in yield curves
have been selected on the basis that these are considered to be reasonably possible changes in these risk
variables over the following year.
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain
unchanged. However, the occurrence of a change in a single market factor may lead to changes in other market
factors as a result of correlations.
The sensitivity analysis is based on the Syndicate’s financial position at the reporting date and may vary at the
time that any actual market movement occurs. As investment markets move past pre-determined trigger points,
action would be taken which would alter the Syndicate’s position.
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
C. Capital management
i.
Capital framework at Lloyd’s
The Society of Lloyd’s (“Lloyd’s”) is a regulated undertaking and subject to supervision by the Prudential
Regulatory Authority (“PRA”) under the Financial Services and Markets Act 2000, and in accordance with the
Solvency UK Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s would comply with the Solvency UK requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level
as a starting point, the requirement to meet Solvency UK and Lloyd’s capital requirements apply at overall and
member level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of
Syndicate 2025 is not disclosed in these financial statements.
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirement
(“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss,
reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must
also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one
year SCR) for Lloyd’s to use in meeting Solvency 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 syndicates on which it is participating but not other members’ shares.
Accordingly, the capital requirements 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 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% of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that
member (Funds at Lloyd’s, or “FAL”), assets held and managed within a syndicate (Funds in Syndicate, or
“FIS”), or as the member’s share of the members’ balances on each syndicate on which it participates.
Accordingly, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported
on the balance sheet on page 14 and 15, represent resources available to meet members’ and Lloyd’s capital
requirements.
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
5.
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
2025
Gross
premiums
written
$000
Gross
premiums
earned
$000
Gross
claims
incurred
$000
Gross
operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Direct insurance
Credit and suretyship
(483 )
(1,310 )
(243 )
(788 )
Total direct insurance
(483 )
(1,310 )
(243 )
(788 )
Reinsurance
acceptances
(339 )
(2,919 )
(160 )
(2,539 )
Total
(822 )
(4,229 )
(403 )
(3,327 )
The gross premiums written for direct insurance by underwriting location of risk is presented in the table below:
2025
$000
United Kingdom
Total gross premiums written
6. Net operating expenses
2025
$000
Change in deferred acquisition costs
Administrative expenses
Members’ standard personal expenses
Reinsurance commissions and profit participation
(10,065 )
Net operating expenses
Administrative expenses include:
2025
$000
Auditors’ remuneration:
fees payable to the Syndicate’s auditor for the audit of these financial statements
fees payable to the Syndicate’s auditor and its associates in respect of other services
pursuant to legislation
Fees payable to the Syndicate's auditor in relation to other services pursuant to legislation primarily relate to
the audit of syndicate regulatory returns, the Schedule 3 return and statement of actuarial opinion.
7.
Key management personnel compensation
Polo Managing Agency Limited did not allocate any directors remuneration to the Syndicate and consequently
no meaningful disclosure can be made.
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
8.
Staff numbers and costs
The Syndicate and Managing Agent have no employees. Staff costs are not charged directly to the Syndicate
and consequently no meaningful disclosure can be made.
9. Investment return
2025
$000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest on cash at bank
Total investment return
Transferred to the technical account from the non-technical account
The investment return was wholly allocated to the technical account.
10. Debtors arising out of direct insurance operations
2025
$000
Due within one year
Due after one year
Total
11. Claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated
have changed from the first estimates made.
Balances have been translated at prevailing exchange rates at 31 December 2025 in all cases.
Gross
:
Pure underwriting year
2025
$000
Estimate of gross claims at the end of the underwriting year
Less gross claims paid
Gross claims reserve
Net:
Pure underwriting year
2025
$000
Estimate of net claims at the end of the underwriting year
Less net claims paid
Net claims reserve
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
12. Technical provisions
The table below shows changes in the insurance contract liabilities and assets from the beginning of the year
to the end of the year.
2025
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Claims outstanding
Balance at 1 January
Claims paid during the year
Expected cost of current year claims
(617 )
Foreign exchange movements
(11 )
Balance at 31 December
(628 )
2025
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Unearned premiums
Balance at 1 January
Premiums written during the year
(28,759 )
Premiums earned during year claims
(2,127 )
(558 )
Foreign exchange movements
(384 )
Balance at 31 December
(27,574 )
Refer to Note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the
accounts, to potential movements in the assumptions applied within the technical provisions.
13. Creditors arising out of reinsurance operations
2025
$000
Due within one year
Due after one year
Total
14. Other creditors
2025
$000
Other related party balances (non-syndicates)
Other liabilities
Total
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
15. Cash and cash equivalents
2025
$000
Cash at bank and in hand
Total cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in
the management of its short-term commitments are included in cash and cash equivalents.
16. Analysis of net debt
1 Jan
Cash
Flows
Fair value
and
Exchange
Movement
31 Dec
$000
$000
$000
$000
Cash and cash equivalents
Total
17. Related parties
These disclosure requirements are in addition to the requirement to disclose key management personnel
compensation. This disclosure is given in note 7
.
Syndicate
The corporate member of the Syndicate is Awbury Corporate Member Limited, which is part of the Awbury
Group LLC group (“Awbury Group”).
A total of $2.7m is owed by the Syndicate to Awbury Group companies, with $0.1m due to Awbury Corporation,
$2.5m due to Awbury Technical Solutions LLC and $0.1m due to Awbury Belgium B.V..
Managing Agent
Polo Managing Agency Limited’s immediate parent undertaking is Marco Capital Holdings (UK) Limited, a
company incorporated in England and Wales. Registered address is 4
th
Floor, 24 Monument Street, London
EC3R 8AJ. Managing agency fees of $1.5m was paid by the Syndicate to PMA.
The Managing Agent’s ultimate parent undertaking is Marco Capital Holdings Limited, a company incorporated
in Malta. Registered address is 171 Old Bakery Street, Valletta, VLT1455, Malta.
The Managing Agent’s ultimate controlling party is Brookfield Oaktree Holdings, LLC (formerly known as
Oaktree Capital Group, LLC).
18. Off-balance sheet items
The Syndicate has not been party to any arrangement, which is not reflected in its balance sheet, where material
risks and benefits arise for the Syndicate.
19. Post balance sheet events
In January 2026, Awbury Technical Solutions LLC injected a further $1.5m (£1.1m) for the Syndicate to utilise
as working capital. There have been no other material subsequent events from the balance sheet date until the
date of approval of the financial statements by Management.
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906
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Registered office: Polo Managing Agency, registered in England & Wales Registration no.
03935227
www.polo.works
20. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025
Start
of
period
rate
End of
period rate
Averag
e rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
21. 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 Prudential Regulatory Authority requirements and resource criteria. The
determination of 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 Member’s FAL to meet liquidity requirements or to settle losses.
Docusign Envelope ID: E0EDC533-4DF1-4764-B97F-E99C463F7906