Important information about Syndicate Reports and Accounts
Access to this document is restricted to persons who have given the certification set forth below. If this
document has been forwarded to you and you have not been asked to give the certification, please be
aware that you are only permitted to access it if you are able to give the certification.
The Syndicate reports and accounts set forth in this section of the Lloyd’s website, which have been filed
with Lloyd’s in accordance with the Syndicate Accounting Byelaw (No. 8 of 2005), are being provided for
informational purposes only. The Syndicate reports and accounts have not been prepared by Lloyd’s, and
Lloyd’s has no responsibility for their accuracy or content. Access to the Syndicate reports and accounts is
not being provided for the purposes of soliciting membership in Lloyd’s or membership of any Syndicate of
Lloyd’s, and no offer to join Lloyd’s or any Syndicate is being made hereby. Members of Lloyd’s are
reminded that past performance of a Syndicate in any Syndicate year is not predictive of the related
Syndicate’s performance in any subsequent Syndicate year.
You acknowledge and agree to the foregoing as a condition of your accessing the Syndicate reports and
accounts. You also agree that you will not provide any person with a copy of any Syndicate report and
accounts without also providing them with a copy of this acknowledgment and agreement, by which they
will also be bound.
Contents
Directors and administration ................................................................................................................................ 3
Report of the managing agent ............................................................................................................................. 4
Statement of managing agent’s responsibilities ............................................................................................... 8
Auditors Report ...................................................................................................................................................... 9
Statement of profit or loss and comprehensive income – technical account general business ................ 13
Statement of profit or loss and comprehensive income – non-technical account ...................................... 14
Balance sheet - assets ........................................................................................................................................... 15
Balance sheet – liabilities ...................................................................................................................................... 16
Statement of changes in members‘ balances .................................................................................................... 17
Cash flow statement .............................................................................................................................................. 18
Notes to the accounts ........................................................................................................................................... 19
Reports & Accounts Syndicate 1856 2
Directors and administration
IQUW Syndicate Management Limited
Managing Agent IQUW Syndicate Management Limited
Directors Francois-Xavier B Boisseau (Chairman)
Peter A Bilsby
Charlotte Constable
Michele J Faull
Martin Hall
Richard A Hextall
John G Holland
David E Morris
Nathan R Ott
Heather I Thomas
Christopher E Watson (Resigned 21 July 2025)
Sarah A Willmont (Appointed 31 July 2025)
Managing Agent’s Registered Office 30 Fenchurch Street
London
EC3M 3BD
Managing Agent’s Registered Number 00426475
Syndicate 1856
Syndicate Active Underwriter Steven Tebbutt
Bankers Lloyds Bank plc
Citibank NA
RBC Investor and Treasury Services
Barclays Bank plc
Investment Managers Conning Asset Management Limited
Wellington Management Company LLP
Independent Auditors PricewaterhouseCoopers LLP
Reports & Accounts Syndicate 1856 3
Report of the managing agent
IQUW Syndicate Management Limited (the “Managing Agent”), the managing agent of Syndicate 1856 (the
“Syndicate”) presents its report for the year ended 31 December 2025 which has been prepared under the
regulations outlined in note 1 to the annual accounts, using the presentational currency of US Dollars.
The Managing Agent has an agreed exemption from preparing separate underwriting year accounts for the
closed 2023 year of account.
Principal activity
The principal activity of the Syndicate remains the transaction of general insurance and reinsurance
business in the Lloyd’s market, underwriting a mixture of reinsurance, property, aviation, marine, motor,
energy, portfolio solutions and professional lines business, as well as a range of specialty lines including
cyber, crisis management, terrorism, and political risks. The Syndicate’s functional currency is US Dollars.
Review of the business
The Syndicate’s key financial performance indicators during the year were as follows:
Financial Year
2025 2024 2023 2022 2021
$'000
Total Total Total Total Total
Gross premium written
1,316,766 1,109,668 913,379 674,576 245,840
Net premium written
1,078,610
866,117
728,916
546,200
229,300
Net earned premium
991,699 782,082 632,478 412,000 170,400
Investment return
51,120
34,884
17,306
700
100
Profit/(loss) for the ļ¬nancial year
229,767 156,429 138,031 (17,000) (13,400)
Claims ratio
46.9 %
48.3 %
46.7 %
72.2 %
68.9 %
Expense ratio
36.3 %
35.4 %
34.3 %
30.5 %
39.7 %
Combined operating ratio
83.2 % 83.6 % 81.0 % 102.7 % 108.6 %
The result for the Syndicate in calendar year 2025 was a profit of $229.8m (2024: profit of $156.4m). The
underwriting result has improved this year due to higher net earned premium from the continued growth of
the Syndicate.
Gross premium written grew by 18.7% (2024: 21.5%) during 2025. There was strong growth in premium
despite rating pressure in multiple classes. Overall claims experience was favourable relative to
expectations. Natural catastrophe losses were broadly in line with forecasts, as the impact of the California
wildfires in Q1 offset benign hurricane season.
Reports & Accounts Syndicate 1856 4
The Syndicate’s business is written in a divisional structure reflecting the markets covered. The 2025 gross
written premium by division is summarised by division below.
Gross Written Premium 2025 2024 2023 2022 2021
$'000
Total Total Total Total Total
Reinsurance
268,048 264,129 217,264 163,745 78,056
Property
326,452 294,057 233,944 206,642 56,905
Professional Lines
131,174 118,315 104,657 81,614 44,920
Marine & Aviation
267,843 216,548 188,703 120,467 36,289
Specialty
300,341 192,288 151,383 92,320 29,670
Motor
22,908 24,331 17,428 9,788 —
Total
1,316,766 1,109,668 913,379 674,576 245,840
Outwards reinsurance
The Syndicate purchases outwards reinsurance to reduce gross exposures to within the net risk appetite, to
mitigate the impact of individual large losses, to manage the capital requirement and to minimise the impact
of accumulation of claims that may arise from the same event.
In 2025, the Syndicate purchased per occurrence and aggregate reinsurance cover to protect the Direct
Property and Property Treaty lines of business from large catastrophe losses. Separate per occurrence
excess of loss reinsurance was purchased to protect against the potential systemic occurrence of losses
across the marine, energy, political violence, and terrorism lines. Proportional reinsurance was purchased to
protect the property, cyber, professional lines and war, political violence and terrorism insurance portfolios.
Investment report
2025 2024
$'000 Total Total
Invested assets 1,014,212 835,194
Investment return 51,120 34,884
% Return on investments 5.0 % 4.2 %
Investment income 33,432 27,240
2025 has been a year whereby the new US administration created notable uncertainty and subsequent
market volatility. This was due to the planned imposition of US tariffs against international trading partners,
in addition to sizeable fiscal stimulus plans. Subsequently, financial markets have been uneven. Two-year US
Treasuries have traded through a range of almost 100 basis points. The VIX volatility index spiked above 50
and fell back to 15 with other notable spikes during the second half of the year. Investment grade and high
yield credit spreads had a range of approximately 50 basis points and 200 basis points respectively. Overall,
the moves have seen short-dated US Treasury yields trend lower as the Federal Reserve has continued to
cut interest rates off the back of relatively robust economic data, with the Fed Funds Rate reducing from
4.5% to 3.75% over the course of the year. Despite the volatility in the market, the Syndicate's investment
portfolio achieved a favourable return on investments of 5.0% compared to 4.2% in 2024.
Reports & Accounts Syndicate 1856 5
Capital
For the 2025 year of account, $1,143.5m (97.7%) of the capacity to support the Syndicate’s underwriting was
provided by IQUW Corporate Member Limited. The remaining $26.5m (2.3%) of the Syndicate’s capacity
was provided by non-aligned members based on limited tenancy one year rolling agreements. The 2026
year of account capital is 100% provided by IQUW Corporate Member Limited.
On 29 October 2025, Starr International, Inc ("Starr"), a global investment and insurance organisation,
announced that it had entered into a definitive agreement to acquire IQUW Holdings Bermuda Limited, the
ultimate parent company of the IQUW Group and all of its subsidiaries, including the Managing Agent
IQUW Syndicate Management Ltd. Starr Insurance and Reinsurance Limited, a Bermuda exempted
company, registered as a class 4 insurance company under the Insurance Act 1978, will be the acquiring
entity. The transaction is expected to close in the first half of 2026, subject to regulatory approvals and
closing conditions.
Principal risks and uncertainties
A description of the principal risks and uncertainties facing the Syndicate and how it manages risks is set out
in note 4 of the financial statements. In particular, the Syndicate is exposed to Insurance risk, Financial risk,
Market risk, Operational risk and Climate change risk.
Russia-Ukraine Conflict
The Syndicate, through its reinsurance and insurance portfolios, has exposure relating to the Russia-Ukraine
Conflict. The Syndicate has exposure to war on land and contingent aviation war and hull coverage for
aircraft lessors. We continue to model scenarios on a case by case basis considering circumstances of the
claims, taking account of cancellation, law and jurisdiction, subrogation and recoveries, and legal fees.
During 2025, the UK High Court determined that the Contingent War market was liable for the losses and
the judgement also gave a determination on the dates of loss. This resulted in the Syndicate reserves being
materially strengthened. As at 31 December 2025, the uncertainty around the Contingent War claims has
reduced materially, due to settlements and the outcome of the court case. Operator War reinsurance claims
remain the subject of ongoing litigation. These present a complex set of circumstances and in view of the
existence of a number of defences, any potential exposure continues to remain highly uncertain, with a High
Court hearing set for October 2026. However, modelling indicates that the uncertainty around the outcome
of these potential claims is within a normal range of expectations.
The booked ultimates for these losses as at 31 December 2025 are $303.8m (2024: $230.6m) gross of
reinsurance and $158.8m (2024: $76.4m) net of reinsurance (inclusive of inwards and outwards
reinstatement premiums). The booked amount for 2025 takes into account potential Operator War claims,
which were not previously provided for in 2024.
Reports & Accounts Syndicate 1856 6
Directors’ interests and interests in other Group Companies
The directors of the Managing Agent who were in ofļ¬ce during the year and up to the date of signing the
ļ¬nancial statements were:
Francois-Xavier B Boisseau Independent Non-Executive Chairman
Peter A Bilsby Chief Executive Officer
Charlotte Constable Chief Financial Officer
Michele J Faull Independent Non-Executive Director
Martin Hall Managing Director Syndicate 218
Richard A Hextall
Non-Executive Director
John G Holland Group Chief Risk Officer
David E Morris Group Chief Strategy Officer
Nathan R Ott Non-Executive Director
Heather I Thomas Independent Non-Executive Director
Christopher E Watson Non-Executive Director (Resigned 21 July 2025)
Sarah A Willmont Independent Non-Executive Director (Appointed 31 July 2025)
A number of the directors hold shares in the ultimate parent company. Shares are not held in any other
group company.
Disclosure of information to the auditors
The directors of The Managing Agent who held ofļ¬ce at the date of approval of the Report of the Managing
Agent conļ¬rm that, so far as each of them is aware, there is no relevant audit information of which the
Syndicate’s auditors are unaware, and each director has taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant audit information and to establish that the
Syndicate’s auditors are aware of that information.
Syndicate auditors
The Syndicate’s auditors, PricewaterhouseCoopers LLP, are deemed reappointed under the provisions of
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.
Annual general meeting (“AGM”)
Notice is hereby given that the Managing Agent does not propose holding a Syndicate AGM this year
unless objections to this proposal or the intention to reappoint the auditors are received from Syndicate
members by 30 April 2026.
On behalf of the Board:
Peter Bilsby
Director
11 February 2026
Reports & Accounts Syndicate 1856 7
Statement of managing agent’s responsibilities
The managing agent is responsible for preparing the managing agent’s report and the annual accounts in
accordance with applicable law and regulations comprising FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require
the managing agent to prepare annual accounts at 31 December each year in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable
law). The annual accounts are required by law to give a true and fair view of the state of affairs of the
Syndicate as at that date and of its profit or loss for that year.
In preparing the annual accounts, the managing agent is required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards comprising FRS 102, have been followed, subject
to any material departures disclosed and explained in the notes to the Syndicate Annual Accounts; and
• prepare the Syndicate Annual 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 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 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.
The managing agent is responsible for the preparation and review of the iXBRL tagging that has been
applied to the Syndicate Accounts in accordance with the instructions issued by Lloyd’s, including
designing, implementing and maintaining systems, processes and internal controls to result in tagging that
is free from material non-compliance with the instructions issued by Lloyd’s, whether due to fraud or error.
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.
Peter Bilsby
Director
11 February 2026
Reports & Accounts Syndicate 1856 8
Independent auditor’s report to the members of Syndicate 1856
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 1856’s syndicate annual accounts:
• give a true and fair view of the state of the syndicate’s affairs as at 31 December 2025 and of its
profit and cash flows for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and applicable law); and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within the
Lloyd’s Syndicate Accounts Instructions version V3.1 as modified by the Frequently Asked
Questions issued by Lloyd’s version V1.0 (“the Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Annual accounts (the “Annual Report”),
which comprise: the Balance sheet – assets and the Balance sheet – liabilities as at 31 December 2025; the
Statement of profit or loss and comprehensive income - technical account general business, the Statement
of profit or loss and comprehensive income - non-technical account, the Cash flow statement, and the
Statement of changes in members‘ balances for the year then ended; and the notes to the syndicate annual
accounts, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s
Syndicate Instructions and applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the syndicate annual accounts section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to
our audit of the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as
applicable to other entities of public interest, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in note 7, we have provided no non-audit services to the syndicate in the period
under audit.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to
continue as a going concern for a period of at least twelve months from when the syndicate annual accounts
are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going
concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as
to the syndicate's ability to continue as a going concern.
Reports & Accounts Syndicate 1856 9
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual
accounts and our auditors’ report thereon. The Managing Agent is responsible for the other information.
Our opinion on the syndicate annual accounts does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
syndicate annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material misstatement of the syndicate annual accounts
or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report based on these responsibilities.
With respect to the Report of the managing agent (the “Managing Agent’s Report”), we also considered
whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and
matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the
Managing Agent’s Report for the year ended 31 December 2025 is consistent with the syndicate annual
accounts and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of
the audit, we did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of managing agent’s responsibilities, the Managing Agent is
responsible for the preparation of the syndicate annual accounts in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The Managing Agent is also responsible
for such internal control as they determine is necessary to enable the preparation of syndicate annual
accounts that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless it is intended for the syndicate to cease operations, or it has
no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
syndicate annual accounts.
Reports & Accounts Syndicate 1856 10
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-
compliance with laws and regulations related to breaches of regulatory principles, such as those governed
by the Prudential Regulation Authority and the Financial Conduct Authority, and those regulations set by
the Council of Lloyd’s, and we considered the extent to which non-compliance might have a material effect
on the syndicate annual accounts. We also considered those laws and regulations that have a direct impact
on the syndicate annual accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Instructions. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the syndicate annual accounts
(including the risk of override of controls), and determined that the principal risks were related to
management bias in accounting estimates and the posting of inappropriate journals. Audit procedures
performed by the engagement team included:
• Discussions with the Audit Committee, management, internal audit, and the syndicate’s compliance
function, including consideration of known or suspected instances of non-compliance with laws and
regulation and fraud;
• Assessment of any matters reported on the Managing Agent’s whistleblowing helpline and
management’s investigation of such matters;
• Reviewing relevant meeting minutes including those of the Board, the Audit Committee, the Risk
Management Committee, the Reserving Committee, and correspondence with regulatory
authorities, including Lloyd’s of London, the Financial Conduct Authority and the Prudential
Regulatory Authority;
• Reviewing, and challenging where appropriate, the assumptions and judgements made by
management in their significant accounting estimates, in particular in relation to the estimation of
claims outstanding, with a focus on the incurred but not reported (“IBNR”) claims, and the
estimation of gross premiums written;
• Designing audit procedures to incorporate unpredictability around the nature, timing or extent of
our testing; and
• Identifying and testing journal entries based on selected fraud risk criteria, in particular journal
entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware
of instances of non-compliance with laws and regulations that are not closely related to events and
transactions reflected in the syndicate annual accounts. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through
collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s members as a body in
accordance with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Reports & Accounts Syndicate 1856 11
ī7,)5ī5)48-5)(ī5)3257-1+
*<23@ī)63īī<AC@/<13īī11=C<BAīī7@31B7D3īī!:=G2īAī(G<271/B3ī/<2īī55@35/B3īī11=C<BAīī'35C:/B7=<AīOMMUīE3ī
/@3ī@3?C7@32īB=ī@3>=@BīB=īG=Cī74īī7<ī=C@ī=>7<7=<ī
ī
ī E3ī6/D3ī<=Bī=0B/7<32ī/::īB63ī7<4=@;/B7=<ī/<2ī3F>:/</B7=<AīE3ī@3?C7@3ī4=@ī=C@ī/C27Bīī=@ī
ī /23?C/B3ī /11=C<B7<5ī @31=@2Aī 6/D3ī <=Bī 033<ī 93>Bī 0Gī B63ī "/</57<5ī ī53<Bī 7<ī @3A>31Bī =4ī B63ī
AG<271/B3īī=@ī
ī 13@B/7<ī27A1:=AC@3Aī=4ī"/</57<5īī53<Bī@3;C<3@/B7=<īA>3174732ī0Gī:/Eī/@3ī<=Bī;/23īī=@ī
ī B63īAG<271/B3ī/<<C/:ī/11=C<BAī/@3ī<=Bī7<ī/5@33;3<BīE7B6īB63ī/11=C<B7<5ī@31=@2Aīīīī
,3ī6/D3ī<=ī3F13>B7=<AīB=ī@3>=@Bī/@7A7<5ī4@=;īB67Aī@3A>=<A707:7BGīīīīī
ī7,)5ī0%77)5ī
,3ī2@/Eī/BB3<B7=<īB=īB63ī4/1BīB6/BīB67Aī@3>=@Bī;/Gī03ī7<1:C232īE7B67<ī/ī2=1C;3<BīB=īE6716ī7-ī'!īB/557<5ī
6/Aī 033<ī />>:732īī )67Aī /C27B=@Aīī @3>=@Bī >@=D723Aī <=ī/AAC@/<13ī=D3@ī E63B63@ī B63ī 7-ī'!ī B/557<5ī 6/Aī 033<ī
/>>:732ī7<ī/11=@2/<13īE7B6īA31B7=<īOī=4īB63ī!:=G2īAī(G<271/B3īī<AB@C1B7=<AīD3@A7=<ī+PīNī
ī)%1īī2567)5
ī(3<7=@īAB/BCB=@Gī/C27B=@īīīī
4=@ī/<2ī=<ī036/:4ī=4ī%@713E/B3@6=CA3ī==>3@Aī!!%
ī6/@B3@32īī11=C<B/<BAī/<2ī(B/BCB=@GīīC27B=@A
!=<2=<
NNīī30@C/@GīOMOS
'3>=@BAīīīī11=C<BAī(G<271/B3īNURS NO
Statement of profit or loss and comprehensive income -
technical account general business
For the year ended 31 December 2025
| 2025 | 2024 | ||
Note | $'000 | $'000 | |
Earned premium, net of reinsurance | |||
| Gross premium written | 5 | | |
Outward reinsurance premium | ( | ( | |
Premiums written, net of reinsurance | | | |
Changes in unearned premium: | |||
Gross amount | ( | ( | |
Reinsurers’ share | | | |
Net change in provisions for unearned premiums | ( | ( | |
| Earned premium, net of reinsurance | 11 | | |
Allocated investment return transferred from non-technical account | 6 | | |
Claims incurred, net of reinsurance | |||
Claims paid: | |||
Gross amount | ( | ( | |
Reinsurers’ share | | | |
| Net claims paid | 11 | ( | ( |
Change in the provision for claims: | |||
Gross amount | | ( | |
Reinsurers’ share | ( | | |
| Net change in provisions for claims | 11 | ( | ( |
| Claims incurred, net of reinsurance | 11 | ( | ( |
| Net operating expenses | 7 | ( | ( |
Balance on the technical account for general business | | |
All amounts relate to continuing operations.
The notes on pages 19 to 50 form an integral part of these annual accounts.
Reports & Accounts Syndicate 1856 13
Statement of profit or loss and comprehensive income –
non-technical account
For the year ended 31 December 2025
| 2025 | 2024 | ||
Note | $'000 | $'000 | |
| Balance on the technical account for general business | | | |
Investment return | |||
| Investment income | | | |
| Realised gains on investments | | | |
| Unrealised gains on investments | | | |
| Investment expenses and charges | | ( | |
| Total investment return | 6 | | |
Allocated investment return transferred to general business technical account | ( | ( | |
| Foreign exchange gain/(loss) | 10 | | ( |
| Other income | | | |
| Profit for the ļ¬nancial year | | | |
| Total comprehensive income for the year | | |
The notes on pages 19 to 50 form an integral part of these annual accounts.
Reports & Accounts Syndicate 1856 14
Balance sheet - assets
At 31 December 2025
| 2025 | 2024 | ||
Note | $'000 | $'000 | |
Investments | |||
| Financial investments | 9 | | |
| Deposits with ceding undertakings | | | |
| | | ||
Reinsurers’ share of technical provisions | |||
| Provision for unearned premiums | 11 | | |
| Claims outstanding | 11 | | |
| | | ||
Debtors | |||
| Debtors arising out of direct insurance operations | 13 | | |
| Debtors arising out of reinsurance operations | 14 | | |
| Other debtors | 15 | | |
| | | ||
Other assets | |||
| Cash at bank and in hand | 16 | | |
| Other | | | |
| | | ||
Prepayments and accrued income | |||
| Accrued interest and rent | | | |
| Deferred acquisition costs | 12 | | |
| Other prepayments and accrued income | | | |
| | | ||
| Total assets | | |
The notes on pages 19 to 50 form an integral part of these annual accounts.
Reports & Accounts Syndicate 1856 15
Balance sheet – liabilities
At 31 December 2025
| 2025 | 2024* | ||
Note | $'000 | $'000 | |
Capital and reserves | |||
| Members’ balances | | | |
| Total capital and reserves | | | |
Technical provisions | |||
| Provision for unearned premiums | 11 | | |
| Claims outstanding | 11 | | |
| | | ||
Creditors | |||
| Creditors arising out of direct insurance operations | 18 | | ( |
| Creditors arising out of reinsurance operations | 19 | | |
| Other creditors including taxation and social security* | 20 | | |
| | | ||
Other liabilities | |||
| Accruals and deferred income* | | | |
| Total Liabilities | | | |
| Total liabilities, capital and reserves | | |
*Prior year reclassification to comply with the requirements of Lloyd’s Syndicate Accounts Instructions
(version 3.1 issued 1 December 2025). Other creditors including taxation and social security has been
updated to remove and disclose Accruals and deferred income separately.
The notes on pages 19 to 50 form an integral part of these annual accounts.
The Syndicate annual accounts on pages 13 to 50 were approved by the Board on 11 February 2026 and
signed on behalf of the Syndicate’s managing agent by:
Charlotte Constable
Director
11 February 2026
Reports & Accounts Syndicate 1856 16
Statement of changes in members‘ balances
For the year ended 31 December 2025
| 2025 | 2024 | |
| $'000 | $'000 | |
| Members’ balances brought forward at 1 January | | |
| Total comprehensive income for the year | | |
| Payments of profit to members’ personal reserve funds: | ( | |
| Losses collected in relation to distribution on closure of underwriting year | | |
| Other | ( | |
| Total members’ balances | | |
Members participate in Syndicates by reference to years of account and their ultimate result. Assets and
liabilities are assessed with reference to policies incepting in that year of account.
The notes on pages 19 to 50 form an integral part of these annual accounts.
Reports & Accounts Syndicate 1856 17
Cash flow statement
For the year ended 31 December 2025
| 2025 | 2024 | ||
| Note | $'000 | $'000 | |
Net cash flows from operating activities | |||
| Profit for the financial year | | | |
| Movement in gross technical provisions | 11 | | |
| Movement in reinsurers' share of gross technical provisions | 11 | | ( |
| Movement in debtors | ( | ( | |
| Movement in creditors | | | |
| Investment return | 6 | ( | ( |
| Movement in other assets/liabilities | ( | ( | |
| Net cash generated from operating activities | | | |
Net cash flows from investing activities | |||
Purchase of equity and debt instruments | ( | ( | |
Sale of equity and debt instruments | | | |
Investment income received | | | |
Other | | | |
| Net cash used in investing activities | ( | ( | |
Net cash flows from financing activities | |||
| Distribution of profit | ( | | |
| Collection of losses | | | |
Net cash (used in)/generated from financing activities | ( | | |
Net increase/(decrease) in cash and cash equivalent | | ( | |
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 | 16 | | |
Reconciliation of cash and cash equivalents: | |||
| Cash at bank and in hand | 24,379 | 12,697 | |
| Cash equivalents | 153,397 | 109,407 | |
Cash and cash equivalents | 177,776 | 122,104 |
The notes on pages 19 to 50 form an integral part of these annual accounts.
Reports & Accounts Syndicate 1856 18
Notes to the accounts
1. Basis of preparation
Syndicate 1856 (The "Syndicate") comprises a group of members of the Society of Lloyd's that underwrites
insurance business in the London Market. The address of the Syndicate’s managing agent IQUW Syndicate
Management Limited ("The Managing Agent") is 30 Fenchurch Street, London, EC3M 3BD. The principal
activity of the Syndicate is the transaction of general insurance and reinsurance business at Lloyd’s and
through the Lloyd’s Brussels platform Lloyd’s Insurance Company S.A (“LIC”).
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, and applicable Accounting Standards in the United
Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102). FRS 102
requires the application of 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 1.0 issued by Lloyd’s.
These annual accounts have been prepared under the historical cost basis, except for financial assets at fair
value through profit or loss that are measured at fair value.
The Syndicate’s functional currency is US Dollars as that is the currency of the primary economic
environment in which the Syndicate operates. All amounts have been rounded to the nearest hundred
thousand and presented in thousands, unless otherwise indicated.
Standards, interpretations and amendments to published standards that are not yet effective and have
not been adopted early by the Syndicate.
The Syndicate has not early adopted any new standards and amendments to existing standards that have
been issued but are not yet effective. IFRS 15 (Revenue Recognition) or IFRS 16 (Leases) are not applicable
to entities reporting under FRS 102 until 1 January 2026 and therefore did not impact the Syndicate’s
statutory financial statements.
Overall, the Syndicate does not expect the adoption of changes to IFRS 15 or IFRS 16 to have a material
impact on its financial position or performance either for statutory reporting under FRS 102 or for Group
consolidation purposes.
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 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. The Syndicate has sufficient capital for each year of account in its Funds at Lloyd’s ('FAL'). There is
no intention to cease underwriting or cease the operations of the Syndicate.
Accordingly, the directors of the Managing Agent continue to adopt the going concern basis in preparing
the annual report and financial statements.
On 29 October 2025, Starr International, Inc ("Starr"), a global investment and insurance organisation,
announced that it had entered into a definitive agreement to acquire IQUW Holdings Bermuda Limited, the
ultimate parent company of the IQUW Group, and all of its subsidiaries, including the Managing Agent
IQUW Syndicate Management Ltd. Starr Insurance and Reinsurance Limited, a Bermuda exempted
company, registered as a class 4 insurance company under the Insurance Act 1978, will be the acquiring
entity. The transaction is expected to close in the first half of 2026, subject to regulatory approvals and
closing conditions.
Reports & Accounts Syndicate 1856 19
2. Judgements and key sources of estimation uncertainty
In the application of the accounting policies, which are described in note 3, the directors are required to
make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as
at the balance sheet date and the amounts reported for revenues and expenses during the year.
The following judgements, estimations and assumptions have had the most signiļ¬cant effect on amounts
recognised in the ļ¬nancial statements.
(i) Valuation of general insurance contract liabilities
The estimation of the ultimate liability arising from claims made under insurance contracts is the Syndicate's
most critical accounting estimate. The carrying amount of the liability is disclosed in note 11. For general
insurance contracts, estimates are made for the expected ultimate cost of claims notified at the balance
sheet date and the cost of claims incurred but not yet reported. It can take a significant period before the
ultimate cost of claims can be established with certainty, and the final outcome may be better or worse than
that provided. The estimation of these claims is based on historical experience projected forward, and where
the Syndicate does not have sufficient historical experience this is supplemented with other data sources
such as relevant market loss data or cedant notifications of their own underlying loss experience. Since
2021, the Syndicate has aligned with the updated strategy of the Managing Agency, meaning historic
experience is less reliable as an indicator for future trends. To determine the Actuarial best estimate's for the
2021 year of account onwards reserving use a combination of historic experience since 2021, internal pricing
loss ratios, Lloyd’s Market Association (“LMA”) benchmark data, and insights from coverholders, claims or
legal team updates, or cedant notifications. The Syndicate's estimate of claims and related claims handling
costs is mainly assessed through the application of several commonly accepted actuarial projection
methodologies based on the following:
• paid claims development, where payments to date are extrapolated based upon market data and
observed development of earlier years;
• the development of claims based on seasonally adjusted exposure curves;
• application of frequency/severity methods for large claims;
• incurred claims development, where incurred claims to date for each year are extrapolated based upon
observed development of earlier years;
• expected ultimate loss ratios, which are estimated using an average of (developed) years, the averaging
period varies depending on reserving subclass, but is based on historic claims trends and risk
characteristics;
• quarterly underwriter updates on expected premium and associated rating assumptions; and
• inflationary assumptions are set so as to allow for both exposure inflation and claims inflation. The former
is based on an appropriate economic index, relative to the class of business, and the latter with additional
excess inflation and social inflation allowances.
The claims provisions are initially calculated gross of any reinsurance recoveries. A separate estimate is
made of the amounts recoverable from all the Syndicate’s reinsurance arrangements, having due regard to
collectability. Claims provisions are subject to regular review, both within the Syndicate and externally.
The Syndicate’s management discusses and challenges the actuarial best estimate and selected booked
claims provisions at the quarterly Reserve Committee (“RC”) and Audit Committee (“AC”). The
membership of the AC comprises exclusively non-executive directors with significant insurance expertise.
External actuaries are engaged to calculate an independent best estimate of the ultimate cost of claims as
at each 31 December and present a Statement of Actuarial Opinion (“SAO”) against which the Syndicate’s
best estimate is assessed.
Reports & Accounts Syndicate 1856 20
The total gross estimate for incurred but not reported ("IBNR") losses as at 31 December 2025 is $620.7m
(2024: $763.2m). The total net estimate for IBNR losses as at 31 December 2025 is $457.5m (2024:
$441.4m).
Major catastrophes, both man-made and natural, and specific large losses are reviewed separately, and
specific reserves are set. These reserves are set with input from the actuarial, claims and underwriting teams
using market knowledge and historical experience.
A management margin is set, over and above the actuarial best estimate net reserves, non-catastrophic
only, to allow for inherent uncertainty within the reserves. Uncertainty regarding the catastrophe estimates
is considered when setting reserves for each event.
(ii) Premium estimates
Gross premium written is initially based on estimated premium income (“EPI”) of each contract. EPI is based
on information provided by the brokers, policyholders, coverholders, past underwriting experience, and the
contractual terms of the policy. Uncertainty arises because EPI could be different to the signed premium
ultimately received. This risk is mitigated by detailed reviews of EPI and signed premium and regular reviews
that coverholder income is coming through as expected.
Premium in respect of insurance contracts underwritten under binding authorities is booked as the
underlying contracts incept. Premium is earned on a pro-rata basis that is seasonally adjusted for the risk
exposure of the policy. The carrying value amount of the unearned premium is disclosed in note 11.
Gross premium written includes an estimation for reinstatement premium which is determined based on
incurred losses held in the technical provisions. Reviews of the reinstatement premiums held are carried out
on a regular basis as part of the reserve review process.
3. Summary of signiļ¬cant accounting policies
The principal accounting policies applied in the preparation of these annual accounts are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.
(i) Gross premium written
Gross premium written comprises premium on contracts incepted during the ļ¬nancial year as well as
adjustments made in the year to premium written in prior accounting periods. Premium is shown gross of
brokerage payable and excludes taxes and duties levied on them.
Premium written includes an estimate of gross premium written during the year. For certain contracts,
premium is initially recognised based on estimates of ultimate premium. This occurs where pricing is based
on variables which are not known with certainty at the point of binding the policy. In determining the
estimated premium, use is made of information provided by brokers and coverholders, past underwriting
experience, the contractual terms of the policy, and prevailing market conditions. Subsequently,
adjustments to those estimates arise as updated information relating to those pricing variables becomes
available, for example due to declarations obtained on binding authority contracts, reinstatement premium
on reinsurance contracts, or other policy amendments. Such adjustments are recorded in the period in
which they are determined, and impact gross premium written in the income statements and premium
received from insureds and cedants recorded on the balance sheet.
(ii) Unearned premium
Written premium is recognised as earned according to the risk proļ¬le of the policy. The provision for
unearned premium comprises the proportion of gross and outwards reinsurance premium written, which is
estimated to be earned in the following or subsequent financial years, computed using the daily pro-rata
method weighted by the risk profile of the underlying policies.
(iii) Reinsurance premium ceded
Outwards reinsurance premium comprises premium on contracts incepted during the financial year.
Outwards reinsurance premium is also disclosed gross of commissions and profit participations recoverable
Reports & Accounts Syndicate 1856 21
from reinsurers. Written outwards reinsurance premium is recognised as earned according to the coverage
period and in line with the risk proļ¬le to which the inwards business being protected relates. Reinstatement
premiums are fully earned at the stage they are recognised in the financial statements.
(iv) Investment return
Investment return comprises interest, realised and unrealised gains and losses on assets held at fair value
through proļ¬t or loss.
Fair value realised gains and losses are calculated as the difference between net sales proceeds and fair
value at acquisition.
Fair value unrealised gains and losses are calculated as the difference between the current fair value at the
balance sheet date and the fair value at acquisition or at previous remeasurement date, adjusted by
excluding previously recognised unrealised gains and losses of those ļ¬nancial assets disposed of in the
accounting period.
The returns on pooled investments arising in each calendar year are apportioned to years of account open
during the calendar year in proportion to average funds available for investment on each year of account.
Investment return is initially recorded in the statement of comprehensive income within the non-technical
account. A transfer is made from the statement of comprehensive income non-technical account to the
statement of comprehensive income technical account for general business. Investment return has been
wholly allocated to the technical account as all investments relate to underwriting activities.
(v) Operating expenses
Where expenses are incurred by, or on behalf of, the Managing Agent for the administration of the
Syndicate, these expenses are apportioned appropriately based on type of expense. Expenses that are
incurred jointly are apportioned between the Managing Agent and the Syndicate on bases depending on
the amount of work performed, resources used, and the volume of business transacted. Syndicate operating
expenses are normally allocated to the year of account for which they are incurred, but the 2023, 2024 and
2025 years of account were supported by non-aligned members and were charged a profit commission.
(vi) Other income
Consortium income arises where the Syndicate leads a consortium arrangement and is entitled to risk-free
income to compensate for the costs of managing the consortium, together with profit commission where
applicable. The risk-free revenue is attributable to the youngest year of account and profit commission
receivable in respect of the prior year of account, in accordance with the Syndicate's accounting policy,
which recognises profit commission payable one year post-inception. Risk-free revenue is non-contingent
and is therefore recognised in the youngest year of account.
(vii) 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 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 are included in the
balance sheet under the heading ‘Members’ balances’. No provision has been made for any overseas tax
payable by members on underwriting results.
(viii) Foreign currency
The functional currency of the Syndicate is US Dollars which is the currency of the primary economic
environment in which the Syndicate operates.
Reports & Accounts Syndicate 1856 22
Transactions denominated in foreign currencies are translated into US Dollars at the rates of exchange
ruling at the date of the transaction. At the balance sheet date, monetary assets and liabilities are translated
at the year-end rates of exchange. For 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 insurance operations of the
Syndicate are recognised in the profit/(loss) on financial exchange in the statement of comprehensive
income non-technical account.
(ix) Financial instruments
The Managing Agent has chosen to adopt Sections 11 and 12 of FRS 102 in respect of ļ¬nancial instruments.
Financial instruments are recognised in the balance sheet at such time as the Syndicate becomes a party to
the contractual provisions of the ļ¬nancial instrument. A ļ¬nancial asset is derecognised when the contractual
rights to receive cash ļ¬ows from the ļ¬nancial assets expire, or where the ļ¬nancial assets have been
transferred, together with substantially all the risks and rewards of ownership. Financial liabilities are
derecognised if the Syndicate’s obligations speciļ¬ed in the contract expire, are discharged or cancelled.
Financial assets
The Syndicate has classiļ¬ed these assets into the following categories: ļ¬nancial assets at fair value through
proļ¬t or loss, and loans and receivables.
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not
at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence
demonstrates that a loss event has occurred after the initial recognition of an asset, and that the loss event
has an impact on the future cash flows on the asset that can be estimated reliably.
Financial investments
Financial investment assets are designated at fair value through proļ¬t or loss on initial recognition where it
is the Syndicate’s strategy to manage those ļ¬nancial investments on a fair value basis. Internal reporting and
performance measurement of these assets are also on a fair value basis. Note 9 sets out the amount of each
class of ļ¬nancial asset that has been designated at fair value through proļ¬t or loss.
Investments carried at fair value through proļ¬t or loss are initially recognised at fair value with any
associated transaction costs being expensed through the statement of comprehensive income non
technical account.
If the market for an investment is not active, the valuation is based upon the net asset values of underlying
holdings, which are independently sourced. The fair value of listed equity and debt securities is determined
by reference to their quoted bid price at the balance sheet date.
Fair values for unlisted debt securities are estimated at the present value of their future cash ļ¬ows,
discounted at the market rate of interest at the reporting date.
Loans and receivables
Loans and receivables are recognised at amortised cost, being the fair value of consideration paid plus
incremental direct transaction costs less any provision for impairments. Syndicate loans to the central fund
are measured at fair value through profit and loss .
(x) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts,
when applicable, are shown within current borrowings in liabilities.
For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
Reports & Accounts Syndicate 1856 23
(xi) Deferred acquisition costs
The costs of acquiring new business, which are incurred during the ļ¬nancial year, but where the beneļ¬t of
such costs will be obtained in subsequent accounting periods, are deferred, and recognised as an asset to
the extent that they are recoverable out of margins in future matching revenues. All other costs are
expensed when they are incurred.
In respect of insurance contracts, acquisition costs comprise direct and indirect costs incurred in writing
new contracts. Deferred acquisition costs are amortised over the life of the policy in line with the
recognition of earned premium.
All deferred acquisition costs are tested for recoverability at each reporting date. The carrying values are
adjusted to recoverable amounts and any resulting impairment losses are charged through the proļ¬t and
loss account.
(xii) Claims provision and related recoveries
Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported
or not, including related direct and indirect claims handling costs and adjustments to claims incurred from
previous years.
The provision for claims outstanding is assessed on an individual case basis and is based on the estimated
ultimate cost of all claims notiļ¬ed but not settled by the balance sheet date, together with a provision for
related claims handling costs. The provision also includes an estimated cost of claims incurred but not
reported (“IBNR”) at the balance sheet date based on statistical methods.
These methods generally involve projecting from past experience the development of claims over time to
form a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to
variations in the business accepted and the underlying terms and conditions. For the most recent years,
where a high degree of volatility arises from projections, estimates may be based in part on output from
premium rating and other pricing models of business accepted, together with assessments of underwriting
conditions.
The reinsurers’ share of the provision for claims is based on the amount 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 rating of the reinsurance
companies involved. Several statistical methods are used to assist in making these estimates.
The two most critical assumptions as regards claims provisions are that the past is a reasonable predictor of
the likely level of future claims development, and that the premium rating and other pricing models used for
current business are fair reflections of the likely level of ultimate claims to be incurred.
The directors consider that the provision for gross claims and related reinsurance recoveries is fairly stated
based on the information currently available to them. However, the ultimate liability will vary because of
subsequent information and future events and this may result in significant adjustments to the amounts
provided. Adjustments to the amounts of claims provisions established in prior years are reļ¬ected in the
annual accounts for the period in which the adjustments are made. The methods used, and the estimates
made, are reviewed regularly.
(xiii) Unexpired risks provision
A provision for unexpired risks is made where claims, related claims handling costs and other related
expenses arising after the end of the ļ¬nancial year in respect of contracts concluded before that date are
expected to exceed the unearned premiums on these contracts, after the deduction of any deferred
acquisition costs.
The provision for unexpired risks is calculated by reference to classes of business that are managed
together. No account is taken of the relevant investment return arising from investments supporting the
unexpired premiums and unexpired risk provisions.
Reports & Accounts Syndicate 1856 24
(xiv) Reinsurance assets and liabilities
Amounts due to and from reinsurers are accounted for in a manner consistent with the insured policies and
in accordance with the relevant reinsurance contract. Reinsurance assets are assessed for impairment at
each balance sheet date. A reinsurance asset is deemed impaired if there is objective evidence, because of
an event that occurred after its initial recognition, that the Syndicate may not recover all amounts due, and
that the event has a reliably measurable impact on the amounts that the Syndicate will receive from the
reinsurer. Objective factors that are considered when determining whether a reinsurance asset or group of
reinsurance assets may be impaired include, but are not limited to the following:
• negative rating agency announcements of reinsurers;
• significant reported financial difficulties of reinsurers;
• actual breaches of credit terms such as persistent late payment or actual default; and
• adverse economic or regulatory conditions that may restrict future cash flows and asset recoverability.
Impairment losses on reinsurance assets are recognised in the profit and loss account.
(xv) Bad debt
A full bad debt general provision is made for doubtful debts when a debtor balance is more than 1 year
outside credit terms, beginning with a 75% provision at 9 months overdue. Bad debt provisions are
recognised in the profit and loss account.
(xvi) Pension costs
IQUW Administration Services Limited (“IQUW ASL”) employs all UK based employees and operates a
deļ¬ned contribution scheme. Pension contributions relating to staff are recharged to the Syndicates via
IQUW Syndicate Services Limited (“IQUW SSL”) and are included within net operating expenses.
(xvii) Profit commission
For the 2023 to 2025 year of accounts, a 17.5% profit commission is being charged to the non-aligned
members. The Managing Agent has exempted IQUW Corporate Member Limited from the profit
commission.
(xviii) Deposit components of reinsurance contracts
Where a deposit component exists in a reinsurance contract, it is not unbundled and is recorded as part of
the reinsurance assets. Any interest payable on the deposit component is accrued annually at the effective
interest rate.
(xix) 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 contracts.
(xix) Reinsurance to close ("RITC") received
When the Syndicate accepts an RITC from another Syndicate it records all the assets and liabilities
transferred from the other Syndicate on the balance sheet at fair value on the date the RITC agreement is
effective. The RITC transaction has no impact on the Syndicate's profit or net assets at the time that it is first
recorded.
Reports & Accounts Syndicate 1856 25
4. Risk Management
The Syndicate’s overall appetite for accepting and managing varying classes of risk is defined by the
Managing Agent’s Board (the “Board”). The Board has developed a governance framework and has set risk
management policies and procedures which include risk identification, risk assessment, risk response, risk
monitoring, and risk reporting. The objective of these policies and procedures is to protect the Syndicate’s
members, policyholders and other stakeholders from negative events that could hinder the Syndicate’s
delivery of its contractual obligations and its achievement of sustainable profitable performance.
The Board exercises oversight of the development and operational implementation of its risk management
policies and procedures through the Managing Agent’s Risk and Compliance Committee (“RCC”). The Risk
Management function under the stewardship of the Chief Risk Officer (“CRO”), ensures that the Risk
Management Framework ("RMF") policies and procedures remain effective and approved by the RCC on
behalf of the Board. The Executive Committee operates regular oversight of the RMF activities and
outcomes. Ongoing compliance is monitored through the Internal Audit function, which is shared with other
entities within the IQUW group, and which has operational independence, a charter and clear upwards
reporting structures back into the AC and the Board.
The Board risk appetites and tolerances consider the risk capacity, capital adequacy, prevailing regulatory
and legislative adherence, and the fair treatment and protection of customer and stakeholder interests. Risk
metrics and measures of the business are monitored against the risk appetites reported to the RCC and
Board quarterly.
The Board is ultimately responsible for ensuring that the RMF is in place and adhered to. Responsibilities
are then delegated through the Three Lines of Defence Model across the IQUW group, summarised as
follows:
• Line 1: Business units operating within a framework of internal controls underpinned by policies,
procedures, and senior management oversight with direct responsibility for risk management and
controls;
• Line 2: Risk Management and Compliance functions ensure that the RMF is effective, and that the
Syndicate operates within its legal and regulatory boundaries. Employees in Line 2 coordinate, facilitate
and oversee the effectiveness and integrity of the RMF. As a key input to decision making, the RMF
focusses on assuring the Board that the risk proļ¬le is in line with expectations, escalating all material
risk and capital issues to the Board, and providing input to, challenge and oversight of Line 1 decision
making; and
• Line 3: Internal Audit provides independent assurance to the Board via the AC as to the effectiveness
of the internal control environment. Employees in Line 3 provide independent assurance and challenge
across all business functions in respect of the integrity and effectiveness of the RMF.
The principal sources of risk relevant to the Syndicate fall into four broad categories: insurance risk, financial
risk, operational risk and climate change risk.
4.1 Insurance risk
The predominant risk to which the Syndicate is exposed is insurance risk, which is assumed through the
underwriting process. Insurance risk is defined as the risk of ļ¬uctuations in the frequency, severity and
timing of insured events and claims settlements relative to expectation. Insurance risk can be sub-
categorised into: (a) underwriting risk including the risk of catastrophe and systemic insurance losses, and
the insurance cycle and competition. Underwriting risk also encompasses the risk that insurance premium
will not be sufficient to cover future claims and associated expenses, as well as people, process and system
risks directly related to underwriting; and (b) reserving risk, defined as the risk that reserves set in respect of
insurance claim losses are ultimately insufficient to fully settle these claims and associated expenses.
Reports & Accounts Syndicate 1856 26
4.1 (a) Underwriting risk
The Board sets the Syndicate’s underwriting strategy and risk appetite, seeking to benefit from identified
opportunities considering other relevant anticipated market conditions.
The Syndicate aims to manage underwriting risk:
• to achieve proļ¬ts and return on equity by ensuring that insurance risks are carefully selected in
accordance with the underwriting strategy and risk appetite tolerances, underwritten in accordance
with risk strategy and priced to reļ¬ect the underlying risk; and
• to mitigate insurance risk using optimal reinsurance arrangements.
4.1 (a)(i) Underwriting strategy
Specific underwriting objectives such as aggregation limits, reinsurance protection thresholds, geographical
disaster event risk exposures, and line of business diversification parameters are prepared and reviewed by
the Managing Agent’s management team to translate the Board’s underwriting strategy into specific
measurable actions and targets. These actions and targets are reviewed and approved in advance of the
underwriting year. The Board continually reviews its underwriting strategy throughout the course of each
underwriting year considering evolving market pricing and loss conditions, and as opportunities present
themselves.
The underwriters and the Managing Agent’s management consider underwriting risk at an individual
contract level and from a portfolio perspective where the risks assumed in similar classes of policies are
aggregated and the exposure evaluated considering historical portfolio experience and prospective factors.
The delegation of underwriting authority to specific individuals, both internally and externally, is subject to
regular review. All underwriting staff and binding agencies are set strict parameters in relation to the levels
and types of business they can underwrite, based on individual levels of experience and competence. These
parameters cover areas such as maximum sums insured per insurance contract, maximum gross premium
written, and maximum aggregated exposures per geographical zone and risk class. All delegations are
strictly controlled through these underwriting guidelines and limits, and extensive monitoring, review, and
auditing of the agencies.
The Syndicate compiles estimates of losses arising from realistic disaster events using statistical and/or
meteorological models alongside input from the underwriters. They also reflect the areas that represent
significant exposures for the Syndicate. The events are extreme and therefore mostly untested, which
increases the risk that estimates may prove inadequate because of incorrect assumptions, model
deficiencies, or losses from unmodelled risks.
4.1 (a)(ii) Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies between the classes of business and the nature of the risk being
underwritten and can arise from developments in case reserving for large losses and catastrophes, or from
changes in estimates of claims IBNR.
The following table presents the 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 or decrease 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.
Reports & Accounts Syndicate 1856 27
General insurance business sensitivities as at 31 December 2025 | Sensitivity | |
+5.0% $'000 | -5.0% $'000 | |
Claims outstanding - gross of reinsurance | | ( |
Claims outstanding - net of reinsurance | | ( |
General insurance business sensitivities as at | Sensitivity | |
+5.0% $'000 | -5.0% $'000 | |
Claims outstanding - gross of reinsurance | | ( |
Claims outstanding - net of reinsurance | | ( |
4.1 (a)(iii) Outwards reinsurance
The Syndicate also manages underwriting risk by purchasing reinsurance. The classes of business expose
the Syndicate to claims not only at individual risk level, but also at event level. The Syndicate therefore
reinsures a portion of the risks that it underwrites to control its exposure to claims and to protect its capital
resources. Reinsurance protections, such as excess of loss and proportional covers, are purchased to
mitigate the effect of individual large losses, catastrophes and concentrations of risk beyond the risk
appetite approved by the Board. The scope and type of reinsurance protection purchased may change
depending on the extent and competitiveness of cover available in the market. There is exposure to credit
risk to the extent that any reinsurer is unable to meet its obligations assumed under such reinsurance
arrangements as outlined above. To mitigate this risk, the Syndicate either purchases reinsurance with rated
insurers A- or above by S&P or AM Best equivalent, or requires non-rated insurers to collateralise their
obligations.
4.1 (b) Reserving risk
The Syndicate’s procedures for estimating the outstanding costs of settling insured losses at the balance
sheet date, including IBNR, are detailed in note 2(i).
The Syndicate aims to manage reserving risk:
• to minimise reserve volatility through robust reserving and application of actuarial modelling
approaches; and
• to monitor reserve adequacy and performance on an ongoing basis
The Syndicate undertakes both an internal and external actuarial review of the claims’ provisions,
independent of the underwriting teams. The SAO on claims reserve adequacy, required by Lloyd’s, is
provided by an independent external actuarial ļ¬rm.
The Syndicate’s estimates are subject to regular and rigorous review by senior management from all areas of
the business including independent actuaries and Audit Committee. The final provision is approved by the
Managing Agent's Board.
Booked reserves include a net margin of $28.5m (2024: $31.2m). This is the margin above the best estimate
to further mitigate the uncertainty within the reserve estimates.
4.1 (b)(i) Sources of uncertainty in the estimation of future claim payments
For the inwards reinsurance lines, there is often a time lag between the establishment and re-estimation of
case reserves and reporting to the Syndicate. The Syndicate works closely with the reinsured to ensure
timely reporting and analyses industry loss data to verify the reported reserves. Additional reserves are
provided for, particularly for IBNR, and especially for the longest-tailed lines such as Professional Lines
where the final settlement may not be made until several years after the claim occurred. Actuarial projection
methodologies are used to estimate ultimate claims based on the historical development patterns for paid
and incurred claims. For the most uncertain claims, standard actuarial techniques are augmented with
Reports & Accounts Syndicate 1856 28
bespoke analysis, views of other business functions such as claims, underwriting and exposure management,
and alternative data sources.
4.1 (b)(ii) Development of claims provision
The tables below show the estimated ultimate cumulative claims, being incurred claims plus IBNR and
claims handling costs, for each successive underwriting year at each balance sheet date.
The Syndicate seeks to set robust reserves and to minimise volatility in those reserves over time to mitigate
the risk that reserves will be insufficient to meet future claims payments and related expenses. The tables
below show the development of the estimated ultimate claims costs over an extended period to provide an
illustration of the Syndicate’s ability to accurately estimate the ultimate level of claims. It should be noted
that the Syndicate’s material change in strategy and management from the 2021 underwriting year means
the development of prior years is less relevant to the 2021 and future underwriting years.
The data for claims development periods prior to 2022 includes data for Syndicate 3268 which was
reinsured into Syndicate 1856 with effect from 1 January 2024.
Analysis of claims development - gross of reinsurance
Underwriting | |||||||||||
year | |||||||||||
| (Restated)* | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total |
| $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | |
At end of reporting year | | | | | | | | | | | |
| One year later | | | | | | | | | | | |
| Two years later | | | | | | | | | | ||
Three years later | | | | | | | | | |||
Four years later | | | | | | | | ||||
| Five years later | | | | | | | |||||
| Six years later | | | | | | ||||||
Seven years later | | | | | |||||||
Eight years or more later | | | | ||||||||
Nine years later | | | |||||||||
Current estimate of cumulative claims | | | | | | | | | | | |
Cumulative payments to date | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( |
Total gross provision included in the balance sheet | | | | | | | | | | | |
Reports & Accounts Syndicate 1856 29
Analysis of claims development - net of reinsurance
Underwriting | |||||||||||
year | |||||||||||
| (Restated)* | 2016 | 2017 | 2018 | 2019 | 2020** | 2021** | 2022 | 2023 | 2024 | 2025** | Total |
| $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | $000's | |
At end of reporting year | | | | | | | | | | | |
| One year later | | | | | | | | | | | |
| Two years later | | | | | | | | | | ||
Three years later | | | | | | | | | |||
Four years later | | | | | | | | ||||
| Five years later | | | | | | | |||||
| Six years later | | | | | | ||||||
Seven years or more later | | | | | |||||||
Eight years or more later | | | | ||||||||
Nine years or more later | | | |||||||||
Current estimate of cumulative claims | | | | | | | | | | | |
Cumulative payments to date | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( |
Total net provision included in the balance sheet | | | | | | | | | | | |
**Protected by stop loss
*The loss development tables have undergone a restatement following the identification of calculation
errors in the prior year working files, on a net provision basis across all years of account the impact is $0.1m.
In addition, the figures have been updated to reflect the exchange rates applicable in 2025.
4.1 (b)(iii) Sensitivity analysis of reserve estimates
Assumptions about future developments, outcomes or events underpin the setting of the Syndicate’s
booked reserves. The sources of estimation uncertainty are discussed in note 2. Sensitivity analysis of the
key assumptions provides an illustration of the inherent uncertainty in the reserves as shown below.
The following illustrates the sensitivity of some of the key assumptions.
The Syndicate, through its reinsurance and insurance portfolios, has exposure relating to the Russia-Ukraine
Conflict. The Syndicate has exposure to war on land and contingent aviation war and hull coverage for
aircraft lessors. We continue to model scenarios on a case by case basis considering circumstances of the
claims, taking account of cancellation, law and jurisdiction, subrogation and recoveries, and legal fees.
During 2025, the UK High Court determined that the Contingent War market was liable for the losses and
the judgement also gave a determination on the dates of loss. This resulted in the Syndicate reserves being
materially strengthened. As at 31 December 2025, the uncertainty around the Contingent War claims has
reduced materially, due to settlements and the outcome of the court case.Operator War reinsurance claims
remain the subject of ongoing litigation. These present a complex set of circumstances and in view of the
existence of a number of defences, any potential exposure continues to remain highly uncertain, with a High
Court hearing set for October 2026. However, modelling indicates that the uncertainty around the outcome
of these potential claims is within a normal range of expectations.
Reports & Accounts Syndicate 1856 30
The booked ultimates for these losses as at 31 December 2025 are $303.8m (2024: $230.6m) gross of
reinsurance and $158.8m (2024: $76.4m) net of reinsurance (inclusive of inwards and outwards
reinstatement premiums). The booked amount for 2025 takes into account potential Operator War claims,
which were not previously provided for in 2024.
4.2 Financial risk
The Syndicate is exposed to financial risk through its ownership of financial instruments including financial
liabilities. The Syndicate invests in financial assets to fund obligations arising from its insurance contracts
and other liabilities.
The key financial risk for the Syndicate is that the proceeds from its financial assets and investment result
generated therefrom are not sufficient to fund the obligations. The most important variables that could
result in such an outcome relate to (a) credit risk, (b) market risk, and (c) liquidity risk.
4.2 (a) Credit risk
Credit risk is the risk that a counterparty will suffer a deterioration in solvency or be unable to pay amounts
in full when due. The primary sources of credit risk for the Syndicate are:
• brokers and intermediaries – whereby counterparties fail to pass on premiums collected or claims paid
on behalf of the Syndicate.
• reinsurers – whereby reinsurers may fail to pay valid claims against a reinsurance contract.
• investments – where issuer default results in the Syndicate losing all or part of the value of a ļ¬nancial
instrument.
The Syndicate has a relatively low appetite for credit risk, as its principal business is to accept insurance risk.
This approach is intended to protect the Syndicate’s capital from erosion from credit risk so that it can meet
its insurance liabilities. The Syndicate structures the acceptable levels of credit risk by placing limits on its
exposure to singular and group counterparties, to geographical and industry segments and by reviewing the
creditworthiness of reinsurers through credit ratings provided by rating agencies and other publicly
available financial information detailing their financial strength and performance. Risk limits are subject to
regular review. The Syndicate also mitigates credit risk through the requirement for certain counterparties
to hold high-credit quality collateral in segregated accounts.
The credit control function monitors the ageing and collectability of debtor balances, with credit evaluations
performed on all relevant counterparties.
4.2 (a) (i) Investments
The Syndicate is exposed to counterparty risk with respect to cash and cash equivalents, and investments
and other deposits.
The Syndicate mitigates counterparty credit risk by ensuring appropriate diversification of total invested
assets across high-quality instruments. Investments are to be fully admissible for Lloyd’s/Prudential
Regulatory Authority (“PRA”) solvency purposes, primarily only in liquid securities and with counterparties
that have a credit rating equal to investment grade or better.
The Syndicate imposes guidelines on its external investment managers in relation to the constituents of the
investment portfolios. These guidelines specify the acceptable asset classes, duration, and credit ratings.
The performance of the investment managers is regularly reviewed to conļ¬rm adherence to these
guidelines.
Reports & Accounts Syndicate 1856 31
4.2 (a) (ii) Analysis of counterparty credit risk
The following table summarises the Syndicate’s significant credit risk for impacted assets:
AAA AA A BBB Other
Asset
classes
not
subject
to rating
Total
2025 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Shares and other variable
yield securities and units in
unit trusts
Debt securities and other
fixed income securities
Participation in investment
pools
Deposits with ceding
undertakings
Cash at bank and in hand
Syndicate loan to the
central fund
Reinsurers’ share of claims
outstanding
Debtors arising out of
insurance operations
Debtors arising out of
reinsurance operations
Other debtors and
accrued interest
Other assets
21,465 6,795 5,702 2,736 29,042 — 65,740
Total
Reports & Accounts Syndicate 1856 32
AAA AA A BBB Other
Asset
classes
not
subject
to rating
Total
2024 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Shares and other variable
yield securities and units
in unit trusts
Debt securities and other
fixed income securities
Participation in
investment pools
Deposits with ceding
undertakings
Cash at bank and in hand
Syndicate loan to the
central fund
Reinsurers’ share of
claims outstanding
Debtors arising out of
insurance operations
Debtors arising out of
reinsurance operations
Other debtors and
accrued interest
Other assets
18,962 4,494 3,807 2,859 2,604 23,649 56,375
Total
Assets classified as Other
Shares and other variable yield securities and units in unit trusts rated other include $32.8m (2024: $31.2m)
of investments in the Octagon Senior Secured Credit Fund. The fund seeks to generate high current
income consistent with capital preservation and low duration by investing primarily in broadly syndicated
floating rate US bank loans.
During the current reporting period, the Syndicate undertook a review of the credit quality classifications
applied to its opening balances. As part of this exercise, management identified that a prior-year balance
relating to “Shares and other variable yield securities and units in unit trusts” had been misclassified within
the BBB credit rating category. The balance did not meet the criteria for inclusion within rated credit
exposures and should instead have been presented within the “Other” credit quality category.
Accordingly, the comparative information has been revised to reclassify the affected balance from the BBB
category to Other. This reclassification has no impact on total assets, total liabilities, net result, or equity for
either the current or prior periods. The adjustment relates solely to the presentation of credit quality analysis
to ensure classifications more accurately reflect the underlying characteristics of the exposure.
Reports & Accounts Syndicate 1856 33
The tables below provide information regarding the maximum credit risk exposure to these assets, together
with the extent to which they are due, past due and impaired. An assessment is performed on all assets,
based on the ageing of these assets, which may result in an impairment charge in the statement of
comprehensive income if the Syndicate considers this to be appropriate.
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
Shares and other variable yield securities and
unit trusts
Debt securities and other fixed income securities
Participation in investment pools
Deposits with ceding undertakings
Cash at bank and in hand
Syndicate loan to central fund
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Other assets
65,740 — — — 65,740
Total
Neither
past due
nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance Total
2024 $'000 $'000 $'000 $'000 $'000
Shares and other variable yield securities and
unit trusts
Debt securities and other fixed income securities
Participation in investment pools
Deposits with ceding undertakings
Cash at bank and in hand
Syndicate loan to the central fund
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Other assets
56,375 — — — 56,375
Total
Reports & Accounts Syndicate 1856 34
The table below sets out a reconciliation of changes in impairment allowance during the period for each
class of financial asset at the balance sheet date:
1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to profit
and loss
account
Foreign
exchange Others 31 Dec
2025 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Deposits with ceding
undertakings
Debtors arising out of
direct insurance
operations
Debtors arising out of
reinsurance operations
Total
1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to profit
and loss
account
Foreign
exchange Others 31 Dec
2024 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Deposits with ceding
undertakings
Debtors arising out of
direct insurance
operations
Debtors arising out of
reinsurance operations
Total 1,387 1,661 — — — — 3,048
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
Debtors arising out of reinsurance
operations
Total
Reports & Accounts Syndicate 1856 35
Past due but not impaired
0-3 months
past due
3-6 months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
2024
$'000 $'000 $'000 $'000 $'000
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance
operations
Total
4.2 (b) Market risk
Market risk is the risk of a variation in the value of ļ¬nancial institution deposits and ļ¬nancial investments,
relative to the variation in the value of liabilities due to market movements. Market risk arises where the
value of assets less liabilities changes because of movements in foreign exchange rates, interest rates,
inļ¬ation rates and/or market prices.
The Syndicate engages external investment managers to actively manage the market risk associated with
ļ¬nancial investments. Detailed guidelines imposed on the investment managers are in place and the Board
and its investment committee regularly monitor performance and risk metrics.
4.2 (b) (i) Foreign currency risk
Most of the Syndicate’s gross premium written is in US Dollars. The Syndicate’s financial assets are
denominated in the same currencies as its insurance liabilities to reduce currency exchange volatility. The
profit/loss is distributed/collected in line with Lloyd’s rules using a combination of UK Pound Sterling and
US Dollars.
The following table summarises the carrying value of total assets and total liabilities categorised by currency:
| GBP | USD | CAD | EUR | AUD | JPY | Total | |
| 2025 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Investments | | | | | | | |
Reinsurers’ share of technical provisions | | | | | | | |
Debtors | | | ( | | | | |
Other assets | | | | | | | |
Prepayments and accrued income | | | | | | | |
| Total assets | | | | | | | |
Technical provisions | ( | ( | ( | ( | ( | ( | |
Creditors | ( | ( | ( | ( | ( | | ( |
Accrued and deferred income | ( | ( | ( | ( | ( | | ( |
| Total liabilities | ( | ( | ( | ( | ( | ( | |
| Total capital and reserves | ( | ( | ( | ( | ( | ( | |
Reports & Accounts Syndicate 1856 36
| GBP | USD | CAD | EUR | AUD | JPY | Total | |
| 2024 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Investments | | | | | | | |
Reinsurers’ share of technical provisions | | | | | | | |
Debtors | | | ( | | | | |
Other assets | | | | | | | |
Prepayments and accrued income | | | | | | | |
| Total assets | | | | | | | |
Technical provisions | ( | ( | ( | ( | ( | ( | ( |
Creditors | ( | ( | | ( | ( | | ( |
Accrued and deferred income | ( | ( | ( | ( | ( | | ( |
| Total liabilities | ( | ( | ( | ( | ( | ( | ( |
| Total capital and reserves | ( | ( | ( | | ( | ( | ( |
Negative debtors can arise where premium is written and recorded in one currency and corresponding cash
is received in multiple settlement currencies.
At 31 December 2025, the Syndicate used closing rates of exchange of $1:£0.74 and $1:€0.85 (2024: $1:
£0.80 and $1: €0.97).
The Syndicate performs sensitivity analysis on a 10% strengthening or weakening of the presentational
currency, US Dollar, against the Euro and Sterling. This analysis assumes that all other variables, in particular
interest rates, remain constant and that the underlying valuation of assets and liabilities in their base
currency is unchanged. The process of deriving the undernoted estimates takes account of the linear
retranslation movements of foreign currency monetary assets and liabilities. A 10% strengthening
(weakening) of the following currencies at 31 December would have increased (decreased) members’
balances for the financial year by the amounts shown below:
(Decrease)/increase on members’ balances
2025 2024
$'000 $'000
10% strengthening of GBP 5,048 3,864
10% weakening of GBP (5,048) (3,868)
10% strengthening of EUR 1,446 3,513
10% weakening of EUR (1,446) (3,517)
4.2 (b)(ii) Interest rate risk
The Syndicate undertakes a sensitivity analysis for interest rate risk to illustrate how changes in the fair value
or future cash flows of a financial instrument will fluctuate because of changes in market interest rates at the
reporting date. An increase or decrease of 50 basis points in interest yields would result in a charge or credit
to members’ balances as set out below.
Reports & Accounts Syndicate 1856 37
| Impact on result for the year | Impact on members’ balances | |||
$'000 | 2025 | 2024 | 2025 | 2024 |
Shift in yield (basis points): | ||||
| 50 basis points increase | ( | ( | ( | ( |
| 50 basis points decrease | | | | |
| 100 basis points increase | (17,829) | (13,970) | (17,829) | (13,970) |
| 100 basis points decrease | 17,277 | 13,972 | 17,277 | 13,972 |
This is applied to the position as at 31 December 2025 and considers the full effect of mark to market
movements, but without recognising any running yield benefit.
Insurance contract liabilities are not directly sensitive to the level of market interest rates, as they are
undiscounted and contractually non-interest-bearing. Although interest may be payable as damages for late
payment of claims under statute or case law, this does not create sensitivity of the underlying insurance
liabilities to market interest rate movements.
4.2 (b) (iii) Liquidity risk
Liquidity risk arises where cash may not be available at a reasonable cost to pay obligations when due. The
Syndicate is exposed to daily cash outflows on its available cash resources, mostly for the settlement of
claims arising from insurance contracts. Limits on the minimum level of cash and maturing funds available to
meet such outflows are set to cover unexpected levels of claims and other cash demands. A sizeable
proportion of the Syndicate’s investments is in highly liquid assets that can be converted to cash at short
notice without any significant capital loss or material expense. These funds are monitored by management
daily.
Undiscounted net cash flows
No
stated
maturity 0-1 year 1-3 years
3-5
years >5 years Total
2025 $'000 $'000 $'000 $'000 $'000 $'000
Gross claims outstanding
Creditors
Total — 515,320 377,489 118,611 39,354 1,050,774
Undiscounted net cash flows | ||||||
No | ||||||
stated maturity | 0-1 year | 1-3 years | 3-5 years | > 5 years | Total | |
2024 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Gross claims outstanding | | | | | | |
Creditors | | | | | | |
| Total | | | | | | |
*Prior year reclassification to comply with the requirements of Lloyd’s Syndicate Accounts Instructions
(version 3.1 issued 1 December 2025). Creditors has been updated to include Other creditors including
taxation and social security.
Reports & Accounts Syndicate 1856 38
4.2 (b) (iv) 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 II 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 operate 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 II 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’.
4.3 Operational risk
Operational risk is the risk of loss from people, processes or systems, or external events with origins outside
the scope of other risk categories. The Managing Agent actively monitors and controls its operational risks.
The nature of the risk means that it can impact all areas of the business. Examples of key operational risks
for the Syndicate include IT performance and stability, cyber security, and the delivery of major projects.
Key activities to manage operational risk across the Syndicate include:
• quarterly assessment of the risk register across all areas of the business to identify instances where
the risk profile has increased, and/or areas where additional mitigation may be necessary to control
the risk within tolerance;
• the Operational Committee reviewing key activities across the business, with governance, reporting
and escalation paths for operational risk;
• independent second line and third line reviews of key controls designed to mitigate operational risk;
• risk culture and management training to ensure continued awareness of operational risk for all
employees;
• and disaster recovery planning, with effective communication programmes in place utilising
Everbridge and scenario testing across the business;
• Compliance function oversee the effective management of the regulatory risk associated with the
business written by the company and jurisdiction in which it operates.
4.3 (a) Third-party risk
The company recognises the evolving risks associated with third-party relationships, particularly in the areas
of cyber security, operational resilience, technology reliance, and data protection. These risks are
heightened by increasing regulatory scrutiny, the complexity of supply chains, and the ever-present threat
of cyberattacks. The potential impact of third-party incidents could include financial loss, regulatory
penalties, operational disruptions, and reputational damage.
To mitigate these risks, the company has made significant investments over the past number of years to
enhance its IT infrastructure and cyber resilience. Key initiatives include a significant upgrade of the
infrastructure to improve resilience, implementing advanced threat detection and response systems,
advanced security and protection across the laptop estate, and strengthening data protection measures.
Additionally, the company has improved third-party risk management practices, including enhanced due
Reports & Accounts Syndicate 1856 39
diligence, regular audits of third-party providers, and robust incident response planning. These efforts are
aimed at ensuring continued operational integrity and safeguarding stakeholder interests in a rapidly
changing risk landscape.
4.4 Climate change risk
The Syndicate’s underwriting performance is exposed to the physical risk of climate change from an
increased frequency or severity of physical hazards because of global temperature increases of 1.5 degrees
or more. Further, there are elements of the portfolio that may be exposed to transition risk from the
resulting economic transition following regulatory or government intervention, and liability risk from
increased litigation raising the issue of climate change in investment management practices.
5. Segmental analysis
An analysis of the technical account balance before investment return is set out below:
2025
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance Total
$'000 $'000 $'000 $'000 $'000 $'000
Direct insurance:
Accident and health 1,270 1,388 (2,059 ) (446 ) (182 ) (1,299 )
Motor (third party liability) 20 83 (52 ) (25 ) (14 ) (8 )
Motor (other classes) 12,431 8,462 (1,838 ) (2,860 ) (859 ) 2,905
Marine, aviation and
transport
Fire and other damage to
property
Third party liability 198,389 181,228 (49,465 ) (58,897 ) (22,940 ) 49,926
Credit and suretyship 26,595 24,373 (355 ) (7,743 ) (3,560 ) 12,715
Legal expenses 2,276 1,420 (136 ) (489 ) (126 ) 669
Total direct insurance 708,661 631,368 (217,417 ) (205,289 ) (80,107 ) 128,555
Reinsurance acceptances 608,105 585,719 (277,642 ) (186,930 ) (82,464 ) 38,683
Total 1,316,766 1,217,087 (495,059 ) (392,219 ) (162,571 ) 167,238
2025
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance Total
$'000 $'000 $'000 $'000 $'000 $'000
Additional analysis
Fire and other damage to property of which is:
Specialities 23,772 19,392 (7,837 ) (6,419 ) (2,207 ) 2,929
Energy 31,628 25,801 (10,427 ) (8,541 ) (2,937 ) 3,896
Third party liability of which is:
Energy 5,529 5,051 (1,379 ) (1,642 ) (639 ) 1,391
Reports & Accounts Syndicate 1856 40
2024
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance Total
$'000 $'000 $'000 $'000 $'000 $'000
Direct insurance:
Accident and health 661 391 (98 ) (98 ) (65 ) 130
Motor (third party liability) — — — — — —
Motor (other classes) 9,581 7,178 1,426 (1,831 ) (1,930 ) 4,843
Marine, aviation and
transport
Fire and other damage to
property
Third party liability 167,530 147,958 (7,854 ) (39,834 ) (24,837 ) 75,433
Credit and suretyship 21,076 20,363 (56 ) (6,000 ) (4,470 ) 9,837
Total direct insurance 599,446 544,972 (358,998 ) (154,238 ) 6,498 38,234
Reinsurance acceptances 510,222 469,537 (248,749 ) (122,452 ) (8,626 ) 89,710
Total 1,109,668 1,014,509 (607,747 ) (276,690 ) (2,128 ) 127,944
2024
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance Total
$'000 $'000 $'000 $'000 $'000 $'000
Additional analysis
Fire and other damage to property of which is:
Specialities 32,595 27,287 (32,454 ) (7,460 ) 4,911 (7,716 )
Energy 2,318 1,941 (2,308 ) (531 ) 349 (549 )
Third party liability of which is:
Energy 3,910 3,445 (163 ) (927 ) (581 ) 1,774
The reinsurance balance is the aggregate total of reinsurance outwards balances included in the technical
account.
The gross premiums written for direct insurance by location (where the contracts were concluded) is
presented in the table below:
| 2025 | 2024 | |
| $'000 | $'000 | |
| United Kingdom | | |
| European Union member states | | |
| United States of America | | |
| Rest of the world | | |
| Total Gross premium written | | |
*To comply with the requirements of Lloyd’s Syndicate Accounts Instructions (version 3.1 issued 1 December
2025) reinsurance acceptances has been removed from the table.
Reports & Accounts Syndicate 1856 41
6. Total Investment return
All the Syndicate’s investments are recognised at fair value through the profit and loss.
| 2025 | 2024 | |
| Interest income | $'000 | $'000 |
From financial instruments designated at fair value through profit or loss | ||
| Interest and similar income | | |
| Total income from financial assets at fair value through profit and loss | | |
| Interest on cash at bank | | |
Other income from investments | ||
From financial instruments designated at fair value through profit or loss | ||
| Gains on the realisation of investments | | |
| Losses on the realisation of investments | ( | ( |
| Unrealised gain on investments | | |
| Unrealised loss on investments | ( | ( |
| Investment expenses and charges | | ( |
| Total investment return | | |
| Transferred to the technical account from the non technical account | | |
Syndicate funds include investments and cash, $1,104.3m (2024: $919.8m) funds are held in trust fund and
short-term deposit accounts.
7. Net operating expenses
| 2025 | 2024 | |
| $'000 | $'000 | |
Acquisition costs | | |
Reinsurance commissions | ( | ( |
Change in deferred acquisition costs | ( | ( |
Administrative expenses | | |
| Members’ standard personal expenses | | |
Net operating expenses | | |
Administrative expenses including staff costs (note 8) of $76.3m (2024: $69.9m), and audit fees of $0.8m
(2024: $0.7m).
2025 | 2024 | |
| $'000 | $'000 | |
Total commission on direct insurance business | | |
Reports & Accounts Syndicate 1856 42
Auditors’ remuneration
The below represents the Syndicate’s share of the total audit fee.
During the year the Syndicate, obtained the following services | 2025 | 2024 |
| $'000 | $'000 | |
Fees payable to the Syndicate's auditors for the audit of these financial statements | | |
Fees payable to the auditors and their associates for other services pursuant to legislation | | |
Total | 778 | 714 |
8. Staff costs
The Syndicate and the Managing Agent have no employees, and incur no staff costs directly. All employees
are employed by IQUW ASL and costs are recharged to the Syndicate via IQUW Syndicate Services Limited
("IQUW SSL"). The following salary and related costs were recharged to the Syndicate during the year:
2025 | 2024 | |
$'000 | $'000 | |
Wages and salaries | | |
Social security costs | | |
Other pension costs | | |
Other | | |
Total | | |
The average number of staff employed by IQUW ASL and recharged to the Syndicate via IQUW SSL during
the year was as follows:
| Number of employees | 2025 | 2024 |
Underwriting | ||
Claims | ||
Administration | ||
Total |
The Directors of the Managing Agent received the following aggregate remuneration recharged to the
Syndicate and included in net operating expenses:
2025 | 2024 | |
$'000 | $'000 | |
Directors’ emoluments | | |
Pension contributions | | |
| Total | 1,226 | 1,516 |
The active underwriter received the following remuneration charged as Syndicate expense:
| 2025 | 2024 | |
| $'000 | $'000 | |
| Underwriter’s emoluments | | |
| Total | 559 | 507 |
Reports & Accounts Syndicate 1856 43
9. Financial investments
| 2025 | 2024 | |||
| Fair value | Cost | Fair value | Cost | |
$'000 | $'000 | $'000 | $'000 | |
Shares and other variable yield securities, unit trusts | | | | |
| Debt securities and other fixed income securities | | | | |
| Participation in investment pools | | | | |
| Syndicate loan to the central fund | | | | |
| Financial investments | | |
*Prior year reclassification to comply with the requirements of Lloyd’s Syndicate Accounts Instructions
(version 3.1 issued 1 December 2025). Other investments have been remapped to Other debtors and
accrued interest.
All financial investments in the current and prior financial year were carried at fair value through profit or
loss. No financial assets in the current or prior financial year were classified as ‘held for trading’ under FRS
102.
Fair value hierarchy
The Syndicate has classified its ļ¬nancial investments using the fair value hierarchy in accordance with the
FRS 102 amendments to “Fair value hierarchy disclosures” issued by the Financial Reporting Council on 8
March 2016. The fair value of the Syndicates financial assets is based on prices provided by custodians and
asset managers who follow the practice as outlined in the level structure further down. The fair value
hierarchy classifies ļ¬nancial instruments into Levels 1 through 3 based on the significance of the inputs used
in measuring their fair value with Level 1 being the most reliable. The classifications within the fair value
hierarchy are defined as follows:
• Level 1 – Quoted price for an identical asset in an active market. This includes securities and ļ¬nancial
investments that are priced based on unadjusted quoted prices in an active market for identical assets
that can be accessed at the measurement date.
• Level 2 – Price of a recent transaction for an identical asset and valuation technique using observable
market data. This includes securities and ļ¬nancial investments that are priced using valuation techniques
based on direct or indirect observable market data, including market prices from recognised exchanges,
broker-dealers, recognised indices, or pricing vendors.
• Level 3 – Valuation technique using unobservable market data. This includes securities which are not
actively traded. The pricing service uses common market valuation pricing models. Observable inputs
used in common market valuation pricing models include, but are not limited to, broker quotes, credit
ratings, interest rates, and yield curves, prepayment speeds, default rates, and other such inputs which
are available from market sources.
Reports & Accounts Syndicate 1856 44
2025
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Shares, other variable yield securities and units in
unit trusts
Debt securities and other ļ¬xed income securities
Participation in investment pools
Syndicate loan to the central fund
Total 191,277 790,057 32,823 1,014,157
2024
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Shares, other variable yield securities and units in unit
trusts
Debt securities and other ļ¬xed income securities
Participation in investment pools
Syndicate loan to the central fund
Total 113,430 687,321 34,252 835,003
*Prior year reclassification to comply with the requirements of Lloyd’s Syndicate Accounts Instructions
(version 3.1 issued 1 December 2025). Other investments have been remapped to Other debtors and
accrued interest.
Level 3 investments include loans made to the Lloyd’s Central Fund to which a fair value adjustment has
been applied based on the Lloyd’s RT1 valuation model and investments included in Octagon. The fund has
been classed as equity instrument as its contractual features meet the criteria for equity. During 2025, the
loan was fully repaid by the Corporation of Lloyd’s. The table below sets out a reconciliation of the opening
and closing balances for financial instruments classified under level 3 of the fair value hierarchy:
2025 2024
$'000 $'000
Balance at 1 January 34,252 1,862
3268 RITC as at January 1 — 1,582
Purchases (3,055) 31,198
Unrealised gain/(loss) in the year on securities held at the end of the year 1,626 (390)
Balance at 31 December 32,823 34,252
10. Foreign exchange gain/(loss)
2025 2024
$'000 $'000
Non-technical account foreign exchange gain/(loss)
4,383 (6,398)
Total
4,383 (6,398)
Reports & Accounts Syndicate 1856 45
11. Technical provisions
Technical Provisions - Unearned premium
Gross
Reinsurer’s
share
Net
2025
$'000 $'000 $'000
At 1 January 2025
(49,755 )
Premium written in the year
Premium earned in the year
(1,217,087 )
(991,699 )
Effect of movements in exchange rates
At 31 December 2025
Technical Provisions - Unearned premium
Gross
Reinsurer’s
share
Net
2024
$'000 $'000 $'000
At 1 January 2024
(39,324 )
Premium written in the year
Premium earned in the year
(1,014,509 )
(782,082 )
Effect of movements in exchange rates
(5,286 ) 693 (4,593 )
At 31 December 2024
Technical Provisions - claims outstanding Gross
Reinsurer’s
share Net
2025
$'000 $'000 $'000
At 1 January 2025
Claims incurred in the year
Claims paid during the year
(586,571 ) 196,812 (389,759 )
RITC from Syndicate 3268
Foreign exchange
At 31 December 2025
Technical Provisions - claims outstanding Gross
Reinsurer’s
share Net
2024
$'000 $'000 $'000
At 1 January 2024
Claims incurred in the year
Claims paid during the year
(284,299 ) 79,857 (204,443 )
RITC from Syndicate 3268
Foreign exchange
(10,832 ) 5,031 (5,801 )
At 31 December 2024
An unexpired risk reserve was not required at 31 December 2025 or 31 December 2024.
Reports & Accounts Syndicate 1856 46
12. Deferred acquisition costs
| 2025 | 2024 (Restated)* | |||||
| $'000 | Gross | RI | Net | Gross | RI | Net |
| Balance at 1 January | | ( | | | ( | |
| Incurred Deferred Acquisition | | ( | | | ( | |
| Amortised Deferred Acquisition | ( | | ( | ( | | ( |
| Foreign Exchange Movements | | ( | | ( | | ( |
Balance at 31 December | | ( | | | ( | |
*Prior year figures have been restated following the identification of a calculation error in the underlying
working files.
13. Debtors arising out of direct insurance operations
| 2025 | 2024 | |
$'000 | $'000 | |
Due within one year | | |
Total | | |
14. Debtors arising out of reinsurance operations
| 2025 | 2024 | |
$'000 | $'000 | |
| Due within one year | | |
Total | | |
15. Other debtors
| 2025 | 2024 | |
$'000 | $'000 | |
| Amounts due from IQUW group companies (due within one year) | | |
| Other | | |
Total | | |
Included within amounts due from IQUW group companies is $30.7m (2024: $25.6m) due from IQUW SSL
in relation to a Credit Asset Facility held to procure Fixed Assets. Other also includes consortium income of
$8.9m (2024: $1.7m).
16. Cash and cash equivalents
| 2025 | 2024 | |
$'000 | $'000 | |
| Cash at bank and in hand | | |
| Short term debt instruments presented within other financial instruments | | |
Total | | 122,104 |
Reports & Accounts Syndicate 1856 47
17. Analysis of net debt
At 1
January
2025 Cash flows Acquired
Fair value
and foreign
exchange
movements
Non-cash
changes
At 31
December
2025
$'000
$'000
$'000
$'000
$'000
$'000
Cash and cash equivalents
Total
18. Creditors arising out of direct insurance operations
| 2025 | 2024 | |
| $'000 | $'000 | |
| Due within one year | | ( |
Total | | ( |
19. Creditors arising out of reinsurance operations
| 2025 | 2024 | |
$'000 | $'000 | |
| Due within one year | | |
Total | | |
20. Other creditors including taxation and social security
| 2025 | 2024 | |
$'000 | $'000 | |
| Amounts due to IQUW group companies (due within one year) | | |
| Other | | |
Total | | |
21. Other net cashflow from investing activities
Other net cashflow from investing activities of $0.4m (2024: $1.2m) comprises of overseas deposits and
deposits with ceded undertakings.
22. Related parties
IQUW Corporate Member Limited (“IQUW CML”)
IQUW CML is a wholly-owned subsidiary of IQUW IGL through which IQUW group conducts its
underwriting business at Lloyd’s.
IQUW CML’s share of the Syndicate profit for the year is $224.0m (2024: profit $157.7m).
IQUW Syndicate Management Limited (The “Managing Agent”)
The Managing Agent is a wholly owned subsidiary of IQUW IGL and acts as managing agent for the
Syndicate. The Managing Agent charged management fees of $11.6m (2024: $8.8m) to the Syndicate.
Reports & Accounts Syndicate 1856 48
IQUW Administration Services Limited (“IQUW ASL”)
IQUW ASL is a wholly-owned subsidiary of IQUW IGL and provides services for all activities of IQUW UK
entities. All expenses not paid directly by the Syndicate are paid for by IQUW ASL and recharged
accordingly via IQUW SSL. In accordance with the Managing Agent’s current Syndicate expense policy,
which complies with the Lloyd’s Code of Practice:
• directly attributable expenses are recharged fully to the Syndicate; and
• non-directly attributable expenses are recharged to the Syndicate on an allocation basis across all
other IQUW group companies. These allocations are on an equitable basis, to ensure no gain or loss
arises from these accounting treatments.
IQUW Syndicate Services Limited (“IQUW SSL”)
IQUW SSL is a wholly owned subsidiary of the Managing Agent and acts as a service company for the
Syndicate.
IQUW SSL became an appointed representative of the Managing Agent on 14 January 2005 and is
authorised by the PRA and regulated by the Financial Conduct Authority (“FCA”) and the PRA. The
Managing Agent does not receive any direct income from IQUW SSL. No director of the Managing Agent
has received any beneļ¬t for acting as a director of IQUW SSL.
IQUW SSL recharged the following expenses to the Syndicate:
2025 2024
$'000 $'000
Closing balance receivable
27,092 36,682
In-year expense
112,472 89,317
23. Syndicate structure
The Managing Agent of the Syndicate IQUW Syndicate Management Limited whose immediate parent
undertaking is IQUW IGL, a company registered in England and Wales.
The ultimate parent undertaking of the largest and smallest group of companies for which group accounts
are drawn up is IQUW Holdings Bermuda Limited. Copies of financial statements can be obtained from the
Company Secretary Appleby Global Services at Canon's Court, 22 Victoria Street, Hamilton HM12,
Bermuda.
24. Funds at Lloyd's
Every member is required to hold capital at Lloyd's, which is held in trust and known as 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 resources criteria. These resources are calculated by Lloyd's under the rules of the
Solvency II regime.
The resources calculation 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 control of the managing agents, no amount has been shown in
these annual accounts for such capital resources. However, managing agents are able to make a call on the
members' FAL to meet liquidity requirements to settle losses.
Reports & Accounts Syndicate 1856 49
25. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025 2024
Start of
period rate
End of
period rate
Average
rate
Start of
period rate
End of
period rate
Average
rate
Sterling
Euro
US Dollar 1.00 1.00 1.00 1.00 1.00 1.00
Canadian Dollar 1.44 1.37 1.40 1.32 1.44 1.37
Australian Dollar
Japanese Yen 157.52 156.77 149.60 141.54 157.52 151.20
26. Contingencies and commitments
There are no contingencies and commitments applicable to the Syndicate for 2025.
27. Post balance sheet events
The closing underwriting year of 2023 was reinsured to close ("RITC") into the Syndicate on 1 January 2026.
Reports & Accounts Syndicate 1856 50
