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Beazley Furlonge Limited | Syndicate 4321 at Lloyd’s
Annual report and accounts 2025
Welcome to our 2025 Annual report
Syndicate 4321 launched
in 2022 to focus on
offering additional
capacity to clients that
perform well against
pre-defined ESG metrics,
the first in the Lloyd's
market to do so. Its ESG
capacity was moved to
Syndicate 5623 from the
2024 year of account,
and the syndicate was
reinsured to close into
Syndicate 5623 on
1 January 2026.
Contents
1
Highlights
2
Strategic report of the managing agent
4
Managing agent’s report
10
Statement of managing
agent’s responsibilities
11
Independent auditor’s report to the
members of Syndicate 4321
14
Statement of comprehensive income
15
Balance sheet
16
Statement of changes in
members’ balances
17
Statement of cash flows
18
Notes to the syndicate annual accounts
37
2023 underwriting year accounts
for Syndicate 4321
38
Managing agent’s report
39
Statement of managing
agents responsibilities
40
Independent auditor’s report to the
members of Syndicate 4321 –
2023 closed year of account
43
Profit or loss account
44
Statement of changes in
members’ balances
45
Balance sheet
46
Statement of cash flows
47
Notes to the syndicate 2023
underwriting year accounts
52
Two-year summary of closed year
results at 31 December 2025
53
Managing agent's corporate information
Highlights
Gross premiums written Earned premium
$0.8m $1.2m
(2024: $4.3m) (2024: $11.0m)
Profit for the financial year Cash and investments
$2.5m $19.8m
(2024: $3.7m) (2024: $22.1m)
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
01
Strategic report of the managing agent
Overview
Syndicate-in-a-box 4321 (the ‘syndicate’) was established in 2022 to provide a choice of additional capacity for large corporate
clients who meet the eligibility standards of the environmental, social and governance ('ESG') scoring criteria that have been
developed with support from specialist, independent rating agencies. The syndicate follows the lead underwriting of syndicates
2623 and 623, also managed by Beazley Furlonge Limited ('BFL') to write business on a multi-line basis. From 1 January 2024,
the syndicate no longer writes new business and its ESG capacity was moved to Syndicate 5623. When the 2023 year of
account became a closed year at 31 December 2025, to ensure continuity and effective management, the managing agent
entered Syndicate 4321 into a reinsurance to close arrangement with Syndicate 5623.
The capacities of the syndicates managed by BFL are as follows:
2025 Year of Account
£ m
2024 Year of Account
£ m
623 861.0 887.2
2623 2,357.1 2,299.6
3622 35.5 37.0
3623 432.0 1,325.6
4321 — —
5623 419.3 396.6
6107 43.9 57.8
Total 4,148.8 5,003.8
The result for the syndicate for the year ended 31 December 2025 is a profit of $2,467k (2024: profit of $3,680k) driven
primarily by favourable claims development on the 2023 year of account ('YoA').
Year of account results
The 2023 YoA has closed with a return on capacity of 11.0%.
Claims
Both financial years represent claims development on the 2022 and 2023 years of account, with the syndicate being in run off
since 1 January 2024 and no longer writing new risks.
Net operating expenses
Net operating expenses, including business acquisition costs and administrative expenses for 2025 were $3,052k
(2024: $2,423k). The breakdown of these costs is shown below:
2025 2024
$'000 $'000
Brokerage costs
1,904 1,644
Other acquisition costs 871 103
Total acquisition costs
2,775 1,747
Administrative and other expenses 277 676
Net operating expenses
1
3,052 2,423
1
A further breakdown of net operating expenses can be seen in note 4.
02
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Net operating expenses continued
Brokerage costs are deferred and expensed over the life of the associated premiums in accordance with accounting guidelines.
Other acquisition costs comprise costs that have been identified as being directly related to underwriting activity (e.g. underwriters’
salaries and Lloyd’s box rental). These costs are also deferred in line with premium earning patterns. Administrative expenses
comprise primarily of IT costs, facilities costs, Lloyd’s central costs and other support costs. These other acquisition and
administration expenses are not incurred directly by the syndicate, but are recharged to it through the managing agent.
Reinsurance
Syndicate 4321 did not purchase any outwards reinsurance during 2025 (2024: Nil).
Outlook
The syndicate is currently in run off and will cease operating after the settlement of the 2023 YoA. The managing agent has
transferred the syndicate's assets and liabilities via reinsurance to close to Syndicate 5623 effective 1 January 2026.
C C J Wong
Director
19 February 2026
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
03
Managing agent’s report
The managing agent presents its report for the year ended 31 December 2025.
This annual report is prepared using the annual basis of accounting as required by Statutory Instrument No 1950 of 2008, the
Insurance Accounts Directive (Lloyd’s syndicate and Aggregate Accounts) Regulations 2008 and applicable United Kingdom
Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the United
Kingdom and Republic of Ireland and Financial Reporting Standard 103: Insurance Contracts.
Principal activity
The principal activity of Syndicate 4321 was the underwriting of insurance risks that meet specific ESG scoring metrics at Lloyd’s.
The syndicate is currently in run-off and will cease operating when the 2023 YoA is reinsured to close in early 2026.
Business review
A review of the syndicate’s activities and future outlook is included in the strategic report.
Risk governance and reporting
BFL’s Board of Directors (the 'Board') has the responsibility for defining and monitoring the risk appetite within which BFL and
the syndicates operate (collectively, ‘Beazley’), with key individuals and committees accountable for day-to-day management of
risks and controls. Regular reporting from the Risk Function to Board and Risk Committee meetings and senior management
committees ensures that risks are monitored and managed as they arise. Beazley Group is structured across three platforms,
one of which is the London Wholesale platform governed by BFL on behalf of the syndicates. This platform-focused structure
strengthens leadership accountability, enhances platform-level and legal entity governance, and further reinforces the effectiveness
of the overall risk management framework.
Climate-related risks and opportunities
Climate-related risks, opportunities, and other sustainability related matters were regular agenda items throughout 2025 led by
Beazley plc’s Board and supported by the boards of BFL and the Group’s other regulated subsidiaries. The Group’s sustainability
strategy, sets out the goals and targets across a wider range of sustainability issues, including climate change. Beazley plc’s
consolidated Annual report and accounts includes the Group’s disclosures for the Task Force on Climate-Related Financial
Disclosures ('TCFD') Recommendations. The 2025 Beazley plc Annual report and accounts is expected to be published on the Group's
website in March 2026.
Although not specifically listed in the risk categories detailed further in this report, the Board of BFL deems climate risk to be
inherently embedded within all risks managed across the syndicate.
Risk management
The Board maintains a sound understanding of all drivers of risk and, supported by the Risk Function, provides effective
challenge to management in overseeing risks across Beazley. The Board and the Risk Committee continue to ensure that the
risk management framework remains aligned to Beazley’s evolving risk profile, supports robust oversight and challenge, and
embeds a strong risk culture across the business.
The Board remains attentive to emerging risks and developments in the regulatory and legal landscape. The Risk Function
continues to engage in key strategic projects, providing proportionate and effective second-line challenge to support the ongoing
evolution of the risk management framework.
The effectiveness of risk management across the business is underpinned by continued collaboration between Beazley's
assurance functions, in particular Compliance, Risk Function and, Control and Compliance Assurance Team, to deliver a
coherent second line oversight function.
Throughout the year, Beazley strengthened its risk leadership team and further matured its risk culture across the Group.
Investment in both the first and second lines of defence has progressed through the phased delivery of modernisation and
transformation programmes, to enhance oversight, agility and overall risk management capability.
04
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Risk management oversight and framework
The Board has ultimate responsibility for risk management and delegates direct oversight of the risk management framework to
its Risk Committee. The Board delegates executive oversight of the Risk Function and framework to the BFL Management
Committee, which fulfils this responsibility in conjunction with the Group Risk and Regulatory Committee.
The risk management framework sets out the approach to identifying, assessing, managing, monitoring, and reporting principal
risks. This framework underpins the delivery of the Group’s strategic priorities and supports informed decision making at all levels.
Beazley operates a governance structure founded on the ‘three lines of defence’ model, with the Risk Function forming part of
the second line of defence. Ongoing communication and collaboration across the three lines of defence ensures that Beazley
identifies and manages risks effectively.
The Board approves Beazley's risk appetite statements annually and receives regular updates throughout the year on performance
against these appetites, including impact on the risk profile of the business.
A comprehensive suite of reports from the Risk Function supports senior management and the Board in fulfilling their
oversight responsibilities. These reports include updates on risk culture, risk appetite, risk profiles, stress and scenario testing
(including reverse stress testing) and analysis, emerging and heightened risks, and the Own Risk and Solvency Assessment
(ORSA). In addition, the Risk Function provides reporting to the Remuneration Committee to ensure alignment between risk
considerations and remuneration practices.
An annual risk management plan is developed, with reference to Beazley's business strategy, external market and regulatory
developments, as well as Beazley's risk profile. In addition, the Risk Function integrates insights from internal audit
findings and other assurance activities into its risk assessment and planning processes to ensure a comprehensive and
forward-looking approach.
The approach to identifying, managing and mitigating emerging risks includes inputs from across the business, analysis of
lessons learned following incidents and industry thought leadership. The approach considers the potential materiality and
likelihood of impacts, which helps prioritise emerging risks that Beazley monitors or undertakes focused work on. Key emerging
risks in 2025 included: Artificial Intelligence; Geopolitical and conflict escalation; Supply chain complexity; and Political and
social unrest/instability.
Principal risks
Beazley operates in a dynamic environment where risk exposures evolve in response to changes in market conditions,
regulatory developments, and strategic priorities. Identifying and managing these risks is fundamental to safeguarding Beazley's
financial strength and delivering sustainable value to stakeholders.
Principal risks are subject to regular review through Beazley's risk and control assessment process. The overall risk profile is
continuously monitored with emphasis on operational and regulatory risks, to ensure that our control environment and risk
management capabilities evolve in line with business change and developments in the external environment.
The table below summarises the principal risks faced by Beazley, together with the governance, oversight and control measures
in place to mitigate these exposures, and the associated outlook.
Legend for principal risks table below
Risk outlook
Increasing Stable Decreasing
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
05
Managing agent’s report continued
Insurance
Risk of loss arising from uncertainties and
deviations of the occurrence, frequency,
amount and timing of insurance premium and
claim liabilities relative to the assumptions at
the time of underwriting. This includes risk from
underwriting such as catastrophe and reserves.
• Catastrophe: one or more large events
caused by nature (e.g. hurricane, windstorm,
earthquake and/or wildfire) or mankind
(e.g. systemic cyber-event, global pandemic,
losses linked to an economic crisis, an act
of terrorism or an act of war and/or a political
event) impacting a number of policies, and
therefore giving rise to multiple losses;
• Reserving: reserves may not be sufficiently
established to reflect the ultimate paid losses;
• Climate risk: impact of climate change on
reserving assumptions, including the risk
arising from the physical effects of
climate change.
Whilst in run-off, insurance risk, is principally managed through analysis of
macro trends and claim frequency/severity.
Our prudent and comprehensive approach to reserving ensures adequate
provisions are made for the payment of all valid claims. High calibre claims
and underwriting professionals deliver expert service and claims handling to
insureds, ensuring good customer outcomes.
Outlook:
Insurance risk outlook continues to be stable as BFL manages the
syndicate run-off.
Market
The risk of loss resulting from fluctuations in the
level and in the volatility of market prices of
assets, liabilities and financial instruments.
Investment assets may be impacted by adverse
movements in financial markets, interest rates,
exchange rates, or external market forces.
There is limited market risk for this syndicate as assets are largely held in cash
or cash equivalents but it is exposed to FX risk.
Outlook:
We maintain a stable market risk outlook for 2026, underpinned by active
investment portfolio management and a robust internal control framework.
Credit
Exposure to credit risk largely emanates from
the use of brokers and coverholders.
Credit risk is the risk of loss resulting from
default in obligations due or changes in the
credit standing of either issuers of securities,
counterparties or any debtors which Beazley is
exposed to.
The credit risk outlook remains stable, as Beazley manages down the small
amounts of credit exposures as the syndicate is run-off.
Liquidity
Investments and/or other assets are not
available or adequate in order to settle financial
obligations when they fall due.
By actively managing its liquidity needs, Beazley maximizes flexibility in handling
its financial assets and investment strategy. This proactive approach ensures
that clients and creditors are financially protected. Beazley regularly evaluates
the liquidity position of the syndicates, under the oversight of the Risk Committee.
Our liquidity risk outlook remains stable as we consistently maintain adequate
levels of liquidity as the syndicate is run-off.
Principal risks and summary descriptions Mitigation and monitoring
06
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Group
The contagion risk that an action or inaction of
one part of the Beazley Group adversely affects
another part or parts of the syndicate. This also
includes a changes in culture which leads to
inappropriate behaviour, actions and/or decisions
including dilution of culture or negative impact
on the brand.
In 2025, Beazley further developed its Risk Culture Framework, to align with
industry best practice. The framework is underpinned by six guiding principles:
Leadership and Tone from the Top; Risk Governance and Accountability;
Risk Awareness; Communication and Transparency; Risk and Reward; and
Innovation and Adaptiveness.
A strong risk culture is the cornerstone of a mature risk function. It enables
informed and responsible decision-making, fosters transparency, and promotes
vigilance across both existing and emerging risks, ensuring Beazley remains
resilient and forward-looking in an evolving risk and regulatory landscape. In
2025, advancing our risk culture maturity was a key management priority. A
series of organisation-wide initiatives were launched to strengthen communication
and engagement, with the aim of cultivating a consistent and robust risk culture.
These efforts focused on building a shared understanding of risk, encouraging
proactive management, and reinforcing a supportive ‘speak up’ environment.
Beazley operates shared services, systems, processes and controls across
different legal entities and jurisdictions. As such, the impact of an issue or
incident in one area of the business can have implications across the Group
(i.e. contagion risk). To mitigate this risk we continue focus on group-wide
strategic initiatives, which include continued enhancement of our internal
control environment and optimization of key business and IT processes
through deployment of technology solutions.
The BFL Management Committee and the Board oversee Group risk, with regular
monitoring conducted by the Risk Function and overseen by the Risk Committee.
Outlook:
Our Group risk outlook remains stable, with the BFL Management Committee
continuously evolving our risk culture through ongoing monitoring and annual
assessments, designed to drive enhancements.
Regulatory and legal
The risk of non-compliance with regulatory and
legal requirements and supervisory expectations
or failing to operate in line with the relevant
regulatory framework in the territories where
Beazley operates. This may lead to financial
loss (fines, penalties), sanctions, reputational
damage, loss of confidence from regulators,
regulatory intervention, inability to underwrite
or pay claims.
Beazley’s compliance framework supports adherence to rules, laws and regulatory
expectations including through horizon scanning, advice and training. The work of
the compliance function is overseen by the Risk and Regulatory Committee.
In 2025, we implemented a global horizon scanning tool to support the
increasing size and complexity of our multi- jurisdictional business. This tool
aids in identifying, assessing and implementing new and emerging legal and
regulatory policy in a way that is both accessible and immediate across all
areas of our business and locations that we underwrite. Additionally, it helps
to increase awareness of the regulatory environment for a wider audience,
strengthens our adherence to requirements and provides additional clarity
over the expectations of our regulators.
We enhanced our regulatory engagement protocols by developing a new
framework, establishing oversight and strengthening our reporting mechanisms
for sharing key information with our regulators. To ensure effective embedding of
the new protocols and further strengthen our culture of transparency and openness,
we provided firm-wide training to ensure that expectations are understood.
Delivering good customer outcomes remains central to our business. The
second line functions contribute to the work of the Conduct Review Group,
which provides oversight of conduct risk throughout the product lifecycle,
ensuring we are able to consistently meet regulatory expectations for the
treatment of our policyholders and retail customers.
Beazley maintains a very low appetite for regulatory and legal risk. As we
consolidate the regulatory engagement achieved in 2025 and navigate an
increasingly complex environment, maintaining strong and open relationships
with our regulators remains paramount.
Outlook:
The outlook for this risk has moved from increased to stable as a result of the
positive action taken above. We also continue to enhance our key systems and
internal control frameworks as well as adapting our compliance framework to
adhere to our regulatory and compliance landscape. We expect the risk outlook
to improve, as changes become well embedded.
Principal risks and summary descriptions Mitigation and monitoring
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
07
Managing agent’s report continued
Principal risks and summary descriptions Mitigation and monitoring
Operational
The risk of failure of people, processes and
systems or the impact of an external event
on Beazley operations
Primary risk drivers include technology,
information management, project and change
transformation, third-party management and
the process and people related infrastructure
supporting core business activities;
Underwriting and Claims management
Our risks and controls are formally monitored and reported through a risk and
control self-assessment process and the use of quantifiable KRIs. Our ongoing
control enhancement and underwriting transformation programmes are designed
to ensure that Beazley is fully equipped to meet current and future operational
challenges, strengthening our resilience and supporting sustainable growth.
In 2025, we further advanced our investment in technology and process
re-engineering to strengthen our operational capabilities and add resilience to
internal processes and associated controls. Our business continuity, disaster
recovery and incident response plans ensure the stability of our processes and
systems, enabling our team to consistently deliver optimal outcomes for our clients.
As the external environment grows more complex, technology and cyber
resilience remain top priorities. We have advanced our cyber maturity journey,
collaborating with external agencies, and maintaining robust controls over
information security, data and operational resilience. Regular reviews of our
incident response plans and ongoing investment in cyber security training for
all employees ensure we remain vigilant and prepared.
While maintaining a low appetite for operational risk, we observed an increase
in reported risk incidents during 2025, albeit of lower materiality, reflecting both
the growing complexity of our operational environment and our enhanced risk
awareness and reporting culture. Our Risk Function works closely with first line
teams to ensure that controls and processes evolve in line with emerging risks
and business change.
Outlook:
This risk has moved from an increased to stable outlook in 2026, reflecting a
reduction in the severity of operational risk incidents. This is supported by the
continued benefits of our investment in modernising controls, systems and
processes. As our transformation programmes and modernisation initiatives
progress, we expect these efforts to further enhance our operational resilience
in the years ahead.
Strategic
The risk of loss resulting from ineffective
strategic direction and implementation that
leads to inadequate profitability, financial loss
and/or reputational damage.
Pervasive risks impacting multiple areas of
Beazley (e.g., reputation, and sustainability)
occurring through real or perceived action, or
inaction, by a regulatory body, market and/or
third-party provider.
A negative change to Beazley’s reputation
would have a detrimental impact to BFL and the
syndicates performance and public perception.
Beazley’s strategic focus for run-off syndicates is on ensuring an orderly run-off,
with robust oversight of legacy risks and timely execution against agreed run-off
plans. Strategic priorities are centred on preserving capital, meeting policyholder
and regulatory obligations, and protecting the Group’s reputation through
disciplined claims handling and transparent governance.
More widely over the past 18 months, Beazley has made enhancements to
its corporate governance arrangements to align to a three-platform model. It
aims to ensure that the legal entities benefit from increased transparency,
and clarity around decision-making powers & autonomy, which aims to de-risk
the organisation. The three platform model has been implemented and will
continue to be embedded throughout 2026.
Outlook:
Our strategic risk outlook remains stable as the syndicate is run-off.
08
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Directors
A list of Directors of the managing agent who held office during the year can be found on page 53 of this syndicate annual report.
Syndicate annual general meeting
In accordance with the Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000) the managing agent does not propose
to hold a syndicate annual meeting this year. Members may object to this proposal within 21 days of this notice. Any objections
must be made in writing to the managing agent.
Disclosure of information to the auditor
The Directors of the managing agent who held office at the date of approval of this managing agent’s report confirm that, so far
as they are each aware, there is no relevant audit information of which the syndicate’s auditor is unaware; and each Director
has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information
and to establish that the syndicate’s auditor is aware of that information.
On behalf of the Board
C C J Wong
Director
19 February 2026
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
09
Statement of managing agent’s responsibilities
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires the Directors of the
managing agent to prepare their syndicate annual accounts for each financial year. Under that law they have elected to prepare
the annual accounts in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting
Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 the Directors of the
managing agent must not approve the annual accounts unless they are satisfied that they give a true and fair view of the state
of affairs of the syndicate and of the profit or loss of the syndicate for that period. In preparing these financial statements,
the Directors of the managing agent are 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 have been followed, subject to any material departures disclosed and
explained in the annual accounts;
• assess the syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading, or have no realistic alternative but to do so.
• For the reasons stated in the Managing agent's report/Strategic Report of the managing agent and Note 1, the financial
statements have not been prepared on a going concern basis'.
The Directors of the managing agent are responsible for keeping adequate accounting records that are sufficient to show and
explain the syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the syndicate
and enable them to ensure that the financial statements comply with the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008. They are responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error and have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and
detect fraud and other irregularities.
The Directors of the managing agent are responsible for the maintenance and integrity of the syndicate and financial
information included on the syndicate’s website. Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
The Directors of the managing agent are required to comply with the requirements of Section 1 of the Lloyd’s Syndicate Accounts
Instructions version 3.1 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (the 'Syndicate Accounts
Instructions').
The Directors of the managing agent are 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 as modified by the Frequently Asked
Questions version 1.1 issued by Lloyd’s.
On behalf of the Board
C C J Wong
Director
19 February 2026
10
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Independent auditor's report to the members of
Syndicate 4321
Opinion
We have audited the syndicate annual accounts of syndicate 4321 (‘the syndicate’) for the year ended 31 December 2025
which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes In Members’
Balances, the Statement of Cash Flows and the related notes 1 to 23, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law including The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS
102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and FRS 103 ‘Insurance Contracts’ (‘United
Kingdom Generally Accepted Accounting Practice’), and Section 1 of the Lloyd’s Syndicate Accounts Instructions V3.1 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (‘the Syndicate Accounts Instructions’).
In our opinion, the syndicate annual accounts:
• give a true and fair view of the syndicate’s affairs as at 31 December 2025 and of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Syndicate Accounts Instructions.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Syndicate Accounts Instructions, and other
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the syndicate annual accounts section of our report. We are independent of the syndicate in accordance with the ethical
requirements that are relevant to our audit of the syndicate annual accounts in the UK, including the FRC’s Ethical Standard as
applied to other entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter – anticipated closure of the 2023 year of account
We draw attention to the basis of preparation note which explains that the 2023 year of account of Syndicate 4321 is
anticipated to close from 1 January 2026, transferring all assets and liabilities to Syndicate 5623 through a reinsurance to
close arrangement. Syndicate 4321 has no successor year of account. As a result, the Annual Report and Accounts of
Syndicate 4321 has been prepared under a basis other than going concern. Our opinion is not modified in respect of this
matter.
Other information
The other information comprises the information included in the annual report and accounts, other than the syndicate annual
accounts and our auditor’s report thereon. The directors of the managing agent are responsible for the other information
contained within the annual report and accounts.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the syndicate annual accounts or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the syndicate annual accounts themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
11
Independent auditor's report to the members of Syndicate 4321
continued
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the managing agent’s report for the financial year in which the syndicate annual accounts are
prepared is consistent with the syndicate annual accounts; and
• the managing agent’s report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we
have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters where The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us to report to you, if in our opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the syndicate annual accounts are not in agreement with the accounting records; or
• certain disclosures of the managing agent’s emoluments specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities set out on page 10, the directors of the
managing agent are responsible for the preparation of the syndicate annual accounts and for being satisfied that they give a
true and fair view, and for such internal control as they determine is necessary to enable the preparation of the syndicate
annual accounts that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the directors of the managing agent are responsible for assessing the syndicate’s
ability to continue in operation, disclosing, as applicable, matters related to its ability to continue in operation and using the
going concern basis of accounting unless the directors of the managing agent either intends to cease to operate the syndicate,
or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these syndicate annual accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the
primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the managing
agent and management.
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Our approach was as follows:
• We obtained a general understanding of the legal and regulatory frameworks that are applicable to the syndicate and
determined that the most significant are direct laws and regulations related to elements of Lloyd’s Byelaws and Regulations,
and the financial reporting framework (UK United Kingdom Generally Accepted Accounting Practice), and requirements
referred to by Lloyd’s in the Syndicate Accounts instructions. Our considerations of other laws and regulations that may have
a material effect on the syndicate annual accounts included permissions and supervisory requirements of Lloyd’s of London,
the Prudential Regulation Authority (‘PRA’) and the Financial Conduct Authority (‘FCA’).
• We obtained a general understanding of how the syndicate is complying with those frameworks by making enquiries of
management, internal audit, and those responsible for legal and compliance matters of the syndicate. In assessing the
effectiveness of the control environment, we also reviewed significant correspondence between the syndicate, Lloyd’s of
London and other UK regulatory bodies; reviewed minutes of the Board and Risk Committee of the managing agent; and
gained an understanding of the managing agent’s approach to governance.
• For direct laws and regulations, we considered the extent of compliance with those laws and regulations as part of our
procedures on the related syndicate annual accounts’ items.
• For both direct and other laws and regulations, our procedures involved: making enquiries of the directors of the managing
agent and senior management for their awareness of any non-compliance of laws or regulations, enquiring about the policies
that have been established to prevent non-compliance with laws and regulations by officers and employees, enquiring about
the managing agent’s methods of enforcing and monitoring compliance with such policies, and inspecting significant
correspondence with Lloyd’s, the PRA and the FCA.
• The syndicate operates in the insurance industry which is a highly regulated environment. As such the Senior Statutory
Auditor considered the experience and expertise of the engagement team to ensure that the team had the appropriate
competence and capabilities, which included the use of specialists where appropriate.
• We assessed the susceptibility of the syndicate’s annual accounts to material misstatement, including how fraud might occur
by considering the controls that the directors of the managing agent have established to address risks identified by them, or
that otherwise seek to prevent, deter or detect fraud. We also considered areas of significant judgement, complex
transactions, performance targets, economic or external pressures and the impact these have on the control environment.
Where this risk was considered to be higher, we performed audit procedures to address each identified fraud risk including:
– Reviewing accounting estimates for evidence of management bias. Supported by our Actuaries, we assessed if there were
any indicators of management bias in the valuation of insurance liabilities and the recognition of estimated premium
income.
– Evaluating the business rationale for significant and/or unusual transactions.
– Testing the appropriateness of journal entries recorded in the general ledger, particularly in respect of judgemental areas
including valuation of insurance liabilities and estimated premium income.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these syndicate annual accounts,
and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been undertaken so that we might state to the
syndicate’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the syndicate and the
syndicate’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Niamh Byrne (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
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13
20 February 2026
Statement of comprehensive income
for the year ended 31 December 2025
2025 2024
Notes $'000 $'000
Gross premiums written 3 844 4,285
Outward reinsurance premiums — —
Premiums written, net of reinsurance
Changes in unearned premium
Change in the gross provision for unearned premiums
14
Net change in the provisions for unearned premiums
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical account
7
Claims paid
Gross amount
14
(3,630 ) (3,851 )
Net claims paid
(3,630 ) (3,851 )
Change in the provision for claims
Gross amount
14
Net change in provisions for claims
Claims incurred, net of reinsurance 3,643 (5,649 )
Net operating expenses
4
(3,052 ) (2,423 )
Balance on technical account - general business
Investment income 7 679 886
Total investment return 679 886
Allocated investment return transferred to technical account
(679 ) (886 )
Loss on foreign exchange (42 ) (158 )
Profit for the financial year
Total comprehensive income for the financial year
There were no other comprehensive gains or losses in the year.
The notes on pages 18 to 36 form part of these financial statements.
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Balance sheet
as at 31 December 2025
| 2025 | 2024 | ||
Notes | $'000 | $'000 | |
Assets | |||
Investments | |||
| Financial investments | 9 | | |
| | | ||
Reinsurers' share of technical provisions | |||
Provision for unearned premiums | | | |
Claims outstanding | | | |
| | | ||
Debtors | |||
Debtors arising out of direct insurance operations | 10 | | |
Debtors arising out of reinsurance operations | 11 | | |
| Other debtors | 12 | | |
| | | ||
Other assets | |||
| Cash at bank and in hand | 17 | | |
| | | ||
Prepayments and accrued income | |||
| Deferred acquisition costs | 13 | | |
| Other prepayments and accrued income | | | |
| | | ||
Total assets | | | |
Capital and reserves | |||
Members' balances | | | |
| | | ||
Liabilities | |||
Technical provisions | |||
| Provision for unearned premiums | 14 | | |
| Claims outstanding | 14 | | |
| | | ||
Creditors | |||
| Creditors arising out of direct insurance operations | 15 | | |
| Other creditors | 16 | | |
| | | ||
Accruals and deferred income | | | |
| Total liabilities | | | |
Total liabilities, capital and reserves | | |
The notes on pages 18 to 36 form part of these financial statements.
The syndicate annual accounts on pages 14 to 36 were approved and authorised for issue by the Board of Beazley Furlonge
Limited on 19 February 2026 and were signed on its behalf by
C C J Wong
Director
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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 financial year | | |
| Loss collected in relation to distribution on closure of underwriting year | | |
| Members' agent fees | ( | |
Members’ balances carried forward at 31 December | | |
The notes on pages 18 to 36 form part of these financial statements.
Members participate in syndicates by reference to year of account ('YoA') and their ultimate result, assets and liabilities are
assessed with reference to policies incepting in that YoA in respect of their membership of a particular year.
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Statement of cash flows
for the year ended 31 December 2025
| 2025 | 2024 | ||
| Notes | $'000 | $'000 | |
Cash flows from operating activities | |||
| Profit for the financial year | | ||
Adjustments for: | |||
Decrease in gross technical provisions | 14 | ( | ( |
| Increase in debtors | ( | ( | |
| Increase in creditors | | ||
| Movement in other assets/liabilities | ( | | |
Investment return | 7 | ( | ( |
| Foreign exchange | ( | | |
Net cash flows from operating activities | ( | ( | |
Cash flows from investing activities | |||
| Purchase of equity and debt securities | ( | ( | |
| Sale of equity and debt securities | | | |
| Investment income received | | | |
Net cash flows from investing activities | | ||
Cash flows from financing activities | |||
| Distribution of profit | | | |
| Collection of losses | | ||
| Other | ( | | |
Net cash flows from financing activities | | ||
Net decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the beginning of the year | | ||
| Foreign exchange on cash and cash equivalents | | ( | |
Cash and cash equivalents at the end of the year | 17 | |
The notes on pages 18 to 36 form part of these financial statements.
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1. Accounting policies
Basis of preparation
Syndicate 4321 (the ‘syndicate’) comprises a group of members of the Society of Lloyd’s that underwrites insurance business
in the London Market. The managing agent of the syndicate is Beazley Furlonge Limited ('BFL'), whose registered address and
principal place of business is 22 Bishopsgate, London, EC2N 4BQ. The ultimate controlling party of BFL is Beazley plc, a company
incorporated in England and Wales.
These syndicate annual accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United Kingdom and the Republic of Ireland,
including Financial Reporting Standard 102 ('FRS 102'), Financial Reporting Standard 103 ('FRS 103') in relation to insurance
contracts, and the Lloyd's Syndicate Accounts Instructions Version 3.1 as modified by the Frequently Asked Questions version
1.1 issued by Lloyd’s.
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value through profit
or loss ('FVTPL') which are measured at fair value. The principal accounting policies applied in the preparation of these financial
statements are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated.
All amounts presented are stated in US dollars, being the syndicate’s functional currency, and in thousands, unless noted otherwise.
Going concern
In respect of the 2023 year of account, the managing agent has entered the syndicate into a reinsurance to close arrangement
with Syndicate 5623, effective from 1 January 2026. At this point, Syndicate 4321 will cease operating, as there will be no
successor year of account. Consequently, the syndicate is no longer considered a going concern, and these annual accounts
have been prepared on a basis other than going concern.
It is important to note that the reinsurance to close process occurs in the ordinary course of business. Apart from adjustments
to gross claims outstanding to align the technical provisions with those agreed in the reinsurance to close arrangement,
there will be no impact on the valuation of the syndicate's assets or liabilities.
Use of estimates and judgements
The preparation of financial statements requires the use of estimates and judgements that affect the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from those on which management’s estimates are based.
Estimates and assumptions are continually evaluated and are based on historical experience and other factors. For example,
estimates which are sensitive to economic, regulatory and geopolitical conditions could be impacted by significant changes
in the external environment such as the volatile macroeconomic environment, climate change, international conflicts,
and significant changes in legislation. Any revisions to accounting estimates are recognised in the period in which the estimate
is revised and in any future periods affected.
Specific to climate change, since responses to it are still developing, it is not possible to consider all possible future outcomes
when determining asset and liability valuations, and timing of future cash flows, as these are not yet known. Nevertheless,
the current management view is that reasonably possible changes arising from climate risks would not have a material impact
on asset and liability valuations at the year-end date.
(a) Valuation of insurance contract liabilities
The most critical estimate included within the syndicate’s balance sheet is the estimate for insurance losses incurred but not
reported (‘IBNR’), which is included within total technical provisions and reinsurers’ share of technical provisions in the balance
sheet and note 14. This estimate is critical as it outlines the current liability for future expenses expected to be incurred in
relation to claims. If this estimation was to prove inadequate then an exposure would arise in future years where a liability has
not been provided for.
The best estimate of the most likely ultimate outcome is used when calculating notified claims.This estimate is based upon the
facts available at the time, in conjunction with the claims manager’s view of likely future developments. The total estimate of gross
IBNR as at 31 December 2025 included within claims outstanding is $6,548k (2024: $11,342k).
Notes to the syndicate annual accounts
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1. Accounting policies continued
(b) Premium estimates
Premium written is initially based on the estimated premium income (‘EPI’) of each contract. Judgement is involved in
determining the ultimate estimates in order to establish the appropriate premium value and, ultimately, the cash to be received.
EPI estimates are updated to reflect changes in an underwriters expectation through consultation with brokers and third-party
coverholders, changes in market conditions, historic experience and to reflect actual cash received for a contract.
Significant accounting policies
The financial statements have been prepared on an annual basis of accounting, whereby the incurred cost of claims,
commissions and related expenses are charged against the earned proportion of premiums, net of reinsurance as follows:
(a) Premiums written
Gross premiums written comprise premiums on contracts incepted during the financial year together with adjustments to
premiums written in previous accounting periods and estimates for premiums from contracts entered into during the course of
the year. Gross written premiums are stated before the deduction of brokerage, taxes, duties levied on premiums and other deductions.
(b) Unearned premiums
A provision for unearned premiums represents the part of the gross premiums written that is estimated will be earned in the
following or subsequent financial periods. It is calculated using the daily pro-rata method, under which the premium is apportioned
over the period of risk.
(c) Claims provisions
Claims represent the cost of claims and claims handling expenses paid during the financial year, together with the movement in
provisions for outstanding claims, claims IBNR and future claims handling provisions. The provision for claims outstanding
comprises amounts set aside for claims advised and IBNR.
The IBNR amount is based on estimates calculated using widely accepted actuarial techniques which are reviewed quarterly by
the group actuary and annually by the independent syndicate reporting actuary. The techniques generally use projections, based
on past experience of the development of claims over time, to form a view on the likely ultimate claims to be experienced.
For more recent underwriting, regard is given to the variations in the business portfolio accepted and the underlying terms and
conditions. Thus, the critical assumptions used when estimating claims provisions are that the past experience is a reasonable
predictor of likely future claims development and that the rating and other models used to analyse current business are a fair
reflection of the likely level of ultimate claims to be incurred.
A provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet date, including
the cost of claims incurred but not yet reported to the managing agent. The managing agent takes all reasonable steps to ensure
that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions,
it is likely that the final outcome will prove to be different from the original liability established.
(d) Liability adequacy testing
At each reporting date, liability adequacy tests are performed to ensure the adequacy of the claims liabilities net of deferred
acquisition costs and unearned premium reserves. In performing these tests, current best estimates of future contractual cash
flows, claims handling and administration expenses as well as investment income from the assets backing such liabilities are used.
Any deficiency is subsequently charged to the statement of comprehensive income and a liability for unexpired risk provision
is established.
(e) Acquisition costs
Acquisition costs comprise brokerage, premium levies, and staff related costs of the underwriters acquiring the business.
The proportion of acquisition costs in respect of unearned premiums is deferred at the balance sheet date and recognised
in later periods when the related premiums are earned.
(f) Foreign currencies
Foreign currency transactions are translated into the functional currency using average exchange rates applicable to the period in
which the transactions take place and where the syndicate considers these to be a reasonable approximation of the transaction
rate. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at the period end
of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
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1. Accounting policies continued
(g) Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in unrealised gains and
losses, net of investment expenses, charges and interest.
Realised gains and losses on investments carried at market value are calculated as the difference between sale proceeds and
purchase price. Movements in unrealised gains and losses on investments represent the difference between the valuation at the
balance sheet date, together with the reversal of unrealised gains and losses recognised in earlier accounting periods in respect
of investment disposals in the current period.
Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical account to the
general business technical account to reflect the investment return on funds supporting underwriting business.
(h) Financial instruments
Recognition and derecognition
Financial instruments are recognised on the balance sheet at such time that the syndicate becomes a party to the contractual
provisions of the financial instrument. A financial asset is derecognised when:
• the contractual rights to receive cash flows from the financial assets expire;
• the financial assets have been transferred, together with substantially all the risks and rewards of ownership; or
• despite having retained some, but not substantially all, risks and rewards of ownership, control of the asset is transferred to
another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party.
Financial liabilities are derecognised if the syndicate’s obligations specified in the contract expire, are discharged or cancelled.
Financial assets and liabilities measurement
On acquisition of a financial asset or liability, the asset or liability is measured at the transaction price, except for those financial
assets and liabilities at FVTPL, which are initially measured at fair value. The exception to this is when the arrangement constitutes
a financing transaction however, the syndicate does not make use of any such arrangements.
All financial investments are designated as FVTPL upon initial recognition because they are managed and their performance is
evaluated on a fair value basis. Information about these financial instruments is provided internally on a fair value basis to key
management. The investment strategy is to invest and evaluate their performance with reference to their fair values.
Fair value measurement
Fair value is the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market
participants at the measurement date. Fair value is a market-based measure and in the absence of observable market prices
in an active market, it is measured using the assumptions that market participants would use when pricing the asset or liability.
The best evidence of the fair value of a financial instrument at initial recognition is the transaction price, i.e., the fair value of
the consideration given or received, unless the fair value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e., without modification or repackaging) or based on a valuation technique
whose variables include only data from observable markets.
When transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially
measured at the transaction price and any difference between this price and the value initially obtained from a valuation model
is subsequently recognised in statement of comprehensive income depending on the individual facts and circumstances of the
transaction but not later than when the valuation is supported wholly by observable market data or the transaction is closed out.
Upon initial recognition, attributable transaction costs relating to financial instruments at FVTPL are recognised in the statement
of comprehensive income when incurred. Financial assets at FVTPL are continuously measured at fair value, and changes
therein are recognised in the statement of comprehensive income. Net changes in the fair value of financial assets at FVTPL
exclude interest and dividend income, as these items are accounted for separately.
Notes to the syndicate annual accounts continued
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1. Accounting policies continued
(i) Insurance debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract holders. These are
classified as debt instruments as they are non-derivative financial assets with fixed or determinable payments that are not
quoted on an active market. Insurance debtors are measured at amortised cost less any provision for impairment. Insurance
creditors are stated at amortised cost. The syndicate does not have any debtors directly with policyholders, all transactions occur
via an intermediary.
(j) Other debtors
Other debtors principally consist of intercompany debtor balances and sundry debtors and are carried at amortised cost less
any impairment losses.
(k) Other creditors
Other creditors principally consist of amounts due to other related entities and profit commissions payable. These are stated at
amortised cost determined using the effective interest rate method.
(l) Impairment of financial assets
Assessment is made at each reporting date whether there is objective evidence that a financial asset or group of financial
assets measured at amortised cost is impaired. A financial asset or group of financial assets is impaired and impairment
losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after
the initial recognition of the assets, and that event has an impact on the estimated cash flows of the financial asset, or group
of financial assets that can be reliably estimated.
If there is objective evidence that impairment exists, the amount of the loss is measured as the difference between the assets
carrying amount and the value of the estimated future cash flows discounted at the financial asset’s original effective interest
rate. Where a loss is incurred this is recognised in the statement of comprehensive income.
(m) Cash and cash equivalents
Cash and cash equivalents are comprised of cash at bank and in hand, in addition to deposits held at call with banks and other
short-term highly liquid investments with maturities of three months or less from the acquisition date. Only cash at bank and in
hand is presented separately on the face of the balance sheet, while cash equivalents are included within the 'financial
investments' line. Cash and cash equivalents are shown in aggregate on the cash flow statement and at note 17. These are carried
at amortised cost less impairment losses.
(n) Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax from trading
income. In addition, all UK basic rate income tax (currently at 20%) deducted from 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 US federal income tax payable on underwriting results or investment earnings. Any payments
on account made by the syndicate during the year have been included in the balance sheet under the heading ‘other debtors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
2. Risk management
The managing agent has identified the risks arising from its activities and has established policies and procedures to manage these
items in accordance with its risk appetite. The sections below outline the syndicate’s risk appetite and explain how the managing
agent defines and manages each category of risk. The risk management framework is discussed in the managing agent's report.
2.1 Insurance risk
The syndicate’s insurance business assumes the risk of loss from persons or organisations that are directly exposed to an
underlying loss. Insurance risk arises from this risk transfer due to inherent uncertainties about the occurrence, amount and
timing of insurance liabilities. The four key components of insurance risk are underwriting, claims management and reserving.
Each element is considered below:
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2. Risk management continued
(a) Underwriting risk
Underwriting risk comprises four elements that apply to all insurance products offered by the syndicate:
• cycle risk – the risk that business is written without full knowledge as to the (in)adequacy of rates, terms and conditions;
• event risk – the risk that individual risk losses or catastrophes lead to claims that are higher than anticipated in plans and pricing;
• pricing risk – the risk that the level of expected loss is understated in the pricing process; and
• expense risk – the risk that the allowance for expenses and inflation in pricing is inadequate.
The annual business plans for each underwriting team reflect the syndicate’s underwriting strategy, and set out the classes of
business, the territories and the industry sectors in which business is to be written. These plans are approved by the Board of
Beazley Furlonge Limited ('BFL') and monitored by the Underwriting Committee.
The managing agent’s underwriters calculate premiums for risks written based on a range of criteria tailored specifically to each
individual facility. These factors include but are not limited to the financial exposure, loss history, risk characteristics, limits,
deductibles, terms and conditions and acquisition expenses.
The managing agent also recognises that insurance events are, by their nature, random, and the actual number and size of
events during any one year may vary from those estimated using established statistical techniques.
To address this, the managing agent sets out the exposure that it is prepared to accept in certain territories to a range of
events such as natural catastrophes and specific scenarios which may result in large industry losses. This is monitored through
regular calculation of Realistic Disaster Scenarios. The aggregate position is monitored at the time of underwriting a risk,
and reports are regularly produced to highlight the key aggregations to which the syndicate is exposed.
The managing agent uses a number of modelling tools to monitor its exposures against the agreed risk appetite set and to
simulate catastrophe losses. Stress and scenario tests are also run using these models. The range of scenarios considered
includes natural catastrophe, cyber, marine, liability, political, terrorism and war events.
One of the largest types of event exposure relates to natural catastrophe events such as windstorm or earthquake. With the
increasing risk from climate change impacting the frequency and severity of natural catastrophes, the managing agent continues
to monitor its exposure. Where possible the managing agent measures geographic accumulations and uses its knowledge of
the business, historical loss behaviour and commercial catastrophe modelling software to assess the expected range of losses
at different return periods. The key gross exposures are calculated on the basis of extreme events at a range of return periods.
To manage underwriting exposures, the managing agent has developed limits of authority and business plans which are binding
upon all staff authorised to underwrite and are specific to underwriters, classes of business and industry.
These authority limits are enforced through a comprehensive sign-off process for underwriting transactions including dual
sign-off for all line underwriters and peer review for all risks exceeding individual underwriters authority limits. Exception reports
are also run regularly to monitor compliance.
All underwriters also have a right to refuse renewal or change the terms and conditions of insurance contracts upon renewal.
Rate monitoring details, including limits, deductibles, exposures, terms and conditions and risk characteristics are also captured
and the results are combined to monitor the rating environment for each class of business.
(b) Claims management risk
Claims management risk may arise within the syndicate in the event of inaccurate or incomplete claims reporting for facilities
underwritten. As a follow syndicate which delegates claims authority to approved brokers, consortia or coverholders, the syndicate
relies on accurate claims reporting from third parties.
The managing agent’s claims teams are focused on delivering quality, reliability and speed of service to both internal and
external clients. Their aim is to adjust and process claims in a fair, efficient and timely manner, in accordance with the policy’s
terms and conditions, the regulatory environment, and the business’s broader interests. Case reserves are set for all known
claims liabilities, including provisions for expenses, as soon as a reliable estimate can be made of the claims liability.
Notes to the syndicate annual accounts continued
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2. Risk management continued
(c) Reserving and ultimate reserves risk
Reserving and ultimate reserves risk occurs within the syndicate where established insurance liabilities are insufficient through
inaccurate forecasting, or where there is inadequate allowance for expenses and reinsurance bad debt in provisions.
To manage reserving and ultimate reserves risk, the managing agent's actuarial team uses a range of recognised techniques
to project gross premiums written, monitor claims development patterns and stress test ultimate insurance liability balances.
An external independent actuary also performs an annual review to produce a statement of actuarial opinion for the syndicate.
The objective of the syndicate’s reserving policy is to produce accurate and reliable estimates that are consistent over time and
across classes of business.
The syndicate monitors its exposure to insurance risk by location. The geographical breakdown of written premiums is disclosed
in note 3.
A set increase or decrease in total claims liabilities would have the following impact on profit and members' balances':
Sensitivity to insurance risk (claims reserves)
Impact on profit and members' balances'
2025 2024
$'000 $'000
Claims outstanding - gross of reinsurance 8,390 15,397
Claims outstanding - net of reinsurance
8,390
15,397
5% increase in gross claims reserve
(420 )
(770 )
5% decrease in gross claims reserve
5% increase in net claims reserve
(420 )
(770 )
5% decrease in net claims reserve
2.2 Market risk
Market risk arises where the value of assets and liabilities changes as a result of movements in foreign exchange rates and
interest rates.
Foreign exchange risk
The functional and presentational currency of the syndicate is the US dollar. The effect of this on foreign exchange risk is that
the syndicate is exposed to fluctuations in exchange rates for non-dollar denominated transactions and net assets.
The syndicate has four main settlement currencies: US dollars, sterling, Canadian dollars and euro. Transactions in all currencies
are converted to US dollars on initial recognition and revalued at the reporting date. Remaining foreign exchange risk is actively
managed as described below.
The syndicate’s assets are broadly matched by currency to the principal underlying settlement currencies of its insurance
liabilities. This helps mitigate the risk that future movements in exchange rates would materially impact the syndicate’s assets
required to cover its insurance liabilities.
The following table summarises the carrying value of total assets and total liabilities categorised by currency:
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2. Risk management continued
| UK £ | US $ | EUR € | CAD $ | AUD $ | Other | Total | |
31 December 2025 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
| Investments | | | | | | | |
| Debtors | | | | | | | |
| Other assets | | | | | | | |
| Prepayments and accrued income | ( | | | | | | |
| Total assets | | | | | | | |
| Technical provisions | ( | ( | ( | ( | | | ( |
| Creditors | ( | ( | ( | ( | | | ( |
| Accruals and deferred income | ( | | | | | | ( |
| Total liabilities | ( | ( | ( | ( | | | ( |
| Total Capital and Reserves | | ( | ( | ( | ( | ( | ( |
UK £ | US $ | EUR € | CAD $ | AUD $ | Other | Total | |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'0000 | $'000 | |
| Investments | | | | | | | |
| Debtors | | | | | | | |
| Other assets | | | | | | | |
| Prepayments and accrued income | | | | | | | |
| Total assets | | | | | | | |
| Technical provisions | ( | ( | ( | ( | | | ( |
| Creditors | ( | ( | ( | ( | | | ( |
| Accruals and deferred income | ( | ( | | | | | ( |
| Total liabilities | ( | ( | ( | ( | | | ( |
| Total Capital and Reserves | | ( | ( | ( | ( | ( | ( |
Sensitivity analysis - foreign exchange risk
In 2025, the managing agent managed the syndicate's foreign exchange risk by periodically assessing its non-dollar exposures
while targeting net assets to be predominately US dollar denominated. On a forward looking basis an assessment is made of
expected future exposure development and appropriate currency trades put in place to reduce risk.
Fluctuations in the syndicate’s trading currencies against the US dollar would result in a change to profit and members'
balances. The table below gives an indication of the impact on profit and members' balances of a percentage change in relative
strength of US dollar against the value of sterling, Canadian dollar, Australian dollar, and euro, simultaneously. The analysis is
based on the current information available and an assumption that the impact of foreign exchange on non-monetary items will
be nil and is presented net of the impact of the exchange rate derivatives referenced above.
Impact on profit and members' balances'
2025 2024
Change in exchange rate of sterling, Canadian dollar, Australian dollar and euro relative to US dollar
$'000 $'000
Dollar weakens 10% against other currencies (124) (162)
Dollar strengthens 10% against other currencies 124 162
Notes to the syndicate annual accounts continued
24
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
2. Risk management continued
Interest rate risk
The managing agent manages interest rate risk by primarily investing in short duration financial investments and cash.
The Investment Committee monitors the duration of these assets on a regular basis.
The following table shows the average duration at the reporting date of the financial instruments that are exposed to movements
in market interest rates.
Duration is a commonly used measure of volatility which gives a better indication than maturity of the likely sensitivity of our
portfolio to changes in interest. The syndicate manages interest rate risk by primarily investing in short duration financial
investments and cash. The investment committee monitors the duration of these assets on a regular basis.
Duration
<1 yr
1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
31 December 2025
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Participation in investment pools 698 — — — — — — 698
Other investments 835 — — — — — — 835
Cash at bank and in hand 18,268 — — — — — — 18,268
Total
19,801 — — — — — — 19,801
Duration
<1 yr
1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
31 December 2024
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Participation in investment pools 977 — — — — — — 977
Other investments 1,490 — — — — — — 1,490
Cash at bank and in hand 19,668 — — — — — — 19,668
Total
22,135 — — — — — — 22,135
Sensitivity analysis – interest rate risk
The syndicate holds financial assets and liabilities that are exposed to interest rate risk. Changes in interest yields, with all
other variables constant, would result in changes in the capital value of debt and derivative financial instruments. This will affect
reported profits and members' balances as indicated in the table below.
Impact on profit for the year
ended
Impact on members
balances
2025 2024 2025 2024
Shift in yield (basis points) $'000 $'000 $'000 $'000
50 basis point increase (12 ) (20 ) (12 ) (20 )
50 basis point decrease 12 20 12 20
Price risk
This is not a material risk to the syndicate.
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25
2. Risk management continued
2.3 Credit risk
Credit risk arises from the failure of another party to perform its financial or contractual obligations to the syndicate in a timely
manner. The primary sources of credit risk for the syndicate are:
• brokers and coverholders – whereby counterparties fail to pass on premiums or claims collected or paid on behalf of the
syndicate;
• investments – whereby issuer default results in the syndicate losing all or part of the value of a financial instrument and
derivative financial instrument; and
• cash at bank and in hand.
The syndicate’s core business is to accept significant insurance risk and the appetite for other risks is low. This protects the
syndicate’s capital from erosion so that it can meet its insurance liabilities.
The managing agent limits exposure to a single counterparty or a group of counterparties and analyse the geographical locations
of exposures when assessing credit risk.
An approval system also exists for all new brokers, and broker performance is carefully monitored by the managing agent.
Regular exception reports highlight trading with non-approved brokers, and the managing agent's credit control function
frequently assesses the ageing and collectability of debtor balances. Any large, aged items are prioritised and where collection
is outsourced, incentives are in place to support these priorities.
The tables below summarise the syndicate’s concentrations of credit risk:
| AAA | AA | A | BBB | Other | Not rated | Total | |
| 31 December 2025 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Investments | |||||||
| Participation in investment pools | | | | | | | |
| Other investments | | | | | | | |
| Total Investments | — | — | 1,533 | — | — | — | 1,533 |
Debtors arising out of direct insurance operations | | | | | | | |
| Debtors arising out reinsurance operations | | | | | | | |
| Cash at bank and in hand | | | | | | | |
| Other debtors and accrued interest | | | | | |||
Total | | | | | | | |
| AAA | AA | A | BBB | Other | Not rated | Total | |
| 31 December 2024 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
Investments | |||||||
| Participation in investment pools | | | | | | | |
| Other investments | | | | | | | |
| Total investments | – | – | 2,467 | – | – | – | 2,467 |
Debtors arising out of direct insurance operations | | | | | | | |
| Debtors arising out reinsurance operations | | | | | | | |
| Cash at bank and in hand | | | | | | | |
| Other debtors and accrued interest | | | | | | | |
| Total | | | | | | | |
Based on all evidence available, debtors arising out of insurance operations and other debtors have not been impaired and no
impairment provision has been recognised in respect of these assets.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table on the following page.
Notes to the syndicate annual accounts continued
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Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
2. Risk management continued
Neither past due
nor impaired
Past due but not
impaired
Gross value of
impaired assets
Impairment
allowance Total
31 December 2025
$'000 $'000 $'000 $'000 $'000
Investments
Participation in investment pools 698 — — — 698
Other investments 835 — — — 835
Total investments 1,533 — — — 1,533
Debtors arising out of direct insurance
operations
Debtors arising out reinsurance operations 3 — — — 3
Cash at bank and in hand 18,268 — — — 18,268
Other debtors and accrued interest 1,392 — — — 1,392
Total
Neither past due
nor impaired
Past due but not
impaired
Gross value of
impaired assets
Impairment
allowance Total
31 December 2024
$'000 $'000 $'000 $'000 $'000
Investments
Participation in investment pools 977 — — — 977
Other investments 1,490 — — — 1,490
Total investments 2,467 — — — 2,467
Debtors arising out of direct insurance
operations
Debtors arising out reinsurance operations 45 — — — 45
Cash at bank and in hand 19,668 — — — 19,668
Other debtors and accrued interest 1,438 — — — 1,438
Total
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet date:
Past due but not impaired assets
0 - 3 months
past due
3 - 6 months
past due
6 - 12 months
past due
Greater than 1
year past due Total
31 December 2025
$'000 $'000 $'000 $'000 $'000
Debtors arising out of direct insurance operations — — — — —
Debtors arising out of reinsurance operations — — — — —
Total — — — — —
Past due but not impaired assets
0 - 3 months
past due
3 - 6 months
past due
6 - 12 months
past due
Greater than 1
year past due Total
31 December 2024
$'000 $'000 $'000 $'000 $'000
Debtors arising out of direct insurance operations — — — — —
Debtors arising out of reinsurance operations — — — — —
Total — — — — —
2.4 Liquidity risk
Liquidity risk arises where cash may not be available to pay obligations when due at a reasonable cost. The syndicate is exposed to
daily calls on its available cash resources, principally from claims arising from its insurance business. In the majority of the cases,
these claims are settled from the premiums received.
The managing agent’s approach is to manage its liquidity position so that it can reasonably survive a significant individual or
market loss event. This means that the syndicate maintains sufficient liquid assets, or assets that can be translated into liquid
assets at short notice and without any significant capital loss, to meet expected cash flow requirements. These liquid funds are
regularly monitored using cash flow forecasting to ensure that surplus funds are invested to achieve a higher rate of return.
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2. Risk management continued
The maturity analysis presented in the table below shows the remaining contractual maturities for the syndicate’s insurance
contracts and financial instrument liabilities. For insurance and reinsurance contracts, the contractual maturity is the estimated
date when the gross undiscounted contractually required cash flows will occur. For financial liabilities, it is the earliest date on
which the gross undiscounted cash flows (including contractual interest payments) could be paid assuming conditions are
consistent with those at the reporting date.
Undiscounted net cash flows
No maturity
stated 0-1 yrs 1-3 yrs 3-5 yrs >5 yrs Total
31 December 2025 $'000 $'000 $'000 $'000 $'000 $'000
Claims outstanding — 2,467 3,738 1,346 839 8,390
Creditors 1,933 8,250 — — — 10,183
Other liabilities — 178 — — — 178
Total 1,933 10,895 3,738 1,346 839 18,751
Undiscounted net cash flows
No maturity
stated 0-1 yrs 1-3 yrs 3-5 yrs >5yrs Total
31 December 2024
$'000 $'000 $'000 $'000 $'000 $'000
Claims outstanding — 5,798 5,675 2,458 1,466 15,397
Creditors 1,473 7,372 — — — 8,845
Other liabilities — 272 — — — 272
Total 1,473 13,442 5,675 2,458 1,466 24,514
2.5 Capital management
Capital framework at Lloyd's
The Society of Lloyd’s is a regulated undertaking and subject to the supervision of the Prudential Regulation Authority under the
Financial Services and Markets Act 2000.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that Lloyd’s
complies with Solvency II, and beyond that to meet its own financial strength, license and ratings objectives. Although, as described
below, the Lloyd’s capital setting processes use a capital requirement set at syndicate level as a starting point, the requirement
to meet Solvency II and Lloyd’s capital requirements apply at an overall and member level respectively, not at a syndicate level.
Accordingly the capital requirement in respect of Syndicate 4321 is not disclosed in these financial statements.
Lloyd's capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirement ('SCR') for the
prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting uncertainty in the
ultimate run-off of underwriting liabilities (SCR to ultimate). The syndicate must also calculate its SCR at the same confidence
level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency 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 comprises one or more underwriting members of Lloyd’s. Each member is liable for its own share of underwriting
liabilities on the syndicate(s) on which it participates but not other members’ shares. Accordingly, the capital requirement that
Lloyd’s sets for each member operates on a similar basis. Each member’s SCR shall thus be determined by the sum of the
member’s share of the syndicate SCR to ultimate. Where a member participates on more than one syndicate, a credit for
diversification is provided to reflect the spread of risk, but consistent with determining an SCR which reflects the capital
requirement to cover a 1 in 200 year loss to ultimate for that member. Over and above this, Lloyd’s applies a capital uplift to
the member’s capital requirement, known as the Economic Capital Assessment (ECA). The purpose of this uplift, which is a
Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, license and ratings objectives. The capital uplift
applied for 2025 was 35% (2024: 35%) of the member’s SCR to ultimate.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that member (funds at
Lloyd’s), held within and managed within a syndicate (funds in syndicate) and/or as the member’s share of the solvency II
members’ balances on each syndicate on which it participates. Accordingly all of the assets less liabilities of the syndicate, as
represented in the members’ balances reported on the balance sheet on page 15, represent resources available to meet members’
and Lloyd’s capital requirement.
Notes to the syndicate annual accounts continued
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Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
3 Analysis of underwriting result
Underwriting result is the balance on the technical result - general business, less the allocated investment return transferred
from the non-technical account.
Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Underwriting result | |
| 2025 | $'000 | $'000 | $'000 | $'000 | $'000 |
Direct Insurance | |||||
| Marine, aviation and transport | | | | ( | |
| Fire and other damage to property | | | | ( | |
| Third party liability | ( | | | ( | ( |
| Total direct insurance | | | ( | | |
| Reinsurance accepted | ( | | | ( | ( |
Total | | | ( | |
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross operating
expenses
Underwriting
result
2024 $'000 $'000 $'000 $'000 $'000
Direct Insurance
Marine, aviation and transport (41 ) 291 (2,159 ) (119 ) (1,987 )
Fire and other damage to property 302 3,315 (983 ) (643 ) 1,689
Third party liability 3,634 6,456 (2,344 ) (1,501 ) 2,611
Total direct insurance 3,895 10,062 (5,486 ) (2,263 ) 2,313
Reinsurance accepted 390 962 (163 ) (160 ) 639
Total
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 | | |
Total gross premiums written | | |
4 Net operating expenses
| 2025 | 2024 | |
| $'000 | $'000 | |
Acquisition costs | | |
Change in deferred acquisition costs | | |
Administrative expenses | | |
| Members’ standard personal expenses | | |
Net operating expenses | | |
Acquisition costs include commissions for direct insurance business as shown below:
| 2025 | 2024 | |
| $'000 | $'000 | |
Total commission for direct insurance business | | |
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4 Net operating expenses continued
Administrative expenses include:
| 2025 | 2024 | |
| $'000 | $'000 | |
| Fees payable to the syndicate’s auditor for the audit of these syndicate annual accounts | | |
Fees payable to the syndicate’s auditor and its associates in respect of other services pursuant to legislation to align with Lloyds | | |
Total | 345 | 230 |
Fees payable to the syndicate's auditor in relation to other services pursuant to legislation primarily relate to the review and audit
of syndicate regulatory returns along with the statement of actuarial opinion.
5 Key management personnel compensation
The Directors of BFL received the following aggregate remuneration charged to Syndicate 4321 and included within net
operating expenses:
| 2025 | 2024 | |
| $'000 | $'000 | |
| Directors' emoluments | | |
The active underwriter received the following aggregate remuneration charged to Syndicate 4321
| 2025 | 2024 | |
$'000 | $'000 | |
| Emoluments | | |
The run-off manager received the following aggregate remuneration charged to Syndicate 4321
| 2025 | 2024 | |
$'000 | $'000 | |
| Emoluments | | |
6 Staff numbers and costs
The syndicate has no employees. All staff are employed by Beazley Management Limited ('BML'), a related company to the
managing agent, both of which operate within the Beazley Group. The average number of persons employed by BML analysed by
category was as follows:
Number of employees | ||
| 2025 | 2024 | |
| Administration and finance | | |
| Underwriting | | |
| Claims | | |
| Investments | | |
Total | | |
The following amounts were recharged to the syndicate in respect of staff costs:
2025 2024
$'000 $'000
Wages and salaries 63 93
Social security 24 34
Other pension costs 20 28
Other 46 90
Total
Notes to the syndicate annual accounts continued
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Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
7 Investment return
| 2025 | 2024 | |
| $'000 | $'000 | |
Interest and similar income | ||
From financial assets designated at fair value through profit or loss | ||
| Interest and similar income | | |
From financial assets classified at amortised cost | ||
| Interest on cash at bank | | |
Total investment return | | |
| Transferred to the technical account from the non-technical account | | |
8 Distribution and open years of account
A profit distribution of $4,897 k to members will be proposed in relation to the closing year of account 2023 (2024: collection of
$2,225 k for year of account 2022).
9 Financial investments
| Carrying value | Cost | |||
| 2025 | 2024 | 2025 | 2024 | |
| $'000 | $'000 | $'000 | $'000 | |
Participation in investment pools | | | ||
Other investments | | | | |
| Total financial investments | |
The syndicate held no listed investments in the period to 31 December 2025.
The table below presents an analysis of financial investments by their measurement classification: | ||
| 2025 | 2024 | |
| $'000 | $'000 | |
| Financial assets measured at fair value through profit or loss | | |
| Total financial investments | |
Overseas deposits are held as a condition of conducting underwriting business in certain countries. These are included in the other
investments line in the table above.
Valuation hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole. If the inputs used to measure the fair value of an asset or a liability could be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
Level 1 – Valuations based on quoted prices in active markets for identical instruments. An active market is a market in which
transactions for the instrument occur with sufficient frequency and volume on an ongoing basis such that quoted prices reflect
prices at which an orderly transaction would take place between market participants at the measurement date.
Level 2 – Valuations based on quoted prices in markets that are not active, or based on pricing models for which significant inputs
can be corroborated by observable market data,directly or indirectly (e.g. interest rates, exchange rates). Level 2 inputs include:
• Quoted prices similar assets and liabilities in active markets;
• Quoted prices for identical or similar assets and liabilities in markets that are not active, the prices are not current, or price
quotations vary substantially either over time or among market makers, or in which little information is released publicly;
• Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves
observable at commonly quoted intervals, implied volatilities and credit spreads); and
• Market corroborated inputs.
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9 Financial investments continued
Level 3 – Valuations based on inputs that are unobservable or for which there is limited market activity against which to
measure fair value. The availability of financial data can vary for different financial assets and is affected by a wide variety of
factors, including the type of financial instrument, whether it is new and not yet established in the marketplace, and other
characteristics specific to each transaction. To the extent that valuation is based on non-active markets, the determination of
fair value requires more judgement. Accordingly the degree of judgement exercised by management in determining fair value is
greatest for instruments classified in level 3. The managing agent uses prices and inputs that are current as of the measurement
date for valuation of these instruments.
Valuation approach
The table below shows the fair values of financial instruments at 31 December 2025 and 31 December 2024, including their
levels in the fair value hierarchy:
Level 1 Level 2 Level 3
Assets held
at amortised
cost
Total
2025
$'000 $'000 $'000
$'000 $'000
Participation in investment pools
Other investments
Total financial investments
Derivative financial liabilities — — — — —
Total
| Level 1 | Level 2 | Level 3 | Assets held at amortised cost | Total | |
2024 | $'000 | $'000 | $'000 | $'000 | $'000 |
| Participation in investment pools | | | | | |
| Other investments | | | | | |
Total financial investments | | | | ||
| Derivative financial liabilities | | | | | |
Total | | | |
The investment portfolio above contains $698k (2024: $977k) of short term deposits separately disclosed in note 17.
10 Debtors arising out of direct insurance operations
| 2025 | 2024 | |
| $'000 | $'000 | |
| Due within one year | | |
| Due after one year | | |
Total | | |
These balances are due within one year.
11 Debtors arising out of reinsurance operations
| 2025 | 2024 | |
| $'000 | $'000 | |
| Due within one year | | |
| Due after one year | | |
Total | | |
These balances are due within one year.
Notes to the syndicate annual accounts continued
32
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
12 Other debtors
| 2025 | 2024 | |
| $'000 | $'000 | |
Inter-syndicate balances | ||
| Amounts due from Syndicate 5623 | 1,128 | 1,068 |
| Total inter-syndicate balances | | |
| Other | | |
Total | | |
These balances are due within one year. |
13 Deferred acquisition costs
| 2025 | 2024 | |||||
| Gross | Reinsurance | Net | Gross | Reinsurance | Net | |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
| Balance at 1 January | | | | | | |
Incurred deferred acquisition costs | | | | | ||
Amortised deferred acquisition costs | ( | ( | ( | | ( | |
Foreign exchange movements | | | | | ||
Balance at 31 December | | | | | |
14 Technical Provisions
The table below shows the changes in the insurance contract liabilities and assets from the beginning of the period to the end
of the period.
Gross provisions
Reinsurance
assets
Net Gross provisions
Reinsurance
assets
Net
Claims outstanding
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 15,397 — 15,397 13,613 — 13,613
Claims paid during the year (3,630 ) — (3,630 ) (3,851 ) — (3,851 )
Expected cost of current year claims 219 — 219 6,229 — 6,229
Change in estimates of prior year
provisions
(3,862 ) — (3,862 ) (580 ) — (580 )
Foreign exchange movements 266 — 266 (14 ) — (14 )
Balance at 31 December
Gross provisions Reinsurance
assets
Net Gross provisions Reinsurance
assets
Net
Unearned premiums
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
Premium written during the year 844 — 844 4,285 — 4,285
Premiums earned during the year (1,239 ) — (1,239 ) (11,024 ) — (11,024 )
Foreign exchange movements 26 — 26 34 — 34
Balance at 31 December
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred, including claims
notified and IBNR, for each successive underwriting year, illustrating how amounts estimated have changed from the first
estimates made. The below tables were previously shown on a fully earned basis. This is the first year presenting these tables
on a earned basis. As these tables are on an underwriting year basis, there is an apparent large increase from amounts
reported for the end of the underwriting year to one year later as a large proportion of premiums are earned in the year of
account’s second year of development.
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33
14 Technical Provisions continued
Gross:
| 2022 | 2023 | 2024 | 2025 | Total | |
Pure underwriting year | $'000 | $'000 | $'000 | $'000 | $'000 |
Estimate of gross claims | |||||
at end of underwriting year | | | | ||
One year later | | | |||
| Two years later | | | |||
| Three years later | | ||||
| Estimate of gross claims reserve | | | | ||
| Provision in respect of prior years | | ||||
| Less gross claims paid | ( | ( | | | ( |
Gross claims reserves | | | | | |
Net:
| 2022 | 2023 | 2024 | 2025 | Total | |
Pure underwriting year | $'000 | $'000 | $'000 | $'000 | $'000 |
Estimate of net claims | |||||
at end of underwriting year | | | | ||
One year later | | | |||
| Two years later | | | |||
| Three years later | | ||||
| Estimate of net claims reserve | | | | ||
| Provision in respect of prior years | | ||||
| Less net claims paid | ( | ( | | ( | |
Net claims reserves | | | | | |
15 Creditors arising out of direct insurance operations
| 2025 | 2024 | |
| $'000 | $'000 | |
| Due within one year | | |
| Due after one year | | |
Total | | |
16 Other creditors
2025 2024
$'000 $'000
Inter-syndicate balances
Amounts due to Syndicate 623 395 263
Amounts due to Syndicate 2623 1,538 1,210
Total inter-syndicate balances
Other related party balances (non-syndicate) 8,232 7,342
Other liabilities 16 —
Total
The above other creditors balances are payable within one year.
Notes to the syndicate annual accounts continued
34
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
17 Cash and cash equivalents
| 2025 | 2024 | |
| $'000 | $'000 | |
| Cash at bank and in hand | | |
| Short term deposits | | |
Total cash and cash equivalents | | |
*Included within Cash at bank and in hand are money market funds of $15,465k ( 2024: nil).
Short term deposits disclosed in this table are included within financial investments. Included within cash and cash equivalents
are the following amounts which are not available for use by the syndicate as they are held for regulatory purposes.
| 2025 | 2024 | |
| $'000 | $'000 | |
Short term debt instruments presented within other financial investments | | |
Total cash and cash equivalents not available for use by the syndicate | | |
18 Analysis of net debt
All amounts in $'000 At 1 January 2025 Cash flows Acquired
Fair value and
exchange movements
Non-cash
changes At 31 December 2025
Cash and cash equivalents 20,645 (2,285 ) — 606 — 18,966
Total
All amounts in $'000 At 1 January 2024 Cashflows Acquired
Fair value and
exchange movements
Non-cash
changes At 31 December 2024
Cash and cash equivalents 20,925 (239 ) — (41 ) —
Total
19 Related party transactions
BFL as the managing agent of the syndicate is responsible for settling intercompany balances with other managed syndicates
and net amounts due to/from other related parties.
Certain Directors of BFL have shareholdings in Beazley plc which provides capacity for Syndicates 2623, 623, 3622, 3623,
4321 and 5623. Beazley Corporate Member No. 3 Limited provides 10% of the underwriting capacity to the syndicate for the
2023 YoA.
The intercompany positions of amounts (due)/from with related parties as at 31 December 2025 are shown in the table below:
2025
$'000
2024
$'000
Amounts due to Syndicate 623 (395) (263)
Amounts due to Syndicate 2623 (1,538) (1,210)
Amounts due from Syndicate 5623 1,128
1,068
Amounts due to Beazley Management Limited (8,104)
(18)
Amounts due to Beazley Furlonge Limited (113) (7,324)
Total
(9,022) (7,747)
20 Subsequent events
In February 2026 the syndicate entered into a reinsurance to close transaction with Syndicate 5623, with Syndicate 5623
assuming all liabilities of the syndicate with effect from 1 January 2026. For further details of the reinsurance to close premium
paid, please see note 5 of the 2023 year of account underwriting year accounts.
The 2023 YoA has closed with a profit of $4,897k. It is the intention that these funds will be distributed to the members reserve
funds in May 2026.
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35
22 Foreign exchange rates
The syndicate used the following exchange rates to translate foreign currency assets, liabilities, income and expenses into US
dollars, being the syndicate’s presentational currency:
| 2025 | 2024 | |||||
| Start of period | End of period | Average rate | Start of period | End of period | Average | |
| Sterling | | | | | | |
| Euro | | | | | | |
| US dollar | | | | | | |
| Canadian dollar | | | | | | |
| Australian dollar | | | | | | |
23 Funds at Lloyd's
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (‘FAL’). These funds are
intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating members’ underwriting
liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on Prudential Regulatory
Authority requirements and resource criteria. The determination of FAL has regard to a number of factors including the nature
and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has
been underwritten. Since FAL is not under the management of the managing agent, no amount has been shown in these
Financial Statements by way of such capital resources. However, the managing agent is able to make a call on the Member’s
FAL to meet liquidity requirements or to settle losses.
Notes to the syndicate annual accounts continued
36
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
2023 underwriting
year accounts for
Syndicate 4321
38
Managing agent's report
39
Statement of managing agent’s responsibilities
40
Independent auditor's report to the members of
Syndicate 4321 – 2023 closed year of account
43
Profit or loss account
44
Statement of changes in members' balances
45
Balance sheet
46
Cash flow statement
47
Notes to the syndicate underwriting year accounts
52
Two year summary of closed year results at 31
December 2025
53
Managing agent's corporate information
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37
Managing agent’s report
The syndicate underwriting year accounts have been prepared under the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 (the ‘Lloyd’s Regulations’) and in accordance with the Syndicate Accounting Byelaw
(No.9 of 2005), including Financial Reporting Standard 102 (FRS 102) and Insurance Contracts 103 (FRS 103) in accordance
with the provisions of Schedule 3 of the Large and Medium-size Companies and Groups (Accounts and Reports) Regulations
relating to insurance companies.
Members participate on a syndicate by reference to a year of account ('YoA') and each syndicate YoA is a separate annual
venture. These accounts relate to the 2023 YoA which has been closed by reinsurance to close at 31 December 2025;
consequently the balance sheet represents the assets and liabilities of the 2023 YoA and the profit or loss account reflects the
transactions for that YoA during the 36 months period until closure. The profit of $4,897k includes a reinsurance to close profit
from the 2022 YoA of $173k (note 6). This profit on the 2023 YoA represents a profit on capacity of 11.0% which includes the
impact of personal members expenses of $12k. The profit on capacity remains at 11.0% after excluding these expenses.
Principal activity
Syndicate-in-a-box 4321 (the ‘syndicate’) was established in 2022 to provide a choice of additional capacity for large corporate
clients who meet the eligibility standards of the environmental, social and governance ('ESG') scoring criteria that have been
developed with support from specialist, independent rating agencies. The syndicate follows the lead underwriting of syndicates
2623 and 623, also managed by Beazley Furlonge Limited ('BFL') to write business on a multi-line basis. From 1 January 2024,
the syndicate no longer writes new business and its ESG capacity was moved to Syndicate 5623. When the 2023 year of
account became a closed year at 31 December 2025, to ensure continuity and effective management, the managing agent
entered Syndicate 4321 into a reinsurance to close arrangement with Syndicate 5623.
Directors
A list of Directors of the managing agent who held office during the current year can be found on page 53 of the syndicate
annual accounts.
Disclosure of information to the auditor
The Directors of the managing agent who held office at the date of approval of this managing agent’s report confirm that, so far
as they are each aware, there is no relevant audit information of which the syndicate’s auditor is unaware; and each Director
has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information
and to establish that the syndicate’s auditor is aware of that information.
On behalf of the Board
C C J Wong
Director
19 February 2026
38
Beazley | Syndicate 4321 Annual report 2024 www.beazley.com
Statement of managing agent’s responsibilities
The Directors of the managing agent are responsible for preparing the syndicate underwriting year accounts in accordance with
the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Accounting Byelaw. They have elected to prepare the accounts in accordance with FRS 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 the Directors of the
managing agent must not approve the underwriting year accounts unless they are satisfied that they give a true and fair view of
the result of the underwriting year at closure. In preparing these accounts, the Directors of the managing agent are required to:
• select suitable accounting policies and then apply them consistently and where there are items which affect more than one YoA,
ensure a treatment which is equitable between the members of the syndicate affected is used;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and
explained in the accounts;
• assess the syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading, or have no realistic alternative but to do so. As
explained in note 1 the Directors of the managing agent have not prepared the underwriting year accounts on a going concern basis.
The Directors of the managing agent are responsible for keeping adequate and proper accounting records that are sufficient
to show and explain the syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of
the syndicate and enable them to ensure that the underwriting year accounts comply with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. They are responsible for such internal control as they determine
is necessary to enable the preparation of accounts that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and
to prevent and detect fraud and other irregularities.
On behalf of the Board
C C J Wong
Director
19 February 2026
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39
Opinion
We have audited the syndicate underwriting year accounts for the 2023 year of account of syndicate 4321 (‘the syndicate’) for
the three years ended 31 December 2025 which comprise the Profit or loss account, the Balance Sheet, the Statement of
Changes in Members’ Balances, the Statement of Cash Flows and the related notes 1 to 16, including a summary of significant
accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United
Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of
Ireland” and FRS 103 “Insurance Contracts” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the syndicate underwriting year accounts:
• give a true and fair view of the profit for the 2023 closed year of account;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and have been properly prepared in accordance with the Lloyd’s Syndicate Accounting
Byelaw (no. 8 of 2005).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the syndicate
underwriting year accounts section of our report. We are independent of the syndicate in accordance with the ethical
requirements that are relevant to our audit of the syndicate underwriting year accounts in the UK, including the FRC’s Ethical
Standard as applied to other entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter – closure of the 2023 year of account
We draw attention to the Note 1 which explains that the 2023 year of account of syndicate 4321 has closed and all assets and
liabilities transferred to the 2024 year of account by reinsurance to close at 31 December 2025.
As a result, the syndicate underwriting year accounts for the 2023 year of account of syndicate 4321 have been prepared under
basis other than going concern.
Our opinion is not modified in respect of this matter.
Other information
The other information comprises the information included in the Underwriting Year report and accounts,other than the syndicate
underwriting year accounts and our auditor’s report thereon. The managing agent is responsible for the other information
contained within the Underwriting Year report and accounts.
Our opinion on the syndicate underwriting year accounts does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the syndicate underwriting year accounts or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement in the syndicate underwriting year accounts
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact.
We have nothing to report in this regard.
Independent auditor's report to the members of
Syndicate 4321
2023 closed year of account
40
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where The Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005)
requires us to report to you, if in our opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the syndicate underwriting year accounts are not in agreement with the accounting records.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities set out on page 39, the managing agent is
responsible for the preparation of the syndicate underwriting year accounts in accordance with The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and The Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005) and
for being satisfied that they give a true and fair view, and for such internal control as the managing agent determines is
necessary to enable the preparation of the syndicate underwriting year accounts that are free from material misstatement,
whether due to fraud or error.
In preparing the syndicate underwriting year accounts, the managing agent is responsible for assessing the syndicate’s ability to
realise its assets and discharge its liabilities in the normal course of business, disclosing, as applicable, any matters that
impact its ability to do so.
Auditor’s responsibilities for the audit of the syndicate underwriting year accounts
Our objectives are to obtain reasonable assurance about whether the syndicate underwriting year accounts as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these syndicate underwriting year accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the
primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the managing
agent and management.
Our approach was as follows:
• We obtained a general understanding of the legal and regulatory frameworks that are applicable to the syndicate and
determined that the most significant are direct laws and regulations related to elements of Lloyd’s Byelaws and Regulations,
and the financial reporting framework (UKGAAP) and requirements referred to by Lloyd’s in the Instructions. Our
considerations of other laws and regulations that may have a material effect on the syndicate underwriting year accounts
included permissions and supervisory requirements of Lloyd’s of London, the Prudential Regulation Authority (‘PRA’) and the
Financial Conduct Authority (‘FCA’).
• We obtained a general understanding of how the syndicate is complying with those frameworks by making enquiries of
management, internal audit, and those responsible for legal and compliance matters of the syndicate. In assessing the
effectiveness of the control environment, we also reviewed significant correspondence between the syndicate, Lloyd’s of
London and other UK regulatory bodies; reviewed minutes of the Board and Risk Committee of the managing agent; and
gained an understanding of the managing agent’s approach to governance.
• For direct laws and regulations, we considered the extent of compliance with those laws and regulations as part of our
procedures on the related syndicate underwriting year accounts’ items.
• For both direct and other laws and regulations, our procedures involved: making enquiries of the directors of the managing
agent and senior management for their awareness of any non-compliance of laws or regulations, enquiring ab,out the policies
that have been established to prevent non-compliance with laws and regulations by officers and employees, enquiring about
the managing agent’s methods of enforcing and monitoring compliance with such policies, and inspecting significant
correspondence with Lloyd’s, the FCA and the PRA.
• The syndicate operates in the insurance industry which is a highly regulated environment. As such the Senior Statutory
Auditor considered the experience and expertise of the engagement team to ensure that the team had the appropriate
competence and capabilities, which included the use of specialists where appropriate.
Independent auditor's report to the members of
Syndicate 4321
2023 closed year of account continued
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41
• We assessed the susceptibility of the syndicate’s underwriting year accounts to material misstatement, including how fraud
might occur by considering the controls that the managing agent has established to address risks identified by the managing
agent, or that otherwise seek to prevent, deter, or detect fraud. We also considered areas of significant judgement, complex
transactions, performance targets, economic or external pressures and the impact these have on the control environment.
Where this risk was considered to be higher, we performed audit procedures to address each identified fraud risk including,
– Reviewing accounting estimates for evidence of management bias. Supported by our Actuaries we assessed if there were
any indicators of management bias in the valuation of insurance liabilities and the recognition of estimated premium
income.
– Evaluating the business rationale for significant and/or unusual transactions.
• These procedures included testing manual journals and were designed to provide reasonable assurance that the syndicate
underwriting year accounts were free from fraud or error.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Lloyd’s Syndicate Accounting Byelaw
(no. 8 of 2005) and The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit
work has been undertaken so that we might state to the syndicate’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the syndicate and the syndicate’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
Niamh Byrne (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
Independent auditor's report to the members of
Syndicate 4321
2023 closed year of account continued
42
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
20 February 2026
Profit or loss account
2023 year of account for the 36 months ended 31 December 2025
Notes
2023 year
of account
$'000
Gross premiums written
3 18,339
Earned premiums, net of reinsurance 18,339
Allocated investment return transferred from the non technical account 1,977
Reinsurance to close premiums received, net of reinsurance
4
6,607
Investment return and reinsurance adjusted premium 8,584
Reinsurance to close premiums payable, net of reinsurance
5
(5,436)
Gross claims paid (6,022)
Claims incurred, net of reinsurance
(11,458)
Net operating expenses 7 (10,559)
Balance on technical account 4,906
Loss on foreign exchange (9)
Investment income 1,977
Investment expenses and charges
8
—
Net investment return
1,977
Allocated investment return transferred to the technical account (1,977)
Profit for the 2023 closed year of account 6 4,897
Syndicate allocated capacity (£'000) 33,100
Profit for the 2023 closed year of account (£'000) 3,641
Return on capacity 11.0 %
There are no other comprehensive gains or losses in the accounting period.
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43
Statement of changes in members’ balances
for the 36 months ended 31 December 2025
2023 year
of account
$'000
Profit for the 2023 closed YoA
4,897
Amounts due to members' at 31 December 2025
4,897
Members participate in syndicates by reference to YoA and their ultimate result, assets and liabilities are assessed with reference
to policies incepting in that YoA in respect of their membership of a particular year.
44
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Balance sheet
closed at 31 December 2025
Notes
2023 year
of account
$'000
Assets
Financial investments
12 1,533
Debtors 13
1,397
Prepayment and accrued income 47
Cash at bank and in hand 18,268
Deferred acquisition costs 15
Total assets
21,260
Members' balances and liabilities
Members' balances
Amounts due from members
14 4,897
Liabilities
Reinsurance to close premium payable to close the account - gross amount 5 6,002
Creditors 15 10,183
Accruals and deferred income 178
Total liabilities
21,260
The syndicate underwriting year accounts on pages 43 to 51 were approved by the Board of Directors of Beazley Furlonge Limited
on 19 February 2026 and were signed on its behalf by:
C C J Wong
Director
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45
Statement of cash flows
2023 year of account for the 36 months ended 31 December 2025
2023 year
of account
$'000
Cash flows from operating activities
Profit for the 2023 closed YoA 4,897
Increase in gross technical provisions 6,002
Increase in debtors (1,397)
Movement in other assets/liabilities 116
Increase in creditors 10,183
Investment return (1,977)
Net cash flows from operating activities
17,824
Cash flows from investing activities
Purchase of equity and debt securities (1,533)
Investment income received 1,977
Net cash flows from investing activities
444
Net cash flows from financing activities
—
Net increase in cash and cash equivalents 18,268
Foreign exchange on cash and cash equivalents —
Cash and cash equivalents at the closing of the 2023 YoA
18,268
46
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
1 Accounting policies
Basis of preparation
These underwriting accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 (‘the Regulations’) and applicable Accounting Standards in the United Kingdom,
including Financial Reporting Standard 102 (FRS 102) and Insurance Contracts (FRS 103). They have also been prepared in
accordance with Lloyd’s Syndicate Accounting Byelaw (No.8 of 2005) and in accordance with the provisions of Schedule 3 of the
Large and Medium-size Companies and Groups (Accounts and Reports) Regulations relating to insurance companies.
As noted in Note 1 to the syndicate's annual accounts, the syndicate is no longer considered a going concern, and the annual
accounts have been prepared on a basis other than going concern. These financial statements represent the participation of
members in the 2023 YoA which closed on 31 December 2025. The accumulated profits of the 2023 YoA will be distributed
shortly after the publication of these accounts and the syndicate will enter into a reinsurance to close transaction with
Syndicate 5623. Therefore the 2023 YoA is not continuing to trade and, accordingly, the Managing Agent has not adopted the
going concern basis in the preparation of these accounts. The amounts reported would be identical if the accounts had been
prepared on a going concern basis as the 2023 YoA will be closed by payment of a reinsurance to close premium, as outlined
in note (a) below, which is consistent with the normal course of business for a Lloyd’s Syndicate and with the approach the
managing agent has applied to earlier underwriting years.
The principal accounting policies applied in the preparation of these underwriting accounts are set out below. The policies have
been consistently applied to all periods presented, unless otherwise stated. All amounts presented are stated in US dollars,
being the syndicate’s functional currency, and in millions, unless noted otherwise.
Underwriting transactions
a) The underwriting accounts for each YoA are normally kept open for three years before the result of that year is determined.
At the end of the three year period, outstanding liabilities can normally be determined with sufficient accuracy to permit the
YoA to be closed by payment of a reinsurance to close premium to the successor YoA.
b) Gross premiums are allocated to YoA on the basis of the inception date of the policy. Commission and brokerage are
charged to the YoA to which the relevant policy is allocated. Policies written under binding authorities, lineslips or consortium
arrangements are allocated to the YoA into which the arrangement incepts. Additional and return premiums follow the YoA
of the original premium. Premiums in respect of reinsurance ceded are attributed to the same year as the original risk being
protected. Gross premiums are stated before the deduction of brokerage, taxes and duties levied on them. Estimates are
made for pipeline premiums, representing amounts due to the syndicate not yet notified.
c) Gross claims paid are allocated to the same YoA as that to which the corresponding premiums are allocated and include internal
and external claims settlement expenses. Reinsurance recoveries are allocated to the YoA to which the claim was charged.
d) The reinsurance to close premium is determined by reference to outstanding liabilities, including claims incurred but not
yet reported, relating to the closed year and to all previous closed years reinsured therein. Although the estimate of net
outstanding liabilities is considered to be fair and reasonable, it is implicit in the estimation procedure that the ultimate
liabilities will be at variance from the premium so determined. The reinsurance to close premium includes a provision for unearned
premiums and unexpired risks at the balance sheet date, net of deferred acquisition costs.
e) Please refer to Note 1 in the Syndicate 4321 annual accounts for details around measurement of insurance contracts.
Comparatives
f) Comparatives are not provided in these syndicate underwriting year accounts as each syndicate YoA is a separate annual venture.
Investment return
(g) Investment return comprises investment income, realised investment gains and losses and movements in unrealised gains
and losses, net of investment expenses, charges and interest. Investment return arising in each calendar year is allocated
to years of account in proportion to the average funds available for investment attributable to those years. Investment returns
in respect of overseas deposits are allocated to the YoA which funded these deposits.
(h) The investment return is wholly allocated to the technical account.
(i) Investments are valued at market value at the balance sheet date. Movements in unrealised gains and losses on investments
represent the difference between the valuation at the balance sheet date, and the valuation at the previous period end or
purchase value during the period.
Notes to the syndicate underwriting year accounts
closed at 31 December 2025
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47
.1 Accounting policies continued
Syndicate operating expenses
(j) Acquisition costs comprise brokerage, premium levies, and staff related costs of the underwriters acquiring the business.
Costs incurred by the managing agent in respect of the syndicate are charged to the syndicate. Where expenses do not
relate to any specific YoA they are apportioned between YoA on a basis which reflects the benefit obtained by each YoA
from each type of expense.
(l) Where expenses are incurred jointly by the managing agent and the syndicate, they are apportioned as follows:
• salaries and related costs – according to the staff time spent on dealing with syndicate matters;
• accommodation costs – proportioned based on the overall staff costs allocation above; and
• other costs – as appropriate in each case
Taxation
(k) 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 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. It is the responsibility of members to agree and settle their individual
tax liabilities with the Inland Revenue.
(l) No provision has been made for any US federal income tax payable on the underwriting results or investment earnings.
Any payments on account made by the syndicate during the year have been included in the balance sheet under the heading
‘other debtors’.
(m)No provision has been made for any other overseas tax payable by members on underwriting results. Members resident
overseas for tax purposes are responsible for agreeing and settling any tax liabilities with the taxation authorities of their
country of residence.
Basis of currency translation
(n) The functional and presentational currency of the syndicate is US dollars. Non-USD denominated items going through
the profit or loss account are translated to US dollars at the three years’ average rates of exchange. Assets and liabilities
denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign
exchange rate at that date.
2 Risk management
The 2023 YoA has closed and all assets and liabilities have been transferred to a reinsuring YoA. The risks that it is exposed to in
respect of the reported financial position and financial performance are significantly less than those relating to the open YoA's
as disclosed in the syndicate annual accounts. Accordingly, these underwriting year accounts do not have associated risk
disclosures as required by section 34 of FRS 102. Full disclosures relating to these risks are provided in the syndicate
annual accounts.
3 Analysis of underwriting result
Gross premiums
written
*Gross premiums
earned
Gross claims
incurred
Net operating
expenses
Underwriting
result
$'000 $'000 $'000 $'000 $'000
Direct Insurance
Marine, aviation and transport
756 723 (1,217) (1,634) (2,128)
Fire and other damage to property
9,248 9,207 (2,426) (3,488) 3,293
Third party liability
8,636 7,832 (1,977) (4,912) 943
Total direct insurance
18,640 17,762 (5,620) (10,034) 2,108
Reinsurance acceptances
(301) 276 1,070 (525) 821
Total direct insurance and reinsurance accepted
18,339 18,038 (4,550) (10,559) 2,929
*An amount of $301k of unearned premiums is included as a gross claim incurred and forms part of the reinsurance to close
premiums payable to the reinsurance to close counterparty.
All business was concluded in the UK.
The balances in reinsurance acceptances include the impact of risks accepted from prior years of account. As such, negative
gross written premiums and claims releases on the reinsurance acceptances line can occur.
Notes to the syndicate underwriting year accounts
closed at 31 December 2025 continued
48
Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
4 Reinsurance to close premiums received
2023 year
of account
$'000
Gross reinsurance to close premiums received
6,607
Reinsurance to close premiums received, from 2022 and earlier, net of reinsurance
6,607
5 Reinsurance to close premiums payable
2023 year
of account
$'000
Gross reinsurance to close premiums through profit and loss 5,436
Foreign exchange
566
Reinsurance to close premiums payable to 5623, net of
reinsurance
6,002
Reported
Unearned
premium
reserve
IBNR Total
$'000 $'000 $'000 $'000
Reinsurance to close premium payable
1,842 301 3,859 6,002
Reinsurance to close premiums payable
1,842 301 3,859 6,002
6 Analysis of the 2023 year of account results
2023 year
of account
$'000
Amount attributable to business allocated to the 2023 year of account 4,724
Surplus on the reinsurance to close for the 2022 year of account 173
4,897
7 Net operating expenses
2023 year
of account
$'000
Acquisition costs 6,270
Administrative expenses 4,289
10,559
Administrative expenses include:
$'000
Audit services 393
8 Investment expenses and charges
2023 year
of account
$'000
Investment management expenses —
—
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49
9 Emoluments of Directors of BFL
An allocation of remuneration to the 2023 underwriting YoA for the Directors of BFL is based on the amounts paid between
2023 and 2025 as follows:
2023 year
of account
$'000
Emoluments and fees 65
65
10 Staff costs
2023 year
of account
$'000
Wages and salaries 844
Social security costs 270
Pension costs 223
Incentive payments 569
1,906
11 Active underwriter's emoluments
An allocation of the active underwriter’s remuneration to the 2023 underwriting YoA is based on the amounts paid between 2023
and 2025 as follows:
2023 year
of account
$'000
Emoluments and fees 220
220
12 Financial Assets
Level 1 Level 2 Level 3
Total
2023
$'000 $'000 $'000 $'000
Participation in investment pools
698 — — 698
Other investments 835 — — 835
Total financial assets at fair value
1,533 — — 1,533
13 Debtors
2023 year
of account
$'000
Debtors arising out of direct insurance operations – intermediaries 49
Debtors arising out of reinsurance operations 3
Amounts due from syndicate 5623 1,128
Other debtors 217
1,397
These balances are due within one year.
Notes to the syndicate underwriting year accounts
closed at 31 December 2025 continued
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Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
14 Amounts due from members
2023 year
of account
$'000
Profit for the 2023 closed YoA before standard personal expenses 4,909
Members standard personal expenses (12)
Amounts due to members at 31 December 2025
4,897
15 Creditors
2023 year
of account
$'000
Creditors arising out of direct insurance operations - intermediaries 2
Amounts due to Syndicate 2623 1,538
Amounts due to Syndicate 623 395
Other creditors 8,248
10,183
The above balances are payable within one year.
16 Related parties transactions
Please refer to page 35 of the syndicate annual accounts for further details of related party transactions for the 2023 YoA.
The Directors of BFL have shareholdings in Beazley plc which provides capacity for Syndicates 2623, 623, 3622, 3623, 4321 and
5623. Amounts due from other syndicates is disclosed within note 13.
As at the balance sheet date, the 2023 YoA has a payable due to Beazley Management Limited ('BML') of $8,104k and $150k
due to BFL. These amounts are included in other creditors, disclosed within note 15. BML provides services to the managing
agent, and by extension, to the syndicate.
BFL, the managing agent of Syndicate 4321, is a wholly-owned subsidiary of Beazley plc. BFL is responsible for settling intercompany
balances with other managed syndicates and net amounts due to/from other related entities.
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51
2023 2022
Syndicate allocated capacity – £’m
33,100 29,000
Syndicate allocated capacity – $’m 40,051 40,020
Capacity utilised 34 % 33 %
Aggregate net premiums – $’m 13,475 13,198
Underwriting profit as a percentage
of gross premiums
53.6 % 10.2 %
Return on capacity 11.0 % (6.0) %
Results for an illustrative £10,000 share $ $
Gross premiums – $
4,071 4,551
Net premiums
4,071 4,551
Reinsurance to close from an earlier account
1,996 —
Net claims
(1,819) (1,666)
Reinsurance to close the year of account
(1,642) (2,370)
Underwriting profit
2,606 515
Loss on foreign exchange
(76) (87)
Syndicate operating expenses (1,633) (1,132)
Balance on technical account 897 (703)
Gross investment return 597 27
Loss before personal expenses 1,494 (677)
Illustrative personal expenses
(87) (91)
Managing agent’s profit commission — —
Profit/(Loss) after illustrative profit commission and personal expenses ($)
1,407 (767)
Profit/(Loss) after illustrative profit commission and personal expenses (£)
1,100 (612)
Notes:
1 The illustrative profit commission and personal expenses are estimates of amounts which might be charged on an illustrative share of £10,000. The agency
agreements for 1991 and subsequent years of account only provide for the deduction of fees and profit commission on behalf of the managing agent.
2 The effect of any minimum charges on personal expenses or deficit clauses on profit commission have been ignored.
3 Internal claims settlement expenses have been included in ‘net claims’.
4 The above figures are stated before members’ agents’ fees.
5 Profit after illustrative profit commission and personal expenses is shown in dollars and converted to sterling at the closing rate.
6 Gross and net premium amounts shown above are net of brokerage expenses.
7 The summary of closed years results are on a 'pure year' basis.
Summary of closed year results (unaudited)
at 31 December 2025
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Beazley | Syndicate 4321 Annual report 2025 www.beazley.com
Managing agent's corporate information
Beazley Furlonge Limited has been the managing agent of Syndicate 4321 throughout the period covered by this report and the
registered office is 22 Bishopsgate, London, EC2N 4BQ, United Kingdom.
Directors
R A Stuchbery* - Chair
R S Anarfi - (resigned 28/02/2025)
P J Bantick - (resigned 17/03/2025)
W W E Barkholt* - (appointed 01/01/2025)
R J Clark*
A P Cox - (resigned 18/03/2025)
M E Diacon - (appointed 10/03/2025)
B J Greenwood - (appointed 18/03/2025)
G A Hayes - (appointed 13/03/2025)
A J Reizenstein* - (resigned 30/04/2025)
L Santori*
K J Somasundaram* - (appointed 03/11/2025)
N Wall*
C C J Wong
* Non-Executive Director.
Active underwriter & Run-off manager
W J F Roscoe
Company secretary
R Yeoman
Managing agent’s registered office
22 Bishopsgate
London
EC2N 4BQ
United Kingdom
Registered number
01893407
Syndicate number
4321
Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Banker
Deutsche Bank AG
Winchester House
London
1 Great Winchester Street
EC2N 2DB
www.beazley.com Beazley | Syndicate 4321 Annual report 2025
53
Beazley Furlonge Limited
Syndicate 4321 at Lloyd’s
22 Bishopsgate
London
EC2N 4BQ
T +44 (0)20 7667 0623
info@beazley.com
www.beazley.com
Syndicate 4321
annual report 2025
investor.relations.beazley.com
