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Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
1
Lloyd’s Syndicate
Syndicate1996
Annual Report and Accounts for the year ended
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
2
Contents
Directors and Administration
...........................................................................................................
3
Managing Agent’s Report
................................................................................................................
4
Statement of Managing Agent’s Responsibilities
.............................................................................
8
Independent Auditor’s Report to the Members’ of Syndicate 1996
..................................................
9
Statement of profit or loss and other comprehensive income
........................................................
13
Balance sheet – Assets
.................................................................................................................
15
Balance sheet (cont’d) – Liabilities
................................................................................................
16
Statement of changes in members’ balances
................................................................................
17
Statement of cash flows
................................................................................................................
18
Notes to the financial statements
..................................................................................................
19
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
3
Directors and Administration
Managing agent
Registered office
Grange Park,
Bishop's Cleeve,
Cheltenham, England,
GL52 8YQ
Registered number
03935227
Directors
P D Andrews
M J Bishop (resigned 13 Mar 2025)
I J Bremner*
K D Curtis*
J A Hummerston (resigned 19 Feb 2025)
C E Layton (appointed 03 Jan 2025)
S Minshall
G H J Nokes (appointed 13 Mar 2025)
R M Richardson-Bunbury
M Sebold-Bender*
P R Smith
Z Szalkai
P I Wooldridge
*Independent non-executive director
Company Secretary
L Robinson (appointed 6 Oct 2025)
P M Laws (resigned 15 Sep 2025)
Syndicate
Active Underwriter
S Jefferys
Bankers
Barclays Bank – London
Investment manager
Payden & Rygel
Auditors
PKF Littlejohn LLP
Statement of actuarial opinion signing actuary
PKF Littlejohn LLP
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
4
Managing Agent’s Report
The Directors of PMA, the Managing Agent, present their report for Syndicate 1996 ("the Syndicate") for the
year ended 31 December 2025.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and the Lloyd’s Syndicate Accounts
Instructions V3.1 as modified by the Frequently Asked Questions V1.1 issued by Lloyd’s (the Syndicate
Accounts Instructions).
Effective 1 January 2025, the Syndicate has changed its presentational currency from Pounds Sterling (GBP)
to US Dollars (USD). The Syndicate’s functional currency is USD, the currency of the primary economic
environment in which the Syndicate operates. Presenting in USD provides a more relevant and meaningful view
of the Syndicate’s performance and financial position.
Results
The result for the year ended 31 December 2025 is a profit of $2.3m (2024: $0.1m loss).
Principal activities
The principal activity of Syndicate 1996 is the underwriting of Property Insurance in the Lloyd’s market.
The Syndicate exclusively underwrites wildfire-exposed commercial property risks located in California,
spanning a broad range of occupancies. Business is currently accepted by the Syndicate via a binding authority
agreement with Wildfire Defense Insurance Services, Inc (“WDIS”), a Lloyd’s approved coverholder. This
arrangement enables efficient access to the target market and supports the Syndicate’s strategic focus on
wildfire-related exposures.
Management of the Syndicate
Polo Managing Agency Limited (“PMA”) is the Managing Agency for the Syndicate.
The Managing Agent is a wholly owned subsidiary of Marco Capital Holdings (UK) Limited.
Review of financial performance
The key financial indicators for the year ended 31 December 2025 were as follows:
Key performance indicators
2025
2024
$m
$m
Gross premiums written
12.3
13.9
Net written premium
9.0
10.3
Net premiums earned
9.9
6.5
Net claims incurred
1.4
0.9
Net operating expenses
6.3
5.7
Profit / (Loss) for the financial year
2.3
(0.1)
Net annual accounting ratios
2025
2024
%
%
Claims ratio
14.6
13.9
Expense ratio
63.4
87.7
Combined ratio
78.0
101.6
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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The Syndicate’s 2024 underwriting year completed underwriting on 30 June 2025 and the 2025 underwriting
year incepted on 1 July 2025. Written premium of $12.3m relates to both underwriting years of account $7.3m
and $5m, respectively.
Claims activity for the year has been driven by a water damage loss incurred during the Palisades Fire in
January 2025, total incurred claims in relation to this event are $1.1m.
Net operating expenses of $6.3m include $0.7m payments to Wildfire Defence Systems, Inc. (“WDS”) response
service. The well-established WDS response service provides wildfire mitigation and loss intervention across
22 U.S. states.
Principal risks and uncertainties
The Managing Agent has a Risk Management Function for the Syndicate with clear terms of reference from the
Board of Directors, its committees, including the Audit and Risk committees. The Board approves the risk
management policies and meets regularly to approve commercial, regulatory and organisational requirements
of such policies. The Board reviews and approves its risk appetite annually.
The Risk Management Function has implemented a Board approved Risk Management Framework to enable
the ongoing identification, assessment and management (mitigation, monitoring and reporting) of risks and is
also responsible for producing the Syndicate’s Own Risk and Solvency Assessment (‘ORSA’); recommending
the assessment to the Board for approval.
The principal risks and uncertainties facing the Syndicate are set out below. Additional information regarding
how the Syndicate manages risk, including capital management is disclosed in Note 4 to these financial
statements.
Insurance risk
The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit payments
or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims,
actual benefits paid and subsequent development of long–term claims. The objective of the Syndicate is to
ensure that sufficient reserves are available to cover these liabilities.
The Board manages insurance risk by agreeing its appetite for these risks annually through the business plan,
which sets out targets for volumes, pricing, line sizes and retention. The Syndicate purchases reinsurance as
part of its risk mitigation programme.
The Syndicate Management Committee (“SMC”) monitors performance against the business plan on a quarterly
basis. Reserve adequacy is monitored through quarterly review by the Syndicate Actuary and the Reserving
and Syndicate Management Committee.
Credit risk
Credit risk relates to the risk of default on the settlement of balances receivable by the Syndicate. The
Syndicate’s reinsurers represent the principal sources of this risk.
This risk is actively managed by the policies,
procedures and controls overseen by Management. The Syndicate has reinsurance with highly rated or
reputable reinsurers.
Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations due to a short-term
shortfall in available funds. A number of processes are followed by the Managing Agent to further mitigate
against the risk of the Syndicate being unable to settle its obligations as they fall due.
Market risk
The key aspect of market risk is that the Syndicate incurs losses on foreign exchange movements as a result
of mismatches between the currencies in which assets and liabilities are denominated. Currency matching is
reviewed by Management quarterly. Where there is a significant mismatch, the Managing Agent seeks to
mitigate the risk through buying or selling currency, where this is appropriate.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The extent of any price fluctuation is driven by the portfolio duration and
changes in interest rate spreads. The investment portfolio duration is managed so as to be slightly less than the
duration of claims payments and spread risk is mitigated by investment guidelines which place limits on the
amounts that can be invested with different grades of counterparty.
Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate. Risks include
those from information security (including cyber) and technology related activities, legal and regulatory, financial
reporting, and financial crime as well as those from operations, outsourcing and change. The Managing Agent
seeks to manage this risk through its governance structure and internal control framework as well as business
processes (including business continuity and resilience plans).
Regulatory risk
The Managing Agent is required to comply with the requirements of the Prudential Regulation Authority (“PRA”)
and Financial Conduct Authority (“FCA”) and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s
market by overseas regulators, particularly in respect of US situs business. Regulatory risk is the risk of loss
owing to a breach of regulatory requirements or failure to respond to regulatory change.
The Managing Agent has a Compliance Function that monitors regulatory developments and assesses the
impact on the Managing Agent’s policies. The compliance function reports regularly to the Board which has
ultimate responsibility for ensuring compliance with applicable laws and regulations.
Conduct risk
Conduct risk is the risk that the Syndicate fails to pay appropriate regard to the interest of its customers and/or
fails to treat them fairly at all times. Conduct risk is managed through the application of strong internal controls,
compliance policies and procedures, and through the monitoring of various conduct risk metrics
Future developments
The Syndicate will continue to transact the current class of insurance business, seeking growth where
underwriting criteria is within the risk appetite. If opportunities arise to write new classes of business, these will
be investigated at the appropriate time.
Environmental matters
The Syndicate is aligned to Wildfire Defense companies which follow an environmental professional services
model that aligns with wildfire as an evolving environmental impact. Wildfire Defense companies work as a
system to support ESG goals with respect to achieving a significant reduction of wildfire loss.
Keeping carbon from being released into the environment is a major strategic goal for leading insurance
companies, reinsurance companies and syndicates. Lloyd's continues with a clear net-zero commitment for the
Corporation and a commitment to lead the market to a net-zero underwriting position through the championing
of new products and services which accelerate these targets. Wildfire Defense companies and the Syndicate
play a key strategic role in the achievement of that long-term objective for Lloyd’s.
The Syndicate is uniquely positioned to facilitate the transfer of wildfire risk exacerbated by climate change. As
climate change leads to an increase in wildfires, the demand for protection against such events will rise. As a
specialist provider of wildfire related insurance products Wildfire Defense Insurance Services, Inc. has launched
a dedicated wildfire only product, which is being written in the Syndicate. Supported by Wildfire Defense
Systems' fire response and risk mitigation services, the Syndicate is well-equipped to offer both insurance
coverage and physical risk protection.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
7
Directors
Details of the Directors of the Managing Agent who served during the period and up to the date of signing of
the Syndicate Annual Report and Accounts are provided on page 3 in the Directors and Administration section.
Disclosure of information to the auditors
The Directors of the Managing Agent at the time the report is approved confirm that:
•
So far as each of them is aware, there is no relevant audit information, being information needed by
the Syndicate’s auditor in connection with the auditor’s report, of which the auditor is unaware; and
•
Having made enquiries of fellow Directors of the Managing Agency and the Syndicate’s auditor, each
director has taken all the steps that he or she ought to have taken as a director to become aware of
any relevant audit information and to establish that the Syndicate’s auditor is aware of that information.
Auditors
Pursuant to Section 14 (2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008, PKF Littlejohn LLP will continue in office.
On behalf of the Board
G H J Nokes
Director
17 February 2026
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Statement of Managing Agent’s Responsibilities
The Managing Agent is responsible for preparing the Syndicate annual report and accounts in accordance with
applicable laws and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the
Managing Agent to prepare Syndicate annual report and accounts at 31 December each year in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). The Syndicate annual reports and accounts are required by law to give a true and fair view of
the state of affairs of the Syndicate as at that date and of its profit or loss for that year.
In preparing the Syndicate annual report and accounts, the Managing Agent is required to
•
Select suitable accounting policies which are applied consistently;
•
Make judgements and estimates that are reasonable and prudent;
•
State whether applicable UK accounting standards have been followed, subject to any material
departures disclosed and explained in the notes to the Syndicate annual accounts;
•
Prepare the Syndicate annual report and accounts on the basis that the Syndicate will continue to write
future business unless it is inappropriate to presume that the Syndicate will do so; and
•
Prepare and review of the iXBRL tagging that has been applied to the Syndicate Accounts in
accordance with the instructions issued by Lloyd’s, including designing, implementing and maintaining
systems, processes and internal controls to result in tagging that is free from material non-compliance
with the instructions issued by Lloyd’s, whether due to fraud or error.
The Managing Agent is responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Syndicate and enable it to ensure that the Syndicate annual
report and accounts comply with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008. It is also responsible for safeguarding the assets of the Syndicate and hence for taking
reasonable steps for prevention and detection of fraud and other irregularities.
The Managing Agent is responsible for the maintenance and integrity of the corporate and financial information
included on the business’ website. Legislation in the United Kingdom governing the preparation and
dissemination of annual accounts may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge the Syndicate Report and Accounts, including the iXBRL tagging
applied to these accounts, comply with the requirements of the Lloyd’s Syndicate Accounts Instructions V3.1
as modified by the Frequently Asked Questions V1.1 issued by Lloyd’s.
On behalf of the Board
G H J Nokes
Director
17 February 2026
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Independent auditor’s report to the members’ of Syndicate 1996
Opinion
We have audited the Syndicate Annual Accounts of Syndicate 1996 (the ‘Syndicate’) for the year ended 31
December 2025 which comprise the Statement of profit or loss and other comprehensive income, the Balance
sheet, the Statement of changes in members' balances, the Statement of cash flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 103 "Insurance Contracts"
(United Kingdom Generally Accepted Accounting Practice), and the Lloyd's Syndicate Accounts Instructions
version 3.1 as modified by the Frequently Asked Questions version 1.1 issued by Lloyd's (the Syndicate
Accounts Instructions).
In our opinion, the Syndicate Annual Accounts:
•
give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2025 and of its 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 requirements within Lloyd’s Syndicate
Accounts Instructions Version 3.1 as modified by the Frequently Asked Questions Version 1.0 issued
by Lloyd’s (the “Lloyd’s Syndicate Accounts Instructions”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate
Accounts
Instructions
and other applicable law. Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the Syndicate Annual Accounts section of our report. We are
independent of the Syndicate in accordance with the ethical requirements that are relevant to our audit of the
Syndicate Annual Accounts in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Other Matter
This report may be included within a document to which iXBRL tagging has been applied. This auditor’s report
provides no assurance over whether the iXBRL tagging has been applied in accordance with the Lloyd’s
Syndicate Accounts Instructions.
Conclusions relating to going concern
In auditing the Syndicate Annual Accounts, we have concluded that the managing agent’s use of the going
concern basis of accounting in the preparation of the Syndicate Annual Accounts is appropriate.
Based upon the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Syndicate’s ability to continue as
a going concern for a period of at least twelve months from when the Syndicate Annual Accounts are authorised
for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Other information
The other information comprises the information included in the Syndicate Annual Report and Accounts, other
than the Syndicate Annual Accounts and our auditor’s report thereon.
The managing agent is responsible for the other information contained within the Syndicate Annual Report and
Accounts. Our opinion on the Syndicate Annual Accounts does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the Syndicate Annual Accounts or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the Syndicate
Annual Accounts themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the managing agent’s report for the financial year for which the Syndicate
Annual Accounts are prepared is consistent with the Syndicate Annual Accounts; and
•
the managing agent’s report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Syndicate and its environment obtained in the course of
the audit, we have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters in relation to which the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you if, in our
opinion:
•
adequate accounting records have not been kept on behalf of the Syndicate; or
•
the Syndicate Annual Accounts are not in agreement with the accounting records and returns; or
•
certain disclosures of managing agent emoluments and other benefits specified by law are not made;
or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the statement of managing agent’s responsibilities, the managing agent is responsible
for the preparation of the Syndicate Annual Accounts and for being satisfied that they give a true and fair view
and for such internal control as the managing agent determines is necessary to enable the preparation of
Syndicate Annual Accounts that are free from material misstatement, whether due to fraud or error.
In preparing the Syndicate Annual Accounts, the managing agent is responsible for assessing the Syndicate’s
ability to continue to write new business, disclosing, as applicable, matters related to its ability to continue to
operate and using the going concern basis of accounting, unless the managing agent intends to cease to
operate the Syndicate or has no realistic alternative but to do so.
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.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
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Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
•
We obtained an understanding of the Syndicate and the insurance sector in which it operates to identify
laws and regulations that could reasonably be expected to have a direct effect on the Syndicate Annual
Accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions. We obtained our understanding in this
regard through discussions with management, industry research and the application of our cumulative audit
knowledge and experience of the insurance sector.
•
We determined the principal laws and regulations relevant to the Syndicate in this regard to be those arising
from the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), Lloyd’s of London
and the Insurance Accounts Directive (Lloyd’s Syndicates and Aggregate Accounts) Regulations 2008, and
the financial reporting framework (UK GAAP).
•
The Syndicate operates in the insurance industry which is a highly regulated environment. As such the
Senior Statutory Auditor considered the experience and expertise of the engagement team to ensure that
the team has the appropriate competence and capabilities to perform the audit.
•
We designed our audit procedures to ensure the audit team considered whether there were any indications
of non-compliance by the Syndicate with those laws and regulations. These procedures included, but were
not limited to:
o
agreement of the Syndicate Annual Accounts disclosures to underlying supporting documentation;
o
enquiries of management and review of minutes of Board, committee and management meetings
throughout the period;
o
understanding the Syndicate’s policies and procedures in monitoring compliance with laws and
regulations;
o
inspection of correspondence with Lloyd’s of London, the PRA and FCA; and
o
reviewing compliance reports and internal audit reports relating to the Syndicate.
•
We also identified possible risks of material misstatement of the Syndicate Annual Accounts due to fraud;
in particular:
o
We considered that there is a rebuttable presumption that there is a significant fraud risk over revenue
recognition. We did not consider fraud over the accuracy of revenue to be a significant risk for
transactions that have been processed during the period whilst no fraud risk was identified, we
challenged the seasonality assumptions made by management in deriving the earning patterns.
o
We considered that there was potential for management bias in the reporting of events and
transactions in the Syndicate Annual Accounts relating to the valuation of technical provisions and the
calculation of the reinsurer’s share of technical provisions. To address this, we involved actuarial
specialists to assist us in challenging the assumptions and judgements made by management when
auditing those significant accounting estimates. This included performing independent projections on
the 2023 and 2024 year of account reserves and comparing to management reserves.
o
As in all of our audits, we addressed the risk of fraud arising from management override of controls
by performing audit procedures which included, but were not limited to, the testing of journals,
reviewing accounting estimates for evidence of bias and evaluating the business rationale of any
significant transactions that were unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the Syndicate Annual Accounts or non-compliance with laws and
regulations. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the Syndicate Annual Accounts, as we will be less likely to become aware of
instances of non-compliance. This risk is also greater regarding irregularities occurring due to fraud rather than
error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the Syndicate Annual Accounts is located on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of
our auditor’s report.
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Use of our report
This report is made solely to the Syndicate’s members, as a body, in accordance with Part 2 of the Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.
Our audit work has been
undertaken so that we might state to the Syndicate’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the Syndicate and the Syndicate's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Cheryl Mason
(Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
17 February 2026
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Statement of profit or loss and other comprehensive income
Technical account – General business
For the year ended 31 December 2025
Note
2025
$000
2024
$000
Gross premiums written
5
Outwards reinsurance premiums
(3,236 )
(3,589 )
Premiums written, net of reinsurance
Changes in unearned premium
15
Change in the gross provision for unearned premiums
(2,935 )
Change in the provision for unearned premiums reinsurers’ share
(866 )
Net change in provisions for unearned premiums
(3,801 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
9
Claims paid
15
Gross amount
(1,303 )
(191 )
Net claims paid
(1,303 )
(191 )
Change in the provision for claims
15
Gross amount
(77 )
(978 )
Reinsurers’ share
(63 )
Net change in provisions for claims
(140 )
(719 )
Claims incurred, net of reinsurance
(1,443 )
(910 )
Net operating expenses
6
(6,262 )
(5,687 )
Balance on the technical account – general business
(93 )
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
14
Statement of profit or loss and other comprehensive income (cont.)
Non-technical account – General business
For the year ended 31 December 2025
Note
2025
2024
$000
$000
Balance on the technical account – general business
(93 )
Investment income
9
Realised gains on investments
Unrealised gains/(losses) on investments
9
Investment expenses and charges
(3 )
Total investment return
Allocated investment return transferred to the general business
technical account
(106 )
(38 )
Gain/(Loss) on foreign exchange
(15 )
Profit / (loss) for the financial year
(108 )
Other comprehensive income
Total comprehensive profit / (loss) for the year
(108 )
The accompanying notes from page 19 to 40 form an integral part of these financial statements.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
15
Balance sheet – Assets
As at 31 December 2025
Note
2025
2024
(restated)
$000
$000
Financial investments
Investments
10
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
15
Debtors arising out of direct insurance operations
11
Other debtors
12
Debtors
Cash at bank and in hand
18
Other assets
Deferred acquisition costs
13
Other prepayments and accrued income
Prepayments and accrued income
Total assets
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
16
Balance sheet (cont’d) – Liabilities
As at 31 December 2025
Note
2025
2024
$000
$000
Members’ balances
(1,335 )
Total capital and reserves
(1,335 )
Provision for unearned premiums
Claims outstanding
Technical provisions
15
Creditors arising out of direct insurance operations
16
Other creditors including taxation and social security
17
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The Syndicate financial statements on pages 13 to 40 were approved by the board of Directors of Polo
Managing Agency Limited on 16 February 2026 and were signed on its behalf by:
G H J Nokes
Director
17 February 2026
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
17
Statement of changes in members’ balances
For the year ended 31 December 2025
2025
2024
$000
$000
Members’ balances brought forward at 1 January
(1,335 )
(1,140 )
Total recognised gains / (losses) for the period
(108 )
Members agent fees
(75 )
(87 )
Members’ balances carried forward at 31 December
(1,335 )
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
18
Statement of cash flows
For the year ended 31 December 2025
Note
2025
2024
$000
$000
Cash flows from operating activities
Profit/(Loss) for the financial year
(108 )
Adjustments:
(Decrease)/Increase in gross technical provisions
(443 )
(Increase)/decrease in reinsurers’ share of gross technical provisions
(245 )
(Increase) in debtors
(315 )
(380 )
(Decrease)/Increase in creditors
(829 )
Movement in other liabilities
(117 )
(881 )
Investment return
(106 )
(38 )
Foreign exchange
(19 )
(5 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(819 )
(1,584 )
Sale of equity and debt instruments
Investment income received
Net cash flows from investing activities
(1,542 )
Cash flows from financing activities
Loan proceeds
-
1,479
Loan repayments
(500)
(2,079)
Other cash flows from financing activities
(500 )
(600 )
Net cash flows from financing activities
(500 )
(600 )
Net (decrease) increase in cash and cash equivalents
(33 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
Cash and cash equivalents at the end of the year
18
The accompanying notes from page 19 to 40 form an integral part of these financial statements
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
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Notes to the financial statements – (Forming part of the financial
statements)
1. Basis of preparation
Syndicate
1996 (‘The Syndicate’) comprises a member of the Society of Lloyd's that underwrites insurance
business in the London Market. The address of the Syndicate’s managing agent is 'Grange Park', Bishop's
Cleeve, Cheltenham, England, GL52 8YQ.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and the Lloyd’s Syndicate Accounts
Instructions V3.1 as modified by the Frequently Asked Questions V1.1 issued by Lloyd’s (the Syndicate
Accounts Instructions).
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value
through profit or loss.
The financial statements are presented in US Dollars, the functional currency of the Syndicate is US Dollars
which is the currency of the primary economic environment in which the Syndicate operates.
Effective 1 January 2025, the Syndicate has changed its presentational currency from Pounds Sterling (GBP)
to US Dollars (USD). The Syndicate’s functional currency is USD, the currency of the primary economic
environment in which the Syndicate operates. Presenting in USD provides a more relevant and meaningful view
of the Syndicate’s performance and financial position.
During Q1 2026, Lloyd’s advised that overseas deposits should be classified as ‘financial investments’ rather
than ‘other assets’, as the taxonomy does not support tagging the required risk. As a result, certain financial
statement line items have been reclassified whilst the underlying amounts remain unchanged. The principal
change is the reclassification of overseas deposits of $5k as part of the investments, previously shown as a
separate balance sheet item, to form part of the Other assets. Investments have been restated to $1,585k
(previously £1,264k) and Other assets decreased from £4k to nil.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Going concern
The Syndicate has financial resources to meet its financial needs and manage its portfolio of insurance risk.
The directors have continued to review the business plans, liquidity and operational resilience of the Syndicate
and are satisfied that the Syndicate is well positioned to manage its business risks in the current economic
environment. The Syndicate 2026 year of account has opened. The Syndicate has sufficient capital in its Funds
at Lloyd’s (“FAL”). There is no intention to cease underwriting or cease the operations of the Syndicate.
Accordingly, the directors of the Managing Agent continue to adopt the going concern basis in preparing the
report and financial statements.
2.
Use of judgements and estimates
In preparing these financial statements, the directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses. The Syndicate makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The
following significant estimates have been made in applying the Syndicate’s accounting policies:
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
20
Insurance contract technical provisions
For insurance contracts, estimates of the claim provisions (referred to as Claims Outstanding in the accounts)
comprise the expected cost of claims incurred and reported at the valuation date (outstanding claims), further
development of these claims (incurred but not enough reported or “IBNER”) and those claims that have been
incurred but not yet reported (“IBNR”) at the valuation date. IBNR and IBNER are commonly referred to
collectively as IBNR.
It can take a significant period of time before the ultimate claims cost can be established
with a high degree of certainty and for some types of policies, IBNR claims form the majority of the liability in
the statement of financial position.
The IBNER and IBNR provisions are estimated by using a range of standard actuarial claims projection
techniques, together with benchmarking certain books of business to available market data. The main
assumption underlying these techniques is that historical claims development patterns can be used to project
future claims development and hence ultimate claims costs. Where this assumption is not believed to hold,
judgement has been applied to estimate the expected future claims costs based on the latest available
information.
The provision for outstanding claims is assessed on an individual case basis and is based on the estimated
ultimate cost of all claims notified but not settled by the balance sheet date, together with the provision for
related claims handling costs.
Written and earned premium
Written premium is recognised based on the policy inception date and then earned according to the risk profile
which reflects any seasonality of exposed perils. Seasonality assumptions have been supplied by the WDS
team and agreed with the actuarial team. Written outwards reinsurance premium ceded are recognised as
earned according to the coverage period and in line with the risk profile to which the inwards business being
protected relates (i.e. seasonally).
3. Significant accounting policies
The following significant accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Syndicate’s financial statements.
A. Premiums written
Gross premiums written reflect direct and inwards reinsurance business written during the period, gross of
commission payable to intermediaries, and exclude any taxes or duties based on premiums. Premiums written
include estimates for ‘pipeline’ premiums representing amounts due to the Syndicate not yet notified and
adjustments to estimates of premiums written in previous periods.
Estimated premium income in respect of facility contracts, for example binding authorities and lines slips, are
deemed to be written in a manner that reflects the expected profile of the underlying business which has been
written. Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for
the related direct or inwards business being reinsured. The earned proportion of premiums is recognised as
income. Premiums are earned from the date of attachment of risk over the indemnity period based on the pattern
of the risks underwritten.
B. Unearned premiums
The provision for unearned premiums comprises the proportion of gross premiums written which is estimated
to be earned in the following or subsequent financial periods. Written premium is earned according to the risk
profile of the policy. Unearned premiums represent the proportion of premiums written in the period that relate
to unexpired terms of policies in force at the balance sheet date, calculated on the basis of established earnings
patterns based on seasonality and time apportionment, as appropriate.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
21
C. Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such
as brokerage and commission, and indirect costs such as administrative expenses connected with the
processing of proposals and the issuing of policies. The deferred acquisition cost asset represents the
proportion of acquisition costs which corresponds to the proportion of gross premiums written that is unearned
at the balance sheet date.
D. Reinsurance
The Syndicate cedes reinsurance in the normal course of business. Reinsurance premiums ceded and
reinsurance recoveries on claims incurred are included in the respective expense and income accounts.
Premiums ceded and claims reimbursed are presented on a gross basis in the technical account and balance
sheet as appropriate.
Reinsurance outwards premiums are earned according to the coverage period and in line with the risk profile to
which the inwards business being protected relates (i.e. seasonality).
Reinstatement premiums on both inwards and outwards business are accreted to the technical account on a
pro-rata basis over the term of the original policy to which they relate.
E.
Claims provisions and related reinsurance recoveries
Claims incurred comprise claims and claims handling expenses (both internal and external) paid in the period
and the movement in provision for outstanding claims and settlement expenses. The Syndicate does not
discount its liability for outstanding claims nor the reinsurance share of outstanding claims.
Outstanding claims include an allowance for the cost of claims incurred by the balance sheet date but not
reported until after the period end (IBNR). The liability for outstanding claims is estimated using the input of
assessments for individual cases reported to the Syndicate and widely accepted actuarial techniques for the
claims incurred but not reported (IBNR). The amount included in respect of IBNR is based on statistical
techniques of estimation applied by actuaries. These techniques generally involve projecting using Lloyd's
market statistics, the development of claims over time, to form a view of the likely ultimate claims to be
experienced for more recent underwriting, having regard to variations in the business accepted and the
underlying terms and conditions. The provision for claims also includes amounts in respect of internal and
external claims handling costs. For the most recent years, where a high degree of volatility arises from
projections, estimates may be based in part on output from rating and other models of the business accepted
and assessments of underwriting conditions. An element of IBNR also relates to specific large losses, such as
catastrophe events where applicable.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and
projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in
place for the class of business, the claims experience for the period and the current security rating of the
reinsurance companies involved. A number of statistical techniques are used to assist in making these
estimates.
Reinsurance assets are assessed for impairment at each balance sheet date. A reinsurance asset is deemed
impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that the
Syndicate may not recover all amounts due, and that event has a reliably measurable impact on the amount
that the Syndicate will receive from the reinsurer. Impairment losses are recognised in profit or loss in the period
in which the impairment loss is recognised.
F.
Unexpired risks provision
Provision is made for unexpired risks arising from general insurance contracts where the expected value of
claims and expenses attributable to the unexpired periods of policies in force at the balance sheet date exceeds
the unearned premiums provision in relation to such policies (after the deduction of any deferred acquisition
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
22
costs). The provision for unexpired risks is calculated by reference to classes of business which are managed
together. No unexpired risk provision has been made at the Balance Sheet date.
G. Foreign currencies
Foreign currency transactions are translated into the functional currency using the exchange rate at the date of
transaction.
At each period end, foreign currency monetary items are translated using the closing rate. For this purpose, all
assets and liabilities arising from insurance contracts (including unearned premiums, deferred acquisition costs,
and unexpired risk provisions) are monetary items.
Monetary items - Foreign exchange gains and losses resulting from the settlement of transactions and from the
translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the non-technical account.
Non-monetary items measured at historical cost and non-monetary items measured at fair value are measured
using the exchange rate when the fair value was determined.
H.
Financial assets and liabilities
The full provisions of FRS 102 have been applied to the treatment of financial instruments. The accounting
classification of financial assets and liabilities determines their basis of measurement and how changes in those
values are presented in the profit or loss or other comprehensive income. These classifications are made at
initial recognition, and subsequent reclassification is only permitted in restricted circumstances.
i.
Classification
The accounting classification of financial assets and liabilities determines the way in which they are measured
and changes in those values are presented in the statement of profit or loss and other comprehensive income.
Financial assets and liabilities are classified on their initial recognition.
The initial classification of a financial instrument shall take into account contractual terms including those relating
to future variations. Once the classification of a financial instrument is determined at initial recognition,
re-assessment is only required subsequently when there has been a modification of contractual terms that is
relevant to an assessment of the classification.
Financial assets and financial liabilities at fair value through profit and loss comprise financial assets and
financial liabilities designated as such on initial recognition. Investments in shares and other variable yield
securities, units in unit trusts, and debt and other fixed income securities are designated as at fair value through
profit or loss on initial recognition, as they are managed on a fair value basis in accordance with the Syndicate’s
investment strategy.
The Syndicate does not hold any derivatives.
ii.
Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Syndicate’s contractual rights to the cash flows from the
financial assets expire or if the Syndicate transfers the financial asset to another party without retaining control
of substantially all risks and rewards of the asset. A financial liability is derecognised when its contractual
obligations are discharged, cancelled or expired.
Purchases and sales of financial assets are recognised and derecognised, as applicable, on the trade date, i.e.
the date that the Syndicate commits itself to purchase or sell the asset.
iii. Measurement
A financial asset or financial liability is measured initially at fair value, plus, for a financial asset or financial
liability not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or
issue.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
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Subsequently, financial assets at fair value through profit or loss are measured at fair value with fair value
changes recognised immediately in profit or loss. Net gains or net losses on financial assets measured at fair
value through profit or loss includes foreign exchange gains/losses arising on their translation to the functional
currency but excludes interest.
Impairment losses and foreign exchange gains or losses are reported in profit or loss. Other fair value changes
are recognised in other comprehensive income (“OCI”). Any gain or loss recognised in OCI will be recycled to
profit and loss on derecognition of the asset.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using the effective
interest method.
iv. Identification
and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not at
fair value through profit or loss are impaired. Financial assets are impaired when objective evidence
demonstrates that a loss event has occurred after the initial recognition of an asset, and that the loss event has
an impact on the future cash flows on the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention of
the Syndicate about any significant financial difficulty of the issuer, or significant changes in the technological,
market, economic or legal environment in which the issuer operates.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between the carrying amount, and the present value of the estimated future cash flows discounted at the asset’s
original effective interest rate. Individually significant financial assets are tested for impairment on an individual
basis. The remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.
v.
Off-setting
Debtors/creditors arising from reinsurance operations shown in the balance sheet include the totals of all
outstanding debit and credit transactions as processed by the Lloyd’s central facility. No account has been taken
of any offsets which may be applicable in calculating the net amounts due between the Syndicate and each of
its counterparty insureds, reinsurers or intermediaries as appropriate.
Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when,
and only when, the Syndicate has a legal right to set off the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
I.
Investment return
Investment return comprises interest income and movements in gains and losses on financial instruments at
fair value through profit or loss, less investment management expenses, interest expense, realised losses and
impairment losses.
Movements in unrealised investment gains and losses comprise the increase/decrease in the reporting period
in the value of the investments held at the reporting date and the reversal of previously recorded unrealised
investment gains.
Investment return is initially recorded in the non-technical account. The return is transferred in full to the general
business technical account to reflect the investment return on funds supporting underwriting business.
J.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less
from the acquisition date that are subject to an insignificant risk of changes in fair value and are used by the
Syndicate in the management of its short-term commitments.
Cash and cash equivalents are carried at amortised cost in the statement of financial position.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
24
Bank overdrafts that are repayable on demand and form an integral part of the Syndicate’s cash management
are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
K. Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax
from trading income. In addition, all UK basic rate income tax deducted from Syndicate investment income is
recoverable by managing agents and consequently the distribution made to members or their members’ agents
is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the period 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.
L. Pension costs
No pension costs are directly borne by the Syndicate.
M. Prepayments and accrued income
Prepayments are payments made in advance for services to be received in future periods. These are initially
recognised as assets in the balance sheet and are amortised over the period to which they relate. The expense
is recognised in the income statement as the benefits are received.
Accrued income represents income that has been earned but not yet received by the end of the accounting
period. This is recognised as an asset in the balance sheet and the corresponding investment income is
recorded in the income statement for the period in which it is earned.
N. Operating expenses
Where expenses are incurred by the Managing Agent for the administration of the Syndicate, these expenses
are apportioned appropriately based on type of expense, and allocated to the year of account for which they
are incurred.
O. Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract
holders. Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified
as debt instruments as they are non-derivative financial assets with fixed or determinable payments that are not
quoted on an active market. Insurance and reinsurance debtors are measured at amortised cost less any
provision for impairments. Insurance and reinsurance creditors are stated at amortised cost. The Syndicate
does not have any debtors directly with policyholders, all transactions occur via an intermediary. Reinsurance
creditors are primarily premiums payable for reinsurance contracts and are recognised as an expense when
due. Reinsurance debtors principally relate to claims recoveries where the underlying claim has been settled,
and the recovery is due.
Other debtors principally consist of amounts due from members and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to other related entities and other sundry payables. These
are stated at amortised cost determined using the effective interest rate method.
P.
Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument.
All of the Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk
and therefore are recognised as insurance contracts.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
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25
4.
Risk and capital management
Introduction and overview
This note presents information about the nature and extent of insurance and financial risks to which the
Syndicate is exposed, the Managing Agent’s objectives, policies and processes for measuring and managing
insurance and financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Board of Directors of the Managing Agent has overall responsibility for the establishment and oversight of
the Syndicate’s risk management framework. The Board has established a Risk Committee to oversee the
operation of the Syndicate’s risk management framework and to review and monitor the management of the
risks to which the Syndicate is exposed. The Risk Committee has delegated oversight of the management of
aspects of insurance risks to the Underwriting and Reserving Committee, which is responsible for developing
and monitoring insurance risk management policies, and the management of aspects of financial risks to the
Investment Committee, which is responsible for developing and monitoring financial risk management policies.
The Risk Committee reports regularly to the Board of Directors on its activities. The Underwriting and Reserving
Committee report regularly to the Risk Committee on their activities.
The risk management policies are established to identify and analyse the risks faced by the Syndicate,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
A. Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities.
The insurance risk the Syndicate is exposed can be separated into underwriting risk and reserve risk.
i. Underwriting risk
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future insurance losses
and associated expenses. This includes the risks that the premium is set too low, provides inappropriate levels
of cover, or that the actual frequency or severity of claims events will be significantly higher than was expected
during the underwriting process.
ii. Reserve Risk
Reserving risk is the risk of exposure to the financial consequences of material uncertainty in ultimate claim
payments and expenses.
This risk is mitigated by the Syndicate's Actuarial function using external expertise and recognised actuarial
reserving approaches, coupled with close liaison with claims personnel to identify potential downside risks
before they become apparent in the data. These results are then subject to formal annual external peer review,
the result of which is a Statement of Actuarial Opinion over the reserves held being at least as high as a mean
best estimate. The statement is provided annually to Lloyd’s.
The governance process supporting Syndicate reserving is applied through the SMC, reporting to the Audit
Committee, which is responsible for approving Syndicate reserves quarterly, as delegated by the PMA Board.
The level of booked reserves is subject to an external audit annually.
Claim estimates are sensitive to the actual rate of claims development. If the Syndicate's rate of claim
development is faster than the market, standard methods would overestimate future claims. Conversely, if the
Syndicate's rate of claim development is slower than the market, standard methods would underestimate future
claims. Consideration is given to Lloyd’s risk code data from the Lloyd’s Market Association (“LMA”) where PMA
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
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26
uses risk code triangles to produce development patterns. The provision for claims also includes amounts in
respect of internal and external claims handling costs.
iii. Management of insurance risk
A key component of the management of underwriting risk for the Syndicate is a disciplined underwriting strategy
that is focused on writing quality business and not writing for volume. Product pricing is designed to incorporate
appropriate premiums for each type of assumed risk. The underwriting strategy includes underwriting limits on
the Syndicate’s total exposure to specific risks together with limits on geographical and industry exposures. The
aim is to ensure a well-diversified book is maintained with no over exposure in any one geographical region or
industry.
Contracts can contain a number of features which help to manage the underwriting risk such as the use of
deductibles, or capping the maximum permitted loss, or number of claims (subject to local regulatory and
legislative requirements).
The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event,
including excess of loss, stop loss and catastrophe reinsurance. Where an individual exposure is deemed
surplus to the Syndicate’s appetite additional facultative reinsurance is also purchased.
The SMC, Underwriting and Reserving Committee oversees the management of reserving risk. The use of
proprietary and standardised modelling techniques, internal and external benchmarking, and the review of
claims development are all instrumental in mitigating reserving risk.
The Syndicate Managing Agent’s actuaries perform a reserving analysis on a quarterly basis liaising closely
with underwriters, claims and reinsurance technicians. The aim of this exercise is to produce a probability -
weighted average of the expected future cash outflows arising from the settlement of incurred claims. These
projections include an analysis of claims development compared to the previous ‘best estimate’ projections.
The output of the reserving analysis is reviewed by external consulting actuaries. The Underwriting and
Reserving Committee performs a comprehensive review of the projections, both gross and net of reinsurance.
Following this review the Underwriting and Reserving Committee makes recommendations to the Risk
Committee and the Managing Agent’s Board of Directors of the claims provisions to be established.
Insurance risk includes the risks that a policy will be written for too low a premium or provide inappropriate cover
(underwriting risk), that the frequency or severity of insured events will be higher than expected (claims risk), or
that estimates of claims subsequently prove to be insufficient (reserving risk). The Syndicate manages
insurance risk through the approved business plan, which sets out targets for volumes, pricing, line sizes and
retention by class of business. The Syndicate monitors performance against the business plan through the year
and reviews pricing on an ongoing basis depending on market conditions. Reserve adequacy is monitored
through quarterly review by the PMA Actuarial team and SMC, which meets quarterly.
The claims development table in note number 13 shows the actual claims incurred.
iv. Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies the risk being underwritten and can arise from developments in case
reserving for large losses and catastrophes, or from changes in estimates of claims IBNR.
The following table presents the profit and loss impact of the sensitivity of the value of insurance liabilities
disclosed in the accounts to potential movements in the assumptions applied within the technical provisions.
Given the nature of the business underwritten by the Syndicate, the approach to calculating the technical
provisions for each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse
risk margin to the total insurance liability. The amount disclosed in the table represents the profit or loss impact
of an increase or decrease in the insurance liability as a result of applying the sensitivity. The amount disclosed
for the impact on claims outstanding – net of reinsurance represents the impact on both the profit and loss for
the year and member balance.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
27
General insurance business sensitivities as at 31 December 2025
+5.0%
-5.0%
$000
$000
Claims outstanding – gross of reinsurance
(62 )
Claims outstanding – net of reinsurance
(49 )
General insurance business sensitivities as at 31 December 2024
+5.0%
-5.0%
$000
$000
Claims outstanding – gross of reinsurance
(58 )
Claims outstanding – net of reinsurance
(42 )
B. Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets
are sufficient to fund the obligations arising from its insurance contracts. The goal of the investment
management process is to optimise the risk adjusted investment income and risk adjusted total return by
investing in a diversified portfolio of securities, whilst ensuring that the assets and liabilities are managed on a
cash flow and duration matching basis.
a. Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The Syndicate is exposed to credit risk in respect of the following:
•
Debt securities and derivative financial instruments;
•
Reinsurers’ share of claims outstanding;
•
Amounts due from intermediaries;
•
Amounts due from reinsurers in respect of settled claims; and
•
Cash and cash equivalents.
The Syndicate has a very low appetite for credit risk, as its principal business is to accept insurance risk. This
approach is intended to protect the Syndicate’s capital from erosion from credit risk so that it can meet its
insurance liabilities.
i. Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a single
counterparty, by reference to the credit rating of the counterparty. Financial assets are graded according to
current credit ratings issued by rating agencies such as Standard and Poor’s. The Syndicate has a policy of
investing mainly in government issued and government backed debts. The Syndicate does not currently invest
new monies in speculative grade assets (i.e., those rated below BBB).
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single counterparty
and maintains an authorised list of acceptable cash counterparties.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the individual
business units as part of their credit control processes.
All intermediaries must meet minimum requirements established by the Syndicate. The credit ratings and
payment histories of intermediaries are monitored on a regular basis.
The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating information and by
internal investigations. The impact of reinsurer default is regularly assessed and managed accordingly.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
28
ii. Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The following table analyses the credit rating by investment grade of financial investments, debt securities and
reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in
respect of settled claims, cash and cash equivalents, and other debtors and accrued interest.
Year 2025
AAA
AA
A
BBB
Other
Not
rated
Total
$000
$000
$000
$000
$000
$000
$000
Debt securities and other fixed income securities
Other investments
Reinsurers’ share of claims outstanding
Debtors arising out of direct insurance operations
Cash at bank and in hand
Other debtors and accrued interest
Total
Year 2024 (restated)
AAA
AA
A
BBB
Other
Not
rated
Total
$000
$000
$000
$000
$000
$000
$000
Debt securities and other fixed income securities
Other investments
Reinsurers’ share of claims outstanding
Debtors arising out of direct insurance operations
Cash at bank and in hand
Other debtors and accrued interest
Total
iii. Financial assets that are not past due or impaired
The Syndicate has no financial assets that are past due nor impaired at the reporting date.
Year 2025
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
$000
$000
$000
$000
$000
Debt securities and other fixed income securities
-
Other investments
-
Reinsurers’ share of claims outstanding
-
Debtors arising out of direct insurance operations
-
Cash at bank and in hand
-
Other debtors and accrued interest
-
Total
-
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
29
Year 2024 (restated)
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
$000
$000
$000
$000
$000
Debt securities and other fixed income securities
-
Other investments
-
Reinsurers’ share of claims outstanding
-
Debtors arising out of direct insurance operations
-
Cash at bank and in hand
-
Other debtors and accrued interest
-
Total
-
b. Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its
insurance contracts and financial liabilities. The Syndicate is exposed to calls on its available cash resources
mainly from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i.
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
•
Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance contracts
over the short, medium and long term;
•
Assets purchased by the Syndicate are required to satisfy specified investment management
guidelines;
•
The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts;
•
The Syndicate holds uncommitted borrowing facilities from a highly rated bank to enable cash to be
raised in a relatively short time span in addition to a loan from a related party; and
•
The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid financial
resources are in place to meet obligations as they fall due in the event of reasonably foreseeable
abnormal circumstances.
The Syndicate has benefitted from a loan facility in place with WDS, one of its capital providers to support it
with operational expenses during the startup phase. A $3.4m loan facility was agreed, in order to provide an
additional layer of liquidity, $0.9m is still to be repaid at the year end.
There is also a $1.5m multicurrency overdraft in place, in addition to a $10m trade cycle loan, both of which
remain undrawn.
ii.
Maturity analysis of syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance 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.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
30
Undiscounted net cash flows
Year 2025
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
$000
$000
$000
$000
$000
$000
Claims outstanding
Creditors
Total
Undiscounted net cash flows
Year 2024
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
$000
$000
$000
$000
$000
$000
Claims outstanding
Creditors
Total
C. Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
i.
Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
ii.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio, borrowings and cash and cash
equivalents.
The risk of changes in the fair value of these assets is managed by primarily investing in short-duration financial
investments and cash and cash equivalents. The SMC monitors the duration of these assets on a regular basis,
targeting an investment portfolio duration that, in the event of changes in interest rates, always maintains the
internal liquidity requirements.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
31
iii. Currency risk
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Year 2025
GBP
US $
Total
$000
$000
$000
Investments
Reinsurers' share of technical provisions
Debtors
Other assets
Prepayments and accrued income
Total assets
Technical provisions
(6,122 )
(6,122 )
Creditors
(1,828 )
(1,828 )
Accruals and deferred income
(246 )
(9 )
(255 )
Total liabilities
(246 )
(7,959 )
(8,205 )
Total Capital and reserves
(891 )
(891 )
Year 2024 (restated)
GBP
US $
Total
$000
$000
$000
Investments
Reinsurers' share of technical provisions
Debtors
Other assets
Prepayments and accrued income
Total assets
Technical provisions
(6,566 )
(6,566 )
Creditors
(3,154 )
(3,154 )
Accruals and deferred income
(279 )
(243 )
(522 )
Total liabilities
(279 )
(9,963 )
(10,242 )
Total Capital and reserves
(73 )
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
32
iv.
Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market indices on financial instruments
with all other variables held constant, showing the impact on the result before tax due to changes in fair value
of financial assets and liabilities (whose fair values are recorded in the profit and loss account) and members’
balances.
2025
2025
2024
2024
Impact on
results
Impact on
members'
balances
Impact on
results
Impact on
members'
balances
$000
$000
$000
$000
Interest rate risk
+ 50 basis points shift in yield curves
(7 )
(7 )
(8 )
(8 )
- 50 basis points shift in yield curves
Currency risk
10 percent increase in exchange rates
10
1
135
31
10 percent decrease in exchange rates
(10)
(1)
(135)
(31)
D. Capital management
i.
Capital framework at Lloyd’s
The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to the supervision of the PRA under the
Financial Services and Markets Act 2000 and in accordance with Solvency UK requirements.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s would comply with the Solvency UK requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level
as a starting point, the requirement to meet Solvency UK and Lloyd’s capital requirements apply at overall and
member level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of
Syndicate 1996 is not disclosed in these financial statements.
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital Requirement
(“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200-year loss,
reflecting uncertainty in the ultimate run off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must
also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one
year SCR) for Lloyd’s to use in meeting Solvency UK requirements. The SCRs of each syndicate are subject to
review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
A syndicate may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its
own share of underwriting liabilities on the Syndicates on which it is participating but not other members’ shares.
Accordingly, the capital requirements that Lloyd’s sets for each member operates on a similar basis.
Each member’s SCR shall thus be determined by the sum of the member’s share of the Syndicate SCR ‘to
ultimate’. Where a member participates on more than one syndicate, a credit for diversification is provided to
reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover
a 1 in 200 loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s
capital requirement, known as the Economic Capital Assessment (“ECA”). The purpose of this uplift, which is a
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
33
Lloyd’s not a Solvency UK requirement, is to meet Lloyd’s financial strength, licence and ratings objectives. The
capital uplift applied for 2025 was 35% (2024: 35%) of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that
member (FAL), assets held and managed within a syndicate (FIS), or as the member’s share of the members’
balances on each syndicate on which it participates.
5.
Analysis for underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
Year 2025
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Direct insurance
Fire and other damage
to property
(1,380 )
(6,262 )
(2,990 )
Total direct insurance
(1,380 )
(6,262 )
(2,990 )
Total
(1,380 )
(6,262 )
(2,990 )
Year 2024
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Direct insurance
Fire and other damage
to property
(1,169 )
(5,687 )
(4,196 )
(131 )
Total direct insurance
(1,169 )
(5,687 )
(4,196 )
(131 )
Total
(1,169 )
(5,687 )
(4,196 )
(131 )
No gains or losses were recognised in profit or loss during the year on buying reinsurance.
The gross premiums written for direct insurance by underwriting location of risk is presented in the table below:
2025
2024
$000
$000
United Kingdom
Total gross premiums written
All protected risks are located in California, USA.
6.
Net operating expenses
2025
2024
$000
$000
Acquisition costs
Change in deferred acquisition costs
(733 )
Administrative expenses
Members’ standard personal expenses
Net operating expenses
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
34
Total commissions for direct insurance business for the year amounted to:
2025
2024
$000
$000
Total commission for direct insurance business
Administrative expenses include:
2025
2024
$000
$000
Auditors’ remuneration:
Fees payable to the Syndicate’s auditor for the audit of these financial statements
Fees payable to the Syndicate’s auditor and its associates in respect of other services
pursuant to legislation
7.
Key management personnel compensation
No emoluments of the Directors of PMA were directly charged to the Syndicate and consequently no meaningful
disclosure can be made.
No staff of PMA were directly charged to the Syndicate. The emoluments of the Active Underwriter are borne
by the Syndicate.
2025
2024
$000
$000
Emoluments – Active Underwriter
No other compensation was payable to key management personnel.
8.
Staff numbers and costs
The Syndicate and Managing Agent have no employees. Staff costs are not charged directly to the Syndicate
and consequently no meaningful disclosure can be made.
9.
Investment return
2025
2024
$000
$000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments
Unrealised gains on investments
Unrealised losses on the investment
(15 )
Investment management expenses
(3 )
Total investment return
Transferred to the technical account from the non-technical account
An investment return of $106k was wholly allocated to the technical account.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
35
10.
Financial investments
Carrying value
Cost
2025
$000
2024
(restated)
$000
2025
$000
2024
(restated)
$000
Debt securities and other fixed income securities
Other investments
Total financial investments
The table below presents an analysis of financial investments by their measurement classification.
2025
$000
2024
(restated)
$000
Financial assets measured at fair value through profit or loss
Total financial investments
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
•
Level 1
– financial assets that are measured by reference to published quotes in an active market. A
financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those
prices represent actual and regularly occurring market transactions on an arm’s length basis.
•
Level 2
– financial assets measured using a valuation technique based on assumptions that are supported
by prices from observable current market transactions. For example, assets for which pricing is obtained
via pricing services but where prices have not been determined in an active market, financial assets with
fair values based on broker quotes, investments in private equity funds with fair values obtained via fund
managers and assets that are valued using the Syndicate’s own models whereby the significant inputs into
the assumptions are market observable.
•
Level 3
– financial assets measured using a valuation technique (model) based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are
they based on available market data. Therefore, unobservable inputs reflect the Syndicate's own
assumptions about the assumptions that market participants would use in pricing the asset or liability
(including assumptions about risk). These inputs are developed based on the best information available,
which might include the Syndicate’s own data.
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the
reporting date by its level in the fair value hierarchy.
Year 2025
Level 1
$000
Level 2
$000
Level 3
$000
Assets
held at
amortised
cost
$000
Total
$000
Debt securities and other fixed income securities
Other investments
Total financial investments
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
36
Year 2024 (restated)
Level 1
$000
Level 2
$000
Level 3
$000
Assets
held at
amortised
cost
$000
Total
$000
Debt securities and other fixed income securities
Other investments
Total financial investments
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will often
determine prices by consolidating prices of recent trades for identical or similar securities obtained from a panel
of market makers into a composite price. The pricing service may make adjustments for the elapsed time from
a trade date to the valuation date to take into account available market information. Lacking recently reported
trades, pricing vendors will use modelling techniques to determine a security price.
11.
Debtors arising out of direct insurance operations
2025
2024
$000
$000
Amounts due within one year
Total
12.
Other debtors
2025
2024
$000
$000
Other
Total
Other debtors include a claims float and input VAT.
13.
Deferred acquisition costs
The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end
of the period.
2025
2024
Gross
Net
Gross
Net
$000
$000
$000
$000
Balance at 1 January
Incurred deferred acquisition costs
Amortised deferred acquisition costs
(3,199 )
(3,199 )
(2,732 )
(2,732 )
Balance at 31 December
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
37
14.
Claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated
have changed from the first estimates made.
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.
Balances have been translated at exchange rates prevailing at 31 December 2025 in all cases.
Gross:
Pure underwriting year
2025
$000
2024
$000
2023
$000
Total
$000
Estimate of gross claims
At the end of underwriting year
One year later
Two years later
Less gross claims paid
Gross claims reserve
Net:
Pure underwriting year
2025
$000
2024
$000
2023
$000
Total
$000
Estimate of net claims
At end of underwriting year
One year later
Two years later
Less net claims paid
Net claims reserve
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
38
15.
Technical provisions
The table below shows changes in the insurance contract liabilities and assets from the beginning of the period
to the end of the period.
2025
2024
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Claims outstanding
Balance at 1 January
(316 )
(57 )
Claims paid during the year
(1,303 )
(1,303 )
(191 )
(191 )
Expected cost of current year claims
(3 )
(316 )
Change in estimates of prior year
provisions
(319 )
(252 )
(126 )
(69 )
Effect of movements in exchange rate
Balance at 31 December
(252 )
(316 )
2025
2024
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Unearned premiums
Balance at 1 January
(954 )
(1,820 )
Premiums written during the year
(3,236 )
(3,589 )
Premiums earned during the year
(12,798 )
(9,871 )
(10,921 )
(6,466 )
Effect of movements in exchange
rate
Balance at 31 December
(1,263 )
(954 )
16.
Creditors arising out of direct insurance operations
2025
2024
$000
$000
Due within one year
Total
17.
Other creditors
2025
2024
$000
$000
Other liabilities
Total
Other creditors include of a loan due to WDS of $0.9m. This fixed rate loan accrues at a rate of 8% repaid in
full each quarter.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
39
18.
Cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in
the management of its short-term commitments are included in cash and cash equivalents.
Included within cash and cash equivalents are the following amounts which are not available for use by the
Syndicate as they collateralise the US Situs requirements
.
2025
2024
$000
$000
Cash at bank and in hand
Total cash and cash equivalents not available for use by the Syndicate
19.
Analysis of net debt
1 January
2025
$000
Cash flows
$000
Fair value
and exchange
movements
$000
31 December
2025
$000
Acquired
$000
Cash at bank and in hand
(33 )
Other
(1,447 )
(947 )
Total
`-
20.
Related parties
Polo Managing Agency Limited’s immediate parent undertaking is Marco Capital Holdings (UK) Limited, a
company incorporated in England and Wales. Registered address is 4th Floor, 24 Monument Street, London
EC3R 8AJ. Managing agency fees of $0.8m were paid by the Syndicate to PMA.
The Managing Agent’s ultimate parent undertaking is Marco Capital Holdings Limited, a company incorporated
in Malta. Registered address is 171 Old Bakery Street, Valletta, VLT1455, Malta.
The Managing Agent’s ultimate controlling party is Brookfield Oaktree Holdings, LLC (formerly known as
Oaktree Capital Group, LLC).
During 2023 the Syndicate entered into an unsecured loan facility with WDS, which is related to Wildfire Defense
Corporate Member Limited by virtue of common control. Wildfire Defense Corporate Member Limited
participates on the Syndicate as one of the corporate members. At the balance sheet date the outstanding loan
from WDS is $0.9m (2024: $1.4m) and all interest accrued has been repaid at the end of the 2025.
21.
Off-balance sheet items
The Syndicate has not been party to any arrangement, which is not reflected in its balance sheet, where material
risks and benefits arise for the Syndicate.
2025
2024
$000
$000
Cash at bank and in hand
Total cash and cash equivalents
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6
Registered office: Polo Managing Agency Limited, registered in England & Wales Registration no. 039353227
www.polo.works
40
22.
Post balance sheet events
There have been no material subsequent events from the balance sheet date until the date of approval of the
financial statements.
23.
Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025
2024
Start of
period
rate
End of
Period
rate
Average
rate
Start of
period
rate
End of
Period
rate
Average
rate
US dollar
Sterling
24.
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 Regulation Authority requirements and resource criteria. The
determination of FAL has regard to a number of factors including the nature and amount of risk to be
underwritten by the member and the assessment of the reserving risk in respect of business that has been
underwritten. Since FAL is not under the management of the Managing Agent, no amount has been shown in
these Financial Statements by way of such capital resources. However, the Managing Agent is able to make a
call on the Member’s FAL to meet liquidity requirements or to settle losses.
Docusign Envelope ID: 80CBA374-E2C7-4B4C-81E1-E7992691CBA6