Ki Syndicate 1618
Annual Report 2025
Ki Syndicate 1618 Annual Report 2025
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Contents
1
Ki Syndicate 1618 Annual Report 2025
Directors and administration 2
Report of the Directors of the Managing Agent 3
responsibilities 9
Independent auditors report to the member of Syndicate 1618 10
Statement of profit or loss and other comprehensive income 14
Statement of financial position 16
Statement of changes in Member s balances 18
Statement of cash flows 19
Notes to the financial statements
1. Basis of preparation 20
2. Critical accounting estimates and judgements 21
3. Significant accounting policies 23
4. Principal risks and uncertainties 29
5. Analysis of underwriting result 48
6. Net operating expenses 50
7. Key management personnel compensation 50
8. Staff numbers and costs 51
9. Investment return 51
10. Distribution 51
11. Financial Investments 52
12. Derivative contracts 54
13. Provision for unearned premium 54
14. Claims outstanding 55
15. Claims development tables 55
16. Deferred acquisition costs 56
17. Debtors arising out of direct insurance operations 56
18. Debtors arising out of reinsurance operations 56
19. Other debtors 56
20. Creditors arising out of direct insurance operations 56
21. Creditors arising out of reinsurance operations 57
22. Other creditors including taxation and social security 57
23. Cash and cash equivalents 57
24. Other assets 57
25. Related parties 58
26. Disclosure of interests 59
27. Funds at Lloyd's 60
28. Ultimate holding company 60
29. Post balance sheet events 60
Directors and administration
2
Ki Syndicate 1618 Annual Report 2025
Managing Agent
Directors
P A Jardine (Chairman)*
C V Barley
S Bradbury
E M Catchpole*
L Edmonds (subject to regulatory approval)
S Fisher*
L Harfitt
D A Hopkins
S B Logue
L J M McMaster
A F J Neden*
S D Redmond*
Non-Executive Directors*
Managing Agent's registered office
5th Floor
20 Gracechurch Street
London
EC3V 0BG
Managing Agent's registered number
1918744
Syndicate Active Underwriter
Matthew Bellamy
Syndicate 1618 registered office
The Leadenhall Building
122 Leadenhall Street
London
EC3V 4AB
Bankers and investment managers
Barclays
Royal Bank of Canada
Citibank
Lloyds
Conning
Northern Trust
Goldman Sachs Asset Management
Pacific Investment Management Company LLC (PIMCO)
Bank of New York Mellon
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London
SE1 2RT
SAO Signing Actuary
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London
SE1 2RT
Report of the Directors of the Managing Agent
3
Ki Syndicate 1618 Annual Report 2025
With effect from 1 January 2025, the Managing Agent of Ki Syndicate 1618 (the Syndicate), is Asta Managing
Agency Limited (Asta), a company registered in England and Wales. The Directors of the Managing Agent
present their report for the year ended 31 December 2025.
The financial statements herein have been prepared using the annual basis of accounting as required by
Statutory Instrument No 1950 of 2008,
Accounts) Regulations 2008 ( ).
The Syndicate presents its results under FRS 102, the Financial Reporting Standard applicable in the UK and
Republic of Ireland. In accordance with FRS 102, the Syndicate has identified its insurance contracts and
accounted for them in accordance with FRS 103 Insurance Contracts.
Principal activities and review of the business
The principal activity of the Syndicate is the transaction of general insurance and reinsurance business in the
Utilising platform and algorithm, the Syndicate is the first fully digital,
algorithmically
+ (Superior) rating from AM Best, AA- (Very Strong) from S&P and AA- (Very Strong) rating
from Fitch.
The Syndicate has written a balanced portfolio of business during 2025, in line with its business plan.
The result for the 2025 calendar year is a profit of $147,909k (2024: $101,568k), comprising an underwriting
profit of $82,057k (2024: $66,390k) with a combined ratio of 89.1% (2024: 90.0%), and a net investment return
of $69,794k (2024: $37,671k). The result , with strong core underwriting
performance reflected in improved attritional losses, catastrophe losses and reserve releases, alongside
excellent investment returns. This was delivered whilst navigating an increasingly challenging London market,
maintaining underwriting discipline and implementing a Ki Group wide technological transformation. Foreign
exchange losses for the year of $3,942k (2024: $2,493k) were a result of unfavourable currency rates of
exchange movements against the US dollar. Net investment return includes a gain on currency derivatives of
$4,958k (2024: $2,550k loss), which the Syndicate utilises to effectively manage its currency exposure.
year were as follows:
2025
2024
$
$
Gross premiums written (GWP) 853,022
800,973
Net premiums written 766,758
713,637
Earned premiums, net of reinsurance (NEP) 754,777
664,664
Underwriting result 82,057
66,390
Investment income
48,711
42,002
Realised gains on investments 5,441
186
Unrealised gains/(losses) on investments 16,451
(3,557)
Investment expenses and charges (809)
(960)
Technical account investment income 69,794
37,671
Technical result for the financial year 151,851
104,061
Loss on foreign exchange
(3,942)
(2,493)
Non-technical account for the financial year (3,942)
(2,493)
Result for the financial year 147,909
101,568
Combined ratio (CoR)
1
89.1
%
90.0%
1
The total of net claims and net operating expenses as a percentage of net earned premium.
Report of the Directors of the Managing Agent (continued)
4
Ki Syndicate 1618 Annual Report 2025
Principal activities and review of the business (continued)
The performance of the Syndicate has been assessed by measuring, as a percentage of underwriting capacity,
the 36-month forecasted result on a funded accounting basis for an individual underwriting year of account
(YOA). The return on capacity for each underwriting year is shown below.
2025
YOA
Open
2024 YOA
Open
2023 YOA
Closed
Capacity ($ 1,017,429
927,216
920,377
Forecast result ($
123,592
130,022
-
Forecast return on capacity (%) 12.1%
14.0%
-
Our mission disrupt using technology and data
-
remains as a pioneer in the future of digital insurance which revolutionises the commercial Property
and Casualty (P&C)
technology, and algorithmic science to offer insurance coverage to our clients in an efficient and scalable
2025 was the second successful year of the Ki Digital platform, through which the Syndicate binds all its
business. Ki has continued to invest in our algorithmic underwriting capabilities and has launched several
market-first integrations to further improve efficiency and drive the industry forward. Our team of leading data
scientists and engineers continues to prioritise developing new capabilities at pace with a spirit of continuous
improvement that defines our business model.
Our technology is partnered with a strong underwriting culture, with a focus on sustainable profitability and
discipline embedded in the business. This was evidenced in 2025 as the market became increasingly
competitive, yet Ki maintained its underwriting discipline with careful oversight of business written, increasing
controls and selective reductions in risk appetite. Ki also enhanced our risk selection and pricing models during
2025.
The Syndicate is backed by its capital partners, Blackstone Tactical Opportunities (Blackstone) and Fairfax
Financial Holdings Limited (Fairfax) and is managed by Asta.
Outlook
Ki continues to actively manage the portfolios, to grow where the market is strongest and the best opportunities
to deliver on profitability are seen, taking action on the weaker segments of the portfolio.
Further information can be found at www.ki-insurance.com.
2025 results
2025 was the most profitable year on record for the Syndicate with a full year CoR of 89.1% (2024: 90.0%) and
profit for the financial year of $147,909k (2024: $101,568k). 2025 had higher topline revenue, with GWP
increasing by 6.5% to $853,022k (2024: $800,973k), growth driven through new classes (Property Treaty) and
initiatives (Portfolio Solutions and digital integrations), somewhat offsetting competitive market conditions. Due
to lower relative reinsurance spend alongside the increase in gross premium income, NEP increased by 13.6%
to $754,777k (2024: $664,664k). With the successful launch of the new initiatives, we are confident in the
Underwriting profitability has increased substantially year on year to $82,057k (2024: $66,390k). This has been
driven by the increase in NEP,improvements in attritional and catastrophe losses, and increased reserves
releases following favourable development, particularly on the 2023 underwriting year.
Report of the Directors of the Managing Agent (continued)
5
Ki Syndicate 1618 Annual Report 2025
2025 results (continued)
NEP) was 35.1% (2024:
27.5%). The majority of expenses are incurred in group entities outside of the Syndicate, including Ki Digital
Services Limited (Ki Digital) which underwrites all business on behalf of the Syndicate in return for a
commission. The year-on-year increase in the total expense ratio is driven by increased commissions because
of the change in business model. 2025 saw Ki Digital commission attaching to the vast majority of earned
premium, versus only half in the prior year. In addition, the Syndicate paid Ki Digital a profit commission for
performance on the 2024 underwriting year, in line with the binding authority agreement.
Outwards reinsurance
Reinsurance expenditure in 2025 was $86,264k or 10.1% of GWP (2024: $87,336k or 10.9%), a decrease of
$1,072k.
of risk. Individual per risk programmes are purchased with comprehensive vertical cover and significant
sideways frequency protection. Per-occurrence and aggregate catastrophe protections are purchased to
manage aggregations in relevant classes, providing comprehensive balance sheet protection. Quota share
protection is considered at a class and whole account level to manage overall net exposure and optimise capital
requirements. The Syndicate significantly reduced its appetite for quota share reinsurance in 2025, a strategy
which will continue into 2026.
Underwriting result
The Syndicate reported an underwriting profit of $82,057k (2024: $66,390k) and a combined ratio of 89.1%
(2024: 90.0%).
Claims
Attritional losses
ratio of 54.0%, (2024: 56.6%). The decrease in the ratio year on year reflects favourable experience, through
current accident year, in the short tail Property classes on the 2024 and 2025 underwriting years.
Major loss activity
event:
2025
2024
Major losses - adverse impact
Hurricane Milton
-
27,337
Hurricane Helene -
25,227
2025 California Wildfires 14,180
-
Hurricane Melissa 10,892
-
Typhoon Ragasa 3,000
-
Total natural catastrophe events
28,072
52,564
Report of the Directors of the Managing Agent (continued)
6
Ki Syndicate 1618 Annual Report 2025
Natural catastrophes
5 event year amounted to $28,072k and added 3.7%
(2024: $52,564k / 7.9%), due to 2025 California Wildfires ($14,180k net), Hurricane
Melissa ($10,892k net), and Typhoon Ragasa ($3,000k net). The 2025 catastrophe events have not breached
the Catastrophe Aggregate reinsurance threshold.
On the 2024 event year the major natural catastrophe net ultimate loss as at 2025 year-end totalled $45,965k
which is a $6,599k net reduction on the net ultimate loss estimate held at year-end 2024 of $52,564k.
The Syndicate does not have material exposure to other catastrophe events which occurred during the year.
While some claims are anticipated to emerge, it is expected that these will be attritional in scale.
Prior year development
The 2025 result includes $28,145k of prior year reserve releases (3.7% improvement on the CoR). The release
is due to the reductions in major claims estimates for Hurricanes Helene and Milton as described above, in
addition to favourable attritional experience on Property and Specialty on the 2023 and 2022 underwriting years.
(2024: $13,700k of reserve releases, 2.1% improvement on the CoR).
Net operating expenses
Net operating expenses include net commissions and administrative expenses. The net commission ratio (the
ratio of net commission to net earned premium) was 27.3%, four points above 2024 (23.3%).
The increase in commission ratio and increase in administrative expense ratio (the ratio of administrative
expense to NEP
in group entities outside of the Syndicate, including Ki Digital. Ki Digital charges a commission to the Syndicate
in return for undertaking all of the underwriting on behalf of the Syndicate.
Investment return
Net investment return for the 2025 financial year totalled $69,794k, an 85.3% increase on the prior year (2024:
$37,671k). The fixed income portfolio generated a gain of $56,994k (2024: gain of $31,755k). See note 9 for
further details.
The yield on the portfolio at the end of 2025 was 3.9% (2024: 4.6%). Whilst yields were materially unchanged
over the year, there was volatility during the period.
Member s balance
s Balance comprises the cumulative results of the Syndicate for the open years of
account, plus any cash calls that the Syndicate has made on its Member. The Member s balance as at 31
December 2025 was $269,070k (2024: $196,961k, re-presented). The increase year on year includes the profit
for the year of $147,909k (2024: $101,568k).
Report of the Directors of the Managing Agent (continued)
7
Ki Syndicate 1618 Annual Report 2025
Financial position
Net technical reserves
Preserving a strong financial position is critical to the long-term success of an insurance business. The
$208,154k, or 18.0%, to $1,364,627k (2024:
$1,156,473k). The Syndicate maintains appropriate loss reserves to cover its estimated future liabilities.
Reserves are estimates that involve actuarial and statistical projections of the expected cost of the ultimate
settlement and administration of claims. The reserving process is robust and managed by the Chief Actuary of
the Managing Agent and under the oversight of the Reserving Committee. Reserving estimates are prepared
quarterly and are based on facts and circumstances then known, predictions of future developments, estimates
of future trends in claims frequency and severity and other variable factors such as inflation. Movement in these
reserves forms an integral element of the operating result.
best estimate. Maintaining reserves is critical to safeguard future obligations to policyholders and the
business which is particularly critical in a soft rating environment.
Financial investments and cash
The investment portfolio retains a large proportion of high-quality fixed income securities ($902,969k or 72.4%)
and an allocation to cash and cash equivalents ($344,633k or 27.6%).
The comparative numbers for 2024 are fixed income securities: $849,526k or 83.3% and cash and cash
equivalents: $169,947k or 16.7%.
Syndicate outlook
In Sterling, stamp capacity for the 2026 year of account has decreased by 5.3% to £730,327k (2025 year of
account £771,311k). In US dollars, the 2025 stamp utilisation decreased to 83.8% (2024 year
of account: 86.4%). As in previous years, Ki continues to actively manage the portfolios, to grow where the
market is strongest and the best opportunities to deliver on profitability are seen and taking action on the weaker
segments of the portfolio.
Environmental, social and governance (ESG)
Climate change is recognised as a risk with the potential to have a significant impact on the Syndicate and the
Ki Group, and all of their stakeholders. The Syndicate and the Ki Group are committed to responsible business
practices and recognise that these are most effective when acting alongside others in the industry. We have
incorporated ESG into our regular monitoring and annual due diligence reviews of the investment managers
their stakeholders.
their diverse backgrounds and skills to make a positive impact. The climate strategy involves making data-
driven decisions to address ESG risks and opportunities, enhancing risk awareness, and ensuring sustainable
operations. As a digital innovator, Ki will continually endeavor to develop new processes and analytics to
achieve this. The Sustainability Steering Group has created a Responsible Underwriting Framework which is
being implemented, embedding ESG into the underwriting decision making processes without disrupting the
digital customer experience. In addition to the Sustainability Steering Group, Ki Group is also launching a
Corporate Social Responsibility (CSR) strategy to further its commitment to making a positive impact on society
and the environment through various initiatives.
Employee matters and talent management
Ki Group is building a new model in our market and at the centre of this model is a differentiated talent pool.
The business has deliberately brought together leaders in the disciplines of Underwriting, Data and Technology,
from a diverse range of backgrounds. Ki Group has built a culture where these talented experts can collaborate
and thrive as equal partners, rather than the traditional underwriter-
Report of the Directors of the Managing Agent (continued)
8
Ki Syndicate 1618 Annual Report 2025
Employee matters and talent management (continued)
Ki Group, including the Syndicate.
Ki has also continued to invest in its team, and the quality of talent attracted from both the tech and insurance
Going concern
Following a review of the financial performance and position of the Syndicate, and following representations
from the new Managing Agent, Asta, the Directors have a reasonable expectation that the Syndicate has
adequate resources to continue in operational existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the report and financial statements.
Directors
Brit Syndicates Limited was the Managing Agent to the Syndicate up until 31 December 2024.
novation of the Syndicate to Asta as its Managing Agent from 1
st
January 2025, the changes to the Directors of
Asta during 2025 were as follows:
R P Barke Resigned 30 June 2025
S B Logue Appointed 26 August 2025
D B Jones Resigned 31 December 2025
K Shah Resigned 31 December 2025
D A Hopkins Appointed 9 February 2026
L Edmonds Subject to regulatory approval
Details of the Directors of the Managing Agent that were serving at the date of signing these financial statements
are provided on page 2.
Disclosure of information to the auditors
So far as each person who was a Director of the Managing Agent at the date of approving the report is aware,
there is no relevant audit information, being information needed by the Syndicate auditors in connection with
the auditors report, of which the auditors are unaware. Having made enquiries of fellow Directors of the
Managing Agent and the Syndicate's auditors, each Director has taken all the steps that he or she ought to
have taken as a Director to become aware of any relevant audit information and to establish that the Syndicate's
auditors are aware of that information.
Independent Auditors
PricewaterhouseCoopers LLP were re- auditors following novation to Asta on 1
st
January 2025.
Syndicate Annual General Meeting
In accordance with the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the Managing Agent
does not propose holding an annual meeting this year; objections to this proposal or the intention to reappoint
the auditors for a further 12 months can be made by Syndicate members within 21 days of this notice.
On behalf of the Board
S B Logue
Director
19 February 2026
responsibilities
9
Ki Syndicate 1618 Annual Report 2025
The Managing Agent is responsible for preparing the financial statements in accordance with applicable
law and regulations.
The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008
require the managing agent to prepare financial statements at 31 December each year in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law) including FRS 102 the Financial Reporting Standard applicable in the UK and
Republic of Ireland. The financial statements are required by law to give a true and fair view of the state
of affairs of the Syndicate as at that date and of its profit or loss for that year.
In preparing the financial statements, the managing agent is required to:
select suitable accounting policies and then apply them consistently subject to changes arising
on the adoption of new accounting standards in the year;
make judgements and estimates that are reasonable and prudent;
state whether applicable Accounting Standards have been followed, subject to any material
departures disclosed and explained in the notes to the Syndicate accounts; and
prepare the Syndicate Accounts on the basis that the Syndicate will continue to write future
business unless it is inappropriate to presume that the Syndicate will do so.
The Managing Agent is responsible for keeping adequate accounting records which disclose with
reasonable accuracy at any time the financial position of the Syndicate and enable it to comply with the
Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008. It is also
responsible for safeguarding the assets of the Syndicate and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Managing Agent is responsible for the maintenance and integrity of the corporate and financial
information included on the business' website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Managing Agent is responsible for the preparation and review of the iXBRL tagging that has been
designing, implementing and maintaining systems, processes and internal controls to result in tagging
that is free from material non-compliance with the instructions, whether due to fraud or error.
We confirm that to the best of our knowledge the Syndicate Accounts, including the iXBRL tagging
version 3.1 as modified by the Frequently Asked Question
On behalf of the Board
S B Logue
Director
19 February 2026
10
Ki Syndicate 1618 Annual Report 2025
Independent auditors’ report to the member of Syndicate 1618
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, Syndicate 1618’s syndicate annual accounts:
●
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2025 and of its
profit and cash flows for the year then ended;
●
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and applicable law); and
●
have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within the
Lloyd’s Syndicate Accounts Instructions version 3.1 as modified by the Frequently Asked Questions
issued by Lloyd’s version 1.1 (“the Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Report and Accounts (“Annual
Report”) which comprise: the Statement of financial position as at 31 December 2025; the Statement of
profit or loss and other comprehensive income, the Statement of cash flows, and the Statement of
changes in member’s balances for the year then ended; and the notes to the syndicate annual accounts,
which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the
Lloyd’s Syndicate Instructions and applicable law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of the syndicate annual accounts section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant
to our audit of the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as
applicable to other entities of public interest, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s
Ethical Standard were not provided.
Other than those disclosed in note 6, we have provided no non-audit services to the syndicate in the
period under audit.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability
to continue as a going concern for a period of at least twelve months from when the syndicate annual
accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the
going concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee
as to the syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are
described in the relevant sections of this report.
Independent auditors’ report to the member of Syndicate 1618
11
Ki Syndicate 1618 Annual Report 2025
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate
annual accounts and our auditors’ report thereon. The Managing Agent is responsible for the other
information. Our opinion on the syndicate annual accounts does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in
this report, any form of assurance thereon.
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
syndicate annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the syndicate annual
accounts or a material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
With respect to the Report of the Directors of the Managing Agent (the “Managing Agent’s Report”), we
also considered whether the disclosures required by The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and
matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the
Managing Agent’s Report for the year ended 31 December 2025 is consistent with the syndicate annual
accounts and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course
of the audit, we did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of Managing Agent’s responsibilities, the Managing Agent is
responsible for the preparation of the syndicate annual accounts in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The Managing Agent is also
responsible for such internal control as they determine is necessary to enable the preparation of
syndicate annual accounts that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the
syndicate’s ability to continue as a going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless it is intended for the syndicate to cease
operations, or it has no realistic alternative but to do so.
Independent auditors’ report to the member of Syndicate 1618
12
Ki Syndicate 1618 Annual Report 2025
Responsibilities for the syndicate annual accounts and the audit (continued)
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individualy or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-
compliance with laws and regulations related to breaches of regulatory principles, such as those
governed by the Prudential Regulation Authority and the Financial Conduct Authority, and those
regulations set by the Council of Lloyd’s, and we considered the extent to which non-compliance might
have a material effect on the syndicate annual accounts. We also considered those laws and regulations
that have a direct impact on the syndicate annual accounts such as The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Instructions.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the syndicate
annual accounts (including the risk of override of controls), and determined that the principal risks were
related to management override of controls, including the potential for management bias in significant
accounting estimates. Audit procedures performed by the engagement team included:
●
Discussions with the Board, management, the compliance function and the internal audit function of
the Managing Agent, including consideration of known or suspected instances of non-compliance
with laws and regulations, and fraud;
●
Assessment of matters reported on the Managing Agent’s whistleblowing helpline and the results of
the investigation of such matters;
●
Reviewing relevant meeting minutes and correspondence with regulatory authorities;
●
Testing and challenging where appropriate the assumptions and judgements made in establishing
significant accounting estimates;
●
Identifying and testing journal entries identified as potential indicators of fraud; and
●
Designing audit procedures to incorporate unpredictability around the nature, timing and extent of
testing.
There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events
and transactions reflected in the syndicate annual accounts. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through
collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’
report.
Independent auditors report to the member of Syndicate 1618
13
Ki Syndicate 1618 Annual Report 2025
Use of this report
Accounts) Regulations 2008 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the Managing Agent in respect of the syndicate;
or
certain disclosures of Managing Agent remuneration specified by law are not made; or
the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging
s Syndicate Instructions version 3.1.
Paul Pannell (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
19 February 2026
Statement of profit or loss and other comprehensive income
Technical account - general business
For the year ended 31 December 2025
14
Ki Syndicate 1618 Annual Report 2025
Notes | 2025 | 2024 | |
| Gross premiums written | 5 | ||
| Outward reinsurance premiums | ( | ( | |
| Premiums written, net of reinsurance | |||
| Changes in unearned premium | |||
Change in the gross provision for unearned premiums | 13 | ( | |
Change in the provision for unearned premiums | 13 | ( | ( |
| Net change in provision for unearned premiums | ( | ( | |
Earned premiums, net of reinsurance | |||
Allocated investment return transferred from the non-technical account | |||
Claims paid: | |||
| Gross amount | 14 | ( | ( |
| 14 | |||
| Net claims paid | ( | ( | |
Change in the provision for claims: | |||
Gross amount | ( | ( | |
( | |||
| Net change in provision for claims | ( | ( | |
| Claims incurred, net of reinsurance | 14 | ( | ( |
| Net operating expenses | 6 | ( | ( |
| Balance on the technical account general business |
All the amounts above are in respect of continuing operations.
The notes on pages 20 to 60 form part of these financial statements.
Statement of profit or loss and other comprehensive income (continued)
Non-technical account - general business
For the year ended 31 December 2025
15
Ki Syndicate 1618 Annual Report 2025
Restated | |||
Notes | 2025 | 2024 | |
| Balance on the technical account general business | | ||
Investment income* | 9 | | |
| Realised gains on investments* | 9 | | |
| Unrealised gains/(losses) on investments* | 9 | | ( |
| Investment expenses and charges* | 9 | ( | ( |
Total investment return | |||
Allocated investment return transferred to the general business technical account | ( | ( | |
| Loss on foreign exchange | ( | ( | |
Profit for the financial year | |||
Total comprehensive income for the financial year |
*A reclassification has been made across each of the categories of investment income to correct for an internal consistency with the
disclosure notes which were accurate in the comparative period.
All the amounts above are in respect of continuing operations.
There was no other comprehensive income or expense in the current or prior period. The total
comprehensive income for the financial period is equal to the profit for the period.
The notes on pages 20 to 60 form part of these financial statements.
Statement of financial position
As at 31 December 2025
16
Ki Syndicate 1618 Annual Report 2025
Restated | |||
Notes | 2025 | 2024 | |
$ | $ | ||
Assets | |||
Investments | |||
| Financial investments | 11 | ||
| Total Investments | |||
| Provision for unearned premiums | 13 | | |
| Claims outstanding | 14 | | |
Debtors | |||
| Debtors arising out of direct insurance operations | 17 | | |
| Debtors arising out of reinsurance operations | 18 | | |
| Other debtors* | 19 | | |
Other assets | |||
| Cash at bank and in hand | 23 | | |
| Other | 24 | | |
Prepayments and accrued income | |||
| Deferred acquisition costs | 16 | | |
Other prepayments and accrued income | |||
| Total assets |
The notes on pages 20 to 60 form part of these financial statements.
*The s line have been re-presented financial
statements. In the prior year this line was on the Statement of Financial Position and the
.
Statement of financial position (continued)
As at 31 December 2025
17
Ki Syndicate 1618 Annual Report 2025
Restated | |||
| Notes | 2025 | 2024 | |
| $ | $ | ||
| Member s balance and liabilities | |||
Capital and reserves | |||
| Member s balances* | | ||
| | |||
Technical provisions | |||
| Provision for unearned premiums | 13 | | |
| Claims outstanding | 14 | | |
| | |||
Creditors | |||
| Creditors arising out of direct insurance operations | 20 | | |
| Creditors arising out of reinsurance operations | 21 | | |
| Other creditors including taxation and social security | 22 | | |
| | |||
| Accruals and deferred income | | ||
| Total liabilities | |||
| Total liabilities, capital and reserves |
*The s line have been re-presented financial
statements. In the prior year this line was on the Statement of Financial Position and the
.
The notes on pages 20 to 60 form part of these financial statements.
The financial statements on pages 14 to 60 were approved by the Board of Asta on 17 February 2026 and
were signed on its behalf by:
S B Logue
Director
19 February 2026
Statement of changes in Member s balances
For the year ended 31 December 2025
18
Ki Syndicate 1618 Annual Report 2025
Restated
2025 | 2024 | ||
$ | $ | ||
| Member s balances brought forward at 1 January | |||
Total comprehensive income for the year | |||
| Payments of profit to member s personal reserve funds | 10 | ( | ( |
| Member s balances carried forward at 31 December* |
*The s line have been re-presented financial
statements. In the prior year this line was on the Statement of Financial Position and the
.
Statement of cash flows
For the year ended 31 December 2025
19
Ki Syndicate 1618 Annual Report 2025
Notes
2025
2024
$
$
| Cash flows from operating activities | |||
| Profit for the financial year | |||
| Increase in gross technical provisions | |||
| De | |||
| (Increase) / decrease in debtors | ( | ||
| Decrease in creditors | ( | ( | |
| Movement in other assets/liabilities | ( | ||
Investment return | ( | ( | |
| Foreign exchange | ( | ||
Net cash flows from operating activities | |||
Cash flows from investing activities | |||
| Purchase of equity and debt instruments | ( | ( | |
| Sale of equity and debt instruments | |||
Purchase of derivatives | ( | ||
Sale of derivatives | |||
| Investment income received | |||
Other | |||
| Net cash flows from investing activities | | ( | |
| Cash flows from financing activities | |||
| Distribution of profit | ( | ( | |
| Other | ( | ||
| Net cash flows from financing activities | ( | ( | |
| Net increase in cash and cash equivalents | | ||
| Cash and cash equivalents at the beginning of the year | |||
| Foreign exchange on cash and cash equivalents | ( | ||
| Cash and cash equivalents at the end of the year | 23 |
Notes to the financial statements
For the year ended 31 December 2025
20
Ki Syndicate 1618 Annual Report 2025
1 Basis of preparation
1.1 Statement of compliance
The financial statements have been prepared in accordance with The Insurance Accounts Directive (Lloyd's
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United Kingdom
and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard
3.1 as
modified by the Frequently Asked Questions Version 1.1
In March 2024, the FRC issued amendments to FRS 102 and FRS 103 effective for accounting periods beginning
on or after 1 January 2026, with certain disclosure requirements on supplier finance arrangements effective from
1 January 2025. The Syndicate has not early adopted these amendments and does not expect them to have a
material impact on the financial statements. The Syndicate has no supplier finance arrangements in place
throughout 2025.
The financial statements are prepared under the historical cost convention, as modified by the recognition of
certain financial assets and liabilities measured at fair value. The annual basis of accounting has been applied to
all classes of business written by the Syndicate.
The Directors of the Managing Agent have prepared the financial statements on the going concern basis on the
basis that the Syndicate will continue to write future business.
The financial statements are reported in US dollars ($), which is the functional and presentational currency of the
Syndicate, and rounded to the nearest $ , unless otherwise stated.
Unless otherwise stated, the reporting period is defined as the year ended 31 December 2025.
1.2 Product classification
Insurance contracts are those contracts that transfer significant insurance risk. The significance of insurance risk
is dependent on both the probability of an insured event and the magnitude of its potential effect to the
policyholder. Once a contract has been classified as an insurance contract, it remains an insurance contract for
the remainder of its lifetime, even if the insurance risk reduces significantly during this period.
1.3 Going concern
part of this assessment, the Directors have considered cash forecasts, the availability of financial resources,
consistency of loss ratios, credit worthiness of reinsurers, capital support for the existing underwriting years,
business plans for future underwriting years and availability of future capital support. Following this assessment,
the Directors consider it appropriate to adopt the going concern basis in preparing the annual report and financial
statements.
Notes to the financial statements (continued)
For the year ended 31 December 2025
21
Ki Syndicate 1618 Annual Report 2025
2 Critical accounting estimates and judgements
The Syndicate makes various assumptions about the future, and other major sources of estimation uncertainty
at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the reported
amounts of assets and liabilities within the next financial year.
Estimates and judgements are regularly re-evaluated and are based on a combination of historical experience
and other factors, including exposure analysis, expectations of future experience and expert judgement.
In addition to the experience over the last 5 years, the Syndicate has also benchmarked against
Syndicate 2987 (using data up until the cut-off date for separation), allowing for any specific features of the
Syndicate which support deviation. Brit Syndicate 2987 is considered an appropriate benchmark as it is an
established syndicate with a reliable history
level. enchmarks will continue to be reviewed going forwards to ensure they continue to be based on
2.1 Estimation and judgement in relation to determining the ultimate liability arising from claims
made under insurance contracts
critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate
of the amounts that the Syndicate will ultimately pay to settle such claims.
Significant areas requiring estimation and judgement include:
Estimates of the amount of any liability in respect of claims notified but not settled and incurred but not
reported claims (IBNR) to be included within provisions for inwards insurance and reinsurance contracts;
The corresponding estimate of the amount of outwards reinsurance recoveries which will become due
as a result of the estimated claims on inwards business;
The recoverability of amounts due from reinsurers; and
Estimates of the proportion of exposure which has expired in the period as represented by the earned
proportion of premiums written.
The assumptions used and the manner in which these estimates and judgements are made are set out below,
including the reserving process for the estimation of gross, and net of reinsurance, ultimate premiums and claims:
Quarterly statistical data is produced in respect of gross and net premiums and claims (paid and
incurred);
Projections of ultimate premiums, reinstatement premiums and claims are produced by the internal
actuarial department using standard actuarial projection techniques (e.g. Basic Chain Ladder,
Bornhuetter- Ferguson, Initial Expected Loss Ratio). The Basic Chain Ladder and Bornhuetter-Ferguson
projection methods are based on the key assumption that historical development of premiums and
claims is representative of future development. Claims inflation is taken into account in the initial
expected loss ratio selections but is otherwise assumed to be in line with historical inflation trends,
unless explicit adjustments for other drivers of inflation such as legislative developments are deemed
appropriate;
Some classes of business have characteristics which do not necessarily lend themselves easily to
statistical estimation techniques e.g. due to low data volumes. In such cases, for example, a policy-by-
policy review may also be carried out to supplement statistical estimates;
In the event of catastrophe losses, and prior to detailed claims information becoming available, claims
provision estimates are compiled using a combination of output from specific recognised modelling
software and detailed reviews of contracts exposed to the event in question.
The initial attritional ultimate selections derived by the actuarial department, along with the underlying
-
make adjustments to the initial ultimates following
these meetings;
-
department, the ultimate catastrophe and attritional selections (actuarial estimate), assumptions,
methodology and uncertainties are presented to the Reserving Committee for discussion and debate;
Notes to the financial statements (continued)
For the year ended 31 December 2025
22
Ki Syndicate 1618 Annual Report 2025
2 Critical accounting estimates and judgements (continued)
2.1 Estimation and judgement in relation to determining the ultimate liability arising from claims
made under insurance contracts (continued)
Following review of the actuarial estimate, the Reserving Committee recommends the Committee
estimates to be adopted in the financial statements.
The estimates and judgements are applied in line with the overall reserving philosophy and seek to state the
claims provisions on a best estimate, undiscounted basis. A management risk margin is also applied over and
above the actuarial best estimate to allow for the inherent uncertainty within the best estimate reserve position.
margin above the actuarial estimate which is set on a best estimate basis.
As part of the year-end reserving exercise, the impact of inflation was considered in detail by the internal Actuarial
forward-looking expectations for claims
In addition to claims provisions, the reserve for future loss adjustment expenses is also subject to estimation with
consideration being given to the level of internal and third-party loss adjustment expenses incurred annually.
The estimated loss adjustment expenses are expressed as a percentage of gross claims reserves and the
reasonableness of the estimate is assessed through benchmarking. Further judgements are made as to the
recoverability of amounts due from reinsurers. Provisions for bad debts are made specifically, based on the
solvency of reinsurers, internal and external ratings, payment experience with them and any disputes of which
the Syndicate is aware.
2.2 Estimation of pipeline premiums
Premium income reported by the Syndicate includes estimates for ultimate premiums for certain contracts,
particularly those written under delegated authority agreements. These ultimate premiums are written in line with
expected attachments of the underlying policies. The Syndicate considers relevant information when determining
estimates, including information provided by brokers and coverholders, past underwriting experience, market
conditions, and the contractual terms of policies. As updated information relating to such variables becomes
available, for example when bordereaux are received, adjustments to estimates are recorded in the period in
which they are determined and will impact gross premiums written and provisions for unearned premium in the
technical account.
In addition to the experience obtained during the last 5 years, the Syndicate has also benchmarked against
Syndicate 2987 (using data up until the cut-off date for separation), allowing for any specific features of the
Syndicate which support deviation. Additionally, the actuarial team works closely with other business functions,
such as finance and underwriting, to ensure that the ultimate premium estimates are appropriate given the actual
premiums written and signed and the known pipeline of policies bound.
2.3 Estimation of premium earnings
The Syndicate attributes earning of gross and reinsurance written premium to each period on the basis of the
passage of time. At a portfolio level this is considered to provide a reasonable estimate for the full year of the
pattern of risk over the coverage period.
Notes to the financial statements (continued)
For the year ended 31 December 2025
23
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Insurance contracts
a. Premiums
Premiums written relate to business incepted during the year, together with any differences between booked
premiums for prior years and those previously accrued and include estimates of premiums due but not yet
receivable or notified, less an allowance for cancellations. Pipeline premium estimates (estimated premium
income) are derived from ultimate premium estimates which are typically based on standard actuarial projection
techniques (e.g. Basic Chain Ladder) on the key assumption that historical development of premiums is
representative of future development. Premiums are accreted to the technical account (i.e. earned) on a pro rata
basis over the term of the related policy, except for those contracts where the period of risk differs significantly
over the contract period. In these circumstances, premiums are recognised over the period of risk in proportion
to the amount of insurance protection provided. Reinstatement premiums are accreted to the technical account
on a pro rata basis over the term of the original policy to which it relates. Premiums are shown net of premium
taxes and other levies on premiums.
b. Profit commissions
Profit commission income arising from whole account quota share contracts is recognised when the economic
benefits are highly probable. These are netted off against commission costs which are included within the
c. Deferred acquisitions costs
Commission and other acquisition costs incurred during the financial period that are related to securing new
insurance contracts and/or renewing existing insurance contracts, but which relate to subsequent financial
periods, are deferred to the extent that they are recoverable out of future revenue margins. Deferred acquisition
costs are capitalised and amortised over the life of the policy to which they relate on a basis consistent with the
earnings pattern of that policy.
d. Claims
Claims incurred comprise claims and claims handling costs paid in the year and changes in the outstanding
claims provisions, including provisions for claims incurred but not reported (IBNR) and related expenses, together
with any adjustments to claims from prior years. Claims handling costs are mainly external costs related to the
negotiation and settlement of claims.
Internal costs to negotiate, manage, and settle claims (unallocated loss adjustment expenses) are apportioned
to paid claims. The apportionment utilises the annual unallocated loss adjustment expenses assumption that is
agreed by the Reserving Committee.
Outstanding claims represent the estimated ultimate cost of settling all claims (including direct and indirect claims
settlement costs) arising from events which have occurred up to the date of the statement of financial position,
including IBNR, less any amounts paid in respect of those claims. The Syndicate does not discount its liabilities
for unpaid claims, the ultimate cost of which cannot be known with certainty at the date of the statement of
financial position.
Claims provisions have been established on an individual class of business basis. The underwriting and
management teams conduct a quarterly review of each class of business. Claims are projected to the ultimate
position and provision is made for known claims and claims IBNR.
While the Directors consider that the estimate of claims outstanding is fairly calculated based on the information
currently available to them, there is inherent uncertainty in relation to the ultimate liability which will vary as a
result of subsequent information and events. Adjustments to the amounts of the claims provisions established in
prior years are reflected in the technical account for the period in which the adjustments are made.
Notes to the financial statements (continued)
For the year ended 31 December 2025
24
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies (continued)
3.1 Insurance contracts (continued)
e. Provision for unearned premiums
The proportion of written premiums that relate to unexpired terms of policies in force at the date of the statement
of financial position is deferred as a provision for unearned premiums, generally calculated on a time apportioned
basis. The movement in the provision is taken to the technical account in order that revenue is recognised over
the period of the risk.
f. Unexpired risks provision
Provision is made for any deficiencies arising when unearned premiums, net of related deferred acquisition costs,
are insufficient to meet expected claims and expenses. The expected claims are calculated having regard to
events that are relevant to the provision at the date of the statement of financial position.
Unexpired risk surpluses and deficits are offset where business classes are managed together, and a provision
is made if an aggregate deficit arises. At 31 December 2025, the Syndicate reported an unexpired risks provision
of $nil (2024: $nil).
g. Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Premiums and claims on
reinsurance assumed are recognised in the technical account along the same basis as direct business, taking
into account the product classification. Reinsurance premiums ceded and reinsurance recoveries on claims
incurred are included in the respective expense and income accounts. Reinsurance outwards premiums are
ly over the policy
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.
Reinsurance assets include amounts recoverable from reinsurance companies for paid and unpaid losses and
loss adjustment expenses and ceded unearned premiums. Amounts recoverable from reinsurers are calculated
with reference to the claims liability associated with the reinsured risks. Revenues and expenses arising from
reinsurance agreements are therefore recognised in accordance with the underlying risk of the business
reinsured.
Gains or losses on buying reinsurance are recognised immediately in the technical account.
If a reinsurance asset is impaired, the Syndicate reduces its carrying amount accordingly and will immediately
recognise the impairment loss in the technical account. A reinsurance asset will be deemed to be impaired if
there is objective evidence, as a result of an event that occurred after initial recognition of that asset, that the
Syndicate may not receive all amounts due to it under the terms of the contract, and that the event has a reliably
measurable impact on the amounts that the Syndicate will receive from the reinsurer.
Gains or losses on buying retroactive reinsurance are recognised immediately in the technical account and are
not deferred and amortised. Premiums ceded and claims reimbursed are presented on a gross basis in the
technical account and statement of financial position as appropriate.
Notes to the financial statements (continued)
For the year ended 31 December 2025
25
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies (continued)
3.1 Insurance contracts (continued)
h. Expenses and other income receivable
The Syndicate expenses for the year ending 31
st
December 2025 contains the following:
Recharge of expenses by Ki Group Services Limited, as all Ki employees are employed by KGSL.
A Managing Agency fee was charged for services provided to the Syndicate.
The Managing Agent recharged an outsourcing fee to cover the support for the Syndicate.
Investment management charges are netted off against investment return, as disclosed in note 9. Any internal or
external claims adjustment or settlement costs are included within gross claims paid.
3.2 Investments
a. Financial investments
The Syndicate has designated on initial recognition its financial assets held for investment purposes
investment strategy and consistent with investment risk being assessed on a portfolio basis. Information relating
to investments is provided internally to the Directors of the Managing Agent and management personnel on a fair
value basis.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value of financial assets and liabilities traded in
active markets (which are the principal markets or the most advantageous markets that maximise the amount
that would be received to sell the asset or minimises the amount that would be paid to transfer the liability) is
based on quoted market bid and ask price for both financial assets and financial liabilities respectively.
The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter
derivatives, is determined using valuation techniques. The Syndicate uses a variety of methods and makes
assumptions that are based on market conditions existing at each reporting date. Valuation techniques include
same, discounted cash flow analysis, option pricing models and others commonly used by market participants
and which make the maximum use of observable inputs.
Gains and losses on investments designated as FVTPL are recognised through the technical account. Interest
income from investments in bonds and short-term investments is recognised at the effective interest rate.
b. Investment return
Investment return comprises all investment income, interest receivable, dividend income, overseas deposit
income and realised and unrealised investment gains and losses and investment expenses and charges. Interest
income is recognised using the effective interest rate method.
Realised gains and losses on investments carried at market value are calculated as the difference between sale
proceeds and purchase price and are recognised when the sale transaction occurs. Unrealised gains and losses
on investments represent the difference between the valuation at the date of the statement of financial position
and their valuation at the previous statement of financial position, or purchase price if acquired during the year,
Notes to the financial statements (continued)
For the year ended 31 December 2025
26
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies (continued)
3.2 Investments (continued)
b. Investment return (continued)
together with the reversal of unrealised gains and losses recognised in earlier accounting periods in respect of
investment disposals in the current period. Investment expenses and charges relate to those costs incurred in
relation to investment activities.
Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical
account to the general business technical account to reflect the investment return on funds supporting
underwriting business. All investment return is considered to arise on such funds except to the extent that
(FIS), that income remains in the non-technical account.
3.3 Measurement of other financial assets and financial liabilities
Other financial assets and financial liabilities are initially recognised at transaction price and subsequently
measured at amortised cost using the effective interest rate method.
3.4 Recognition and derecognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised when the Syndicate becomes a party to the contractual
flows expire, or the asset is transferred, and the transfer qualifies for derecognition under a combination of risks
and rewards and control tests.
A financial liability is derecognised when it is extinguished which is when the obligation in the contract is
discharged, cancelled or expired.
Syndicate commits to purchase or sell the asset. Regular way purchases and sales are purchases and sales of
financial assets that require delivery of assets within the time frame generally established by regulation or
convention in the marketplace.
If the carrying value of an asset is impaired, it is reduced to the recoverable amount by an immediate charge to
in use.
3.5 Derivatives
Derivative financial instruments include foreign exchange contracts, forward rate agreements, interest rate
futures, currency and interest rate swaps and other financial instruments that derive their value mainly from
underlying interest rates, foreign exchange rates, credit indices, commodity values or equity instruments. All
derivatives are initially recognised in the statement of financial position at their fair value, which represents their
cost. They are subsequently remeasured at their fair value, with movements in this value recognised in the
technical account. Fair values are obtained from quoted market prices or, if these are not available, by using
valuation techniques such as discounted cash flow models or option pricing models.
All derivatives are carried as assets when the fair values are positive and as liabilities when the fair values are
negative. Derivative contracts may be traded on an exchange or over-the-counter (OTC). Exchange-traded
derivatives are standardised and include certain futures and option contracts. OTC derivative contracts are
individually negotiated between contracting parties and include forwards and swaps.
Derivatives are subject to various risks including market, liquidity and credit risk, similar to those related to the
underlying financial instruments. Many OTC transactions are contracted and documented under International
Swaps and Derivatives Association (ISDA) master agreements or their equivalent, which are designed to provide
legally enforceable set-
Notes to the financial statements (continued)
For the year ended 31 December 2025
27
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies (continued)
3.5 Derivatives (continued)
or contractual amounts associated with derivative financial instruments are not recorded as assets or liabilities
on the statement of financial position as they do not represent the fair value of these transactions.
3.6 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 the Managing Agents and consequently the distribution made to members, or their members
agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year are included in the
statement of financial position under the heading s
No provision has been made for any overseas tax payable by the member on underwriting results.
3.7 Pension costs
Ki Group Services Limited is operating a defined contribution pension scheme on behalf of the Managing Agent.
3.8 Foreign currencies
In accordance with FRS 102, the functional currency is the currency of the primary economic environment in
which the Syndicate operates. The functional currency for the Syndicate is the United States dollar ($). Items
included in the financial statements
presentational currency.
Unless otherwise stated, transactions in Sterling, Canadian dollars and Euros are translated into the functional
currency at the average rates of exchange. Transactions in foreign currencies other than Sterling, US dollars,
Canadian dollars and Euros are translated at the rate of exchange ruling at the date the transaction is processed.
Monetary assets and liabilities in currencies other than the functional currency are translated at the rate of
exchange ruling at 31 December of each year. Exchange profits or losses arising on the translation of foreign
currency amounts relating to the Syndicate insurance operations are included within the non-technical account
as prescribed by FRS 103.
The following currency exchange rates have been used for principal foreign currency transactions:
2025 2024
Start of
period rate
End of
period rate
Average
rate
Start of
period rate
End of period
rate
Average
rate
Sterling 0.7985
Euro 0.9657
US dollar 1.0000
Canadian dollar
Australian dollar
Notes to the financial statements (continued)
For the year ended 31 December 2025
28
Ki Syndicate 1618 Annual Report 2025
3. Significant accounting policies (continued)
3.9 Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract holders.
These are classified as debt instruments as they are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. Insurance debtors are measured at amortised cost less any
provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does not have any
debtors directly with policyholders, all transactions occur via an intermediary. Where permitted under UK GAAP
accounting standards, insurance creditors are netted off against insurance debtors where the legally enforceable
right to offset exists.
s
s
Position and the Statement of changes in Member s balance.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not quoted
on an active market. Reinsurance debtors are measured at amortised cost less any provision for impairments.
Reinsurance creditors are stated at amortised cost. Reinsurance debtor principally relates to claims recoveries
where the underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily
premiums payable for reinsurance contracts and are recognised as an expense when due.
3.10 Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position only
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a
net basis, or to realise the assets and settle the liability simultaneously.
Notes to the financial statements (continued)
For the year ended 31 December 2025
29
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties
4.1 Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual 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. This is the principal risk the Syndicate is exposed to as its primary function is to underwrite insurance
contracts. The risk arises due to the possibility of insurance contracts being under-priced, under-reserved or
subject to unforeseen catastrophe claims.
The areas of insurance risk discussed below include underwriting (including aggregate exposure management),
reinsurance and reserving.
a. Underwriting risk
Underwriting risk is the risk that insurance premiums will not be sufficient to cover the future losses and associated
expenses. It arises from the fluctuations in the frequency and severity of financial losses incurred through the
underwriting process by the Syndicate as a result of unpredictable events.
The Syndicate is also exposed to the risks resulting from its underwriting process to accept risks for premiums
which are insufficient to cover the ultimate claims which result from such policies. The underwriting and economic
environment and the associated impact on premium rates, including trends due to the underwriting cycle and
to assess whether any corrective action is required. Additional controls over the underwriting strategy are
described in the section below.
licensing agreements providing t
platform subjects the Syndicate to a number of resulting underwriting risks. The Syndicate relies on the efficient
ability to write new business.
The Syndicate
ratings may have an adverse effect on the Syndicate.
(i) Controls over underwriting strategy
Portfolio Underwriting Committee (PUC) meets regularly to drive the underwriting strategy and to monitor
performance. The 1618 Underwriting Committee meets six times each year to monitor underwriting performance.
The assessment of underwriting performance is all-encompassing applying underwriting key performance
indicators (KPIs), technical pricing management information (MI), premium monitoring, and claims monitoring.
Additional metrics related to Algorithm and Underwriter grades of policies specific to Ki because of the business
model are also regularly monitored within underwriting governance fora. The risks are managed by the
appropriate committees in line with the underwriting risk policy and within the risk tolerance set by the Syndicate
Board in conjunction with the Asta Board. The underwriting risk policy also sets out a number of controls, which
are summarised below.
The Managing Agent carried out a detailed annual business planning process. The resulting plans set out
premium, territorial and aggregate limits as well as reinsurance protection thresholds for all classes of business
and represent a key tool in managing concentration risk. Performance against the plans is monitored on a regular
basis by the PUC and the Syndicate Underwriting Committee as well as by the Syndicate Board. A dedicated
Risk Aggregation team performs catastrophe modelling and Realistic Disaster Scenarios (RDS) on a regular
Notes to the financial statements (continued)
For the year ended 31 December 2025
30
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.1 Insurance risk (continued)
a. Underwriting risk (continued)
(i) Controls over underwriting strategy (continued)
The Managing Agent has developed underwriting guidelines, limits of authority and business plans for the
Syndicate which are binding upon all underwriting activities. These are detailed and specific to classes of
business. Gross and net line size limits are in place for each class of business with additional restrictions in place
on catastrophe exposed business.
insurance risks are written by third parties under delegated underwriting
authorities, with the remainder being written through individual risk acceptances or through reinsurance treaties.
The third parties are closely vetted in advance and are subject to tight reporting requirements. In addition, the
performance of these contracts is closely monitored by underwriters and/or portfolio managers, with regular audits
being carried out.
The technical pricing framework ensures that the pricing process in the Syndicate is appropriate. It ensures
pricing methodologies are demonstrable and transparent and that technical (or benchmark) prices are assessed
for each risk. Much of this assessment is carried out within the pricing capability of the algorithm. The portfolio
management, underwriting and actuarial functions work together to maintain the pricing models and assess the
difference between technical price and actual price. The framework also ensures that sufficient data is recorded
and checked by underwriters to enable the Syndicate to maintain an adequate rate monitoring process.
Business offered to the Syndicate is rated by a proprietary algorithm before being underwritten. The algorithm
assesses the attractiveness of the business based on factors such as technical pricing and offers larger lines for
more attractive business. The Syndicate monitors its approved Nominated Syndicate panel to ensure that it is
following those that are market leaders in those areas.
A dedicated Portfolio Management function monitors the business written on a daily basis to ensure the portfolio
is balanced and aggregations are controlled. The PUC and the Syndicate Underwriting Committee are
responsible for governance and oversight of the portfolio and the underwriting process.
Audit department which is entirely independent of the underwriting units.
In order to limit risk, the number of reinstatements per policy is limited, deductibles are imposed, policy exclusions
are applied and whenever allowed by statute, maximum indemnity limits are put in place per insured event.
(ii) Underwriting risk profile
The core insurance portfolio of Property, Specialty and Casualty covers a variety of largely uncorrelated events
and also provides some protection against the underwriting cycle as different classes are at different points in
the underwriting cycle. The underwriting portfolio is managed to target top quartile underwriting performance and
the mix of business is continually adjusted based on the current environment (including the current pricing
strength of each class). This assessment is conducted as part of the business planning process, which operates
annually, is an ongoing strategy process and uses inputs from the technical pricing framework. The business
plan is approved by the relevant Boards and is monitored on an ongoing basis.
Notes to the financial statements (continued)
For the year ended 31 December 2025
31
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.1 Insurance risk (continued)
a. Underwriting risk (continued)
(iii) Geographical concentration of premium
The Syndicate enters into policies with policyholders from all over the world, with the underlying risk relating to
premiums spread worldwide. This allows the Syndicate to benefit from a wide geographic diversification of risk.
rs is the United States. The concentration of insurance
premium before and after reinsurance by the location of the underlying risk is summarised below:
Premiums written Gross
Net
2025
United States 613,118
551,120
United Kingdom 110,486
99,586
Europe (excluding UK) 25,101
23,306
Other (including worldwide) 104,317
92,746
Total 853,022
766,758
Premiums written Gross
Net
2024
United States 483,148
429,543
United Kingdom 130,901
115,731
Europe (excluding UK) 55,953
50,151
Other (including worldwide) 130,971
118,212
Total 800,973
713,637
The nature of the London Market business is such that the insured and reinsured are often operating on a multi-
territory or worldwide basis and hence coverage is often provided on a worldwide basis. Premiums written on a
multi-territory or worldwide basis
(iv) Portfolio mix
premium by principal categories is summarised below:
2025 2024
Premium by portfolio Direct
Reinsurance
Direct
Reinsurance
Casualty 10,048
187,866
9,887
117,617
Financial and Professional
Liability
134,269
16,507
154,670
9,635
Programmes and Facilities 103,207
5,465
110,557
1,074
Property 180,138
78,748
200,883
77,244
Specialty 103,295
33,479
81,477
31,330
Other -
-
6,599
-
Total 530,957
322,065
564,073
236,900
The Syndicate underwrites a business mix of both insurance and reinsurance, long and short tailed business
mix is monitored on an ongoing basis and measured against plan.
Notes to the financial statements (continued)
For the year ended 31 December 2025
32
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.1 Insurance risk (continued)
a. Underwriting risk (continued)
(v) Aggregate exposure management
The Syndicate closely monitors aggregation of exposure to natural catastrophe events against agreed risk
appetites using stochastic catastrophe modelling tools, along with knowledge of the business, historical loss
information, and geographical accumulations. Climate change impacts natural catastrophe events. Analysis and
Risk appetites are set
by the Board on an annual basis.
(RDSs).
(vi) Sensitivity to changes in risk margin
The following table presents the profit and loss impact of the sensitivity of the value of insurance liabilities
disclosed in the financial statements 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
| General insurance business sensitivities as at 31 December 2025 | Sensitivity | |
| +5.0% | -5.0% | |
| Claims outstanding gross of reinsurance | ( | |
| Claims outstanding net of reinsurance | ( |
| General insurance business sensitivities as at 31 December 2024 | Sensitivity | |
| +5.0% | -5.0% | |
| Claims outstanding gross of reinsurance | ( | |
| Claims outstanding net of reinsurance | ( |
Notes to the financial statements (continued)
For the year ended 31 December 2025
33
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.1 Insurance risk (continued)
b. Reinsurance risk
The Syndicate purchases reinsurance to manage exposure to individual risks and aggregation of risks arising
from individual large claims and catastrophe events. This allows the Syndicate to mitigate exposure to insurance
losses against the risk appetite, reduce volatility of reported results and protect capital.
Proportional quota share reinsurance is purchased to provide protection against claims arising either from
net exposure to classes of business
of the class of business on a gross of reinsurance basis. These placements are reviewed on the basis of market
conditions.
The Syndicate also has in place a comprehensive programme of excess of loss reinsurances to protect itself
from severe size or frequency of losses:
(i) Facultative reinsurance is used to reduce risk relating to individual contracts. The amount of cover bought
varies by class of business. Facultative reinsurance is also used as a tool to manage the net line size on
individual risks to within tolerance.
(ii) Risk excess of loss reinsurance is used to protect a range of individual inwards contracts which could give
rise to individual large claims. The optimal net retention per risk is assessed for each class of business given
g the business planning exercise.
(iii) Aggregate catastrophe excess of loss cover is in place to protect the Syndicate against combined property
claims from multiple policies resulting from catastrophe events. From time to time the Syndicate may
supplement this with specific covers for peril regions, catastrophe swaps, catastrophe bonds and industry
loss warranties where they are a cost-efficient means to ensure that the Syndicate remains within its
catastrophe risk appetite.
Agent has in place internal controls and processes to ensure that the reinsurance arrangements provide
appropriate protection of capital and maintai
Underwriting Committee oversees the purchase of reinsurance.
The Syndicate remains exposed to a number of risks relating to its reinsurance programme:
It is possible for extremely severe catastrophe losses to exhaust the reinsurance purchased. Any losses
exceeding the reinsurance protection would be borne by the Syndicate.
Some parts of the programme have limited reinstatements which limit the amount that may be
recovered from second or subsequent claims. If the entirety of the cover is exhausted, it may not be
possible to purchase additional reinsurance at a reasonable price.
A dispute may arise with a reinsurer which may mean the recoveries received are lower than
anticipated.
These risks are managed through a combination of techniques and controls including risk aggregation
management, capital modelling and internal actuarial review of outward reinsurance costs. The counterparty risk
in relation to reinsurance purchased is reviewed by the Syndicate Underwriting Committee. This is further
discussed in the Credit risk section below.
Notes to the financial statements (continued)
For the year ended 31 December 2025
34
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.1 Insurance risk (continued)
c. Reserving risk
Reserving risk arises where the actual cost of losses for policyholder obligations incurred before the reporting
date may differ from the established reserves due to inaccurate assumptions or unforeseen circumstances. This
is a key risk for the Syndicate a
liabilities and are inherently uncertain. Reserving Committee is responsible for the management
The Syndicate has a rigorous process for establishing reserves for insurance claim liabilities and a number of
controls are used to mitigate reserving risk. The reserving process starts with controls over claims data which
ensure complete and accurate recording of all paid and notified claims. Case reserves are set for notified claims
Whilst the case reserve is expected to be sufficient to meet the claims amount when it is settled, incurred but not
reported (IBNR) claims require additional reserves. This is particularly the case for the longest tailed classes of
business where the final settlement can occur several years after the claim occurred. Actuarial triangulation
These techniques project IBNR reserves based on historical development of paid and incurred claims by
underwriting year. For the most uncertain claims, triangulation techniques are supplemented by additional
methods to ensure the established reserves are appropriate. The actuarial team work closely with other business
functions such as portfolio management and risk aggregation to ensure that they have a full understanding of the
emerging claims experience. Inflation is considered as part of reserve setting process.
accurate and reliable estimates that are consistent over time and across classes of business. The actuarial best
estimate set out in the policy is subject to Reserving Committee sign-off as part of the formal governance
arrangements. The estimate agreed by the committees is used as a basis for the financial statements. A
management risk margin may be applied over and above the actuarial best estimate to allow for the inherent
uncertainty within the best estimate reserve position and wider inherent uncertainty across the economic and
insurance environment. This margin increases the reserves reflected in the Syndicate financial statements above
the mean expectation. Finally, the reserves in the financial statements are presented to the Audit Committee for
recommendation to the Asta Board who are responsible for the final sign-off.
Reserve estimates may be more or less than is ultimately required to meet the claims arising from earned
business. The level of uncertainty varies significantly between classes but typically is highest for those classes
where there are significant delays in the settlement of the final claim amount. More specifically, the key areas of
reserves are considered to be claims from the long-tailed direct and long-tailed
reinsurance classes. The issues contributing to this heightened uncertainty are common to all entities which write
such business.
Notes to the financial statements (continued)
For the year ended 31 December 2025
35
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.2 Liquidity risk
This is the risk the Syndicate may encounter difficulty in meeting obligations associated with financial liabilities
that are settled by delivering cash or another financial asset. The predominant liquidity risk the Syndicate faces
is the daily calls on its available cash resources in respect of claims arising from insurance contracts.
The Managing Agent via the Ki Treasury team monitors the levels of cash and cash equivalents on a daily basis,
ensuring adequate liquidity to meet the expected cash flow requirements due over the short-term.
The Syndicate also limits the amount of investment in illiquid securities in line with the investment policy set by
the Board. This involves ensuring sufficient liquidity to withstand claim scenarios at the extreme end of business
plan projections, by reference to modelled RDS.
The tables below present the undiscounted value of monetary liabilities of the Syndicate into their relevant
maturing groups based on the remaining period at the end of the year to their contractual maturities or expected
repayment dates.
2025
Liabilities
(undiscounted values)
Up to a year
1-3 years
3-5 years
Over 5
years
Total
Claims outstanding 343,766
Derivative liabilities 252
Creditors 52,353
Accruals and deferred income 9,092
Total 405,463
2024
Liabilities
(undiscounted values)
Up to a year
1-3 years
3-5 years
Over 5
years
Total
Claims outstanding 321,660
Derivative liabilities 1,646
Creditors 68,233
Accruals and deferred income 9,307
Total 400,846
Notes to the financial statements (continued)
For the year ended 31 December 2025
36
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.3 Credit risk
This is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to
discharge an obligation in a timely manner. The main sources of credit risk relate to:
Reinsurers: through the failure to pay valid claims against a reinsurance contract held by the Syndicate;
Brokers and coverholders: where counterparties fail to pass on premiums or claims collected or paid
on behalf of the Syndicate;
Investments: through the issuer default of all or part of the value of a financial instrument or derivative
financial instrument; and
Cash and cash equivalents: through the default of the banks holding the cash and cash equivalents.
The insurance and non-insurance related counterparty credit risks are managed separately by the Syndicate.
a. Investments credit risk
(i) Investment credit risk management process
The Investment Committee was responsible for the management of investment credit risk. The
Investment Guidelines and Investment Policy set out clear limits and controls around the level of investment
credit risk. The Syndicate has established concentration guidelines that restrict the exposure to any individual
counterparty. The investment guidelines further limit the type, credit quality and maturity profile of both the
In addition, the investment risk framework further limits potential exposure to credit risk through monitoring of the
aggregate investment risk limits.
(ii) Insurance credit risk management process
Insurance credit risk arises primarily from reinsurers (whereby reinsurers fail to pay recoveries due to the
Syndicate in a timely manner), direct policyholders (where policy holders fail to pay premium in a timely manner)
and brokers and coverholders (whereby intermediaries fail to pass on premiums due to the Syndicate in a timely
manner).
The Credit Committee is responsible for the management of credit risk arising from insurance activities. This is
managed by the Syndicate Underwriting Committee.
Reinsurer credit risk is managed by transacting only with reinsurance counterparties that satisfy a minimum level
of financial strength or provide appropriate levels of collateral and have been approved for use by the Credit
Committee. The reinsurer security list, which sets out the list of approved reinsurance counterparties, is reviewed
at least annually and following any significant change in risk profile, which includes any changes to reinsurers'
financial ratings. Credit risk appetite limits are set for reinsurance entities and groups to limit accumulations of
risk. These positions are monitored quarterly against current statement of financial position exposures and in
relation to a number of extreme loss scenarios.
Reinsurance aged debt is monitored and managed against the management risk appetite limits set by the Credit
Committee. A bad debt provision is held against all non-rated reinsurers or any reinsurer where there is deemed
to be a specific risk of non-payment.
Any breaches of credit risk tolerance and/or appetite are reported to the Ki Financial Limited (KFL) and the
Syndicate Board on a quarterly basis.
Notes to the financial statements (continued)
For the year ended 31 December 2025
37
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.3 Credit risk (continued)
a. Investments credit risk (continued)
(iii) Credit risk profile
A summary of the credit risk exposures for the Syndicate is set out in the tables below:
*The line have been re-presented
financial statements. In the prior year this line was on the Statement of Financial Position
.
AAA
AA
A
BBB
Other
Not
Rated
Total
2025
Shares and other variable
yield securities and units in
unit trusts
Debt securities and other
fixed income securities
Derivative assets
Total investments
261,487
606,427
145,809
68,813
-
138,882
1,221,418
outstanding -
Debtors arising out of direct
insurance operations -
Debtors arising out of
reinsurance operations -
Cash at bank -
Other debtors and accrued
interest 28,876
Total 290,363
Restated AAA
AA
A
BBB
Other
Not
Rated
Total
2024
Shares and other variable
yield securities and units in
unit trusts
Debt securities
Derivative assets
Total investments
609,803
45,848
140,296
72,159
-
127,795
995,901
outstanding -
Debtors arising out of direct
insurance operations -
Debtors arising out of
reinsurance operations -
Cash at bank -
Other debtors and accrued
interest* 22,951
Total
Notes to the financial statements (continued)
For the year ended 31 December 2025
38
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.3 Credit risk (continued)
a. Investments credit risk (continued)
(iii) Credit risk profile (continued)
Collateral of $88,852k (2024: $85,134k) is held in third party trust accounts or as a letter of credit (LOC) to
guarantee the Syndicate against reinsurance counterparties and is available for immediate drawdown in the event
of a default. As at 31 December 2025, collateral of $6,650K (2024: $11,228k) had been drawn against
reinsurance assets.
The table below shows the maximum exposure to credit risk for the components of the statement of financial
position. The maximum exposure is shown gross, before the effect of mitigation through agreements.
Neither past due nor impaired assets | Past due but not impaired assets | Gross value of impaired assets | Impairment allowance | Total | |
| 2025 | $'000 | $'000 | $'000 | $'000 | $'000 |
Shares and other variable yield securities and units in unit trusts | |||||
Debt securities and other fixed income securities | |||||
| Derivative assets | |||||
Other investments | |||||
Reinsurer' share of claims outstanding | |||||
Debtors arising out of direct insurance operations | |||||
Debtors arising out of reinsurance operations | |||||
Other debtors and accrued interest | |||||
| Cash at bank and in hand | |||||
| Total |
Restated
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
2024 $'000
$'000
$'000
$'000
$'000
Shares and other variable yield
securities and units in unit trusts
Debt securities and other fixed
income securities
Derivative assets 617
Reinsurer' share of claims
outstanding
Debtors arising out of direct
insurance operations
Debtors arising out of reinsurance
operations
Other debtors and accrued interest* 173,279
Cash at bank and in hand 24,189
Total 1,648,628
*The line have been re-presented
financial statements. In the prior year this line was on the Statement of Financial Position
.
Notes to the financial statements (continued)
For the year ended 31 December 2025
39
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.3 Credit risk (continued)
a. Investments credit risk (continued)
(iii) Credit risk profile (continued)
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
Past due but not impaired
0- 3 months past due | 3- 6 months past due | 6- 12 months past due | Greater than 1 year past due | Total | |
| 2025 | $'000 | $'000 | $'000 | $'000 | $'000 |
| Debtors arising out of reinsurance operations | | ||||
| Total |
Past due but not impaired | |||||
0- 3 months past due | 3- 6 months past due | 6- 12 months past due | Greater than 1 year past due | Total | |
| 2024 | $'000 $'000 | $'000 | $'000 | $'000 | |
| Debtors arising out of reinsurance operations | | ||||
| Total | |||||
Notes to the financial statements (continued)
For the year ended 31 December 2025
40
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.4 Market risk
This is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.
Credit risk on financial investments and cash is covered in the credit risk section.
a. Currency risk
Currency risk is the risk that movements in exchange rates impact the financial performance or solvency position
dollars, is set out in the tables below.
UK £ | US $ | CAD $ | AUD $ | Total | ||
2025 | ||||||
| Investments | ||||||
| provisions | ||||||
| Debtors | ||||||
| Other assets | ||||||
Prepayments and accrued income | ||||||
| Total assets | ||||||
| Technical provisions | ( | ( | ( | ( | ( | |
| Creditors | ( | ( | ( | ( | ( | |
| Accruals and deferred income | ( | ( | ( | ( | ( | |
| Total liabilities | ( | ( | ( | ( | ( | |
| Total capital and reserves | | ( | ( | ( | ( |
| Restated | UK £ | US $ | CAD $ | AUD $ | Total | |
2024 | ||||||
| Investments | ||||||
| provisions | ||||||
| Debtors* | ||||||
| Other assets | ||||||
Prepayments and accrued income | ||||||
| Total assets | ||||||
| Technical provisions | ( | ( | ( | ( | ( | |
| Creditors | ( | ( | ( | ( | ( | ( |
| Accruals and deferred income | ( | ( | ( | ( | ( | |
| Total liabilities | ( | ( | ( | ( | ( | ( |
| Total capital and reserves | | ( | ( | ( | ( |
*The line have been re-presented
financial statements. In the prior year this line was on the Statement of Financial Position
.
Notes to the financial statements (continued)
For the year ended 31 December 2025
41
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.4 Market risk (continued)
a. Currency risk (continued)
The non-US dollar denominated net assets of the Syndicate may lead to profit or losses (depending on the mix
relative to the liabilities), should the US dollars vary relative to these currencies.
The Syndicate manages its exposure in each of the main four currencies and the net asset position is rebalanced
periodically. Where mismatches occur, these may lead to foreign exchange gains and losses reported through
the income statement.
Foreign currency forward contracts may be used to achieve the desired exposure to each currency. From time
to time the Syndicate may also choose to utilise foreign currency derivatives to manage the risk of reported losses
due to changes in foreign exchange rates. The degree to which derivatives are used is dependent on the
prevailing cost versus the perceived benefit to the Syndicate from reducing the chance of a reported loss due to
changes in foreign exchange rates. The details of all foreign currency derivatives contracts entered into are given
in Note 11.
b. Sensitivity to changes in foreign exchange rates
The table below gives an indication of the impact on the result of a percentage movement in the relative strength
of the US dollar against the value of sterling, Canadian dollar and Euro simultaneously, after taking into
consideration the effect of hedged positions. The analysis is based on the information at 31 December of each
year end:
Impact on result for the financial year
and net assets
$
2025 2024
US dollar weakens
10% against other currencies (2,986) 2,364
20% against other currencies (5,972) 4,729
US dollar strengthens
10% against other currencies 2,986 (2,364)
20% against other currencies 5,972 (4,729)
Notes to the financial statements (continued)
For the year ended 31 December 2025
42
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.4 Market risk (continued)
c. Interest rate risk and price 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 sensitivity of the price of these financial exposures is
indicated by their respective durations. This is defined as the modified duration which is the change in the price
of the security subject to a 100 basis points parallel shift in interest rates. The greater the duration of a security,
the greater the possible price volatility.
Insurance liabilities are measured on an undiscounted basis and therefore the reported liabilities are not sensitive
to changes in interest rates.
The Syndicate takes into account the duration of its required capital, targeting an investment portfolio duration
that, under a variation in interest rates, preserves the solvency ratio of the Syndicate. The duration of the
investment portfolio is then set within an allowable range relative to the targeted duration.
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 member s
balances. The analysis is based on the information at 31 December of each year end:
2025
Impact
on results
before tax
2025
Impact
on member
s
balances
2024
Impact
on results
before tax
2024
Impact
on member
s
balances
Interest rate risk
+50 basis points shift in yield curves (15,563 )
(15,563 )
(14,861 )
(14,861 )
-50 basis points shift in yield curves 15,563
Equity price risk
5% increase in equity prices -
5% decrease in equity prices -
Notes to the financial statements (continued)
For the year ended 31 December 2025
43
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.5 Operational risk
Operational risk is the potential for loss arising from the failure of people, process or technology or the impact of
external events. The nature of operational risk means that it is dispersed across all functional areas of the Ki
Group. Operational risk exposures are managed through a consistent set of management processes that drive
risk identification, assessment, control and monitoring.
Risk tolerance and appetite limits are set by the Syndicate Board.
With oversight from the Managing Agent, a Risk Management Framework (RMF) is in place to ensure an
appropriate standard approach is taken to managing operational risk across the Syndicate. The key elements of
this framework are:
Allocation of responsibility for the identification and assessment of operational risk. Standard tools are
used to facilitate these assessments;
Definition of standard elements of sound operating controls that are expected to be in place to address
all identified operational risks;
A process that integrates with internal model to support the setting and monitoring of
operational risk appetite and tolerances;
Governance, reporting and escalation for operational risk;
Infrastructure supporting the operational risk management framework; and
Operational risk management training and awareness.
The Syndicate operates with a novel method of distribution (a broker-facing platform) and a differentiated method
of selecting risks (the algorithm). The operational risks associated with the platform and algorithm have been
addressed as follows:
The platform has been comprehensively tested. Monitoring software detects any failure, and IT support
is in place to rectify any issues together with a clear disaster recovery plan to be reviewed again in
2026. Policies can be manually underwritten for short periods if required;
The algorithm is independently reviewed by the Risk function annually and subject to an internal audit
in Q4 2025. The risks underwritten are monitored daily by the Portfolio Management team with detailed
MI available. Refinement of the algorithm is ongoing and subject to change management controls and
will include further development of risk monitoring capabilities; and
A Conduct Risk Framework is in place to ensure products and services continue to meet the needs of
our customers.
Notes to the financial statements (continued)
For the year ended 31 December 2025
44
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.6 Emerging risks
A formal emerging risk review has been undertaken by the Risk Management Function. The results of this review
are reported to the Claims, Trends and Emerging Risks Working Group, as well as the Executive Committee,
and are included in the Own Risk & Solvency Assessment (ORSA) report. The review is an important part of the
risk identification aspect of the RMF and includes horizon scanning of the internal and external risk environment
to identify potential new or developing risks to Ki Group. These risks can then be included in the risk register and
managed appropriately as required.
The emerging risk review has identified risks such as climate change and cyber risk. These risks have been
managed throughout their development and are now monitored as part of the business-as-usual risk
management process.
4.6.1 Climate change risk
Climate change is recognised as an emerging risk and has been identified as a high priority by emerging risks
analysis. Its potential impact on the insurance industry is also an area of focus for the wider insurance market
and its regulators.
The RMF sets out the methodology by which the Syndicate identifies, measures, and manages risks associated
with climate change. The Syndicate considers natural catastrophe risk, liability risk and investment risks to be
the most material risks. Using Board tolerances and management metrics, exposure to the above risk types is
managed and monitored on an ongoing basis.
The RMF is reviewed annually, and regulatory developments are monitored on an ongoing basis. The PRA issued
Supervisory Statement SS5/25 in December 2025. This sets out expectations for firms regarding their
management of climate, related risks and replaces the Supervisory Statement SS3/19.
Climate risk management
Natural catastrophe risk
Natural catastrophe risk relates to the physical risks of increased frequency and severity of weather-related
natural catastrophes. This could result in additional claims. Climate change to date may already be affecting
present-day weather events and therefore claims.
Natural catastrophe modelling is leveraged in pricing and outwards reinsurance purchasing decisions. The
Syndicate seeks to ensure a balanced and well diversified portfolio (including exposure to weather perils). The
Syndicate has reviewed its property underwriting strategy in recent years and has sought to reduce exposure in
peak catastrophe regions.
Natural Catastrophe risk is assessed using software provided by Verisk (developed by scientists and
specialists) Ki View of
-house adjustments used to apply view of risk to vendor model output and is being
scientific studies and regularly review the completeness of existing models to ensure the view of risk accurately
captures the current day risk.
The S -region level at key return periods is
monitored on an ongoing basis by the Risk Management Function. Board limits are in place to ensure the
Syndicate is not over-exposed to natural catastrophe risk, and reinsurance is purchased to manage tail risk.
Notes to the financial statements (continued)
For the year ended 31 December 2025
45
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.6 Emerging risks (continued)
4.6.1 Climate change risk (continued)
Liability risk
claims could arise from firms being held responsible for directly contributing to climate change, not taking climate
change into account in business decisions or inadequate disclosures.
through the purchase of reinsurance. There is uncertainty over whether courts rule against insurers and if so,
over what time horizon. The number of climate change litigation related claims notifications is monitored to enable
early identification of any material increase.
Market risk
Investment losses have the potential to arise from exposure to industries contributing to climate change whose
market value could reduce as the economy transitions away from fossil fuels. This transition risk could occur over
the short or long-term depending on government policies and financial market movements.
The Syndicate has a diversified investment portfolio, with limits on exposure to individual issuers. Additionally,
-
and gas or transport. An annual review of equity holdings is conducted which includes a review of the ESG
strategy of the underlying companies.
Climate scenario analysis and understanding climate risk
Climate scenario analysis is key to understanding the potential impact of climate-related risks. Analysis performed
to date considering a range of risks has identified physical risks arising from natural catastrophes as having the
highest potential for insured losses therefore this is an area of greater focus.
ORSA, which assesses both physical and transition risk impacts on insurance, group, operational, market and
credit risk. In 2025, the Risk Function conducted a climate change scenario analysis, assessing insurance,
reserving, operational, and group risks under both orderly and disorderly transition scenarios. The findings from
the tests above have been integrated into:
Clarity on potential losses to be accounted for in underwriting and business planning decisions (relevant
to natural catastrophe risk); and
The ORSA process, to ensure climate change related risks are considered across relevant areas of the
business (relevant to all risks).
Notes to the financial statements (continued)
For the year ended 31 December 2025
46
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.6 Emerging risks (continued)
4.6.2 Geopolitics
Geopolitical events, including the ongoing conflicts in Ukraine and the Middle East, as well as renewed US-
China trade tensions, continue to pose risks of insurance losses and financial market disruption. Losses may
arise from direct damage caused by conflicts or from secondary impacts, such as supply chain disruptions and
costs. The Group continues to monitor these developments closely.
Geopolitical risk events may also impact the global economy, as discussed in section 4.6.3 below.
4.6.3 Global economic environment
Inflation in the USA and UK remains above target despite easing from prior peaks, driven by wage pressures and
renewed tariff impacts. Interest rates have begun to decline gradually but remain high compared to pre-2022
levels. Political uncertainty persists following the US aggressive trade policies, while ongoing conflicts in Ukraine
and the Middle East, coupled with rising protectionism, continue to weigh on global markets.
Although recession risks have moderated, they remain, given these factors. There are potential implications for
claims frequency and severity, investment performance, counterparty credit risk, and operational resilience. The
Syndicate continues to actively monitor and respond to the evolving economic environment.
The Syndicate has considered the impact of the increased level of inflation and the economic downturn. Increased
focus has been placed on ensuring the pricing models adequately address current inflationary trends.
Feeding into these models is an enhanced framework assessing the key drivers of claim settlement costs for
each class of business. Inflationary impacts were also considered during the year end reserving process.
The Syndicate remains cognisant of the impact of inflation on the underlying portfolio. We continue to review the
key drivers of claim settlement costs and frequency by class of business, which in turn will further inform any
required recalibration of our pricing models. Our reserves continue to incorporate our current view of social and
economic inflation and include a risk adjustment to allow for uncertainty.
Regulatory Authority (PRA) under the Financial Services and Markets Act 2000, and in accordance with the
Solvency UK framework.
UK, and beyond that to meet its own financial strength, licence and ratings
objectives.
as a starting point, the requirement to meet Solvency UK
member level respectively, not at syndicate level. Accordingly, the capital requirement in respect of the Syndicate
is not disclosed in these financial statements.
(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
UK requirements. The SCRs of each syndicate are subject to
Notes to the financial statements (continued)
For the year ended 31 December 2025
47
Ki Syndicate 1618 Annual Report 2025
4 Principal risks and uncertainties (continued)
4.7 Capital risk management
own share of underwriting liabilities on the syndicate(s) on which it participates but not other member s shares.
Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the
spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200
year loss to ultimate for that member. Over and above this, Lloyd's applies a capital uplift to the member's capital
not a Solvency UK
uplift applied for 2025 was 35% (2024
Provision of capital by members
s
Funds in syndicate are not applicable to the Syndicate
Accordingly, all of
on the statement of financial position on page 17
capital requirements.
Capital calculation
The SCR to Ultimate is calculated using a stochastic risk-based capital model developed by the Ki Group which
allows the Board of the Managing Agent to identify an appropriate level of capital required. This capital
requirement is specific to the actual reserving history, reinsurance programme and business profile of the
Syndicate rather than being based on company market averages. The Managing Agent Internal Model Steering
Notes to the financial statements (continued)
For the year ended 31 December 2025
48
Ki Syndicate 1618 Annual Report 2025
5 Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the following table:
2025
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
Direct Insurance:
Accident and health 3,726
(1,917 )
(759 )
Marine, aviation and
transport 74,030
(41,179 )
(21,068 )
(5,354 )
Fire and other
damage to property 284,569
(79,811 )
(93,154 )
(39,252 )
Third party liability 153,876
(115,960 )
(44,879 )
(3,104 )
(8,658 )
Miscellaneous 14,756
(4,901 )
(4,982 )
(1,325 )
Total Direct
Insurance 530,957
(241,357 )
(166,000 )
(49,794 )
Reinsurance
acceptances 322,065
(196,112 )
(106,347 )
(4,935 )
Total 853,022
(437,469 )
(272,347 )
(54,729 )
2024
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
Direct Insurance:
Accident and health 4,166
(1,241 )
(2,016 )
(1,182 )
Marine, aviation and
transport 78,666
(56,001 )
(17,364 )
Fire and other
damage to property 303,414
(161,708 )
(71,140 )
(54,817 )
Third party liability 164,870
(103,494 )
(36,604 )
(17,084 )
Miscellaneous 12,957
(4,971 )
(3,594 )
(1,909 )
Total Direct
Insurance 564,073
(327,415 )
(130,718 )
(74,759 )
Reinsurance
acceptances 236,900
(160,350 )
(75,628 )
Total 800,973
(487,765 )
(206,346 )
(64,513 )
Notes to the financial statements (continued)
For the year ended 31 December 2025
49
Ki Syndicate 1618 Annual Report 2025
5 Analysis of underwriting result (continued)
2025
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
Additional analysis
Fire and other damage to property of which is:
Specialties 3,943
(1,154 )
(1,130 )
(990 )
Energy 3,821
(4,549 )
(1,456 )
(132 )
(1,667 )
Third party liability of which is:
Energy 2,200
(1,343 )
(528 )
(75 )
(81 )
2024
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
Additional analysis
Fire and other damage to property of which is:
Specialties 923
(257 )
(693 )
Energy 13,600
(7,075 )
(3,243 )
(1,051 )
(934 )
Third party liability of which is:
Energy 672
(321 )
(157 )
(55 )
(11 )
No gains or losses were recognised in profit or loss during the year on buying reinsurance (2024: nil).
The gross premiums written for direct insurance by underwriting location is presented in the table below:
2025 | 2024 | |
| United Kingdom | ||
| Europe (excluding UK) | | |
| Total |
The geographical concentration of total gross written premium and net written premium can be found in Note
4.1(a)(iii).
Notes to the financial statements (continued)
For the year ended 31 December 2025
50
Ki Syndicate 1618 Annual Report 2025
| 6 Net operating expenses | ||
2025 | 2024 | |
$ | $ | |
| Acquisition costs | ||
| Change in deferred acquisition costs | ( | |
| Reinsurance commissions and profit participation | ( | ( |
| Administrative expenses | ||
| Member s standard personal expenses | ||
| Net operating expenses |
Total commission for direct insurance business for the year amounted to:
2025 | 2024 | |
| 000 | $ | |
| Total commission for direct insurance business |
The auditors remuneration and audit services charged to the Syndicate within the annual fixed fee charged by
the Managing Agent and the auditors remuneration borne by another group company are as follows:
2025 | 2024 | |
| 000 | $ | |
auditors for the audit of these financial statements | ||
auditors and its associates in respect of other services pursuant to legislation | ||
| Total | 862 | 622 |
7 Key management personnel compensation
remuneration
The aggregate emoluments of the Directors and staff of the Asta Group are charged to companies of the Asta
Group in accordance with the proportion of their time associated with each company. Further disclosures
in the financial statements of Asta.
No remuneration of the Directors of Asta has been charged to the Syndicate for the 2025 calendar year.
For 2024 calendar year, BSL was the Managing Agent for the Syndicate up until 31 December 2024. Following
as its Managing Agent from 1st January 2025. No remuneration of the
Directors of BSL or KFL has been charged to the Syndicate for the 2024 calendar year.
No other compensation was payable to key management personnel.
remuneration
The active underwriter received the following remuneration charged to the Syndicate.
2025 | 2024 | |
| Emoluments |
The active underwriter also received $41k (2024: $25k) of pension contributions.
Notes to the financial statements (continued)
For the year ended 31 December 2025
51
Ki Syndicate 1618 Annual Report 2025
8 Staff numbers and costs
the other legal
entities of the Ki Group including the Syndicate.
The following amounts were recharged by KGSL to the Syndicate during the year in respect of payroll costs:
2025
2024
$
$
Wages and salaries 12,593
-
Social security costs 503
-
Other pension costs 2,119
-
Other 1,346
-
Total 16,561
-
recharged to the Syndicate. The full staff cost disclosure was cial
statements.
9 Investment return
2025 | 2024 | |
| $ | $ | |
Interest and similar income | ||
From financial instruments designated at fair value through profit or loss | ||
| Interest and similar income | ||
| Interest on cash at bank | ||
Other income from investments From financial instruments designated at fair value through profit or loss | ||
| Gains on the realisation of investments | ||
| Losses on the realisation of investments | ( | ( |
| Unrealised gains on investments | ||
| Unrealised losses on investments | ( | |
| Investment management expenses | ( | ( |
| Total investment return |
10 Distribution
A distribution to the corporate member of $176,566k will be proposed in relation to the closing year of account
2023. A distribution of $75,800k was made to the corporate member in relation to closing the 2022 year of account
in the 2025 financial year (2024: $278k distribution in relation to the closing year of account 2021).
Notes to the financial statements (continued)
For the year ended 31 December 2025
52
Ki Syndicate 1618 Annual Report 2025
11 Financial investments
2025 | Carrying Value | Cost |
| Shares and other variable yield securities and units in unit trusts | | |
| Debt securities and other fixed income securities | ||
| Derivative assets | ||
| Total financial investments |
2024 | Carrying Value | Cost |
| $ | $ | |
| Shares and other variable yield securities and units in unit trusts | | |
| Debt securities and other fixed income securities | ||
| Derivative assets | ||
| Total financial investments |
$1,220,416k (2024: $995,284k
99.9% (2024: 99.9%) of the total market value of investments.
All financial investments have been designated as held at fair value through profit or loss.
The following table shows financial investments recorded at fair value analysed between the three levels in the
fair value hierarchy:
Level 1 | Level 2 | Level 3 | Total | |
| 2025 | $ | $ | $ | $ |
Shares and other variable yield securities and units in unit trusts | ||||
| Debt securities and other fixed income securities | ||||
| Derivative assets | ||||
| Total financial investments | ||||
| Derivative liabilities | ( | ( | ||
| Total |
Level 1 | Level 2 | Level 3 | Total | |
| 2024 | $ | $ | $ | $ |
Shares and other variable yield securities and units in unit trusts | ||||
| Debt securities and other fixed income securities | ||||
| Derivative assets | ||||
| Total financial investments | ||||
| Derivative liabilities | ( | ( | ||
| Total |
a. Basis for determining the fair value hierarchy of financial instruments
The Syndicate has classified the fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making those measurements. The fair value hierarchy comprises the following levels:
1. Level one quoted prices (unadjusted) in active markets for identical assets
2. Level two inputs other than quoted prices included within level one that are observable for the asset,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3. Level three inputs for the assets that are not based on observable market data (unobservable inputs).
Notes to the financial statements (continued)
For the year ended 31 December 2025
53
Ki Syndicate 1618 Annual Report 2025
11 Financial investments (continued)
a. Basis for determining the fair value hierarchy of financial instruments (continued)
Assets are categorised as level one where fair values determined in whole directly by reference to an active
market relate to prices which 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
For assets and liabilities that are recognised at fair value on a recurring basis, the Syndicate determines whether
transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level
of input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Fair values for level two and level three assets include:
Values provided at the request of the Syndicate by pricing services, and which are not publicly available,
or values provided by external parties which are readily available but relate to assets for which the
market is not always active; and
Assets measured on the basis of valuation techniques including a varying degree of assumptions
supported by market transactions and observable data.
For all assets not quoted in an active market or for which there is no active market, the availability of financial
data can vary and is affected by a wide variety of factors, including the type of financial instrument, whether it is
new and not yet established in the marketplace, and other characteristics specific to each transaction. To the
extent that valuation is based on the models or inputs that are unobservable in the market, the determination of
fair value requires more judgement. Accordingly, the degree of judgement exercised is higher for instruments
classified in level three and the classification between level two and level three depends highly on the proportion
of assumptions used, supported by market transactions and observable data.
b. Valuation techniques
Level one
These represent assets traded in an active market whose quoted price is readily and regularly available and
These also include government
bonds and treasury bills issued in the US, Canada and in the UK.
Level two
Inputs include directly or indirectly observable inputs (other than level one inputs) such as quoted prices for similar
financial instruments exchanged in active markets, quoted prices for identical or similar financial instruments
exchanged in inactive markets and other market observable inputs.
Level two securities contain certain investments in US and non-US government agency securities, US and non-
US corporate debt securities and specialised investment funds. US government agency securities are priced
using valuations from independent pricing vendors who use discounted cash flow models supplemented with
market and credit research to gather specific information. Market observable inputs for these investments may
include broker-dealer quotes, reported trades, issuer spreads and available bids. Non-US government agency
securities are priced with over-the-counter (OTC) quotes or broker-dealer quotes. Other market observable inputs
include benchmark yields and reported trades. Issuer spreads are also available for these types of investments.
US and non-US corporate debt securities are investment grade, and the information collected during pricing of
these instruments includes credit data as well as other observations from the market and the particular sector.
Prices for all these securities are based on a limited number of transactions (OTC prices/broker-dealer quotes)
so they are derived indirectly using inputs that can be corroborated by observable market data. These also include
certain private placement corporate debt securities which are valued with the use of discounted cash flow models.
Level two specialised investment funds contain credit opportunities funds that are valued based on the underlying
assets in the fund on a security-by-security basis. A number of direct and indirect inputs such as benchmark yield
curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates and
anticipated timing of principal repayments are considered during their valuation.
Notes to the financial statements (continued)
For the year ended 31 December 2025
54
Ki Syndicate 1618 Annual Report 2025
11 Financial investments (continued)
b. Valuation techniques (continued)
Level three
investments are not traded/quoted in an active market. Pricing models factor in interest rates, bond or credit swap
spreads and volatility.
Level three specialised investment funds include securities that are valued using techniques appropriate to each
specific investment. The valuation techniques include fair value by reference to net asset values (NAVs) adjusted
and issued by fund managers based on their knowledge of underlying investments and credit spreads of
counterparties. In some instances, certain investment funds are classified as Level three because they may
This requirement results in an adjustment to the reported value
for illiquidity which is unobservable.
traded/quoted in an active market. In some instances, limited partnerships are classified as level three because
they may require at least three months of notice to liquidate. This requirement results in an adjustment to the
reported value for illiquidity which is unobservable.
12 Derivative contracts
The Syndicate purchases derivative financial instruments:
i. to hedge its foreign currency exposure on future commitments;
ii. as part of its investment management strategy.
The hierarchy of fair values of derivatives contracts is included within the Fair Value Hierarchy in note 11 above.
13 Provision for unearned premium
Gross
Provisions
Reinsur
ance
assets
Net
Balance at 1 January 2025 388,836
(26,601 )
Premiums written during the year 853,022
(86,264 )
Premiums earned during the year (846,602 )
(754,777 )
Foreign exchange movements 5,999
(348 )
Balance at 31 December 2025 401,255
(21,388 )
Gross
Provisions
Reinsu
rance
assets
Net
$
$
$
Balance at 1 January 2024 416,482
(99,963 )
Premiums written during the year 800,973
(87,336 )
Premiums earned during the year (825,014 )
(664,664 )
Foreign exchange movements (3,605 )
(3,257 )
Balance at 31 December 2024 388,836
(26,601 )
2025
2025
2024
2024
Notational
amount
Fair value
Notational
amount
Fair value
Foreign exchange forward contract assets 1,002
1,002
617
617
Foreign exchange forward contract liabilities (252)
(252)
(1,646)
(1,646)
Net value of derivatives at 31 December 750
(1,029 )
(1,029 )
Notes to the financial statements (continued)
For the year ended 31 December 2025
55
Ki Syndicate 1618 Annual Report 2025
14 Claims outstanding
Gross
provisions
Reinsur
ance
assets
Net
Balance at 1 January 2025 986,098
(191,860 )
Claims paid during the year (298,985 )
(229,298 )
Expected cost of current year claims 251,477
(18,057 )
Change in estimates of prior year provisions 185,992
(11,621 )
Foreign exchange movements 14,639
(2,610 )
Balance at 31 December 2025 1,139,221
(154,461 )
Gross
provisions
Reinsurance
assets
Net
Balance at 1 January 2024 732,568
(160,298 )
Claims paid during the year
(227,606 )
(187,816 )
Expected cost of current year claims 289,038
(27,975 )
Change in estimates of prior year provisions 198,727
(44,648 )
Foreign exchange movements (6,629 )
(5,358 )
Balance at 31 December 2024 986,098
(191,860 )
15 Claims development tables
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. Non-US dollar cumulative claims estimates, and cumulative
payments are translated into US dollars at the period end rate as at 31 December 2025.
Estimate of cumulative gross claims incurred
| Estimate of cumulative net claims incurred | ||||||
| Underwriting year | 2021 | 2022 | 2023 | 2024 | 2025 | Total |
At end of first underwriting year | ||||||
| One year later | ||||||
| Two years later | ||||||
| Three years later | ||||||
| Four years later | ||||||
Estimate of net claims reserve | ||||||
Less cumulative net claims paid | ( | ( | ( | ( | ( | ( |
| Total net claims reserves | | |||||
Underwriting year 2021
2022
2023
2024
2025
Total
At end of first underwriting
year 123,868
One year later 268,725
Two years later 272,565
Three years later 263,927
Four years later 261,138
Estimate of gross claims
reserve 261,138
Less cumulative gross claims
paid (174,024 )
(284,878 )
(197,057 )
(134,814 )
(10,907 )
(801,680 )
Total gross claims reserves 87,114
Notes to the financial statements (continued)
For the year ended 31 December 2025
56
Ki Syndicate 1618 Annual Report 2025
15 Claims development tables (continued)
The uncertainty associated with the ultimate claims experience of an underwriting year is greatest when the
underwriting year is at an early stage of development and the margin for future experience potentially being more
adverse than assumed is at its highest. As claims develop, and the ultimate cost of the claims becomes more
certain, the relative level of margin should decrease. Due, however, to the uncertainty inherent in the claims
estimation process, initial reserves may not always be in a surplus. This is particularly so for large catastrophe
claims where uncertainly is initially great.
16 Deferred acquisition costs
2025
2025
2024
2024
Gross
provisions
Reinsurance
assets
Gross
provisions
Reinsurance
assets
Balance at 1 January 101,488
(3,427 )
(19,698 )
Incurred deferred acquisition costs 209,831
(5,647 )
(6,924 )
Amortised deferred acquisition costs (213,727 )
(177,992 )
Foreign exchange movements 2,091
(1,003 )
(19 )
Balance at 31 December 99,683
(1,446 )
(3,427 )
17 Debtors arising out of direct insurance operations
2025 | 2024 | |
| Due within one year | | |
| Total |
18 Debtors arising out of reinsurance operations
2025 | 2024 | |
| Due within one year | | |
| Total |
19 Other debtors
Restated
2025 | 2024 | |
| Amounts due from members* | | |
| Other | ||
| Total |
*The line have been re-presented financial
statements. In the prior year this line was on the Statement of Financial Position and the
.
20 Creditors arising out of direct insurance operations
2025 | 2024 | |
$ | $ | |
| Due within one year | ||
| Total |
Notes to the financial statements (continued)
For the year ended 31 December 2025
57
Ki Syndicate 1618 Annual Report 2025
21 Creditors arising out of reinsurance operations
2025 | 2024 | |
| Due within one year | ||
| Total |
22 Other creditors including taxation and social security
2025 | 2024 | |
$ | $ | |
| Other related party balances (non-syndicates) | ||
| Derivative Liabilities | ||
| Other liabilities | ||
| Total |
23 Cash and cash equivalents
2025 | 2024 | |
| Cash at bank and in hand | ||
| Shares and other variable yield securities and units in unit trusts | ||
| Total cash and cash equivalents |
Shares and other variable yield securities and units in unit trusts are investments in nature but are treated as
cash and cash equivalents for cash flow purposes, so therefore are included in both Financial investments and
Cash and cash equivalents.
Cash and cash equivalents comprises cash at bank and in hand, Shares and other variable yield securities and
units in unit trusts, and other highly liquid investments with a maturity of three months or less at the date of
acquisition.
Of the total cash and cash equivalents, the following amount was held in regulated bank accounts in overseas
jurisdictions.
2025 | 2024 | |
Total cash and cash equivalents held in regulated accounts in overseas jurisdictions |
24 Other assets
Other assets comprise only overseas deposits which are lodged as a condition of conducting underwriting
business in certain countries.
Notes to the financial statements (continued)
For the year ended 31 December 2025
58
Ki Syndicate 1618 Annual Report 2025
25 Related parties
a. Asta Managing Agency Limited (Asta or the Managing Agent)
Asta provides services and support to the Syndicate in its capacity as Managing Agent. During the year,
Managing Agency fees of $2,773k were charged to the Syndicate (2024: $4,005; charged by BSL, the former
managing agent). Asta also recharged $1,458k worth of service charges in the year (2024: $500k of outsourcing
fees; recharged by BSL, the former managing agent) and as at 31 December 2025 a cumulative amount are all
paid in respect of this service (2024: $4,210k were outstanding to be paid to BSL, the former managing agent).
From time to time, syndicates managed by Asta enter into (re)insurance contracts with one another. All such
Byelaw provisions. All transacti For the year ended 31 December 2025, there
are no (re)insurance contracts with other syndicates managed by Asta.
Asta Capital Ltd, the parent of Asta Managing Agency Limited, is owned by the Davies Group but maintains a
level of independence by virtue of separate boards and a separate governance structure. Other entities within
the wider Davies Group provide insurance- . The
provision of these services is managed by a separate management team distinct from Asta, and these services
The ultimate parent company of Asta Managing Agency Limited is Tennessee Topco Ltd.
b. Fairfax Financial Holdings Limited (FFHL)
The Syndicate has historically entered into various (re)insurance arrangements with subsidiaries of FFHL. The
gross premiums written with FFHL subsidiaries for the year ended 31 December 2025 are $24,735k with
insurance receivables of $24k (2024: GWP of $2,426k and insurance receivables of $618k). During the current
reporting period Syndicate has entered into a material new reinsurance arrangement with Brit Syndicate 2987.
c. Ki Financial Limited (KFL)
There are no financial transactions between the Syndicate and KFL, the parent company of the Ki Group of
companies. There are no related party director disclosures to note for the year ended 31 December 2025.
d. Ki Member Limited (KML)
KML is a wholly owned subsidiary of KFL
underwriting activity. The current capacity for the 2025 year of account is $1,017,429k (2024: $927,216k).
e. Syndicate premium income derived from other related parties in the wider Fairfax group of
companies
The Brit group of companies (Brit) of which Brit Group Holdings Limited is the parent, is a fellow subsidiary of
FFHL. The following related parties in the wider Brit and Ki groups of companies introduced insurance business
to the Syndicate during 2025:
Ki Digital Services Limited (Ki Digital)
Camargue Underwriting Managers Proprietary Limited
Sutton Specialty Risk Inc
The amounts in the income statement relating to trading with these related parties for the year ended 31
December 2025 included commission for introducing insurance business of $33,420k (2024: $29,457k).
Amounts recorded in the statement of financial position in respect of premium net of commissions due from, and
fees payable, to these related parties as at 31 December 2025 were $17,676k (2024: $9,980k).
Notes to the financial statements (continued)
For the year ended 31 December 2025
59
Ki Syndicate 1618 Annual Report 2025
25 Related parties (continued)
A brief description of the various related parties introducing insurance business to the Syndicate is as follows:
Ki Digital Services Limited (Ki Digital)
Ki Digital Services Limited (Ki Digital), a subsidiary of KFL, commenced trading in 2024, acting as a
insurance intermediary on behalf of its partners (including the Syndicate) and charges commission on
the insurance business introduced.
Camargue Underwriting Managers Proprietary Limited
On 30 August 2016, the Brit Group acquired 50% of the share capital of the South African company,
Camargue Underwriting Managers Proprietary Limited (Camargue) and also entered into a call and a put
option to purchase the remaining 50% in 2021. On 4 October 2021, Camargue became a 100%
subsidiary of the Group and ceased to be an associated undertaking. Camargue is a leading managing
general underwriter of a range of specialised insurance products and specialist liability solutions in South
Africa and is an
length basis and is settled in cash.
Sutton Specialty Risk Inc
On 2 January 2019, Brit Insurance Holdings Limited, acquired 49% of the issued shares of Sutton
Specialty Risk Inc (Sutton) for a total purchase consideration of CAD$17,200k and entered into a forward
contract to purchase the remaining 51% in 2023. Sutton is a Canadian MGU, specialising in Accident
and Health business. The 49% shareholding in Sutton was sold on 8 March 2024 to Amynta Group. The
arms-length underwriting relationship between Sutton and the Syndicate continued post sale.
f. Ki Group Services Limited (KGSL)
KGSL is a group services company. With effect from 1 August 2024, all Ki staff were transferred to KGSL via a
arrangement.
KGSL recharged expenses to the Syndicate during the period of $41,044k (2024: $4,731k of expenses incurred
by the Brit Group services company, Brit Group Services Limited (BGSL). Amounts were recharged to the
Syndicate as part of the direct costs recharged by Brit Syndicates Limited).
The amount recorded in the statement of financial position in respect of expenses recharges payable to KGSL
as at 31 December 2025 is $1,681k (31 December 2024: $4,210k was payable to Brit Syndicates Limited).
26 Disclosure of interests
As at 31 December 2025, Asta was the Managing Agent for the following syndicates on behalf of third-party
capital providers:
Syndicates 1322, 1609, 1618, 1699, 1892, 1947, 1984, 1985, 1988, 2525, 2689, 3123 and 4747,
Syndicates-in-a-Box 1796, 1902, 1922, 1966, 2427, 2880, 3456 and 5183.
During 2025, Asta took on management of the following syndicates:
Syndicate 1618 on 1 January 2025
Syndicate 1984 on 1 April 2025
Syndicate 1947 on 1 July 2025
On 1 January 2026, Asta took on management of syndicates 1918, 2126 and 2610.
Notes to the financial statements (continued)
For the year ended 31 December 2025
60
Ki Syndicate 1618 Annual Report 2025
26 Disclosure of interests (continued)
During 2025, Asta ceased to be the Managing Agent for the following syndicates:
Syndicate 2786 on 17 August 2025
Syndicate 4242 and Special Purpose Arrangement 1416 on 30 December 2025
The Managing Agency also provides administrative services to syndicates and special purpose arrangements,
also undertaking several ancillary roles for other clients.
The financial statements of the Managing Agency can be obtained by application to the Registered Office (see
page 2).
27
These funds are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet
ng liabilities.
Regulation Authority (PRA) requirements and resource criteria. FAL has regard to a number of factors including
but not limited to the nature and amount of risk to be underwritten by the member and the assessment of the
reserving risk in respect of business that has been underwritten. Since FAL is not under the control of the
Managing 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.
28 Ultimate holding company
The ultimate parent of the Ki Syndicate at the reporting date is Fairfax Financial Holdings Limited a company
registered in Toronto. Copies of Fairfax consolidated financial statements can be obtained by writing to 95
Wellington Street West, Suite 800, Toronto, Ontario, Canada, M5J 2N7 or from the website www.fairfax.ca.
29 Post balance sheet events
There are no post balance sheet events to disclose.
