Important information about Syndicate Annual Reports and Accounts
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AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
SYNDICATE 3002
ANNUAL REPORT AND ACCOUNTS
YEAR ENDED
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
CONTENTS
Directors and Administration
1
Financial Highlights
2
Strategic Report of the Managing Agent
3
Managing Agent’s Report
9
Statement of Managing Agent’s Responsibilities
10
Independent Auditor's Report to the Member of Syndicate 3002
11
Statement of Profit or Loss and Other Comprehensive Income
15
Statement of Changes in Member's Balances
16
Balance Sheet - Assets
17
Balance Sheet (continued) - Liabilities
18
Statement of Cash Flows
19
Notes to the Financial Statements – (forming part of the financial statements)
20
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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SYNDICATE INFORMATION
MANAGING AGENT:
Managing Agent
Company number
01815126
Directors
P Bishop
(Non-Executive)
M Cantor-Grable
(Non
-
Executive)
M Cummings
M Gosselin
J Lejeune
(Non-Executive)
S McGovern
M O'Connor
(Non
-
Executive)
B Poupart-Lafarge
(Non
-
Executive)
C Richmond
(Non
-
Executive)
N Williams
(Non
-
Executive)
Company secretary
A M Bond
Registered office
20 Gracechurch Street
London
EC3V 0BG
SYNDICATE:
Active underwriter
S Hearn
Independent auditor
Ernst & Young LLP
25 Churchill Place, Canary Wharf
London
E14 5EY
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FINANCIAL HIGHLIGHTS
Key Performance Indicators ("KPI's")
2025
2024
Syndicate capacity (£'m)
38
33
Gross premiums written (£'m)
33
36
Premiums written, net of reinsurance (£'m)
30
34
Earned premiums, net of reinsurance (£'m)
30
34
Underwriting profit (£'m)
1
7
Total investment return (£'m)
1
(1)
Total comprehensive income for the year (£'m)
2
6
Claims ratio (%)
71
53
Expense ratio (%)
26
27
Combined ratio (%)
96
80
Claim ratio is the percentage of net incurred claims in relation to earned premiums, net of reinsurance.
Expense ratio is the percentage of net operating expenses in relation to earned premiums, net of reinsurance.
The combined ratio is the sum of the ratios of net operating expenses and claims incurred, net of reinsurance
and earned premiums, net of reinsurance. A combined ratio of less than 100% represents an underwriting profit.
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STRATEGIC REPORT OF THE MANAGING AGENT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors of AXUAL, the Managing Agent, present their strategic report and audited financial statements for
the year ended 31 December 2025.
Principal activities
The principal activity of Syndicate 3002 ("the Syndicate") is to underwrite term life insurance business within the
Lloyd's of London market. The Syndicate's strategy is to focus on developing UK and International term life
insurance and reinsurance solutions, both on a standalone basis and in conjunction with the Accident and Health
policies offered by Syndicate 2003.
The Syndicate trades through Lloyd's worldwide licenses, rating and brand. Lloyd's has an A + (Superior) rating
from A.M.Best, AA- (Very Strong) rating from S&P and AA- (Very Strong) rating from Fitch. AXA S.A. which
backs the Syndicate has an AA- (Stable) rating from S&P, Aa2 (Stable) rating from Moody's and A+ (Superior)
rating from A.M.Best.
Results and performance
Premiums
The gross premiums written for the Syndicate decreased 10.8% in 2025 to £32.5m (2024: £36.4m), driven
mainly by lower estimated premium.
Analysis of the Syndicate’s business written by class of business is set out in Note 5: Analysis of underwriting
result, in the notes to the financial statements.
Underwriting result
The Syndicate has reported an underwriting profit (earned premiums, net of reinsurance less claims incurred,
net of reinsurance and net operating expenses) of £1.1m (2024: £7m) with a combined ratio of 96% (2024:
80%) mainly driven by lower net earned premium.
Investment performance
The investment portfolio return relating to the technical accounts is at £0.9m
(2024: £0.7m unfavourable).
Overall result
The total comprehensive income is £2.2m (2024: £6.1m income).
Strategy and future outlook
AXUAL's strategy is to leverage the inherent strengths of the Lloyd's market to write a portfolio of business that
provides a better return than the market over the underwriting cycle. We aim to differentiate ourselves through
offering underwriting excellence in specialised areas of insurance and reinsurance. Our objective is to support
our underwriters with a flexible underwriting environment, superior analytics, efficient claims handling and a
robust Enterprise Risk Management Framework (“RMF”).
The Syndicate’s focus is to continue sustainable and disciplined growth across the business it writes. An
enhanced focus is being placed on portfolio analysis and optimization actions to exit or re-underwrite poor
performing accounts and grow better performing accounts.
The Syndicate will continue to transact term life insurance business. Disciplined development of the business will
continue to be encouraged and supported by the Board.
For the 2026 underwriting year, the Syndicate will continue to purchase intra group reinsurance with XL Bermuda
Ltd
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STRATEGIC REPORT OF THE MANAGING AGENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Risk Management
The Syndicate faces strategic, financial, and operational risks related to, among others: underwriting activities,
financial reporting, changing macroeconomic conditions, investment, reserving, changes in laws or regulations,
information systems, business interruption and fraud. An enterprise view of risk is required to identify and
manage the consequences of these common risks and risk drivers on our profitability, capital strength and
liquidity which is managed by the Managing Agent’s risk management function who implement the RMF.
The RMF is reviewed by the Board, at least annually which includes a self-attestation of compliance with the
Framework which is completed by the UK Risk function. The RMF would be reviewed more regularly if the
Company was subject to a major change in regulatory requirements, strategy, or organisational structure. The
aim of the RMF is to:
•
Set out the Syndicate's approach to risk management, including the governance processes in place
including the roles and responsibilities across the three lines of defence in the management of risks
faced by the business;
•
Support business objectives and strategy;
•
Provide management information to facilitate the identification and understanding of material risks
including related mitigants;
•
Contribute to the Company's overall internal control framework by helping to manage the inherent
complexity within the business;
•
Support regulatory risk management requirements; and
•
Set out the approach for creating a positive risk culture.
Key risks and uncertainties facing the Syndicate are:
Risk
Description
Mitigation
Insurance risk
Insurance risk arises from the Syndicate's general
insurance business and refers to the risk of loss or
of adverse change in the value of insurance
liabilities due to inadequate pricing and reserving
assumptions. Examples of such risks include
unexpected losses arising from fluctuations in the
timing, frequency and severity of claims compared
to
expectations
and
inadequate
reinsurance
protection.
The Syndicate seeks to maintain a diversified and
well-balanced portfolio of risks. The Syndicate's
underwriting and reinsurance strategies are set
within the context of the overall AXA XL strategies,
approved by the AXUAL Board and communicated
clearly throughout the business through policy
statements and guidelines.
Market risk
Market risk is the impact arising from the
uncertainty of asset prices, interest rates, foreign
exchange rates, and other factors related to
financial
markets
and
investment
asset
management.
Restrictions are placed upon external investment
managers' strategies, and close monitoring is
performed of activity.
Liquidity risk
Liquidity risk is the risk that cash may not be
available to pay obligations when due at a
reasonable cost. The primary liquidity risk of the
Syndicate is the obligation to pay claims as they
fall due.
The projected settlement of these liabilities is
modelled, on a regular basis, using actuarial
techniques. The Syndicate manages this risk by
maintaining
sufficient
liquid
assets
to
meet
expected cash flow requirements.
Operational
risk
Operational risk is the risk of loss, resulting from
inadequate or failed internal processes, or from
people and systems, or from external events.
The Managing Agent manages this risk through a
formal disaster recovery plan, monitoring of risk,
and by the Syndicate's inclusion in AXA XL's
Internal Control Framework.
Credit risk
Credit risk is the risk that a counterparty will be
unable to pay amounts in full when due. This
includes reinsurance counterparty and investment
counterparty risk.
Credit risk is identified through the business
planning process, counterparty creditworthiness
reviews,
regulator
monitoring,
and
limits
to
exposure on a single counterparty.
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STRATEGIC REPORT OF THE MANAGING AGENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Geopolitical risk and conflict
Ongoing geopolitical instability and uncertainty in regions across the world continues to affect economic and
global financial markets, and has exacerbated ongoing economic challenges such as higher inflation, lower
growth, and global supply-chain disruption. This includes but is not limited to the Russian invasion of Ukraine
and further conflicts in the Middle East.
The Directors continue to monitor these situations closely to identify potential exposures arising out of
underwriting, impacts on investments, operational issues including potential cyber-attacks, impacts from
sanctions, and the potential expansion or changes to the conflicts.
Engaging with stakeholders
The Board is cognisant of the stakeholders of the Company, as the managing agent of the Syndicate, and the
importance of strong relationships coupled with appropriate levels of communication and engagement.
People
The Company, in line with the AXA XL Division, strives to create a diverse and inclusive workplace that values
and encourages individual differences and treats all employees with dignity and respect. It acknowledges that
the workforce’s culture, values, behaviours, performance, and engagement drive how the Company serves its
customers.
To facilitate this, and to provide equal opportunities to all employees, regardless of 'protected characteristics',
there is a robust Inclusion and Diversity ("I&D") 'Authentic You' strategy and roadmap in the UK. The roadmap
and governance are set and monitored by the UK I&D Board. Several mechanisms are in place to support the
I&D strategy, including:
•
All employees are encouraged to set an annual I&D goal to ensure they too have an opportunity to
contribute to I&D as a strategic business priority.
•
A global ‘Dignity at Work’ policy and associated mandatory training for all employees to protect against
harassment and discrimination, ensuring colleagues feel safe, valued, and respected.
•
Initiatives and charters to support diversity at all levels enhanced by specific talent and development
programmes for traditionally underrepresented groups, such as ‘Women in Finance’, and a ‘Race at
Work Charter’.
•
Four UK Business Resource Groups ("BRGs") - LEAD, Pride, Rise, EnAble and, additionally, the UK I&D
Board drive innovation, collaboration, and business goals to promote I&D at AXA XL. The BRGs work
with the central I&D team to ensure overall alignment with AXA XL’s business goals.
•
Inclusive Futures Coalition founding partner, working with Lloyd’s and London Market firms to deliver the
programme’s three flagship initiatives: higher education bursaries, an early careers talent pool and a
Board-level talent pool. Supporting black and ethnically diverse individuals to participate and progress
from the classroom to the boardroom. The early careers programmes include the partnership with
10,000 Interns Foundation and selected collaborations within the UK Insurance market and educational
institutions, designed to enhance the diversity of the workforce.
•
Applications for employment by disabled persons are always fully considered, and equal opportunities
given. Reasonable adjustments are provided to applicants and colleagues where required to ensure they
are appropriately supported.
•
AXA XL’s We Care programme; providing colleague support including a Focus on Families, Dependents
Care Leave and domestic abuse support.
•
Regular webinars and live sessions are offered to colleagues supporting I&D education.
•
AXA XL holds strategic partnerships with various external partners in the UK to provide best practice and
strategic guidance – ICAN (Insurance Cultural Awareness Network), Business In The Community, LGBT
Great and GAIN (Group for Autism, Insurance, Investment and Neurodiversity).
The AXUAL Board monitors people-related items through regular reports to its Governance Committee with
topics including people strategy, succession planning, remuneration, employee engagement surveys and annual
UK Gender & Ethnicity Pay Gap reporting. The Company is committed to engaging with its workforce, with
representatives from the workforce contributing and participating in decisions where appropriate, facilitated via
regular Town Halls with Q&A, Engagement & Inclusion Surveys and the Employee Representative Body,
representing the colleague voice.
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STRATEGIC REPORT OF THE MANAGING AGENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Customers
The Company believes that fostering business relationships with its brokers and clients is important to the
Company's success.
The Company strives to build trusted relationships with brokers and clients and to always treat them fairly,
providing commitment to its clients that the business delivers on its purpose, to "act for human progress by
protecting what matters". Delivering on this purpose helps to enhance AXA’s reputation, both in the eyes of the
brokers and clients, and other external stakeholders such as regulators, rating agencies and the media.
Claims are dealt with promptly and efficiently, in compliance with applicable regulations and laws. The Company
is committed to acting in the best interests of its customers by ensuring fair, transparent, and accessible
communication throughout the entire claims lifecycle. Updates and clear explanations of claim decisions are
provided, including any declinatures. The Company’s goal is to pay valid claims in full whenever possible, and to
seek amicable resolutions that deliver fair value to our customers, minimising the need for litigation. In addition,
there is a clearly defined complaints process, making it easy for customers to raise concerns or dissatisfaction.
Processes are regularly reviewed as part of our aim to ensure they meet the high standards expected and focus
on achieving good customer outcomes.
The Company maintains a close presence with its brokers and clients through events such as the British
Insurance Brokers’ Association (‘BIBA’) and the Association for Insurance and Risk Managers in Industry and
Commerce (‘AIRMIC’). Virtual and in person events and personal communications are fostered to deepen
relationships with partners and create interactions to update them on core business initiatives, value proposition
and appetite. Regular insights and feedback are collated through our broker partners and market surveys to
improve broker experience and engagement ensuring relevancy to customers and brokers.
As part of its duty to customers, the AXUAL Board regularly reviews key customer-related metrics and other
appropriate management information, enabling it to closely monitor how the Company is supporting customers
by ensuring that good outcomes are achieved for customers. In compliance with the Financial Conduct
Authority's ("FCA") Consumer Duty, in June 2025 the Board reviewed and approved its annual assessment of
the Company’s delivery of good outcomes for its customers.
Suppliers and Third Parties
The Company is committed to acting conscientiously and advancing processes to ensure that responsible
procurement is central to all its purchases. As part of the AXA XL Division, the Company benefits from the use of
the AXA Core Values and Ethics (Guidelines), that are adopted by AXA XL and embedded into the AXA XL
Procurement Policy.
The Company complies with the requirements of the Modern Slavery Act 2015. Together with other AXA XL
companies to which the Modern Slavery Act 2015 applies, the Company publishes an annual Slavery and
Human Trafficking Statement.
Community and the Environment
In alignment with other entities in the AXA XL Division, the Company considers the impact that its operations
have on the community and the environment. The AXUAL Board considers the topics of Climate and
Sustainability to be critical to the Company’s long-term resilience and are committed to AXA Group’s
environmental ambitions and to understanding and mitigating the impact that climate change will have on
customers and the business.
The Company has adopted a Climate and Sustainability Statement, which outlines AXA XL Division’s Climate
and Sustainability strategies, and the roles of the Company's Board and senior management in overseeing and
implementing these strategies.
Environment
AXA XL strives to help colleagues, clients and communities manage the impacts of a changing climate, promote
more sustainable practices, support the protection of natural assets and biodiversity and reduce their carbon
footprint. The AXA XL 2023-26 Sustainability Strategy, ‘Roots of Resilience’, focuses on protecting natural
ecosystems, addressing climate change, and embedding sustainable practices across our operations.
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STRATEGIC REPORT OF THE MANAGING AGENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company understands the importance of continuing to develop new products and services which will
support clients and their changing needs in response to climate change and wider Environmental, Social and
Governance ("ESG") topics.
The Company has adopted the AXA Group restrictions and exclusions within its underwriting and investment
portfolios and its statements of intent on appetite for carbon intensive industries, such as the 2023 AXA Group
Energy Policy. The Company is working with clients and seeking to offer appropriate risk transfer and consulting
services to those that need support as they transition on their own sustainability journeys and is increasingly
engaging with clients on these topics.
Community
The Company strives to play a positive role in society and actively supports the communities in which it operates.
From volunteering and mentoring to fundraising and sharing business expertise, the Company encourages its
workforce to get involved where possible.
The Company demonstrates its commitment to local communities through various initiatives such as the annual
"AXA Week for Good", AXA XL’s Global Day of Giving, "Hearts in Action" charity working groups, Matching Gifts
program, and Volunteering Leave Policy.
Regulators
The Company strives to maintain strong and effective relationships with regulators through regular and
transparent engagement to facilitate efficient supervision. Ensuring there is a collaborative and a transparent
relationship with regulators is vital for AXA XL's business operations, customer reputation, as well as the
recruitment and retention of senior staff.
The primary regulatory engagement for the Company, as managing agent of the Syndicate, is with Lloyd's and
with the Prudential Regulation Authority ("PRA") and Financial Conduct Authority ("FCA") supervisory teams and
senior management and Lloyd's. Lloyd’s requirements include those imposed on the Lloyd’s market by overseas
regulators, particularly in respect of US situs business. Regulatory risk is the risk of loss owing to a breach of
regulatory requirements or failure to respond to regulatory change. The PRA engages directly with the AXUAL
Board of Directors following the issue of their annual Periodic Summary Meetings ("PSM") feedback letter and
meets with senior management throughout the year in accordance with their supervisory strategy.
Shareholder
Two Non-Executive Directors from other parts of the AXA Group are members of the Board, partly to allow for
insight into operational thinking, practice and philosophy from a different part of the AXA Group, being the
Company’s ultimate shareholder.
The Company continues its work with the AXA Group and its network. Various initiatives were pursued
throughout the year, including working with colleagues at AXA General Insurance ("GI") in the UK to demonstrate
our combined offering as “One AXA” and to assess opportunities for mutual growth.
Maintaining a reputation for high standards of business conduct
The reputation of the Company is fundamental to its long-term success. The Company is committed to
maintaining the highest standards of ethical conduct, and this is reflected in the AXA Values: Customer First,
Integrity, Courage and One AXA. Having a clear set of values and ethics guide behaviours drives good outcomes
for all stakeholders.
The Company’s commitment to ethical conduct is set out in more detail in the AXA Group Compliance and Ethics
Code and the AXA XL Code Supplement (“Code of Conduct”) which is reviewed by the AXUAL Board of
Directors on a
regular basis. Policies contained in the Code of Conduct include treating customers fairly and
professionally, anti-bribery and corruption, speaking up (whistleblowing) and dignity at work. Code of Conduct
violations, or other misconduct, is taken very seriously and may result in disciplinary action, including dismissal.
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STRATEGIC REPORT OF THE MANAGING AGENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Managing Agent
AXUAL, the Managing Agent of the Syndicate, is a company registered in England and Wales. AXUAL is a
wholly owned subsidiary of its ultimate parent AXA SA, a company registered in France. Copies of the financial
statements of AXA SA can be obtained from 25 Avenue Matignon FR-75008, Paris, France.
The Syndicate is wholly aligned with capital provided by AXA XL, a division of AXA SA, through a subsidiary
AXA XL Life Syndicate Limited.
Auditor
In accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 (the “2008 Regulations”) a Syndicate Annual General Meeting ("AGM") was held in April 2025 to reappoint
Ernst & Young LLP as the Syndicate’s registered auditor.
Stamp capacity of the Syndicate
The stamp capacity for the 2026 underwriting year has decreased to £35m (2025 underwriting year £38m)
This report was approved by the Board of AXUAL and signed on its behalf by:
S McGovern
M Cummings
Director
Director
19 February 2026
19 February 2026
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MANAGING AGENT'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors of the Managing Agent present their report together with the audited financial statements for the
year ended 31 December 2025.
The annual accounts are prepared using the annual basis of accounting as required by the Insurance Accounts
Directive ("Lloyd’s Syndicate and Aggregate Accounts") Regulations 2008, as well as in compliance with
applicable Accounting Standards in the United Kingdom and the Republic of Ireland, including Financial
Reporting Standard 102 ("FRS 102"), Financial Reporting Standard 103 ("FRS 103") in relation to insurance
contracts, and the Lloyd's Syndicate Accounts Instructions V3.1 as modified by the Frequently Asked Questions
V1.1 issued by Lloyd's. The Syndicate continues to adopt the going concern basis in preparing the Syndicate
annual accounts.
The Managing Agent has received, in writing, agreement from AXA XL Life Syndicate Limited, the sole member
of Syndicate 3002, that no underwriting year accounts need to be prepared in respect of Syndicate 3002. This is
in accordance with Section 6, Paragraph 1b of the 2008 Regulations.
Future developments and strategy are discussed within the strategic report.
Profit distribution
Profits will continue to be collected by reference to the results of individual underwriting years. Under Lloyd’s
accounting rules, the Syndicate’s 2023 year of account was closed at the end of 2025 with a positive return
equal to (12%) of capacity.
The member’s balance as at 31 December 2025 is a surplus £6.4m (2024: surplus of £7.9m).
Directors
The Directors of AXUAL who held office during the year and up to the date of signing the annual accounts were:
P Bishop
(Non
-
Executive)
M Cantor-Grable
(Non
-
Executive)
M Cummings
M Gosselin
N Hinshelwood
(Non-Executive)
Resigned 21 February 2025
J Lejeune
(Non
-
Executive)
S McGovern
M O'Connor
(Non-Executive)
Appointed 27 August 2025
B Poupart-Lafarge
(Non
-
Executive)
C Richmond
(Non
-
Executive)
N Williams
(Non
-
Executive)
None of the Directors of the Managing Agent were underwriting participants on the Syndicate.
Financial instruments and risk management
Information on the use of financial instruments by the Syndicate and its management of financial risk, in
particular its exposure to interest rate risk, equity price risk, currency risk, credit risk and liquidity risk is
disclosed in Note 4 to the financial statements.
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STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES
FOR THE YEAR ENDED 31 DECEMBER 2025
Statement of Managing Agent's responsibilities
The Directors of the Managing Agent are responsible for preparing the Syndicate annual accounts in
accordance with the Insurance Accounts Directive ("Lloyd’s Syndicate and Aggregate Accounts") Regulations
2008, applicable Accounting Standards in the United Kingdom and the Republic of Ireland, including Financial
Reporting Standard 102 ("FRS 102"), Financial Reporting Standard 103 ("FRS 103") in relation to insurance
contracts, and the Lloyd's Syndicate Accounts Instructions V3.1 as modified by the Frequently Asked Questions
V1.1 issued by Lloyd's.
The Insurance Accounts Directive ("Lloyd’s Syndicate and Aggregate Accounts") Regulations 2008 require the
Managing Agent to prepare Syndicate annual accounts for the Syndicate at 31 December each year. The
Directors must not approve the financial statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Syndicate and of the profit or loss of the Syndicate for that period.
In preparing these Syndicate annual accounts, the Directors of the Managing Agent are required to:
•
select suitable accounting policies and then apply them consistently;
•
make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
•
prepare the financial statements on the basis that the Syndicate will continue to write future business unless
it is inappropriate to presume that there will be future years of account of the Syndicate.
The Directors of the Managing Agent are responsible for keeping adequate accounting records that are
sufficient to show and explain the Syndicate's transactions and disclose with reasonable accuracy at any time,
the financial position of the Syndicate and enable it to ensure that the Syndicate's annual accounts comply with
the Regulations and the relevant provisions of the Companies Act 2006. 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 Directors of the Managing Agent are responsible for the preparation and review of the iXBRL tagging that
has been applied to the Syndicate Annual Accounts in accordance with the instructions issued by Lloyd's,
including designing, implementing and maintaining systems, processes and internal controls to result in tagging
that is free from material non-compliance with the instructions issued by Lloyd's, whether due to fraud or error.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
Statement of disclosure of information to the auditors
Each of the persons who are Directors at the date of this report confirms that:
•
so far as each Director is aware, there is no relevant audit information for which the Syndicate's auditor is
unaware; and
•
each Director has taken all the steps that he ought to have taken in his duty as a Director in order to make
himself aware of any relevant audit information and to establish that the Syndicate's auditor is aware of that
information.
Approved by the Board of AXUAL and signed on its behalf by:
S McGovern
M Cummings
Director
Director
19 February 2026
19 February 2026
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3002
Opinion
We have audited the syndicate annual accounts of syndicate 3002 (‘the syndicate’) for the year ended 31
December 2025 which comprise Statement of Profit or Loss and Other Comprehensive Income, the Balance
Sheet, the Statement of Changes in Member’s Balances, the Statement of Cash Flows and
the related notes 1 to
30, including a summary of significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law including The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS 102 ‘The
Financial Reporting Standard applicable in the UK and Republic of Ireland’ and FRS 103 ‘Insurance
Contracts’ (‘United Kingdom Generally Accepted Accounting Practice’), and Section 1 of the Lloyd’s Syndicate
Accounts Instructions V3.1 as modified by the Frequently Asked Questions Version 1.1
issued by Lloyd’s (‘the
Syndicate Accounts Instructions’).
In our opinion, the syndicate annual accounts:
•
give a true and fair view of the syndicate’s affairs as at 31 December 2025 and of its profit for the year
then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
•
have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the Syndicate Accounts Instructions.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Syndicate Accounts
Instructions, and other applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the syndicate annual accounts section of our report. We are independent
of the syndicate in accordance with the ethical requirements that are relevant to our audit of the syndicate annual
accounts in the UK, including the FRC’s Ethical Standard as applied to other entities of public interest, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the syndicate annual accounts, we have concluded that the managing agent’s use of the going
concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
Based 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 the period to 31 March 2027.
Our responsibilities and the responsibilities of the Directors of the managing agent with respect to going concern
are described in the relevant sections of this report. However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the syndicate’s ability to continue as a going concern.
Other information
The other information comprises the information included in the Annual Report and Accounts, other than the
syndicate annual accounts and our auditor’s report thereon. The Directors of the managing agent are
responsible for the other information contained within the Annual Report and Accounts.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the syndicate annual accounts or our knowledge obtained in the course of the audit
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the syndicate
annual accounts themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3002 (CONTINUED)
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the managing agent’s report for the financial year in which the syndicate annual
accounts are prepared is consistent with the syndicate annual accounts; and
•
the managing agent’s report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the syndicate and its environment obtained in the course of
the audit, we have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters where The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you, if in our opinion:
•
the managing agent in respect of the syndicate has not kept adequate accounting records; or
•
the syndicate annual accounts are not in agreement with the accounting records; or
•
certain disclosures of the managing agent’s emoluments specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities on page 10, the Directors of the
managing agent are responsible for the preparation of the syndicate annual accounts and for being satisfied that
they give a true and fair view, and for such internal control as they determine is necessary to enable the
preparation of the syndicate annual accounts that are free from material misstatement, whether due to fraud or
error.
In preparing the syndicate annual accounts, the Directors of the managing agent are responsible for assessing
the syndicate’s ability to continue in operation, disclosing, as applicable, matters related to its ability to continue
in operation and using the going concern basis of accounting unless the Directors of the managing agent either
intends to cease to operate the syndicate, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these syndicate annual accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the managing agent and management.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3002 (CONTINUED)
Our approach was as follows:
•
We obtained a general understanding of the legal and regulatory frameworks that are applicable to the
syndicate and determined that the most significant are direct laws and regulations related to elements of
Lloyd’s Byelaws and Regulations, and the financial reporting framework (UK United Kingdom Generally
Accepted Accounting Practice), and requirements referred to by Lloyd’s in the Syndicate Accounts
instructions. Our considerations of other laws and regulations that may have a material effect on the
syndicate annual accounts included permissions and supervisory requirements of Lloyd’s of London, the
Prudential Regulation Authority (‘PRA’) and the Financial Conduct Authority (‘FCA’).
•
We obtained a general understanding of how the syndicate is complying with those frameworks by
making enquiries of management, internal audit, and those responsible for legal and compliance matters
of the syndicate. In assessing the effectiveness of the control environment, we also reviewed significant
correspondence between the syndicate, Lloyd’s of London and other UK regulatory bodies; reviewed
minutes of the Board and Risk Committee of the managing agent; and gained an understanding of the
managing agent’s approach to governance.
•
For direct laws and regulations, we considered the extent of compliance with those laws and regulations
as part of our procedures on the related syndicate annual accounts’ items.
For both direct and other
laws and regulations, our procedures involved: making enquiries of the Directors of the managing agent
and senior management for their awareness of any non-compliance of laws or regulations, enquiring
about the policies that have been established to prevent non-compliance with laws and regulations by
officers and employees, enquiring about the managing agent’s methods of enforcing and monitoring
compliance with such policies, and inspecting significant correspondence with Lloyd’s, the PRA and the
FCA.
The syndicate operates in the insurance industry which is a highly regulated environment. As
such the Senior Statutory Auditor considered the experience and expertise of the engagement team to
ensure that the team had the appropriate competence and capabilities, which included the use of
specialists where appropriate.
•
We assessed the susceptibility of the syndicate’s annual accounts to material misstatement, including
how fraud might occur by considering the controls that the Directors of the managing agent have
established to address risks identified by them, or that otherwise seek to prevent, deter or detect fraud.
We also considered areas of significant judgement, including complex transactions, performance targets,
economic or external pressures and the impact these have on the control environment. Where this risk
was considered to be higher, we performed audit procedures to address each identified fraud risk.The
fraud risk was considered to be higher within the valuation of gross long term business provisions and
recognition of estimated premium income.
Our audit procedures included:
•
Reviewing accounting estimates for evidence of management bias. We assessed if there were any
indicators of management bias in the valuation of gross long term business provisions, which included
the support of our Actuaries, and in the recognition of estimated premium income;
•
Evaluating the business rationale for significant and/or unusual transactions; and
•
Testing the appropriateness of journal entries recorded in the general ledger, particularly in respect of
judgmental areas including gross long term business provisions and estimated premium income.
A further description of our responsibilities for the audit of the annual accounts is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3002 (CONTINUED)
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these syndicate
annual accounts, and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been undertaken so
that we might state to the syndicate’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the syndicate and the syndicate’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
Michael Purrington (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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20 February 2026
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
TECHNICAL ACCOUNT
-
LONG-TERM BUSINESS
2025
2024
Note
£000's
£000's
Gross premiums written
5
Outward reinsurance premiums
(2,777 )
(2,336 )
Premiums written, net of reinsurance
Changes in unearned premium
18
Change in the gross provision for unearned premiums
(368 )
Change in the provision for unearned premiums, reinsurers' share
Net change in provisions for unearned premiums
(144 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non
-
technical
account
9
(714 )
Other technical income, net of reinsurance
30,501
33,563
Claims paid
18
Gross amount
(16,485 )
(18,325 )
Reinsurers' share
Net claims paid
(16,058 )
(15,331 )
Change in the provision for claims
18
Gross amount
(434 )
(137 )
Reinsurers' share
Net change in provisions for claims
(434 )
(137 )
Claims incurred, net of reinsurance
(16,492 )
(15,468 )
Changes in other technical provisions, net of reinsurance, not shown
under other headings
Long term business provision, net of reinsurance
Gross amount
(3,993 )
(1,007 )
Reinsurers’ share
(472 )
(1,781 )
Net change in long term business provisions
18
(4,465 )
(2,787 )
Other technical provisions, net of reinsurance
Net change in other technical provisions
(4,465 )
(2,787 )
Net operating expenses
6
(7,559 )
(9,052 )
Other technical charges, net of reinsurance
Balance on the technical account for long-term business
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
NON-TECHNICAL ACCOUNT – LONG-TERM BUSINESS
2025
2024
Note
£000's
£000's
Balance on the technical account for long-term business
Investment income
9
Realised gains on investments
9
Unrealised losses on investments
9
(109 )
(1,747 )
Investment expenses and charges
9
(33 )
(4 )
Total investment return
(714 )
Allocated investment return transferred to the technical account for
long-term business
(911 )
Gain/(loss) on foreign exchange
(141 )
Other income
Other expenses
Profit for the financial year
There are no recognised gains or losses in the accounting period other than those dealt with in the technical and
non-technical accounts, therefore no statement of other comprehensive income has been presented.
The accompanying notes from page 20 to 59 form an integral part of these financial statements.
STATEMENT OF CHANGES IN MEMBER'S BALANCES
FOR THE YEAR ENDED 31 DECEMBER 2025
2025
2024
£000's
£000's
Member's balances brought forward at 1 January
Total comprehensive income for the year
Payments of profit to member's personal reserve funds
(3,729 )
(1,024 )
Losses collected in relation to distribution on closure of underwriting year
Cash calls on open underwriting years
Member's agent fees
Net movement on funds in syndicate
Other
Member's balances carried forward at 31 December
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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BALANCE SHEET – ASSETS
AS AT 31 DECEMBER 2025
2025
2024
Note
£000's
£000's
Financial investments
11
Deposits with ceding undertakings
Investments
Provision for unearned premiums
Claims outstanding
Long term business provision
Reinsurers' share of technical provisions
18
Debtors arising out of direct insurance operations
12
Debtors arising out of reinsurance operations
13
Other debtors
14
Debtors
Cash at bank and in hand
22
Other
16
Other assets
Accrued interest and rent
Deferred acquisition costs
15
Other prepayments and accrued income
Prepayments and accrued income
Total assets
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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BALANCE SHEET (CONTINUED) – LIABILITIES
AS AT 31 DECEMBER 2025
2025
2024
Note
£000's
£000's
Member's balances
Total capital and reserves
Provision for unearned premiums
Claims outstanding
Long term business provision
Other technical provisions
Technical provisions
18
Deposits received from reinsurers
Creditors arising out of direct insurance operations
19
Creditors arising out of reinsurance operations
20
Other creditors including taxation and social security
21
Amounts owed to credit institutions
22
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The accompanying notes from page 20 to 59 form an integral part of these financial statements.
The Syndicate financial statements on page 15 to 59 were approved by the AXUAL Board of Directors on 17
February 2026 and were signed on its behalf by:
M Cummings
Director
19 February 2026
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
2025
2024
£000's
£000's
Cash flows from operating activities
Profit for the financial year
Adjustments:
Depreciation and other movements in tangible fixed assets
(Gain)/loss on disposal of tangible fixed assets
Increase in gross technical provisions
18
Increase in reinsurers’ share of gross technical provisions
18
Increase/(decrease) in debtors
(10,230 )
Decrease in creditors
(1,758 )
(363 )
Increase/(decrease) in deposits received from reinsurers
Movement in other assets/liabilities
(2 )
Investment return
9
(911 )
Foreign exchange
(403 )
Other
Net cash flows generated from / (used in) operating activities
(551 )
Cash flow from investing activities:
Purchase of tangible fixed assets
Sales of tangible fixed assets
Purchase of equity and debt instruments
Sale of equity and debt instruments
Purchase of derivatives
Sale of derivatives
Investment income received
Other
(458 )
Net cash flows generated from investing activities
Cash flows from financing activities:
Distribution profit
(3,729 )
(1,024 )
Open year profit release
Capital contributions/ open year cash calls made
Funds In Syndicate released to member
Other
Net cash flows used in financing activities
(3,729 )
(1,024 )
Net decrease in cash and cash equivalents
(970 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(151 )
(117 )
Cash and cash equivalents at end of the year
22
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS – (FORMING PART OF THE FINANCIAL STATEMENTS)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
BASIS OF PREPARATION
Syndicate 3002 (“the Syndicate”) underwrites insurance business in the London Market. The address of the
Syndicate’s Managing Agent is 20 Gracechurch Street, London EC3V 0BG.
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 103 ("FRS 103") in relation to insurance contracts, and the Lloyd's Syndicate Accounts Instructions V3.1
as modified by the Frequently Asked Questions V1.1 issued by Lloyd's.
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value
through profit or loss and available for sale that are measured at fair value.
The functional and presentational currency of the Syndicate is Sterling. All amounts have been rounded to the
nearest thousand, unless otherwise indicated.
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 previous years presented, unless otherwise stated.
Going concern
The Syndicate has financial resources to meet its financial needs and manages its portfolio of insurance risk. The
Directors have continued to review the business plans, liquidity and operational resilience of the Syndicate and
are satisfied that the Syndicate is well positioned to manage its business risks in the current economic
environment. The Syndicate 2026 year of account has opened, and the Directors have concluded that the
Syndicate has sufficient resources to, and a reasonable expectation that it will, open a 2027 year of account.
Capital supporting the business of the Syndicate, referred to as Funds at Lloyd's ("FAL") is, in part, held in
separate trust funds administered by Lloyd's in addition to amounts held within the Syndicate Premium Trust
Funds. The amounts held by the corporate member outside the Syndicate Premium Trust Funds are available to
meet the underwriting obligations of the Syndicate, if required. However, these funds are not included in the
Syndicate's balance sheet because they are not owned by the Syndicate. The Lloyd's central fund arrangements
are available at the discretion of Lloyd's in the event that an individual member's funds are exhausted.
The Syndicate has sufficient capital for each year of account in its FAL and there is additional capital available in
the corporate member. There is no intention to cease underwriting or cease the operations of the Syndicate.
The ability of the Syndicate to meet its obligations as they fall due is underpinned by the support provided by
Lloyd's solvency process and its chain of security for any member who is unable to meet their underwriting
liabilities.
Having assessed the principal risks, the Directors of the Managing Agent have not identified any material
uncertainties that may cast significant doubt on the syndicate’s ability to continue as a going concern for the
period to 31 March 2027 and continue to adopt a going concern basis of accounting in preparing the annual report
and financial statements.
The financial statements have been prepared on a going concern basis, under the accrual basis whereby the
incurred cost of claims, commission and related expenses are charged against the earned proportion of
premiums,
net of reinsurance.
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SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
2
USE OF JUDGEMENTS AND ESTIMATES
In preparing these financial statements, the Directors of the Managing Agent have made judgments, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and reported amounts of
assets, liabilities, income and expenses.
The Syndicate makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal actual results.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future period affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are addressed below:
Note 3A - Significant accounting policies - Premiums written (estimated premium income)
Note 17 – Claims development (movement in prior year’s provision for long-term business provision); and
Note 18 – Technical provisions (estimates for losses Incurred But Not Reported (“IBNR”))
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Syndicate’s financial statements.
A
Premiums written
Gross premiums written reflect direct and inward reinsurance business written during the period, together with
adjustments made in the year to premiums written in prior accounting periods, gross of commission or brokerage
payable, and exclude any taxes or duties based on premiums and levied on them. Premiums written include
estimates for ‘pipeline’
premiums, representing amounts due to the Syndicate not yet notified and adjustments to
estimates of premiums written in previous periods.
Contracts with duration of greater than one year and payable in annual installments, generally, only the initial
annual installment is included as premiums written at policy inception due to the ability of the (re)insured to
commute or cancel coverage during the term of the policy. The remaining annual installments are included as
premiums written at each successive anniversary date within the term. Additional or return premiums are treated
as a re-measurement of the initial premium.
Gross premiums written include an estimate of the total premiums expected to be received under each insurance
and reinsurance contract. Estimated premium income recognised in respect of facility contracts or policies written
through contracts with third parties, for example binding authorities and lines slips, are deemed to be written in a
manner that reflects the expected profile of the underlying business which has been written. These are estimated
in full at the inception of such contracts and, therefore, this estimate is judgmental. Further adjustments to
estimates from previous years are also included in the reported premiums for the relevant underwriting years.
Premium estimation uses expert judgement, the quality of the estimate being influenced by the nature and
maturity of the portfolio, availability of timely data, relevant underwriting input to the estimating process and
management review. Gross premiums written estimates are reviewed regularly using underwriter estimates and
actuarial projections. At the end of 2025 the estimates held in the balance sheet were £5m (2024: £6m).
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct or inwards business being reinsured. The earned proportion of premiums is recognised as income.
Premiums are earned from the date of attachment of risk over the indemnity period based on the pattern of the
risks underwritten.
B
Unearned premiums
Written premium is earned according to the risk profile of the policy. The provision for unearned premiums
comprises the proportion of gross premiums written which is estimated to be earned in the following or
subsequent financial periods, in the year that relate to the unexpired terms of the policies in force at the balance
sheet date, computed separately for each insurance contract on the basis of established earnings patterns or time
apportionment as appropriate, and adjusted if necessary to reflect any variation in the incidence of risk during the
period covered by the contract.
C
Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such
as brokerage and commission, indirect costs such as administrative expenses connected with the processing of
proposals and issuing of policies, and other internal and external costs related to the acquisition of new business
and renewing contracts. The deferred acquisition cost asset represents the proportion of acquisition costs which
corresponds to the proportion of gross premiums written that is unearned at the balance sheet date. The
proportion of acquisition costs in respect of unearned premiums is deferred at the reporting date and recognized
in periods when the related premiums are earned.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D
Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Ceded reinsurance are
contracts entered into by the Syndicate with reinsurers under which the Syndicate is compensated for losses on
contracts issued by the Syndicate and that meet the definition of an insurance contract. Insurance contracts
entered into by the Syndicate under which the contract holder is another insurer (inwards reinsurance) are
included with insurance contracts.
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. Premiums ceded and
claims reimbursed are presented on a gross basis in the technical account and balance sheet as appropriate.
Reinsurance outwards premiums are earned according to the nature of the cover. ‘Losses occurring during’
policies are earned evenly over the policy period. ‘Risks attaching’ policies are expensed on the same basis as
the inwards business being protected.
Reinstatement premiums on both inwards and outwards business are earned when written. Reinstatement
premiums are estimated in accordance with the contract terms and recorded based upon paid losses and case
reserves.
Reinsurer’s share of deferred acquisition costs are amortised over the period in which the related premiums are
earned.
Where an individual reinsurance contract includes retroactive and prospective provisions, these different
provisions will have separate accounting where practical. A bifurcated approach is applied, whereby the
Syndicate determines the component of the premiums associated with the retroactive reserves transferred to the
reinsurer/retrocessionaire and accounts for this as retroactive reinsurance, separate to the prospective or
unearned component.
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E
Claims provisions and related reinsurance recoveries
Claims incurred comprise claims and settlement or claims handling expenses (both internal and external) paid in
the year and the movement in provision for outstanding claims and settlement expenses, including an allowance
for the cost of claims IBNR until after the year-end. Claims incurred are reduced by anticipated salvage and other
recoveries.
The Syndicate does not discount its liability for outstanding claims nor the reinsurance share of outstanding
claims.
The outstanding claims comprise amounts set aside for claims notified and include an allowance for the cost of
claims IBNR.
Notified claims are estimated on a case by case basis. In estimating the cost of these, the Syndicate has regard
to the claim circumstance as reported, any information available from loss adjusters and information on the cost
of settling claims with similar characteristics in a previous period. Large claims impacting each relevant business
class are generally assessed separately, being measured on a case by case basis or projected separately in
order to allow for the possible distortion of the development and incidence of these large claims.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the
Syndicate's actuaries. These techniques generally involve projecting from past experience of the development of
claims over time to form a view of the likely ultimate claims to be experienced for more recent underwriting,
having regard to variations in the business accepted and the underlying terms and conditions. For the most
recent years, where a high degree of volatility arises from projections, estimates may be based in part on output
from rating and other models of the business accepted and assessments of underwriting conditions. Classes of
business where claims are typically reported relatively quickly after the claim event tend to display lower levels of
volatility.
The provision for claims includes amounts in respect of internal and external claims handling costs.
The two most critical assumptions with regards to claims provisions are that the past is a reasonable predictor of
the likely level of claims development and that the rating and other models used for current business are fair
reflections of the likely level of ultimate claims to be incurred.
Allowance is made, however, for changes or uncertainties which may create distortions in the underlying
statistics or which might cause the cost of unsettled claims to increase or reduce when compared with the cost of
previously settled claims including:
•
changes in the Syndicate processes which might accelerate or slow down the development and/or recording of
paid or incurred claims compared with the statistics from previous periods;
•
changes in the legal environment;
•
the effects of inflation;
•
changes in the mix of business;
•
the impact of large losses; and
•
movements in industry benchmarks.
Long term business provision
The long term business provision is determined in accordance with the requirements of the EU Third Life
Directive 92/96/EEC, under which certain contingency and other reserves required by insurance company
regulations are excluded from the long term business provision.
The basis of the calculation is as follows:
Provision is made at year end for the cost of claims incurred but not yet reported to the Syndicate. The estimated
cost of claims includes expenses to be incurred in settling plus a provision for future administrative expenses
relating to existing business. The Syndicate takes all reasonable steps to ensure that it has appropriate
information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is
likely that the final outcome will prove to be different from the original liability established.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E
Claims provisions and related reinsurance recoveries (continued)
Any benefits to which the Syndicate is entitled under its reinsurance contracts held are recognised as
reinsurance assets. These assets consist of balances due from reinsurers and include reinsurers’ share of
provisions for claims. The reinsurers' share of provisions for claims is based on calculated amounts of
outstanding claims and projections for IBNR, net of estimated irrecoverable amounts, having regard to the
reinsurance programme in place for the class of business, the claims experience for the year and the current
security rating of the reinsurance companies involved. A number of statistical techniques are used to assist in
making these estimates.
Reinsurance assets of the Syndicate are assessed for impairment at each balance sheet date.
A reinsurance
asset is deemed impaired if there is objective evidence, as a result of an event that occurred after its initial
recognition, that the Syndicate may not recover all amounts due, and that event has a reliably measurable impact
on the amount that the Syndicate will receive from the reinsurer. If there is objective evidence of impairment, then
the carrying amount is reduced to its recoverable amount and the impairment loss is recognised in the profit or
loss in the period in which the impairment loss is recognised.
F
Unexpired risks provision
Provision is made for for unexpired risks arising from general insurance contracts where the expected value of
claims and expenses attributable to the unexpired periods of policies in force at the balance sheet date, having
regard to events that occur prior to the balance sheet date, exceeds the unearned premiums provision in relation
to such policies (after the deduction of any deferred acquisition costs). The provision for unexpired risks is
calculated by reference to classes of business which are managed together.
Unexpired risk surpluses and deficits are offset when business risk classes are managed together and a
provision is made only when an aggregate deficit arises. The Unexpired Risk Reserve ("URR") held at 2025 was
nil (2024: nil).
G
Foreign currencies
Transactions in foreign currencies and assets, liabilities, revenues and costs denominated in foreign currencies
are translated to the functional currency using the exchange rates prevailing at the date of the transactions or an
appropriate average rate. The Syndicate’s monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the rates of exchange at the balance sheet date. Non-monetary items
denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at
the exchange rate at the date the fair value was determined. Non-monetary items denominated in foreign
currencies that are measured at historical cost are translated to the functional currency using the exchange rate
at the date of the transaction. For the purposes of foreign currency translation, unearned premiums and deferred
acquisition costs are treated as if they are monetary items.
Differences arising on the translation of foreign currency amounts relating to insurance operations of the
Syndicate are included within profit/(loss) on foreign exchange in the non-technical account. Differences arising
on translation from the functional currency to the presentational currency are recognized in other comprehensive
income.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H
Financial assets and liabilities
i.
Classification
The accounting classification of financial assets and liabilities determines the way in which they are measured and
changes in those values are presented in the statement of profit or loss and other comprehensive income.
Financial assets and liabilities are classified on their initial recognition.
The initial classification of a financial instrument shall take into account contractual terms including those relating
to future variations. Once the classification of a financial instrument is determined at initial recognition, re-
assessment is only required subsequently when there has been a modification of contractual terms that is
relevant to an assessment of the classification.
Financial assets and financial liabilities at fair value through profit and loss comprise financial assets and
financial liabilities held for trading and those designated as such on initial recognition. Investments in shares and
other variable yield securities, units in unit trusts, and debt and other fixed income securities are designated as at
fair value through profit or loss on initial recognition, as they are managed on a fair value basis in accordance
with the Syndicate’s investment strategy. All financial assets are designated as fair value through the statement
of profit or loss and other comprehensive income upon initial recognition because they are managed and their
performance is evaluated on a fair value basis.
The Syndicate has designated hedge funds, equity funds, equity securities and money market funds at fair value
through the statement of profit or loss and other comprehensive income.
Designated debt securities and other fixed income securities are stated at fair value through the statement of
profit or loss and other comprehensive income. The fair value is based on the quoted market prices provided by
either independent pricing services, or, when such prices are not available, by reference to broker or underwriter
bid indications.
Deposits with credit institutions, debtors, and accrued interest are classified as loans and receivables.
ii.
Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Syndicate’s contractual rights to the cash flows from the
financial assets expire or if the Syndicate transfers the financial asset to another party without retaining control of
substantially all risks and rewards of the asset. A financial liability is derecognised when its contractual obligations
are discharged, cancelled or expired.
Regular way purchases and sales of financial assets are recognised and derecognised, as applicable, on the
trade date, which is the date that the Syndicate commits itself to purchase or sell the asset, net of transaction
costs.
iii.
Measurement
A financial asset or financial liability is measured initially at fair value plus, for a financial asset or financial liability
not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.
Financial assets at fair value through profit or loss are measured at fair value with fair value changes recognised
immediately in profit or loss. Net gains or net losses on financial assets measured at fair value through profit or
loss includes foreign exchange gains/losses arising on their translation to the functional currency but excludes
interest and dividend income.
Level 3 assets pertain to the Syndicate’s loans to the Lloyd’s central fund, which are fair valued based on a
discounted cash flow model.
Consideration is made to the credit and illiquidity risk, and a fair value adjustment has been applied to reflect
such risk in an appropriate manner. The repayment of the loan and payment of interest is at the discretion of the
Corporation of Lloyd’s. An element of subjectivity is applied to the valuation of the Syndicate loans, and the
approach includes significant unobservable inputs, which is why they have been classified as level 3.
AXA XL UNDERWRITING AGENCIES LIMITED
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H
Financial assets and liabilities (continued)
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using the effective
interest method, except Syndicate Loans to the Central Fund which are measured at fair value through profit or
loss.
iv.
Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not at fair
value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates
that a loss event has occurred after the initial recognition of an asset, and that the loss event has an impact on the
future cash flows on the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention of the
Syndicate about any significant financial difficulty of the issuer, or significant changes in the technological, market,
economic or legal environment in which the issuer operates.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the asset’s
original effective interest rate. Individually significant financial assets are tested for impairment on an individual
basis. The remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.
An impairment loss recognised on an amortised cost asset reduces directly the carrying amount of the impaired
asset. All impairment losses are recognised in profit or loss. An impairment loss is reversed if the reversal can be
related objectively to an event occurring after the impairment loss was recognised. For financial assets measured
at amortised cost the reversal is recognised in profit or loss.
v.
Off-setting
Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when, and
only when, the Syndicate currently has a legal right to set off the amounts and intends either to settle on a net
basis or to realise the asset and settle the liability simultaneously.
vi.
Investments and overseas deposits
Investments and overseas deposits are stated at current value at the balance sheet date. For this purpose, listed
investments are stated at bid value and deposits with credit institutions are stated at cost. All other financial
instruments are designated as at fair value through profit and loss. In line with normal Lloyd's market practice, the
Syndicate writes business in certain jurisdictions that require the deposit of cash and investments in locally held
trust funds therefore preventing the free transfer of cash between currencies and locations.
I
Investment return
Investment return comprises all investment income and movements in unrealized gains and losses on financial
instruments at fair value through profit or loss, less investment management expenses, interest expense, realized
losses and impairment losses. Investment income comprises interest income, dividends receivable and realized
investment gains.
a.
Interest income
Interest income on financial assets measured at amortised cost is recognised using the effective interest method.
For the purpose of separately presenting investment income and unrealised gains and losses for financial assets
at fair value through profit or loss, interest income is calculated using the effective interest method excluding
transaction costs that are expensed when incurred.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I
Investment return (continued)
b.
Dividend income
Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend
date for equity securities, which includes the imputed tax credits.
c.
Realised gains and losses
For investments at fair value through profit or loss, realised gains and losses represent the difference between the
net sale proceeds on disposal and the purchase price. For investments measured at amortised cost, realised
gains and losses represents the difference between the net proceeds on disposal and the latest carrying value (or
if acquired after the last reporting date, the purchase price).
d.
Unrealised gains and losses
Unrealised investment gains and losses represent the difference between the fair value at the balance sheet date
and the fair value at the previous balance sheet date, or purchase price if acquired during the year. Movements in
unrealised investment gains and losses comprise the increase/decrease in the reporting period in the value of the
investments held at the reporting date and the reversal of unrealised investment gains and losses recognised in
earlier reporting periods in respect of investment disposals of the current period.
e.
Investment expenses, charges of interest
These are accounted for as incurred on an accruals basis. A transfer is made from the non-technical account to
the technical account for investment return related to Syndicate assets supporting the underwriting business.
Investment return attributable to funds in Syndicate deposited by the participating member, has not been
transferred to the technical account.
Investment return is initially recorded in the non-technical account within the statement of profit or loss and other
comprehensive income. The return is transferred in full to the general business technical account to reflect the
investment return on funds supporting underwriting business.
J
Cash and cash equivalents
Cash and cash equivalents comprise of cash held at bank, cash in hand, deposits held at call with banks, cash
held in Lloyd’s trust accounts, and other short term highly liquid investments that are readily convertible to known
amounts of cash, with maturities of three months or less from the acquisition date, that are subject to an
insignificant risk of changes in fair value and are used by the Syndicate in the management of its short-term
commitments.
Cash and cash equivalents are carried at amortised cost in the balance sheet.
Bank overdrafts, where applicable, that are repayable on demand and form an integral part of the Syndicate’s
cash management, are held within the current liabilities as amounts due to credit institutions. These are also
included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
K
Taxation
Under Schedule 19 of the Finance Act 1993, managing agents are not required to deduct basic rate income tax
from trading income. In addition, all UK basic rate income tax (currently at 20%) deducted from Syndicate
investment income is recoverable by Managing Agents and consequently the distribution made to members or
their members' agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross
of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in the
balance sheet under the heading "other debtors".
No provision has been made for any other overseas tax payable by members on underwriting results.
L
Pension costs
Staff working on the Syndicate are employed by an AXA XL service company, XL Catlin Services SE (“XLCSSE”),
an approved Central Bank of Ireland ("CBI") regulated intermediary. The pension contributions relating to staff
working on the affairs of the Syndicate are charged to the Syndicate as part of the AXA XL expense recharging
model across the international network, which includes the Syndicate and the amount is captured within the net
operating expenses on the statement of profit or loss and other comprehensive income.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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FOR THE YEAR ENDED 31 DECEMBER 2025
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M
Other prepayment and accrued income
Other prepayments are recorded at cost and subsequently amortised over the period to which it relates.
N
Reinsurance To Close (“RITC”) and portfolio transfer policy
Each Lloyd's Syndicate underwriting account is normally closed at the end of the third year by means of
reinsurance into the following year, which reinsures all future liabilities for the closed year and all previous years
in return for a premium which is approved by the Managing Agent. The payment of RITC premium does not
eliminate the liability of the closed year for outstanding claims. If the reinsuring Syndicate was unable to meet its
obligations, and other elements of Lloyd's chain of security were to fail, then the closed underwriting account
would have to settle the outstanding claims.
The Directors consider that the likelihood of such a failure of the RITC is extremely remote, and consequently the
RITC has been deemed to settle liabilities outstanding at the closure of an underwriting account.
O
Operating expenses
Where expenses are incurred by the Managing Agent exclusively for the administration of the Syndicate, these
expenses are apportioned appropriately based on type of expense and are charged to the Syndicate on an
accruals basis. Expenses that are incurred jointly are apportioned between the Managing Agent and the
Syndicate on bases depending on the amount of work performed, resources used, and the volume of business
transacted, and are charged to the Syndicate to reflect the costs of services provided. This recharge does not
include any profit element. Syndicate operating expenses are allocated to the year of account for which they are
incurred.
P
Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit commission and overriding
commission, are treated as a contribution to expenses and are calculated according to contractual terms.
Q
Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract holders.
These are classified as debt instruments as they are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. Insurance debtors are measured at amortised cost less any
provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does not have any
debtors directly with policyholders, all transactions occur via an intermediary.
Reinsurance debtors and creditors include amounts due to and from (re)insurers. 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.
Other debtors principally consist of amounts due from member and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to related Syndicates and other related entities, profit
commissions payable and other sundry payables. These are stated at amortised cost determined using the
effective interest rate method.
Bad debts are provided for only where specific information is available to suggest a debtor may be unable or
unwilling to settle its debt to the Syndicate. The provision is calculated on a case-by-case basis.
R
Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument. All
of the Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk and
therefore are recognised as insurance contracts.
S
Member’s balances
Distributions to its member are made in the year following the year a reporting year of account closes, which is
generally three years after the inception of the reporting year of account.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT
Introduction and overview
This note presents information about the nature and extent of insurance and financial risks to which the
Syndicate is exposed, the Managing Agent’s objectives, policies and processes for measuring and managing
insurance and financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Syndicate is exposed to a range of financial risks through its financial assets, insurance liabilities and
reinsurance assets. In particular, the key financial risk is that the proceeds from financial assets are not
sufficient to fund the obligations arising from insurance policies as they fall due. The most important
components of this financial risk are insurance risk (including reserve risk and reinsurance risk), market risk
(including interest rate risk and spread risk, equity price risk and currency risk), credit risk and liquidity risk.
These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to
general and specific market movements. The risks that the Syndicate primarily faces due to the nature of its
investments and liabilities are interest rate, equity price risk and currency risk.
The Syndicate’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Syndicate’s financial performance. It manages these
positions within the Enterprise Risk Management Framework ("RMF") that has been developed to plan for
investment proceeds and returns that are in excess of obligations under insurance contracts. The Syndicate
produces regular reports that are circulated to the management of the Managing Agency. The principal
technique of the Syndicate’s framework is to match assets and liabilities from insurance contracts by reference
to the type of benefits payable to contract holders. The Syndicate’s framework is also integrated with the
management of the financial risks associated with the Syndicate’s other financial assets and liabilities not
directly associated with insurance liabilities.
The notes that follow explain how financial risks are managed.
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OR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
A
Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities.
Examples of such risks include unexpected losses arising from fluctuations in the timing, frequency and severity
of claims compared to expectations and inadequate reinsurance protection. The Syndicate's underwriting and
reinsurance strategies are set within the context of the overall AXA XL strategies, approved by the AXUAL Board
and communicated clearly throughout the business through policy statements and guidelines.
The insurance risk the Syndicate is exposed can be separated into underwriting risk and reserve risk.
i.
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future
insurance losses and associated expenses. This includes the risks that the premium is set too low,
provides inappropriate levels of cover, or that the actual frequency or severity of claims events will
be significantly higher than was expected during the underwriting process.
ii.
Reserve risk is the risk that the reserves established in respect of insurance claims incurred are
insufficient to settle the claims and associated expenses in full.
i.
Management of insurance risk
Underwriting risks are continually monitored through, for example, adherence with the limits set within the risk
appetite framework, the established peer review process (including pre and post bind reviews and independent
reviews), underwriting authority limits imposed, underwriting rules and guidelines, quarterly business reviews,
as well as via exception reporting. Formal price monitoring procedures form part of the standard monthly
management information. These contribute to the quarterly actuarial review whereby the loss outcome of the
underwriting activity is continually re-assessed and considered by the Reserving actuaries. There is a dedicated
Catastrophe and Aggregation management function independent of Underwriting management, whose
responsibility is to model aggregate risk and support pricing decisions, providing a key control to the
underwriting process.
The Syndicate seeks to maintain a diversified and balanced portfolio of risks in order to reduce the variability of
outcomes. Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative
variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected
by a change in any subset of the portfolio. This is achieved by accepting a spread of business over time,
segmented between different classes of business. The Syndicate business forecasts for each class of business
reflect this underwriting strategy, and set out the types of business to be written, the geographical regions in
which business is to be written and the sectors to which the Syndicate is prepared to expose itself. These plans
are approved and monitored by management and are submitted to Lloyd's. The Syndicate's management also
recognises that insurance events are, by their nature, random, and the actual number and size of events during
any one year may vary from those estimated using established statistical techniques. To address this, the
Syndicate's Risk management team sets out the realistic disaster scenario exposure that it is prepared to
accept in certain territories to a range of natural and man-made events.
The current aggregate position is considered when underwriting a risk, and regular reporting is produced to
highlight, monitor and assist in the control of the key aggregations to which the Syndicate is exposed. The
Syndicate uses a number of modelling tools to monitor aggregation and to simulate catastrophe losses in order
to measure the effectiveness of its reinsurance programmes. Stress and Scenario Tests are also run using
these models. The greatest likelihood of significant losses to the Syndicate arises from catastrophe events, such
as flood damage, windstorm or earthquake. Where possible the Syndicate's underwriting team measures
geographic accumulations and use their knowledge of the business, historical loss behaviour and commercial
catastrophe modelling software. The Syndicate regularly models and monitors known accumulations of risks
including natural catastrophes, marine, liability and political events. Upon application of the reinsurance
coverage purchased, the key gross and net exposures are calculated on the basis of a 1% Total Value at Risk,
however a range of return periods are reported and tracked over time.
The claims development table in Note 17 shows the actual claims incurred to previous estimates for the last 10
years.
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4
RISK MANAGEMENT (CONTINUED)
A
Insurance risk (continued)
ii.
Concentration of insurance risk
Capital resource sensitivities
The capital position is sensitive to market conditions due to changes in the value of the assets, and to
assumptions and experience in respect of the value of the liabilities. The most significant risks to the Syndicate
are as follows:
i.
Event risk
The risk that individual risk losses or catastrophes lead to claims that are higher than anticipated in plans and
pricing.
ii.
Pricing risk
The risk that the level of expected loss is understated in the pricing process.
iii.
Reinsurance risk
Reinsurance risk to the Syndicate occurs where reinsurance contracts put in place to reduce gross insurance
risk do not perform as anticipated, prove inadequate in terms of the vertical or horizontal limits purchased or
result in coverage disputes.
iv.
Expense risk
The risk that the allowance for expenses and inflation in pricing is inadequate.
iii.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies between the classes of business and the nature of the risk being
underwritten and can arise from developments in case reserving for large losses and catastrophes, or from
changes in estimates of claims IBNR.
The following table presents the sensitivity of the value of insurance liabilities disclosed in the accounts to
potential movements in the assumptions applied within the technical provisions. Given the nature of the business
underwritten by the Syndicate, the approach to calculating the technical provisions for each class can vary and
as a result the sensitivity performed is to apply a beneficial and adverse risk margin to the total insurance liability.
The amount disclosed in the table represents the profit or loss impact on an increase or decrease in the
insurance liability as a result of applying sensitivity. The amount disclosed for the impact on long-term business
provision – net of reinsurance represents the impact on both profit and loss for the year and member balance.
Long-term business sensitivities as at 31 December
Sensitivity
2025
+5.0%
£000
-5.0%
£000
Long-term business provision – gross of reinsurance
(1,494 )
Long-term business provision – net of reinsurance
(1,445 )
Long-term business sensitivities as at 31 December
Sensitivity
2024
+5.0%
£000
-5.0%
£000
Long-term business provision – gross of reinsurance
(1,365 )
Long-term business provision – net of reinsurance
(1,287 )
AXA XL UNDERWRITING AGENCIES LIMITED
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FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets
are sufficient to fund the obligations arising from its insurance contracts. The goal of the investment
management process is to optimise the risk-adjusted investment income and risk-adjusted total return by
investing in a diversified portfolio of securities, whilst ensuring that the assets and liabilities are managed on a
cash flow and duration matching basis.
a.
Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The Syndicate is exposed to credit risk in respect of the following:
•
Debt securities and derivative financial instruments;
•
Reinsurers’ share of claims outstanding;
•
Amounts due from intermediaries;
•
Amounts due from reinsurers in respect of settled claims;
•
Cash and cash equivalents; and
•
Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
i.
Management of credit risk
The Syndicate manages the levels of credit risk it accepts by placing limits on its exposure to a single
counterparty, or groups of counterparties, and monitoring its exposure to regions, countries and industries. Such
risks are subject to regular review.
Changes to the limits on the level of credit risk by category and territory are approved annually by the managing
agency AXUAL Board of Directors. Reinsurance is used to manage insurance risk. This does not, however,
discharge the Syndicate's liability as primary insurer. If a reinsurer fails to pay a claim, the Syndicate remains
liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on an ongoing basis
by reviewing their financial strength prior to finalisation of any contract. In addition, management assesses the
creditworthiness of all reinsurers and intermediaries by reviewing credit grades provided by rating agencies and
other publicly available financial information. The recent payment history of reinsurers is also used to update the
reinsurance purchasing strategy. In certain circumstances, deposits from reinsurers are also held as collateral.
ii.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The following table analyses the credit rating by investment grade of financial investments, debt securities and
derivative financial instruments, reinsurers’ share of claims outstanding, amount due from intermediaries,
amounts due from reinsurers in respect of settled claims, cash and cash equivalents, and other debtors and
accrued interest.
The prior
-
year comparative figures have been re-presented to ensure consistency with current year’s
presentation. This includes adding the Reinsurer's share of long term business provision in the credit risk table.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 33
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
a.
Credit risk (continued)
ii.
Exposure to credit risk (continued)
2025
AAA
£000's
AA
£000's
A
£000's
BBB
£000's
Other
£000's
Not rated
£000's
Total
£000's
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims outstanding
Reinsurers' share of long term business
provision
-
-
385
606
-
-
991
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance
operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
-
-
-
-
-
-
-
Total
2024
AAA
£000's
AA
£000's
A
£000's
BBB
£000's
Other
£000's
Not rated
£000's
Total
£000's
Shares and other variable yield securities
and units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims outstanding
Reinsurers' share of long term business
provision
-
-
1,528
34
-
-
1,562
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance
operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
-
7
-
-
-
-
7
Total
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 34
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
a.
Credit risk (continued)
ii.
Exposure to credit risk (continued)
The prior
-
year comparative figures have been re-presented to ensure consistency with current year’s
presentation. This includes the removal of past due but not impaired amounts from the table above.
iii.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date.
The Syndicate also has debtors arising from direct insurance operations that are impaired at the reporting date.
These debtors have been individually assessed for impairment by considering information such as the
occurrence of significant changes in the counterparty’s financial position, patterns of historical payment
information and disputes with counterparties.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
2025
Neither past
due nor
impaired
assets
£000's
Past due but
not impaired
assets
£000's
Gross value of
impaired
assets
£000's
Impairment
allowance
£000's
Total
£000's
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims outstanding
Reinsurers' share of long term business
provision
991
-
-
-
991
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
-
-
-
-
-
Total
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 35
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
a.
Credit risk (continued)
iii.
Financial assets that are past due or impaired (continued)
2024
Neither past due
nor impaired
assets
£000's
Past due but not
impaired assets
£000's
Gross value of
impaired assets
£000's
Impairment
allowance
£000's
Total
£000's
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers’ share of claims outstanding
Reinsurers' share of long term business
provision
1,562
-
-
-
1,562
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
7
-
-
-
7
Total
There were no impairment allowance during each period for each class of financial asset at the balance sheet
date.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 36
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
a.
Credit risk (continued)
iii.
Financial assets that are past due or impaired (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's
£000's
£000's
£000's
£000's
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Reinsurers' share of long term business
provision
-
-
-
-
-
Debtors arising out of direct insurance
operations
(14 )
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
-
-
-
-
-
Total
(14 )
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 37
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
a.
Credit risk (continued)
iii.
Financial assets that are past due or impaired (continued)
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's
£000's
£000's
£000's
£000's
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central fund
Other investments
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Reinsurers' share of long term business
provision
-
-
-
-
-
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Other debtors and accrued interest
Cash at bank and in hand
Overseas deposits
-
-
-
-
-
Total
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 38
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
b.
Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its insurance
contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash resources mainly
from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i.
Management of liquidity risk
The projected settlement of these liabilities is modelled, on a regular basis, using actuarial techniques. The
Syndicate manages this risk by maintaining sufficient liquid assets to meet expected cash flow requirements.
The nature of insurance is that the requirements of funding cannot be predicted with absolute certainty and
therefore the theory of probability is applied on insurance contracts to ascertain the likely provision and the time
period when such liabilities will require settlement.
ii.
Maturity analysis of Syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance and reinsurance contracts, the
contractual maturity is the estimated date when the gross undiscounted contractually required cash flows will
occur. For financial liabilities, it is the earliest date on which the gross undiscounted cash flows (including
contractual interest payments) could be paid assuming conditions are consistent with those at the reporting date.
Undiscounted net cash flows
2025
Carrying
amount
£000's
No
maturity
stated
£000's
0-1 yrs
£000's
1-3 yrs
£000's
3-5 yrs
£000's
>5 yrs
£000's
Total
£000's
Long-term business provision
29,883
-
15,687
11,190
1,913
1,093
29,883
Derivative liabilities
-
Deposits received from reinsurers
-
Creditors
11,045
Other credit balances
-
Total
40,928
Undiscounted net cash flows
2024
Carrying
amount
£000's
No
maturity
stated
£000's
0-1 yrs
£000's
1-3 yrs
£000's
3-5 yrs
£000's
>5 yrs
£000's
Total
£000's
Long-term business provision
27,303
-
14,149
10,509
1,740
905
27,303
Derivative liabilities
-
Deposits received from reinsurers
-
Creditors
14,299
Other credit balances
-
Total
41,602
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 39
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
c.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
i.
Management of market risks
AXA XL division places restrictions on the external investment managers’ investment strategies. Strict limits, by
trust fund, are set for types of assets held, concentration limits and average investment grade ratings.
Investments are typically investment grade bonds and investment grade asset backed securities. Guidelines
and benchmarks are set at a minimum of every three years and approved by the AXUAL Board of Directors.
The performance of the investment managers is monitored constantly and reviewed quarterly by the AXUAL
Board of Directors. The Syndicate aims to manage exchange rate exposure in US dollar terms.
i.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio, borrowings and cash and cash
equivalents.
The Syndicate monitors interest rate risk on a monthly basis by calculating the impact of changes in interest rate
on the value of investments and the net present value of liabilities against a risk appetite that has been agreed
with the Board.
ii.
Currency risk
The Syndicate manages its foreign exchange risk against its functional currency. Foreign exchange arises when
future commercial transactions or recognised assets and liabilities are denominated in a currency that is not the
Syndicate’s functional currency.
The Syndicate is primarily exposed to currency risk in respect of liabilities under policies of insurance
denominated in currencies other than US Dollars. The most significant currencies to which the Syndicate is
exposed are Pounds Sterling, Australian Dollar, Japanese Yen, New Zealand Dollar and Euro. The Syndicate
seeks to mitigate the risk by matching the estimated foreign currency denominated liabilities with assets
denominated in the same currency. Profit and Loss is distributed in accordance with Lloyd's rules using a
combination of Sterling and US Dollars.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 40
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
c.
Market risk (continued)
iii.
Currency risk (continued)
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:`
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Other
Total
2025
£000's
£000's
£000's
£000's
£000's
£000's
£000's
£000's
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
Prepayments and
accrued income
Total assets
Technical provisions
(6,820 )
(37,640 )
(347 )
(44,807 )
Deposits received
from reinsurers
Creditors
(7,357 )
(3,559 )
(129 )
(11,045 )
Accruals and
deferred income
(216 )
(216 )
Total liabilities
(14,393 )
(41,199 )
(476 )
(56,068 )
Total capital and
reserves
(10,290 )
(641 )
(6,389 )
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Other
Total
2024
£000's
£000's
£000's
£000's
£000's
£000's
£000's
£000's
Investments
Reinsurers' share of
technical provisions
Debtors
Other assets
Prepayments and
accrued income
Total assets
Technical provisions
(5,855 )
(36,178 )
(542 )
(42,575 )
Deposits received
from reinsurers
Creditors
(9,489 )
(4,340 )
(470 )
(14,299 )
Accruals and
deferred income
(221 )
(221 )
Total liabilities
(15,565 )
(40,518 )
(1,012 )
(57,095 )
Total capital and
reserves
(11,140 )
(2,275 )
(7,940 )
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 41
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
B
Financial risk (continued)
c.
Market risk (continued)
iv.
Equity price risk
Equity price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market
prices (other than those arising from interest rate risk or currency risk), principally investment securities, whether
those changes are caused by factors specific to the individual financial instrument or its issuer, or factors
affecting all similar financial instruments traded in the market.
The Syndicate is exposed to equity securities price risk as a result of its holdings in equity investments, classified
as financial assets at fair value through statement of profit or loss and other comprehensive income. Exposures
to individual companies and to
equity shares in aggregate are monitored in order to ensure compliance with the relevant regulatory limits for
solvency purposes.
The Syndicate has a defined investment policy which sets limits on the Syndicate's exposure to equities both in
aggregate terms and by geography, industry and counterparty. This policy of diversification is used to manage
the Syndicate's price risk arising from its investments in equity securities.
As at 31 December 2025, the Syndicate had no unlisted equity investments (2024: £0.4m).
v.
Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market indices on financial instruments
with all other variables held constant, showing the impact on the result before tax due to changes in fair value of
financial assets and liabilities (whose fair values are recorded in the profit and loss account) and member's
balances.
2025
Impact on
results
before tax
£000's
2025
Impact on
member's
balances
£000's
2024
Impact on
results before
tax
£000's
2024
Impact on
member's
balances
£000's
Interest rate risk
+ 50 basis points shift in yield curves
(698 )
(698 )
(764 )
(764 )
- 50 basis points shift in yield curves
Equity price risk
5 percent increase in equity prices
5 percent decrease in equity prices
(968 )
(968 )
(910 )
(910 )
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain
unchanged. However, the occurrence of a change in a single market factor may lead to changes in other market
factors as a result of correlations.
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting date
and may vary at the time that any actual market movement occurs. As investment markets move past pre-
determined trigger points, action would be taken which would alter the Syndicate’s position.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 42
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
C
Capital management
i.
Capital framework at Lloyd’s
Lloyd’s is a regulated undertaking and subject to the supervision of the PRA under the Financial Services and
Markets Act 2000 and in accordance with Solvency II legislation. The Syndicate is in compliance with the
regulatory capital requirements.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s complies with Solvency II requirements, and beyond that to meet its own financial strength, licence
and ratings objectives.
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital Requirement
(“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss,
reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also
calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year
SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each Syndicate are subject to review
by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
A Syndicate may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its
own share of underwriting liabilities on the Syndicate(s) on which it is participating but not other member's
shares. Accordingly, the capital requirement that Lloyd’s sets for each member operates on a similar basis.
Each member’s SCR shall thus be determined by the sum of the member’s share of the Syndicate SCR ‘to
ultimate’. Where a member participates on more than one Syndicate, a credit for diversification is provided to
reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover
a 1 in 200 year loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the
member’s capital requirement, known as the Economic Capital Assessment (“ECA”). The purpose of this uplift,
which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings
objectives. The capital uplift applied for 2025 was 35% (2024: 35%) of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
Each member may provide capital to meet its ECA either by: assets held in trust by Lloyd’s specifically for that
member (FAL) or held within and managed within a Syndicate (FIS); or as the member’s share of the member's
balances on each Syndicate on which it participates. Accordingly, all of the assets less liabilities of the Syndicate
as represented in the member's balances reported on the balance sheet, represent resources available to meet
member’s and Lloyd’s capital requirements.
The level of FAL/FIS that Lloyd's requires a member to maintain is determined by Lloyd's based on PRA
requirements and resource criteria. This capital requirement is based on a number of factors including the nature
and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of
business that has been underwritten.
Resources available to meet member's and Lloyd’s capital requirements are separately identified in the
Statement of Changes in Member's Balances.
Lloyd’s also retains the right to request a callable contribution equal to 5% of capacity from the Syndicate.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 43
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
RISK MANAGEMENT (CONTINUED)
D
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes and systems, or from
external events. AXUAL actively monitors and controls its operational risks. Both the Group and Lloyd’s have
formal disaster recovery plans which, in the event of an incident, will support alternative accommodation
strategies. All computer systems are assessed for recovery time objectives and remote working technology is
well used and familiar to staff.
Single event limits are in place for operational risk which are monitored by the UK Operational Risk
Committee. The Syndicate continues to monitor operational risks and their potential impact on the financial
position through its assessment process, scenario analysis, key risk indicators, operational risk event
reporting and loss data collation (OPERA process) and governance processes. These processes are well
embedded within the business and are designed to identify new risks or changes to existing risks as they
emerge. Responsibilities for identifying and reporting risk within the first line are understood which facilitates
our ability to respond quickly to any changes in the risk landscape. The output of these processes are
reported through the UK governance structure and issues escalated when required
The Syndicate is part of AXA XL's Internal Control Framework which is a key means by which operational risk
is mitigated. Controls are tested for both design and operational effectiveness on a rolling 3-year cycle, with
formal actions assigned to any controls which fail the testing.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 44
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
5
ANALYSIS OF UNDERWRITING RESULT
An analysis of the underwriting result before investment return is presented in the table below:
2025
Gross
premiums
written
£000's
Net
Premiums
Earned
£000's
Gross
premiums
earned
£000's
Gross
claims
incurred
£000's
Gross
operating
expenses
£000's
Reinsurance
balance
£000's
Underwriting
result
£000's
Direct insurance
-
-
-
-
-
-
-
Accident and health
-
Motor (third party
liability)
-
Motor (other classes)
-
Marine, aviation, and
transport
-
Fire and other damage
to property
-
Third party liability
-
Credit and suretyship
-
Legal expenses
-
Assistance
-
Miscellaneous
-
Life
8,773
(2,151 )
(5,127 )
(2,577 )
Total direct insurance
8,773
(2,151 )
(5,127 )
(2,577 )
Reinsurance
acceptances
20,817
(18,761 )
(2,726 )
(397 )
Total
29,590
(20,912 )
(7,853 )
(2,304 )
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification
of the above segments into the Lloyd’s aggregate classes of business:
2025
Gross
premiums
written
£000's
Gross
premiums
earned
£000's
Gross
claims
incurred
£000's
Gross
operating
expenses
£000's
Reinsurance
balance
£000's
Underwriting
result
£000's
Additional analysis
Fire and damage to property of which
is:
Specialities
Energy
Third party liability of which is:
Energy
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 45
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
5
ANALYSIS OF UNDERWRITING RESULT (CONTINUED)
2024
Gross
premiums
written
£000's
Net
Premiums
Earned
£000's
Gross
premiums
earned
£000's
Gross
claims
incurred
£000's
Gross
operating
expenses
£000's
Reinsurance
balance
£000's
Underwriting
result
£000's
Direct insurance
-
-
-
-
-
-
-
Accident and health
-
Motor (third party
liability)
-
Motor (other classes)
-
Marine, aviation, and
transport
-
Fire and other damage
to property
-
Third party liability
-
Credit and suretyship
-
Legal expenses
-
Assistance
-
Miscellaneous
-
Life
9,796
(4,222 )
(6,039 )
(857 )
Total direct insurance
9,796
(4,222 )
(6,039 )
(857 )
Reinsurance
acceptances
24,481
(15,247 )
(3,013 )
(207 )
Total
34,277
(19,469 )
(9,052 )
(1,064 )
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification
of the above segments into the Lloyd’s aggregate classes of business:
2024
Gross
premiums
written
£000's
Gross
premiums
earned
£000's
Gross
claims
incurred
£000's
Gross
operating
expenses
£000's
Reinsurance
balance
£000's
Underwriting
result
£000's
Additional analysis
Fire and damage to property of which
is:
Specialities
Energy
Third party liability of which is:
Energy
The reinsurance balance represents the charge to the technical account from the aggregate of all items relating
to outwards reinsurance. The Lloyd's insurance market has been treated as one geographical segment. All
business is signed and concluded in the UK.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 46
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
5
ANALYSIS OF UNDERWRITING RESULT (CONTINUED)
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 destination of risk is presented in the table below:
2025
£000's
2024
£000's
United Kingdom
European Union Member States
US
Rest of the world
Total gross premiums written
6
NET OPERATING EXPENSES
2025
£000's
2024
£000's
Acquisition costs
Change in deferred acquisition costs
(19 )
Administrative expenses
Member's standard personal expenses
Reinsurance commissions and profit participation
(294 )
Net operating expenses
Total commissions for direct insurance business for the year amounted to:
2025
£000's
2024
£000's
Total commission for direct insurance business
Administrative expenses include:
2025
£000's
2024
£000's
Auditor’s remuneration:
fees payable to the Syndicate’s auditor for the audit of these financial statements
fees payable to the Syndicate’s auditor and its associates in respect of other
services pursuant to legislation
Impairment losses on debtors:
arising out of direct insurance operations
arising out of reinsurance operations
Impairment losses on financial instruments:
arising from instrument measured at amortised cost
arising from instruments measured as available for sale
The auditor's remuneration for the year has been recharged to the Syndicate by XLCSSE.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 47
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
7
KEY MANAGEMENT PERSONNEL COMPENSATION
The Directors of AXUAL received the following aggregate remuneration charged to the Syndicate and included
within net operating expenses:
2025
£000's
2024
£000's
Directors’ emoluments
Fees
The active underwriter received the following aggregate remuneration charged to the Syndicate.
2025
£000's
2024
£000's
Emoluments
There was no run-off manager charged with remuneration to the Syndicate.
2025
£000's
2024
£000's
Emoluments
8
STAFF NUMBERS AND COSTS
The Syndicate and Managing Agent have no direct employees. Many of the staff working on the affairs of the
Syndicate are employed by a Group service company, XLCSSE, but there are staff from the rest of the AXA XL
international network that may also work on the Syndicate. The recharge of the expenses from the service
company to the Syndicate is through a recharge model across the international network, including UK domiciled
entities and the recharge of the costs are dependent on the nature of the service performed for the Syndicate,
for which amounts have been disclosed below, however it is not considered practicable to present staff
numbers.
The following amounts were recharged by XLCSSE to the Syndicate in respect of payroll costs:
2025
£000's
2024
£000's
Wages and salaries
Social security costs
Other pension costs
Other short/ long term incentive costs
Total
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 48
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
9
INVESTMENT RETURN
2025
£000's
2024
£000's
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
Dividend income
From financial instruments classified as Available for Sale
Interest and similar income
Dividend income
From financial instruments at amortised cost
Interest and similar income
Dividend 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 the investments
(544 )
(1,747 )
Other relevant gains/ (losses)
From financial instruments at amortised cost
Gains on the realisation of investments
Losses on the realisation of investments
Unrealised gains on investments
Unrealised losses on the investments
Other relevant gains/(losses)
Financial liabilities at amortised cost
Interest expense
Other relevant gain
Other relevant loss
Investment management expenses
(33 )
(4 )
Total investment return
(714 )
Transferred to the technical account from the non-technical account
(714 )
Impairment losses on debtors recognised in administrative expenses
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 49
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
10
DISTRIBUTION AND OPEN YEARS OF ACCOUNT
A distribution of £3.5m to the member will be proposed in relation to the closing year of account 2023 (2024:
£3.7m in relation to closing year of account 2022).
The table below shows the current accident year result of the years of account remaining open after the three-
year period.
2025
£000's
2024
£000's
2023
2024
2025
2026
-
-
2027
-
-
2028
-
-
2029
-
-
2030
-
-
2031
-
-
2032
-
-
11
FINANCIAL INVESTMENTS
Carrying value
Cost
2025
£000's
2024
£000's
2025
£000's
2024
£000's
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Participation in investment pools
Loans secured by mortgages
Loans and deposits with credit institutions
Derivative assets
Syndicate loans to central funds
Other investments
Total financial investments
The Syndicate has pledged £nil (2024: £nil) financial instruments as collateral against derivatives used for
hedging.
The amount ascribable to listed investments is £nil (2024: £nil).
The table below presents an analysis of financial investments by their measurement classification.
2025
£000's
2024
£000's
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value as available for sale
Financial assets measured at amortised cost
Total financial investments
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 50
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
11
FINANCIAL INVESTMENTS (CONTINUED)
There were no financial instruments which would otherwise be required to be measured at fair value, but for
which a reliable measure of fair value is no longer available.
There were no derivative assets and liabilities for the year.
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
•
Level 1
– financial assets that are measured by reference to published quotes in an active market. A
financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those
prices represent actual and regularly occurring market transactions on an arm’s length basis.
•
Level 2
– financial assets measured using a valuation technique based on assumptions that are supported
by prices from observable current market transactions. For example, assets for which pricing is obtained via
pricing services but where prices have not been determined in an active market, financial assets with fair
values based on broker quotes, investments in private equity funds with fair values obtained via fund
managers and assets that are valued using the Syndicate’s own models whereby the significant inputs into
the assumptions are market observable.
•
Level 3
– financial assets measured using a valuation technique (model) based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are they
based on available market data. Therefore, unobservable inputs reflect the Syndicate's own assumptions
about the assumptions that market participants would use in pricing the asset or liability (including
assumptions about risk). These inputs are developed based on the best information available, which might
include the Syndicate’s own data.
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting
date by its level in the fair value hierarchy.
2025
Level 1
£000's
Level 2
£000's
Level 3
£000's
Assets
held at
amortised
cost
£000's
Total
£000's
Shares and other variable yield securities and units in
unit trusts
Debt securities and other fixed income securities
Participation in investment pools
Loans secured by mortgages
Loans with credit and other institutions
Derivative assets
Syndicate loans to central fund
Other investments
Total financial investments
Derivative liabilities
Total
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 51
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
11
FINANCIAL INVESTMENTS (CONTINUED)
2024
Level 1
£000's
Level 2
£000's
Level 3
£000's
Assets
held at
amortised
cost
£000's
Total
£000's
Shares and other variable yield securities and units in
unit trusts
Debt securities and other fixed income securities
Participation in investment pools
Loans secured by mortgages
Loans with credit and other institutions
Derivative assets
Syndicate loans to central fund
Other investments
Total financial investments
Derivative liabilities
Total
Fixed maturities and short
-
term investments
Fair values of fixed maturities and short
-
term investments are based on the quoted market price or evaluated
bid prices of these securities provided by either independent pricing services, or, when such prices are not
available, by reference to broker or underwriting bid indications.
Other investments
The fair value of investments in funds is based on the NAV provided by the funds’ administrators. The fair values
of holdings in equity and loan instruments are based on the market price or evaluated bid prices of these
securities provided by independent pricing services, or, when such prices are not available, by reference to
broker or underwriting bid indications provided by administrators and recent transactions, if any.
The Syndicate's level 3 other invested assets consist of investments in funds with significant redemption
restrictions and unquoted private equity and debt, for which manager NAV statements are the primary source of
the valuations. Although the Syndicate does not have access to the specific unobservable inputs that may have
been used in the fair value measurements, the Syndicate would expect the significant inputs for private equity
and debt to be discounted cash flows and valuations of similar sized peers. Significant increases or decreases
in any of those inputs in isolation could result in a significantly different fair value measurement.
The Syndicate’s level 3 investments also include other invested assets where the prices provided by vendors
have been unchanged for three months or more.
Level 3 assets include non-traded private credit funds, hedge funds with significant redemption restrictions,
loans to credit institutions, Syndicate's loans to central fund, collateralized debt obligations, sub-prime
securities, Alt A securities and securities rated CCC and below. The fair value of the private credit fund is
determined with reference to the NAV. Loans to credit institutions which have no market price have been valued
at cost as a proxy for fair value. The loans to the Lloyd's central fund are not tradable and are fair valued based
on discounted cash flow model to which a fair value adjustment has been applied to appropriately reflect the
credit and illiquidity risk of the instrument. These loans are deemed to be equity on the basis that the repayment
of the loan and payment of interest thereon is at the discretion of the Corporation of Lloyd's. The Syndicate
loans have been classified as level 3 because the valuation approach includes significant unobservable inputs
and an element of subjectivity in determining appropriate credit and illiquidity spreads within the discount rates
used in discounted cash flow model. The fair value of the loan at year end is nil (2024: £0.5m). There has been
no impairment in the current period (2024: £nil).
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 52
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
12
DEBTORS ARISING OUT OF DIRECT INSURANCE OPERATIONS
2025
£000's
2024
£000's
Due within one year
Due after one year
Total
13
DEBTORS ARISING OUT OF REINSURANCE OPERATIONS
2025
£000's
2024
£000's
Amounts due within one year
Amounts due after one year
Total
14
OTHER DEBTORS
2025
£000's
2024
£000's
Inter-Syndicate balance
Other related party balances (non-Syndicate)
Amounts due from member
Other
Total
Amounts owed from group undertakings are unsecured, interest free, have no fixed date of repayment and
are repayable on demand.
15
DEFERRED ACQUISITION COSTS
The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end
of the period.
2025
2024
Gross Reinsurance
Net
Gross Reinsurance
Net
£000's
£000's
£000's
£000's
£000's
£000's
Balance at 1 January
Incurred deferred acquisition
costs
Amortised deferred acquisition
costs
(2,317 )
(2,317 )
(2,788 )
(2,788 )
Foreign exchange movements
(157 )
(157 )
Other
Balance at 31 December
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 53
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
16
OTHER ASSETS
2025
£000's
2024
£000's
Overseas deposits
-
7
Other asset
-
-
Total
-
7
Overseas deposits are lodged as a condition of conducting underwriting business in certain countries and
are managed by Lloyd’s centrally or by investment managers on their behalf. Overseas deposits have not
been included on the balance sheet within investments or cash at bank or in hand as they are not under
direct control of the Syndicate.
17
CLAIMS DEVELOPMENT
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated
have changed from the first estimates made. Some business is not off risk after the first twelve months.
Therefore, we would anticipate cumulative claims to increase in the second year as this business is earned.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported for
the end of the underwriting year to one year later as a large proportion of premiums are earned in the year of
account’s second year of development.
Balances have been translated at exchange rates prevailing at 31 December 2025 in all cases.
Gross:
Pure underwriting
year
2016
£000's
2017
£000's
2018
£000's
2019
£000's
2020
£000's
2021
£000's
2022
£000's
2023
£000's
2024
£000's
2025
£000's
Total
£000's
Estimate of gross
claims
at end of
underwriting year
one year later
two years later
three years later
four years later
five years later
six years later
seven years later
eight years later
nine years later
Estimate of gross
claims reserve
Provision in
respect of
prior years
Less claims paid
(16,979 ) (30,737 ) (30,255 ) (21,697 ) (18,458 ) (13,264 ) (14,947 ) (12,292 )
(10,458 )
(389 )
(169,476 )
Gross claims
reserve
(19 )
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 54
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
17
CLAIMS DEVELOPMENT (CONTINUED)
Net:
Pure underwriting
year
2016
£000's
2017
£000's
2018
£000's
2019
£000's
2020
£000's
2021
£000's
2022
£000's
2023
£000's
2024
£000's
2025
£000's
Total
£m
Estimate of net claims
at end of underwriting
year
one year later
two years later
three years later
four years later
five years later
six years later
seven years later
eight years later
nine years later
Estimate of gross
claims reserve
Provision in respect
of
prior years
Less claims paid
(9,036 ) (17,592 ) (16,086 ) (16,346 ) (16,565 ) (13,139 ) (13,754 ) (12,292 ) (7,110 )
(389 )
(122,309 )
Net claims reserve
(19 )
18
TECHNICAL PROVISIONS
The table below shows changes in the insurance contract liabilities and assets from the beginning of the period
to the end of the period.
2025
2024
Gross
provisions
£000's
Reinsurance
assets
£000's
Net
£000's
Gross
provisions
£000's
Reinsurance
assets
£000's
Net
£000's
Long term business provisions
Balance at 1 January
(1,562 )
(3,323 )
Movements in provision
Foreign exchange movements
(1,847 )
(1,748 )
(19 )
Other
Balance at 31 December
(991 )
(1,562 )
The gross long term business provisions, the loss adjustment liabilities and the liabilities for claims IBNR are
gross of expected recoveries from salvage and subrogation.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
Page 55
Docusign Envelope ID: 4D9D698B-6A12-4D5A-894D-502DCDDA54A0
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
18
TECHNICAL PROVISIONS (CONTINUED)
2025
2024
Gross
provisions
£000's
Reinsurance
assets
£000's
Net
£000's
Gross
provisions
£000's
Reinsurance
assets
£000's
Net
£000's
Unearned premiums
Balance at 1 January
(838 )
(782 )
Premiums written during the year
(2,777 )
(2,336 )
Premiums earned during the year
(32,143 )
(29,590 )
(36,555 )
(34,277 )
Foreign exchange movements
(716 )
(712 )
Other
Balance at 31 December
(1,058 )
(838 )
Refer to Note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the
accounts, to potential movements in the assumptions applied within the technical provisions.
19
CREDITORS ARISING OUT OF DIRECT INSURANCE OPERATIONS
2025
£000's
2024
£000's
Due within one year
Due after one year
Total
20
CREDITORS ARISING OUT OF REINSURANCE OPERATIONS
2025
£000's
2024
£000's
Due within one year
Due after one year
Total
21
OTHER CREDITORS
2025
£000's
2024
£000's
Inter-Syndicate balances
Profit commissions payable
Other related party balances (Non-Syndicates)
Derivative liabilities
Other liabilities
Total
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of payment and are
payable on demand.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
22
CASH AND CASH EQUIVALENTS
2025
£000's
2024
£000's
Cash at bank and in hand
Short term debt instruments presented within other financial investments
Deposits with credit institutions
Bank overdrafts
(5,065 )
(6,396 )
Total cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the
management of its short-term commitments are included in cash and cash equivalents.
There were no cash and cash equivalents which are not available for use by the Syndicate or held in regulated
bank accounts in overseas jurisdictions.
23
ANALYSIS OF NET DEBT
At 1 January
2025
Cash
flows
Acquired
Fair value and
exchange
movements
Non-cash
changes
At 31
December
2025
Cash and cash
equivalents
(412 )
(152 )
Derivative financial
liabilities
Other
(6,396 )
(5,065 )
Total
(60 )
24
RELATED PARTIES
AXUAL is the managing agent for Syndicate 3002. Under the standard managing agent's agreement, AXUAL
receives an annual fee of £35k (2024: £35k).
AXA XL Life Syndicate Limited is the sole member of Syndicate 3002.
AXA SA wholly owns a number of cover holders which underwrite on behalf of Syndicate 3002 and these are
listed below:
XL Catlin Services SE
Catlin Risk Solutions Limited
Recharge of the expenses from the service company, XLCSSE, an approved CBI regulated intermediary, is
made on a monthly basis to the Syndicate through a Service Level Agreement. Quarterly full settlement is repaid
in relation to the provision of services and other support costs provided by XLCSSE.
The Syndicate has an intra-group reinsurance contract with XL Bermuda Ltd. The effect of this contract on the
statement of profit or loss and other comprehensive income in 2025 is a charge of £2.4m (2024: a charge of
£2.2m). Amounts relating to these contracts of £1.7m (2024: £0.7m) were payable as at the year-end date.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
24
RELATED PARTIES (CONTINUED)
Including in other debtors and other creditors which represent amounts owing to/from group undertakings is a net
owed amount of £1.7m (2024: £1.8m
).
2025
£000's
2024
£000's
Catlin Risk Solutions Ltd
-
56
Catlin Underwriting Inc.
7
7
Other
(107)
(139)
Total
(100)
(76)
AXA XL Syndicate Limited is the corporate member for the 2013 and prior underwriting years, whilst AXA XL Life
Syndicate Limited (formerly Catlin (ONE) Limited) is the corporate member for the 2014 and subsequent
underwriting years
25
OFF BALANCE SHEET ITEMS
The Syndicate has not been party to arrangements that are not reflected in its balance sheet.
26
POST BALANCE SHEET EVENTS
The Directors have not identified particulars of any important events affecting the Syndicate since the year end,
that require disclosures in the financial statements.
27
CONTINGENCIES AND COMMITMENTS
There were no contingencies and commitments required to be disclosed in the Syndicate’s financial statements.
28
FOREIGN EXCHANGE RATES
The following currency exchange rates have been used for principal foreign currency transactions:
2025
2024
Start of period
rate
End of period
rate
Average
rate
Start of period
rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
29
FUNDS AT LLOYD’S
Every member is required to hold capital at Lloyd’s which is held in trust and known as FAL. As at the date of the
accounts, the value of assets supporting FAL for the 2026 year of account is £29m (2025: £26m). These funds
are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet participating
member's underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by
Lloyd’s based on PRA requirements and resource criteria. The determination of FAL has regard to a number of
factors including the nature and amount of risk to be underwritten by the member and the assessment of the
reserving risk in respect of business that has been underwritten. Since FAL is not under the management of the
Managing Agent, no amount has been shown in these Financial Statements by way of such capital resources.
However, the Managing Agent is able to make a call on the Member’s FAL to meet liquidity requirements or to
settle losses.
30
ULTIMATE PARENT UNDERTAKING
AXA XL Life Syndicate Limited is the sole member of Syndicate 3002.
The direct holding company of AXA XL Life Syndicate Limited is XL Bermuda Ltd, a company registered in
Bermuda.
The ultimate parent undertaking and controlling party is AXA SA, a company registered in France, which is the
parent undertaking of the largest group to consolidate the financial statements of AXA XL Life Syndicate Limited.
Copies of the AXA SA consolidated financial statements can be obtained from 25 Avenue Matignon FR-75008
Paris France.
AXA XL UNDERWRITING AGENCIES LIMITED
SYNDICATE 3002 ANNUAL REPORT AND ACCOUNTS
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