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Everest
Syndicate 2786
Annual Report and Accounts
For the year ended 31 December 2025
Contents
Directors and Administration .............................................................................................. 1
Strategic report of the Managing Agent ............................................................................. 2
Managing Agent’s report .................................................................................................... 7
Statement of Managing Agent's responsibilities ................................................................ 8
Independent Auditor’s Report to the members of Everest Syndicate 2786 ...................... 9
Statement of profit or loss and other comprehensive income .......................................... 13
Statement of financial position .......................................................................................... 15
Statement of changes in members' balances .................................................................... 17
Statement of cash flows ..................................................................................................... 18
Notes to the financial statements ...................................................................................... 19
1. Basis of preparation ....................................................................................................... 19
2. Critical accounting estimates and judgements ............................................................. 20
3. Significant accounting policies ...................................................................................... 21
4. Risk and Capital Management ...................................................................................... 27
5. Analysis of underwriting result ...................................................................................... 43
6. Net operating expenses ................................................................................................ 46
7. Key management personnel compensation ................................................................. 47
8. Staff Numbers and Costs ............................................................................................... 47
9. Investment Return .......................................................................................................... 48
10. Distribution and open years of account ...................................................................... 49
11. Financial Investments .................................................................................................. 49
12. Debtors arising out of direct insurance operations ..................................................... 52
13. Debtors arising out of reinsurance operations ............................................................ 52
14. Other Debtors .............................................................................................................. 53
15. Deferred Acquisition Costs .......................................................................................... 53
16. Claims Development ................................................................................................... 54
17. Technical Provisions .................................................................................................... 56
18. Creditors arising out of direct insurance operations ................................................... 58
19. Creditors arising out of reinsurance operations .......................................................... 58
20. Other Creditors ............................................................................................................ 58
21. Cash and cash equivalents .......................................................................................... 58
22. Related parties ............................................................................................................. 59
23. Funds at Lloyd’s ........................................................................................................... 59
24. Post balance sheet events ........................................................................................... 60
1
Directors and Administration
Managing Agent
Directors
I D Sanderson
B G Riggs* (appointed 21 February 2025)
J L Lye (appointed 22 April 2025)
A Kennedy* (appointed 21 February 2025)
A J Kendrick* (appointed 21 February 2025)
J W Keen*
Non-Executive Directors*
Managing Agent's registered office
40 Lime Street
London
EC3M 5BS
Managing Agent's registered number
15804887
Active Underwriter
P Dreblow
Bankers and investment managers
Royal Bank of Canada
Citibank
Lloyds Bank
New England Asset Management
Registered Auditor
KPMG LLP
2
Strategic report of the Managing Agent
The Directors of the Managing Agent, Everest Managing Agency Limited (EMAL) a company
registered in England and Wales, present this strategic report on behalf of the Syndicate 2786
(“Syndicate”) for the year ended 31 December 2025. This annual report is prepared using the annual
basis of accounting as required by Regulation 5 of the Insurance Accounts Directive (Lloyd's
Syndicate and Aggregate Accounts) Regulations 2008 ("the 2008 Regulations"), this includes 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).
Results
The result for the calendar year ended 31 December 2025 (“the period”) is a profit of £33.4m (31
December 2024: profit of £10.5m) comprising an underwriting profit of £12.7m (31 December 2024:
profit of £5.4m) with a combined ratio of 95.6% (31 December 2024: 97.9%). The result reflects the
hard work of colleagues right across the business as we continue to build a positive, resilient
underwriting business.
Principal activity and review of the business
The Syndicate’s principal activity is the underwriting of direct insurance and reinsurance business in
the Lloyd’s market. The underwriting strategy reflects the Directors’ view of prevailing market
conditions in the classes of business written by the Syndicate during the year.
Gross written premium income by class of business for the calendar year was as follows:
2025
2024
£’000
£’000
Accident and Health 22,761
21,242
Commercial Management Liability 7,588
12,057
Contingency (46)
102
Cyber 15,156
16,160
Energy 18,600
18,486
Financial Institutions 13,188
16,889
Latent Defects 18
10
Liability 34,260
29,831
Marine 84,764
74,722
Medical Malpractice 24,247
21,760
Political Violence & Terrorism 15,065
4,836
Professional Indemnity 48,769
57,633
Property 58,810
45,518
Reinsurance 51
74
Specie 11,221
9,632
Warranty & Indemnity -
(153)
354,451
328,799
3
Strategic report of the Managing Agent continued
The Syndicate's financial key performance indicators during the period were as follows:
2025
2024
Gross premiums written (£’000) 354,451 328,799
Profit/(loss) for the period (£’000) 33,365 10,461
Net Loss ratio* 52.9% 55.8%
Net Expense ratio* 42.6% 42.0%
Combined ratio* 95.6% 97.9%
*Net loss ratio is the ratio of net claims incurred to net premiums earned in the calendar year. Net
expense ratio is the ratio of net operating expenses to net premiums earned in the calendar year.
Combined ratio is the ratio of net claims incurred and net operating expenses to net premiums earned
in the calendar year. Lower ratios represent better performance.
The performance of the Syndicate has been assessed by measuring, as a percentage of underwriting
capacity, the 36-month forecasted result on a funded accounting basis for an individual underwriting
year of account (“YOA”). The return on capacity for each underwriting year is shown below.
2025 YOA
Open
2024 YOA
Open
2023 YOA
Closed
Capacity (£’000) 355,000 340,000 320,000
Forecast result (£’000) 32,343 31,907 50,902
Forecast return on capacity 9.11% 9.40% 15.91%
Gross written premiums increased by 7.8% to £354.4m (2024: £328.8m).
Market conditions throughout 2025 were mixed. Overall, portfolio pricing remains robust despite
some softening during the year, with an aggregate risk-adjusted rate reduction of 2.9%. While the
Marine and Accident & Health classes saw moderate rate increases, most other lines experienced
some rate softening, particularly Financial Lines. Renewal retention for Open Market and Facultative
business was 70%, below historical levels, reflecting underwriters’ disciplined approach to declining
business where rates fall below adequacy.
The Syndicate continued its strategy to rebalance the tail of the portfolio. Between 2016 and 2022,
the portfolio was heavily weighted towards Third Party lines. Since 2023, the focus has shifted
towards achieving greater balance, with the launch of Marine and Energy portfolios and accelerated
growth in the Property class. In 2025, this trend continued, with premium in First Party lines increasing
by approximately 21%, while Third Party lines declined by 7%.
The Property class has traditionally maintained a strong international presence and, since mid-2024,
has entered the US market. The approach has been deliberately conservative, allowing class
underwriters flexibility to manage the portfolio. Premium growth in 2025 was primarily driven by the
first full year of US operations, alongside continued management of the international portfolio, with
a focus on efficient and disciplined deployment of capacity.
The Marine class consolidated its position in 2025 following substantial growth in 2023 and 2024.
This was supported by the introduction of the Political Violence & Terrorism class in Q3 2024, which
completed its first full year of underwriting in 2025. The Specie class also expanded its business
following a portfolio review in 2024.
4
Strategic report of the Managing Agent continued
Financial Institutions and Commercial Management Liability lines continued to experience rate
softening following the market peak in 2021. The Syndicate maintained a core portfolio in these lines,
deploying capacity selectively to ensure rates remain appropriate. Cyber and Professional Indemnity
markets, which peaked later, have also started to soften, and reduced premiums in 2025 reflect early
measures to manage this.
Casualty lines experienced moderate growth, supported by additional MGA relationships in the
Liability class and increased Open Market presence in the Medical Malpractice line, improving
portfolio acquisition costs.
The Accident & Health class maintained a stable portfolio.
Runoff activity continued in the Reinsurance, Contingency, Warranty & Indemnity, and Latent Defects
lines, reflecting only minor adjustments from prior years. The Syndicate sources minimal business
through the Treaty market, with moderate participation in Marine and Accident & Health lines to
complement the respective portfolios.
Principal risks and uncertainties
The Managing Agent sets risk appetite annually, which is approved by the Managing Agent Board
of Directors (“Board”). The Managing Agent Risk & Capital Committee (“RCC”) is a sub-committee of
the Board and meets at least quarterly to oversee the risk management framework. The RCC reviews
the risk profile as reflected in the risk register, and monitors performance against risk appetite using
a series of key risk indicators. The principal risk and uncertainties facing the Syndicate are as follows:
Insurance risk
Insurance risk includes the risks that a policy will be written for too low a premium or provide
inappropriate cover (underwriting risk), that the frequency or severity of insured events will be higher
than expected (claims risk), or that estimates of claims subsequently prove to be insufficient
(reserving risk). The Managing Agent Underwriting & Claims Committee (“UWC”), a sub-committee
of the Managing Agent Executive Committee (“ExCom”), manage insurance risk through challenge
and oversight of the approved business plan, which sets out targets for volumes, pricing, line sizes
and retention by class of business. The Board then monitors performance against the business plan
and the aggregation of risk through exposure management reporting through the year. Reserve
adequacy is monitored through quarterly review by the Everest Actuarial team and the Managing
Agent Reserving Committee (“RC”).
Credit risk
The key aspect of credit risk is reinsurance counterparty risk which is the risk of default by one or
more of the Syndicate’s reinsurers and intermediaries. The Managing Agent’s policy is to only use
approved reinsurers, supported by collateralisation where required. The Managing Agent sets
approval and usage criteria, monitors reinsurer ratings and is required to approve and oversee the
application of the reinsurer approval policy. The Syndicate may also be exposed to broker credit risk,
in particular where risk transfer arrangements are in place. Aged debt reporting for premiums is
reviewed by the Managing Agent Board at quarterly meetings.
Market risk
Market risk is the exposure of the Syndicate to fluctuations in interest rates, exchange rates, inflation,
credit spreads, and other financial conditions. This risk covers both the Syndicate’s day to day
funding, as well as any funding requirements under stressed conditions. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while
optimising the return on risk. Exposure to market risk mainly arises through the investment of the
5
Strategic report of the Managing Agent continued
syndicate’s free and regulated funds, the investment of the syndicate’s Funds In Syndicate (“FIS”)
where applicable and transacting in different currencies.
The Managing Agent’s policy is to maintain received income or incurred expenditure in the core
currencies in which they were received or paid. Any surplus or deficit in a core currency would be
subject to review by the Managing Agent’s Finance and Investments Committee (“FIC”), a sub-
committee of the Managing Agent Audit Committee (“AC”). Investments are monitored through
Investment Managers with quarterly updates provided to the FIC who review the performance,
duration and ESG ratings for the investments.
Liquidity risk
Liquidity risk is the risk of the Syndicate, although solvent, either does not have available sufficient
financial resources to enable it to meet its obligations as they fall due or can secure such resources
only at excessive cost. This risk covers both the Syndicate’s day to day funding, as well as any funding
requirements under stressed conditions. The Syndicate is exposed to liquidity risk through the
uncertainty of the size and timing of cash flows used to maintain a sufficient level of liquidity to fund
any potential syndicate liabilities and other financial commitments. To mitigate this risk the FIC
review cash flow projections at quarterly meetings, funds are invested in cash and short-duration
financial instruments, and ensure that, where needed, the Syndicate has liquidity facilities in place or
has utilised the option of a cash call from capital providers.
Operational risk
This is the risk that errors caused by people, processes, systems and external events lead to losses to
the Syndicate. The Managing Agent seeks to manage this risk through a robust operational risk and
control framework including detailed procedure manuals and a thorough training programme. This
is underpinned by a structured programme of testing of processes and systems by internal audit,
who serve as an independent line of assurance, reporting directly to the Chair of the AC. Business
continuity and disaster recovery plans are in place and are regularly updated and tested.
Regulatory risk
Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to respond
to regulatory change. The Managing Agent is required to comply with the requirements of the
Financial Conduct Authority (“FCA”), Prudential Regulatory Authority (“PRA”) and Lloyd’s of London
(“Lloyd’s”). Lloyd’s requirements include those imposed on the Lloyd’s market by overseas
regulators. The Managing Agent has a Compliance function that monitors business activity and
regulatory developments to assess any effects on both the Managing Agent and the Syndicate.
Group and strategic risk
Group Risk is the risk of contagion that arises from being associated with key stakeholders and the
impact that activities and events that occur within other connected or third parties has on the
business.
Strategic risk covers the risks faced by the Syndicate due to changes in underlying strategy of the
business or that of its key stakeholders (including strategic conflicts of interest).
6
Strategic report of the Managing Agent continued
Emerging risks
An emerging risk or opportunity is defined as “a developing issue, triggered externally, with the
potential to have a significant business impact but which may not be sufficiently understood or
accounted for”. The business impact in this case could represent a downside risk or an upside
opportunity. Emerging risks and opportunities include:
Syndicate insurable risks, as areas of potential future losses or new product offerings;
Those risks that may affect a syndicate’s ability to carry out normal business operations
and/or lead to unplanned significant costs/income;
Both new risks and those which are re-emerging in a new context.
The Managing Agent and Syndicate continue to monitor the impact of emerging risks on the
Syndicate’s business through the Own Risk and Solvency Assessment (ORSA), taking into account
their impacts on the strategic direction of the Syndicate.
Future developments
The Syndicate will continue to transact the current classes of general direct insurance and
reinsurance business. If opportunities arise to write new classes of business, these will be investigated
at the appropriate time.
The capacity for the 2026 underwriting year is £365.0m (2025 underwriting year: £355.0m).
Environmental, Social and Governance (ESG) and sustainability
The Managing Agent has documented a position with regard to ESG and sustainability, which is
submitted annually to Lloyd’s on behalf of the Syndicate as part of business planning. The position
has been developed in alignment with Lloyd’s principles and expectations, broader regulatory
requirements, and to support the Syndicate’s strategic objectives. Lloyd’s published an updated
version of its “Insuring the Transition” Roadmap as well as its principles for doing business regarding
sustainability, and the Syndicate continues to ensure its approach aligns with those expectations.
7
Managing Agent’s report
Directors Serving in the Year
The Directors of the Managing Agency, Everest Managing Agency Limited, who served during the
year ended 31 December 2025 and up to the date of signing can be seen in the Directors and
Administration section on page 1.
Disclosure of Information to the Auditor
So far as each person who was a Director of the Managing Agent at the date of approving the report
is aware, there is no relevant audit information, being information needed by the Syndicate auditor
in connection with the auditor's report, of which the auditor is unaware. Having made enquiries of
fellow Directors of the Managing Agent and the Syndicate's auditors, each Director has taken all the
steps that he or she ought to have taken as a Director to become aware of any relevant audit
information and to establish that the Syndicate's auditor is aware of that information.
Syndicate Annual General Meeting
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, the auditor will be deemed to be reappointed.
In accordance with the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the Managing
Agent does not propose holding an annual meeting this year; objections to this proposal or the
intention to reappoint the auditors for a further 12 months can be made by Syndicate member within
21 days of this notice.
On behalf of the Board
Jim Lye
Director
19 February 2026
8
Statement of Managing Agent's responsibilities
The Managing Agent is responsible for preparing the financial statements in accordance with
applicable law and regulations.
The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008
require the managing agent to prepare financial statements at 31 December each year in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law) including FRS 102 the Financial Reporting Standard applicable in the
UK and Republic of Ireland. The financial statements are required by law to give a true and fair view
of the state of affairs of the Syndicate as at that date and of its profit or loss for that year.
In preparing the financial statements, the managing agent is required to:
select suitable accounting policies and then apply them consistently subject to changes
arising on the adoption of new accounting standards in the year;
make judgements and estimates that are reasonable and prudent;
state whether applicable Accounting Standards have been followed, subject to any material
departures disclosed and explained in the notes to the Syndicate accounts; and
prepare the Syndicate Accounts on the basis that the Syndicate will continue to write future
business unless it is inappropriate to presume that the Syndicate will do so.
The Managing Agent is responsible for keeping adequate accounting records which disclose with
reasonable accuracy at any time the financial position of the Syndicate and enable it to comply with
the Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008. It
is also responsible for safeguarding the assets of the Syndicate and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Managing Agent is responsible for the maintenance and integrity of the corporate and financial
information included on the business' website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
We confirm that to the best of our knowledge the syndicate accounts, including the iXBRL tagging
applied to these accounts, comply with the requirements of the Lloyd’s Syndicate Accounts
Instructions version [3.1] as modified by the Frequently Asked Questions version [1.1] issued by
Lloyd’s.
On behalf of the Board
Jim Lye
Director
19 February 2026
9
Independent Auditor’s Report to the members of Everest Syndicate 2786
Opinion
We have audited the Syndicate Annual Accounts of Syndicate 2786 (“the Syndicate”) for the year
ended 31 December 2025 which comprise the Statement of profit or loss and other comprehensive
income, Statement of financial position, Statement of changes in members’ balances, Statement of
cash flows, and related notes, including the accounting policies in note 3.
In our opinion the Syndicate Annual Accounts:
give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2025 and of
its profit for the year then ended;
have been properly prepared in accordance with UK accounting standards, including FRS
102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and
have been prepared in accordance with the requirements of the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and Sections 1 and
5 of the Syndicate Accounts Instructions Version 3.1 issued by the Council of Lloyd’s, as
modified by the Syndicate Accounts Frequently Asked Questions Version 1.1 dated 13
February 2026 issued by the Council of Lloyd’s (together “the Syndicate Accounts
Instructions”)
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”),
applicable law, and, under the terms of our engagement letter dated 15 July 2025, the Syndicate
Account Instructions. Our responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Syndicate in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to other entities of public interest. We
believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
The directors of the Managing Agent (“the Directors”) have prepared the Syndicate Annual Accounts
on the going concern basis as they do not intend to cease underwriting or to cease its operations,
and as they have concluded that the Syndicate’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that could have cast significant doubt
over its ability to continue as a going concern for at least a year from the date of approval of the
Syndicate Annual Accounts (“the going concern period”).
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s
business model and analysed how those risks might affect the Syndicate’s financial resources or
ability to continue operations over the going concern period, including inspecting correspondence
with the Council of Lloyd’s to assess whether there were any known impediments to establishing a
further year of account.
Our conclusions based on this work:
we consider that the Directors’ use of the going concern basis of accounting in the
preparation of the Syndicate annual accounts is appropriate; and
we have not identified, and concur with the Directors’ assessment that there is not, a material
uncertainty related 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 going
concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result
in outcomes that are inconsistent with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Syndicate will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
10
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions
that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit
fraud. Our risk assessment procedures included:
Enquiring of directors and other management and inspection of policy documentation as to
the Syndicate and Managing Agent’s high-level policies and procedures to prevent and
detect fraud, including the internal audit function, and the Syndicate and Managing Agent’s
channel for “whistleblowing”, as well as whether they have knowledge of any actual,
suspected or alleged fraud.
Reading Board, audit committee, and other relevant meeting minutes.
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets,
we perform procedures to address the risk of management override of controls, in particular:
the risk that management may be in a position to make inappropriate accounting entries;
and
the risk of bias in accounting estimates such as valuation of claims outstanding.
Valuation of these liabilities, specifically in respect of the gross incurred but not reported component,
is highly judgmental as it requires a number of assumptions to be made such as initial expected loss
ratios and claim development patterns which carry high estimation uncertainty and are difficult to
corroborate creating opportunity for management to commit fraud.
On this audit we do not believe there is a fraud risk related to revenue recognition because of the
limited estimation involved in estimating premium income.
We did not identify any additional fraud risks.
We performed procedures including:
Identifying journal entries and other adjustments to test based on risk criteria and comparing
the identified entries to supporting documentation. These included entries posted on
weekends and bank holidays, entries posted to seldom-used and high-risk accounts and
entries posted by individual who do not typically post journal entries;
Assessing whether the judgements made in making accounting estimates are indicative of a
potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws and
regulations
We identified areas of laws and regulations that could reasonably be expected to have a material
effect on the Syndicate Annual Accounts from our general commercial and sector experience and
through discussion with the directors and other management (as required by auditing standards),
and from inspection of the Syndicate and Managing Agent’s regulatory and legal correspondence
and discussed with the directors and other management the policies and procedures regarding
compliance with laws and regulations.
As the Syndicate is regulated, our assessment of risks involved gaining an understanding of the
control environment including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any
indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the Syndicate annual accounts varies
considerably.
11
Firstly, the Syndicate is subject to laws and regulations that directly affect the Syndicate annual
accounts including financial reporting legislation (such as the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, and the Lloyd’s Syndicate Accounts
Instructions), and we assessed the extent of compliance with these laws and regulations as part of
our procedures on the related Annual return items.
Secondly, the Syndicate is subject to many other laws and regulations where the consequences of
non-compliance could have a material effect on the annual accounts or the Annual return, for
instance through the imposition of fines or litigation or the loss of the Syndicate’s license to operate.
We identified the following areas as those most likely to have such an effect: regulatory capital and
liquidity, health and safety, data protection laws, anti-bribery, employment law, recognising the
financial and regulated nature of the Syndicate’s activities. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and regulations to enquiry of the directors
and other management and inspection of regulatory and legal correspondences, if any. Therefore,
if a breach of operational regulations is not disclosed to us or evident from relevant correspondence,
an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have
detected some material misstatements in the Annual Return, even though we have properly planned
and performed our audit in accordance with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events and transactions reflected in the Annual
Return, the less likely the inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls. Our audit procedures are designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
Other information – Report of the Directors of the Managing Agent
The Directors are responsible for the Report of the Directors of the Managing Agent. Our opinion on
the Syndicate Annual Accounts does not cover that report and, accordingly, in this audit report we
do not express an audit opinion or, except as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the Report of the Directors of the Managing Agent and, in doing so,
consider whether, based on our Syndicate annual accounts audit work, the information therein is
materially misstated or inconsistent with the Syndicate annual accounts or our audit knowledge.
Based solely on that work:
we have not identified material misstatements in the Report of the Directors of the Managing
Agent;
in our opinion the information given in the Report of the Directors of the Managing Agent is
consistent with the Syndicate Annual Accounts; and
in our opinion the Report of the Directors of the Managing Agent has been prepared in
accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008.
Matters on which we are required to report by exception
Under the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008, we are required to report to you if, in our opinion:
adequate accounting records have not been kept on behalf of the Syndicate; or
the Syndicate annual accounts are not in agreement with the accounting records; or
certain disclosures of Managing Agent’s emoluments specified by law are not made; or
12
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Responsibilities of the Directors of the Managing Agent
As explained more fully in their statement set out on page 8, the Directors of the Managing Agent
are responsible for: the preparation of the Syndicate Annual Accounts in accordance with the
requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and the Syndicate Accounts Instructions, and for being satisfied that they give a
true and fair view; such internal control as they determine is necessary to enable the preparation of
Syndicate Annual Report and Accounts that are free from material misstatement, whether due to
fraud or error; assessing the Syndicate’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of accounting
unless they either intend to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the Syndicate Annual Report and
Accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue
our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
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 aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the Syndicate annual accounts.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Directors of the Managing Agent are required, under the Syndicate Accounts Instructions, to
include these financial statements within a document to which XBRL tagging has been applied. This
auditor’s report provides no assurance over whether the XBRL tagged document has been prepared
in accordance with those requirements.
The purpose of our audit work and to whom we owe our responsibilities
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 and the terms of
our engagement letter with the Managing Agent. 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 the further matters we are required to state to them in accordance with the terms agreed
with the Managing Agent, 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.
Dan Wright (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peter’s Square
Manchester
M2 3AE
19 February 2026
13
Statement of profit or loss and other comprehensive income
Technical account – general business
For the year ended 31 December
Notes 2025
£’000
2024
£’000
Gross premiums written 5 354,451
Outward reinsurance premiums (44,835 )
(47,295 )
Premiums written, net of reinsurance 309,616
Changes in unearned premium
Change in the gross provision for unearned
premiums
(21,512 )
(37,351 )
Change in the provision for unearned
premiums reinsurers’ share
(1,050 )
Net change in provisions for unearned
premiums
16 (22,562 )
(25,857 )
Earned premiums, net of reinsurance 287,054
Allocated investment return transferred
from the non-technical account
Claims paid
Gross amount (102,980 )
(66,315 )
Reinsurers’ share 13,818
Net claims paid (89,162 )
(60,568 )
Changes in the provision for claims
Gross amount (76,207 )
(96,223 )
Reinsurers’ share 13,420
Net change in provisions for claims 16 (62,787 )
(82,126 )
Claims incurred, net of reinsurance (151,949 )
(142,694 )
Net operating expenses 6 (122,416 )
(107,495 )
Balance on the technical account – general
business
All the amounts above are in respect of continuing operations.
The notes on pages 19 to 60 form part of these financial statements.
14
Statement of profit or loss and other comprehensive income continued
Non-technical account – general business
For the year ended 31 December
Notes 2025
£’000
2024
£’000
Balance on the technical account – general
business
Investment income 15,634
Realised gains/(losses) on investments 2,484
Unrealised gains/(losses) on investments 2,472
Investment expenses and charges (483 )
(275 )
Total investment return 9 20,107
Allocated investment return transferred to the
general business technical account
(20,107 )
(16,927 )
Gain/(loss) on foreign exchange 569
(11,927 )
Profit/(loss) for the period 33,365
Other comprehensive income -
-
Total comprehensive income/(loss) for the
period
There were no recognised gains and losses in the year other than those reported in the statement of
profit or loss, and hence no statement of other comprehensive income has been presented.
All the amounts above are in respect of continuing operations.
The notes on pages 19 to 60 form part of these financial statements.
15
Statement of financial position
Notes 2025
£’000
2024
£’000
Assets
Investments
Financial investments 11 435,409
Deposits with ceding undertakings 517
Reinsurers' share of technical provisions
Provision for unearned premiums 17 22,920
Claims outstanding 17 57,070
Debtors
Debtors arising out of direct insurance
operations
12 73,530
Debtors arising out of reinsurance operations 13 102,624
Other debtors 14 11,983
Other assets
Cash at bank and in hand 59,267
Other 53,808
Prepayments and accrued income
Deferred acquisition costs 15 36,568
Other prepayments and accrued income 4,393
Total assets 858,090
The notes on pages 19 to 60 form part of these financial statements.
16
Statement of financial position continued
Notes
2025
£’000
2024
£’000
Members’ balance and liabilities
Capital and reserves
Members’ balances 35,058
Technical provisions
Provision for unearned premiums 17 185,318
Claims outstanding 17 545,656
Creditors
Creditors arising out of direct insurance
operations
18 3,160
Creditors arising out of reinsurance operations 19 80,348
Other creditors including taxation and social
security
20 4,606
Accruals and deferred income 3,944
Total liabilities 823,032
Total liabilities, capital and reserves 858,090
The Syndicate financial statements on pages 13 to 60 were approved by the Managing Agent Board
on 17 February 2026 and were signed on its behalf by:
Iain Sanderson
Director
19 February 2026
17
Statement of changes in members' balances
For the year ended 31 December
2025
£’000
2024
£’000
Members’ balances brought forward at 1 January 10,179
Total comprehensive income/(loss) for the period 33,365
Payments of profit to members’ personal reserve
funds
(8,486 )
(11,246 )
Members’ balances carried forward at 31
December
18
Statement of cash flows
For the year ended 31 December
Notes 2025
£’000
2024
£’000
Cash flows from operating activities
Profit for the financial period 33,365
Adjustments:
Increase in gross technical provisions 77,432
(Increase) in reinsurers’ share of technical
provisions
(8,838 )
(25,081 )
(Increase)/decrease in debtors (2,274 )
Increase/(decrease) in creditors 5,458
(17,372 )
Movement in other assets/liabilities (10,709 )
(665 )
Foreign exchange 10,933
Investment return 9 (20,107 )
(16,927 )
Net cash flows from operating activities 85,260
Cash flows from investing activities
Purchase of equity and debt instruments (551,293 )
(270,836 )
Sale of equity and debt instruments 518,353
Investment income received 18,909
Other 34
Net cash flows from investing activities (13,997 )
(113,789 )
Cash flows from financing activities
Distribution of profit (8,486 )
(11,246 )
Other -
Net cash flows from financing activities (8,486 )
(11,246 )
Net increase/(decrease) in cash and cash
equivalents
(30,704 )
Cash and cash equivalents at the beginning of
the period
Foreign exchange on cash and cash
equivalents
(990 )
(968 )
Cash and cash equivalents at the end of the
period
21 92,416
19
Notes to the financial statements
1. Basis of preparation
Everest Syndicate 2786 comprises a group of members of the Society of Lloyd's that underwrites
insurance business in the London Market. The address of the Syndicate’s managing agent is 40 Lime
Street, London, EC3M 5BS.
The financial statements have been prepared in accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and applicable Accounting Standards
in the United Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS
102), Financial Reporting Standard 103 (FRS 103) in relation to insurance contracts, and the Lloyd’s
Syndicate Accounts Instructions Version [3.1] as modified by the Frequently Asked Questions Version
[1.1] issued by Lloyd’s.
The financial statements have been prepared on the historical cost basis, except for financial assets
at fair value through profit or loss and available for sale that are measured at fair value. The financial
statements are presented in GBP, which is also the Syndicate’s functional currency.
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. The Syndicate has sufficient capital for each year
of account in its Funds at Lloyd’s (FAL). There is no intention to cease underwriting or cease the
operations of the Syndicate.
Accordingly, the directors of the Managing Agent continue to adopt the going concern basis in
preparing the annual report and financial statements.
20
2. Critical accounting estimates and judgements
In preparing these financial statements, the Board have made judgements, estimates and
assumptions that affect the application of the Syndicate’s accounting policies and the reported
amounts of assets, liabilities, income and expenses.
The following critical accounting estimates have been made in applying the Syndicate’s accounting
policies:
Valuation of claims reserves
The measurement of the provision for claims outstanding involves judgements and
assumptions about the future that have a significant effect on the value recognised in the
financial statements.
The provision for claims outstanding comprises the estimated cost of settling all claims
incurred but unpaid at the Statement of Financial Position date, whether reported or not. This
is a judgemental and complex area due to the subjectivity inherent in estimating the impact
of claims events that have occurred but for which the eventual outcome remains uncertain.
Case estimates are generally set by skilled claims technicians applying their experience and
knowledge to the circumstances of individual claims. Critical judgement is applied when
estimating the value of amounts that should be provided for
claims that have been incurred at the reporting date but have not yet been reported (IBNR)
to the Syndicate. This is a source of significant estimation uncertainty.
The ultimate cost of outstanding claims is estimated using a range of techniques including
actuarial and statistical projections, benchmarking, case by case review and judgement.
Statistical techniques assume that past claims development experience can be used as a
basis to project ultimate claims costs. Typical methods employed include, but are not limited
to, the chain ladder method and the Bornhuetter-Ferguson method, whilst plan and pricing
loss ratios are also considered.
The reserving process will disaggregate the insured risks into reserving classes – these are
collections of risks of a similar profile. Each reserving class will be assessed separately, and
corresponding claims development patterns will be selected as bases against which to
forecast expected claims. Judgement is used to assess the extent to which past trends may
not apply in the future. When selecting historic data to use for claims forecasting purposes,
the suitability and reliability of the dataset is considered.
A dataset that most closely resembles the expected risk profile of a given reserving class will
be selected. The benchmark data provided by Lloyd’s is generally used as reserving
development patterns, but these can be substituted by or blended with additional data,
providing that this additional data has an established track record and is relevant.
Whilst the Board consider that the claims reserves are fairly stated based on the information
currently available to them, the ultimate liability will vary as a result of subsequent information
and events.
Estimated premium income (“EPI”)
For the majority of assumed (inwards) reinsurance policies, EPI is initially used as the basis
for reporting gross premiums written. EPI is a measure of expected premium income over
the life of a policy. These estimates, typically supplied by the cedent, are judgemental and
could result in misstatements of revenue recorded in the financial statements.
21
3. Significant accounting policies
The following principal accounting policies have been applied consistently in dealing with items
which are considered material in relation to the Syndicate’s financial statements.
Gross premiums
Gross written premiums comprise the total premiums receivable for the whole period of cover
provided by the contracts entered into during the reporting period, regardless of whether these are
wholly due for payment in the reporting period, together with any adjustments arising in the
reporting period to such premiums receivable in respect of business written in prior reporting
periods. They are recognised on the date on which the policy commences. This is applicable to both
direct premium and assured (inwards reinsurance) premium. Gross written premiums are stated
gross of brokerage payable to intermediaries, and exclude taxes and duties levied on the
policyholder.
Estimated premium income in respect of facility contracts, for example binding authorities and lines
slips, are deemed to be written in a manner that reflects the expected profile of the underlying
business which has been written.
Ceded reinsurance premiums
Reinsurance written premiums comprise the total premiums payable for the whole cover provided
by contracts entered into the period, including portfolio premiums payable, and are recognised on
the date on which the policy incepts. Premiums include any adjustments arising in the accounting
period in respect of reinsurance contracts incepting in prior accounting periods. They are recognised
on the date on which the policy commences.
Provisions for unearned premiums
Unearned premiums are those proportions of premiums written up to the reporting date that relate
to periods of risk after the reporting date. In respect of general insurance business, written premiums
are recognised as earned over the period of the policy on a time apportionment basis having regard
where appropriate, to the incidence of risk. The proportion attributable to subsequent periods is
deferred as a provision for unearned premiums.
Unearned reinsurance premiums are those proportions of ceded premiums written up to the
reporting date that relate to periods of risk after the reporting date. Ceded reinsurance premiums
are earned on the same basis as the inwards business being protected.
Claims incurred
The amount included in respect of IBNR is based on statistical techniques of estimation applied by
actuaries. These techniques generally involve projecting from experience of the development of
claims over time to form a view of the likely ultimate claims to be experienced, having regard to
variations in the business accepted and the underlying terms and conditions. The provision for claims
also includes amounts in respect of internal and external claims handling costs. For the most recent
years, where a high degree of volatility arises from projections, estimates may be based in part on
output from rating and other models of the business accepted and assessments of underwriting
conditions. An element of IBNR can also relate to specific large losses.
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 and the claims experience for the year. The Syndicate
uses a number of statistical techniques to assist in making these estimates where relevant.
22
Significant accounting policies continued
Accordingly, the two most critical assumptions as regards 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.
The Directors consider that the provisions for gross claims and related reinsurance recoveries are
fairly stated on the basis of the information currently available to them. However, ultimate liability will
vary as a result of subsequent information and events and this may result in significant adjustments
to the amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in the
financial statements for the period in which the adjustments are made. The methods used, and the
estimates made, are reviewed regularly.
Unexpired risks
A provision for unexpired risks is made where claims and related expenses are likely to arise after
the end of the financial period in respect of contracts concluded before that date, are expected to
exceed the unearned premiums and premiums receivable under these contracts, after the deduction
of any acquisition costs deferred.
The provision for unexpired risks is calculated separately by reference to classes of business which
are managed together.
As at 31 December 2025, the Syndicate had a nil net unexpired risk provision, (2024: nil).
Reinsurance assets
The Syndicate cedes insurance risk in the normal course of business. Reinsurance assets represent
balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in a
manner consistent with the outstanding claims provision including IBNR or settled claims associated
with the reinsurer's policies and are in accordance with the related reinsurance contract.
Reinsurance assets are reviewed for impairment at each reporting date, or more frequently if an
indication of impairment arises during the reporting year. Impairment occurs when there is objective
evidence as a result of an event that occurred after initial recognition of the reinsurance asset that
the Syndicate may not receive all outstanding amounts due under the terms of the contract and the
event has a reliably measurable impact on the amounts that the Syndicate will receive from the
reinsurer. The impairment loss is recorded in the statement of profit or loss.
Gains or losses on buying reinsurance are recognised in the statement of profit or loss immediately
at the date of purchase and are not amortised.
Ceded reinsurance arrangements do not relieve the Syndicate from its obligations to policyholders.
Acquisition costs
Acquisition costs comprise costs arising from the conclusion of insurance contracts, such as
intermediary brokerage and commissions. It is not the Syndicate’s policy to reallocate a portion of
indirect costs, such as the advertising costs or the administrative expenses connected with the
processing of proposals and the issuing of policies, to acquisition costs.
The deferred acquisition cost asset represents the proportion of acquisition costs corresponding to
the proportion of gross premiums written that is unearned at the Statement of Financial Position date.
Deferred acquisition costs are amortised over the period in which the related premiums are earned.
23
Significant accounting policies continued
Profit commissions
Profit commissions represent amounts payable to managing agents or members based on the
performance of the Syndicate. They are calculated as a percentage of underwriting profit, after
considering premiums earned, claims incurred, reinsurance recoveries, and expenses incurred, in
accordance with the terms of the managing agent or underwriting agreements. Profit commissions
are recognised as an expense in the statement of comprehensive income.
Foreign currencies
Transactions denominated in currencies other than the functional currency are initially recorded in
the functional currency at the exchange rate ruling at the date of the transactions.
Monetary assets and liabilities (which include all assets and liabilities arising from insurance contracts
including unearned premiums and deferred acquisition costs) denominated in foreign currencies are
retranslated into the functional currency at the exchange rate ruling on the reporting date.
Foreign exchange differences are recorded in the non-technical account.
The following currency exchange rates have been used for principal foreign currency transactions:
2025 2025 2025
2024 2024 2024
Start of
Period
Rate
End of
Period
Rate
Average
Rate
Start of
Period
Rate
End of
Period
Rate
Average
Rate
GBP 1.00 1.00 1.00
USD 1.25 1.35 1.32
CAD 1.80 1.84 1.85
EUR 1.21 1.15 1.14
AUD 2.02 2.01 2.02
JPY 196.90 210.61 206.40
Financial assets and liabilities
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions
of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use in the UK).
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, reassessment 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
24
Significant accounting policies continued
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. Other
financial assets, principally certain debt and other fixed income securities are classified as available
for sale.
Deposits with credit institutions, debtors, and accrued interest are classified as loans and receivables.
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.
Financial assets classified as available for sale are initially recognised at fair value, which typically
equates to the cost, plus transaction costs directly attributable to its acquisition. After initial
measurement, these assets are subsequently measured at fair value. Interest earned whilst holding
available for sale financial assets is reported as interest income. Impairment losses and foreign
exchange gains or losses are reported in profit or loss. Other fair value changes are recognised in
other comprehensive income. Any gain or loss recognised in OCI will be recycled to profit and loss
on derecognition of the asset.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using
the effective interest method, except Syndicate Loans to the Central Fund which are measured at fair
value through profit or loss.
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.
Impairment losses on available for sale financial assets are recognised by reclassifying the losses
accumulated in other comprehensive income to profit or loss. The net cumulative loss that is
reclassified from other comprehensive income to profit or loss is the difference between the
acquisition cost, net of any principal repayment, and the current fair value, less any impairment loss
recognised previously in profit or loss. If, in a subsequent period, the fair value of an impaired
available for sale debt security increases and the increase can be related objectively to an event
occurring after the impairment loss was recognised, the impairment loss is reversed through profit
or loss. Otherwise it is reversed through the statement of comprehensive income.
Financial assets and financial liabilities are offset, and the net amount presented in the Statement of
Financial Position 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.
Investment return
Investment return comprises investment income and movements in unrealised gains and losses on
financial instruments at fair value through profit or loss, less investment management expenses,
interest expense, realised losses and impairment losses. Investment income comprises interest
income, dividends receivable and realised investment gains.
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. For investments at fair
value through profit or loss, realised gains and losses represent the difference between the net
proceeds on disposal and the purchase price.
25
Significant accounting policies continued
Unrealised investment gains and losses represent the difference between the fair value at the
Statement of Financial Position date and the fair value at the previous Statement of Financial Position
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.
Investment return is initially recorded in the non-technical account. The return is transferred in full to
the general business technical account to reflect the investment return on funds supporting
underwriting business.
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months
or less from the acquisition date that are subject to an insignificant risk of changes in fair value and
are used by the Syndicate in the management of its short-term commitments.
Cash and cash equivalents are carried at amortised cost in the statement of financial position.
Cash and cash equivalents
Bank overdrafts that are repayable on demand and form an integral part of the Syndicate’s cash
management are included as a component of cash and cash equivalents for the purpose of the
statement of cash flows.
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 other overseas tax payable by members on underwriting results
or investment earnings. Any payments on account made by the Syndicate during the year have been
included in the Statement of Financial Position under the heading ‘other debtors’.
Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate to
settle Part VII claims. These funds are held at amortised cost in the Statement of Financial Position.
Operating expenses
Where expenses are incurred by the Managing Agent for the administration of managed syndicates,
these expenses are apportioned using various methods depending on the type of expense.
Expenses which are incurred jointly are apportioned between the Managing Agent and the
Syndicate depending on the amount of work performed, resources used, and volume of business
transacted.
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.
26
Significant accounting policies continued
Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance
contract holders. These are classified as debt instruments as they are non-derivative financial assets
with fixed or determinable payments that are not quoted on an active market. Insurance debtors are
measured at amortised cost less any provision for impairments. Insurance creditors are stated at
amortised cost. The Syndicate does not have any debtors directly with policyholders, all transactions
occur via an intermediary.
Where permitted under UK GAAP accounting standards, insurance creditors are netted off against
insurance debtors where the legally enforceable right to offset exists.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified
as debt instruments as they are non-derivative financial assets with fixed or determinable payments
that are not quoted on an active market. Reinsurance debtors are measured at amortised cost less
any provision for impairments. Reinsurance creditors are stated at amortised cost. Reinsurance
debtor principally relates to claims recoveries where the underlying claim has been settled, and the
recovery is due. Reinsurance creditors are primarily premiums payable for reinsurance contracts and
are recognised as an expense when due.
Other Debtors and other creditors
Other debtors and other creditors comprise amounts receivable and payable by the Syndicate that
do not arise directly from insurance premium income, reinsurance recoveries, insurance contract
liabilities, reinsurance liabilities, or borrowings. These include amounts due to/from affiliates and loss
funds. Loss funds represent amounts held or receivable by the Syndicate to meet future claims.
Other debtors and other creditors are recognised when the Syndicate becomes party to the
contractual or legal arrangements, giving rise to the balances and when it is probable that economic
benefits will flow to or from the Syndicate and the amounts can be measured reliably.
Other debtors and other creditors are initially recognised at transaction price and subsequently
measured at amortised cost in accordance with FRS 102. Due to their short-term nature, the carrying
values are considered to approximate fair value.
Other Assets
Other assets comprise only overseas deposits which are lodged as a condition of conducting
underwriting business in certain countries.
27
4. Risk and Capital Management
a) Governance framework
The Managing Agent Board has put in place, on behalf of the Syndicate, a risk and financial
management framework aimed at protecting the Syndicate's members capital from events that might
otherwise prevent the Syndicate from meeting its policyholder obligations, while maximising the
returns to its members. The Board recognise the critical importance of having efficient and effective
risk management systems in place.
The Managing Agent maintains a risk management function for the Syndicate with clear terms of
reference from the Board, its committees and sub-committees.
This is supplemented with a clear organisational structure and documented delegated authorities
and responsibilities from the Board to the Syndicate who perform the underwriting activities. Lastly,
the Managing Agent policy framework sets its risk management and control and business conduct
standards for operations on behalf of the Syndicate. Each policy is reviewed and monitored on at
least an annual basis to ensure compliance with the policy throughout the Syndicate.
The Managing Agent Board approves the risk management policies and meets regularly to approve
any commercial, regulatory and organisational requirements of such policies. These policies define
the identification of risk and its interpretation to ensure the appropriate quality and diversification of
assets, align underwriting and reinsurance strategy to the Syndicate goals, and specify reporting
requirements. The Managing Agent Board places significant emphasis on the assessment and
documentation of risks and controls, including the articulation of the Syndicate's risk appetite.
b) Capital management objectives, policies and approach
Capital framework at Lloyd's
Lloyd's is a regulated undertaking and subject to the supervision of the Prudential Regulatory
Authority (PRA) under the Financial Services and Markets Act 2000.
Within the supervisory framework, Lloyd's applies capital requirements at member level and centrally
to ensure that Lloyd's complies with Solvency II capital requirements, and beyond that to meet its
own financial strength, licence and ratings objectives.
Although Lloyd's capital setting processes use a capital requirement set at Syndicate level as a
starting point, the requirement to meet Solvency II and Lloyd's capital requirements apply at overall
and member level only respectively, not at Syndicate level. Accordingly, the capital requirement in
respect of the Syndicate is not disclosed in these financial statements.
Lloyd's capital setting process
In order to meet Lloyd's requirements, each Syndicate is required to calculate its Solvency Capital
Requirement (SCR) for the prospective underwriting year. This amount must be sufficient to cover a
1 in 200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR 'to
ultimate'). The Syndicate must also calculate its SCR at the same confidence level but reflecting
uncertainty over a one year time horizon (one year SCR) for Lloyd's to use in meeting Solvency II
requirements. The SCRs of each Syndicate are subject to review by Lloyd's and approval by the
Lloyd's Capital and Planning Group.
A Syndicate 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 on which it is participating but not
other members' shares. Accordingly, the capital requirement that Lloyd's sets for each member
operates on a similar basis. Each member's SCR shall thus be determined by the sum of the
member's share of the Syndicate SCR 'to ultimate'. Where a member participates on more than one
28
Risk and Capital Management continued
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.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd's specifically
for that member (funds at Lloyd's), held within and managed within a Syndicate (funds in Syndicate)
or as the member's share of the members' balances on each Syndicate on which it participates.
Accordingly, the ending members balances reported on the Statement of Financial Position on page
15, represent resources available to meet members' and Lloyd's capital requirements.
c) Insurance risk
The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit
payments or the timing thereof, differ from expectations. This is influenced by the frequency of
claims, severity of claims, actual benefits paid and subsequent development of long-term claims.
Therefore, the objective of the Syndicate is to ensure that sufficient reserves are available to cover
these liabilities.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and
geographical areas. The variability of risks is also improved by careful selection and implementation
of underwriting strategy guidelines, as well as the use of reinsurance arrangements.
The Syndicate purchases reinsurance as part of its risk mitigation programme. The Syndicate’s
reinsurance program is predominantly covered by a whole account, non-proportional losses
occurring during policy which covers the calendar year. Amounts recoverable from reinsurers are
estimated in a manner consistent with the outstanding claims provision and are in accordance with
the reinsurance contracts. The Syndicate's placement of reinsurance is diversified such that it is
neither dependent on a single reinsurer nor are the operations substantially dependent upon any
single reinsurance contract.
Sub-committees of the Managing Agent Board oversee the management of reserving risk. The use
of standardised and internal modelling techniques, as well as benchmarking and the review of claims
development are key in mitigating reserving risk. The purpose of these underwriting, reinsurance
and reserving strategies is to limit exposure to catastrophes or large losses based on the Syndicate's
risk appetite as decided by the Managing Agent Board.
Key assumptions
The principal assumption underlying the liability estimates is that the future claims development will
follow a similar pattern to past claims development experience. This includes assumptions in respect
of average claim costs, claim handling costs, claim inflation factors and claim numbers for each
underwriting year. Additional qualitative judgements are used to assess the extent to which past
trends may not apply in the future, for example: once-off occurrence; changes in market factors such
as public attitude to claiming: economic conditions: as well as internal factors such as portfolio mix,
policy conditions and claims handling procedures. Judgement is further used to assess the extent to
which external factors such as judicial decisions and government legislation affect the estimates.
The Syndicate uses both its own and commercially available risk management software to assess
catastrophe exposure. However, there is always a risk that the assumptions and techniques used in
29
Risk and Capital Management continued
these models are unreliable or that claims arising from an un-modelled event are greater than those
arising from a modelled event.
Sensitivities
Other key circumstances affecting the reliability of assumptions include variation in interest rates,
delays in settlement and changes in foreign currency rates.
The claim liabilities are sensitive to the key assumptions that follow. It has not been possible to
quantify the sensitivity of certain assumptions, such as legislative changes, uncertainty in the
estimation process. The following analysis is performed for reasonably possible movements in key
assumptions with all other assumptions held constant, showing the impact on net liabilities, profit
and members' balances. The correlation of assumptions will have a significant effect in determining
the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions,
assumptions had to be changed on an individual basis. It should be noted that movements in these
assumptions are non-linear.
The method used for deriving sensitivity information and significant assumptions did not change
from the previous period.
| Sensitivity | ||
| General insurance business sensitivities as at 31 | ||
December 2025 | +5.0% | -5.0% |
| £000 | £000 | |
| Claims outstanding – gross of reinsurance | ( | |
| Claims outstanding – net of reinsurance | ( | |
| Impact on members balance | (24,429) | 24,429 |
| Impact on profit (movement in year) | (24,429) | 24,429 |
| Sensitivity | ||
| General insurance business sensitivities as at | ||
+5.0% | -5.0% | |
| £000 | £000 | |
| Claims outstanding – gross of reinsurance | ( | |
| Claims outstanding – net of reinsurance | ( | |
| Impact on members balance | (21,846) | 21,846 |
| Impact on profit (movement in year) | (21,846) | 21,846 |
30
Risk and Capital Management continued
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.
Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure
to a single counterparty, by reference to the credit rating of the counterparty. Financial assets are
graded according to current credit ratings issued by rating agencies such as Standard and Poor’s.
The Syndicate has a policy of investing mainly in government issued and government backed debts.
The Syndicate does not currently invest new monies in speculative grade assets (i.e., those rated
below BBB).
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single
counterparty and maintains an authorised list of acceptable cash counterparties. The Syndicate’s
exposure to intermediaries and reinsurance counterparties is monitored by the individual business
units as part of their credit control processes.
All intermediaries must meet minimum requirements established by the Syndicate. The credit ratings
and payment histories of intermediaries are monitored on a regular basis. The Syndicate assesses
the creditworthiness of all reinsurers by reviewing public rating information and by internal
investigations. The impact of reinsurer default is regularly assessed and managed accordingly.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk
exposure.
31
Risk and Capital Management continued
The table below provides information regarding the credit risk exposure of the Syndicate at the
reporting date by classifying assets according to independent credit ratings of the counterparties.
AAA is the highest possible rating.
31 December 2025 £’000
AAA
AA
A
BBB
BBB
or less
Not
Rated
Total
Shares and other variable
yield securities
Debt Securities 65,954 124,795 194,369 4,490 - 12,652 402,260
Loans and deposits with
credit institutions
Syndicate loans to central
fund
Deposits with ceding
undertakings
Reinsurers’ share of claims
outstanding
Debtors arising out of
reinsurance operations
Debtors arising out of direct
insurance operations
Cash at bank and in hand - - 59,267 - - - 59,267
Other assets 25,618 7,424 4,622 5,029 - 11,115 53,808
Other debtors and accrued
interest
Total 91,572 202,325 369,221 9,519 - 174,958 847,595
32
Risk and Capital Management continued
31 December 2024 £’000
AAA
AA
A
BBB
BBB
or less
Not
Rated
Total
Shares and other variable
yield securities
Debt Securities
Loans and deposits with
credit institutions
Syndicate loans to central
fund - 1,962 - - - - 1,962
Deposits with ceding
undertakings
Reinsurers’ share of claims
outstanding
Debtors arising out of
reinsurance operations
Debtors arising out of direct
insurance operations
Cash at bank and in hand
Other assets
23,974 5,571 4,725 3,072 2,971 6,594 46,907
Other debtors and accrued
interest
Total 114,845 176,566 226,102 6,644 2,971 223,652 750,780
Maximum credit exposure
It is the Syndicate’s policy to maintain accurate and consistent risk ratings across its credit portfolio.
This enables management to focus on the applicable risks and the comparison of credit exposures
across all lines of business.
33
Risk and Capital Management continued
The tables below show the maximum exposure to credit risk (including an analysis of financial assets
exposed to credit risk) for the components of the statement of financial position. The maximum
exposure is shown gross, before the effect of mitigation through collateral agreements and the use
of credit derivatives.
31 December 2025 £’000
Neither
past due
nor
impaired
Past due
but not
impaired
assets
Gross value
of impaired
assets
Impairment
allowance
Total
Shares and other variable yield
securities
Debt Securities 402,260 - - - 402,260
Loans and deposits with credit
institutions
Syndicate loans to central fund - - - - -
Deposits with ceding
undertakings
Reinsurers' share of claims
outstanding
Debtors arising out of
reinsurance operations
Debtors arising out of direct
insurance operations
Cash at bank and in hand 59,267 - - - 59,267
Other assets 53,808 - - - 53,808
Other debtors and accrued
interest
Total 847,595 8,852 3,870 (2,227 ) 858,090
34
Risk and Capital Management continued
31 December 2024 £’000
Neither
past due
nor
impaired
Past due
but not
impaired
assets
Gross value
of impaired
assets
Impairment
allowance
Total
Shares and other variable yield
securities
Debt Securities 376,103 - - - 376,103
Loans and deposits with credit
institutions
Syndicate loans to central fund 1,962 - - - 1,962
Deposits with ceding
undertakings
Reinsurers' share of claims
outstanding
Debtors arising out of
reinsurance operations
Debtors arising out of direct
insurance operations
Cash at bank and in hand 18,099 - - - 18,099
Other assets 46,907 - - - 46,907
Other debtors and accrued
interest
Total 750,780 - - - 750,780
35
Risk and Capital Management continued
The table below sets out a reconciliation of changes in impairment allowance during the period for
each class of financial asset at the balance sheet date:
£’000
31 December 2025 1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to Profit
and loss
account
Foreign
exchange
Total
Financial Investments - - - - - -
Deposits with ceding
undertakings
- - - - - -
Reinsurers' share of claims
outstanding
- - - - - -
Debtors arising out of
direct
insurance operations
- - - - - -
Debtors arising out of
reinsurance
operations
Other debtors and
accrued interest
- - - - - -
Cash at bank and in hand - - - - - -
Other assets - - - - - -
Total - (2,227 ) - - - (2,227 )
£’000
31 December 2024 1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to Profit
and loss
account
Foreign
exchange
Total
Financial Investments - - - - - -
Deposits with ceding
undertakings
- - - - - -
Reinsurers' share of claims
outstanding
- - - - - -
Debtors arising out of
direct
insurance operations
- - - - - -
Debtors arising out of
reinsurance
operations
- - - - - -
Other debtors and
accrued interest
- - - - - -
Cash at bank and in hand - - - - - -
Other assets - - - - - -
Total - - - - - -
36
Risk and Capital Management continued
The table below sets out the age analysis of financial assets that are past due but not impaired at
the Statement of Financial Position date:
31 December 2025 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
£'000
£'000
£'000
£'000
£'000
Shares and other variable yield
securities
- - - - -
Debt Securities - - - - -
Loans and deposits with credit
institutions
- - - - -
Syndicate loans to central fund - - - - -
Other investments - - - - -
Reinsurers' share of claims
outstanding
- - - - -
Debtors arising out of
reinsurance operations
Debtors arising out of direct
insurance operations
- - - - -
Cash at bank and in hand - - - - -
Other assets - - - - -
Other debtors and accrued
interest
- - - - -
Total 1,484 3,102 562 3,704 8,852
37
Risk and Capital Management continued
31 December 2024 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
£'000
£'000
£'000
£'000
£'000
Shares and other variable yield
securities
- - - - -
Debt Securities - - - - -
Loans and deposits with credit
institutions
- - - - -
Syndicate loans to central fund - - - - -
Other investments - - - - -
Reinsurers' share of claims
outstanding
- - - - -
Debtors arising out of
reinsurance operations
- - - - -
Debtors arising out of direct
insurance operations
- - - - -
Cash at bank and in hand - - - - -
Other assets - - - - -
Other debtors and accrued
interest
- - - - -
Total - - - - -
38
Risk and Capital Management continued
Liquidity risk
Liquidity risk is the risk that the Syndicate may not have enough cash to pay insurance claims and
other liabilities. This risk is reduced by reviewing the Syndicate’s expected cash obligations on a
weekly basis and keeping adequate cash on deposit to meet those obligations. Further, a Liquidity
Committee meets monthly to review liquidity strength and forthcoming liquidity needs on a monthly
basis.
The table below summarises the maturity profile of the Syndicate's financial liabilities based on
remaining undiscounted contractual obligations, including interest payable and outstanding claim
liabilities based on the estimated timing of claim payments resulting from recognised insurance
liabilities. Repayments which are subject to notice are treated as if notice were to be given
immediately.
31 December 2025 £’000
No
stated
maturity
0-1 Year 1-3 Years 3-5 Years
>5
years
Total
Claims Outstanding - 147,873 192,071 103,675 102,037 545,656
Creditors - 88,078 36 - - 88,114
Total - 235,951 192,107 103,675 102,037 633,770
| 31 December 2024 | £’000 | |||||
No stated maturity | 0-1 Year | 1-3 Years | 3-5 Years | >5 years | Total | |
| Claims Outstanding | | | | | | |
| Creditors | | | | | | |
| Total | | | | |||
39
Risk and Capital Management continued
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:
currency risk, interest rate risk and other price risk. Other price risk has been assessed as negligible.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return on risk.
a) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Syndicate's functional currency is GBP and its exposure to foreign exchange risk arises primarily
with respect to transactions in US Dollar, Euro, Canadian Dollar and Australian Dollar. The Syndicate
seeks to mitigate the risk by matching the estimated foreign currency denominated liabilities with
assets denominated in the same currency.
The Syndicate matches its currency position, so it holds net assets across a number of currencies. The
Syndicate takes into consideration the underlying currency of the Syndicate's required capital and
invests its assets proportionately across these currencies so as to protect the solvency of the
Syndicate, against variation in foreign exchange rates.
The following table summarises the exposure of the financial assets and liabilities to foreign currency
exchange risk at the reporting date, as follows, with all numbers reported in converted sterling:
40
Risk and Capital Management continued
31 December
2025 | £’000 | |||||||
| GBP | USD | EUR | CAD | AUD | JPY | OTH | Total | |
| Investments | | | | | | | | |
Reinsurers’ share of technical provisions | | | | | | | | |
| Debtors | | | | | | ( | | |
| Other assets | | | | | | | | |
Prepayments and accrued income | | | | | | | | |
| Total Assets | | | | | | | ||
Technical Provisions | ( | ( | ( | ( | ( | ( | | ( |
Deposits received from reinsurers | - | - | - | - | - | - | - | - |
| Creditors | ( | ( | ( | ( | ( | ( | ( | ( |
Accruals and deferred income | ( | ( | ( | ( | ( | | | ( |
| Total Liabilities | ( | ( | ( | ( | ( | ( | ( | ( |
Total Capital and Reserves | | ( | ( | ( | ( | ( | ( |
41
Risk and Capital Management continued
The table below gives an indication of the impact on profit of a percentage change in the relative
strength of the Sterling against the value of the US Dollar, Euro, Canadian Dollar and Australian Dollar
simultaneously. The analysis is based on the information as at the reporting date.
Currency Risk
Impact on profit and
members balance
2025
2024
£’000
£’000
10 percent increase in GBP/EUR exchange rate
30
230
10 percent decrease in GBP/EUR exchange rate (37) (281)
10 percent increase in GBP/USD exchange rate (2,487) 1,583
10 percent decrease in GBP/USD exchange rate 3,039 (1,935)
10 percent increase in GBP/AUD exchange rate 3,433 3,361
10 percent decrease in GBP/AUD exchange rate (4,196) (4,108)
10 percent increase in GBP/CAD exchange rate 5,428 4,064
10 percent decrease in GBP/CAD exchange rate (6,634) (4,967)
31 December 2024 | £’000 | |||||||
| GBP | USD | EUR | CAD | AUD | JPY | OTH | Total | |
| Investments | | | | | | | | |
Reinsurers’ share of technical provisions | | | | | | |||
| Debtors | | | | | ( | ( | | |
| Other assets | | | | | | | ||
Prepayments and accrued income | | | | | | | ||
| Total Assets | | | | | | | ||
Technical Provisions | ( | ( | ( | ( | ( | ( | ( | ( |
Deposits received from reinsurers | - | - | - | - | - | - | - | - |
| Creditors | ( | ( | ( | | | ( | | ( |
Accruals and deferred income | ( | ( | | ( | | ( | ( | |
| Total Liabilities | ( | ( | ( | ( | ( | ( | ( | ( |
Total Capital and Reserves | ( | ( | ( | ( | ( | ( | ( |
42
Risk and Capital Management continued
b) Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will
fluctuate because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio, borrowings and
cash and cash equivalents.
The risk of changes in the fair value of these assets is managed by primarily investing in short-duration
financial investments and cash and cash equivalents. The Investment Committee monitors the
duration of these assets on a regular basis, targeting an investment portfolio duration that, in the
event of changes in interest rates, always maintains the internal capital requirements.
c) Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market interest rates with all
other variables held constant, showing the impact on the result before tax due to changes in fair
value of financial assets (whose fair values are recorded in the profit and loss account) and members’
balances.
| Impact on profit and member’s balance | ||
| 2025 | 2024 | |
| £’000 | £’000 | |
| 50 basis points increase in yield curves | ( | ( |
| 50 basis points decrease in yield curves | |
Insurance liabilities are not discounted and therefore are not exposed to interest rate risk.
43
5. Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
2025 | Gross premiums written | Gross premium earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting Result |
£’000 | £’000 | £’000 | £‘000 | £’000 | £’000 | |
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 | - | - | - | - | - | - |
Total direct insurance | ( | ( | ( | |||
Reinsurance acceptances | | ( | ( | ( | | |
| Total | ( | ( | ( |
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 | Gross premium earned | Gross claims incurred | Gross operating expenses | Reinsurance balance | Underwriting Result |
£’000 | £’000 | £’000 | £‘000 | £’000 | £’000 | |
Fire and damage to property of | ||||||
| which is: | ||||||
Specialties | | | | | | |
Energy | | | | | | |
Third party liability of which is: | ||||||
Energy | ||||||
- - - - - -
44
Analysis of underwriting result continued
2024
Gross
premiums
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
Result
£’000
£’000
£’000
£‘000
£’000
£’000
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 128,262 129,081 (66,935 ) (54,637 ) (3,743 ) 3,766
Credit and
suretyship
- - - - - -
Legal expenses - - - - - -
Assistance - - - - - -
Miscellaneous 345 431 1,099 (419 ) (1,364 ) (253 )
Life - - - - - -
Total direct
insurance
(117,066 )
(83,081 )
(8,766 )
Reinsurance
acceptances
Total 328,799
(162,538 )
(107,495 )
(15,957 )
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
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwritin
g Result
£’000
£’000
£’000
£‘000
£’000
£’000
Fire and damage to property of
which is:
Specialties
Energy
Third party liability of which is:
Energy - - - - - -
45
Analysis of underwriting result continued
The total gross premiums written for direct insurance by underwriting activity location is presented
in the table below:
| 2025 | 2024 | |
| £‘000 | £‘000 | |
| United Kingdom | | |
| European Union Member States | - | - |
| US | - | - |
| Rest of World | - | - |
Total Gross premiums Witten |
Underlying risks include exposures outside of the United Kingdom; however, the business is
concluded through Lloyd’s and therefore falls within the UK reporting classification.
No gains or losses were recognised in profit or loss during the year on buying reinsurance (2024:
nil).
46
6. Net operating expenses
2025 | 2024 | |
| £’000 | £’000 | |
| Acquisition costs | ||
| Change in deferred acquisition costs | ( | ( |
| Administration expenses | ||
| Foreign exchange | - | - |
| Members’ standard personal expenses | ||
| Reinsurance commissions and profit participation | ( | ( |
| Net operating expenses |
Total commissions for direct insurance business for the year amounted to:
2025 | 2024 | |
£’000 | £’000 | |
Total commission for direct insurance business | ( | ( |
Administrative expenses include:
Auditors’ Remuneration | 2025 | 2024 |
| £’000 | £’000 | |
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 | ( | ( |
| Total | (490) | (432) |
47
7. Key management personnel compensation
During the year, the composition of key management personnel changed from the prior year,
reflecting the transition from Asta Managing Agency Limited (AMAL) to EMAL. In the prior year the
key management were provided through the AMAL, and these directors were appointed and
renumerated through AMAL. No disclosures were made in the prior year accounts, this was disclosed
in the financial statements of Asta Managing Agency Ltd.
Partway through the year, the Syndicate transitioned to EMAL, appointing its own directors and key
management. Consequently, the director’s compensation for the current year reflects both the
period under AMAL and EMAL.
The directors of EMAL received the following aggregate remuneration charged to the Syndicate:
2025 | 2024 | |
£’000 | £’000 | |
Directors' emoluments | ||
Fees | - | - |
The active underwriter received the following aggregate remuneration charged to the Syndicate:
2025 | 2024 | |
£’000 | £’000 | |
Emoluments |
8. Staff Numbers and Costs
All staff are employed by Everest Advisors (UK) Limited. The Syndicate and Managing Agent have no
employees. During the year the Syndicate continued to receive staff services from AMAL and partway
through the year the syndicate transitioned to relying entirely on the staff wholly employed by Everest
Advisors (UK) Limited. This information was previously not available in 2024 for AMAL.
The average number of persons employed by the Service company, but working for the Syndicate
during the year, analysed by category, was as follows:
Number of Employees | ||
| 2025 | 2024 | |
| Administration and Finance | | |
| Underwriting | ||
| Claims | ||
| Investments | ||
| Total |
48
Staff Numbers and Costs continued
The following amounts were recharged by Entities within the Group to the Syndicate in respect of
payroll costs:
2025
2024 | ||
| £’000 | £’000 | |
| Wages and Salaries | ||
| Social Security Costs | | |
| Other Pension Costs | | |
| Other | ||
| Total |
9. Investment Return
2025 | 2024 | |
£’000 | £’000 | |
Interest and similar income | ||
From financial assets designated at fair value through profit or loss | ||
| Interest and similar income | ||
| Dividend income | ||
| Interest on cash at bank | ||
| Other income from investments | ||
From financial assets designated at fair value through profit or loss | ||
| Gains on realisation of investments | ||
| Losses on realisation of investments | ( | ( |
| Unrealised gains on investments | ||
| Unrealised losses on investments | ( | ( |
| Investment management expenses | ( | ( |
| Total investment return |
49
10. Distribution and open years of account
A distribution to Members of £50,901,601 will be proposed in relation to the closing year of account
2023 (2024: £8,486,709 distribution in relation to the closing year of account 2022).
The table below shows the current reporting year result (total comprehensive income/(loss) of the
years of account remaining open after the three-year period.
2025 | 2024 | |
| £’000 | £’000 | |
2023 | ||
2024 | ( | |
2025 | ( |
11. Financial Investments
As at 31 December 2025 | Carrying value | Cost |
| £’000 | £’000 | |
Shares and other variable yield securities and units in unit trusts | ||
Debt securities and other fixed income securities | ||
Syndicate loans to central fund | ||
Total financial investments |
As at 31 December 2024 | Carrying value | Cost |
| £’000 | £’000 | |
Shares and other variable yield securities and units in unit trusts | ||
Debt securities and other fixed income securities | ||
Syndicate loans to central fund | ||
Total financial investments |
Included in the carrying values above are listed investments as follows:
2025 | 2024 | |
£’000 | £’000 | |
Listed investments |
50
Financial investments continued
The table below presents an analysis of financial investments by their measurement classification:
2025 | 2024 | |
| £’000 | £’000 | |
Financial assets measured at fair value through profit or loss | ||
Financial assets measured at fair value as available for sale | - | - |
Financial assets measured at amortised cost | - | - |
Total financial investments |
The Syndicate classifies its financial instruments held at fair value in its Statement of Financial
Position 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.
51
Financial investments continued
The following table shows financial investments recorded at fair value analysed between the three
levels in the fair value hierarchy.
| 31 December 2025 | Level 1 | Level 2 | Level 3 | Total |
| £’000 | £’000 | £’000 | £’000 | |
Shares and other variable yield securities and units in unit trusts | | | | |
Debt securities and other fixed income securities | ||||
Loans and deposits with credit institutions | - | - | - | - |
| Syndicate loans to central fund | - | - | - | - |
| Other investments | - | - | - | - |
| Total |
| 31 December 2024 | Level 1 | Level 2 | Level 3 | Total |
| £’000 | £’000 | £’000 | £’000 | |
Shares and other variable yield securities and units in unit trusts | | | | |
Debt securities and other fixed income securities | ||||
Loans and deposits with credit institutions | - | - | - | - |
| Syndicate loans to central fund | | |||
| Other investments | - | - | - | - |
| Total |
52
Financial investments continued
Information on the methods and assumptions used to determine fair values for each major category
of financial instrument measured at fair value is provided below.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing
vendors will often determine prices by consolidating prices of recent trades for identical or similar
securities obtained from a panel of market makers into a composite price. The pricing service may
make adjustments for the elapsed time from a trade date to the valuation date to take into account
available market information. Lacking recently reported trades, pricing vendors will use modelling
techniques to determine a security price.
Some government and supranational securities are listed on recognised exchanges and are
generally classified as level 1 in the fair value hierarchy. Those that are not listed on a recognised
exchange are generally based on composite prices of recent trades in the same instrument and are
generally classified as level 2 in the fair value hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or
are traded in an established over the counter market are also mainly valued using composite prices.
Where prices are based on multiple quotes and those quotes are based on actual recent transactions
in the same instrument the securities are classified as level 2, otherwise they are classified as level 3
in the fair value hierarchy.
At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using valuation
techniques based on observable market data. All of the investments categorised as Level 3 are fair
valued based on the inputs to the valuation technique used.
12. Debtors arising out of direct insurance operations
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Due within one year | ||
| Due after one year | | |
| Total |
13. Debtors arising out of reinsurance operations
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Due within one year | ||
| Due after one year | | |
| Total |
53
14. Other Debtors
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Other | ||
| Total |
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 | |||
Gross Provisions | Reinsurance Assets | Net | |
| £’000 | £’000 | £’000 | |
| Balance at 1 January | ( | ||
| Incurred deferred acquisition costs | | ( | |
| Amortised deferred acquisition costs | ( | ( | |
| Foreign exchange movements | ( | ( | ( |
| Balance at 31 December | ( |
2024
Gross
Provisions
Reinsurance
Assets
Net
£’000
£’000
£’000
Balance at 1 January 27,365
(1,143 )
Incurred deferred acquisition costs 77,730
(2,160 )
Amortised deferred acquisition costs (71,397 )
(68,627 )
Foreign exchange movements 300
(38 )
Balance at 31 December 33,998
(571 )
54
16. Claims Development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims
incurred, including claims notified and IBNR, for each successive underwriting year, illustrating how
amounts estimated have changed from the first estimates made.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts
reported for the end of the underwriting year to one year later as a large proportion of premiums are
earned in the year of account’s second year of development.
Balances have been translated at exchange rates prevailing at 31 December 2025 in all cases.
Underwriting
year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Estimate of
cumulative
gross claims
incurred:
At end of first
underwriting year 20,252 38,964 35,316 35,943 61,879 45,975 44,400 57,229 78,977 84,527
One Year Later 47,513 77,725 88,852 110,004 112,433 93,091 92,261 127,495 178,776
Two Years Later 48,798 88,754 101,032 114,216 104,089 94,013 93,454 137,229
Three Years Later 63,909 89,141 101,401 102,178 91,702 85,577 81,345
Four Years Later 66,557 88,367 106,067 107,457 84,744 76,480
Five Years Later 64,061 87,974 113,730 110,509 85,211
Six Years Later 57,847 90,189 123,859 107,650
Seven Years Later
Eight Years Later 58,297 95,618
Nine Years Later 58,400
Less cumulative
gross paid (47,025 ) (78,197 ) (86,184 ) (77,370 ) (51,867 ) (36,409 ) (29,331 ) (33,895 ) (34,469 ) (6,113 )
Liability for gross
outstanding
claims (2016 to
2025)
Total gross
outstanding
claims (all years)
55
Claims Development continued
Underwriting
year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Estimate of
cumulative net
claims incurred:
At end of first
underwriting year 15,777 27,134 28,235 27,856 40,195 34,018 42,604 50,822 66,629 70,383
One Year Later 35,720 56,809 73,832 92,285 85,474 79,342 88,463 117,226 155,051
Two Years Later 38,523 66,383 89,755 98,689 84,720 83,012 90,524 126,908
Three Years Later 43,058 68,590 90,598 88,883 72,315 74,077 79,372
Four Years Later 43,528 67,998 96,333 93,998 67,150 66,471
Five Years Later 42,781 68,774 104,766 96,740 62,455
Six Years Later 43,257 71,233 114,008 93,589
Seven Years Later
Eight Years Later 40,588 64,249
Nine Years Later 52,524
Less cumulative
net paid
(43,707 ) (49,271 ) (78,684 ) (64,331 ) (33,300 ) (28,519 ) (29,331 ) (31,381 ) (30,771 ) (5,606 )
Liability for net
outstanding
claims (2016 to
2025)
Total net
outstanding
claims (all years)
The uncertainty associated with the ultimate claims experience of an underwriting year is greatest
when the underwriting year is at an early stage of development and the margin for future experience
potentially being more adverse than assumed is at its highest. As claims develop, and the ultimate
cost of the claims becomes more certain, the relative level of margin should decrease. Due, however,
to the uncertainty inherent in the claims estimation process, initial reserves may not always be in a
surplus. This is particularly so for large catastrophe claims where uncertainly is initially great.
56
17. 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 | |||
Gross Provisions | Reinsurance Assets | Net | |
| £’000 | £’000 | £’000 | |
Claims Outstanding | |||
| Balance at 1 January | ( | ||
| Claims paid during the year | ( | ( | |
| Expected cost of current year claims | ( | ||
| Change in estimates of prior year provisions | ( | ( | |
| Foreign exchange movements | ( | ( | |
| Balance at 31 December | ( |
| 2024 | |||
Gross Provisions | Reinsurance Assets | Net | |
| £’000 | £’000 | £’000 | |
Claims Outstanding | |||
| Balance at 1 January | ( | ||
| Claims paid during the year | ( | ( | |
| Expected cost of current year claims | ( | ||
| Change in estimates of prior year provisions | | ( | |
| Foreign exchange movements | ( | ( | |
| Balance at 31 December | ( |
57
Technical Provisions continued
2025 | |||
Gross Provisions | Reinsurance Assets | Net | |
| £’000 | £’000 | £’000 | |
Unearned Premiums | |||
| Balance at 1 January | ( | ||
| Premiums written during the year | | ( | |
| Premiums earned during the year | ( | ( | |
| Foreign exchange movements | ( | ( | |
| Balance at 31 December | ( |
| 2024 | |||
Gross Provisions | Reinsurance Assets | Net | |
| £’000 | £’000 | £’000 | |
Unearned Premiums | |||
| Balance at 1 January | ( | ||
| Premiums written during the year | | ( | |
| Premiums earned during the year | ( | ( | |
| Foreign exchange movements | | ( | |
| Balance at 31 December | ( |
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.
58
18. Creditors arising out of direct insurance operations
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Due within one year | | |
| Due after one year | | |
| Total |
19. Creditors arising out of reinsurance operations
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Due within one year | ||
| Due after one year | | |
| Total |
20. Other Creditors
| As at | 2025 | 2024 |
| £’000 | £’000 | |
| Other Liabilities | | |
| Total |
21. Cash and cash equivalents
| As at | 2025 | 2024 |
| £’000 | £’000 | |
Cash at bank and in hand | ||
Deposits with credit institutions | ||
Short term debt instruments presented within other financial investments | ||
Bank overdrafts | ||
| Total cash and cash equivalents |
59
Cash and cash equivalents continued
Short term debt instruments presented within other financial investments are disclosed in both
Financial investments and Cash and cash equivalents. 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.
Of the total cash and cash equivalents, the following amount was held in regulated bank accounts in
overseas jurisdictions:
2025
2024
£’000
£’000
Total cash and cash equivalents held in regulated
accounts in overseas jurisdictions 7,052
1,197
22. Related parties
During the year, the Syndicate was managed by AMAL for part of the reporting period. With effect
from 12
th
August 2025, the Syndicate transitioned to EMAL.
All transactions with AMAL are related party transactions. During the year the Syndicate incurred
service fees payable to AMAL £1.5m (31 December 2024: £2.7m) in the ordinary course of business.
At the year-end 2025 there is nothing owed to AMAL in respect of their services (31 December 2024:
£0.2m).
The following entities are considered related parties of the Syndicate by virtue of control and
common ownership:
Everest Managing Agency Limited
Everest Advisors (UK) Limited
Everest Corporate Member Limited
Everest Service Company (UK) Limited
The ultimate parent company is Everest Global Limited, and the syndicate operates within the overall
structure of the group. Everest Group Ltd provides 100% of the Syndicate’s insurance capacity.
Entities within the Group have recharged expenses to the Syndicate during 2025 of £48.1m (31
December 2024: £28.3m).
In the prior year the Managing Agency fees were paid to AMAL, and in the current year AMAL
continued to provide services for part of the year, and these fees were paid in respect of those
services. During the period, Managing Agency fees of £1.3m were charged to the Syndicate (31
December 2024: £2.1m). These amounts disclosed within this note include the fees paid to AMAL in
both the prior year and the relevant portion of the current year.
23. Funds at Lloyd’s
Every member is required to hold capital at Lloyd's which is held in trust and known as Funds at
Lloyd's (“FAL”). These funds are intended primarily to cover circumstances where Syndicate assets
prove insufficient to meet participating members' underwriting liabilities. The level of FAL that
Lloyd's requires a member to maintain is determined by Lloyd's based on PRA requirements and
resource criteria. FAL has regard to a number of factors including the nature and amount of risk to
60
Funds at Lloyd’s continued
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 members' FAL to meet liquidity requirements or to
settle losses.
24. Post balance sheet events
There are no post balance sheet events to disclose.
