Accounts disclaimer
Important information about Syndicate Reports and Accounts Access to this document is
restricted to persons who have given the certification set forth below. If this document has
been forwarded to you and you have not been asked to give the certification, please be
aware that you are only permitted to access it if you are able to give the certification. The
syndicate reports and accounts set forth in this section of the Lloyd’s website, which have
been filed with Lloyd’s in accordance with the Syndicate Accounting Byelaw (No. 8 of 2005),
are being provided for informational purposes only. The syndicate reports and accounts have
not been prepared by Lloyd’s, and Lloyd’s has no responsibility for their accuracy or content.
Access to the syndicate reports and accounts is not being provided for the purposes of
soliciting membership in Lloyd’s or membership on any syndicate of Lloyd’s, and no offer to
join Lloyd’s or any syndicate is being made hereby. Members of Lloyd’s are reminded that
past performance of a syndicate in any syndicate year is not predictive of the related
syndicate’s performance in any subsequent syndicate year. You acknowledge and agree to
the foregoing as a condition of your accessing the syndicate reports and accounts. You also
agree that you will not provide any person with a copy of any syndicate report and accounts
without also providing them with a copy of this acknowledgment and agreement, by which
they will also be bound.
SYNDICATE 2010
Annual Report and Accounts
Chairman’s Statement 1
Directors and Administration 2
Report of the Directors of the Managing Agent 3
Statement of Managing Agent’s Directors Responsibilities 10
Syndicate Annual Accounts for the Year Ended 31 December 2025 11
Independent Auditor’s Report to the Members of Syndicate 2010 12
Statement of Profit or Loss - Technical Account - General Business 15
Statement of Profit or Loss - Non-Technical Account 16
Balance Sheet 17
Statement of Changes in Members’ Balances 18
Statement of Cash Flows 19
Notes to the Syndicate Annual Accounts 20
Syndicate Underwriting Year Accounts for the 2023 Year of Account 46
Independent Auditor’s Report to the Members of Syndicate 2010 - 2023 Closed Year of Account 47
Statement of Managing Agent’s Responsibilities 50
Statement of Profit or Loss - Technical Account - General Business 51
Statement of Profit or Loss - Non-Technical Account 52
Balance Sheet 53
Statement of Changes in Members’ Balances 54
Statement of Cash Flows 55
Notes to the Syndicate Underwriting Year Accounts 56
Seven Year Summary of Results (Unaudited) 65
Contents
Chairman's Statement
I am pleased to report that, following a robust result in 2024, Syndicate 2010 has delivered a profit of $82.7 million for the 2025
calendar year, achieving a combined ratio of 81.7%.
Softening market conditions during 2025 continued across most classes, with pronounced pressure in the Property lines. After
several challenging years in catastrophe-exposed classes, the Syndicate undertook decisive actions to strengthen profitability.
These included expanding our Specialty classes to broaden our underwriting footprint and enhance portfolio diversification, as
well as increasing attachment levels. While these measures-combined with market pressures-resulted in an 8.3% reduction in
written premiums, from $430.7 million to $395.0 million, they also drove a meaningful reduction in attritional losses and
supported a corresponding uplift in overall profitability. The risk-adjusted rate change (RARC) for 2025 at a whole-account level
was -4.5%.
The year featured several significant catastrophe events, including the California wildfires, Hurricane Melissa, and the Washington
air collision. Despite these losses, overall claims experience remained well within expectations, culminating in a net loss ratio of
40.5%.
These accounts have been prepared on both an annual accounting basis for the 2025 calendar year and on the traditional
three-year basis for the closure of the 2023 Year of Account. On the latter basis, it is pleasing to confirm that Syndicate 2010 has
closed the 2023 Year of Account with a profit of 19.3% for a participant paying standard managing agency fees and profit
commission. The 2023 underwriting year was impacted by several catastrophe events, including Cyclone Gabrielle, the New
Zealand floods, and the Middle East earthquakes.
The 2024 Year of Account was similarly affected by notable catastrophe activity-most significantly Hurricanes Debby, Helene, and
Milton, and the Calgary hailstorm. Nevertheless, the current forecast for 2024 remains within the published range of +5% to
+10%.
Looking ahead to 2026, we anticipate further pressure on market conditions in certain classes. However, we enter the year from a
position of strength, and we remain optimistic about the Syndicate’s prospects. Our focus will remain on responding effectively to
market developments while continuing to provide dependable value, financial strength, longevity, and underwriting expertise to
our clients and brokers. We will maintain our disciplined approach to underwriting-prioritising balanced risk-and-reward
decision-making and emphasising sustainable profitability over top-line growth.
N P Davenport
Chairman
19 February 2026
1
Managing Agent:
29th Floor
20 Fenchurch Street
London EC3M 3BY
Managing Agent’s Registered Number
00292093
Directors
N P Davenport Non-Executive Chairman
C J Whittle
L J Gibbins Non-Executive (Resigned 12 February 2025)
P Martin Non-Executive
M Thomas (Appointed 01 April 2025)
J D Spence (Resigned 11 February 2026)
R D Milner
B A Schofield Non-Executive
K Turner
S J Churchill
B Cass
B Joseph Non-Executive
R L Sabbarton (Appointed 11 February 2026)
Company Secretary
P Kelly
Syndicate Active Underwriter
M Narbett (Resigned 01 January 2025)
M Thomas (Appointed 01 January 2025)
Bankers
Barclays Bank plc
Citibank N.A
Royal Bank of Canada
Investment Manager
Conning Asset Management Limited
24 Monument Street
London EC3R 8AJ
Lloyd’s Treasury Services
One Lime Street
London EC3M 7HA
Registered Auditor
KPMG LLP
15 Canada Square
Canary Wharf
London E14 5GL
Directors and Administration
2
Introduction
The Directors of Lancashire Syndicates Limited (“LSL”), the managing agent for Syndicate 2010, present their Annual Report
and Accounts for the year ended 31 December 2025.
These Annual Report and Accounts have been prepared using the annual basis of accounting as required by Statutory Instrument
No. 1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and applicable
United Kingdom Accounting Standards including Financial Reporting Standard 102: The Financial Reporting Standard
Applicable in the United Kingdom and Ireland ("FRS102") and Financial Reporting Standard 103 Insurance Contracts
("FRS103"), 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 Directors continue to prepare the Syndicate annual accounts on a going concern basis as the Syndicate does not intend to
cease underwriting or cease its operations, and the Directors have concluded that the Syndicate's financial position means that
this is realistic. The Directors have also concluded that there are no material uncertainties that could cast significant doubt over
the Syndicate's ability to continue as a going concern for at least a year from the date of approval of the Syndicate annual
accounts. Management's assessment of the Syndicate as a going concern is set out in Note 1 on page 20.
Separate underwriting year accounts for the closed 2023 year of account of Syndicate 2010 are included following these annual
accounts.
Principal activity
The principal activity of Syndicate 2010 remains the transaction of general insurance and reinsurance business in the United
Kingdom at Lloyd’s of London. The main lines of business are Non-marine and Aviation reinsurance, Direct and facultative
property, and Specialty.
LSL is the managing agent for Syndicate 2010. It also acts as managing agent for Syndicate 3010. LSL is subject to the regulation
of the Prudential Regulation Authority ("PRA") and the Financial Conduct Authority ("FCA"), as well as Lloyd’s.
Cathedral Capital Holdings Limited ("CCHL"), registered in England and Wales, is the immediate parent company of LSL.
Lancashire Holdings Limited ("LHL"), incorporated in Bermuda, is the ultimate parent company of LSL.
Calendar year results and business review
The result for the 2025 calendar year is a profit of $82.7m (2024: $84.8m profit) and a combined ratio of 81.7%* (2024: 79.3%).
An analysis of the contribution to the overall result made by the individual underwriting years is as follows:
2023
account
$'000
2024
account
$'000
2025
account
$'000
31 December
2025
$'000
31 December
2024
$'000
Gross premiums written
(5,436) 23,769 376,660 394,993 430,736
Gross premiums earned
1,144 191,498 216,932 409,574 424,095
Net premiums earned
(878) 170,177 141,801 311,100 338,138
Profit for the financial year
16,011 63,027 3,672 82,710 84,817
Loss ratio (%) 324.5 34.7 49.3 40.5 39.3
Expense ratio (%) (441.4) 31.0 50.4 41.2 40.0
Combined ratio (%) * (116.9) 65.7 99.7 81.7 79.3
*The combined ratio before profit commission is 78.3% and after profit commission is 81.7%.
2025 stands out as a year of heightened natural catastrophe activity, with insured losses exceeding those of 2024 and approaching
the elevated benchmarks set in 2022. The severity and frequency of events, spanning wildfires, hurricanes, floods, and earthquakes
underscore the increasing volatility faced by the global insurance market.
Natural catastrophe claims had a significant effect on Lloyd’s syndicate results in 2025. Syndicates are estimated to absorb roughly
10–15% of global catastrophe insured losses (USD 11–18 billion), consistent with historical market share, Gesmann, M. (2025a).
Lloyd’s 2025 Insights Report. The confluence of high-impact Gulf hurricanes and wildfire events, particularly in California and
Canada, posed notable challenges.
The biggest event of the year centered around wildfires in California. Marked by unusually high temperatures, severe drought
conditions, and strong winds. Wildfires ravaged the Los Angeles area from early January, displacing thousands of people and
claiming multiple lives. The Palisades fire, the first to erupt, and the hardest to contain, engulfed 23,000 acres and devastated
Report of the Directors of the Managing Agent
31 December 2025
3
surrounding communities. Both the Palisades and Eaton fires rank among the deadliest and most destructive in California history,
culminating in an industry event of circa $40bn. J MacCarthy & J Richter (Feb 2025). World Resources Institute. Despite this, the
underlying business continued to perform very well, as evidenced by the lower attritional loss development during the year. The
reduced volatility that we have referenced in the past with the diversification of the syndicate portfolio has had the desired effect
of reducing the impact of industry catastrophic events.
The Russia/Ukraine conflict has caused significant disruption to worldwide economies, both directly through the invasion and
indirectly through sanctions being imposed on Russia by the UK, EU and US. Given the nature of the Russia/Ukraine Conflict,
the ultimate losses relating to the event are subject to a degree of uncertainty. Reserves have been set on a case by case and
probability basis. The exposures and associated loss pattern are more developed in 2025. We continue to monitor this closely.
The Syndicate’s strategic underwriting objective and commitment is to underwriting our portfolio in a disciplined fashion with a
view to the longer term. We cultivate a deep understanding of our portfolio and client base and, as such, we took a conservative
and measured approach towards 2025, with a focus on delivering sustainable profit. However, we remain poised to adapt to any
greater market opportunity.
The Syndicate strategy focuses on its core classes of business and explores new opportunities to produce the best possible returns
for capital providers over the cycle whilst providing appropriate and stable support to its client base. The high-level classes of
business written by the Syndicate were consistent with those in the 2024 Syndicate Business Forecast.
Following on from a strong result in 2024, it is pleasing to report that Syndicate 2010 has produced a significant profit of $82.7m
for the 2025 calendar year with a combined ratio of 81.7%.
Further endorsement of the Syndicate’s strong performance during 2025 was the Syndicate’s upgraded status from Good to
Moderate, as assessed under Lloyd’s Principles Based Oversight. Lloyd’s also previously acknowledged that all other measures are
scored at, or above expectations.
The Syndicate's and wider Lancashire Group's approach to reserving for catastrophe losses is well established. We utilise actuarial
modelling techniques, historical loss experience analysis and professional judgement to estimate ultimate losses. For catastrophe
loss events, we bring together a highly skilled team from across the Group, including underwriters, claims and actuarial staff, as
well as senior management to review all our potentially exposed lines of business. This enables us to assess the likelihood and
quantum of claims arising within our underwriting portfolio.
Underwriting
A breakdown of divisional performance is shown below:
31 December 2025
31 December 2024
Gross
premiums
written
$’000
Net loss
ratio
%
Gross
premiums
written
$’000
Net loss
ratio
%
Non-marine reinsurance
118,024 14.1 124,714 26.5
Direct and facultative property
155,923 30.0 179,983 46.2
Aviation reinsurance
60,820 125.5 57,022 41.7
Specialty
61,361 91.0 64,798 41.8
Satellite
(1,135) 109.1 4,219 87.4
Total
394,993 40.5 430,736 39.3
The gross written premiums for the calendar year have decreased by 8.3% to $395.0m (2024: $430.7m). Our strategy is to build
when market conditions are favourable; however, competition for business increased in 2025 as carriers across the globe looked to
increase market shares. The Syndicate's strategy remains focused on its core classes of business whilst exploring new opportunities
to produce the best possible returns for capital providers over the cycle whilst providing appropriate and stable support to its
client base.
Top line premium reduction was driven by a number of factors, however it was primarily due to increased competition levels in
the core lines of the Syndicate. Negative risk adjusted rate change was recorded for the Syndicate as a whole, however this was
distinguished between stages in the year, with the second half of the year proving more challenging than the first half of the year.
We agree with what seems to be the market sentiment that broadly, conditions are still favourable in spite of the negative RARC
we are seeing. Additionally, we believe that the existing core book of business we have in the Syndicate, our risk selection and
cycle management based on many years of data, should mean that we can continue to deliver sustainable profit into 2026.
The overall loss ratio is broadly in line with prior year. As stated last year, one of our key objectives has been to build out a more
robust portfolio that allows the Syndicate to have a greater ability to absorb the inherent volatility of the business underwritten.
Report of the Directors of the Managing Agent
31 December 2025
4
We are now clearly seeing the benefits of the actions of the Syndicate and the broader marketplace in accepting a lesser
percentage of the global catastrophe losses.
Within the reinsurance and retrocession tiered markets there is sufficient capacity, however discipline has remained stronger
especially with the established markets whose participation is key to most placements. As a result, non-proportional treaty
premium levels remain high although recent headline losses referenced above and older year deterioration continue to challenge
the market.
The net loss ratio for the 2025 calendar year was 40.5% (2024: 39.3%).
The Syndicate purchases outwards reinsurance cover principally to limit the impact of catastrophes or multiple large losses.
Reinsurance is purchased on both an excess of loss and proportional basis. Outwards reinsurance premiums in 2025 increased by
11.6% to $98.0m (2024: $87.8m). The Syndicate continues to purchase a proportion of its reinsurance protection as part of shared
reinsurance in conjunction with the broader Lancashire Group which provides economies of scale.
Net operating expenses, including business acquisition costs and administrative expenses were $128.1m (2024: $135.1m) and the
expense ratio was 41.2% (2024: 40.0%). The breakdown of these costs is summarised in Note 6 of the accounts.
Non-marine reinsurance
This class accounts for 29.9% of the overall calendar year income (2024: 29.0%).
Non-marine reinsurance comprises of our catastrophe-exposed reinsurance classes as well as our excess of loss risk and other
property treaty portfolios. Despite some pressure on rating levels during the year, 2025 saw continued favourable underwriting
conditions as those established in 2024. The increased levels of attachment put in place during the remediation phase of the
market continues to offer protection from higher frequency, lower value industry insured losses. This shift in risk profile of the
reinsurance products allows the excess of loss contracts to focus on larger industry losses. This proved a successful strategy in 2025.
The increase in capacity has inevitably led to pressure on price and 2025 is the first year since 2017 that we have seen more
significant and consistent downwards pressure on pricing in all regions, with the exception of loss impacted business. The
integrity of the attachment points gained in the peak of the market were left largely intact, and the beneficial risk profile was left
in force for 2025. This was a significant benefit to the reinsurance marketplace. 2025 witnessed an elevated level of globally
insured losses in comparison to 2024. Pressure on Terms and Conditions has been varied with clients tending to try and align
their own programmes with the coverage that is given elsewhere in the market.
We made significant changes to the portfolio in 2023 and then further refined this in 2024. The shape of the book has remained
largely consistent in 2025 although we are constantly trying to optimise it within the broadly consistent overall strategy. We will
continue to try and access the best business within each segment of the portfolio and maintain underwriting discipline with
regards to terms and conditions, pricing and attachment levels.
In 2026, the strategy is broadly unchanged with a continued focus on segmentation to target and grow the most profitable parts of
the book and highlight the least profitable segments in most need of correction. We foresee more opportunities in the US owing
to the anticipated rating environment going into 2026. The portfolio as a whole continues to attach at a much better level than in
some of the years pre-2023. Any exposure we do have at the lower return periods is carefully managed and is assessed against the
overall balance of the portfolio.
Direct and facultative ("D&F") property
This class comprises property binding authorities, insuring small property risks and open market business which encompasses a
range of risks from large complex property schedules down to small single locations. The class contributed 39.5% of the 2025
written income (2024: 41.8%).
During 2025 the D&F market started to descend from its peak during the hard market conditions of 2024, however this should
always be contextualised against where the market found itself after multiple years of compound rate increases. After very
favourable trading conditions in 2024 it became clear during Q2 2025 and onwards that there was more capital attracted to the
sector, through both the deployment of retained earnings by existing participants and the return of carriers seeking to regain
market share, particularly among larger US domestic players. The consequence was additional supply which pressured signings
and had a consequential impact on rating levels.
Despite facing these headwinds in the Open Market portfolio, the Syndicate’s underwriting team fought hard to retain desirable
business, and most importantly, remained focused on risk and layer selection. The Syndicate's experienced D&F underwriting
team is well positioned and will continue to optimise the portfolio through proactive portfolio management over the coming year.
Report of the Directors of the Managing Agent
31 December 2025
5
Our property offering in Australia has continued to mature well as market conditions have continued to be supportive. Much like
the London market, the pleasing near-term performance of the sector has resulted in increasing levels of competition. Australia
experienced a sustained period of rate increases over five years, during which we implemented key portfolio changes that
significantly improved underlying performance. However, from late 2024 into 2025, rates have come under pressure due to the
emergence of new coverholders in the region. As a result, our current focus is on refined risk selection within our client base.
In both Australia and New Zealand, we maintain a deliberately concentrated client base, choosing to support a select number of
larger clients in a more meaningful way, rather than writing broadly across the market. What we have seen, especially from
London, is an influx of syndicates enter these territories in order to diversify their portfolios causing increased pressure on rating.
D&F Property remains a meaningful contributor to the premiums underwritten by the Lancashire Group. The Lancashire Group
itself re-entered this class of business in the latter part of 2019 through Lancashire Insurance Company (UK) Limited ("LUK").
The Syndicate and LUK will benefit from the leverage that can be gained from any combined Group offering. In accordance with
Lloyd’s regulations, LSL has a documented multi-platform policy for the allocation of business between the Syndicate and LUK,
although, in certain instances, the Group will market a combined offering. In 2023, the Lancashire Group announced its
intention to commence underwriting in the US during 2024. The US business is written by LUK. The Lancashire Group currently
continues to write the majority of D&F property via the Syndicate.
Aviation reinsurance and Satellite
This class consists of a number of sub-classes of the Aviation business. The core portfolio is airline excess of loss which is
complemented by aviation war and general aviation business. The class contributed 15.1% of the 2025 written income (2024:
14.2%).
As stated in prior reports, the past few years have been difficult for the aviation industry, and this has created challenges for the
insurance and reinsurance sectors. In 2022, the Russia/Ukraine Conflict put pressure on the market, following the challenges of
COVID-19 and reduced levels of air traffic. Increased stress was brought to the aviation (re)insurance market in 2025 due to a
spate of tragic accidents that occurred, with particular focus in the US. This has brought renewed scrutiny to the underlying
aviation insurance market, that became dislocated in Q4 2025.
The Lancashire Group has a wealth of aviation experience across its platforms. Despite increased competition, the underwriting
team will continue to maintain the core essence of the account which has proved successful, but they will also look to develop the
account during the year should compelling opportunities present themselves.
The Satellite market in recent years has suffered from overcapacity and volatility. The Syndicate's involvement was restrained in
this area due to the recent poor rating environment and 2025 has been another challenging year for this class. Despite positive
rate increases being pushed through in both 2024 and 2025, extremely low levels of launch placement activity has resulted in
subdued premium being generated. The Syndicate continues to offer guarded capacity however with an expectation that this will
be utilised at much improved pricing levels.
Specialty
The Specialty class consists of a number of classes predominantly written via consortia agreements with Lancashire Syndicate 3010.
For the 2025 Year of Account, these classes include Cargo, Accident and Health, Casualty, Australia Property D&F and Property
Construction. The Specialty class contributed 15.5% of the 2025 written income (2024: 15.0%).
The historic core strategy around increasing the scope and size of business written into the Specialty class was to diversify the
Syndicate's critical catastrophe exposed classes by adding complementary income. For 2026, a strategic shift to improve
operational efficiency and reduce the duplication of work and associated cost, resulted in the Specialty class ceasing to be written
in Syndicate 2010 and the underlying business being repatriated back into the broader product lines within Lancashire Syndicate
3010.
Outlook and business environment
2025 in review highlighted that the remedial work executed by the market and the Syndicate was again successful. 2025 saw the
return of increased levels of frequency of catastrophe losses. This was to prove a more robust test of underwriting portfolios in
2025 than in 2024. For that reason, it is pleasing that the remediation work over the past few years, at more equitable pricing levels
for reinsurers, maintained lower levels of attritional loss ratios. At the same time the additional actions taken by the Syndicate in
recent years have improved the underlying quality of the underwritten business. This will continue to benefit the Syndicate into
2026.
Strong market performance always attracts attention. As we look into 2026, without doubt the market is witnessing further
increase of supply and consequent competition in all core lines of the Syndicate. We anticipate further market softening and are
forecasting decreases in gross written premiums as we manage the underwriting cycle. The Syndicate will further optimise
outwards reinsurance strategy and reduce execution risk of delivery. Outwards reinsurance efficiencies continue to be sought
Report of the Directors of the Managing Agent
31 December 2025
6
through shared reinsurances with the broader Lancashire Group, whilst maintaining adherence to the Syndicate’s net risk
appetites.
The Syndicate continues to benefit from its dedicated parent in the Lancashire Group. During 2025 the Lancashire Group's
corporate member, Cathedral Capital (1998) Limited ("CC98"), purchased the remaining 20.3% capacity of Syndicate 2010 by
way of a mandatory offer to the remaining third party capacity providers and therefore now owns 100% of the capacity from the
2026 year of account onwards.
Our ongoing challenge remains to understand and adapt to the changing risk landscape. This includes longer-term impacts such
as climate change and shorter-term impacts such as inflation and expected market softening, and we must ensure that our pricing
and exposure management capabilities cater for these. At Syndicate and Group levels, we have adapted our pricing and exposure
models to capture new risks and reflect lessons learned from recent loss activity. This process is one of continual development and
improvement.
Our strategy is to continue to focus on our core lines of business and to optimise results by taking prudent underwriting decisions.
The Syndicate capacity for the 2026 year of account is £400.0m.
Underwriting year of account summary
The table below shows Syndicate 2010’s actual results for the closed 2023 year of account and the forecast results for the 2024 year
of account:
2025 forecast 2024 forecast 2023 actual
Year of account £’000 £’000 £'000
Stamp capacity 399,798 399,465 399,422
Profit n/a n/a 77,280
Return on stamp * 10.0% to 5.0% 19.3%
* A formal forecast range for the 2025 year of account will be released at the time of publishing the Q1 2026 QMA.
CC98, an incorporated member of Lloyd’s and a Lancashire Group Company, provided capacity of £277.0m for the 2023 year of
account, £288.4m for the 2024 year of account and £318.8m for the 2025 year of account through Hampden Agencies Limited.
The remaining capacity is provided by third party capital members via Hampden, Alpha, Argenta and ICP.
2023 underwriting year result
The 2023 year of account closed on 31 December 2025 with a profit of $104.3m. For Capital providers of Syndicate 2010 with
standard personal expenses, this equates to a return of 19.3% of capacity. The gross signed premium income, net of brokerage,
was circa 64.1% of capacity at year-end rates of exchange. Whilst there still remains a degree of uncertainty in relation to the final
outcome of the exposures to the Russia/Ukraine conflict within the 2023 YOA, LSL has conducted a review which also involved
our external actuaries and following this review it has concluded that it will close the 2023 YOA.
The 2023 underwriting accounts are set out on pages 46 to 65.
2024 account forecast
Last year’s report summarised the underwriting conditions and loss activity associated with the 2024 year of account.
Our current forecast for the 2024 year of account result is in the range 10.0% to 5.0% of capacity. As with all years, due to the
nature of the business written, any fluctuation in USD to GBP rate of exchange will influence the final result.
2025 account forecast
For 2025, the Syndicate’s capacity was £399.8m. The commentary outlining the 2025 experience is contained within the Calendar
Year Results and Business Review section of this report.
Syndicate investments
Investment policy
The investment objective for the Syndicate’s investment manager is to invest the Premium Trust Funds to preserve capital and
maintain liquidity to support underwriting operations in line with policies approved by the Board of LSL. The investment
mandate is to invest the Premiums Trust Funds in a manner calculated to maximise returns within agreed restraints. Portfolios are
Report of the Directors of the Managing Agent
31 December 2025
7
invested predominantly in short-term, high-quality fixed maturity securities. The Syndicate investment manager has been
instructed to maintain adequate liquidity and security and has discretion to invest in private sector securities for a limited
proportion of the portfolio and within diversity limits for individual credits. Limiting the target duration of the overall portfolio
controls the exposure of the investments to adverse price movements. Portfolio management is delegated to Conning Asset
Management Limited and Lloyd's Treasury Investment Management. An Investment Committee and formal procedures for
monitoring investments exist in line with the guidance from Lloyd’s.
Investment performance
Syndicate 2010’s investment portfolio returned an investment gain of $22.7m in 2025 (2024: gain of $17.3m). The Syndicate’s
cash and investments totalled $470.5m at 31 December 2025 (2024: $443.3m).
Investment strategy
The investment strategy places an emphasis on the preservation of invested assets and provision of sufficient liquidity for the
prompt payment of claims, in conjunction with providing a reasonably stable income stream. These objectives are reflected in the
Syndicate’s investment guidelines and its relatively conservative asset allocation. Management reviews the composition, duration
and asset allocation of the investment portfolio on a regular basis in order to respond to changes in interest rates and other
market conditions.
Foreign exchange hedging
The Managing Agent, in so far as possible, matches assets and liabilities by currency within the Syndicate. To date, the Managing
Agency has not entered into any transaction to hedge the foreign exchange exposure to the non-US Dollar (Sterling, Canadian
Dollars or Euro) currencies held within the Syndicate’s premium trust funds. The Managing Agent will continue to keep this
possibility under review and may at some future date enter into such transactions. Foreign exchange exposures are hedged across
the Lancashire Group.
Bank borrowing facilities
Details of bank borrowing facilities are set out in Note 26.
Principal risks and uncertainties
In addition to strategic risk, including an inappropriate or poorly executed business plan, the Syndicate is exposed to a variety of
risks when undertaking its activities, all of which are taken into account when setting its Ultimate Solvency Capital Requirement
("uSCR"). The key risks to the Syndicate are: Insurance risk, Financial risk, Credit risk, Liquidity risk, Operational risk, Market risk
and Capital Management risk, details of which are disclosed in Note 4. All areas of risk are subject to the Managing Agency’s risk
management framework and enterprise-wide risk management practices and controls.
Below are risks for which quantitative assessment is difficult but for which a structured approach is still required to ensure that
their potential impact is considered and mitigated insofar as practicable.
Risks relating to Climate Change
The Syndicate is exposed to both climate-related risk and opportunities. The two major categories of risk being transition and
physical risk. Transition risks are those relating to the transition to a lower carbon economy and include risks such as policy and
legal risk, technology risk, market risk and reputation risk. Physical risks are those relating to the physical impacts of climate
change which can be acute (those from increased frequency and severity of climate-related events) or chronic (due to longer-term
shifts in climate patterns). The Syndicate is more significantly affected by physical risk through its exposure to acute and chronic
climate change. However, consideration must be, and is, given to transition and climate-related litigation risks. The potential
financial impact from these climate-related risks is assessed through scenario testing and mitigated by the Syndicate's strategic and
risk management decisions on managing these risks. A risk radar has been prepared to illustrate the risks identified, the
likelihood of the risks and their product impact. The risk assessment also considers the products currently offered by the
Syndicate and how these might change over time during the transition to a lower carbon economy.
In our underwriting operations, we manage this risk effectively by supplementing our internal systems, data and procedures with
external vendor models. Underwriting guidelines have been developed to support the underwriting process and provide guidance
to assist underwriters in their decision making. Performance against guidelines is monitored via the Group Underwriting
Committee, Insurance and Reinsurance Forums. We have clear tolerances and preferences in place to actively manage exposures,
and the Board regularly monitors our Probable Maximum Loss (PMLs). The risks to the asset side of our balance sheet from
exposure to climate change are mitigated in part through providing climate-specific and carbon intensity targets to our
investment managers and by having regular reviews of our third-party asset managers, our asset allocation, and the underlying
securities within our portfolio.
Report of the Directors of the Managing Agent
31 December 2025
8
Climate change, its related risks and opportunities and their financial impact are a key focus of the Board at their quarterly
meetings. The regulatory requirements around companies’ climate-related financial disclosures are increasing and failure to
address these requirements sufficiently may result in the risk of reputational damage or increased regulatory oversight.
Environmental, Social and Governance ("ESG"
Sustainable underwriting is one of the pillars of the Lancashire Group ESG strategy. However, in a complex world there are many
challenges and we understand that there are not always easy solutions. The risk solutions that we provide help protect people,
companies and economies from uncertainty and give them confidence and stability. Our property (re)insurance products insure
clients against the risk of major weather and other catastrophic events and we have long-standing expertise in this area. In our
energy portfolio, we support our clients’ transition to renewable energy and insure a number of projects, from wind and solar
farms to biomass facilities and others. Our product offering will continue to evolve to meet the changing needs of our clients in
supporting the world’s net-zero target. We are committed to playing our part in making the world more sustainable in an open
and honest way. To help us with this, we ratified a number of internal underwriting guidelines and investment guidelines focused
on consideration of climate change and other ESG factors in line with our values.
Syndicate Annual General Meeting
In accordance with the Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000), notice is hereby given that the
managing agent does not propose to hold an Annual General Meeting of the members of the Syndicate.
Directors
The Directors of the Managing Agent who served during the year ended 31 December 2025, as well as any subsequent changes are
listed under the section ‘Directors and Administration’ on page 2.
Disclosure of information to auditors
The Directors of the Managing Agent who held office at the date of approval of this Managing Agent’s report confirm that, so far
as they are aware, there is no relevant audit information of which the Syndicate’s auditors are unaware; and each Director has
taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to
establish that the Syndicate’s auditors are aware of that information.
Auditors
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.
On behalf of the Board
B Cass
Director & Chief Compliance Officer
19 February 2026
Report of the Directors of the Managing Agent
31 December 2025
9
The Directors of the Managing Agent are responsible for preparing the Syndicate annual accounts in accordance with applicable
law
and regulations.
The
Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 requires the Directors of the
Managing Agent to prepare their Syndicate’s annual accounts for each financial year. Under that law they have elected to prepare
the annual accounts in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting
Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under
Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 the directors of the
mana
ging agent must not approve the annual accounts unless they are satisfied that they give a true and fair view of the state of
affairs of the Syndicate and of the profit or loss of the Syndicate for that period. In preparing these annual accounts, the Directors
of the Managing Agent are required to:
• select suitable accounting policies and then apply them consistently;
• make
judgements and estimates that are reasonable and prudent;
• sta
te whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and
explained in the annual accounts;
• assess the Syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading or have no realistic alternative but to do so.
The Directors of the Managing Agent are responsible for keeping adequate accounting records that are sufficient to show and
explain the Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the Syndicate and
enable them to ensure that the Syndicate annual accounts comply with the Insurance Accounts Directive (Lloyd's Syndicate and
Aggregate Accounts) Regulations 2008. They are responsible for such internal control as they determine is necessary to enable the
preparation of Syndicate annual accounts that are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Syndicate and to prevent
and detect fraud and other irregularities.
The Directors of the Managing Agent are responsible for the maintenance and integrity of the Syndicate and financial
information included on the Syndicate’s website. Legislation in the UK governing the preparation and dissemination of Syndicate
annual accounts 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
B Cass
Director & Chief Compliance Officer
19 February 2026
Statement of Managing Agent’s Directors Responsibilities
31 December 2025
10
SYNDICATE ANNUAL ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2025
11
Opinion
We have audited the Syndicate annual accounts of Syndicate 2010 (“the Syndicate”) for the year ended 31 December 2025 which
comprise the Statement of Profit or Loss: Technical account – General Business, Statement of Profit or Loss: Non-Technical
Account, Balance Sheet – Assets, Balance Sheet – Liabilities, 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, as modified
by the Syndicate Accounts Frequently Asked Questions Version 1.1 dated 13 February 2026, issued by the Council of Lloyd’s (“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 30 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
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, the audit committee, internal audit 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 Risk and Challenge Committee minutes.
• Considering remuneration incentive schemes and performance targets for management.
• 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.
Independent Auditor’s Report to the Members of Syndicate 2010
12
As required by auditing standards and taking into account possible pressures to meet profit targets and our overall knowledge of
the control environment, 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 and
judgements such as such as the valuation of insurance contract liabilities.
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 those posted containing key words such as error, restatement, correction; those
posted by individuals who typically do not make journal entries or are not authorized to post journal entries; those posted
without explanation, description, or numerical description only; those posted to seldom used accounts for which the other side
is cash; unusual postings to loss and loss adjustment reserve accounts, gross written premium, premium receivables and expense
accounts; unusual postings to cash accounts for which the other side is not a standard business transaction (including premium
receivable, reinsurance payable, claims paid, reinsurance on paid claims, other receivable, other payable, investment, clearing
intercompany, lease and General & Administrative expense account); any unusual entry to long term debt for which the other
side is not interest payable or interest expense and post-closing journals above our materiality threshold.
• 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 financial statements
from our general commercial and sector experience, through discussion with the directors and other management (as required
by auditing standards), from inspection of the Syndicate’s 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 financial statements varies considerably.
Firstly, the Syndicate is subject to laws and regulations that directly affect the financial statements 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 financial statement items.
Secondly, the Syndicate is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, 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, corruption, and bribery, recognising the financial and regulated nature of the Syndicate’s activities and its legal
form. 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 correspondence, 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 financial statements, 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 financial statements, 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 fraud 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.
Independent Auditor’s Report to the Members of Syndicate 2010
13
Based solely on that work:
• we h
ave 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
U
nder the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, we are required to report
t
o 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
• w
e 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 10, 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
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 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.
Umar Jamil (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
19 February 2026
Independent Auditor’s Report to the Members of Syndicate 2010
14
Notes | 2025 $'000 | 2024 $'000 | |
Earned premiums, net of reinsurance | |||
Gross premiums written | 5 | ||
Outward reinsurance premiums | ( | ( | |
Net premiums written | |||
Change in the provision for unearned premiums: | |||
Gross amount | ( | ||
Reinsurers’ share | ( | ||
Net change in provisions for unearned premiums | ( | ||
Earned premiums, net of reinsurance | |||
Allocated investment return transferred from the non-technical account | |||
Claims incurred, net of reinsurance | |||
Claims paid: | |||
Gross amount | 5 | ( | ( |
Reinsurers’ share | |||
Net claims paid | ( | ( | |
Change in the provision for claims: | |||
Gross amount | 5 | ||
Reinsurers’ share | |||
Net change in the provision for claims | |||
Claims incurred, net of reinsurance | ( | ( | |
Net operating expenses | 5, 6 | ( | ( |
Balance on the technical account for general business |
All operations relate to continuing activities.
Statement of Profit or Loss
Technical Account - General Business
For the year ended 31 December 2025
15
Notes | 2025 $'000 | 2024 $'000 | |
Balance on technical account for general business | |||
Investment income | 10 | ||
Realised gains on investments | 10 | ||
Unrealised gains on investments | 10 | ||
Investment expenses and charges | 10 | ( | ( |
Total investment return | |||
Allocated investment return transferred to the general business technical account | ( | ( | |
Foreign exchange gains/(losses) | ( | ||
Profit for the financial year | |||
Other comprehensive income | |||
Total comprehensive income for the year |
All operations relate to continuing activities.
There are no other comprehensive gains or losses in the year.
Statement of Profit or Loss
Non-Technical Account
For the year ended 31 December 2025
16
Notes | 2025 $'000 | 2024 $'000 | |
Investments: | |||
Financial investments | 11 | ||
Deposits with ceding undertakings | 12 | ||
Reinsurers’ share of technical provisions: | |||
Provision for unearned premiums | 19 | ||
Claims outstanding | 19 | ||
Debtors: | |||
Debtors arising out of direct insurance operations | 13 | ||
Debtors arising out of reinsurance operations | 14 | ||
Other debtors | 15 | ||
Other assets: | |||
Cash and cash equivalents | 16 | ||
Prepayments and accrued income: | |||
Deferred acquisition costs | 17 | ||
Other prepayments and accrued income | |||
Total Assets | |||
Capital and reserves: | |||
Members’ balances | |||
Technical provisions: | |||
Provision for unearned premiums | 19 | ||
Claims outstanding | 19 | ||
Creditors: | |||
Creditors arising out of direct insurance operations | 20 | ||
Creditors arising out of reinsurance operations | 21 | ||
Other creditors including taxation and social security | 22 | ||
Accruals and deferred income | |||
Total Liabilities | |||
Total Liabilities, Capital and Reserves |
The notes on pages 20 to 45 form part of these annual accounts.
The Syndicate annual accounts on pages 15 to 45 were approved by the Board of Lancashire Syndicates Limited on 18 February
2026 and were signed on its behalf by:
C J Whittle
Director & Chief Financial Officer
19
February 2026
Balance Sheet
As at 31 December 2025
17
2025 $'000 | 2024 $'000 | |
Members’ balances as at 1 January | ( | |
Profit for the financial year | ||
Members’ agent fee | ( | ( |
Transfer (to)/from members’ personal reserve fund | ( | |
Members’ balances as at 31 December |
Members participate on Syndicates by reference to years of account and their ultimate result, assets and liabilities are assessed with
reference to policies incepting in that year of account in respect of their membership of that particular year.
Transfers (to) / from members’ personal funds comprise the (2022) / 2021 closed year of account (profit) / loss.
Statement of Changes in Members’ Balances
For the year ended 31 December 2025
18
Notes | 2025 $'000 | 2024 $'000 | |
Cash flows from operating activities | |||
Profit for the financial year | |||
Adjustments for: | |||
| Investment return | 10 | ( | ( |
| Exchange (gains) / losses | ( | | |
| (Increase) / decrease in debtors | ( | | |
| Increase in creditors | |||
| (Decrease) / increase in gross technical provisions | ( | ||
| Increase in reinsurers' share of gross technical provisions | ( | ( | |
| Movement in other assets/liabilities | ( | ||
Net cash inflow from operating activities | | | |
Cash flows from investing activities | |||
Interest received | |||
Purchase of equity and debt securities | ( | ( | |
Sale of equity and debt securities | |||
Net cash (outflow) from investing activities | ( | ( | |
Cash flows from financing activities | |||
Transfer (to) / from members in respect of underwriting participations | ( | ||
Members' agents' fees paid on behalf of members and payment of intercompany loan and interest | ( | ( | |
Net cash (outflow) / inflow from financing activities | ( | ||
Decrease in cash and cash equivalents in the year | ( | ( | |
Cash and cash equivalents at 1 January | |||
Effect of exchange rates and change in market value on cash and cash equivalents | ( | ||
Cash and cash equivalents at 31 December | 16 |
Statement of Cash Flows
For the year ended 31 December 2025
19
1 Basis of Preparation
Syndicate 2010 ("The Syndicate") 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, LSL, is 29th Floor, 20 Fenchurch Street,
London, EC3M 3BY.
The financial statements/annual accounts 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 annual accounts have been prepared on the historical cost basis, except for financial assets at fair value through profit or
loss that are measured at fair value.
The annual accounts are prepared in US Dollars
Syndicate. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
The annual accounts are prepared on a going concern basis in accordance with FRS102.
In assessing the Syndicate's going concern position as at 31 December 2025, the Directors have considered a number of
factors. These include the current balance sheet and liquidity position, the level and composition of the Syndicate's capital
and solvency ratios, the current performance against the Syndicate's strategic and financial business plan, and the current
market environment including consideration of the ongoing Russia/Ukraine conflict, inflation and climate change.
The Russia/Ukraine Conflict has caused significant disruption to worldwide economies, both directly through the invasion
and indirectly through sanctions being imposed on Russia by the UK, EU and US. Given the complexity and evolving nature
of the Russia/Ukraine Conflict, the ultimate losses relating to the event are subject to a degree of uncertainty. Reserves have
been set on a case by case basis for the Contingent War exposure and on a probability basis for Operator policy exposure and
Aviation XoL exposures. Furthermore, the recoverability of associated reinsurance balances is also subject to uncertainty.
Current loss estimates and reinsurance recoveries are based on information available at the reporting date.
Whilst our longer tail lines, such as casualty, remain a small proportion of the overall book, these lines, due to their very
nature, are more difficult to reserve for and will, over time, increase the inherent risk within this principal risk.
The Syndicate's financial forecasts reflect the outcomes that the Directors consider most likely, based on the information
available at the date of signing these annual accounts. To assess the Syndicate's going concern, the financial stability of the
Syndicate was modelled for a period of at least 12 months and a number of sensitivity, stress and scenario tests were applied.
This included, among other analysis, a best estimate forecast as well as various scenarios. This incorporated different
magnitudes of reserve movements and, attritional, large and catastrophe events plus optimistic and pessimistic investment
return scenarios. To further stress the financial stability of the Syndicate, additional stress testing was performed. This
included modelling the breakeven capital requirements of our regulators, the impact of potential management actions to
reduce the Syndicate's exposure to climate change-related risks, an operational risk stress of the main input assumption to
the base case, the occurrence of a number of high severity loss events impacting the Syndicate in 2026 alongside an
investment shock and finally a reverse stress test scenario designed to render the business model unviable. The testing
identified that under the plausible stress scenarios, the Syndicate had more than adequate liquidity and solvency headroom.
Under the severe stress scenario, the corporate member would replenish any cash calls, however this scenario is extremely
unlikely and does not take into account the potential upside opportunities for the Syndicate.
Based on the going concern assessment performed as at 31 December 2025, the Directors consider there to be no material
uncertainties that may cast significant doubt over the Syndicate’s ability to continue to operate as a going concern. The
Directors have formed a judgement that there is a reasonable expectation that the Syndicate has adequate resources to
continue in operational existence in the foreseeable future, a period of at least 12 months from the date of signing these
annual accounts.
During 2025, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial reporting
across the market. As a result, certain comparative information has been reclassified within the financial statements and
related notes to ensure consistency with current year presentation and compliance with the Lloyd's Syndicate Accounts
Instructions.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
20
2 Use of Judgements and Estimates
In preparing these annual accounts, the directors of the Managing Agent have made judgements, estimates and assumptions
that affect the application of the Syndicate’s accounting policies and the reported amounts of assets, liabilities, income and
expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
Estimation of premiums
The measurement of premium estimates comprises the estimated gross premium written during the year, that have not yet
been notified by the financial year-end. For certain insurance contracts, premium is initially recognised based on estimated
premium income ("EPI"). When premium is sourced through binders or treaty business, the EPI is pro-rated across the
contract period. This is done on a straight-line basis unless the underlying writing pattern from the prior period indicates the
actual underlying writing pattern is materially different. The underwriters adjust their EPI estimates as the year of account
matures. After a set amount of time after a contract expires, premiums are adjusted to match the actual signed premium.
Premiums are earned on a straight-line basis over the life of each contract. At a portfolio level this is considered to provide a
reasonable estimate for the full year of the pattern of risk over the coverage period.
Estimation of claims
The measurement of the provision for claims outstanding comprises the estimated cost of settling all claims incurred but
unpaid at the balance sheet 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. In particular, 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.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the Syndicate Managing
Agent’s in-house actuaries and compared to the independent assessment performed by the external consulting actuaries.
These techniques generally involve projecting from past experience the development of claims over time in view of the likely
ultimate claims to be experienced and for more recent underwriting, having regard to variations in 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 business accepted and assessments of underwriting conditions.
In arriving at the level of claims provisions a margin is applied over and above the actuarial best estimate so as to minimise
any adverse run-off deviation.
Further information about the risk that the provision for claims outstanding could be materially different from the ultimate
cost of claims settlement is included in Note 4.
3 Accounting Policies
a) Premiums written
Premiums written comprise premiums on contracts incepted during the financial year, together with adjustments made in
the year to premiums written in prior accounting periods. They also include estimates for pipeline premiums, representing
amounts due to the Syndicate not yet notified. Premiums are shown gross of commission payable and exclude taxes and
duties levied on them.
b) Reinsurance premium ceded
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct or
inwards business being reinsured.
c) Unearned premiums
The provision for unearned premiums comprises the proportion of premiums written which is estimated to be earned in the
following or subsequent financial periods, computed separately for each insurance contract using the daily pro rata method,
adjusted if necessary to reflect any variation in the incidence of risk during the period covered by the contract.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
21
3 Accounting Policies continued
d) Claims provisions and related recoveries
Claims incurred comprise claims and claims handling expenses (both internal and external) paid in the year and the
movement in provision for outstanding claims and settlement expenses.
Outstanding claims including an allowance for the cost of claims incurred by the balance sheet date but not reported until
after the year end ("IBNR"). Claims outstanding are reduced by anticipated salvage and other recoveries.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and projections for
IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in place for the class of
business, the claims experience for the year and the current security rating of the reinsurance companies involved. A
number of statistical techniques are used to assist in making these estimates. The most critical assumption in regards to
claims provisions is that the past is a reasonable predictor of the likely level of claims development. In addition, a
management prudence margin is added to the actuarial best estimate.
Reinsurance assets are assessed for impairment at each balance sheet date. A reinsurance asset is deemed impaired if there is
objective evidence, as a result of an event that occurred after its initial recognition, that the Syndicate may not recover all
amounts due, and that event has a reliably measurable impact on the amount that the Syndicate will receive from the
reinsurer. Impairment losses are recognised immediately in the profit or loss account.
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, the ultimate liability will vary as a result of subsequent information
and events and this may result in significant adjustments to the amounts provided.
e) Unexpired risks provision
A provision for unexpired risks is made where claims and related expenses estimated to arise after the end of the financial
period in respect of contracts incepted before that date, are expected to exceed the unearned premiums under these
contracts, after the deduction of any deferred acquisition costs.
The need for any provision for unexpired risks is assessed at a total Syndicate Year of Account level.
f) Acquisition costs
Acquisition costs, comprising brokerage and commission and other internal and external costs related to the acquisition of
new insurance contracts are deferred to the extent that they are attributable to premiums unearned at the balance sheet
date.
g) Foreign currencies
The presentational and functional currency of the Syndicate is US Dollars. Transactions denominated in currencies other
than the functional currency are translated into the functional currency at the rate of exchange ruling at the date of the
transaction or at an appropriate average rate. The Syndicate’s monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the exchange rate ruling on the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency using the exchange rates at the date when the fair value was determined. Non-monetary items denominated in
foreign currencies that are measured at historical cost are translated to the functional currency using the exchange rate at
the date of transaction. For the purposes of foreign currency translation, unearned premiums and deferred acquisitions costs
are treated as if they are monetary items.
Differences arising on translation of the foreign currency amounts relating to the insurance operations of the Syndicate are
included in the non-technical account.
h) Financial assets and liabilities
As permitted by 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 EU).
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
22
3 Accounting Policies continued
h) Financial assets and liabilities continued
(i) Classification
The accounting classification of financial assets and liabilities determines the way in which they are measured and changes in
those values are presented in the statement of profit or loss and other comprehensive income. Financial assets and liabilities
are classified on their initial recognition. Subsequent reclassifications are permitted only in restricted circumstances.
Financial assets and financial liabilities at fair value through profit and loss comprise financial assets and financial liabilities
held for trading and those designated as such on initial recognition. Investments in shares and other variable yield securities,
units in unit trusts, and debt and other fixed income securities are designated as at fair value through profit or loss on initial
recognition, as they are managed on a fair value basis in accordance with the Syndicate’s investment strategy.
(ii) Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the Syndicate’s contractual rights to the cash flows from the financial assets expire or if
the Syndicate transfers the financial asset to another party without retaining control of substantially all risks and rewards of
the asset. A financial liability is derecognised when its contractual obligations are discharged, cancelled, or expire. Regular
way purchases and sales of financial assets are recognised and derecognised, as applicable, on the trade date, i.e. the date
that the Syndicate commits itself to purchase or sell the asset.
(iii) Measurement
A financial asset or financial liability is measured initially at fair value plus, for a financial asset or financial liability not at fair
value through profit and loss, transaction costs that are directly attributable to its acquisition or issue.
Financial assets at fair value through profit or loss are measured at fair value with fair value changes recognised immediately
in profit or loss. Net gains or net losses on financial assets measured at fair value through profit or loss includes foreign
exchange gains/losses arising on their translation to the functional currency, but excludes interest and dividend income.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using the effective interest
method. This includes Deposits with ceding undertakings.
(iv) Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not measured at fair
value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates that a loss
event has occurred after the initial recognition of an asset, and that the loss event has an impact on the future cash flows on
the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention of the Syndicate
about any significant financial difficulty of the issuer, or significant changes in the technological, market, economic or legal
environment in which the issuer operates.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the asset’s original effective interest
rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
An impairment loss recognised reduces directly the carrying amount of the impaired asset. All impairment losses are
recognised in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring
after the impairment loss was recognised. For financial assets measured at amortised cost the reversal is recognised in profit
or loss.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when,
the Syndicate currently has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset
and settle the liability simultaneously.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
23
3 Accounting Policies continued
i) Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in unrealised gains
and losses, net of investment expenses, charges and interest.
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. For investments measured at amortised cost, realised gains and losses
represents the difference between the net proceeds on disposal and the latest carrying value (or if acquired after the last
reporting date, the purchase price).
Unrealised gains and losses on investments represent the difference between the fair value at the balance sheet date and
their purchase price. 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, or the valuation at the
beginning of the year; as well as the reversal of previously recognised unrealised gains and losses in respect of investment
disposed of in the current period.
Investment return is initially recorded in the Non-Technical Account. The return is transferred in full to the Technical
Account – General Business to reflect the investment return on funds supporting underwriting business.
j) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks and other short-term highly
liquid investments with maturities of three months or less from the acquisition date that are subject to an insignificant risk of
changes in fair value, and are used by the Syndicate in the management of its short-term commitments. Cash and cash
equivalents are carried at amortised cost in the balance sheet.
k) Deposits with ceding undertakings
Deposits with ceding undertakings represent 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 balance sheet.
l) Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax from trading
income. In addition, all UK basic rate income tax (currently at 20%) deducted from Syndicate investment income is
recoverable by managing agents and consequently the distribution made to members or their members’ agents is gross of
tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any US Federal Income Tax payable on underwriting results or investment earnings. Any
payments on account made by the Syndicate during the year have been included in the Balance Sheet under the heading
‘other debtors’. No provision has been made for any other overseas tax payable by members on underwriting results.
m) Pension costs
Lancashire Insurance Services Limited operates a defined contribution pension scheme. Pension contributions relating to
staff are recharged to the Syndicate via LSL as incurred and are included within net operating expenses.
n) Profit commission
Profit commission is charged by the Managing Agent on a year of account basis subject to the operation of a two-year deficit
clause. This is charged to the Syndicate as incurred but does not become payable until after the appropriate year of account
closes, normally at 36 months. Profit commission is charged at a rate of 20% where a seven year rolling average syndicate
result of not less than 7.5% on capacity is achieved. Profit commission at a rate of 17.5% will apply where the seven year
rolling average syndicate result is less than 7.5% on capacity.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
24
4 Risk and Capital Management
The Syndicate is exposed to a variety of insurance and financial risks when undertaking its activities. The Board of Directors
of LSL, the Syndicate’s Managing Agent, has policies in place for measuring and managing insurance and financial risks, and
for managing the Syndicate’s capital. These risks can be split into the following categories:
• Insurance risk;
• Financial risk;
• Credit risk;
• Liquidity risk;
• Operational risk;
• Market risk; and
• Capital management risk.
Risk management framework
The Board of Directors of LSL has overall responsibility for the establishment and oversight of the Syndicate’s risk
management framework. The LSL Board has established a Risk and Compliance Committee to oversee the operation of the
Syndicate’s risk management framework and to review and monitor the management of the risks to which the Syndicate is
exposed. The Risk and Compliance Committee has delegated oversight of the management of aspects of insurance risks to
the Group Underwriting and LSL Reserving Committees, which are responsible for developing and monitoring insurance
risk management policies, and the management of aspects of financial risk to the LSL Investment Committee, which is
responsible for developing and monitoring financial risk management policies. The risk management policies are
established to identify and analyse the risks faced by the Syndicate, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits.
The Risk, Reserving, Audit and Investment Committees report regularly to the Board of Directors on their activities.
The sections below explain how each category of risk is defined and managed.
Insurance Risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being different from that
expected when an insurance product was designed and priced. The actual performance of insurance contracts is subject to
the inherent uncertainty in the occurrence, timing and amount of the final insurance liabilities. The insurance risk the
Syndicate is exposed can be separated into underwriting risk and reserve risk.
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future insurance losses and associated
expenses. This includes the risks that the premium is set too low, provides inappropriate levels of cover, or that the actual
frequency or severity of claims events will be significantly higher than was expected during the underwriting process.
Reserve risk is the risk that the reserves established in respect of insurance claims incurred are insufficient to settle the claims
and associated expenses in full.
Management of insurance risk
A key component of the management of underwriting risk for the Syndicate is a disciplined underwriting strategy that is
focused on writing quality business and not writing for volume. Product pricing is designed to incorporate appropriate
premiums for each type of assumed risk. The underwriting strategy includes monitoring underwriting limits on the
Syndicate’s total exposure to specific risks together with limits on geographical and industry exposures. The aim is to ensure
a well-diversified book is maintained, with no excessive exposure in any one geographical region.
Contracts can contain a number of features which help to manage the underwriting risk, such as the use of deductibles, or
capping the maximum permitted loss, or number of claims (subject to local regulatory and legislative requirements).
The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event, including
excess of loss and catastrophe reinsurance. Where an individual exposure is deemed surplus to the Syndicate’s appetite,
additional facultative reinsurance may also be purchased. The Syndicate may also choose to purchase quota share
reinsurance at selected sub account levels.
The Reserving Committee oversees the management of reserving risk. The use of proprietary and standardised modelling
techniques, internal and external benchmarking, and the review of claims development are all instrumental in mitigating
reserving risk. The Reserving Committee performs a comprehensive review of the projections, both gross and net of
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
25
4 Risk and Capital Management continued
Insurance Risk continued
Management of insurance risk continued
reinsurance. Following this review, the Reserving Committee makes recommendations to the Audit Committee and the
Managing Agent’s Board of Directors of the claims provisions to be established.
The Managing Agent’s in-house actuaries perform a reserving analysis on a quarterly basis liaising closely with subject matter
experts within the underwriting, claims and reinsurance functions. The aim of this exercise is to produce a probability-
weighted average of the expected future cash outflows arising from the settlement of incurred claims. These projections
include an analysis of claims development compared to the previous ‘best estimate’ projections. The output of the reserving
analysis is compared on a twice-yearly basis to the independent analysis performed by the external consulting actuaries.
In addition, claims development is monitored against expectations on a monthly basis and reported to the Executive
Committee to give an early indication of changes expected at the next reserving analysis. The claims development table in
note number 18 shows the actual claims incurred to previous estimates for the last 10 years.
In arriving at the level of claims provisions a margin is applied over and above the actuarial best estimate so as to minimise
the likelihood of any adverse run-off deviation.
Concentration of insurance risk
The Syndicate’s underwriting covers various classes of business which, to some extent, have different exposure profiles and
therefore provide an element of diversification. The Managing Agency monitors the type of business underwritten by the
Syndicate at a whole account level and, where appropriate, adjusts either the business mix or the level of reinsurance
protection in place to try to reduce the extent of overly concentrated exposures.
The table below provides an analysis of the geographical breakdown of the Syndicate's gross written premium by class of
business.
As at 31 December 2025
Accident
and health
$’000
Marine,
aviation and
transport
$’000
Fire and
other
damage to
property
$’000
Reinsurance
$’000
Total
$’000
United Kingdom
56 92 68 5,199 5,415
US
— — 106,801 97,864 204,665
European Union Member States
— 973 525 6,837 8,335
Other countries (including Worldwide)
14,696 20,516 35,818 105,548 176,578
Total 14,752 21,581 143,212 215,448 394,993
As at 31 December 2024
Accident
and health
$’000
Marine,
aviation and
transport
$’000
Fire and
other
damage to
property
$’000
Reinsurance
$’000
Total
$’000
United Kingdom 10 148 — 5,194 5,352
US 2 691 125,896 92,959 219,548
European Union Member States — 2,002 — 4,374 6,376
Other countries (including Worldwide)
9,879 18,472 51,907 119,202
199,460
Total
9,891 21,313 177,803 221,729 430,736
Sensitivity of insurance risk
The frequency and severity of claims in respect of the Syndicate can be affected by several factors. The Syndicate specialises
in Non-marine reinsurance, Aviation reinsurance, and Direct and facultative property insurance. These accounts are
predominantly short-tail in nature, and some of them have a high degree of catastrophe exposure (for example the property
accounts could be affected by hurricane or earthquake losses).
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
26
4 Risk and Capital Management continued
Insurance Risk continued
Sensitivity of insurance risk continued
The catastrophe-exposed nature of these accounts is managed through the Syndicate’s underwriting strategy, aggregate
management and reinsurance arrangements.
Underwriting limits are in place to support appropriate risk selection criteria and loss aggregates are reviewed and managed
by the Syndicate. LSL is committed to monitoring and managing the financial risks from climate change in line with its
stated risk appetite. ESG underwriting guidelines have been established for the Lancashire Group that have been applicable
to all classes of business from 1st January 2022. The guidelines apply to all new business, with renewals in scope with effect
from 1st January 2030.
The reinsurance arrangements include excess and catastrophe coverage. These arrangements are designed to mitigate the
impact of any significant losses to a more manageable level. The Syndicate models various loss scenarios and also runs
specific realistic disaster scenarios ("RDS") in accordance with Lloyd’s franchise guidelines to enable it to monitor the
exposure at a gross and net level.
Based on the July 2025 Lloyd’s RDS submission using AIR v10, the largest RDS on a gross basis remains the North-East USA
windstorm event at $352.7m. The largest event net of reinsurance recoveries and reinstatement costs is also North-East USA
windstorm at $154.7m [unaudited and is not part of the financial statements].
The following table presents the sensitivity of the value of insurance liabilities disclosed in the accounts to potential
movements in the assumptions applied within the technical provisions. Given the nature of the business underwritten by the
Syndicate, the approach to calculating the technical provisions for each class can vary and as a result the sensitivity
performed is to apply a beneficial and adverse risk margin to the total insurance liability.
Management deem a range of +/-2.5% and +/-5.0% to be reasonable in showing sensitivities in insurance liabilities based on
the ultimate cost of settling gross claims.
| 31 December 2025 | Movement in claims reserves | |||
| +2.5% | -2.5% | +5.0% | -5.0% | |
Impact on gross liabilities | 13,872 | (13,872) | ( | |
Impact on net liabilities | 8,431 | (8,431) | | ( |
Impact on profit for the year and members' balances | 8,431 | (8,431) | 16,863 | (16,863) |
| 31 December 2024 | Movement in claims reserves | |||
| +2.5% | -2.5% | +5.0% | -5.0% | |
Impact on gross liabilities | 13,797 | (13,797) | | ( |
Impact on net liabilities | 8,683 | (8,683) | | ( |
Impact on profit for the year and members' balances | 8,683 | (8,683) | 17,367 | (17,367) |
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 basis. A climate value at risk ("VaR") has
been implemented to provide a forward looking return-based valuation assessment to measure climate-related risks and
opportunities in the investment portfolio.
Credit Risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
27
4 Risk and Capital Management continued
Credit Risk continued
The Syndicate is exposed to credit risk in respect of the following:
• Debt securities;
• Reinsurers’ share of insurance liabilities;
• Amounts due from intermediaries;
• Amounts due from reinsurers in respect of settled claims; and
• Cash and cash equivalents.
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.
The Group Reinsurance Security Committee has established guidelines for managing its exposure to a single counterparty.
These guidelines are regularly reviewed by this committee and adjusted as appropriate by the Managing Agency’s board. The
Lancashire Group's Broker Vetting Committee considers the approval of all new brokers, and reviews all approved brokers
on a three year cycle.
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 and investment grade corporate 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, with a minimum rating of AAA to A-.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored as part of its 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 Group Reinsurance Security Committee assesses the creditworthiness of reinsurers by reviewing public rating
information and by internal investigations. The impact of potential 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. The Syndicate
does not hold any collateral as security or purchase any credit enhancements (such as guarantees, credit derivatives and
netting arrangements that do not qualify for offset).
The following table analyses the credit rating by investment grade of financial investments, reinsurers’ share of claims
outstanding, debtors arising out of reinsurance operations, cash at bank and in hand, and other assets that are neither past
due, nor impaired.
| As at 31 December 2025 | AAA to A- $’000 | BBB+ to B- $’000 | Unrated $’000 | Total $’000 |
Debt securities and other fixed income securities | | | | |
Overseas Deposits | | | | |
Cash and cash equivalents | | | | |
Deposits with ceding undertakings | | | | |
Reinsurers' share of claims outstandings | | | | |
Debtors arising out of direct insurance operations | | | | |
Debtors arising out of reinsurance operations | | | | |
Other debtors and accrued interest | | | | |
| Total | | | | |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
28
4 Risk and Capital Management continued
Credit Risk continued
Exposure to credit risk continued
| As at 31 December 2024 | AAA to A- $’000 | BBB+ to B- $’000 | Unrated $’000 | Total $’000 |
Debt securities and other fixed income securities | | | | |
Overseas Deposits | | | | |
| Cash and cash equivalents | | | | |
| Deposits with ceding undertakings | | | | |
| Reinsurers' share of claims outstandings | | | | |
| Debtors arising out of direct insurance operations | | | | |
| Debtors arising out of reinsurance operations | | | | |
| Other debtors and accrued interest | | | | |
| Total | | | | |
Of the $10.0m (2024: $8.6m) unrated reinsurers' share of claims outstanding, $4.0m (2024: $1.6m) is fully collateralised in
trust funds and $1.4m (2024: $2.2m) relates to a handful of specific unsettled recoveries from reinsurers that have
subsequently merged or been taken over by another reinsurer and therefore the original counterparty is no longer rated.
However, no recovery issues are currently anticipated with respect to these specific counterparties.
Of the $89.0m (2024: $76.5m) unrated debtors arising out of reinsurance operations, $88.9m (2024: $76.4m) is due from
ceding insurers under reinsurance business and $0.1m (2024: $0.1m) relates to reinsurance recoverable on paid claims.
The total unrated financial investments represent cash and overseas deposits held in trust funds.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not impaired at
the reporting date. The Syndicate does not consider these debtors to be impaired on the basis of stage of collection of
amounts owed to the Syndicate.
| As at 31 December 2025 | Neither past due nor impaired assets $'000 | Past due but not impaired assets $'000 | Gross value of impaired assets $'000 | Impairment allowance $'000 | Total $'000 |
Debt securities and other fixed income securities | | | | | |
Overseas deposits | | | | | |
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, including letters of credit and bank guarantees | | | | | |
| Total | | | | |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
29
4 Risk and Capital Management continued
Credit Risk continued
As at 31 December 2024 | Neither past due nor impaired assets $'000 | Past due but not impaired assets $'000 | Gross value of impaired assets $'000 | Impairment allowance $'000 | Total $'000 |
| Debt securities and other fixed income securities | | | | | |
| Overseas deposits | | | | | |
| 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, including letters of credit and bank guarantees | | | | | |
| Total | | | |
An analysis of the carrying amounts of past due but not impaired debtors is presented in the table below.
As at 31 December 2025
0-3 months
past due
$’000
3-6 months
past due
$’000
6-12 months
past due
$’000
Greater than
1 year past
due
$’000
Total
$’000
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Total 38,145 439 2,042 6,953 47,579
As at 31 December 2024
0-3 months
past due
$’000
3-6 months
past due
$’000
6-12 months
past due
$’000
Greater than
1 year past
due
$’000
Total
$’000
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Total
Liquidity Risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its insurance contracts
and financial liabilities. The Syndicate is exposed to daily calls on its available cash resources mainly from claims arising from
insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing liquidity risk
have not changed significantly from the prior year.
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Syndicate’s reputation. The Syndicate’s approach to managing its liquidity risk is as follows:
• Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance contracts over the short,
medium and long term;
• The Syndicate purchases assets with durations not greater than its estimated insurance contract outflows;
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
30
4 Risk and Capital Management continued
Liquidity Risk continued
Management of liquidity risk continued
• Assets purchased by the Syndicate are required to satisfy specified marketability requirements;
• The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts;
• The Syndicate holds significant committed borrowing facilities to enable cash to be raised in a relatively short timespan,
details of which are set out in Note 26; and
• The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid financial resources are in
place to meet obligations as they fall due in the event of reasonably foreseeable abnormal circumstances.
The following table shows the financial liabilities (gross provision for outstanding claims and creditors) grouped into
maturity dates.
As at 31 December 2025 | < 1 year $’000 | 1-3 years $’000 | 4-5 years $’000 | > 5 years $’000 | Total $’000 |
Gross provision for claims outstanding | | ||||
Creditors | | | | | |
Total | | | | |
As at 31 December 2024 | < 1 year $’000 | 1-3 years $’000 | 4-5 years $’000 | > 5 years $’000 | Total $’000 |
Gross provision for claims outstanding | | | | | |
Creditors | | | | ||
Total | | | | |
Operational Risk
Operational risk is the risk of loss from people, processes, systems or external events with origins outside the scope of other
risk categories. The Managing Agent actively monitors and controls its operational risks. LSL recognises that the ability to
continue operations in the event of a business interruption, whether from a major disaster or minor incident, is a
fundamental factor in meeting the expectations of its customers and internal and external stakeholders. Both the Syndicate
and Lloyd’s have a formal disaster recovery plan which, in the event of an incident, will support alternative strategies to
ensure business continuity and operational resilience.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will fluctuate
because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return on risk. The nature of the Syndicate exposures to market risk and its objectives, policies and
processes for managing market risk have not changed significantly from the prior year.
Management of market risks
For each of the major components of market risk, the Syndicate has policies and procedures in place which detail how each
risk should be managed and monitored. The management of each of these major components of market risk and the
exposure of the Syndicate at the reporting date to each major risk is addressed as follows:
Interest rate risk
Interest rate risk arises primarily from the Syndicate’s financial investments, cash and overseas deposits. 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.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
31
4 Risk and Capital Management continued
Market Risk continued
Currency risk
The Syndicate writes business primarily in US dollars, Canadian dollars, Sterling and Euros and is therefore exposed to
currency risk arising from fluctuations in the exchange rates of US Dollars against these currencies.
The foreign exchange policy is to, as far as possible, maintain assets in the currency in which the cash flows from liabilities
are to be settled in order to match the currency risk inherent in these contracts. The table below summarises the carrying
value of the Syndicate’s assets and liabilities, at the reporting date.
As at 31 December 2025 | GBP | USD | EUR | CAD | Total |
| $'000 | $'000 | $'000 | $'000 | $'000 | |
Investments | | | | | |
Reinsurers' share of technical provisions | | ||||
Debtors | | | | | |
Other assets | | | | ||
Prepayments and accrued income | | | | | |
Total assets | | | | ||
Technical provisions | ( | ( | ( | ( | ( |
Creditors | ( | ( | ( | ( | ( |
Accruals and deferred income | ( | ( | ( | ( | ( |
Total liabilities | ( | ( | ( | ( | ( |
Total Capital and reserves | ( | ( | ( | ( | ( |
As at 31 December 2024 | GBP | USD | EUR | CAD | Total |
| $'000 | $'000 | $'000 | $'000 | $'000 | |
Investments | | | | ||
Reinsurers' share of technical provisions | | | | | |
Debtors | |||||
Other assets | | | |||
Prepayments and accrued income | | | ( | | |
Total assets | | | | | |
Technical provisions | ( | ( | ( | ( | ( |
Creditors | ( | ( | ( | ( | ( |
Accruals and deferred income | ( | ( | ( | ( | ( |
Total liabilities | ( | ( | ( | ( | ( |
Total Capital and reserves | ( | ( | ( | ( | ( |
The Syndicate participates in the currency conversion scheme at Lloyd’s and as a result holds assets and liabilities in the four
currencies disclosed above. Any other currencies are converted to sterling and disclosed under the GBP caption.
Sensitivity analysis to market risks for financial instruments
An analysis of the Syndicate’s sensitivity to interest rate and currency risk is presented in the tables below. The tables show
the effect on profit or loss of reasonably possible changes in the relevant risk variable, assuming that all other variables
remain constant, if that change had occurred at the end of the reporting period and had been applied to the risk exposures
at that date.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
32
4 Risk and Capital Management continued
Currency Risk continued
| Interest rate risk | 2025 $'000 | 2024 $'000 |
Increase/(decrease) on profit for the year ended | ||
+50 basis points increase | ( | ( |
| - 50 basis points decrease | ||
+100 basis points increase | (7,112) | (5,776) |
-100 basis points decrease | 7,112 | 5,776 |
Currency risk 2025
$'000
2024
$'000
Increase/(decrease) on profit for the year ended
10% strengthening of Sterling to US Dollar
(1,944)
(26)
10% weakening of Sterling to US Dollar
1,944
26
10% strengthening of Euro to US Dollar
1,433
(639)
10% weakening of Euro to US Dollar
(1,433)
639
10% strengthening of Canadian Dollar to US Dollar
3,330
533
10% weakening of Canadian Dollar to US Dollar
(3,330)
(533)
Capital Management Risk
Capital framework at Lloyd’s
The Society of Lloyd’s ("Lloyd’s") is regulated by the Financial Conduct Authority ("FCA") and the Prudential Regulatory
Authority ("PRA"), under the Financial Services and Markets Act 2000, and in accordance with the UK's Solvency UK
prudential framework. This reflects the finalised transition from Solvency II to Solvency UK effective year end 2024.
Capital framework at Lloyd’s continued
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that Lloyd’s
would comply with the Solvency UK requirements, and beyond that to meet its own financial strength, licence and ratings
objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at Syndicate level as a starting
point, the requirement to meet Solvency UK and Lloyd’s capital requirements apply overall and member level only
respectively. Accordingly, the capital requirement in respect of Syndicate 2010 is not disclosed in these annual accounts.
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 in accordance with the Solvency UK framework. This amount must be sufficient to cover a
1 in 200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate
must also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year
SCR) for Lloyd’s to use in meeting Solvency UK requirements. The SCRs of each Syndicate are subject to review by Lloyd’s
and approval by the Lloyd’s Capital and Planning Group.
A Syndicate comprises one or more underwriting members of Lloyd’s. Each member is liable for its own share of
underwriting liabilities on the Syndicates on which it is participating but not other members’ shares. Accordingly, the capital
requirements that Lloyd’s sets for each member operate on a similar basis. Each member’s SCR shall thus be determined by
the sum of the member’s share of the Syndicate’s SCR ‘to ultimate’. Where a member participates on more than one
Syndicate, a credit for diversification is provided to reflect the spread of risk, but consistent with determining an SCR which
reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a
capital uplift to determine the member’s capital requirement, known as the Economic Capital Assessment ("ECA"). The
purpose of this uplift, which is a Lloyd’s and not a Solvency UK requirement, is to meet Lloyd’s financial strength, licence
and ratings objectives. The capital uplift applied for 2025 was maintained at 35.0% (unaudited and is not part of the financial
statements) of the members' SCR ‘to ultimate’.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
33
4 Risk and Capital Management continued
Capital Management Risk continued
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), assets held 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, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported on the
Balance Sheet on page 17, represent resources available to meet members’ and Lloyd’s capital requirements.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
34
5 Analysis of Underwriting Result
An analysis of the underwriting result before investment return for the year and the net technical provisions for the year end
is presented in the table below:
31 December 2025 | ||||||
Type of business | Gross premiums written $’000 | Gross premiums earned $’000 | Gross claims incurred $’000 | Gross operating expenses $’000 | Reinsurance balance $’000 | Total excluding investment return $’000 |
Direct insurance | ||||||
Accident and health | | ( | ( | ( | ||
Marine, aviation and transport | | ( | ( | ( | ||
Fire and other damage to property | | ( | ( | ( | | |
| | ( | ( | ||||
Reinsurance acceptances | | ( | ( | ( | | |
Total | | ( | ( | |
31 December 2025 | ||||||
Gross premiums written $’000 | Gross premiums earned $’000 | Gross claims incurred $’000 | Gross operating expenses $’000 | Reinsurance balance $’000 | Total excluding investment return $’000 | |
Fire and damage to property of which is: | ||||||
Specialities | | ( | ( | ( | ( | |
Energy | | ( | ( | | |
31 December 2024 | ||||||
Type of business | Gross premiums written $’000 | Gross premiums earned $’000 | Gross claims incurred $’000 | Gross operating expenses $’000 | Reinsurance balance $’000 | Total excluding investment return $’000 |
Direct insurance | ||||||
Accident and health | | ( | ( | | | |
Marine, aviation and transport | | ( | ( | | | |
Fire and other damage to property | | ( | ( | ( | ||
| ( | ( | | | |||
Reinsurance acceptances | | ( | ( | ( | | |
Total | | ( | ( | ( | |
31 December 2024 | ||||||
Additional analysis | Gross premiums written | Gross premiums earned | Gross claims incurred | Gross operating expenses | Reinsurance balance $’000 | Total excluding investment return $’000 |
Fire and damage to property of which is: | ||||||
Specialities | | ( | ( | ( | ( | |
Energy | | ( | ( | ( | |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
35
5 Analysis of Underwriting Result continued
The gross premiums written for direct insurance by location is presented in the table below. All premiums written are for
contracts with external customers and are concluded in the UK, except for EU-domiciled business which is written through
Lloyd's Europe, reinsured to the Syndicate and concluded in Belgium.
2025 $'000 | 2024 $'000 | |
United Kingdom | | |
US | | |
European Union Member States | | |
Other countries (including Worldwide) | | |
Total | |
6 Net Operating Expenses
2025 $'000 | 2024 $'000 | |
Brokerage and commissions | | |
Change in deferred acquisition costs | | ( |
Administrative expenses | | |
Members' standard personal expenses | | |
Reinsurance commissions and profit participation | ( | ( |
Total | | |
Total commissions for direct insurance business in the year amounted to:
2025 $'000 | 2024 $'000 | |
Total commission for direct insurance business | | |
Administrative expenses include:
2025 $'000 | 2024 $'000 | |
Auditors’ remuneration: | ||
Audit of the Syndicate annual accounts | | |
Other services pursuant to regulations and Lloyd's Byelaws | | |
Total | 671 | 694 |
7 Staff Number and Costs
Lancashire Insurance Services Limited ("LISL") pays all salaries to the employees and recharges a proportion to LSL, which
in turn recharges the Syndicate. All staff are employed by LISL. The following amounts were recharged by LSL to the
Syndicate in respect of salary costs:
2025 $'000 | 2024 $'000 | |
Wages and salaries | | |
Social security costs | | |
Pension costs | | |
Total | | |
The average number of employees employed by LISL but working for the Syndicate during the year, analysed by category, is
as follows:
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
36
7 Staff Number and Costs continued
2025 Number | 2024 Number | |
Operations, administration and finance | | |
Underwriting and claims | 50 | 46 |
Total | | |
8 Emoluments of the Directors of Lancashire Syndicates Limited
The Syndicate has incurred the following amounts in respect of emoluments paid to its Managing Agent’s Directors,
excluding the Active Underwriter of the Syndicate (see Note 9). Fees relates to fees paid to the Non-Executive Directors.
2025 $'000 | 2024 $'000 | |
Emoluments | | |
Fees | | |
Other benefits | 487 | 432 |
9 Active Underwriter’s Emoluments
The Active Underwriter, the highest paid Director by salary, received the following aggregate remuneration charged to the
Syndicate:
2025 $'000 | 2024 $'000 | |
Emoluments | | |
Other benefits | 113 | 250 |
10 Investment Return
The investment return transferred from the technical account to the non-technical account comprises the following:
2025 $'000 | 2024 $'000 | |
Investment income: | ||
Interest and dividend income | | |
Realised gains on investments | | |
Unrealised gains on investments | | |
Investment expenses and charges: | ||
Investment management expenses, including interest | ( | ( |
Realised losses on investments | ( | ( |
Unrealised gains / (losses) on investments | | ( |
Investment return transferred to the technical account from the non-technical account | | |
The total income, expenses, net of gains or losses, including changes in fair value, recognised on all financial assets and
financial liabilities comprises the following:
2025
$'000
2024
$'000
Financial assets at fair value through profit or loss
23,154
17,410
Investment management expenses, excluding interest
(420)
(102)
Total investment return
22,734
17,308
There are no impairment losses on any financial assets recognised in administrative expenses included in technical account
(2024: $nil).
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
37
10 Investment Return continued
The average Syndicate funds available for investment and investment yield in the calendar year by currency is as follows:
31 December 2025
31 December 2024
Average
funds
$'000
Investment
yield
%
Average
funds
$'000
Investment
yield
%
Sterling
11,838
24.8
15,061 18.4
Euro
32,739
3.0
17,858 4.7
US Dollars
248,415
6.9
180,002 6.2
Canadian Dollars
43,763
3.9
36,250 6.8
All currencies converted to US Dollars
336,755
6.8
249,171 6.9
11 Financial Investments
| Carrying value | Cost | |||
As at 31 December | 2025 $'000 | 2024 $'000 | 2025 $'000 | 2024 $'000 |
Shares and other variable yield securities and units in unit trusts | ||||
Debt securities and other fixed income securities | ||||
Overseas deposits | ||||
Total | ||||
All financial assets are measured at fair value through profit or loss. The amount ascribable to listed investments is $368.9m
(2024: $273.7m).
The Syndicate classifies its financial instruments held at fair value in its Balance Sheet using a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
• Level 1 – investments are securities with quoted prices for identical assets or liabilities in active markets. 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 – investments are securities with quoted prices in active markets for similar assets or liabilities, or securities valued
using other valuation techniques for which all significant inputs are based on observable market data. Instruments
included in Level (ii) are valued through independent external sources using directly observable inputs to models or
other valuation methods. The valuation methods used are typically of an industry-accepted standard and include broker-
dealer quotes and pricing models, including present values and future cash flows, together with inputs such as yield
curves, interest rates, prepayment profiles, and default rates.
• Level 3 – investments are securities for which valuation techniques are not based on observable market data, and therefore
require significant management judgement to determine an appropriate fair value. The Syndicate determines securities
classified as Level 3 to include loans made by the Lloyd's syndicate platforms to the Lloyd's central fund.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
38
11 Financial Investments continued
The table below analyses financial instruments held at fair value in the Syndicate’s Balance Sheet at the reporting date by its
level in the fair value hierarchy:
| As at 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 | | | | |
Overseas deposits | | | | |
Total | | | | |
| As at 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 | | | | |
Overseas deposits | | | | |
Total | | | | |
In the current financial year, the company revised it's investment levelling methodology, to better reflect the fair value
hierarchy and align with the group holding company. 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.
Shares and other variable securities and units in unit trusts are generally categorised as level 1 in the fair value hierarchy
except where they are not actively traded. This includes the Syndicate loans to central fund. The loan has no fixed
repayment date and has been classified as level 3; a valuation model has been used to approximate fair value. The Syndicate
has no exposure to hedge funds.
Debt securities and derivative financial assets 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.
Movement in level 3 investments
The following table provides an analysis of investments values with reference to level 3 inputs.
2025
$'000
2024
$'000
As at 1 January
1,776
2,835
Repayments
(1,919)
(897)
Net loss recognised in profit or loss
—
(127)
Foreign exchange
143
(35)
As at 31 December
—
1,776
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
39
12 Deposits with Ceding Undertakings
As at 31 December
2025
$'000
2024
$'000
Deposits with approved credit institutions
1,179
1,813
13 Debtors Arising Out of Direct Insurance Operations
As at 31 December | 2025 $'000 | 2024 $'000 |
Due within one year | | |
14 Debtors Arising Out of Reinsurance Operations
As at 31 December | 2025 $'000 | 2024 $'000 |
Due within one year | | |
15 Other Debtors
As at 31 December | 2025 $'000 | 2024 $'000 |
Amounts due from members | | |
VAT recoverable | | |
Total | | |
16 Cash and Cash Equivalents
As at 31 December | 2025 $'000 | 2024 $'000 |
Cash and cash equivalents consist of: | ||
Cash at bank and in hand | | |
Holdings in collective investment schemes | | |
Total | | |
Cash and cash equivalents represents cash at bank and in hand, short term bank deposits and other short-term highly liquid
investments that are subject to insignificant risk of change in fair value.
17 Deferred Acquisition Costs
2025 $'000 | 2024 $'000 | |
As at 1 January | | |
Acquisition costs incurred in the year | | |
Amounts used in the year | ( | ( |
Effect of movement in exchange rates | | ( |
As at 31 December | | |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
40
18 Claims Development
Claims development is shown in the tables below on an underwriting year basis. Balances have been translated at exchange
rates as at 31 December 2025. These balances are reflected on the Balance Sheet.
| Underwriting Year - Gross | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At end of the year of account | | | | | | | | | | | |
One year later | | | | | | | | | | ||
Two years later | | | | | | | | | |||
Three years later | | | | | | | | ||||
Four years later | | | | | | | |||||
Five years later | | | | | | ||||||
Six years later | | | | | |||||||
Seven years later | | | | ||||||||
Eight years later | | | |||||||||
Nine years later | | ||||||||||
Estimate of gross claims reserve | | | | | | | | | | | |
Provision in respect of prior years | | ||||||||||
Less gross claims paid | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( |
Gross claims reserves | | | | | | | | | | | |
| Underwriting Year - Ceded | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At end of the year of account | 11,333 | 137,860 | 49,694 | 46,437 | 37,061 | 100,986 | 66,366 | 4,106 | 1,755 | 9,952 | |
One year later | 28,714 | 164,609 | 89,545 | 67,227 | 50,145 | 109,337 | 40,074 | 7,102 | 36,844 | ||
Two years later | 31,529 | 157,819 | 107,619 | 58,597 | 50,897 | 102,877 | 37,135 | 8,129 | |||
Three years later | 32,316 | 155,140 | 99,121 | 45,352 | 47,785 | 157,012 | 32,705 | ||||
Four years later | 31,461 | 150,678 | 113,761 | 42,558 | 45,768 | 231,536 | |||||
Five years later | 30,439 | 149,382 | 112,165 | 44,114 | 60,140 | ||||||
Six years later | 30,965 | 148,812 | 115,714 | 43,563 | |||||||
Seven years later | 30,643 | 148,616 | 113,354 | ||||||||
Eight years later | 29,626 | 150,503 | |||||||||
Nine years later | 29,338 | ||||||||||
Estimate of RI ultimate claims | 29,338 | 150,503 | 113,354 | 43,563 | 60,140 | 231,536 | 32,705 | 8,129 | 36,844 | 9,952 | 716,064 |
Provision in respect of prior years | 15,428 | ||||||||||
Less RI claims paid | (24,039) | (144,171) | (97,095) | (34,339) | (36,942) | (149,492) | (19,750) | (3,592) | (3,087) | (1,360) | (513,867) |
RI claims reserves | 5,299 | 6,332 | 16,259 | 9,224 | 23,198 | 82,044 | 12,955 | 4,537 | 33,757 | 8,592 | |
| 217,625 |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
41
18 Claims Development continued
| Underwriting Year - Net | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At end of the year of account | | | | | | | |||||
One year later | | | | | | | | | |||
Two years later | | | | | | ||||||
Three years later | | | | | | ||||||
Four years later | | | | | |||||||
Five years later | | | | ||||||||
Six years later | | | |||||||||
Seven years later | | ||||||||||
Eight years later | | ||||||||||
Nine years later | |||||||||||
Estimate of net claims reserves | | | | | | | | | | | |
Provision in respect of prior years | | ||||||||||
Less net claims paid | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( |
Net claims reserves | | | | | | | |
19 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.
Gross provisions $’000 | Reinsurance assets $’000 | 2025 net $'000 | Gross provisions $’000 | Reinsurance assets $’000 | 2024 net $'000 | |
Claims outstanding: | ||||||
Claims notified | 195,697 | (70,505) | 125,192 | 239,485 | (82,136) | 157,349 |
Claims incurred but not reported | 356,165 | (134,027) | 222,138 | 317,168 | (102,140) | 215,028 |
As at 1 January | ( | | ( | | ||
Change in prior year provisions | ( | | ( | | ||
Expected cost of current year claims | ( | | ( | | ||
Claims paid during the year | ( | ( | ( | | ( | |
Effects of movements in exchange rates | ( | | ( | | ( | |
As at 31 December | ( | | ( | |||
Claims notified | 188,801 | (64,010) | 124,791 | 195,697 | (70,505) | 125,192 |
Claims incurred but not reported | 366,079 | (153,615) | 212,464 | 356,165 | (134,027) | 222,138 |
As at 31 December | 554,880 | (217,625) | 337,255 | 551,862 | (204,532) | 347,330 |
Provision for unearned premiums: | ||||||
As at 1 January | ( | | ( | | ||
Premiums written during the year | ( | | ( | | ||
Premiums earned during the year | ( | | ( | ( | | ( |
Effects of movements in exchange rates | ( | | ( | | ( | |
As at 31 December | ( | | ( | |
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
42
20 Creditors Arising Out of Direct Insurance Operations
As at 31 December | 2025 $'000 | 2024 $'000 |
Due within one year |
21 Creditors Arising Out of Reinsurance Operations
As at 31 December | 2025 $'000 | 2024 $'000 |
Due within one year |
22 Other creditors
As at 31 December | 2025 $'000 | 2024 $'000 |
Intercompany balances | ||
Member's agent fees | ||
Total |
23 Analysis of net debt
At 1 January 2025 | Cash flow | Acquired | Fair value & exchange movements | Non-cash changes | At 31 December 2025 | |
Cash and cash equivalents | | ( | | | |
24 Foreign Exchange Rates
The following currency exchange rates have been used for principal foreign currency transactions:
2025 year end rate | 2025 average rate | 2025 opening rate | 2024 year end rate | 2024 average rate | 2024 opening rate | |
US dollar | | | | | ||
Sterling | | | | | ||
Euro | | | | | ||
Canadian dollar | | | | |
25 Related Parties
LSL manages Syndicates 2010 and 3010. Cathedral Capital Holdings Limited (“CCHL”), registered in England and Wales, is
the immediate parent company of LSL. Lancashire Holdings Limited (“LHL”), registered in Bermuda, is the ultimate parent
company of LSL. LHL is the largest and smallest Group which includes LSL and for which the consolidated annual accounts
are prepared.
Within the Lancashire Group there are two (re)insurance companies, Lancashire Insurance Company (UK) Limited
(incorporated in the UK) ("LUK") and Lancashire Insurance Company Limited (incorporated in Bermuda) ("LICL"). As at
31 December 2025, the Syndicate owes LICL $nil (2024: $nil) for outwards reinsurance paid on behalf of the Syndicate for
the Syndicate's share of the Group reinsurance cover. In addition, the Lancashire Group includes Lancashire Capital
Management Limited (incorporated in Bermuda) which is the underwriting manager for Kinesis Reinsurance Limited, a
special purpose insurer. There have been no transactions with this latter company.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
43
25 Related Parties continued
Total Managing Agency fees charged during calendar year 2025 by LSL in respect of services provided to the Syndicate
amounted to $3.3m (2024: $3.3m). The amount of profit commission to the Managing Agent incurred in 2025 is $10.5m
(2024: $17.5m).
A number of Non-Executive Directors are also directors of other Lloyd’s and non-Lloyd’s insurance entities. Those syndicates
and insurance companies may from time to time transact business with the syndicates managed by LSL. All such insurance
contracts will have been dealt with on an arm’s length basis.
Alex Maloney, Group CEO of LHL, and his spouse acquired 100% of the shares in Nameco 801 on 7 November 2016.
Nameco 801 provides capacity to a number of Lloyd’s syndicates including Syndicate 2010. Nameco 801 has provided $0.2m
of capacity to Syndicate 2010 for the 2025 year of account ($0.2m for the 2024 year of account). Mr Maloney receives a
proportionate share of the underwriting results of Syndicate 2010 to which he is contractually entitled through his
participation.
The administrative expenses disclosed in Note 6 were recharged to the Syndicate by LSL. Where expenses were incurred
jointly by the Managing Agent and the Syndicate, they were apportioned as follows:
• Salaries and related costs - according to the estimated time of each individual spent on syndicate matters
• Accommodation costs - according to the number of personnel
• Other costs - as appropriate in each case
Amounts owed to LSL at 31 December 2025 totalled $17.4m (2024: $13.6m) and are included in “Other creditors including
taxation and social security” and "accruals and deferred income". This includes amounts due to LSL in relation to managing
agents profit commission, members' agents fees and recharged expenses.
Cathedral Capital (1998) Limited ("CC98"), a subsidiary of CCHL, provided capacity to the 2023, 2024 and
2025 underwriting years. Amounts owed to Cathedral Capital (1998) Limited as at 31 December 2025 totalled $104.3m
(2024: $18.7m), which is further explained in Note 27.
In the normal course of business Syndicate 2010 has underwritten reinsurances of Syndicate 3010 and LICL. The net
receivable from LICL amounted to $nil (2024: $0.9m). These contracts were entered into and dealt with on a purely
commercial arms-length basis and are in the interests of all names on the Syndicate. The following reinsurances of Syndicate
2010’s business have been placed with related parties.
The Australian service company writes property business for the Syndicate. The total gross written premium recognised in
2025 is $10.1m (2024: $12.5m). This contract was entered into and dealt with on a purely commercial arms-length basis and
in the interests of all names on the Syndicate.
Group reinsurance cover
The Syndicate benefits from a Group aggregate reinsurance policy that covers the Non-marine and Direct Property accounts.
Syndicate 2010's share of outwards premium is $7.7m (2024: $8.6m).
Consortia participation
Syndicate 2010 participates on Aviation Consortia which is led by Syndicate 3010 and managed by LSL. As the manager of
these consortia, LSL charges the Syndicate an annual fee and profit commission in proportion to its share of the signed
premium income and any net profit. The amount of consortia fees outstanding as at 31 December 2025 is $0.1m (2024:
$0.1m). The amount of consortia profit commission outstanding as at 31 December 2025 is $0.8m (2024: $0.7m).
Syndicate 2010 also participates on a further three consortia led by Syndicate 3010: Cargo, Accident and Health and Property
construction. Syndicate 3010 is the manager of these consortia and charges Syndicate 2010, a fee based on a percentage of
signed premium income. The amount of consortia fees outstanding as at 31 December 2025 is $0.6m (2024: $0.9m).
Key management compensation
Key management personnel include all persons having authority and responsibility for planning, directing and controlling
the activities of the Syndicate. These people include both the Executive and Non-Executive Directors of the Managing Agent,
LSL, together with certain other members of the executive management team who are not themselves Directors of the
Managing Agent.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
44
25 Related Parties continued
Key management compensation continued
Details of the cost of the key management compensation charged to the Syndicate are as follows:
Key management compensation
2025
$'000
2024
$'000
Salaries and other short-term employee benefits
1,691
1,897
Post-employment benefits
121
135
Other benefits
645
699
Salaries and other short-term employee benefits for current year includes Employers NI.
26 Bank Facilities
As at 31 December 2025, the Syndicate had in place a $60.0m (2024: $60.0m) catastrophe facility with Barclays Bank PLC.
The facility is available to assist in paying claims and the gross funding of catastrophes for the Syndicate and is utilised by way
of a Letter of Credit (LoC). A separate uncommitted overdraft facility is made available to the Syndicate of $20.0m.
27 Post Balance Sheet Events
Total profits of $104.3m will be transferred to the members’ personal reserve funds on 10 April in respect of the 2023 year of
account (2024: $18.7m profits in relation to the 2022 year of account).
28 Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (‘FAL’). These
funds are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet participating
members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s
based on Prudential Regulatory Authority requirements and resource criteria. The determination of FAL has regard to a
number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the
reserving risk in respect of business that has been underwritten.
Since FAL is not under the management of the Managing Agent, no amount has been shown in these annual accounts 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.
Notes to the Syndicate Annual Accounts
For the year ended 31 December 2025
45
SYNDICATE UNDERWRITING YEAR ACCOUNTS
FOR THE 2023 YEAR OF ACCOUNT
CLOSED AT 31 DECEMBER 2025
46
Opinion
We have audited the Syndicate underwriting year accounts for the 2023 year of account of Syndicate 2010 for the three year
period ended 31 December 2023 which comprise the Statement of Profit or Loss Technical Account - General Business; Statement
of Profit or Loss – Non Technical Account; Balance Sheet; Statement of Changes in Members’ Balances; Statement of Cash Flows
and related notes, including the accounting policies in note 2.
In our opinion the Syndicate underwriting year accounts:
• give a true and fair view of the Syndicate’s profit for the 2023 closed year
• 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 properly prepared in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and in accordance with the requirements of the Lloyd’s Syndicate Accounting Byelaw
(No. 8 of 2005).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Syndicate in
accordance with, UK ethical requirements including the Financial Reporting Council (“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.
Emphasis of matter - non-going concern basis of preparation
We draw attention to the disclosure made in Note 1 to the Syndicate underwriting year accounts which explains that the Syndicate
underwriting year accounts have not been prepared on the going concern basis for the reasons set out in that note. Our opinion
is not modified in respect of this matter.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
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, the audit committee, internal audit 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 Risk and Compliance Committee minutes.
• Considering remuneration incentive schemes and performance targets for management.
• 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 and our overall knowledge of
the control environment, 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 and
judgements such as such as the valuation of insurance contract liabilities.
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 those posted containing key words such as error, restatement, correction; those
posted by individuals who typically do not make journal entries or are not authorized to post journal entries; those posted
without explanation, description, or numerical description only; those posted to seldom used accounts for which the other side
is cash; unusual postings to loss and loss adjustment reserve accounts, gross written premium, premium receivables and expense
accounts; unusual postings to cash accounts for which the other side is not a standard business transaction (including premium
receivable, reinsurance payable, claims paid, reinsurance on paid claims, other receivable, other payable, investment, clearing
intercompany, lease and General & Administrative expense account); any unusual entry to long term debt for which the other
side is not interest payable or interest expense and post-closing journals above our materiality threshold.
• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Independent Auditor’s Report to the Members of Syndicate 2010
- 2023 Closed Year of Account
47
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 financial statements
from our general commercial and sector experience, through discussion with the directors and other management (as required
by auditing standards), from inspection of the Syndicate’s 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 financial statements varies considerably.
Firstly, the Syndicate is subject to laws and regulations that directly affect the financial statements 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 financial statement items.
Secondly, the Syndicate is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, 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, corruption, and bribery, recognising the financial and regulated nature of the Syndicate’s activities and its legal
form. 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 correspondence, 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 financial statements, 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 financial statements, 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 fraud 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 of the Managing Agent (“the Directors”) are responsible for the Report of the Directors of the Managing Agent.
Our opinion on the Syndicate underwriting year accounts does not cover that report and, accordingly, in this audit report we do
not express an audit opinion or 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 underwriting year accounts audit work, the information therein is materially misstated or inconsistent with the
Syndicate underwriting year 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.
Matters on which we are required to report by exception
Under the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Accounting Byelaw (No. 8 of 2005), 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 underwriting year accounts are not in agreement with the accounting records; or
• 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 50, the Directors of the Managing Agent are responsible for: the
preparation of the Syndicate underwriting year accounts 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 underwriting year 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,
Independent Auditor’s Report to the Members of Syndicate 2010
- 2023 Closed Year of Account
48
Independent Auditor’s Report to the Members of Syndicate 2010
- 2023 Closed Year of Account
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 underwriting year 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
underwriting year accounts.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the members of the 2023 closed year of account of the Syndicate (“the Syndicate’s Members”), as a
body, in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005). Our audit work has been undertaken so that we might state to the
Syndicate’s Members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Syndicate and the Syndicate’s
Members, as a body, for our audit work, for this report, or for the opinions we have formed.
Umar Jamil (Senior Statutory Auditor
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
19 February 2026
49
The Directors are responsible for preparing the Syndicate underwriting year accounts in accordance with the Insurance Accounts
Dire
ctive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw.
Reg
ulations require the Directors to prepare underwriting year accounts for each financial year. Under the relevant regulations
they have elected to prepare the underwriting year accounts in accordance with UK accounting standards and applicable law (UK
Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland.
Under Insur
ance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 the directors of the
mana
ging agent must not approve the underwriting year accounts unless they are satisfied that they give a true and fair view of the
result of the underwriting year at closure. In preparing these underwriting year accounts, the directors are required to:
• select suitable accounting policies and where there are items which affect more than one year of account, ensure a treatment
which is equitable between the members of the syndicate affected is used and apply them consistently;
• make judgeme
nts and estimates that are reasonable and prudent;
• sta
te whether applicable UK accounting standards have been followed, subject to any material departures disclosed and
explained in the underwriting year accounts;
• assess the syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading, or have no realistic alternative but to do
so. As explained in Note 1, the directors of the managing agent do not believe that it is appropriate to prepare the
underwriting year accounts on a going concern basis.
The Directors are responsible for keeping adequate and proper accounting records that are sufficient to show and explain the
Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the Syndicate and enable them
to ensure that the underwriting year accounts comply with the Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate
Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw. They are responsible for such internal control as they
determine is necessary to enable the preparation of underwriting year accounts that are free from material misstatement, whether
due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets
of the syndicate and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Syndicate’s website. Legislation in the UK governing the preparation and dissemination of underwriting year accounts may differ
from legislation in other jurisdictions.
By order of the Board
B Cass
Director&ChiefComplianceOfficer
Lancashire Syndicates Limited
19 February 2026
Statement of Managing Agent’s Responsibilities
50
Notes
2025
$'000
Gross premiums written
430,638
Outward reinsurance premiums
(97,637)
Earned premiums, net of reinsurance
333,001
Reinsurance to close premiums received, net of reinsurance
181,539
Allocated investment return transferred from the non-technical account
18,957
Claims incurred, net of reinsurance
Gross amount
(233,296)
Reinsurers’ share
116,575
Net claims paid
(116,721)
Reinsurance to close premium payable, net of reinsurance
7
(186,453)
Claims incurred net of reinsurance
(303,174)
Net operating expenses
3, 5
(136,801)
Balance on the technical account for general business
93,522
The underwriting year has closed and all items therefore relate to discontinued operations.
Statement of Profit or Loss
Technical Account - General Business
2023 Year of Account
For the 36 months ended 31 December 2025
51
Notes
2025
$'000
Balance on technical account for general business
93,522
Investment income and realised gains on investments
6
14,679
Unrealised gains on investments
6
4,253
Investment expenses and charges and realised losses on investments
6
(889)
Unrealised losses on investments
6
914
Allocated investment return transferred to the general business technical account
(18,957)
Exchange gain
10,754
Profit for the closed year of account
104,276
There are no other comprehensive gains or losses for the 36 months ended 31 December 2025.
Statement of Profit or Loss
Non-Technical Account
2023 Year of Account
For the 36 months ended 31 December 2025
52
Notes
2025
$'000
Assets
Investments:
Financial investments
8
234,025
Deposits with ceding undertakings
9
1,179
235,204
Debtors:
Debtors arising out of direct insurance operations
10
—
Debtors arising out of reinsurance operations
11
81,428
Other debtors
12
921
82,349
Reinsurance recoveries anticipated on gross reinsurance to close premiums
payable to close the account
7
175,274
Other assets:
Cash and cash equivalents
13
39,238
39,238
Prepayments and accrued income
2,644
Total Assets
534,709
Liabilities
Amounts due to members
104,276
Reinsurance to close premiums payable to close the account - gross amount
7
361,728
Creditors:
Creditors arising out of direct insurance operations
14
5,576
Creditors arising out of reinsurance operations
14
25,787
Other creditors including taxation and social security
14
36,396
67,759
Accruals and deferred income
946
Total Liabilities
534,709
The notes on pages 56 to 65 form part of these accounts.
The Syndicate underwriting year accounts on pages 51 to 65 were approved by the Board of Lancashire Syndicates Limited and
were signed on its behalf by:
C J Whittle
Director & Chief Financial Officer
B Cass
Director & Chief Compliance Officer
19 February 2026
Balance Sheet
2023 Year of Account
As at 31 December 2025
53
2025
$'000
Members’ balance at 1 January 2023
—
Profit for the closed year of account
104,276
Members’ balance as at 31 December 2025
104,276
Statement of Changes in Members’ Balance
2023 Year of Account
For the 36 months ended 31 December 2025
54
Notes
2025
$'000
Cash flow from operating activities
Profit for the closed year of account
104,276
Adjustments for:
Realised and unrealised investment gains
(6,334)
Income from investments
(12,950)
Net reinsurance to close premium payable
186,454
Increase in debtors
(74,946)
Increase in prepayments and accrued income
(2,115)
Increase in creditors
16,522
Increase in accruals and deferred income
764
Non cash consideration received as part of RITC 15
8,522
Net cash inflow from operating activities
220,193
Cash flows from investing activities
Interest received
12,950
Purchase of debt securities and other fixed income securities
(193,905)
Sale of debt securities and other fixed income securities
—
Net cash (outflow) from investing activities
(180,955)
Increase in cash and cash equivalents in the period
39,238
Cash and cash equivalents as at 1 January 2023
—
Effect of exchange rates and change in market value on cash and cash equivalents
—
Cash and cash equivalents as at 31 December 2025
39,238
Statement of Cash Flows
2023 Year of Account
For the 36 months ended 31 December 2025
55
1 Basis of Preparation
These underwriting year accounts have been prepared under the Insurance Accounts Directive (Lloyd's Syndicate and
Aggregate Accounts) Regulations 2008 ("the Lloyd's Regulations") and in accordance with the Syndicate Accounting Byelaw
(No. 8 of 2005) and applicable Accounting Standards in the United Kingdom, including Financial Reporting Standard 102,
“The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) as issued in August 2014, and
Financial Reporting Standard 103 “Insurance Contracts” (“FRS 103”).
Members participate on a syndicate by reference to a year of account and each syndicate year of account is a separate annual
venture. These accounts relate to the 2023 year of account which has been closed by reinsurance to close at 31 December
2025. Consequently the Balance Sheet represents the assets and liabilities of the 2023 year of account and the Statement of
Profit or Loss, and the Statement of Cash Flows reflect the transactions for that year of account during the 36 month period
until closure.
Whilst the Directors of the Managing Agent have a reasonable expectation that the Syndicate has adequate resources to
continue to operate, these underwriting year accounts represent the participation of members in the 2023 year of account,
which closed on 31 December 2025. Therefore the 2023 year of account is not continuing to trade and, accordingly the
Directors have not adopted the going concern basis in the preparation of these accounts. This has no effect on the amounts
reported in the accounts as the 2023 year of account will be closed by payment of a reinsurance to close premium, as
outlined in note 2 below, which is consistent with the normal course of business for a Lloyd’s syndicate and with the
approach we have applied to earlier underwriting years.
Use of estimates
The underwriting year accounts have been prepared using critical estimates and assumptions that affect the reported
amounts of assets and liabilities. Although these estimates are based on management’s best knowledge of the current events
and actions, actual outcomes may differ from those estimates, possibly significantly. The most significant estimate made by
management is in relation to insurance risk, where the key risk factors impacting managements estimate are disclosed in
Note 4 of the Syndicate Annual Accounts.
2 Significant Accounting Policies
a) Underwriting transactions
The underwriting accounts for each year of account are normally kept open for three years before the result on that year is
determined. At the end of the three-year period, outstanding liabilities can normally be determined with sufficient accuracy
to permit the year of account to be closed by payment of a reinsurance to close premium to the successor year of account.
b) Reinsurance to close premium
The reinsurance to close premium is determined by reference to the outstanding technical provisions (including those for
outstanding claims, IBNR, unearned premiums, net of deferred acquisition costs, and unexpired risks) relating to the closed
year and to all previous closed years reinsured therein. Although this estimate of net outstanding liabilities is considered to
be fair and reasonable, it is implicit in the estimation procedure that the ultimate liabilities will be at variance with the
premium so determined. The reinsurance to close premium transfers the liability in respect of all claims, reinsurance
premiums, return premiums and other payments in respect of the closing year (and previous closed years reinsured therein)
to the members of the successor year of account and gives them the benefit of refunds, recoveries, premiums due and other
income in respect of those years in so far as they have not been credited in these accounts.
c) Premiums written, reinsurance premium ceded and unearned premiums
Gross premiums are allocated to years of account on the basis of the inception date of the policy. Commission and brokerage
are charged to the year of account to which the relevant policy is allocated. Policies written under binding authorities, line
slips or consortium arrangements are allocated to the year of account into which the arrangement incepts. Additional and
return premiums follow the year of account of the original premium. Premiums are shown gross of brokerage payable and
exclude taxes and duties levied on them. Estimates are made for pipeline premiums, representing amounts due but not yet
notified to the Syndicate.
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
56
2 Significant Accounting Policies continued
c) Premiums written, reinsurance premium ceded and unearned premiums continued
Written premium is earned according to the risk profile of the policy. Unearned premiums represent the balance of
premiums written in the period to the Balance Sheet date that relate to unexpired terms of policies in force at that date.
Outwards reinsurance premiums ceded are attributed to the same year as the original risk being protected.
d) Claims and related recoveries
Gross claims paid are allocated to the same year of account as that to which the corresponding premiums are allocated and
include internal and external claims settlement expenses. Reinsurance recoveries are allocated to the year of account to
which the claim was charged.
Outstanding claims comprise amounts set aside for claims notified and claims incurred but not yet reported (“IBNR”).
Notified claims are estimated on a case-by-case basis with regard to the circumstances as reported, any information available
from loss adjusters and previous experience of the cost of settling claims with similar characteristics.
The amount included in respect of IBNR is based on a detailed review of losses and loss development by management and
further reviewed by external consulting actuaries. These techniques generally involve projecting from past experience of the
development of claims over time to form a view of the likely ultimate claims to be experienced for more recent underwriting,
having regard to variations in the business accepted and the underlying terms and conditions. The provision for claims
includes amounts in respect of internal and external claims handling costs. In arriving at the level of claims provisions a
margin is applied over and above the actuarial best estimate so as to minimise any adverse run-off deviation.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and projections for
IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in place for the class of
business, the claims experience for the year and the current security rating of the reinsurance companies involved.
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 methods used, and the estimates made, are reviewed regularly.
e) Acquisition costs
Acquisition costs comprise commission and other internal and external costs related to the acquisition of new insurance
contracts. These are recognised in line with gross earned premiums.
f) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks and other short-term highly
liquid investments with maturities of three months or less from the acquisition date that are subject to an insignificant risk of
changes in fair value, and are used by the Syndicate in the management of its short-term commitments. Cash and cash
equivalents are carried at amortised cost in the balance sheet.
g) Financial Instruments
(i) Financial Investments
As permitted by FRS 102, the Syndicate has elected to apply the recognition and measurement provisions of IAS 39 Financial
Instruments (as adopted for use in the EU) to account for all of its financial instruments. The investments are held for
investment purposes as designated at fair value through profit and loss at inception. A financial asset is classified into this
category at inception if acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of
financial assets in which there is evidence of short-term profit taking, or if so designated by management. The investment
strategy is to manage financial instruments acquired on a fair value basis. The fair values of quoted financial instruments are
based on bid prices at the Balance Sheet date. Unlisted investments for which a market exists are stated at the average price
at which they were traded on the Balance Sheet date or the last trading day before that date.
Realised and unrealised gains and losses on investments classified as fair value through profit and loss are recognised
through the Statement of Profit or Loss.
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
57
2 Significant Accounting Policies continued
g) Financial Instruments continued
(i) Financial Investments continued
All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Syndicate
commits to purchase or sell the asset. Regular way purchases or sales of financial assets require delivery of assets within the
time frame generally established by regulation or convention in the marketplace.
(ii) Other financial assets and liabilities
Insurance debtors and other short-term debtors are classed as loans and receivables under IAS 39, which have fixed or
determinable payments that are not quoted in an active market, are initially recorded at fair value and subsequently held at
amortised cost. These receivables are assessed for impairment on an annual basis. Insurance creditors are initially recorded
at fair value and subsequently held at amortised cost.
h) Fair Value of Financial Assets
The fair value hierarchy is as follows:
(i) Level 1 is financial assets which are measured at quoted prices in an active market, where quoted prices are readily
available, and those prices represent actual and regularly occurring market transactions on an arm’s length basis;
(ii) Level 2 is using a valuation technique based on securities with quoted prices in active markets for similar assets or
liabilities or other valuation techniques for which all significant inputs are based on observable market date. These
investments are valued via independent external sources using modelled or other valuation methods; and
(iii) Level 3 is using a valuation technique based on the Syndicate's own assumptions.
i) Investments and investment return
Investment return comprises investment income, realised investment gains and losses and movements in unrealised gains
and losses, net of investment expenses and charges. Investment return arising in each calendar year on all the Syndicate’s
investments is allocated to open years of account in proportion to the average funds available for investment attributable to
those years. Investment returns in respect of overseas deposits are allocated to the year of account which funded these
deposits.
Realised gains and losses on investments carried at market value are calculated as the difference between sale proceeds and
purchase price. Movements in unrealised gains and losses on investments represent the difference between their valuation at
the Balance Sheet date and their purchase price or, if they have been previously valued, their valuation at the end of the
previous calendar year, together with the reversal of unrealised gains and losses recognised in earlier calendar years in
respect of investment disposals in the current period.
Investment return is initially recorded in the Non-Technical Account. A transfer is made from the Non-Technical Account to
the Technical Account General Business to reflect the investment return on funds supporting underwriting business. All
investment return is considered to arise on such funds.
j) Syndicate operating expenses
Costs incurred by the managing agent in respect of the Syndicate are charged to the Syndicate and included within the
relevant profit and loss account heading. Where expenses do not relate to any specific year of account they are apportioned
between years of account on a basis which reflects the benefit obtained by each year of account from each type of expense.
Where expenses are incurred jointly by the managing agent and the Syndicate, they are apportioned as follows:
Salaries and related costs – according to the estimated time of each individual spent on syndicate matters
Accommodation costs – according to the number of personnel
Other costs – as appropriate in each case
Lancashire Insurance Services Limited operates a defined contribution pension scheme. Pension contributions relating to
staff are recharged to the Syndicate via LSL as incurred and are included within net operating expenses. Amounts recharged
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
58
2 Significant Accounting Policies continued
j) Syndicate operating expenses continued
by the managing agent include costs arising from the use of assets in the period. These rental costs are expensed in full in
the period to which the recharge relates.
k) Taxation
Under Schedule 19 of the Finance Act 1993 Managing Agents are not required to deduct basic rate income tax from trading
income. In addition, all UK basic income tax deducted from syndicate investment income is recoverable by Managing Agents
and consequently the distribution made to members is gross of tax. Capital appreciation falls within trading income and is
also distributed gross of tax. It is the responsibility of members to agree and settle their individual tax liabilities with HM
Revenue & Customs.
No provision has been made for any US Federal Income Tax or any overseas tax payable on the underwriting results or
investment earnings.
Members resident overseas for tax purposes are responsible for agreeing and settling any tax liabilities with the taxation
authorities of their country of residence.
l) Basis of currency translation
The functional and presentational currency of the Syndicate is US Dollars. Transactions in currencies other than the
functional currency are translated at the rate of exchange at the date of the transaction or at an approximate average rate.
Assets and liabilities are retranslated into US Dollars at the rate of exchange at the Balance Sheet date unless contracts to sell
currency for Sterling have been entered into prior to the year end, in which case the contracted rates are used. This includes
all assets and liabilities arising from insurance contracts including unearned premium and deferred acquisition costs. Non-
monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was determined.
Although transactions are translated as described above, the final result for the year of account is calculated with Sterling,
Canadian Dollars and Euros translated at the Balance Sheet date rates of exchange.
Differences arising on the retranslation of foreign currency amounts are included in the non-technical account, except when
a gain or loss on a non-monetary item is recognised in Other Comprehensive Income. Realised exchange differences are
included in the technical account within net operating expenses.
Where Canadian Dollars or Euros are sold or bought relating to the profit or loss of a closed underwriting account after 31
December, any exchange profit or loss arising is reflected in the underwriting account into which the liabilities of that year
have been reinsured. Where US Dollars relating to the profit or loss of a closed underwriting account are bought or sold by
members for that year, any exchange profit or loss accrues to those members.
m) Profit commission
Profit commission is charged by the Managing Agent on a year of account basis subject to the operation of a two-year deficit
clause. This is charged to the Syndicate as incurred but does not become payable until after the appropriate year of account
closes, normally at 36 months. Profit commission is charged at a rate of 20% where a seven year rolling average syndicate
result of not less than 7.5% on capacity is achieved. Profit commission at a rate of 17.5% will apply where the seven year
rolling average syndicate result is less than 7.5% on capacity.
n) Deposits with ceding undertakings
Deposits with ceding undertakings represent 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 balance sheet.
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
59
3 Analysis of Underwriting Result
An analysis of the underwriting result before investment return for the 36 months and the net technical provisions as at 31
December 2025 are presented below:
36 months ended 31 December 2025
Type of business
Gross
premiums
earned
$’000
Gross
claims
incurred
$’000
Net
operating
expenses
$’000
Reinsurance
balance
$’000
Total
excluding
investment
return
$’000
Net
technical
provisions
$’000
Direct insurance:
Accident and health
12,797 (4,420) (4,065) 1,629 5,941 4,819
Marine, aviation and
transport
23,158 (97,509) (7,357) 55,388 (26,320) 31,427
Fire and other damage to
property
169,973 (46,019) (53,978) (55,265) 14,711 52,899
Third party liability
— — — — — —
205,928 (147,948) (65,400) 1,752 (5,668) 89,145
Reinsurance acceptances
224,710 (85,348) (71,401) 12,272 80,233 97,309
Total
430,638 (233,296) (136,801) 14,024 74,565 186,454
Reinsurance acceptances include the reinsurance to close premium of $181.5m received from the 2022 year of account.
Reinsurance balance includes all reinsurance related balances including the 2023 reinsurance to close premium payable of
$186.5m.
The gross premiums written by geographical destination analysis is set out below. All premiums written are for contracts with
external customers and are concluded in the UK, except for EU-domiciled business which is written through Lloyd's Europe,
reinsured to the Syndicate and concluded in Belgium.
Geographical analysis by destination Gross written
premiums
$’000
United Kingdom
6,482
US
214,293
European Union Member States
11,020
Rest of the world
198,843
Total
430,638
4 Analysis of Result by current and prior years
2025
$'000
Balance attributable to business allocated to the 2023 year of account
92,842
Balance attributable to the reinsurance to close of the 2022 years of account and prior
11,434
Total
104,276
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
60
5 Net Operating Expenses
2025
$'000
Brokerage and commissions
81,670
Change in deferred acquisition costs
18
Administrative expenses
31,219
Members' standard personal expenses
27,298
Reinsurance commission and profit participation
(3,404)
Total
136,801
2025
$'000
Auditors’ remuneration:
- Fees payable to the Syndicate’s auditor for the audit of these accounts
10
6 Investment Return
2025
$'000
Investment income:
Interest and dividend income
12,950
Realised gains on investments
1,729
Unrealised gains on investments
4,253
Investment expenses and charges:
Investment management expenses, including interest
(327)
Realised losses on investments
(562)
Unrealised gains on investments
914
Total
18,957
7 Reinsurance Premium Payable to Close the 2023 Year of Account
Reported
$'000
IBNR
$'000
Total
$'000
Gross reinsurance to close premium payable
125,420 236,308 361,728
Reinsurance recoveries anticipated
(53,865) (121,409) (175,274)
Reinsurance to close premium payable, net of reinsurance
71,555 114,899 186,454
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
61
8 Financial Investments
2025
$'000
Shares and other variable yield securities
—
Overseas deposits
10,745
Debt Securities and other fixed income securities
223,280
Total
234,025
Debt securities and other fixed income securities are all listed on recognised stock exchanges.
The Syndicate classifies its financial instruments held at fair value in its Balance Sheet using a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
• Level 1 – investments are securities with quoted prices in active markets. 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 – investments are securities with quoted prices in active markets for similar assets or liabilities, or securities valued
using other valuation techniques for which all significant inputs are based on observable market data. Instruments
included in Level (ii) are valued through independent external sources using directly observable inputs to models or
other valuation methods. The valuation methods used are typically of an industry-accepted standard and include broker-
dealer quotes and pricing models, including present values and future cash flows, together with inputs such as yield
curves, interest rates, prepayment profiles, and default rates.
• Level 3 – investments are securities for which valuation techniques are not based on observable market data, and therefore
require significant management judgement to determine an appropriate fair value. The Group determines securities
classified as Level 3 to include private investment funds, hedge funds and loans made by the Group's Lloyd's syndicate
platforms to the Lloyd's central fund.
As at 31 December 2025
Level 1 Level 2 Level 3 Total
$'000 $'000 $'000 $'000
Shares and other variable yield securities
— — — —
Overseas deposits
— 10,745 — 10,745
Debt securities and other fixed income securities
132,134 91,146 — 223,280
Total
132,134 101,891 — 234,025
9 Deposits with Ceding Undertakings
2025
$'000
Deposits with approved credit institutions
1,179
10 Debtors Arising Out of Direct Insurance Operations
2025
$'000
Due within one year
—
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
62
11 Debtors Arising Out of Reinsurance Operations
2025
$'000
Due within one year
81,428
12 Other Debtors
2025
$'000
Amount due from members
915
VAT recoverable
6
Investment Receivable
—
Total
921
13 Cash and Cash Equivalents
2025
$'000
Cash at bank and in hand
39,238
All cash and cash equivalents held by the Syndicate are only available for investment and for paying of claims to its
policyholders and expenses.
14 Creditors
2025
$'000
Creditors arising out of direct insurance operations
5,576
Creditors arising out of reinsurance operations
25,787
Other
36,396
Total
67,759
Creditors are all due within one year.
15 Non-Cash Consideration as Part of RITC
2025
$'000
Financial investments
34,965
Debtors
7,932
Creditors
(51,419)
Total (8,522)
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
63
16 Related Parties
LSL manages Syndicates 2010 and 3010. Cathedral Capital Holdings Limited (“CCHL”), registered in England and Wales, is
the immediate parent company of LSL. Lancashire Holdings Limited (“LHL”), registered in Bermuda, is the ultimate parent
company of LSL. LHL is the largest and smallest group which includes LSL and for which the consolidated accounts are
prepared.
Within the Lancashire Group there are two (re)insurance companies, Lancashire Insurance Company (UK) Limited
(incorporated in the UK) and Lancashire Insurance Company Limited (incorporated in Bermuda). In addition, the
Lancashire Group includes Lancashire Capital Management Limited (incorporated in Bermuda) which is the underwriting
manager for Kinesis Reinsurance Limited, a special purpose insurer. There have been no transactions with this latter
company.
Total Managing Agency fees outstanding payable to LSL in respect of services provided to the Syndicate in respect of the
2023 year of account amounted to $nil as at 31 December 2025. Profit commission due to the managing agent in respect of
the profit on the 2023 closed year as at 31 December 2025 totalled $5.8m. The administrative expenses disclosed in Note 5
were recharged to the Syndicate by LSL to the 2023 year of account. The basis on which expenses are apportioned is set out
in Note 2(j).
Cathedral Capital (1998) Limited, a subsidiary of CCHL, provided capacity to the underwriting years as follows:
Year of Account 2023 (£) 2024 (£) 2025(£)
Cathedral Capital (1998) Limited
277,037,888 288,383,539 318,796,174
A number of Non-Executive Directors are also directors of other Lloyd’s and non-Lloyd’s insurance entities. Those
Syndicates and insurance companies may from time to time transact business with the Syndicates managed by LSL. All such
insurance contracts will have been dealt with on an arm’s length basis.
17 Borrowings
As at 31 December 2025 and 31 December 2024, Syndicate 2010 had in place a $60.0m Letter of Credit (LOC) catastrophe
facility. The facility is available to assist in paying claims and the gross funding of catastrophes for Syndicate 2010. The
Syndicate LOC catastrophe facility is not available to the wider group other than through its participation on Syndicate 2010.
A separate uncommitted overdraft facility of $20.0m is also available to Syndicate 2010. There are no balances outstanding
under the Syndicate bank facilities as at 31 December 2025 and 31 December 2024.
18 Foreign Exchange Rates
2025
Year-end rate
Euro
0.85
Sterling
0.74
Canadian dollar
1.37
19 Post Balance Sheet Events
The reinsurance premium to close the 2023 year of account as at 31 December 2025 was agreed by the Managing Agent on
18 February 2026. Consequently, the technical provisions at 31 December 2025 have been presented in the Balance Sheet
under the headings “reinsurance recoveries anticipated on gross reinsurance to close premiums payable to close the
account” and “reinsurance to close premiums payable to close the account - gross amount” in accordance with the format
prescribed by the Syndicate Accounting Byelaw. The actual amount of reinsurance to close premiums paid will be after
deduction of unsigned premiums.
Total profits of $104.3m will be paid to the members’ personal reserve funds 10 April 2026 in respect of the 2023 year of
account.
Notes to the Syndicate Underwriting Year Accounts
2023 Year of Account
For the 36 months ended 31 December 2025
64
2023
YOA
2022
YOA
2021
YOA
2020
YOA
2019
YOA
2018
YOA
2017
YOA
Syndicate allocated capacity
£399.4m
£344.8m £324.8m £305.9m £305.9m £306.0m £304.6m
Gross capacity utilised
(i)
87.1 %
102.7 % 82.8 % 81.6 % 74.4 % 72.7 % 67.8 %
Number of underwriting members
1,019
1,105 1,137 1,214 1,270 1,292 1,293
Aggregate net written premiums
(i)
£268.6m
£273.5m £193.9m £182.8m £159.9m £155.5m £141.9m
Net capacity utilised
(i)
67.2 %
79.3 % 59.7 % 59.8 % 52.3 % 50.8 % 46.6 %
Loss ratio
(ii)
58.2 %
77.9 % 86.5 % 82.0 % 77.4 % 79.3 % 105.6 %
Results for an illustrative share of £10,000
Gross written premiums
8,715
10,269 8,281 8,160 7,443 7,274 6,782
Net earned premiums
6,724
7,933 5,969 5,976 5,227 5,084 4,568
Reinsurance to close received from an earlier
account
3,617
4,023 3,745 2,987 2,384 2,845 2,337
Net claims paid
(2,264)
(5,179) (4,402) (3,488) (2,783) (4,046) (4,531)
Reinsurance to close payable
(3,459)
(4,190) (4,270) (3,977) (2,986) (2,384) (2,763)
Profit/(Loss) on exchange
(215)
(58) 360 224 (213) 239 (40)
Acquisition costs
(1,648)
(1,822) (1,383) (1,271) (1,164) (1,072) (1,063)
Syndicate operating expenses
(535)
(498) (546) (506) (534) (532) (485)
Balance on technical account before
investment return
2,220
209 (527) (55) (69) 134 (1,977)
Investment income and gains less losses, less
expenses and charges
366
344 156 (57) 57 146 91
Other charges
—
— (7) — — (15) —
Profit/(Loss) for closed year of account before
personal expenses
2,586
553 (378) (112) (12) 265 (1,886)
Currency translation differences
(129)
15 (86) (11) 74 (5) 10
Total recognised gains and losses before
personal expenses
2,457
568 (464) (123) 62 260 (1,876)
Illustrative personal expenses for a traditional
Name:
- Managing agent’s salary
(64)
(66) (66) (65) (63) (63) (65)
- Central Fund contributions
(32)
(36) (32) (28) (25) (26) (25)
- Lloyd’s subscription
(33)
(35) (33) (29) (26) (29) (31)
- Profit commission
(393)
— — — — — —
Total illustrative personal expenses for a
traditional Name
(522)
(137) (131) (122) (114) (118) (121)
T
otal result after illustrative personal expenses
1,935
(595) (245) (52) 142 (1,997) 682
Notes
(i) Premiums above are gross of brokerage. Therefore, it is possible that the capacity utilisation could exceed 100%, as the traditional way of
monitoring utilisation is net of brokerage.
(ii) The loss ratio is claims paid plus the reinsurance to close divided by net earned premiums plus reinsurance to close received.
Seven Year Summary of Results (Unaudited)
65
