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Lloyd’s Syndicate 1414
Annual Report and Accounts for the year ended
Managing Agent - Corporate Information
1
Strategic report of the Managing Agent
2
Managing Agent’s report
7
Statement of Managing Agent’s responsibilities
8
Independent auditor’s report to the member of Syndicate 1414
9
Statement of profit or loss and other comprehensive income
12
Balance sheet
14
Statement of changes in members’ balances
16
Statement of cash flows
17
Notes to the financial statements
18
Contents
Managing Agent
Directors
Robert P Sewell
Non-executive Chairman
Mark L Pepper
Ian D Thompson
Edel S Chatterton
Pascal Keutgens
Non-executive
Andrew Moss
Non-executive
Samantha J Hoe-Richardson
Non-executive
Company Secretary
Elizabeth H Guyatt
Registered Office
20 Fenchurch Street
London
England
EC3M 3BY
Active Underwriter
Mark L Pepper
Investment Managers
Conning Asset Management Limited
Independent Auditor
Deloitte LLP
Statutory Auditor
1 New Street Square
London
EC4A 3HQ
Managing Agent - Corporate Information
www.ascotgroup.com
1
Ascot | Syndicate 1414
The Directors of the managing agent, Ascot Underwriting Limited (AUL), present their strategic report for the year
ended 31 December 2025.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS
The principal activity of Syndicate 1414 (“the Syndicate”) remains the transaction of general insurance and
reinsurance business in the United Kingdom.
For the 2025 year of account Ascot Corporate Name Limited (ACNL) is the sole corporate member, a company
incorporated in England and Wales, and ultimately owned by Canada Pension Plan Investment Board. The final
allocated premium income capacity for each of the last four underwriting years and the prospective year is shown
below:
Syndicate Capacity
Year
£m
2022
950
2023
1,250
2024
1,250
2025
1,250
2026
1,250
The managing agent of Syndicate 1414 is AUL. AUL is a wholly owned subsidiary of Ascot Underwriting Group
Limited (AUGL), which is also the immediate parent of ACNL.
AUL owned one subsidiary during the period, Ascot Insurance Services Limited (AIS) a service company for
Syndicate 1414 providing services between the Syndicate and businesses who are acting as coverholders for the
Syndicate. Syndicate 1414 utilises Lloyd’s Brussels (Lloyd’s Insurance Company SA) to underwrite European Union
(EU) and European Economic Area (EEA) business following the UK’s exit from the EU.
KEY PERFORMANCE INDICATORS
The key performance indicator for the Syndicate is considered to be underwriting profitability and by investment
return. The directors measure profitability of the syndicate by reference to the combined ratio. The combined ratio
for the last two years is set out in the table below:
Year Ended
31 December 2025
Year Ended
31 December 2024
Net loss ratio
1
51.1%
57.9%
Net expense ratio
2
37.0%
33.7%
Combined ratio
3
88.1%
91.6%
Gross written premium decreased from $1,942.1m in year ended 31 December 2024 to $1,810.6m in 2025, a decrease
of 6.8%. This is due to lower reinstatement premiums compared to 2024, softening rate environment across several
classes along with consciously pulling back in certain classes. Excluding reinstatement premiums of $27.0m (year
ended 31 December 2024: $77.3m) premiums were 4.4% lower than prior year.
Net written premium decreased from $1,462.7m in year ended 31 December 2024 to $1,337.1m in 2025, a decrease of
8.6%, with a premium retention ratio of 73.9% for 2025 versus 75.3% for 2024. Excluding net reinstatement premiums
of $10.2m (year ended 31 December 2024: $38.8m) premiums were 6.8% lower than prior year. This is being driven by
the above mentioned decreases in gross premiums written, whilst the exposure of the Syndicate continues to be
protected with the use of an extensive reinsurance programme. Outwards reinsurance premiums including
reinstatement premiums written decreased by 1.2%, predominantly from excess of loss savings.
Strategic report of the Managing Agent
www.ascotgroup.com
2
Ascot | Syndicate 1414
1
Net loss ratio is defined as claims incurred, net of reinsurance as a percentage of earned premiums, net of reinsurance
2
Net expense ratio is defined as net operating expenses as a percentage of earned premiums, net of reinsurance
3
Combined ratio is defined as total costs (including claims and expenses) as a percentage of earned premiums, net of reinsurance
Net loss ratio
Note
Year Ended
31 December 2025
Year Ended
31 December 2024
Variance
Current accident year
55.0%
57.5%
(2.5)%
Prior accident years
6
(3.9)%
0.4%
(4.3)%
Net loss ratio
51.1%
57.9%
(6.8)%
The current accident year net loss ratio improved 2.5% due to a lower level of large catastrophe activity especially
during the hurricane season compared to the prior year. The largest man made catastrophe to impact the
Syndicate in terms of scale was the PBF Martinez refinery fire, gross loss of $36.6m and net $11.4m. Natural
catastrophe events occurring during 2025 that impacted the Syndicate and their relative scale included; California
Wildfires, gross loss of $151.5m and net of $75.8m and Hurricane Melissa, gross loss of $5.6m and net $4.9m.
Catastrophe events made up 9.3% of the current accident year ratio (2024: 14.1%).
The prior accident year release is driven by favourable experience, including specific catastrophe releases for
Hurricanes Milton and Helene.
Net expense ratio
Year Ended
31 December 2025
Year Ended
31 December 2024
Variance
Acquisition cost ratio
29.7%
27.7%
2.0%
Administrative expenses ratio
7.3%
6.0%
1.3%
Net expense ratio
37.0%
33.7%
3.3%
The net expense ratio has deteriorated year on year, with Ascot’s acquisition cost ratio of 29.7% being 2.0% higher
than prior year of 27.7%. Half of this is due to less net reinstatement income in 2025 with the remainder due to
changes in business mix and softening market conditions with competition being high.
Administrative expenses have increased to $99.9m from $86.0m (including members’ standard personal expenses),
driven predominantly by an increase in headcount, continued investment in IT solutions and foreign exchange.
RESULTS AND PERFORMANCE
The result for the year ended 31 December 2025 financial year, as set out on pages 12 and 13, is a profit of $300.2m
(year ended 31 December 2024: profit of $185.1m) and a combined ratio of 88.1% (year ended 31 December 2024:
91.6%). Syndicate profits have been supplemented by an overall investment return of $125.4m (year ended
31 December 2024: $76.2m) which includes unrealised gains on investments of $46.8m (year ended 31 December
2024: $21.7m).
Profits will continue to be distributed by reference to the results of individual underwriting years. Under Lloyd’s
Accounting rules, the trading result of a year of account will not normally be declared until the end of three years
from commencement. The 2023 year of account was closed at 31 December 2025 with a profit of $304.3m or 18.1% of
stamp capacity of £1,250.0m (2024: 2022 year of account closed at 31 December 2024 with a profit: $245.6m or 20.6%
of stamp capacity of £950.0m).
FUTURE OUTLOOK
The market has softened at a more profound rate than that predicted when we wrote the business plan in the early
summer of 2025. It would be easy to hide behind the label of “adequacy”; the market has had many years of
compound rate increase. This is true but in many classes of business it came from a position of loss making and
needed rate to get back to a break-even position before profit could be contemplated, and we feel that in some
areas rate reductions have been so profound that we are now back at worrying levels of rate.
Ascot is twenty five years old in 2026 and this gives us the advantage of having great data going back over this
period so we can truly track adequacy to give us a trading advantage over many competitors. Fortunately, many of
our underwriters have been with us for a long period of time and are truly experienced in both hard and soft
markets, this means we are well set to be able to continue to trade profitably given the downward trend of the
market.
As ever, the excellent profit that has been achieved in 2025 could not have been created if it were not for the hard
work and dedication of everyone at Ascot so thank you all. We are well set for 2026 and we look forward to another
good year.
Strategic report of the Managing Agent continued
www.ascotgroup.com
3
Ascot | Syndicate 1414
PRINCIPAL RISKS AND UNCERTAINTIES
The following are considered to be the principal risks for the Syndicate along with a brief overview of how these risks
are managed. Risks are managed through the Risk Management Framework.
The Board of Directors is ultimately responsible for Risk Management. All aspects of the Risk Management
Framework have been approved by the Board of Directors. Responsibility for the oversight of risk lies on a day to day
basis with the Chief Risk Officer who reports into the Risk Committee, and ultimately into the Board. There are
several sub-committees that are responsible for the identification and management of certain risks (for example,
the Underwriting Management Committee (“UMC”) is responsible for many of the risks which are classified as
Insurance Risk).
The comments below represent only an overview of the key risks and some of the controls to mitigate these risks.
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 to can be separated into underwriting risk, claims
management risk, catastrophes & aggregation & reinsurance risk and reserving risk.
Management of insurance risk includes a comprehensive underwriting peer review process, management
information that includes aggregation management and profitability measures, independent external reserve
reviews and the strict control of terms and conditions of contractual wordings to manage liabilities.
Market risk
– this represents 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. The risk is managed through conservative asset
allocation within a well-diversified portfolio, subject to robust credit quality control and concentration limits.
Liquidity, credit and currency risks are components of an overall market risk however, each is addressed separately.
Credit risk
– this is the risk of loss arising from counterparties being unable or unwilling to meet their financial
obligations as they fall due. The Syndicate’s counterparties include investment counterparties, reinsurers, brokers
and coverholders. The most significant exposure arises from the potential non-performance of reinsurers. This risk is
mitigated through ongoing monitoring of counterparty concentration and the financial strength and security
ratings of each reinsurance partner.
Liquidity risk
– the risk that the Syndicate is unable to meet its financial obligations as they fall due. This risk may
arise where assets held in support of liabilities cannot be realised in a timely manner or can only be realised at
materially below market value. Liquidity is actively managed through regular cash flow forecasting, which
incorporates the expected duration and settlement profile of underlying liabilities. Liquidity considerations are also
a key input into investment decision
-
making, including the determination of asset allocation and associated
portfolio limits.
Currency risk
– the risk is that the fair value or future cash flows of the Syndicate’s assets and liabilities will fluctuate
owing to movements in foreign exchange rates. The Syndicate maintains four separate currency funds: Sterling,
Euros, United States dollars and Canadian dollars. The Syndicate seeks to mitigate the risk by matching the
estimated foreign currency denominated liabilities with assets denominated in the same currency.
Operational risk
– The Syndicate is exposed to the risk of direct or indirect loss resulting from internal processes,
people or systems, or (non-insurance) external events. This includes cyber security risk as well as major IT, systems or
service failures. Our Operational Resilience and Business Continuity frameworks serve to manage these key risks,
with further mitigation provided through the broader Risk Management Framework which includes the Risk
Register, control affirmation process, key metrics and appetites.
Group risk
– the risk that the activities of companies within Ascot Group (Ascot Group Limited (AGL) and its
subsidiaries) have an adverse impact on each other. The key risks considered are sharing of resources (including
financial, labour and infrastructure) and brand damage from negative publicity. These are mitigated through clear
governance structures, financial monitoring (where applicable) and communication between entities across the
group as well as a coordinated marketing and communications strategy.
Climate risk
- the risk that climate change associated risks, including physical, transitional and liability aspects are
not fully considered in the context of wider business operations. The Syndicate’s approach to mitigating potential
financial risk from climate change is set out within the Sustainability framework that monitors and reports on
climate associated risks with key outputs flowing up to the Board for review and action.
Strategic report of the Managing Agent continued
www.ascotgroup.com
4
Ascot | Syndicate 1414
SUSTAINABILITY MATTERS
Whilst there is no disclosure requirement for the Syndicate to include the below, the directors of the Board would
like to share the following statement as it represents the actions being taken by Ascot, within the UK (being AUGL
and its subsidiaries). In addition to the sustainability disclosures below, the Board's responsibilities in respect of
Lloyd's sustainability requirements are re-confirmed annually through the Oversight Principles Attestation, and the
Board continues to monitor requirements from Lloyd's as they develop.
Ascot recognises the importance of building on our existing responsible business practices with continuing to
embed the following sustainability factors:.
Environment
– Ascot recognises the need to address the impact of climate change on global communities. Ascot's
carbon reduction plan, which is published on the Company website, states that AUL is committed to achieving Net
Zero Greenhouse Gas emissions by 2050 and has continued its progress to track its scope 1 and 2 emissions, along
with a subset of scope 3 emissions. The emissions disclosed below cover emissions across Scope 1 and Scope 2 as
well as Scope 3 transport emissions related to Ascot's transport mileage claims (business travel in rental cars or
employee-owned vehicles where the Company is responsible for purchasing the fuel). Scope 1 emissions include
natural gas combustion, transport fuel where Ascot is responsible purchasing the fuel and fugitive emissions from
air conditioning and refrigeration equipment. In line with our commitment to improving the transparency of our
contribution to climate change, the following tables summarise the results of the Streamlined Energy and Carbon
Report (SECR), which has been calculated in line with the Greenhouse Gas (GHG) Protocol Corporate Accounting
and Reporting Standard:
2024-2025 greenhouse gas emission figures
4
(tonnes CO2 equivalent)
Greenhouse Gas (GHG) Emissions
2025
2024
GHG Emissions from
UK Operations (tCO
2
e)
GHG Emissions from
UK Operations (tCO
2
e)
Scope 1: Direct
32
25
Scope 2: Electricity (Location-based)
103
71
Scope 3: (Transport Fuel Reimbursed)
—
1
Total
135
97
UK Energy Consumption and Intensity
Source of Energy Consumption
2025
2024
Energy
Consumption (kWh)
% Contribution to
Total Energy
Consumption
Energy
Consumption (kWh)
% Contribution to
Total Energy
Consumption
Natural Gas
128,951
18.1%
131,109
27.5%
Electricity
580,621
81.6%
342,061
71.8%
Vehicle Fleet
1,543
0.3%
3,032
0.7%
Total
711,115
100.0%
476,202
100.0%
The emissions intensities for Ascot’s UK operations for 2025 are 0.129 per £m revenue for location based (2024:
0.049). The emissions intensities against the number of employees (FTE) are 0.35 per UK employee for location
based (2024: 0.273).
The year-on-year variation in Scope 2 emissions between the 2024 and 2025 reporting periods is attributable to the
addition of a new leased office space at St Mary Axe in London in the latter part of the year, and improvements in
underlying calculation methodology. For the 2025 reporting period, Scope 2 emissions have been calculated in
accordance with the GHG Protocol Corporate Standard, with the appropriate Scope 2 emission factors applied to
the full reported electricity consumption to ensure complete coverage of all purchased electricity.
Ascot has continued to strengthen its commitment to energy reduction by maintaining and optimising a series of
initiatives in collaboration with building management. These measures underpin our sustainability strategy and
ensure our operations align with best practice in energy efficiency:
Renewable Energy Commitment
: All electricity consumed by Ascot remains REGO-certified, guaranteeing that our
energy supply is sourced entirely from renewable generation.
•
Light Pollution Reduction
: We continue to participate in
Project Go Dark
at 20 Fenchurch Street, an
initiative designed to minimise light pollution.
Strategic report of the Managing Agent continued
www.ascotgroup.com
5
Ascot | Syndicate 1414
4
The emission data disclosed within this report has been compiled in collaboration with Greenly Corporate Solutions Limited and is prepared on a
calender year basis.
The directors of the managing agency, Ascot Underwriting Limited, present their report and audited annual
financial statements for the year ended 31 December 2025.
This annual report is prepared using the annual basis of accounting as required by the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008 Lloyd’s Regulations”).
As a result of the 2008 Lloyd’s Regulations, Managing Agents are required to prepare annual financial statements
which comply with the provisions of the Companies Act 2006, subject to certain modifications as specified in the
regulations, for each syndicate that they manage.
RESULTS AND PERFORMANCE
This has been discussed in the strategic report.
FUTURE OUTLOOK
This has been discussed in the strategic report.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
This has been discussed in the strategic report.
DIRECTORS
The directors and officers of Ascot Underwriting Limited who held office during the year and up to the date of
signing are listed below:
Robert P Sewell
Non-executive Chairman
Ian D Thompson
Chief Executive Officer
Edel S Chatterton
Appointed 17 April 2025
Helen R Jones-Bak
Resigned 28 February 2025
Pascal Keutgens
Non-executive
Andrew Moss
Non-executive
Mark L Pepper
Samantha J Hoe-Richardson
Non-executive
Susan J Sutherland
Non-executive
Resigned 16 September 2025
COMPANY SECRETARY
Elizabeth H Guyatt
ACTIVE UNDERWRITER
Mark L Pepper was active underwriter of Syndicate 1414 throughout 2025. Mr Pepper began his career in insurance
in 1987 and joined Ascot at its inception in 2001 to lead the Treaty team. He was promoted to the role of Chief
Underwriting Officer in 2009 and is a member of the Board.
RISK MANAGEMENT
This has been discussed in the strategic report within
Principal risks and uncertainties.
Managing Agent’s report
www.ascotgroup.com
7
Ascot | Syndicate 1414
Report on the audit of the syndicate annual financial statements
Opinion
In our opinion the annual syndicate reports and accounts of Syndicate 1414 (the ‘syndicate’):
•
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2025 and of its profit for the
year then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,
including Financial Reporting Standard 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 Frequently Asked Questions Version 1.1 issued by Lloyd’s (the
“Lloyd’s Syndicate Accounts Instructions”).
We have audited the syndicate annual financial statements which comprise:
•
statement of profit or loss and other comprehensive income;
•
statement of changes in members’ balances;
•
balance sheet;
•
statement of cash flows; and
•
the related notes 1 to 28.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable law
and the Lloyd’s Syndicate Accounts Instructions. Our responsibilities under those standards are further described in
the auditor's responsibilities for the audit of the syndicate annual financial statements section of our report.
We are independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the managing agent’s use of the going concern basis
of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue in
operations for a period of at least twelve months from when the syndicate financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are described in
the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the syndicate annual
financial statements and our auditor’s report thereon. The managing agent is responsible for the other information
contained within the annual report. Our opinion on the syndicate annual financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the syndicate annual reports and accounts or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Independent auditor’s report to the member of Syndicate 1414
www.ascotgroup.com
9
Ascot | Syndicate 1414
Responsibilities of managing agent
As explained more fully in the managing agent’s responsibilities statement, the managing agent is responsible for
the preparation of the syndicate annual financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the managing agent determines is necessary to enable the preparation of
syndicate annual financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual financial statements, the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s ability to
continue in operation and to use the going concern basis of accounting unless the managing agent intends to
cease the syndicate’s operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual financial statements
Our objectives are to obtain reasonable assurance about whether the syndicate annual financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these syndicate annual financial
statements.
A further description of our responsibilities for the audit of the syndicate annual financial statements is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s
documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We
also enquired of management, those charged with governance and internal audit about their own identification
and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and
identified the key laws and regulations that:
•
had a direct effect on the determination of material amounts and disclosures in the financial statements.
These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005); and
•
do not have a direct effect on the financial statements but compliance with which may be fundamental to
the syndicate’s ability to operate or to avoid a material penalty. This included the requirements of Solvency
UK.
We discussed among the audit engagement team including relevant internal specialists such as actuarial and IT
specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and
where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and
regulations in the following areas, and our procedures performed to address them are described below:
•
Estimation of pipeline premiums requires significant management judgement and therefore there is
potential for management bias through manipulation of core assumptions. In response our testing
included, on a sample basis, we performed substantive procedures on new binders during the year,
compared management’s estimates on prior year policies against actual premiums received as well as to
historical experience on similar policies.
•
Valuation of technical provisions includes assumptions requiring significant management judgement and
involves complex calculations, and therefore there is potential for management bias. In response to these
risks we involved our actuarial specialists to develop independent estimates of significant classes of
technical provisions and performed review of assumptions relating to technical provisions.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the
risk of management override. In addressing the risk of fraud through management override of controls, we tested
the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making
accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Independent auditor’s report to the member of Syndicate 1414
continued
www.ascotgroup.com
10
Ascot | Syndicate 1414
Technical account – General business
For the year ended 31 December 2025
Note
$000
$000
Gross premiums written
5
Outwards reinsurance premiums
(473,445 )
(479,416 )
Premiums written, net of reinsurance
Changes in unearned premium
Change in the gross provision for unearned premiums
19
(59,535 )
Change in the provision for unearned premiums, reinsurers’ share
(623 )
Net change in provisions for unearned premiums
(40,810 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
10
Claims paid
19
Gross amount
(750,323 )
(622,168 )
Reinsurers' share
Net claims paid
(588,828 )
(508,517 )
Change in the provision for claims
19
Gross amount
(185,573 )
(527,590 )
Reinsurers' share
Net change in provisions for claims
(111,764 )
(314,206 )
Claims incurred, net of reinsurance
(700,592 )
(822,723 )
Net operating expenses
7
(508,477 )
(479,451 )
Balance on the technical account – general business
Year Ended
31 December 2025
Year Ended
31 December 2024
(restated)
5
Statement of profit or loss and other comprehensive income
www.ascotgroup.com
12
Ascot | Syndicate 1414
5
See note 1 for further details on the reclassification of unrealised foreign exchange movements on investments.
Non-technical account – General business
For the year ended 31 December 2025
Year Ended
31 December 2025
Year Ended
31 December 2024
(restated)
6
Note
$000
$000
Balance on the technical account – general business
Investment income
10
Realised losses on investments
10
(1,164 )
(5,253 )
Unrealised gains on investments
10
Investment expenses and charges
10
(1,992 )
(1,631 )
Total investment return
Allocated investment return transferred to technical account
(125,408 )
(76,208 )
Gain/(loss) on foreign exchange
(10,902 )
Profit for the financial year
Other comprehensive income:
Other
7
(20,194 )
(5,246 )
Total comprehensive income for the year
All items shown above derive from continuing operations. No operations were acquired or discontinued during the
period.
The accompanying notes from page 18 to 49 form an integral part of these financial statements.
Statement of profit or loss and other comprehensive income
continued
www.ascotgroup.com
13
Ascot | Syndicate 1414
6
See note 1 for further details on the reclassification of unrealised foreign exchange movements on investments.
7
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate result
of the closing year of account.
Assets
As at 31 December 2025
Year Ended
31 December 2025
Year Ended
31 December 2024
Note
$000
$000
Financial investments
12
Deposits with ceding undertakings
Investments
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
19
Debtors arising out of direct insurance operations
13
Debtors arising out of reinsurance operations
14
Other debtors
15
Debtors
Cash at bank and in hand
23
Other
17
Other assets
Accrued interest and rent
Deferred acquisition costs
16
Other prepayments and accrued income
Prepayments and accrued income
Total assets
Balance sheet
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Liabilities
As at 31 December 2025
Year Ended
31 December 2025
Year Ended
31 December 2024
Note
$000
$000
Capital and reserves
Members’ balances
Total capital and reserves
Provision for unearned premiums
Claims outstanding
Technical provisions
19
Creditors arising out of direct insurance operations
20
Creditors arising out of reinsurance operations
21
Other creditors including taxation and social security
22
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The accompanying notes from page 18 to 49 form an integral part of these financial statements.
The Syndicate financial statements on pages 12 to 49 were approved by the board of Ascot Underwriting Limited on
17 February 2026 and were signed on its behalf by:
Ian D Thompson
Edel S Chatterton
Chief Executive Officer
Chief Financial Officer
Balance sheet continued
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Ascot | Syndicate 1414
For the year ended 31 December 2025
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Members’ balances brought forward at 1 January
Total comprehensive income for the year
Payments of profit to members’ personal reserve funds
(245,631 )
(124,299 )
Other
8
Members’ balances carried forward at 31 December
Statement of changes in members’ balances
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Ascot | Syndicate 1414
8
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate
result of the closing year of account.
For the year ended 31 December 2025
Year Ended
31 December 2025
Year Ended
31 December 2024
(restated)
Note
$000
$000
Cash flows from operating activities
Profit for the financial year
Adjustments:
Increase/(decrease) in gross technical provisions
(Increase)/decrease reinsurers' share of gross technical provisions
(86,440 )
(225,907 )
(Increase)/decrease in debtors
(52,264 )
Increase/(decrease) in creditors
Movement in other assets/liabilities
(6,729 )
Investment return
(125,408 )
(76,208 )
Other
9
(20,194 )
(5,246 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(2,464,851 )
(1,162,492 )
Sale of equity and debt instruments
Investment income received
Other
(390 )
Net cash flows from investing activities
(75,960 )
(474,432 )
Cash flows from financing activities
Distribution of profit
(245,631 )
(124,299 )
Other
9
Net cash flows from financing activities
(225,437 )
(119,053 )
Net increase/(decrease) in cash and cash equivalents
(153,877 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(10,733 )
Cash and cash equivalents at the end of the year
23
Statement of cash flows
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Ascot | Syndicate 1414
9
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate
result of the closing year of account.
1.
Basis of preparation
Ascot Underwriting Limited is the managing agent for Syndicate 1414 at The Corporation of Lloyd’s. The company is
a private company limited by shares and is incorporated in England. The address of its registered office is 20
Fenchurch Street, London, England, EC3M 3BY.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and applicable Accounting Standards in the United Kingdom
and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard 103
(FRS 103) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions Version 3.1 as modified
by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
The financial statements are prepared on the basis that the Syndicate will continue to write future business, under
the historical cost basis, except for financial assets at fair value through profit or loss and available for sale that are
measured at fair value.
With effect from 1 January 2025, the Syndicate has amended the presentation of unrealised foreign exchange gains
and losses on investments within the income statement. Previously, these amounts were reported within
‘Unrealised gains/(losses) on investments’. From 2025 onwards, such unrealised foreign exchange movements are
presented within ‘Gain/(loss) on foreign exchange’ to better reflect their nature. The comparative figures for 2024
have been restated to reflect this change in presentation with the comparative impact to the Statement of profit or
loss and other comprehensive income being a reclass of $23,115k unrealised foreign exchange loss from unrealised
gains on investments to gain/(loss) on foreign exchange.
The financial statements are presented in USD, which is also the Syndicate’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Going concern
In arriving at a determination of going concern, the directors consider a number of risks, taking into account
economic, regulatory and environmental considerations as referenced in the Managing Agent’s Report:
i.
Insurance risk – the risk of an adverse financial result due to actual claims experience being different from
that expected when an insurance product was designed and priced. This includes the risk that the
insurance premium will not be sufficient to cover future insurance losses and associated expenses.
ii.
Credit risk – this is the risk of loss arising from counterparties being unable or unwilling to meet their
financial obligations as they fall due.
iii.
Market risk – this 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.
iv.
Operational risk – the risk of direct or indirect loss resulting from internal processes, people or systems, or
(non-insurance) external events.
v.
Liquidity risk – the risk that the Syndicate is unable to meet its financial obligations as they fall due.
vi.
Currency risk – the risk is that the fair value or future cash flows of the Syndicate’s assets and liabilities will
fluctuate owing to movements in foreign exchange rates.
vii.
Group risk – the risk that the activities of companies within Ascot Group have an adverse impact on each
other.
viii.
Climate risk – the risk that climate change associated risks, including physical, transitional and liability
aspects are not fully considered in the context of wider business operations.
The directors have concluded that the Syndicate continues to be a going concern after taking into account these
risks, as it can evidence that there is no impact on the ability of the Syndicate to remain profitable for the
foreseeable future, being not less than one year from the signing of the accounts.
Notes to the financial statements
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2.
Use of judgements and estimates
In preparing these financial statements, the directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses. These are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
No critical judgements have been made in applying the Syndicate’s accounting policies.
The Syndicate makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
i.
The ultimate liability arising from claims made under insurance contracts
The estimation of the ultimate liability arising from claims made under insurance contracts is the Syndicate’s most
critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of
the liability that the Syndicate will ultimately pay for such claims. The most significant assumptions made relate to
the level of future claims, the level of future claims settlements and the legal interpretation of insurance policies.
Whilst the directors consider that the gross provision for claims and the related reinsurance recoveries are fairly
stated on the basis of the information currently available to them, the ultimate liability will vary as a result of
subsequent information and events and may result in significant adjustments to the amount provided.
Adjustments to the amounts of provision are reflected in the Financial Statements for the period in which the
adjustments are made. The methods used, and the estimates made, are reviewed regularly.
In setting the provision for insurance liabilities, a best estimate is determined on an undiscounted basis and an
allowance for risk and uncertainty is added.
The method and considerations made in setting the claims provisions are discussed in more detail in note 3 (part F)
and sensitivities run disclosed in note 4 (part A iii) of these Financial Statements.
ii.
Pipeline premium
The Syndicate makes an estimate of premiums written during the year that have not yet been notified by the
financial year end (‘pipeline premiums’) based on current year business volumes. The pipeline premium is booked
as written and an assessment is made of the related unearned premium provision (note 5) and an estimate of
claims incurred but not reported in respect of the earned element (note 18).
Sensitivities have been run on the pipeline premium balance, a 5% reduction in pipeline premium would result in a
decrease of $12,092k (31 December 2024: $13,223k) in the reported 2025 gross written premium and a 5% increase in
pipeline premiums would result in an increase of $12,092k (31 December 2024: $13,223k).
3.
Significant accounting policies
The Syndicate’s financial statements have been prepared in accordance with applicable accounting standards in
the United Kingdom. A summary of the more important accounting policies is set out below, together with an
explanation of where changes have been made to previous policies on the adoption of new accounting standards in
the year.
A.
Premiums written
Under the annual basis of accounting, gross premiums reflect direct and inwards reinsurance business written
during the period, gross of commission payable to intermediaries, and exclude any taxes or duties based on
premiums. Premiums written include estimates for ‘pipeline’ premiums representing amounts due to the Syndicate
not yet notified.
Estimated premium income in respect of facility contracts, for example binding authorities and lines slips, are
deemed to be written in a manner that reflects the expected profile of the underlying business which has been
written. Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct or inwards business being reinsured. The earned proportion of premiums is recognised as income.
Premiums are earned from the date of attachment of risk over the indemnity period based on the pattern of the
risks underwritten.
Notes to the financial statements continued
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B.
Unearned premiums
The provision for unearned premiums comprises the proportion of gross premiums written which is estimated to be
earned in the following or subsequent financial periods, 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.
C.
Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such as
brokerage and commission, and indirect costs such as administrative expenses connected with the processing of
proposals and the issuing of policies. The deferred acquisition cost asset represents the proportion of acquisition
costs which corresponds to the proportion of gross premiums written that is unearned at the balance sheet date.
D.
Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Premiums and claims on
reinsurance assumed are recognised in the technical account along the same basis as direct business, taking into
account the product classification. Reinsurance premiums ceded and reinsurance recoveries on claims incurred are
included in the respective expense and income accounts. Premiums ceded and claims reimbursed are presented
on a gross basis in the technical account and statement of financial position as appropriate.
Reinsurance outwards premiums are accounted for in the accounting period that they incept.
E.
Claims incurred
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, including provisions for claims incurred
but not reported and related expenses, together with any other adjustments to claims from previous years. Where
applicable, deductions are made for salvage and other recoveries. Outwards reinsurance recoveries are accounted
for in the same accounting period as the claims for the related direct or inwards reinsurance business being
reinsured.
F.
Claims provisions and related reinsurance recoveries
The provision for claims outstanding is based on information available at the balance sheet date. Subsequent
information and events may result in the ultimate liability being less or greater than the amount provided. Any
differences between provisions and subsequent settlements are dealt with in the general business technical
account of later periods.
The Directors consider that the provision for gross claims and related reinsurance recoveries are fairly stated on the
basis of information currently available to them.
Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet
date, including an allowance for the cost of claims incurred by the balance sheet date but not reported until after
the year end (IBNR). The estimated cost of claims includes expenses to be incurred in settling claims and a
deduction for the expected value of salvage and subrogation and other recoveries. The Syndicate takes all
reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the
uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the
original liability established.
The estimation of claims incurred but not reported (IBNR) is generally subject to a greater degree of uncertainty
than the estimation of the cost of settling claims already notified to the Syndicate, where more information about
the claim event is generally available. Claims IBNR may often not be apparent to the insured until many years after
the loss event giving rise to the claim. Classes of business where the IBNR proportion of the total reserve is high will
typically display greater variations between initial estimates and final outcomes because of the greater degree of
difficulty of estimating these reserves. Classes of business where claims are typically reported relatively quickly after
the claim event tend to display lower levels of volatility.
Notes to the financial statements continued
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Ascot | Syndicate 1414
In calculating the estimated cost of unpaid claims the Syndicate uses a variety of estimation techniques, generally
based upon statistical analyses of historical experience, which assumes that the development pattern of the current
claims will be consistent with past experience. Allowance is made, however, for changes or uncertainties which may
create distortions in the underlying statistics or which might cause the cost of unsettled claims to increase or
reduce when compared with the cost of previously settled claims including:
•
changes in Syndicate processes which might accelerate or slow down the development and/or recording of
paid or incurred claims compare with the statistics from previous periods;
•
changes in the legal environment;
•
the effects of any change in the inflationary environment;
•
changes in the mix of business;
•
the impact of large losses; and
•
movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified but not paid claims. In
estimating the cost of these the Syndicate has regard to the claim circumstance as reported, any information
available from loss adjusters and information on the cost of settling claims with similar characteristics in previous
periods.
Large claims impacting each relevant business class are generally assessed separately, being measured on a case
by case basis or projected separately in order to allow for the possible distortive effect of the development and
incidence of these large claims.
Where possible the Managing Agent adopts multiple techniques to estimate the required level of provisions. This
assists in giving greater understanding of the trends inherent in the data being projected. The projections given by
the various methodologies also assist in setting the range of possible outcomes. The most appropriate estimation
technique is selected taking into account the characteristics of the business class and the extent of the
development of each accident year.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and projections
for IBNR, net of estimated irrecoverable amounts.
Reinsurance assets are assessed for impairment at each balance sheet date. Impairment losses are recognised in
profit or loss in the period in which the impairment loss is recognised.
G.
Unexpired risks provision
Provision has been made for any deficiencies arising when unearned premiums, net of associated acquisition costs,
are insufficient to meet expected claims and expenses after taking into account future investment return on the
investments supporting the unearned premiums provision and unexpired risks provision. The expected claims are
calculated having regard to events that have occurred prior to the balance sheet date.
Unexpired risk surpluses and deficits are offset where business classes are managed together and a provision is
made if an aggregate deficit arises.
H.
Foreign currencies
Transactions in foreign currencies are translated to the functional currency using the exchange rates at the date of
the transactions. The Syndicate’s monetary assets and liabilities denominated in foreign currencies are translated
into the functional currency at the rates of exchange at the balance sheet date. Non
-
monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the
exchange rate at the date that the fair value was determined. Non
-
monetary items denominated in foreign
currencies that are measured at historical cost are translated to the functional currency using the exchange rate at
the date of the transaction. For the purposes of foreign currency translation, unearned premiums and deferred
acquisition costs are treated as if they are monetary items.
Differences arising on translation of foreign currency amounts relating to the insurance operations of the Syndicate
are included in the non-technical account.
I.
Financial instruments
The Syndicate has chosen to adopt the Sections 11 (Basic Financial Instruments) and 12 (Other Financial Instruments
Issues) of FRS 102 in respect of financial instruments.
Basic financial assets, including cash, bank balances and deposits with cedants, are initially recognised at
transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at
the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost less any provision for impairments. The unwinding of the
associated discount is subsequently recognised in the Statement of Comprehensive Income.
Notes to the financial statements continued
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Financial Investments are initially measured at fair value, which is normally the transaction price. Such assets are
subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except investments
whose fair values cannot be measured reliably are measured at cost less impairment. Unrealised gains and losses
are tracked separately through the statement of comprehensive income based on advice from Lloyd’s.
Overseas deposits are stated at market value based on quarterly statements from Lloyd’s.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are
settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or
(c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the
asset to an unrelated third party without imposing additional restrictions.
J.
Investment return
Investment return comprises investment income and movements in unrealised gains and losses on financial
instruments at fair value through profit or loss, realised gains and losses less investment management expenses,
interest expense, and impairment losses.
Realised gains and losses on investments carried at fair value through profit and loss are calculated as the
difference between net sales proceeds and purchase price. Movements in unrealised gains and losses on
investments represent the difference between the fair value at the balance sheet date and their purchase price or
their fair value at the last balance sheet date, together with the reversal of unrealised gains and losses recognised in
earlier accounting periods in respect of investment disposals in the current period.
Dividends are recorded on the date on which the shares are quoted ex-dividend and include the imputed tax
credits. Interest and expenses are accounted for on an accruals basis.
Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical
account to the technical account to reflect the investment return on funds supporting underwriting business.
K.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Cash Flows comprise cash at banks and in hand and short term
deposits with an original maturity date of three months or less.
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 25%) deducted from Syndicate investment
income is recoverable by managing agents and consequently the distribution made to members or their members’
agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in the
balance sheet under the heading ‘other creditors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
M.
Pension costs
Ascot Underwriting Holdings Limited (AUHL) operates a defined contribution scheme. Pension contributions
relating to Managing agent staff who act on behalf of the Syndicate are charged to the Syndicate as incurred and
are included within net operating expenses.
N.
Profit commission
Profit commission is charged by the managing agent Ascot Underwriting Limited (AUL) for its services as a
consortium manager for the 2023 to the 2025 years of account only and is accrued as an expense in line with the
contractual terms. Profit commission to the managing agent in respect of managed consortia does not become
payable until after the appropriate consortium agreement concludes, normally at 24 months since inception.
O.
Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate to settle Part VII
claims. These funds are held at amortised cost in the balance sheet.
P.
Reinsurance to Close (RITC) and Portfolio Transfer Policy
RITC is a reinsurance which closes a year of account by transferring the responsibility for discharging all the
liabilities that attach to that year of account (and any year of account closed into that year) plus the right to any
income due to the closing year of account into an open year of account of the same or a different syndicate in
return for a premium.
Syndicate 1414 has not entered into any external RITC during the year and reinsures the closing year into the oldest
open year of account. The reserves of the closing year of account constitute the premium for a reinsurance to close.
Notes to the financial statements continued
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A year of account is normally closed by RITC at the end of 36 months.
The profit distribution to the corporate member on the closing year of account at 36 months, is equal to the
ultimate result on the closing year of account.
Portfolio Transfer is the bulk transfer of contracts or risks to another entity. The Syndicate has not participated in any
portfolio transfers to third parties during the year.
Q.
Operating expenses
Where expenses are incurred by the Service Company AUHL for the administration of the Syndicate, these expenses
are recharged to the Syndicate via a service fee based on an agreed share defined by the type of expense as stated
in the Group Resource Agreement.
R.
Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit commission and overriding
commission, are treated as a contribution to acquisitions costs within net operating expenses.
S.
Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract holders.
These are classified as debt instruments as they are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. Insurance debtors are measured at amortised cost less any
provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does not have any
debtors directly with policyholders, all transactions occur via an intermediary.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not quoted on
an active market. Reinsurance debtors are measured at amortised cost less any provision for impairments.
Reinsurance creditors are stated at amortised cost. Reinsurance debtor principally relates to claims recoveries
where the underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily premiums
payable for reinsurance contracts and are recognised as an expense when due.
Other debtors principally consist of amounts due from members and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to related syndicates and other related entities, profit
commissions payable and other sundry payables. These are stated at amortised cost determined using the effective
interest rate method.
T.
Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant insurance
risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument. All of the
Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk and therefore
are recognised as insurance contracts.
Notes to the financial statements continued
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Ascot | Syndicate 1414
4.
Risk and capital management
Introduction and overview
Syndicate 1414 is managed by AUL and considers the business plan proposed and the risk and control environment
as managed by AUL.
This note presents information about the nature and extent of insurance and financial risks to which the Syndicate
is exposed, the Managing Agent’s objectives, policies and processes for measuring and managing insurance and
financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Ascot risk management programme is made up of three key elements which all contribute to managing the
risks faced:
i.
Risk governance – the control and management of risk and capital management
ii.
Risk appetite – the risk the business is willing to accept
iii.
Risk register – details of the risks, controls, responsibilities and reporting
The ultimate governance and approval of the risk management and capital management for Syndicate 1414 is with
the AUL Board of Directors. Details of the governance of risk management are described more fully below but the
key committee in the management of the risk framework is the Risk Committee, which reports to the AUL Board
and whose terms of reference include the responsibility for both risk management and capital modelling.
Our approach is that every member of staff contributes to the overall risk management of the company; this is
stressed to new joiners during their induction program. The business is controlled by the diligence of staff in their
day to day activities, with the overlay of monitoring reports and committees contributing to the management of
risk. The risk management function is responsible, as the second line of defence, for sitting above these business
processes and ensuring that there are no gaps between the level of control expected by the Board (as defined in
the risk appetite) and the actual controls in place. We have created a positive risk management culture at Ascot,
whereby all staff members understand their roles and the importance to the success of the business in carrying out
those roles. Furthermore, this culture allows individuals to raise issues or areas where they believe improvements
could be made with more senior members of staff and thus all areas of the business are constantly looking at ways
to self-improve and better align actual practices with risk appetite.
The following risk areas focus on those that have an impact on or a potential impact on the financial assets and
liabilities of the Syndicate and the methods of assessing the sensitivity and financial impacts of these risks are
discussed further below.
A.
Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities. The insurance risk the Syndicate is exposed to can be separated into underwriting risk, claims
management risk, catastrophes & aggregation & reinsurance risk and reserving risk.
Management of insurance risk includes a comprehensive underwriting peer review process, management
information that includes aggregation management and profitability measures, independent external reserve
reviews and the strict control of terms and conditions of contractual wordings to manage liabilities.
a.
Underwriting risk
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future insurance losses and
associated expenses. This includes the risks that the premium is set too low, provides inappropriate levels of cover,
or that the actual frequency or severity of claims events will be significantly higher than was expected during the
underwriting process.
b.
Claims management
The risk arising from the uncertainties associated with the quantum and timing of claims that will be paid out on
policies underwritten.
c.
Catastrophes & aggregation & reinsurance risk
The risk arising from concentration of exposures by industry, geography, line of business, a single insured or single
insured event, and, in particular:
•
Risk arising from concentration of exposures exposed to catastrophe perils;
•
Clash risk, or risks arising from exposures in which multiple insureds suffer losses from the same occurrence,
or the same cause of loss, such as a wild-fire, a train crash, or a batch of component parts.
Notes to the financial statements continued
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Ascot | Syndicate 1414
d.
Reserve risk
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.
A key driver of uncertainty, which cuts across all areas of insurance risk, is the impact of inflation. When not
adequately allowed for in pricing, claim management and reserving, it has the potential to adversely impact the
underwriting result when claims are ultimately settled. Inflation is a risk that has been in focus over recent years,
given the heightened economic inflationary environment seen across most markets globally. While the longer-term
impact is yet to be seen, the risks from rising social inflation remain.
i.
Management of insurance risk
Ascot has a number of policies in place for identifying the various elements of insurance risk and mitigating the
potential downside from these risks. These include:
•
The classes and characteristics of insurance business that Ascot is prepared to accept;
•
The underwriting (including catastrophe underwriting) criteria that Ascot applies, including how these can
influence its rating and pricing decisions;
•
Ascot’s approach to limiting significant aggregations of insurance risk, including aggregation from
concentration of catastrophe perils, for example, by setting aggregate limits and/or loss assessment that
can be underwritten firm-wide, in each region, in each country, by line of business, or for one insured for
Ascot’s in-force portfolio;
•
Ascot’s approach to monitor overall aggregate risk profile at the firm-wide level, by region, by country, by
profit centre, and by entity on a regular basis; and its procedures of reporting material changes in current or
prospective aggregate risk to the Exposure Management committee and Board;
•
Ascot is cognisant of the risk the inflation uncertainty has on potential future performance and therefore,
allowance for inflation in pricing has been a key focus for all underwriting teams. From a claims
management perspective, all claims continue to be reviewed at least quarterly, ensuring case estimates are
regularly updated to reflect current settlement costs as underlying valuations are impacted by inflation.
•
Ascot’s approach to managing its expense levels, including acquisition costs, recurring costs, and one-off
costs, taking account of the margins available in both the prices for products and in the technical provisions
in the balance sheet;
•
Ascot’s approach to assessing the effectiveness of its risk transfer arrangements and managing the residual
or transformed risks. For example, how it intends to handle disputes over contract wordings, and potential
pay-out delays;
•
A summary of the data and information to be collected and reported on underwriting, claims, and risk
control (including internal accounting records), management reporting requirements, and external data for
risk assessment purposes;
•
The risk measurement and analysis techniques to be used for setting underwriting premiums, technical
provisions in the balance sheet, and assessing capital requirements; and
•
Ascot’s approach to stress testing and scenario analysis of its exposures.
Ascot will identify, assess/measure, control, mitigate and monitor insurance risk in line with the strategy and risk
appetite set by the Board (and its relevant sub-committees).
During the business planning process, the Ascot Board of Directors agrees the Annual Business Plan or Syndicate
Business Forecast (SBF) submission to Lloyd’s. This plan will consider the performance of the portfolio, the external
environment, proposed line sizes and reinsurance structure, the rating environment, and other factors.
On an ongoing basis, there are:
•
Processes for identifying the underwriting risks associated with a particular policyholder or a group of
policyholders. For example, processes for collecting information on the claims histories of insureds,
including whether they have made any potentially false or inaccurate claims, to identify possible adverse
selection or moral hazard problems;
•
Processes for establishing underwriting and distribution procedures that must be followed by all classes of
business and all types of distribution channels; these procedures should include details in respect of the
information that must be gathered in order to assess the level of insurance risk that a particular contract
brings to Ascot;
•
Processes for identifying aggregations of risk that may give rise to a large catastrophic loss. Specific
information can include, for example, risk address, locations value, construction, year built, occupancy, and
number of stories. Policy information and reinsurance information must be gathered in order to assess the
Notes to the financial statements continued
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25
Ascot | Syndicate 1414
level of additional aggregate exposure and enable the calculation of marginal contribution to modelled loss
assessment risk that a particular account or contract brings to Ascot.
•
Process for reviewing current rating and inflationary environment relative to the forecast assumptions of
rate and inflation included within the business plan. To the extent that the actual rate or inflation deviates
from the business plan forecast, this is recognised relative to expected performance within the reserving
process.
In addition, there are committees and groups that are charged with responsibilities to identify and manage
underwriting, catastrophe, reserving and emerging risks:
•
The Ascot Exposure Management Committee (EMC) is responsible for identifying catastrophe and liability
risks, and developing methods for monitoring overall and class exposures to those risks and recommending
appropriate limits in line with Board approved strategy and risk appetites.
•
Ascot Underwriting Management Committee (UMC) is responsible for identifying new types of risk that may
alter the claims pattern for the Syndicate in the future.
•
Ascot Claims Committee is responsible for discussing and setting gross and net of reinsurance reserves for
claim events, where there is an aggregation of loss across multiple classes and/or cedants. The committee
also discusses significant individual losses and is responsible for ensuring appropriate case reserves are held.
•
Ascot Reserve Committee is responsible for setting the ultimate reserves on a gross and net of reinsurance
basis for all classes of business and all years of account. In particular, the reserve committee signs off on the
general Incurred But Not Reported (IBNR) provision held in addition to all incurred losses and specific IBNR
set by the claims committee.
•
Ascot Risk Committee is a Board level committee responsible for the oversight of Ascot’s risk framework,
including risk appetites set annually, the risk register and emerging risks. Insurance risk is the most material
risk under this framework; the committee has oversight of how underlying risks are monitored, managed
and mitigated and acts as an escalation point to other Ascot committees.
The claims development table in note number 18 shows the actual claims incurred to previous estimates for the last
10 years.
ii.
Concentration of insurance risk
The Syndicate’s exposure to insurance risk is well diversified. The following table provides an analysis of the
geographical breakdown of its gross written premiums, by location of the underlying risk, by class of business.
Accident and
Health
Marine,
aviation, and
transport
Fire and other
damage to
property
Third party
liability
Credit and
suretyship
Miscellaneous
Reinsurance
Total
2025
$000
$000
$000
$000
$000
$000
$000
$000
All other Europe
7
7,083
47,172
134,200
5,742
32
6,713
200,949
Australia
—
91
3,763
4,184
219
—
171
8,428
Canada
7
2,077
12,336
7,471
53
—
2,603
24,547
Rest of World
2,544
57,761
39,492
2,041
12,308
176
5,688
120,010
UK
1
310
249
4,546
604
—
6,487
12,197
USA
3,041
11,249
200,644
60,838
2,091
(13)
247,323
525,173
Worldwide
15,006
295,394
180,522
210,777
16,887
141
200,549
919,276
Total gross
premiums written
20,606
373,965
484,178
424,057
37,904
336
469,534
1,810,580
Accident and
Health
Marine,
aviation, and
transport
Fire and other
damage to
property
Third party
liability
Credit and
suretyship
Miscellaneous
Reinsurance
Total
2024
$000
$000
$000
$000
$000
$000
$000
$000
All other Europe
62
5,883
40,354
113,589
4,559
117
10,143
174,707
Australia
—
(209)
3,554
4,068
179
—
251
7,843
Canada
—
746
12,486
10,300
46
—
1,321
24,899
Rest of World
2,533
55,993
63,198
3,317
17,175
144
11,151
153,511
UK
—
919
2,850
2,680
711
—
6,335
13,495
USA
4,372
12,646
208,434
65,554
964
17
247,669
539,656
Worldwide
14,850
304,737
169,243
225,691
13,352
136
300,028
1,028,037
Total gross
premiums written
21,817
380,715
500,119
425,199
36,986
414
576,898
1,942,148
Notes to the financial statements continued
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26
Ascot | Syndicate 1414
iii.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims arising.
This level of uncertainty varies between the classes of business and the nature of the risk being underwritten and
can arise from developments in case reserving for large losses and catastrophes, or from changes in estimates of
claims IBNR.
The following table presents the profit and loss impact on the the sensitivity of the value of insurance liabilities
disclosed in the accounts to potential movements in the assumptions applied within the technical provisions. Given
the nature of the business underwritten by the Syndicate, the approach to calculating the technical provisions for
each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse risk margin to the
total insurance liability. The amount disclosed in the table represents the profit or loss impact of an increase or
decrease in the insurance liability as a result of applying the sensitivity. The amount disclosed for the impact on
claims outstanding – net of reinsurance represents the impact on both the profit and loss for the year and member
balance.
Claims outstanding – gross of reinsurance
(92,359 )
Claims outstanding – net of reinsurance
(68,656 )
General insurance business sensitivities as at
31 December 2024
Sensitivity
‘
+5.0%
$000
‘
-5.0%
$000
Claims outstanding – gross of reinsurance
(94,131 )
Claims outstanding – net of reinsurance
(71,096 )
General insurance business sensitivities as at
31 December 2025
Sensitivity
‘
+5.0%
$000
‘
-5.0%
$000
Notes to the financial statements continued
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Ascot | Syndicate 1414
B.
Financial risk
Financial risk refers to the possibility that the Syndicate could face losses from credit risk, market risk, or liquidity
risk. To address these challenges, the Syndicate has established a comprehensive financial risk management
framework and an investment strategy aligned with its objectives.The primary objective of this investment strategy
is the preservation of capital. This focus ensures that sufficient assets are available to meet the Syndicate’s financial
obligations as they become due whilst optimising risk-adjusted returns.
a.
Credit risk
Credit risk is the risk of loss arising from counterparties being unable or unwilling to meet their financial obligations
as they fall due.
The Syndicate engages with a range of counterparties, including banking institutions, investment entities,
reinsurers, brokers and coverholders.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing credit
risk have not changed significantly from the prior year.
i.
Management of credit risk within the Investment Portfolio
The Syndicate manages credit risk within its investment portfolio through the application of specific investment
guidelines. These guidelines are intended to reduce exposure to credit risk by enforcing rules that ensure both
adequate diversification and high credit quality across the portfolio.
To achieve this, the Syndicate sets minimum credit rating requirements for all investments, ensuring that assets
held meet stringent quality standards. In addition, maximum concentration limits are established for each issuer,
asset type and credit rating category. These limits are closely monitored on a regular basis and are compared
against the authorised thresholds. This systematic approach allows the Syndicate to identify and address any
potential breaches promptly, thereby maintaining the overall integrity and security of the investment portfolio.
Monitoring and Managing Bank Deposits and Liquidity Fund Holdings
The Syndicate maintains a robust approach to overseeing its deposits at banks and investments within liquidity
funds. These holdings are subject to ongoing, regular monitoring to ensure that they remain aligned with the
Syndicate’s risk management policies. Continuous oversight enables prompt identification and response to any
potential risks or breaches of established limits.
Credit Risk Management: Intermediary and Reinsurer Oversight
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the Delegated
Underwriting Committee and the Outwards Reinsurance Committee. This oversight forms an integral part of the
Syndicate’s credit control processes, ensuring that all counterparties are properly managed in line with established
policy.
All intermediaries are required to satisfy minimum standards set by the Syndicate. The credit ratings and payment
histories of these intermediaries are subject to regular monitoring. This ongoing evaluation enables the Syndicate to
identify any changes in credit quality or payment behaviour promptly, thereby maintaining robust control over its
exposures.
The Syndicate undertakes thorough assessments of the creditworthiness of all reinsurers. This process involves
reviewing information provided by rating agencies supplemented by internal investigations. The Syndicate also
regularly evaluates the potential impact of reinsurer default and manages this risk accordingly.
Notes to the financial statements continued
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Ascot | Syndicate 1414
ii.
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 and debt securities,
reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in respect of
settled claims, cash and cash equivalents, and other debtors and accrued interest. This table is the sum of assets
neither past due nor impaired.
Within the unrated reinsurers’ share of outstanding claims of $89,925k (2024: $131,182k), $89,164k relates to
collateralised reinsurers (2024: $130,461k). Within the unrated debtors arising out of reinsurance operations of
$386,883k (2024: $483,724k), $3,738k (2024: $1,959k) relates to amounts due from reinsurance contracts ceded. Of
this, $3,705k (2024: $1,850k) relates to collateralised reinsurers.
AAA
AA
A
BBB
Other
Not rated
Total
2025
$000
$000
$000
$000
$000
$000
$000
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Syndicate loans to central fund
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Cash at bank and in hand
Other assets
41,994
12,619
11,976
5,553
2,631
17,077
91,850
Other debtors and accrued interest
10
Total
AAA
AA
A
BBB
Other
Not rated
Total
2024
$000
$000
$000
$000
$000
$000
$000
Shares and other variable yield securities and
units in unit trusts
Debt securities and other fixed income
securities
Syndicate loans to central fund
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance
operations
Debtors arising out of reinsurance operations
Cash at bank and in hand
Other assets
40,948
8,325
8,659
6,755
4,802
17,744
87,233
Other debtors and accrued interest
10
Total
The comparative disclosure for the above table has been restated to exclude $53,522k of past due but not impaired
assets, to ensure compliance with Lloyd’s Syndicate Accounts Instructions. The assets past due but not impaired
were previously classified as under the ‘not rated’ credit rating.
Notes to the financial statements continued
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29
Ascot | Syndicate 1414
10
Other debtors and accrued interest comprise: Reinsurers’ share of provision for unearned premiums; Other debtors and Prepayments and accrued
income.
iii.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date.
These debtors have been individually assessed for impairment by considering information such as the occurrence of
significant changes in the counterparty’s financial position, patterns of historical payment information and disputes
with counterparties.
An analysis of the carrying amounts of past due is presented in the table below:
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Total
2025
$000
$000
$000
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Syndicate loans to central fund
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Cash at bank and in hand
Other assets
91,850
—
91,850
Other debtors and accrued interest
11
Total
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Total
2024
$000
$000
$000
Shares and other variable yield securities and units in unit trusts
Debt securities and other fixed income securities
Syndicate loans to central fund
Deposits with ceding undertakings
Reinsurers' share of claims outstanding
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Cash at bank and in hand
Other assets
87,233
—
87,233
Other debtors and accrued interest
11
Total
Notes to the financial statements continued
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30
Ascot | Syndicate 1414
11
Other debtors and accrued interest comprise: Reinsurers’ share of provision for unearned premiums; Other debtors and Prepayments and accrued
income. Management do not intend to impair aged debtors and are continuing to monitor support for future recoverability.
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet
date:
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
2025
$000
$000
$000
$000
$000
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Total
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
2024
$000
$000
$000
$000
$000
Debtors arising out of direct insurance operations
Debtors arising out of reinsurance operations
Total
b.
Liquidity risk
Liquidity risk is the risk that the Syndicate is unable to meet its financial obligations as they fall due. This risk may
arise where assets held in support of liabilities cannot be realised in a timely manner or can only be realised at
materially below market value. The Syndicate’s primary exposure to liquidity risk is the requirement to settle claims
payable to policyholders as they become due.
The nature of the Syndicate exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i.
Management of liquidity risk
Liquidity is actively managed through regular cash flow forecasting, which incorporates the expected duration and
settlement profile of underlying liabilities. Liquidity considerations are also a key input into investment decision
making, including the determination of asset allocations and associated portfolio limits.
The Syndicate holds high quality marketable securities with a currency and duration profile that matches the
liabilities they support. This approach reduces the risk that the Syndicate is either unable to sell securities to meet
liability cash flows or of having to realise them at substantially below market value.
Notes to the financial statements continued
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31
Ascot | Syndicate 1414
ii.
Maturity analysis of syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the Syndicate’s
insurance contracts and financial instruments. For insurance and reinsurance contracts, the contractual maturity is
the estimated date when the gross undiscounted contractually required cash flows will occur. For financial
liabilities, it is the earliest date on which the gross undiscounted cash flows (including contractual interest
payments) could be paid assuming conditions are consistent with those at the reporting date.
Undiscounted net cash flows
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2025
$000
$000
$000
$000
$000
Claims outstanding
Creditors
Other credit balances
12
Total
Undiscounted net cash flows
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2024
$000
$000
$000
$000
$000
Claims outstanding
Creditors
Other credit balances
12
Total
c.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency
risk and price risk. The Syndicate is not directly exposed to price risk as it does not invest in instruments such as
equities and commodities that are impacted by this 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.
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 are addressed below.
i.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of interest-bearing securities fluctuate
because of changes in interest rates.
The Syndicate’s mainly exposed to interest rate risk through its investment portfolio.
Interest Rate Risk Management
The Syndicate’s investment portfolio faces interest rate risk in two principal ways: securities with floating interest
rates expose the Syndicate to cash flow interest rate risk, while those with fixed interest rates expose it to fair value
risk. Floating rate securities may result in unpredictable interest receipts, whereas fixed rate securities may lose
value if market interest rates rise.
To mitigate these risks, the Syndicate employs an investment strategy centred on high quality, liquid assets and
actively manages the duration profile of it’s investment portfolios to ensure it aligns to the liabilities they support.
This approach ensures that the Syndicate maintains sufficient liquidity to meet its financial obligations as they fall
due and minimises exposure to adverse movements in interest rates.
Notes to the financial statements continued
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Ascot | Syndicate 1414
12
Other credit balances comprise: Provision for unearned premiums and accruals and deferred income.
ii.
Currency risk
Currency risk is the risk that the fair value or future cash flows of the Syndicate’s assets and liabilities will fluctuate
owing to movements in foreign exchange rates.
Movements in exchange rates can alter the value of financial positions held in currencies other than the functional
currency, affecting both financial performance and the ability to meet obligations as they fall due.
Currency Risk Management
To manage this risk, the Syndicate adopts a foreign exchange policy designed to control and limit exposure to
adverse currency movements. Where it is practical, the Syndicate seeks to match the same currency of assets with
the liabilities and related cash flows they support. This approach helps to minimise the impact of exchange rate
volatility on the Syndicate’s financial position.
The Investment Committee is responsible for overseeing the Syndicate’s asset and liability positions across different
currencies. Regular monitoring by the Committee ensures that currency exposures remain within established risk
parameters.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Other
Total
2025
$000
$000
$000
$000
$000
$000
$000
Investments
Reinsurers' share of technical provisions
Debtors
Other assets
Prepayments and accrued income
Total assets
Technical provisions
(553,728 ) (2,372,405 )
(309,661 )
(187,754 )
Creditors
(12,666 )
(193,724 )
(10,074 )
(3,324 )
(219,788 )
Accruals and deferred income
(1,550 )
(26,997 )
(2,404 )
(5 )
(30,956 )
Total liabilities
(567,944 ) (2,593,126 )
(322,139 )
(191,083 )
Total capital and reserves
(306,414 )
(41,406 )
(26,569 )
(37,269 )
(5,683 )
(412,888 )
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Other
Total
2024
$000
$000
$000
$000
$000
$000
$000
Investments
Reinsurers' share of technical provisions
Debtors
Other assets
Prepayments and accrued income
Total assets
Technical provisions
(460,443 ) (2,299,559 )
(277,136 )
(158,816 )
Creditors
(8,024 )
(196,784 )
(9,359 )
(2,827 )
(17 )
(217,011 )
Accruals and deferred income
(832 )
(27,811 )
(2,572 )
(74 )
(31,289 )
Total liabilities
(469,299 ) (2,524,154 )
(289,067 )
(161,717 )
(17 ) (3,444,254 )
Total capital and reserves
(2,012 )
(229,960 )
(32,270 )
(51,087 )
(32,698 )
(10,320 )
(358,347 )
Notes to the financial statements continued
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33
Ascot | Syndicate 1414
iii.
Sensitivity analysis to market risks
The analysis below is performed to provide an indication of the Syndicate’s sensitivity to reasonable approximations
of possible movements in interest rates and foreign exchange rates. All other variables are held constant for the
purpose of this analysis however, the occurrence of a change in a single market factor may lead to changes in other
market factors as a result of correlations.
Year Ended
31 December 2025
Year Ended
31 December 2024
Impact on
results before
tax
Impact on
members’
balances
Impact on
results before
tax
Impact on
members’
balances
$000
$000
$000
$000
Interest rate risk
+ 50 basis points shift in yield curves
(34,430 )
(34,430 )
(27,940 )
(27,940 )
- 50 basis points shift in yield curves
Currency risk
10 percent increase in USD/EUR exchange rate
3,977
4,141
3,356
3,227
10 percent decrease in USD/EUR exchange rate
(3,977)
(4,141)
(3,356)
(3,227)
10 percent increase in USD/GBP exchange rate
(436)
(445)
205
201
10 percent decrease in USD/GBP exchange rate
436
445
(205)
(201)
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting date
and may vary at the time that any actual market movement occurs. As investment markets move past pre-
determined trigger points, action would be taken which would alter the Syndicate’s position.
C.
Climate risk
Climate risk is the risk that climate change associated risks, including physical, transitional and liability aspects are
not fully considered in the context of wider business operations. Ascot continued to embed climate risk
considerations in business risk management and decision making in 2025. This progress reflects ongoing alignment
with emerging regulatory guidance on climate risk across the wider Group and provides a strong foundation to
adapt to forthcoming regulatory developments:
•
Governance- the specific inclusion of climate risk into various operational and board level committee Terms
of Reference, alongside a dedicated Climate Risk Working Group and Sustainability Steering Committee,
and dedicated control holders. These updates have been documented in an updated risk register to include
climate change risks and controls.
•
Physical risk- We have embedded climate risk into business as usual through established processes,
including forward
-
looking 2030/2050 scenarios for key perils and committee
-
approved methodologies. In
2025, we enhanced model accuracy by applying explicit adjustments for North Atlantic tropical cyclone and
US inland flood outputs and refined climate loadings for other regions, ensuring current conditions are
reflected in capital modelling.
•
Transition risk- a materiality assessment considering transition risk and its financial impacts on the
Company’s underwriting portfolio is ongoing, complementing established transition risk evaluation of
Ascot’s investments portfolio.
•
Litigation risk- biannual climate litigation workshops to monitor trends, open cases, and implications for
insurers. Litigation risk will also be a key consideration in the ongoing materiality assessment.
Our business practices allow us to take a collaborative and cross-functional approach towards the continued
development of our climate risk framework, supported through the cross-collaborative approach of the
Sustainability team and the business owners across the five key workstreams- investments, underwriting,
environmental, vendor management and employees. The Sustainability team has also led the continued
exploration of how Ascot can support the transition to a low carbon economy:
•
Continued monitoring and measurement of groupwide greenhouse gas emissions, with a growing focus on
methods of reductions aligned to Procurement Policy Notice 06/21.
•
Annual reviews of the company’s Responsible Investments Policy, Responsible Procurement Policy, and
Sustainable Underwriting Policy.
•
Continued compliance with Energy Savings Opportunity Scheme and Streamlined Energy and Carbon
Reporting.
Notes to the financial statements continued
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34
Ascot | Syndicate 1414
D.
Capital management
i.
Capital framework at Lloyd’s
The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to supervision by the Prudential Regulatory
Authority (PRA) under the Financial Services and Markets Act 2000, and in accordance with the Solvency UK
Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s would comply with the Solvency UK requirements, and beyond that to meet its own financial strength,
licence and ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level as a
starting point, the requirement to meet Solvency UK and Lloyd’s capital requirements apply at overall and member
level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of Syndicate 1414 is not
disclosed in these financial statements.
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, the Syndicate is required to calculate its Solvency Capital Requirement (SCR)
for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting
uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its
SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s
to use in meeting Solvency UK requirements. The SCR of the Syndicate is subject to review by Lloyd’s and approval
by the Lloyd’s Capital and Planning Group.
A syndicate may be comprised of one or more underwriting members of Lloyd’s. ACNL is the sole corporate
member of the Syndicate and is liable for all underwriting liabilities of the Syndicate. Accordingly, the capital
requirements that Lloyd’s sets for ACNL operates on a similar basis.
ACNL’s SCR shall thus be determined by the Syndicate SCR ‘to ultimate’. Over and above this, Lloyd’s applies a
capital uplift to the member’s capital requirement, known as the Economic Capital Uplift (ECU) to determine the
member’s Economic Capital Assessment (ECA) - the capital value that needs to be held. The purpose of this uplift,
which is a Lloyd’s not a Solvency UK requirement, is to meet Lloyd’s financial strength, licence and ratings
objectives. The capital uplift applied for 2025 was 35% (2024: 35%) of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
ACNL may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for ACNL known as
Funds at Lloyd’s (FAL), assets held and managed within the syndicate known as Funds in Syndicate (FIS), or as the
members’ balances on the syndicate.
Accordingly, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported on
the balance sheet on page 14, represent resources available to meet members’ and Lloyd’s capital requirements.
E.
Operational risk
The Syndicate is exposed to the risk of direct or indirect loss resulting from internal processes, people or systems, or
(non-insurance) external events. This includes cyber security risk as well as major IT, systems or service failures. Our
Operational Resilience and Business Continuity frameworks serve to manage these key risks, with further
mitigation provided through the broader Risk Management Framework which includes the Risk Register, control
affirmation process, key metrics and appetites.
F.
Group risk
In addition to wider Group risk aspects, the following is specific to our UK regulatory regime. The UK Group (being
AUGL and its subsidiaries) is forecast to continue being profitable for the foreseeable future, and the continued
existence of a loan facility between the UK holding company AUGL and Ascot Bermuda Limited (ABL) provides the
Syndicate with continued access to liquidity should the need arise. Every member is required to hold capital at
Lloyd’s which is held in trust and known as FAL. ACNL has met its FAL requirements by the way of assets deposited
by ABL. The Board of AUL monitors the financial strength of ABL on an annual basis, to ensure its continued good
standing of credit rating and solvency regulatory compliance.
Notes to the financial statements continued
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35
Ascot | Syndicate 1414
5.
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
Year Ended
31 December 2025
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Direct insurance
Accident and health
(8,254 )
(7,960 )
(2,009 )
Motor (other classes)
(80 )
(80 )
Marine, aviation, and transport
(150,675 )
(120,003 )
(49,268 )
Fire and other damage to property
(159,192 )
(158,613 )
(87,739 )
Third party liability
(239,719 )
(136,125 )
(9,925 )
Credit and suretyship
(6,203 )
(13,735 )
(12,924 )
Miscellaneous
(173 )
(116 )
(1 )
Total direct insurance
(564,296 )
(436,552 )
(161,866 )
Reinsurance acceptances
Casualty
141,008
160,703
(183,557)
(62,646)
41,531
(43,969)
Property
275,411
281,408
(171,511)
(53,136)
(44,520)
12,241
Marine
39,538
41,627
(32,886)
(6,299)
(1,333)
1,109
Energy
12,738
13,402
16,430
(2,390)
(19,869)
7,573
Aviation
839
975
(76)
(176)
15
738
Total reinsurance acceptances
(371,600 )
(124,647 )
(24,176 )
(22,308 )
Total
(935,896 )
(561,199 )
(186,042 )
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of
the above segments into the Lloyd’s aggregate classes of business:
Year Ended
31 December 2025
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Additional analysis
Fire and damage to property of
which is:
Specialties
(1,857 )
(3,295 )
(6,552 )
Energy
(7,379 )
(9,006 )
Third party liability of which is:
Energy
(2,378 )
(1,727 )
Notes to the financial statements continued
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Ascot | Syndicate 1414
Year Ended
31 December 2024
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Direct insurance
Accident and health
(3,504 )
(7,940 )
(3,870 )
Motor (other classes)
(12 )
Marine, aviation, and transport
(246,097 )
(115,637 )
Fire and other damage to property
(169,547 )
(142,719 )
(91,773 )
Third party liability
(194,534 )
(130,960 )
(48,238 )
Credit and suretyship
(11,063 )
(13,180 )
(6,925 )
Miscellaneous
(48 )
(2 )
Total direct insurance
(624,430 )
(410,481 )
(126,879 )
Reinsurance acceptances
Casualty
178,015
176,071
(144,616)
(44,675)
(3,464)
(16,684)
Property
297,418
297,661
(167,997)
(62,797)
(44,701)
22,166
Marine
76,465
76,032
(159,169)
(8,485)
112,316
20,694
Energy
22,223
23,189
(50,699)
(3,027)
(21,987)
(52,524)
Aviation
2,777
2,751
(2,847)
(376)
1,449
977
Total reinsurance acceptances
(525,328 )
(119,360 )
(25,371 )
Total
(1,149,758 )
(529,841 )
(83,266 )
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of
the above segments into the Lloyd’s aggregate classes of business:
Year Ended
31 December 2024
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
$000
$000
$000
$000
$000
$000
Additional analysis
Fire and damage to property of
which is:
Specialties
(1,639 )
(3,142 )
Energy
(5,150 )
(7,299 )
Third party liability of which is:
Energy
(61 )
No gains or losses were recognised in profit or loss during the year on buying reinsurance, for example, with respect
to adverse development protection (year ended 31 December 2024: nil).
The gross premiums written for direct insurance by location (where the contracts were concluded) is presented in
the table below:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
United Kingdom
USA
Rest of the world
Total gross premiums written
Notes to the financial statements continued
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Ascot | Syndicate 1414
6.
Claims
There has been no material change to the method of reserving during the year under review.
Favourable movements of $53,352k (year ended 31 December 2024: unfavourable $5,715k) in the past year’s
provision for claims outstanding, net of expected reinsurance recoveries, are included in claims incurred, net of
reinsurance.
7.
Net operating expenses
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Acquisition costs
Change in deferred acquisition costs
(8,861 )
Administrative expenses
Members’ standard personal expenses
Reinsurance commissions and profit participation
(52,722 )
(50,390 )
Net operating expenses
Total commissions for direct insurance business for the year amounted to:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Total commission for direct insurance business
Administrative expenses include:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Auditors’ remuneration:
fees payable to the Syndicate’s auditor for the audit of these financial
statements
fees payable to the Syndicate’s auditor and its associates in respect of
other services pursuant to legislation
Under the current agency agreement, there is no provision for a profit commission.
Included in administrative expenses above are the Syndicate’s share of administrative expenses recharged by AUHL
and other Ascot Group service companies whom initially incurred and paid these amounts.
8.
Emoluments of the directors of Ascot Underwriting Limited
The directors of AUL, including the active underwriter, received the following aggregate remuneration, of which
$841k (2024: $720k) was charged to the Syndicate:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Directors’ emoluments
Benefits are accruing in respect of qualifying services for 3 directors.
Notes to the financial statements continued
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Ascot | Syndicate 1414
The active underwriter, and the highest paid director received the following remuneration which was charged to
the Syndicate:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Remuneration of active underwriter
Remuneration of highest paid director
340
419
9.
Staff numbers and costs
The syndicate and managing agent have no employees. Staff are employed by AUHL. The average number of
persons employed by the service company, but working for the Syndicate during the year, analysed by category,
was as follows:
Number of employees
2025
2024
Operations, Administration and IT
106
93
Compliance
40
36
Risk management
28
29
Finance
24
23
Actuarial
24
20
Executive management
3
3
Corporate
4
5
Administration and finance
Underwriting
Claims
Investments
Total
The following amounts were recharged by AUHL to the Syndicate in respect of payroll costs:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Wages and salaries
Social security costs
Other pension costs
Total
Notes to the financial statements continued
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39
Ascot | Syndicate 1414
10.
Investment return
Year Ended
31 December 2025
Year Ended
31 December 2024
(restated)
$000
$000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
Interest on cash at bank
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
Losses on the realisation of investments
(12,667 )
(11,249 )
Unrealised gains on investments
Unrealised losses on the investments
(20,310 )
Investment management expenses
(1,992 )
(1,631 )
Total investment return
Transferred to the technical account from the non-technical account
The investment return was wholly allocated to the technical account (2024: the investment return was wholly
allocated to the technical account).
11.
Distribution and open years of account
A distribution to the member of $304.3m will be proposed in relation to the closing year of account 2023 (2024:
$245.6m distribution in relation to the closing year of account 2022).
Syndicates are required to keep each year of account open for a minimum of three years before it may be closed by
reinsurance to close. There are no years of account remaining open after the three-year period.
12.
Financial investments
Financial investments of the Syndicate, amounting to $2,209.0m (31 December 2024: $1,977.8m), are held under the
terms of Lloyd's Premium Trust Deeds. Under the terms of the deeds these assets are held as security for
obligations to policyholders and amounts may only be released under certain limited circumstances.
Carrying value
Cost
Year Ended
31 December
2025
Year Ended
31 December
2024
Year Ended
31 December
2025
Year Ended
31 December
2024
$000
$000
$000
$000
Shares and other variable yield securities and units
in unit trusts
Debt securities and other fixed income securities
Syndicate loans to central fund
Total financial investments
Included in the carrying values above are listed investments as follows:
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Listed investments
Notes to the financial statements continued
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40
Ascot | Syndicate 1414
The table below presents an analysis of financial investments by their measurement classification.
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Financial assets measured at fair value through profit or loss
Total financial investments
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value hierarchy
based on the inputs used in the valuation techniques as follows:
•
Level 1
– financial assets that are measured by reference to published quotes in an active market. A financial
instrument is regarded as quoted in an active market if quoted prices are readily and regularly available
from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices
represent actual and regularly occurring market transactions on an arm’s length basis.
•
Level 2
– financial assets measured using a valuation technique based on assumptions that are supported
by prices from observable current market transactions. For example, assets for which pricing is obtained via
pricing services but where prices have not been determined in an active market, financial assets with fair
values based on broker quotes, investments in private equity funds with fair values obtained via fund
managers and assets that are valued using the Syndicate’s own models whereby the significant inputs into
the assumptions are market observable.
•
Level 3
– financial assets measured using a valuation technique (model) based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are
they based on available market data. Therefore, unobservable inputs reflect the Syndicate's own
assumptions about the assumptions that market participants would use in pricing the asset or liability
(including assumptions about risk). These inputs are developed based on the best information available,
which might include the Syndicate’s own data.
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting
date by its level in the fair value hierarchy.
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
Syndicate loans to central fund
Total financial investments
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
Syndicate loans to central fund
Total financial investments
Information on the methods and assumptions used to determine fair values for each major category of financial
instrument measured at fair value is provided below.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will often
determine prices by consolidating prices of recent trades for identical or similar securities obtained from a panel of
market makers into a composite price. The pricing service may make adjustments for the elapsed time from a trade
date to the valuation date to take into account available market information. Lacking recently reported trades,
pricing vendors will use modelling techniques to determine a security price.
Some government and supranational securities are listed on recognised exchanges and are generally classified as
level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are generally based on
composite prices of recent trades in the same instrument and are generally classified as level 2 in the fair value
hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or are traded in an
established over-the-counter market are also mainly valued using composite prices. Where prices are based on
Notes to the financial statements continued
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41
Ascot | Syndicate 1414
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.
Management performs an analysis of the prices to ensure that they are reasonable and produce a reasonable
estimate of fair value.
At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using valuation techniques
based on observable market data. All of the investments categorised as Level 3 are fair valued based on the inputs
to the valuation technique used.
For the 2019 and 2020 Underwriting Years, Lloyd’s of London required syndicates to make loans to the Lloyds’s
central fund in order to facilitate the injection of capital into Lloyd’s Brussels. The amount of the loans by Syndicate
was in reference to total premium income, rather than in relation to the amount of business transacted by the
Syndicate through Lloyd's Brussels. At the balance sheet date, all three of the originating loans have been repaid.
The aggregate face value of the loans is nil (2024: $11.1m) and the fair value is nil (2024: $10.7m).
As the central fund loans are deemed to have discretionary features they were reported within other variable-yield
securities and classed as a level 3 asset. Per FRS 102, section 11, this arrangement constitutes a financing transaction
and this being so, where the financial asset is not already deemed at present value, it is measured at the present
value of the future payments discounted at a market rate of interest for a similar debt instrument as determined at
initial recognition. As there are no similar loan instruments, the loans were recorded at fair value using a valuation
model which is provided to Lloyd's of London and it's managing agencies, from an external valuation firm, and
updated every six months. The valuation model requires significant subjective inputs especially in determining
appropriate credit and illiquidity premiums and, since there is no market where the loans can be traded, the values
attributed to the loans remain extremely subjective and can vary substantially.
13.
Debtors arising out of direct insurance operations
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Due within one year
Total
The debtors arising out of direct insurance operations are all due from insurance intermediaries.
14.
Debtors arising out of reinsurance operations
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Due within one year
Due after one year
Total
The debtors due after more than one year are a combination of reinstatement premiums due on gross outstanding
claims on the treaty class of business and reinsurance accruals on the syndicate quota share with ABL.
Notes to the financial statements continued
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42
Ascot | Syndicate 1414
15.
Other debtors
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Other related party balances (non-syndicate)
Other
Total
Amounts due from related companies are repayable on demand and do not have any associated terms and
conditions.
Other debtors include loss funds of $39.6m (31 December 2024: $43.7m), premium tax prepayment of $12.2m
(31 December 2024: $11.1m) and sundry debtors of $0.3m (31 December 2024: $3.1m).
16.
Deferred acquisition costs
The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end of
the period.
2025
2024
Gross
Reinsurance
Net
Gross
Reinsurance
Net
$000
$000
$000
$000
$000
$000
Balance at 1 January
(29,244 )
(21,439 )
Incurred deferred acquisition costs
(9,222 )
(9,018 )
(7,990 )
Foreign exchange movements
(356 )
(2,421 )
(2,236 )
Balance at 31 December
(29,396 )
(29,244 )
17.
Other assets
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Overseas deposits
91,850
87,233
Total
91,850
87,233
Notes to the financial statements continued
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Ascot | Syndicate 1414
18.
Claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated have
changed from the first estimates made.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported for the
end of the underwriting year to one year later as a large proportion of premiums are earned in the year of account’s
second year of development.
Balances have been translated at exchange rates prevailing at 31 December 2025 in all cases.
Gross:
Pure underwriting
year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Estimate of gross
claims
at end of underwriting
year
one year later
two years later
three years later
four years later
five years later
six years later
seven years later
eight years later
nine years later
Estimate of gross
claims reserve
Provision in respect of
prior years
Less gross claims paid
(409,017 )
(848,414 )
(608,939 )
(380,374 )
(426,824 )
(616,708 )
(589,916 )
(337,301 )
(300,094 )
(46,978 )
(4,564,565 )
Gross claims reserve
Net:
Pure underwriting
year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Estimate of net claims
at end of underwriting
year
one year later
two years later
three years later
four years later
five years later
six years later
seven years later
eight years later
nine years later
Estimate of gross
claims reserve
Provision in respect of
prior years
Less net claims paid
(307,661 )
(364,430 )
(334,933 )
(223,098 )
(264,106 )
(411,805 )
(436,964 )
(306,344 )
(245,504 )
(38,891 )
(2,933,736 )
Net claims reserve
The inflationary impact on the Syndicate's reserving approach has been identified as part of insurance risk for 2025,
as referenced in note 4.
Our approach to allowing for inflation in the reserves has not significantly changed over the last three years, and is
now embedded in the selection of loss ratio assumptions.
In the last few years we have not seen a significant increase in the specific margin for inflation established in 2023
which is illustrated in the below table.
Notes to the financial statements continued
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Ascot | Syndicate 1414
Explicit Inflation Load
Proportion of Net Best Estimate
Reserves
$m
%
2025
15.5
0.69%
2024
14.1
0.68%
2023
14.3
0.79%
In addition to this explicit load, the following implicit allowances are in place for longer tailed lines from the 2023
and subsequent year of accounts:
•
For long-tailed classes of business, we continue to monitor a high inflation scenario based on
slow reversion
of inflation rates on an annual basis, against impact of implicit inflation assumptions. As at 31 December
2025 there is sufficient implicit allowance for inflation within the long-tail classes.
•
Inflation is incorporated in the expected loss ratios as opposed to a monetary load, this is another example
of implicit allowance for inflation. The initial expected loss ratio in the 2023 and subsequent planning cycles
incorporates an explicit estimate of premium and claims inflation.
•
Further, case reserves continue to be updated to reflect the current inflationary environment with no
offsetting reduction to any inflation loadings, implicit or explicit.
In aggregate, the explicit and implicit inflation loadings continue to be upheld, recognising the uncertainty of
inflation to the ultimate reserving position persists.
More broadly, a continued focus on inflation within pricing remains as well as feedback loops into planning and
reserving to manage the associated risks to pricing and reserving.
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.
2025
2024
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Claims outstanding
Balance at 1 January
(728,797 )
(520,839 )
Claims paid during the year
(750,323 )
(588,828 )
(622,168 )
(508,517 )
Expected cost of current
year claims
(253,046 )
(348,342 )
Change in estimates of
prior year provisions
(71,094 )
(53,352 )
(15,592 )
Foreign exchange
movements
(11,231 )
(26,311 )
(20,885 )
Balance at 31 December
(813,837 )
(728,797 )
Notes to the financial statements continued
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45
Ascot | Syndicate 1414
2025
2024
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Unearned premiums
Balance at 1 January
(158,055 )
(140,107 )
Premiums written during
the year
(473,445 )
(479,416 )
Premiums earned during
the year
(1,847,182 )
(1,373,114 )
(1,882,613 )
(1,421,922 )
Foreign exchange
movements
(2,023 )
(9,742 )
(8,965 )
Balance at 31 December
(159,455 )
(158,055 )
Refer to Note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the accounts,
to potential movements in the assumptions applied within the technical provisions.
20.
Creditors arising out of direct insurance operations
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Due within one year
Total
The creditors arising out of direct insurance operations are all due from insurance intermediaries.
21.
Creditors arising out of reinsurance operations
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Due within one year
Total
The creditors arising out of reinsurance operations are all due from reinsurance intermediaries.
22.
Other creditors
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Other related party balances (non syndicates)
Other liabilities
Total
Amounts due to related companies are repayable on demand and do not have any associated terms and
conditions.
Other liabilities includes premium taxes payable of $2,090k (31 December 2024: $2,375k).
Notes to the financial statements continued
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Ascot | Syndicate 1414
23.
Cash and cash equivalents
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Cash at bank and in hand
Short term debt instruments presented within other financial
investments
Total cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the
management of its short-term commitments are included in cash and cash equivalents.
Cash at bank and in hand above relates to the underwriting activities of Syndicate 1414 and are held under the
terms of Lloyd's Premium Trust Deeds in Premium Trust Funds (see note 12).
Short term debt instruments included above relates to the cash balances held within the investment portfolio as
well as money market funds.
Included within cash and cash equivalents are the following amounts which are not available for use by the
Syndicate because this cash is held in regulated bank accounts in overseas jurisdictions.
Year Ended
31 December 2025
Year Ended
31 December 2024
$000
$000
Cash at bank and in hand
Short term debt instruments presented within other financial
investments
Total cash and cash equivalents not available for use by the syndicate
24.
Analysis of net debt
At 1 January
2025
Cash
flows
Acquired
Fair value &
exchange
movements
Non-cash
changes
At 31
December
2025
$000
$000
$000
$000
$000
$000
Cash and cash equivalents
(10,733 )
Total
(10,733 )
Net debt consists of the borrowings of the Syndicate, less any cash and cash equivalents. The Syndicate has no
borrowings.
25.
Related parties
Ascot Insurance Services Limited (AIS), a service company for Syndicate 1414, charged a service fee of $22k to the
Syndicate for the 2025 (2024: $19k) the fee is equal to the actual expenses relating to the introduction of business to
Syndicate 1414, plus a mark-up of 5.0% (2024: 5.0%). At 31 December 2025, the insurance balance owed by AIS to
Syndicate 1414 was $15,743k (2024: $15,294k), and the non-insurance balance due from AIS was $1k (2024: $0k due to
AIS).
Ethos Speciality Insurance Services LLC (ESI) was a coverholder of Syndicate 1414 and was remunerated through
coverholder fees payable by the Syndicate. On the 4th November 2024, ESI was sold to Bishop Street Underwriters
LLC and therefore left the wider Ascot Group (being Ascot Group Limited and its subsidiaries). At the date of the sale
the amount due to ESI was $7,513k, at 31 December 2025 the amount due at the date of the sale has been fully
settled (2024: $3,320k).
Expenses totalling $74,099k (2024: $70,399k) and $2,877k (2024: $1,216k) were recharged from AUHL and Ascot
Group Limited (AGL) to the Syndicate respectively. At 31 December 2025 the amount due to AUHL was $9,016k
(2024: $1,766k) and due to AGL $0k (2024: $0k).
Syndicate 1414 paid US Federal Income Taxes on behalf of ACNL during the year. At 31 December 2025 the amount
due from ACNL was $10,379k (2024: $7,220k).
Notes to the financial statements continued
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Ascot | Syndicate 1414
Further, expenses of $4,524k (2024: $2,049k) were recharged from Ascot US Services Company (USC) to the
Syndicate. At 31 December 2025 the amount due to USC was $0k (2024: $0k).
Ascot Underwriting Inc. (AUI) and Ascot Underwriting Bermuda Limited (AUB) charge a coverholder fee to
Syndicate 1414 for the underwriting services they provide; this fee is based on 10%-7% (2024: 10%-7%) of gross written
premiums dependant on class of business and amounted to $10,914k (2024: $11,453k) and $4,860k (2024: $4,624k)
respectively for all underwriting years combined for the 2025. At 31 December 2025 the amount due to AUI was
$537k (2024: $581k) and the amount due to AUB was $291k (2024: $133k).
The Syndicate cedes certain insurance risks to ABL. In 2025, the net impact of these arrangements resulted in
expense to the Syndicate of $998k (2024: $46,515k income). The amount payable at the balance sheet date was
$9,022k (2024: $5,796k). ABL paid expenses in 2025 of $9,916k (2024: $6,959k) recharging these back to the Syndicate
with the amount payable at 31 December 2025 being $2,198k (2024: $0k). ABL is a related party within the wider
Ascot Group of companies, and has provided the cash and securities element of ACNL’s Funds at Lloyd’s for 2025 to
the value of $639,382k (2024: $501,983k).
Syndicate 1414 accepted certain insurance risk from Ascot Speciality Insurance Company and Ascot Insurance
Company in respect of business placed through a third party Managing General Agent. In 2025 the Syndicate
recognised $969k of gross written premiums (2024: $1,000k), and at the balance sheet date had an amount
receivable of $412k (2024: $425k).
For its services as the consortium manager, AUL receives consortium fee and profit commission income from the
Syndicate for the 2023 to 2025 years of account only. The Syndicate recognises the consortium fee expense on a
written basis, amounting to $7,027k for 2025 (2024: $5,859k), and an earned basis amounting to $6,901k (2024:
$5,345k). At 31 December 2025 the amount due to AUL was $4,287k (2024: $3,996k). The Syndicate recognised a
profit commission expense of $2,941k (2024: $263k) and a profit commission payable to AUL at 31 December 2025 of
$1,975k (2024: $263k).
Canro Re Limited (“Canro Re”, a Bermuda domiciled special purpose insurer (“SPI”) was formed to provide
reinsurance capacity to subsidiaries of Ascot, namely ABL and Syndicate 1414, through reinsurance agreements
which will be collateralised and funded by Canro Re through the issuance of non-voting redeemable preference
shares to investors. As of 31 December 2025, the sole investor or the preference shares issues by Canro Re was CPP
Investment Board PMI-2 Inc., CPP Investment Board PMI-2 Inc. is a related party of the Syndicate. Upon issuance of
the preference shares, the proceeds from the issuance are deposited into a collateral account to fund any potential
obligations under the reinsurance agreements entered into with ABL and Syndicate 1414.
For the 2025, the Syndicate recorded $11,890k (2024: $15,579k) of ceded premiums written to Canro Re and $3,353k
expense (2024: $4,892k recoveries) of losses and loss adjustment with Canro Re. At 31 December 2025, the Syndicate
had a reinsurance recoverable on unpaid losses of $12,832k (2024: $21,219k) due from Canro Re and $2,117k (2024:
$11,914k) of reinsurance balances payable to Canro Re.
26.
Post balance sheet events
The amounts that are proposed to be transferred to members are disclosed in note 11.
27.
Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions (reported to 2dp):
2025
2024
Start of period
rate
End of period
rate
Average
rate
Start of period
rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
Notes to the financial statements continued
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Ascot | Syndicate 1414
28.
Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as 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 Financial Statements by way of such
capital resources. However, the Managing Agent is able to make a call on the Member’s FAL to meet liquidity
requirements or to settle losses.
Notes to the financial statements continued
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Ascot | Syndicate 1414