Syndicate Accounts

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Classification: Unclassified

Annual Report and Financial Statements

Syndicate 2488

for the year ended

31 December 2024

Contents

Active Underwriter’s report..........................................................................................................................................4

Managing Agent’s report...............................................................................................................................................6

Independent auditors’ report to the member of Syndicate 2488...............................................................................17

Statement of profit or loss and other comprehensive income:..................................................................................21

Balance sheet – Assets................................................................................................................................................23

Balance sheet (cont’d) – Liabilities............................................................................................................................24

Statement of changes in members’ balances..............................................................................................................25

Statement of cash flows..............................................................................................................................................26

Notes to the financial statements – (forming part of the financial statements).......................................................27

Active Underwriter’s report

Reflections on 2024

I am pleased to report that 2024 was another successful year for Syndicate 2488 (“the syndicate”). Gross written premiums were £7727.5 million, up 4.8% over prior year despite a softening market, as we successfully executed our underwriting strategies and distribution initiatives to retain and win more business. We reported a healthy underwriting profit of £134.2 million with an associated combined ratio of 78.0%, which together with robust investment returns, generated a profit for the year of £219.7 million.

The year saw ever increasing levels of competitor activity and new capacity in the London market, with follow facilities – both new and existing – putting additional pressure on signings. Overall pricing on the syndicate’s renewal portfolio was flat, with still-positive pricing in certain areas, notably property binders and various marine classes, effectively offset by flat to negative movements in other lines. However, even with prices coming off their historic highs, rate adequacy in all core lines remained strong. We maintained underwriting discipline, cutting back new business targets in some of the more challenged areas to protect our profitability margins. We continue to drive growth by further building trading relationships with our broker partners, and through specific initiatives designed to increase in-appetite submission flows and generate a good pipeline of high-quality risks.

2024 also saw some senior leadership changes in Chubb Underwriting Agencies Limited (“CUAL”). David Kirk was appointed as Division President of Chubb Global Markets (“CGM”) in July, taking over the executive management responsibility for CGM, including Syndicate 2488, from David Furby. Having known David Kirk for the best part of a decade, I am delighted to be working more closely with him as he brings his proven underwriting experience and deep knowledge of Chubb Global Markets to lead the charge in the continued development of our London Market wholesale business. From 1 April 2025 David Furby transitions to a new position as Executive Chairman of Europe, Middle East and Africa (“EMEA”) from his role as Regional President for EMEA. David Furby was also appointed as a Non-Executive Director of CUAL during the year.

I am also pleased to report that Syndicate 2488 was again rated "Outperforming" by Lloyd's, reflecting our performance record, governance and effective business planning, and which leads to the lowest level of regulatory oversight.

2024 Financial Performance

Syndicate 2488 underwrote £727.5 million of gross written premium in the year, an increase of 4.8% on the £694.2 million reported at year end 2023 (or 7.7% at constant rates of exchange). Net written premiums for the year increased by 7.2%, rising to £638.3 million from £595.3 million the previous year.

The syndicate reported underwriting profits of £134.2 million, £15.4 million higher than in 2023. The results benefited from prior period reserve releases of £50.3 million, with favourable development in all product lines, but predominantly in marine, aviation and financial lines. Net catastrophe related losses, primarily relating to Hurricanes Helene and Milton, amounted to £55.2 million, higher than the £28.0 million reported in 2023, but still well within with the syndicate’s risk tolerances.

At £88.7 million, total investment returns were £24.7 million less than last year, with the variance driven by lower unrealised gains, reflecting the modest increase in yields witnessed in 2024.

Looking Ahead

After a period of significant, hard market-related growth in the syndicate over the past five years, capacity has returned to the London wholesale market in earnest, and with it, increased competition. With many entities vying for the same accounts, the rating environment is transitioning, with some participants exhibiting typical soft market behaviours and leading to fears that the market will begin to underperform. Risk selection is key to maintaining profitability in this environment. We are balancing our growth ambitions to ensure we continue to achieve rate adequacy and secure margin in the business. Although the longer-term outlook is undoubtedly more challenging, Syndicate 2488 has a dedicated team of seasoned underwriters with experience of managing headwinds and navigating downturns in the cycle, and who will maximise opportunities for profitable growth.

Cost control is also an important factor in maintaining profitability. Lloyd’s syndicates continue to face higher commissions and acquisition costs than other insurance entities, and we expect to receive a first-class service from our broker partners in return. We continue to develop our data and analytical capabilities to provide further insights into underwriting decisions and drive time efficiencies for teams and management. It is disappointing that the Lloyd’s “Blueprint Two” programme has been delayed

and it is imperative that the transition continues to a more digital marketplace that is fit for the future and delivers a platform to make operating in the London market better, faster and cheaper for all participants and delivers enhanced service to our clients.

And finally…

We are operating in an environment with heightened geopolitical and economic volatility, with increased risks of significant catastrophe losses resulting from climate change. Insurance provides clients with the financial stability, through payment of claims and risk mitigation services, to expand their businesses, and the security to take the risks needed to facilitate change. Brokers and clients continue to recognise Syndicate 2488 as a trusted insurance partner with a strong balance sheet, brand and reputation, a broad product portfolio and a track record of delivering market-leading service.

Profitable growth remains our number one priority for next year. We will focus on retaining business and maximising new growth opportunities. We will remain agile, optimising our portfolio to weather any deterioration in market conditions and review our product offerings to ensure we continue to deliver the best insurance solutions for our clients.

Chubb has a very strong culture and is committed to superior underwriting, service and execution. We aim to attract and retain the best talent and strive to create a diverse and inclusive environment where all colleagues feel comfortable to perform to their full potential regardless of their differences, and are recognised for their contributions. We simply could not have achieved the excellent results we have reported this year without the hard work and dedication of CUAL’s employees, and I would like to take the opportunity to thank all my colleagues across the organisation for their continued efforts.

I would also like to thank all our broker partners for their support. This year has highlighted the importance of effective negotiation, patience and collaboration among all parties involved in our daily interactions. Our strong relationships have enabled us to align growth initiatives with specific underwriting strategies to build additional revenue and I look forward to increasing our engagement with the London Market broker community even further in the year ahead.

R Q Wilson

Chief Underwriting Officer and Active Underwriter, Chubb Underwriting Agencies Limited

6 March 2025

Managing Agent’s report

The Board of Directors (“the Board”) of the syndicate’s managing agent, CUAL are pleased to submit their report and the audited syndicate annual accounts for the year ended 31 December 2024.

This report and accounts are 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 amended by The Statutory Auditors and Third Country Auditors Regulations 2017 (the “Regulations”). In addition to this statutory requirement, the report also addresses other aspects of the syndicate’s business which the Board believes will be of benefit to interested parties.

Ownership

Chubb Limited, the ultimate parent of CUAL, is the Swiss-incorporated holding company of the Chubb Group of Companies. Chubb Limited and its direct and indirect subsidiaries, collectively the Chubb Group of Companies (“Chubb”), are a global insurance and reinsurance organisation. At 31 December 2024, Chubb Limited held total assets of $246.3 billion and shareholders’ equity of $68.4 billion. It is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb employs approximately 40,000 people worldwide.

Business Overview

Chubb is a world leader in insurance. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. It is defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. The company manages risk on both sides of its balance sheet by maintaining underwriting discipline, managing exposure accumulations and investing assets conservatively. Chubb’s core operating insurance companies maintain financial strength ratings of “AA” from Standard & Poor’s and “A++” from A.M. Best.

Syndicate 2488 is a strategically important business within Chubb, allowing the group to access specialist Lloyd’s and London market risks. The syndicate offers its clients a broad range of insurance and risk solutions, with policies primarily written under the name “Chubb Global Markets” (“CGM”) which capitalises on the distinctiveness and strength of the Chubb brand and acknowledges the group’s strong insurance platforms, reputation, skill sets and consistent management philosophy.

The structure of the syndicate’s operations allows the underwriters formal and informal interaction with their Chubb underwriting peers across the world. With longstanding client relationships and multi-line global platforms, Syndicate 2488 enjoys a position as a lead insurer in the key lines in which it chooses to compete, with a significant presence in the Lloyd’s market.

CGM’s underwriting products are offered principally through Syndicate 2488 and Chubb European Group SE (“CEG”), a French domiciled company which offers a wide range of property, casualty and accident and health insurance and reinsurance products to both retail and wholesale markets. Business may also be written through a number of overseas Chubb companies. Factors influencing the decision to place business with the syndicate, CEG or an overseas company include licensing eligibilities and capitalisation requirements, but predominantly reflect client and broker preference.

Syndicate 2488 underwrites a diverse portfolio of business organised into product lines including aviation, property, marine, political risk and financial lines. The 2024 split of gross written premiums by major product line is illustrated below:

* Other includes cyber, political risk & credit and energy

Syndicate 2488 benefits from comprehensive and fully integrated support functions encompassing claims, finance and actuarial, risk management, legal and compliance, human resources, operations and IT. Some of the support functions are outsourced to specialist third party service providers and some of their services are performed outside of the UK.

Business Objectives & Strategy

Syndicate 2488 has market-leading risk expertise, a disciplined approach to underwriting and is fully committed to meeting the insurance needs of its clients. It is distinguished by its ability to manage the challenging and constantly changing external environment, the clarity of its strategy and the thoroughness of its execution.

The syndicate’s strategy focuses on an established underwriting ethos that permeates the business. Whilst they strive for top line year-on-year growth, underwriters are fully prepared to shed volume as necessary in order to maintain an underwriting profit. Using CUAL’s underwriting skills and targeted marketing strategies, the syndicate aims to generate growth in areas where risk-adjusted underwriting margins are favourable and achieve better terms or shrink business where they are not.

The syndicate’s product line segmental structure enables underwriters to manage each business class at a detailed level, essential for the identification and analysis of the characteristics, challenges and opportunities of each class. Rating adequacy, competition, volatility and margins are analysed at a micro level by the underwriting teams with significant input from CUAL’s actuaries and management team.

The syndicate strives to offer superior service levels in all aspects of its operations, particularly claims, and it continues to invest in technology to improve its operational efficiency, underwriter support and broker interfaces.

The syndicate and CUAL are committed to protecting and preserving its assets. It operates a conservative investment strategy and has maintained its focus on cash flow management and liquidity to secure its long-term position in the Lloyd’s insurance market.

Investment Strategy

Syndicate 2488 operates a conservative investment strategy by establishing highly liquid, diversified, high quality portfolios managed by expert external managers. Detailed investment guidelines are established for each managed portfolio including Chubb customised benchmarks against which manager performance is measured.

Syndicate 2488 maintains six active investment grade fixed income portfolios, held in US dollars, sterling, Canadian dollars and euro. The syndicate also maintains a US dollar investment grade portfolio, a US dollar high yield portfolio, a private equity fund and an investment grade collateralised loan obligations portfolio in respect of the Funds in Syndicate.

The approximate currency split of the syndicate investment portfolios, including Funds in Syndicate and deposits managed centrally by Lloyd’s, is US dollars 76%, Canadian dollars 9%, Sterling 4%, Euros 8%, and Other currencies 3%. During the year the syndicate continued to maintain diversified actively managed portfolios with exposure to a broad range of sectors. No changes to the asset allocation policy were implemented during 2024.

Presentation of Financial Statements

The basis of preparation of Syndicate 2488’s annual financial statements is in accordance with the 2008 Lloyd’s Regulations, as amended by The Statutory Auditors and Third Country Auditors Regulations 2017, and applicable accounting standards in the United Kingdom. These financial statements recognise a calendar year profit or loss, driven by net earned premium and net incurred losses arising on that net earned premium.

Managing agents are required to prepare syndicate underwriting accounts, similar to those previously prepared on a three-year underwriting basis in respect of any year of account which is being closed by reinsurance to close, unless all the members on the closing year agree otherwise. Syndicate 2488 is a fully aligned syndicate, with 100% of the underwriting capital provided by one corporate capital vehicle, Chubb Capital I Limited. Chubb Capital I Limited has agreed to waive its right to receive syndicate underwriting accounts in respect of Syndicate 2488’s closed 2022 year of account and, as such, no information on this basis has been provided within this report and annual accounts.

Key Performance Indicators

The following financial key performance indicators (“KPIs”) have been deemed relevant to the syndicate business. These KPIs are reviewed regularly by the CUAL Board.

£ million

2024

2023

Gross premiums written

727.5

694.2

Net premiums written

638.3

595.3

Combined ratio % *

78.0%

78.9%

Profit for financial year

219.7

234.0

* Ratio of net claims incurred, commission and expenses to net premiums earned, excluding profit / (loss) on exchange

Management also uses a variety of other performance indicators, including production volumes, retention ratios, price monitoring, loss and expense analyses, and operating metrics in assessing the performance of each of the product lines. All financial results are monitored against plan, forecast and prior year on a regular basis.

CUAL seeks to manage syndicate capacity levels in order to make the most effective use of available capital. The 2025 capacity of Syndicate 2488 has been set at £630.0 million (2024: £630.0 million).

Results & Performance

Syndicate 2488’s business is principally conducted in US dollars however, for accounting purposes, the financial results are presented in sterling. Syndicate 2488’s functional currency is US dollars. Fluctuations in exchange rates during the year can therefore impact the comparability of the income statement and balance sheet for the current year with the prior year.

Syndicate 2488 produced a profit for the 2024 financial year of £219.7 million and a combined ratio of 78.0%. A summary of the reported financial results is shown below.

£ million

2024

2023

Gross premiums written

727.5

694.2

Net premiums written

638.3

595.3

Net premiums earned

609.8

564.0

Incurred losses

(272.0)

(258.1)

Operating expenses

(203.7)

(187.1)

Underwriting profit

134.2

118.8

Investment return

88.7

113.5

(Loss) / Profit / on exchange

(3.2)

1.7

Profit for financial year

219.7

234.0

Combined ratio %

78.0%

78.9%

Rating Environment

After multiple years of rate increases, the London wholesale market is showing signs of softening. The overall rate movement on 2488’s renewal portfolio was -0.1% with still-positive pricing in certain areas, notably property binders and various marine classes, effectively offset by flat to negative movements in other lines.

Drivers of Underwriting Result

Syndicate 2488 recorded an underwriting profit for 2024 of £134.2 million (2023: £118.8 million) and associated combined ratio of 78.0% (2023: 78.9%). The underwriting profit benefited from a prior period reserve release of £50.3 million (2023: £32.7 million). The combined ratio excluding the prior period reserve releases was 86.2% (2023: 79.8%), 8.2 points (2023: 5.0 points) of which related to catastrophe losses. Syndicate 2488’s exposure to large losses is managed by adherence to clear risk management and underwriting guidelines, and the use of reinsurance protection and sophisticated modelling and analysis, with reported losses well within risk tolerances.

The syndicate’s loss ratio excluding prior period reserve movements and catastrophe losses was 43.8% (2023: 46.6%) demonstrating the strength of the underlying portfolio.

Gross written premiums of £727.5 million in 2024 were 4.8% higher than the prior year, or 7.7% if the impact of changes in foreign exchange rates are eliminated. Underlying growth was driven by increased exposure and new business, primarily in Property and Marine.

The syndicate purchases reinsurance to mitigate the impact of major events and an undue frequency of smaller losses and seeks to limit its loss exposures by purchasing reinsurance up to its maximum line sizes and accumulations. The principal reinsurance programmes operated by the syndicate during the year were partly shared with other Chubb companies including CEG. There were no major changes to the syndicate’s reinsurance purchasing strategy in 2024.

Operating expenses constitute acquisition costs, Lloyd’s subscriptions, Central Fund contributions and general administrative expenses. CUAL continues to focus on the management of each of these components in line with the growth and needs of the business.

Investment Performance

Investment grade fixed income returns were positive in 2024 as a result of both sovereign and corporate yield movements during the year. Returns for alternative asset classes held by Syndicate 2488 including high yield bonds and private loans also produced positive returns for the full year as a result of the prevailing market conditions.

Overall Syndicate 2488 generated a total return of 4.7% in 2024 (2023: 6.7%) on balances available for investment. For investment grade portfolios, total returns of 2.5%, 3.8% and 5.5% were generated for Sterling, Euro and Canadian dollar portfolios respectively (2023: 7.8%, 7.4%, 5.8%). The US dollar investment grade portfolios which comprise over 82% of the investment grade bonds generated a total return of 4% in the year (2023: 6%).

Syndicate 2488’s alternative investment assets, constituting around 18% of the total portfolio, are comprised of US dollar upper tier high yield bonds (12%) along with the Oak Hill Advisors private equity fund (6%). The high yield portfolio generated a return of 7.3% and the Oak Hill Advisors fund 8.8% for the year.

Cash Flow

Total syndicate cash flow derived from operating activities in the year was positive. The syndicate made a profit on the 2021 closed year of account which was distributed to the Corporate member during 2024.

Capital

A syndicate’s capital requirements are determined through the submission and agreement by Lloyd’s of a Solvency Capital Requirement (“SCR”) adjusted by Lloyd’s through the application of a market wide uplift of 35%. The uplifted SCR is referred to as the Lloyd’s Economic Capital Assessment (“ECA”).

The Prudential Regulation Authority (“PRA”) conducts reviews directly with Lloyd’s on the overall SCR for the Lloyd’s Market rather than at a syndicate level. Under the governance processes surrounding the Lloyd’s internal model, the syndicate is obligated to ensure compliance with Lloyd’s requirements for the internal model tests and standards, and processes are in place to meet these obligations.

In order to determine the SCR, the syndicate assesses its risk profile and capital requirements using an internal model which has been developed to meet Solvency II requirements. The internal model is supported by a robust validation and governance framework which ensures its ongoing appropriateness and is refined to reflect the syndicate’s experience, changes in the risk profile and advances in modelling methodologies. For 2025, the final SCR used for the ECA shows a decrease compared with the 2024 requirement of approximately 3%. The decrease is mainly attributable to updated plan exposures, volatility parameters and dependency calibrations within the model.

A Quarterly Corridor Test (“QCT”) is undertaken each quarter to establish whether the syndicate’s capital remains within Lloyd’s corridor of 90% to 110% of the ECA. The syndicate maintained capital either within or above the corridor throughout 2024.

Syndicate 2488 now meets its Funds at Lloyd’s (“FAL”) requirement by the provision of investments held within the syndicate which are designated as Funds in Syndicate combined with third party FAL totalling £393.0m provided by Chubb Tempest Re

and £73.4m provided through a Letter of Credit. The overall quantum of FAL for 2024 year end was £1.115 billion (2023: £716.5 million) and has increased in 2024 due to the introduction of the new third party FAL and the LOC. We anticipate the majority of the excess FIS will be released in Q1 2025.

Ratings

All active syndicates benefit from the financial strength ratings assigned to the Lloyd’s market by various rating agencies. At the time of this report, Lloyd’s holds financial strength ratings of “A+ (Superior)” from A.M. Best, “AA- (Very Strong)” from Standard & Poor’s, “AA- (Very Strong)” from Fitch and “AA- (Very Strong)” from Kroll Bond Rating Agency. In view of these robust ratings, together with Chubb’s core operating insurance companies’ ratings of “A++” and “AA” from A.M. Best and Standard & Poor’s respectively, it has not been considered necessary to obtain an individual rating for the syndicate.

Governance

CUAL has a documented corporate governance framework, the purpose of which is to exercise oversight and control over the management of its own and the syndicate’s business.

The Board of Directors (“the Board”) has reserved responsibility for decisions in connection with a number of matters, including those of a significant strategic, structural, capital, financial reporting, internal control, risk (including sustainability risk), contractual, policy or compliance nature.

The Board meets at least four times a year and additionally on other occasions to discharge its responsibilities in respect of these and other matters. In 2024 the Board met eight times.

Membership of the Board is kept under review to ensure that the composition and available expertise remains relevant to the current needs of the syndicate. As at the date of this report the Board comprises two independent non-executive directors, three non-executive regional Chubb representatives and three executive directors. Tim Wade resigned as an independent non-executive director and chair of the Audit & Risk Committee with effect from 26 February 2024 and his replacement, Karen Briggs received regulatory approval on 24 June 2024. In addition David Kirk was appointed as Chief Executive Officer of the Company and received regulatory approval on 4 October 2024, when the status of David Furby changed to non-executive regional Chubb representative and he became a member of the Audit & Risk Committee. CUAL greatly values the contribution of its non-executive directors in providing contrasting insights, experience and challenge in the Board’s discussions and the insights of the regional Chubb representatives into the wider Chubb Group. Details of the directors, including appointments and resignations can be found on page 14.

In addition to the changes to the Board, key non-routine Board activity during the year included: i) CUAL’s adherence with the Operational Resilience and Consumer Duty requirements, ii) the method of provision of capital to Syndicate 2488 by Chubb Capital I Limited and iii) changes to the Board members and senior function holders. The Board reviewed and updated its critical and important outsourced arrangements and reviewed the Risk Management Framework and various Board policies. In addition, the Board conducted deep dives into Resilience; Diversity, Equity and Inclusion; Claims Management and Complaints; Outsourcing and Oversight of Third Parties; Lloyd’s Blueprint 2; Chubb’s Climate+ product offering; Catastrophe Modelling; Data Quality and Investments.

The Board received regular reports on the status of business results, business and function plans, resourcing, developments in the risk and regulatory environments, regulatory compliance, underwriting controls, actuarial and solvency matters. The Board reviewed and updated its responses to the Lloyd’s Principles of Doing Business, with a focus on diversity, equity and inclusion matters. It approved the 2025 Syndicate Business Forecast and the annual whistleblowing report. One meeting each year is dedicated to the syndicate’s business strategy. An external effectiveness review was carried out and no material issues were identified.

The Board has delegated a number of matters to committees. Each of the following committees has formal terms of reference and matters reserved to it and report regularly to the Board.

The Audit & Risk Committee, which is comprised exclusively of non-executive directors, considered and made recommendations to the Board on areas including the validation of solvency calculations, reserving, internal controls, financial reporting, actuarial matters, resilience and the external audit. In addition, it oversaw and advised the Board on emerging risk exposures including geopolitical risk and the management of resourcing pressures which improved throughout the year. It reviewed updates to the

risk management framework, solvency and capital matters. It also ensured that business risks and controls were recorded and monitored.

This Committee received reports from the compliance, conduct, actuarial, finance and resilience functions on a quarterly basis. Other regular reporting included updates on the syndicate’s “Own Risk and Solvency Assessment” metrics, which helps to provide an independent overview of management’s assessment of risk, including performance against Board approved risk appetites. It also reviewed the Company’s compliance with the Lloyd’s Principles of Doing Business and the completion of various CUAL Lloyd’s returns and other regulatory requirements. The Underwriting Risk Committee reports on a quarterly basis to the Audit & Risk Committee, with a focus on underwriting strategy.

In relation to the external audit process, the Audit & Risk Committee monitored the nature and scope of work in the audit of the financial statements and other external reporting requirements. It received regular reports from the External Auditor and the independent non-executive directors met regularly with the External Auditor without management being present.

In the case of the internal audit function, this Committee’s role involved agreeing and monitoring, in conjunction with the group audit function, the nature and scope of work to be carried out by the internal audit team and the availability of sufficient resources. It received regular reports from the Internal Auditor and the independent non-executive directors met regularly with the Head of Internal Audit without management being present. In addition, the independent non-executive directors met with the Chief Risk Officer without management being present.

The Audit & Risk Committee’s role was aimed at providing assurance to the Board that the internal control systems, agreed by executive management, were appropriate for the prudent management of the business during the year and were operating as designed. At all times the Committee members were expected to challenge any aspect of these processes which it considered weak or generally poor practice.

During 2024 the Committee reviewed the control environment and how this was being addressed by Chubb and CUAL’s adherence with the Operational Resilience and Consumer Duty requirements. Other areas of focus were the pressures on rate due to areas of market softening and increased competition.

The CUAL Management Committee comprises executive directors and other members of the senior management team. The primary role of the Management Committee is to oversee the day-to-day management of business operations and performance, and to assist the Chief Executive Officer in implementing and overseeing operational strategies and decisions determined by the Board. The CUAL Management Committee oversees the support function activities, key steering groups and supporting committees which form part of the company’s governance.

The supporting committees reporting into the Management Committee include the: cyber security governance; delegated authority review; finance, capital & credit; reserve; investment; internal model steering; resilience steering and IT steering committees.

CUAL has a Routine Board Committee. It meets on an ad hoc basis between formal Board meetings to consider authorisation of routine activity and its activities are reported at the subsequent quarterly Board meeting.

Risk & Control Framework

The Chubb Group is a global underwriting franchise whose risk management obligation to stakeholders is simple: ensure sufficient financial strength over the long term in order to pay policyholder claims while simultaneously building and sustaining shareholder value.

The Chubb Enterprise Risk Management (“ERM”) strategy helps achieve the goal of building shareholder value by systematically identifying, and then monitoring and managing, the various risks to the achievement of corporate business objectives and thereby minimising potential disruptions that could otherwise diminish shareholder value or balance sheet strength.

CUAL has adopted the Chubb Group Enterprise Risk Management Framework (“RMF”), which describes the role of ERM within CUAL and how it helps the syndicate achieve its business objectives, meet its corporate obligations and maintain the reputation of the Chubb franchise. Chubb’s documented RMF is principles-based and sets out the organisational framework for risk taking, risk management, monitoring and governance.

The RMF adopts a “three lines of defence” model, comprising day-to-day risk management and controls, risk management oversight, and independent assurance.

The RMF identifies the key risks to which each business segment and the syndicate as a whole is exposed, and their resultant impact on economic and regulatory capital. This framework employs Solvency II principles to assess risk and manage capital requirements to ensure the capital required to support CUAL’s business objectives and to meet the requirements of policyholders and regulators.

The Board is ultimately responsible for ensuring that the syndicate operates within an established framework of effective systems of internal control, including the approval of the overall risk tolerance for the organisation and compliance with policies, procedures, internal controls and regulatory requirements.

The Board’s oversight of the RMF is exercised through the various committees and functions with particular purposes and direction around the monitoring of risk tolerances and oversight of internal controls and compliance procedures. The risk management function has a strong mandate from the Board to promote the RMF and embed it across the syndicate.

The RMF was re-approved by the Board in 2024 together with a review of individual risk policies and risk appetite statements which set out defined risk-tolerance constraints for the execution of the business strategy. All key policies and procedures are subject to Board approval and ongoing review by executive management, the risk management function and internal audit function.

Disclosures regarding risks and capital management are provided in note 4 to the financial statements. CUAL employs and monitors risk guidelines to ensure acceptable risk accumulations in the syndicate.

Compliance

Compliance with regulation, legal and ethical standards is a high priority for Chubb and CUAL, and the compliance function has an important oversight role in this regard. Annual affirmation of the Chubb Code of Conduct is required of all employees and directors.

As a material subsidiary of Chubb Limited, a US listed company, the financial control environment in which the financial statements are derived is subject to the requirements of US Sarbanes-Oxley legislation. CUAL has formalised documentation and tested controls to enable Chubb Limited to fulfil the requirements of the legislation.

CUAL is also committed to fulfilling its other compliance-related duties, including its observance of customer-focused policies in line with regulatory principles, and it uses various metrics to assess its performance.

The managing agency utilises a skilled and specialist workforce employed by Chubb Services UK Limited and Chubb European Group SE, to manage its regulatory and compliance responsibilities and aims to operate to a high standard. CUAL recognises and values its relationships with regulators in each of its jurisdictions and engages in open dialogue and communication to address and resolve any issues.

Social, Environmental and Employee Matters

Chubb is a diverse team, serving diverse customers, markets, and distribution channels, and is united in its commitment to the highest ethical standards through the prism of culture, values and beliefs. Chubb’s culture is the heart of ‘The Chubb Way’ which defines who the people of Chubb are, the behaviours expected at Chubb, and what Chubb recognises and rewards.

As a global company, Chubb’s geographical, product and distribution diversification provides unprecedented opportunities for those who want to take advantage of a multitude of career path options. This long-standing commitment to ensuring all employees have the opportunity to evolve professionally and reach their full potential significantly contributes to Chubb’s ability to deliver outstanding business results. CUAL strives to ensure that every applicant, candidate and employee feels welcomed and valued and has access to the resources they need to succeed.

The Chubb Code of Conduct

The Chubb Code of Conduct addresses, among other things, conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets, compliance with laws and regulations and reporting illegal or unethical behaviour. All employees, officers and directors of CUAL are expected to acknowledge acceptance of this code, confirming that they know and understand the standards expected. CUAL expects its business partners such as consultants, agents, third party representatives and service providers to also comply with the code. Appropriate measures may be taken if anyone fails to meet those standards or contractual obligations.

Diversity, Equity & Inclusion (“DE&I”)

Diversity, equity and inclusion are integral to Chubb’s culture and informs how Chubb approaches business. In 2023 the existing DE&I strategy for the EMEA region was updated to ensure inclusion is fully integrated. This includes focused action to:

1.Improve data and insight – to inform action and monitor progress.

2.Clarify accountabilities – so that everyone is clear on the part they play.

3.Build awareness and capability – so that everyone is equipped and empowered to act.

4.Apply an inclusion lens – to policies, processes and decisions.

All Chubb employees are expected to contribute to role-model inclusive actions and behaviours and voicing any concerns in a timely manner to ensure Chubb is a welcoming place to work for everyone. Additional manager responsibilities include setting the tone by role modelling inclusive leadership and prioritising building their knowledge and understanding of diversity, equity and inclusion so that they can provide the best support for their team.

Talent Strategy

Chubb’s ability to deliver outstanding business results relies on the calibre of its talent and the efforts of its employees at all levels of the organisation supporting the personal and professional development of all its people. CUAL aims to maintain a mid- and long-term talent pipeline to ensure the right quality and quantity of diverse talent is available for the company to deliver its key business objectives. Formal succession plans are in place at the senior level with plans in place to expand this to lower management levels in 2025. CUAL expects all employees to own and drive their development by availing themselves of the structured and unstructured learning on offer and supports employees with job-related professional qualifications and external development opportunities where appropriate.

Environmental Matters

Chubb and CUAL recognise and are responding to the reality of climate change across their business. Chubb regularly assesses the nature of the risks being covered, including assessing changes in the insured, its operations and exposures that naturally extend to climate risks and to identify which risks are material. Chubb assesses the impact of physical, transition and liability risks over modelled timeframes by utilising Chubb’s Enterprise Risk Unit to support climate scenario analysis across Chubb’s global operations.

Chubb produces an array of climate-related disclosures, including prior Task Force on Climate-Related Financial Disclosures (“TCFD”) Reports, an annual Sustainability Report, and a Corporate Climate Underwriting Criteria summary. These disclosures outline the scope of the company’s environmental program, including climate-related risk assessment and mitigation strategies, and are available to view on Chubb’s website.

Chubb believes the most effective use of its resources to support society’s transition to net-zero is to provide clients with the risk transfer capacity necessary to facilitate their transition efforts. Chubb’s climate strategy is underwriting-focused and consists of three main components:

1.Applying underwriting and engineering expertise to support renewable energy and emerging clean technologies through Chubb Climate+.

2.Helping clients improve their climate resilience through the risk engineering and new service offerings of Chubb Resilience Services.

3.Developing technical underwriting criteria to manage Chubb’s risk exposure by encouraging the adoption of controls and best practices in high-emitting industries.

Chubb has taken significant actions to address climate change through a holistic effort across its business, including criteria on underwriting and investing in certain fossil fuel related activities.

Through Chubb’s underwriting process, we have opportunities to promote good risk management and the adoption of sound engineering practices by its clients. The company’s climate strategy seeks to deploy Chubb’s fundamental areas of expertise to address the high-emitting industries we insure. Chubb’s approach to these industries involves reviewing best practices, seeking guidance from non-governmental organization (NGO) partners, and engaging with clients to develop perspectives on GHG emissions mitigation measures that apply best engineering practices and relate to risk quality. As Chubb develops underwriting

criteria, Chubb will simultaneously offer on-the-ground engineering expertise, working on-site with its clients to help deploy best practices and controls to reduce GHG emissions.

Chubb has applied this approach to the development of its underwriting criteria for oil and gas, and cement and is currently evaluating the potential evidence to support the development of criteria in other high-emitting industries. Chubb anticipates announcing criteria for additional high-emitting industries over the course of 2025. Chubb’s corporate climate underwriting criteria is available on Chubb’s website, and updated as new criteria are announced.

Citizenship & Charitable Giving

The Chubb Charitable Foundation believes that meaningful contributions that support communities globally provide lasting benefits to society, to Chubb and to Chubb employees. ‘Charity at Chubb’ is Chubb’s European charity committee with a remit to make the best, most relevant charitable impact focusing on championing and encouraging activities under the pillars of: Community & Employee Engagement; Social Mobility; Wellbeing & Disability Confidence; and Education & Youth.

Chubb employees also participate in a number of local voluntary community schemes and personal fundraising efforts which the company supports through a charitable contribution scheme. CUAL employees participated in a wide range of charitable activities during the year including Chubb’s “Week of Giving”, an initiative encouraging colleagues to volunteer their time to support their local communities.

Human Rights

CUAL conducts its business in a manner that respects the human rights and dignity of all and supports international efforts to promote and protect human rights. CUAL does not tolerate abuse of human rights in a CUAL workplace or during CUAL business. CUAL aims to comply with legal and regulatory requirements everywhere it conducts business and to embed the values in the Chubb Code of Conduct, which was updated in 2023, in the company’s activities which affirms its commitment to compliance with equal employment opportunity laws and other applicable civil rights, human rights and labour laws. The Modern Slavery Statement followed by CUAL can be found on the website. Chubb supports the United Nations Global Compact (“the Compact”), the world’s largest corporate sustainability initiative.

Directors

The following have been directors of the managing agent from 1 January 2024 to the date of this report unless otherwise indicated:

Executive directors:

D K Kirk Appointed 4 October 2024, Chief Executive Officer

C P J O’Brien

R Q WilsonChief Underwriting Officer

Non-executive directors:

K S Briggs Appointed 24 June 2024, Independent Non-Executive Director and Chairman of the Audit & Risk Committee

M A Connole

D M A FurbyChief Executive Officer until 4 October 2024

S K Richards

J A TurnerChairman and Independent Non-Executive Director

T C WadeResigned 26 February 2024, Independent Non-Executive Director and Chairman of the Audit & Risk Committee

Qualifying third-party indemnity provisions (as defined by section 234 of the Companies Act 2006) are in place for the benefit of the directors and, at the date of this report, are in in force in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers or office.

The managing agent also has the benefit of a group insurance company management activities policy effected by Chubb Limited (CUAL’s ultimate holding company). No charge was made to CUAL during the year for this policy.

Directors’ Participations

None of the directors participates on the syndicate on a bespoke basis. Certain directors participate indirectly on the syndicate by virtue of their interests in the stock of Chubb Limited.

Statement of Managing Agent’s Responsibilities

The managing agent is required by the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, as amended by The Statutory Auditors and Third Country Auditors Regulations 2017 (the “Regulations”), to prepare syndicate annual accounts for Syndicate 2488 for each financial year which give a true and fair view of the state of affairs of the syndicate and of its profit or loss for that year.

In preparing these syndicate annual accounts the managing agent is required to:

•select suitable accounting policies and then apply them consistently;

•state whether applicable United Kingdom Accounting Standards, comprising FRS 102 and FRS 103 have been followed, subject to any material departures disclosed and explained in the financial statements;

•make judgements and accounting estimates that are reasonable and prudent; and

•prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

•prepare and review the iXBRL tagging that has been applied to the Syndicate Accounts in accordance with the instructions issued by Lloyd’s, including designing, implementing and maintaining systems, processes and internal controls to result in tagging that is free from material non-compliance with the instructions issued by Lloyd’s, whether due to fraud or error.

The directors of the managing agent confirm that they have complied with the above requirements in preparing the syndicate annual accounts.

The managing agent is responsible for keeping adequate accounting records that are sufficient to show and explain the syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the syndicate and enable it to ensure that the syndicate annual accounts comply with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. The managing agent is also responsible for safeguarding the assets of the syndicate and hence for taking reasonable steps to prevent and detect fraud and other irregularities.

Legislation in the UK concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement as to Disclosure of Information to Auditors

In the case of each director in office at the date the directors’ report is approved:

•so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware; and

•they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Independent Auditors

The 2008 Lloyd’s Regulations, as amended by The Statutory Auditors and Third Country Auditors Regulations 2017 (the “Regulations”) require that the auditors of the syndicate annual accounts be appointed by the members of the syndicate, initially for the syndicate annual accounts for the 2009 year end after which provisions for deemed reappointment of auditors will apply.

PricewaterhouseCoopers LLP is deemed to have been reappointed as the auditors of the syndicate annual accounts for the 2024 year end.

Approved by the Board and signed on its behalf:

C P J O’Brien

Director6 March 2025

Independent auditors’ report to the member of Syndicate 2488

Report on the audit of the syndicate annual accounts

Opinion

In our opinion, 2488’s syndicate annual accounts:

•give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit and cash flows for the year then ended;

•have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and

•have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate Accounts Instructions version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the Lloyd’s Syndicate Instructions”).

We have audited the syndicate annual accounts included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the Balance Sheet as at 31 December 2024, the Statement of profit or loss and other comprehensive income, the statement of cash flows, the statement of changes in members’ balances for the year then ended; and the notes to the syndicate annual accounts, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions and other applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the syndicate annual accounts section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in note 6, we have provided no non-audit services to the syndicate in the period under audit.

Conclusions relating to going concern

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going concern for a period of at least twelve months from when the syndicate annual accounts are authorised for issue.

In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the syndicate’s ability to continue as a going concern.

Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the syndicate annual accounts and our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the syndicate annual accounts does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the syndicate annual accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the syndicate annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the syndicate annual accounts or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Managing Agent’s Report, we also considered whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 have been included.

Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.

Managing Agent’s Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Managing Agent’s Report for the year ended 31 December 2024 is consistent with the syndicate annual accounts and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we did not identify any material misstatements in the Managing Agent’s Report.

Responsibilities for the syndicate annual accounts and the audit

Responsibilities of the Managing Agent for the syndicate annual accounts

As explained more fully in the Statement of Managing Agent’s Responsibilities, the Managing Agent is responsible for the preparation of the syndicate annual accounts in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Managing Agent is also responsible for such internal control as they determine is necessary to enable the preparation of syndicate annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless it is intended for the syndicate to cease operations, or it has no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the syndicate annual accounts

Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these syndicate annual accounts.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered the extent to which non-compliance might have a material effect on the syndicate annual accounts. We also considered those laws and regulations that have a direct impact on the syndicate annual accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and the Lloyd’s Syndicate Instructions. We evaluated management’s incentives and opportunities for fraudulent manipulation of the syndicate annual accounts (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgemental areas, including the valuation of claims incurred but not reported, estimated premium income, and the posting of inappropriate journals.

Audit procedures performed by the engagement team included:

•Discussions with senior management including those involved in the Legal, Compliance and Internal Audit functions, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

•Assessment of any matters reported on the managing agent’s whistleblowing helpline and the results of management’s investigation of such matters;

•Reviewing relevant meeting minutes including those of the Audit and Risk Committee of the managing agent, and any correspondence with regulatory authorities, including Lloyd’s of London, the Prudential Regulation Authority and the Financial Conduct Authority;

•Identifying and testing journal entries identified as potential indicators of fraud;

•Challenging assumptions made by the management in their significant accounting estimates, in particular, in relation to the valuation of incurred but not reported claims and estimates within gross premiums written; and

•Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the syndicate annual accounts is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities

. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the syndicate’s member in accordance with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to

any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required to report to you if, in our opinion:

•we have not obtained all the information and explanations we require for our audit; or

•adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or

•certain disclosures of Managing Agent remuneration specified by law are not made; or

•the syndicate annual accounts are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

Other matter

We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been applied. This auditors’ report provides no assurance over whether the iXBRL tagging has been applied in accordance with section 2 of the Lloyd’s Syndicate Instructions version 2.0.

Deepti Vohra (Senior statutory auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

6 March 2025

Statement of profit or loss and other comprehensive income:

Technical account – General business

For the year ended 31 December 2024

Note

2024

£000

2023

£000

Gross premiums written

727,463

694,185

Outwards reinsurance premiums

(89,158)

(98,857)

Premiums written, net of reinsurance

638,305

595,328

Changes in unearned premium

Change in the gross provision for unearned premiums

(27,003)

(25,040)

Change in the provision for unearned premiums reinsurers’ share

(1,500)

(6,331)

Net change in provisions for unearned premiums

(28,503)

(31,371)

Earned premiums, net of reinsurance

609,802

563,957

Allocated investment return transferred from the non-technical account

45,542

61,274

Claims paid

Gross amount

(314,244)

(289,265)

Reinsurers’ share

54,799

82,816

Net claims paid

(259,445)

(206,449)

Change in the provision for claims

Gross amount

(642)

19,283

Reinsurers’ share

(11,898)

(70,929)

Net change in provisions for claims

(12,540)

(51,646)

Claims incurred, net of reinsurance

(271,985)

(258,095)

Net operating expenses

(203,652)

(187,092)

Balance on the technical account – general business

179,707

180,044

Statement of profit or loss and other comprehensive income: (cont.)

Non-technical account – General business

For the year ended 31 December 2024

The accompanying notes from page 27 to 54 form an integral part of these financial statements.

Note

2024£000

2023£000

Balance on the technical account – general business

179,707

180,044

Investment income

89,700

78,245

Realised gains/(losses) on investments

(1,374)

(5,039)

Unrealised gains/(losses) on investments

6,626

46,755

Investment expenses and charges

(6,208)

(6,493)

Total investment return

88,744

113,468

Allocated investment return transferred to the general business technical account

(45,542)

(61,274)

Gain/(loss) on foreign exchange

(3,188)

1,732

Profit for the financial year

219,721

233,970

Other comprehensive income:

Currency translation (losses)

(10,863)

(17,247)

Total comprehensive income for the year

208,858

216,723

Balance sheet – Assets

As at 31 December 2024

Note

2024£000

2023£000

Financial investments

1,831,968

1,796,388

Deposits with ceding undertakings

2,927

3,236

Investments

1,834,895

1,799,624

Provision for unearned premiums

45,459

48,598

Claims outstanding

220,048

233,001

Reinsurers’ share of technical provisions

265,507

281,599

Debtors arising out of direct insurance operations

96,217

101,701

Debtors arising out of reinsurance operations

65,756

82,314

Other debtors

5,835

4,358

Debtors

167,808

188,373

Cash at bank and in hand

171,864

181,237

Other assets

171,864

181,237

Deferred acquisition costs

78,686

71,940

Other prepayments and accrued income

15,428

13,686

Prepayments and accrued income

94,114

85,626

Total assets

2,534,188

2,536,459

Balance sheet (cont’d) – Liabilities

As at 31 December 2024

Note

2024£000

2023£000

Members’ balances

872,356

855,757

Total capital and reserves

872,356

855,757

Provision for unearned premiums

342,070

319,594

Claims outstanding

1,090,758

1,109,398

Technical provisions

1,432,828

1,428,992

Deposits received from reinsurers

Creditors arising out of reinsurance operations

45,569

82,229

Other creditors including taxation and social security

33,682

18,523

Amounts owed to credit institutions

136,438

137,281

Creditors

215,689

238,033

Accruals and deferred income

13,315

13,677

Total liabilities

1,661,832

1,680,702

Total liabilities, capital and reserves

2,534,188

2,536,459

The Syndicate financial statements on pages 21 to 54 were approved by the board of Chubb Underwriting Agencies Limited on 6 March 2025 and were signed on its behalf by;

C P J O’BrienDirector

6 March 2025

Statement of changes in members’ balances

For the year ended 31 December 2024

2024£000

2023£000

Members’ balances brought forward at 1 January

855,757

646,888

Total comprehensive income for the year

208,858

216,723

Payments of profit to members’ personal reserve funds

(95,237)

(40,820)

Net movement on funds in syndicate

(99,617)

36,330

Other

2,595

(3,364)

Members’ balances carried forward at 31 December

872,356

855,757

Statement of cash flows

For the year ended 31 December 2024

Note

2024£000

2023£000

Cash flows from operating activities

Profit for the financial year

219,721

233,970

Adjustments:

Increase/(decrease) in gross technical provisions

3,835

(19,203)

Increase in reinsurers’ share of gross

technical provisions

16,092

82,478

Increase/(decrease) in debtors

12,079

(17,505)

(Decrease) in creditors

(21,863)

(11,693)

Investment return

(88,744)

(113,468)

Other

14,863

12,601

Net cash flows from operating activities

155,983

167,180

Cash flows from investing activities

Purchase of equity and debt instruments

(449,591)

(495,566)

Sale of equity and debt instruments

384,260

244,778

Investment income received

82,118

66,713

Other

(2)

(1)

Net cash flows from investing activities

16,785

(184,076)

Cash flows from financing activities

Distribution of profit

(95,237)

(40,820)

Capital contributions/open year cash calls made

36,330

Funds In Syndicate released to members

(99,617)

Net cash flows from financing activities

(194,854)

(4,490)

Net (decrease) in cash and cash equivalents

(22,086)

(21,386)

Cash and cash equivalents at the beginning of the year

166,193

193,993

Foreign exchange on cash and cash equivalents

5,804

(6,415)

Cash and cash equivalents at the end of the year

149,911

166,192

Notes to the financial statements – (forming part of the financial statements)

1.Basis of preparation

The Syndicate comprises a single member of the Society of Lloyd's that underwrites insurance business in the London Market. The address of the Syndicate’s managing agent is 40 Leadenhall Street, London EC3A 2BJ, United Kingdom.

The syndicate annual accounts have been prepared in accordance with applicable accounting standards in the United Kingdom, including:

•Financial Reporting Standard FRS 102, “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS 102”);

•Financial Reporting Standard FRS 103, “Insurance Contracts” (“FRS 103”);

•the provisions of Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (“SI2008/410”);

•the Lloyd’s Syndicate Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s; and

•Regulation 5 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008 Lloyd’s Regulations”), as amended by The Statutory Auditors and Third Country Auditors Regulations 2017 (the “Regulations”).

These annual accounts include all sources of capital supporting the operations of the syndicate. Given that Syndicate 2488 is a fully aligned syndicate, with 100% of the underwriting capacity provided by Chubb corporate capital vehicles, these accounts are able to disclose the total Funds at Lloyd’s (“FAL”) capital supporting the operations of the syndicate (see note 28).

The financial statements have been prepared on the historical cost basis, except for financial assets at fair value through profit or loss and available for sale that are measured at fair value.

Syndicate 2488’s functional currency is US dollars. The presentational currency is sterling which is common practice in the Lloyd’s market and aids comparability.

Going concern

The Syndicate has financial resources to meet its financial needs and manages its portfolio of insurance risk. The directors have continued to review the business plans, liquidity and operational resilience of the Syndicate and are satisfied that the Syndicate is well positioned to manage its business risks in the current economic environment. The Syndicate 2025 year of account has opened and the directors have concluded that the Syndicate has sufficient resources to, and a reasonable expectation that it will, open a 2026 year of account. The Syndicate has sufficient capital for each year of account in its Funds at Lloyd’s (FAL) and there is additional capital available in the corporate member. There is no intention to cease underwriting or cease the operations of the Syndicate.

Accordingly, the directors of the Managing Agent continue to adopt the going concern basis in preparing the annual report and financial statements.

Restatement of comparative information

During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial reporting across the market. As a result, certain comparative information has been restated to ensure consistency with current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions. The changes comprise:

a)Reclassification changes

Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The principal change is the reclassification of overseas deposits, previously shown as a separate category within Financial Investments and now part of Other Investments. The comparative balances in the affected notes 4,11,24 and 25 have also been represented to align with the current period presentation.

Classification: Confidential28

b)Aggregation changes

To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated or disaggregated within the financial statements and related notes. This includes the presentation of realised and unrealised gains and losses on investments, which are now shown on a disaggregated basis in the Non technical account of the Statement of profit or loss and other comprehensive income.

The comparative balances in notes 4, 5, 6, 7, 9, 11, 14, 15, 17, 18 and 23 have also been re-presented to align with the current period.

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. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The measurement of the provision for claims outstanding involves judgements and assumptions about the future that have the most significant effect on the amounts recognised in the financial statements. The provision for claims outstanding comprises the estimated cost of settling all claims incurred but unpaid at the balance sheet date, whether reported or not. This is a judgemental and complex area due to the subjectivity inherent in estimating the impact of claims events that have occurred but for which the eventual outcome remains uncertain. In particular, judgement is applied when estimating the value of amounts that should be provided for claims that have been incurred at the reporting date but have not yet been reported (“IBNR”) to the syndicate.

The amount included in respect of IBNR is based on statistical techniques of estimation applied by the in-house actuaries and reviewed by external consulting actuaries. These techniques generally involve projecting from past experience the development of claims over time in view of the likely ultimate claims to be experienced and for more recent underwriting, having regard to variations in business accepted and the underlying terms and conditions. The provision for claims also includes amounts in respect of internal and external claims handling costs. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part on output from rating and other models of business accepted and assessments of underwriting conditions.

The gross written premium is initially based on estimated premium income (“EPI”) for each contract. EPI estimates are based on information provided by the brokers, policyholders, coverholders, past underwriting experience and the contractual terms of the policy. The EPI estimates are reviewed on a regular basis. Premiums in respect of insurance contracts underwritten under binding authorities have the highest degree of uncertainty at the time of the initial premium booking. In 2024 £307.1 million (2023 £302.6 million) of premium was written under binding authorities. Binding authority premiums are booked as the underlying contracts incept (a straight-line basis is selected for this inception pattern) and any difference between the EPI for these policies and the actual premium received is eliminated before each year of account closes.

Premiums are earned on a straight-line basis over the life of each contract. At a portfolio level this is considered to provide a reasonable estimate for the full year of the pattern of risk over the coverage period.

3.Significant accounting policies

Premiums written

Premiums written, which are stated gross of brokerage but exclusive of premium taxes, relate to business incepted during the year, together with adjustments made in the year to premiums written in prior accounting periods. Estimates are made of pipeline premiums, representing amounts due but not yet received or notified to the syndicate by intermediaries;

Unearned premiums

Unearned premiums represent the proportion of premiums written in the year that relate to unexpired terms of policies in force at the balance sheet date, calculated on the basis of established risk profiles or time apportionment as appropriate.

Classification: Confidential29

Acquisition costs

Acquisition costs comprise brokerage, commissions and other related costs, and are deferred over the period in which the related premiums are earned.

Claims incurred

Claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or not, including related direct and indirect expenses and adjustments to claims outstanding from previous years. Where applicable, deductions are made for reinsurance, salvage and other recoveries.

Provision for claims outstanding and related reinsurance recoveries

The provision for claims outstanding is assessed on an individual case basis and is based on the estimated ultimate cost of all claims notified but not settled by the balance sheet date, together with the provision for related claims handling costs and deduction for expected salvage and other recoveries. The provision also includes the estimated cost of claims incurred but not reported (“IBNR”) at the balance sheet date based on statistical methods.

These methods generally involve projecting from past experience of the development of claims over time to form a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations in the business accepted and the underlying terms and conditions. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part on output from rating and other models of the business accepted and assessments of underwriting conditions. The amount of salvage and subrogation recoveries is separately identified and where material reported as an asset.

The reinsurers’ share of the provision for claims outstanding is based on the amounts of outstanding claims and projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in place for the class of business, the claims experience for the year and the current security rating of the reinsurance companies involved. A number of statistical methods are used to assist in making these estimates.

The two most critical assumptions as regards the provision for claims outstanding are that the past is a reasonable predictor of the likely level of claims development and that the rating and other models used for current business are fair reflections of the likely level of ultimate claims to be incurred.

The directors consider that the provision for gross claims outstanding and related reinsurance recoveries are fairly stated on the basis of the information currently available to them. However, the ultimate liability will vary as a result of subsequent information and events and this may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made. The methods used, and the estimates made, are reviewed regularly. When calculating the provision for claims outstanding, the reported business segments are subject to specific issues, as set out below:

Fire and other damage to property; marine, aviation and transport; accident and health

These business segments are predominantly “short tail”; that is there is not a significant delay between the occurrence of the claim and the claim being reported to the syndicate. The costs of claims notified to the syndicate at the balance sheet date are estimated on a case by case basis to reflect the individual circumstances of each claim. The ultimate expected cost of claims is projected from this data by reference to statistics, which show how estimates of claims incurred in previous periods have developed over time to reflect changes in the underlying estimates of the cost of notified claims and late notifications.

Third party liability (including marine and aviation liability)

Liability claims are longer tail than the classes of business described above and so a larger element of the provision for claims outstanding relates to IBNR. Claims estimates for the syndicate’s liability business are derived from a combination of loss ratio based estimates and an estimate based upon actual claims experience using a predetermined formula whereby greater weight is

Classification: Confidential30

given to actual claims experience as time passes. The initial estimate of the loss ratio based on the experience of previous years adjusted for factors such as premium rate changes and claims inflation, and on the anticipated market experience, is an important assumption in this estimation technique. In respect of liability claims, the assessment of claims inflation and anticipated market experience is particularly sensitive to the level of court awards and to the development of legal precedent on matters of contract and tort. The liability class of business is also subject to the emergence of new types of latent claims but no allowance is included for this as at the balance sheet date.

Reinsurance acceptances

This business segment includes both short tail and longer tail business, and is subject to the issues laid out in the preceding two sections.

Unexpired risks provision

A provision for unexpired risks is made where claims and related expenses arising after the end of the financial period in respect of contracts concluded before that date, are expected to exceed the unearned premiums and premiums receivable under these contracts, after the deduction of any acquisition costs deferred. The provision for unexpired risks is calculated by reference to classes of business which are managed together, after taking into account relevant investment return. No unexpired risk provision has been made in 2024 (2023 £Nil).

Investment return

Investment return comprises all investment income, realised investment gains and losses and movements in unrealised gains and losses, net of investment expenses, charges and interest. Both realised investment gains and losses are included as part of investment return in the profit and loss account. Dividends receivable are accounted for by reference to the date on which the price of the investment is quoted ex-dividend. Interest and expenses are accounted for on an accruals basis.

Realised gains and losses on investments carried at bid value are calculated as the difference between net sale proceeds and purchase price. Movements in unrealised gains and losses on investments represent the difference between the valuation at the balance sheet date and their purchase price or, if they have previously been revalued, their valuation 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.

Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical account to the general business technical account to reflect the investment return on funds supporting underwriting business. Other than investment return on Funds at Lloyd’s retained within the syndicate, all investment return has been wholly allocated to the technical account.

Investments

Investments in marketable securities are stated at bid value on the balance sheet date. For quoted investments where there is an active market, this is their quoted bid price at the balance sheet date. For quoted and non-quoted investments where there is no active market, the bid value is determined by reference to prices for similar assets in active markets.

Overseas deposits are stated at cost or market value, as notified by Lloyd’s.

Investments – fair value through profit and loss

A financial asset is classified into this category at inception if they are acquired principally for the purpose of selling in the short term, if they form part of a portfolio of financial assets in which there is evidence of short-term profit-taking, or if so designated to minimise any measurement or recognition inconsistency with the associated liabilities.

Financial assets designated as fair value through profit and loss are initially recognised at fair value with any transaction costs being expensed through the profit and loss account. For quoted investments where there is an active market, the fair value is their quoted bid price at the balance sheet date. For quoted investments where there is no active market, the fair value is determined

Classification: Confidential31

by reference to prices for similar assets in active markets.

Insurance and other receivables

Insurance and other receivables are recognised at fair value less any provision for impairment. Any impairment of a receivable will be recognised if there is evidence that the company will not be able to collect the amounts receivable according to the original terms of the receivable.

Insurance and other payables

Payables arising from insurance contracts, creditors and deposits received from reinsurers, are initially measured at cost, which is equal to fair value, net of transaction costs. Insurance payables are derecognised when the obligation under the liability is settled, cancelled or expired.

Taxation

Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax from trading income. In addition, all UK basic rate income tax deducted from syndicate investment income is recoverable by managing agents and consequently the distribution made to members is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.

A provision has been made for overseas taxes payable (United States Federal Income Tax, Canadian Federal Income Tax, Japanese Income Tax) on underwriting results or investment earnings. Any payments on account during the year, made by the syndicate on behalf of its corporate member have been set off against members’ balances in the balance sheet.

Foreign currencies

Foreign currency transactions are accounted for, in functional currency, at the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions, from translating such transactions into the functional currency of the syndicate, and from the revaluation to year end exchange rates of monetary assets and liabilities, are recognised in the profit and loss account.

At each period end foreign currency monetary items are translated using the closing rate. For this purpose all assets and liabilities arising from insurance contracts (including unearned premiums, deferred acquisition costs and unexpired risks provisions) are monetary items. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Results recorded in their functional currency, are translated into sterling at average rates of exchange for the year while assets and liabilities are translated to sterling at year end exchange rates. Differences arising on translation are recorded in the statement of comprehensive income.

Profit commission

Profit commission is chargeable by the managing agent at a rate of 15% of the year of account profit, subject to the operation of a deficit clause. This does not become payable until after the appropriate year of account closes, normally at 36 months.

The managing agent has waived its right to the receipt of profit commission for the 2021 and 2022 years of account. It is currently anticipated that the profit commission will also be waived for the 2023 and 2024 years of account.

Reinsurance to close (“RITC”) received from a third party syndicate

When the syndicate accepts a RITC premium from another syndicate it records all of the assets and liabilities transferred from the other syndicate on the balance sheet at fair value on the date the RITC agreement is effective. Any unearned gross and reinsurance premiums included with the RITC transaction are recorded in the income statement on the date of the RITC agreement is effective and immediately deferred as movements in gross and reinsurers’ share of unearned premiums and are subsequently earned over the remaining life of the relevant contracts. The RITC transaction has no impact on the syndicate’s profit or net assets at the time

Classification: Confidential32

that it is first recorded.

4.Risk and capital management

Capital management

CUAL assesses the capital needs for Syndicate 2488 and maintains an efficient capital structure consistent with its risk profile and business requirements and to meet regulatory requirements. The company then seeks to maintain financial strength and capital adequacy to support business growth and meet the requirements of policyholders, rating agencies and regulators, whilst retaining financial flexibility by ensuring substantial levels of liquidity. Once the capital needs have been met, it is the policy of the company to distribute any surplus capital through dividends to its ultimate parent company.

From a prudential perspective, the Lloyd’s market is regulated by the PRA and is subject to insurance solvency regulations which specify the minimum amount and type of capital that must be held. In line with regulatory requirements CUAL managed its capital levels in 2024 in the context of Solvency II and the Funds at Lloyd’s requirement.

Syndicate 2488’s regulatory capital requirement is set according to the Solvency II Internal Model. The company performs tests and controls to ensure continuous and full compliance with the Solvency II regulations.

The primary objectives for managing capital can be summarised as follows:

•to satisfy the requirements of policyholders, regulators and rating agencies;

•to match the profile of assets and liabilities, taking account of the risks inherent in the business;

•to manage exposures to key risks; and

•to retain financial flexibility by maintaining strong liquidity.

Insurance risk

Insurance risk arises from underwriting activities both prospective and retrospective. Key risks include unexpected losses arising from inaccurate pricing, fluctuations in the timing, frequency and/or severity of claims compared to expectations, inadequate reinsurance protection and inadequate reserving. The syndicate mitigates the risk of inaccurate pricing by maintaining underwriting discipline throughout its operations with the use of underwriting guidelines, technical expertise and appropriate authority limits which are monitored through price monitoring procedures, an established peer review process and exception monitoring. These guidelines are updated regularly to reflect developments in the nature of the insurance risks being underwritten.

The syndicate’s exposures are continually monitored and the catastrophe management function, independent of underwriting management, has responsibility to model aggregate risk and assists with the pricing of risk, providing a key control to the underwriting process.

The syndicate also uses reinsurance to help mitigate insurance risk by providing coverage against and limiting large individual or aggregated losses. However, the use of reinsurance provides additional risk where reinsurance may transpire to be inadequate in coverage or recoveries cannot be collected due to reinsurer default.

The reserving process is owned by the Actuarial Function and includes: coordinating the calculation of technical provisions; selecting appropriate methods and assumptions for each element of the reserve calculation; ensuring the appropriateness of the methodologies and underlying models used as well as the assumptions made in the calculation of the technical provisions; assessing the sufficiency and quality of the data used in the calculation of the technical provisions; comparing best estimate against experience; reviewing sufficiency of reserves; monitoring of large losses; forecasting and planning; regular deep dives; calculation of a range of reasonable estimates; arranging appropriately independent external review and peer review of assumptions and calculations. Challenge and oversight is provided by the Reserve Committee. The Responsibilities of this committee include monitoring the risk appetite statements related to reserve risk. CUAL’s independent non-executive directors attend the Reserve Committee meetings.

Classification: Confidential33

Sensitivity to insurance risk

As highlighted in note 3, there is inherent uncertainty in the ultimate cost of claims for which the company uses a variety of different actuarial techniques to estimate the provision for claims outstanding. If the net claims ratio for the year had been higher by 1%, then the profit for the financial year would have been lower by £6.1 million (2023: £5.6 million) and members’ balances would have been lower by £6.1 million (2023: £5.6 million). If the net claims ratio had been lower by 1%, then the profit for the financial year would have been higher by £6.1 million (2023: £5.6 million) and members’ balances would have been higher by £6.1 million (2023: £5.6 million).

The following table presents the profit and loss impact of 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.

General insurance business sensitivities as at 31 December 2024

Sensitivity

+5.0%£000

-5.0%£000

Claims outstanding – gross of reinsurance

54,538

(54,538)

Claims outstanding – net of reinsurance

43,535

(43,535)

General insurance business sensitivities as at 31 December 2023

Sensitivity

+5.0%£000

-5.0%£000

Claims outstanding – gross of reinsurance

55,470

(55,470)

Claims outstanding – net of reinsurance

43,820

(43,820)

Concentrations of insurance risk

As shown in note 5, the syndicate writes a diverse book of business across a number of underwriting classes. Approximately 82% of the gross written premiums for 2024 (2023: approximately 82%) related to property and casualty lines of insurance, with the remainder split across a number of other classes.

Geographically, 57% (2023: 56%) of gross premiums written in 2024 relate to risks within the United States of America, with the remainder being spread across the UK, Europe and the Rest of the World.

Financial risk management objectives

The syndicate is exposed to a range of financial risks through its financial assets and financial liabilities. The most important components of this financial risk are market risk (including interest rate risk and currency risk), liquidity risk and credit risk.

These financial risks principally arise from the investment activity of the business and consequent holdings in fixed income investments, all of which are exposed to general and specific market movements. The underwriting activity of the business also generates financial risk, particularly in the form of currency risk as well as liquidity and credit risk through its insurance and reinsurance receivables and payables. The notes below explain how financial risks are managed. The processes used to manage these risks are unchanged from previous periods, and cover areas such as investment activity through stochastic modelling of the portfolio, within its internal capital model and consequent capital requirements.

Classification: Confidential34

Investment activity governance

The managing agent operates an Investment Committee which functions under terms of reference determined by the Board. The Committee is charged with establishing and effecting an appropriate investment policy for the syndicate having regard to the financial risk appetite of the syndicate. In addition, the Committee has the responsibility for recommending the appointment and removal of investment managers, for reviewing the managers’ performance and for reporting on all other material aspects of the investment function.

The Investment Committee comprises senior Chubb management along with representatives from Chubb Asset Management, the group’s investment specialists who provide advisory services to Chubb group companies and is chaired by Scott Lawlis.

The investment management function is outsourced to specialist external managers.

Asset allocation policy

The Investment Committee has established an asset allocation policy which defines the limits for different asset types. The broad asset allocation policy cites two major asset classes: investment grade fixed income securities and alternative assets. The policy includes limits within the alternative assets for high yield, emerging market debt, liquid loans and equities. The policy stipulates a range of between 70% and 100% for investment grade fixed income securities and a range of between 0% and 30% for alternative asset classes. At the end of 2024 the total allocation to alternative assets was approximately 18% (2023: 18%) and is monitored by the Investment Committee.

Investment guidelines

Investment management agreements have been established with the external investment managers. The agreements include specific guidelines for each individual portfolio in order to limit risks arising from duration, currency, liquidity, credit and counterparty exposures. The managers provide quarterly affirmation of compliance with these guidelines.

Interest rate risk and Equity price risk

The syndicate is exposed to interest rate risk primarily through its investments in fixed interest securities and, to the extent that claims inflation is correlated to interest rates, its liabilities to policyholders. Interest rate risk arises in the fixed income investment portfolio primarily through instrument duration. Accordingly, the investment guidelines include restrictions relating to the maximum weighted average duration of the portfolio. The restriction is stated by reference to the permissible duration variance compared to the customised benchmark index by which the external investment managers’ performance is assessed.

Sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates at the reporting date. To illustrate the downside risk within the fixed interest portfolio of £1,599.0 million at external managers as at 31 December 2024 (2023: £1,558.9 million), the impact of an increase of 50 basis points in interest yields across all portfolios simultaneously (principally sterling, euros and US dollars) has been calculated and shown in the table below.

The impact of higher rates of inflation in the countries and economic sectors in which the syndicate trades has been analysed and reflected in the loss ratios selected for the current and prior underwriting years and is allowed for in forecasts and risk pricing.

The syndicate held £0.7 million of equities in 2024 (2023: £0.6 million) and as a result the syndicate is exposed to changes in the level and volatility of equity prices. To illustrate the downside risk within the equity portfolio, the impact of a 5% decrease in stock market prices has been calculated and shown in the table below.

Classification: Confidential35

The analysis below and described above is performed for reasonably possible movements in market indices on financial instruments with all other variables held constant, showing the impact on the result before tax due to changes in fair value of financial assets and liabilities (whose fair values are recorded in the profit and loss account) and members’ balances.

The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain unchanged. However, the occurrence of a change in a single market factor may lead to changes in other market factors as a result of correlations.

The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting date and may vary at the time that any actual market movement occurs. As investment markets move past pre-determined trigger points, action would be taken which would alter the Syndicate’s position.

Currency risk

The syndicate is primarily exposed to currency risk in respect of assets and liabilities under policies of insurance denominated in currencies other than sterling. The syndicate maintains various currency balances generated through regular business activity but the majority of the funds held are denominated in Sterling, Euros, Canadian Dollars and US Dollars. The syndicate’s policy seeks to ensure that an approximate currency match of assets and liabilities is maintained, with the bulk of surplus funds held in Canadian Dollars and US Dollars.

Any component of the members' funds denominated in currencies other than Sterling gives rise to currency risk due to exchange rate volatility relative to Sterling.

The accounting policy for foreign currencies is stated in note 3 to the financial statements.

For the profit and loss account, the 2024 average US Dollar/Sterling rate of US$1.277/£1 shows Sterling is stronger by 2.6% compared with the prior period (2023: US$1.244/£1). Had the average Sterling rate weakened against the US Dollar by 10% compared to the actual 2024 average and all other variables remained constant, the profit for the year would have been £23.3 million more than the amount reported (2023: £23.9 million less).

For the monetary components of the balance sheet, the year-end rates of US$1.277/£1 used to convert US Dollar to Sterling shows Sterling is stronger by 1.2% (2023: US$1.262/£1). Assuming sterling had weakened by 10% against the US Dollar and all other variables remained constant, the effect of translating year-end net assets based on these parameters would have resulted in an increase in members’ balances of £97.0 million, which would have appeared as a gain in the statement of comprehensive income (2023: £95.1 million gain).

2024Impact on results before tax£000

2024Impact on

members’

balances£000

2023Impact on results before tax£000

2023Impact on

members’

balances£000

Interest rate risk

+ 50 basis points shift in yield curves

(27,646)

(25,206)

- 50 basis points shift in yield curves

27,646

25,206

Equity price risk

+ 5 percent increase in equity prices

- 5 percent decrease in equity prices

(33)

(32)

Classification: Confidential36

The table below summarises the carrying value of the Syndicate’s assets and liabilities in Sterling and by currency , at the reporting date:

Sterling

US dollar

Euro

Canadian dollar

Australian dollar

Japanese Yen

Other

Total

2024

£000

Investments

73,604

1,376,940

154,434

175,720

17,595

36,602

1,834,895

Reinsurers' share of technical provisions

11,489

214,157

18,932

14,251

5,204

1,471

265,507

Debtors

3,147

122,942

10,797

727

8,792

(157)

21,560

167,808

Other assets

27,747

110,255

367

31,482

2,000

171,864

Prepayments and accrued income

16,890

62,690

2,756

6,020

3,600

2,133

94,114

Total assets

132,877

1,886,984

187,286

196,731

66,673

(129)

63,766

2,534,188

Technical provisions

(105,855)

(1,029,493)

(108,978)

(107,865)

(54,512)

(2,358)

(23,767)

(1,432,828)

Creditors

(26,038)

(41,697)

(51,391)

(60,169)

(932)

(216)

(35,246)

(215,689)

Accruals and deferred income

(299)

(10,086)

(2,520)

(89)

(84)

(237)

(13,315)

Total liabilities

(132,192)

(1,081,276)

(162,889)

(168,123)

(55,528)

(2,574)

(59,250)

(1,661,832)

Total capital and reserves

685

805,708

24,397

28,608

11,145

(2,703)

4,516

872,356

Sterling

US dollar

Euro

Canadian dollar

Australian dollar

Japanese Yen

Other

Total

2023

£000

Investments

71,973

1,334,118

149,681

185,294

16,151

42,407

1,799,624

Reinsurers' share of technical provisions

17,435

231,902

15,232

13,226

1,574

2,219

281,599

Debtors

1,562

129,089

11,585

5,962

11,542

(170)

28,803

188,373

Other assets

50,430

98,016

440

30,281

2,011

181,237

Prepayments and accrued income

1,935

69,948

2,979

5,865

3,008

1,874

85,626

Total assets

143,335

1,863,073

179,917

210,406

62,556

(142)

77,314

2,536,459

Technical provisions

(118,156)

(992,481)

(112,461)

(126,295)

(53,096)

(1,543)

(24,960)

(1,428,992)

Creditors

(15,614)

(69,955)

(31,646)

(68,191)

(257)

(248)

(52,122)

(238,033)

Accruals and deferred income

7,996

(18,326)

(2,666)

(241)

(67)

(373)

(13,677)

Total liabilities

(125,774)

(1,080,762)

(146,773)

(194,727)

(53,420)

(1,791)

(77,455)

(

)

Total capital and reserves

17,561

782,311

33,144

15,679

9,136

(1,933)

(141)

855,757

Liquidity risk

Liquidity risk is the risk that the syndicate is unable to meet its obligations as they fall due. To counter this risk, the syndicate aims to maintain funds in the form of cash or cash equivalents to meet known cash flows. In addition, the asset allocation policy and the investment guidelines are structured in order to ensure that funds are predominantly held in investment grade fixed income securities, the proceeds of which are readily realisable.

However, a significant share of the syndicate’s investments is held to meet regulatory deposit requirements which may not be available to meet recommended liquidity needs.

Syndicate 2488 participates in a notional pooling programme with other Chubb group companies under a facility operated by Bank Mendes Gans, a subsidiary of ING, which specialises in global liquidity management. The facility operates by the notional pooling of designated balances of the Chubb group participants in order to provide additional liquidity. Chubb group participants may overdraw individual account balances to fund immediate short term needs against credit balances held elsewhere within the pool. On this basis, CUAL maintained an overdraft of £136.4 million at year end (2023: £137.3 million) and credit balances of £156.3 million (2023: £172.1 million) in designated accounts.

The syndicate also benefits from letter of credit facilities which can be utilised to meet certain funding needs and notional pooling facilities with other Chubb group companies which serve to provide additional liquidity.

As indicated in the balance sheet, the syndicate’s financial liabilities are all payable within one year. Non-derivative financial liabilities with contractual maturities are paid within agreed terms of trade. Non-derivative financial liabilities with contractual maturities are limited to reinsurance premiums payable and expense accruals.

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.

000

Undiscounted net cash flows

Year 2024

No maturity stated£000

0-1 yrs£000

1-3 yrs£000

3-5 yrs£000

>5 yrs£000

Total£000

Claims outstanding

356,403

346,471

164,527

223,357

1,090,758

Creditors

215,689

Total

572,092

346,471

164,527

223,357

1,306,447

000

Undiscounted net cash flows

Year 2023

No maturity stated£000

0-1 yrs£000

1-3 yrs£000

3-5 yrs£000

>5 yrs£000

Total£000

Claims outstanding

355,957

348,090

176,063

229,288

1,109,398

Creditors

238,033

Total

593,990

348,090

176,063

229,288

1,347,431

Credit risk

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The syndicate is exposed to credit risk through its investment activity and its insurance operations.

The syndicate is exposed to investment credit and price risk as a result of its holdings in fixed income. The risk in respect of fixed income investments is moderated by the application of detailed investment guidelines which limit the size of holdings with individual issuers, restrict duration and dictate minimum credit quality, both for individual holdings and for the aggregate weighted portfolio.

The average credit quality of investment portfolios remained high throughout the year and at year end was “A+” (2023: “A”).

The investment guidelines seek to limit the credit risk of each of the portfolios through specifying eligible/ineligible investments, setting maximum counterparty exposures and minimum weighted credit quality and individual issuer credit quality.

Credit risk – insurance operations

The syndicate is exposed to credit risk as a result of its regular insurance and reinsurance activity. The areas of key exposure are:

•reinsurers’ share of provision for claims outstanding;

•debtors arising from reinsurers in respect of claims already paid;

•amounts due from direct insurance and reinsurance policyholders; and

•amounts due from direct insurance and reinsurance intermediaries.

Ceded reinsurance is used to manage and mitigate inwards direct insurance and reinsurance risk. Ceded reinsurance does not discharge the syndicate’s liability as primary insurer. If a ceded reinsurer fails to pay a claim, the syndicate remains liable for the payment to the policyholder. A Reinsurance Security Committee is operated by the Chubb group which analyses the creditworthiness of ceded reinsurers on a quarterly basis by reviewing their financial strength. In addition, the recent payment history of ceded reinsurers is used to update the reinsurance purchasing strategy.

With regard to direct insurance and reinsurance receivables, the syndicate operates a committee to review broker security, a process for monitoring arrangements with managing general agents, and, in certain circumstances, the requirement for collateral to be posted by the policyholder to the benefit of the syndicate.

Exposure to credit risk

The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.

The following table analyses the credit rating by investment grade of financial investments, debt securities and derivative financial instruments, reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in respect of settled claims, cash and cash equivalents, and other debtors and accrued interest.

The value of £518.0m (2023: £537.6m) that is below BBB or not rated includes the Oakhill Equity portfolio which is not rated, Swiss overseas deposits and all debtors arising out of direct insurance operations (for which rating data is not held).

The amount of change, during the period and cumulatively, in the fair value of receivables that is attributed to changes in credit risk is represented by a provision for impairment against receivables past due.

Reinsurers’ share of technical provisions includes claims outstanding, related claims handling costs and IBNR. This is described along with the valuation methods in note 3. This balance includes 2.5% past due that have been impaired (2023: 2.6%).

Year 2024

AAA£000

AA£000

A£000

BBB£000

Other£000

Not rated£000

Total£000

Shares and other variable yield securities and units in unit trusts

6,760

Debt securities and other fixed income securities

164,522

660,779

324,364

264,321

184,969

1,598,955

Loans and deposits with credit institutions

21,012

10,884

397

32,293

Other investments

27,733

5,159

6,547

5,081

80,087

69,353

193,960

Deposits with ceding undertakings

2,927

Reinsurers’ share of claims outstanding

162,171

53,049

4,785

220,048

Debtors arising out of direct insurance operations

96,217

Debtors arising out of reinsurance operations

5,396

1,641

58,719

65,756

Cash at bank and in hand

7,234

164,630

171,864

Other debtors and accrued interest

4,542

16,721

21,263

Total

213,267

856,165

553,158

269,405

265,493

252,555

2,410,043

Year 2023

AAA£000

AA£000

A£000

BBB£000

Other£000

Not rated£000

Total£000

Shares and other variable yield securities and units in unit trusts

8,183

Debt securities and other fixed income securities

143,232

580,753

366,112

284,838

183,947

1,558,882

Loans and deposits with credit institutions

5,258

17,960

3,648

224

27,090

Other investments

36,436

5,232

6,000

4,925

83,988

65,652

202,233

Deposits with ceding undertakings

3,236

Reinsurers’ share of claims outstanding

175,222

55,762

132

1,860

233,001

Debtors arising out of direct insurance operations

101,701

Debtors arising out of reinsurance operations

4,460

1,023

76,805

82,314

Cash at bank and in hand

3,460

177,777

181,237

Other debtors and accrued interest

2,861

15,183

18,044

Total

184,926

789,948

613,558

289,921

268,184

269,384

2,415,921

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.

Debtors have been individually assessed for impairment by considering information such as the occurrence of significant changes in the counterparty’s financial position, patterns of historical payment information and disputes with counterparties.

An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2024

£000

Shares and other variable yield securities and units in unit trusts

6,760

Debt securities and other fixed income securities

1,598,955

Loans and deposits with credit institutions

32,293

Other investments

193,960

Deposits with ceding undertakings

2,927

Reinsurers' share of claims outstanding

225,739

(5,691)

220,048

Debtors arising out of direct insurance operations

86,842

9,375

96,217

Debtors arising out of reinsurance operations

37,654

28,102

65,756

Other debtors and accrued interest

21,263

Cash at bank and in hand

171,864

Total

2,378,257

37,477

(5,691)

2,410,043

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2023

£000

Shares and other variable yield securities and units in unit trusts

8,183

Debt securities and other fixed income securities

1,558,882

Loans and deposits with credit institutions

27,090

Other investments

202,233

Deposits with ceding undertakings

3,236

Reinsurers' share of claims outstanding

239,018

(6,017)

233,001

Debtors arising out of direct insurance operations

90,769

10,932

101,701

Debtors arising out of reinsurance operations

46,987

35,327

82,314

Other debtors and accrued interest

18,044

Cash at bank and in hand

181,237

Total

2,375,679

46,259

(6,017)

2,415,921

The table below sets out a reconciliation of changes in impairment allowance during the period for each class of financial asset at the balance sheet date:

The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet date:

1 Jan

New impairment charges added in year

Changes in impairment charges

Released to profit and loss account

Foreign exchange

Others

31 Dec

2024

£000

Reinsurers' share of claims outstanding

6,017

(326)

5,691

Total

6,017

(326)

5,691

1 Jan

New impairment charges added in year

Changes in impairment charges

Released to profit and loss account

Foreign exchange

Others

31 Dec

2023

£000

Reinsurers' share of claims outstanding

6,331

(314)

6,017

Total

6,331

(314)

6,017

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

Debtors arising out of direct insurance operations

9,376

(1)

9,375

Debtors arising out of reinsurance operations

14,527

3,906

3,130

6,539

28,102

Total

23,903

3,906

3,130

6,538

37,477

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

2023

£000

Debtors arising out of direct insurance operations

10,239

2,530

(177)

(1,660)

10,932

Debtors arising out of reinsurance operations

14,515

14,053

4,783

1,976

35,327

Total

24,754

16,583

4,606

316

46,259

5.Analysis of underwriting result

An analysis of the underwriting result before investment return is presented in the table below:

2024

Gross premiums written£000

Gross premiums earned£000

Gross claims incurred£000

Gross operating expenses£000

Reinsurance balance£000

Underwriting result£000

Direct insurance

Accident and health

(130)

217

105

Marine, aviation, and transport

159,383

142,380

(55,914)

(44,388)

(4,645)

37,433

Fire and other damage to property

283,529

272,467

(122,149)

(91,306)

(4,724)

54,288

Third party liability

153,180

153,927

(93,496)

(52,347)

10,771

18,855

Credit and suretyship

3,201

4,550

(1,186)

(1,583)

(1,527)

254

Total direct insurance

599,308

573,339

(

)

(189,621)

110,935

Reinsurance acceptances

128,155

127,121

(42,011)

(34,620)

(27,260)

23,230

Total

727,463

700,460

(

)

(224,241)

(27,168)

134,165

The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into the Lloyd’s aggregate classes of business:

2024

Gross premiums written£000

Gross premiums earned£000

Gross claims incurred£000

Gross operating expenses£000

Reinsurance balance£000

Underwriting result£000

Additional analysis

Fire and damage to property of which is:

Specialities

(12)

Energy

367

169

(209)

(9)

1,304

1,255

2023

Gross premiums written£000

Gross premiums earned£000

Gross claims incurred£000

Gross operating expenses£000

Reinsurance balance£000

Underwriting result£000

Direct insurance

Accident and health

(21)

(96)

159

Marine, aviation, and transport

141,540

138,031

(43,332)

(43,419)

(8,040)

43,240

Fire and other damage to property

251,753

229,193

(106,457)

(73,267)

7,001

56,470

Third party liability

178,091

179,308

(95,505)

(62,427)

(17,803)

3,573

Credit and suretyship

3,323

5,483

(4,307)

(1,968)

(721)

Total direct insurance

574,686

551,994

(

)

(181,076)

(18,612)

102,609

Reinsurance acceptances

119,499

117,151

(20,285)

(20,143)

(60,562)

16,161

Total

694,185

669,145

(

)

(201,219)

(79,174)

118,770

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:

2023

Gross premiums written£000

Gross premiums earned£000

Gross claims incurred£000

Gross operating expenses£000

Reinsurance balance£000

Underwriting result£000

Additional analysis

Fire and damage to property of which is:

Specialities

(13)

Energy

(27)

(33)

(472)

(414)

No gains or losses were recognised in profit or loss during the year on buying reinsurance (2023: nil).

The gross premiums written for direct insurance by underwriting location of risk is presented in the table below:

2024£000

2023£000

United Kingdom

87,839

104,288

European Union Member States

11,449

8,739

417,507

388,692

Rest of the world

210,668

192,466

Total gross premiums written

727,463

694,185

6.Net operating expenses

2024£000

2023£000

Acquisition costs

178,664

166,678

Change in deferred acquisition costs

(7,927)

(6,807)

Administrative expenses

38,262

34,262

Members’ standard personal expenses

4,747

5,075

Reinsurance commissions and profit participation

(10,094)

(12,116)

Net operating expenses

203,652

187,092

Total commissions for direct insurance business for the year amounted to:

2024£000

2023£000

Total commission for direct insurance business

149,201

139,158

Administrative expenses include:

2024£000

2023£000

Auditors’ remuneration:

fees payable to the Syndicate’s auditor for the audit of these financial statements

597

578

fees payable to the Syndicate’s auditor and its associates in respect of other services pursuant to legislation

140

124

7.Key management personnel compensation

The managing agency has no employees (2023: none). Staff that support the syndicate and managing agency are employed by Chubb Services UK Limited (“CSUK”), Chubb European Group SE (“CEGSE”) and other fellow Chubb group undertakings (together the “employing entities”).

All directors of the managing agent received emoluments from the employing entities in respect of their services to the syndicate and Chubb group companies. The cost of these emoluments is included in a fee reimbursed directly to the employing entities by the syndicate. It is not practical to allocate these amounts to the underlying entities to which the directors provide services. Consequently, the following amounts represent the total emoluments paid by the employing entities in respect of the directors of the managing agent for the period during the year in which they served as directors:

2024£000

2023£000

Directors’ emoluments

3,902

3,070

Fees

223

201

The active underwriter received the following aggregate remuneration charged to the Syndicate.

8.Staff numbers and costs

The syndicate and managing agent have no employees. All staff are employed by Chubb Services UK Limited (“CSUK”), Chubb European Group SE (“CEGSE”) and other fellow Chubb group undertakings.

The Syndicate did not directly incur staff costs in the year (2023: £Nil) the following salary and related costs amounts were recharged by CSUK to Chubb Underwriting Agencies Limited (“CUAL”) and then onto to the Syndicate in 2024, and directly from CSUK to the Syndicate in 2023:

2024£000

2023£000

Wages and salaries

14,407

12,260

Social security costs

1,953

1,966

Other pension costs

1,517

1,348

Other short and long term incentive costs

4,263

4,297

Total

22,140

19,871

*Prior year comparatives have been included to aid comparison.

2024£000

2023£000

Emoluments

610

583

9.Investment return

2024£000

2023£000

Interest and similar income

From financial assets designated at fair value through profit or loss

Interest and similar income

89,700

78,214

Dividend income

Other income from investments

From financial assets designated at fair value through profit or loss

Gains on the realisation of investments

3,987

1,386

Losses on the realisation of investments

(5,361)

(6,425)

Unrealised gains on investments

152,267

134,689

Unrealised losses on the investments

(145,641)

(87,934)

Financial liabilities at amortised cost

Interest expense

(4,859)

(5,192)

Investment management expenses

(1,349)

(1,301)

Total investment return

88,744

113,468

Transferred to the technical account from the non-technical account

45,542

61,274

Investment return on Funds in Syndicate

43,202

52,194

An investment return of £45.5m was allocated to the technical account. All investment return has been wholly allocated to the technical account other than investment return on Funds at Lloyd’s retained within the Syndicate.

10.Distribution and open years of account

A distribution to the Syndicate’s Corporate members of £163.3m will be proposed in relation to the closing year of account (

2022

) (2023: £95.2m distribution in relation to the closing year of account (

2021

)).

11.Financial investments

Carrying value

Cost

2024£000

2023£000

2024£000

2023£000

Shares and other variable yield securities and units in unit trusts

658

646

270

273

Debt securities and other fixed income securities

1,598,955

1,558,882

1,651,851

1,624,481

Loans and deposits with credit institutions

32,293

27,090

32,293

27,090

Syndicate loans to central fund

6,102

7,537

6,102

7,537

Other investments

193,960

202,233

163,865

180,546

Total financial investments

1,831,968

1,796,388

1,854,381

1,839,927

The amount in the table above ascribable to listed investments is £1,631,906 (2023: £1,586,618).

The table below presents an analysis of financial investments by their measurement classification:

2024£000

2023£000

Financial assets measured at fair value through profit or loss

1,831,968

1,796,388

Total financial investments

1,831,968

1,796,388

Within the balances in the table above there are no financial instruments (2023: £Nil) which would otherwise be required to be measured at fair value, but for which a reliable measure of fair value is no longer available.

As the Syndicate is fully aligned, the Syndicate holds the capital supporting its underwriting in the Syndicate’s premium trust funds. These funds are known as funds in syndicate (FIS). At 31 December 2024, the following amount was held as funds in syndicate:

2024£000

2023£000

Funds in Syndicate (FIS)

648,694

716,477

Total funds in syndicate

648,694

716,477

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:

2024

Level 1£000

Level 2£000

Level 3£000

Assets held at amortised cost

Total£000

Shares and other variable yield securities and units in unit trusts

311

347

658

Debt securities and other fixed income securities

117,634

1,481,321

1,598,955

Loans and deposits with credit institutions

21,012

11,281

32,293

Syndicate loans to central fund

6,102

Other investments

25,101

57,091

111,768

193,960

Total financial investments

164,058

1,549,693

118,217

Total

164,058

1,549,693

118,217

2023

Level 1£000

Level 2£000

Level 3£000

Assets held at amortised cost

Total£000

Shares and other variable yield securities and units in unit trusts

299

347

646

Debt securities and other fixed income securities

183,814

1,375,068

1,558,882

Loans and deposits with credit institutions

5,258

21,832

27,090

Syndicate loans to central fund

7,537

Other investments

28,282

66,865

107,086

202,233

Total financial investments

217,653

1,463,765

114,970

1,796,388

Total

217,653

1,463,765

114,970

1,796,388

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 and other fixed interest securities’ with active markets such as Government securities are classified within Level 1, as fair values are based on quoted market prices. For debt securities and other fixed interest securities that trade in less active markets, including corporate securities, fair values are based on the output of pricing models, the significant inputs into which include, but are not limited to, yield curves, credit risks and spreads, measures of volatility, and prepayment speeds. These debt securities and other fixed interest securities are classified within Level 2. For debt securities and other fixed interest securities and debt securities and other fixed interest securities for which pricing is unobservable, these are classified within Level 3.

‘Loans and deposits with credit institutions’ include short term investments, such as liquidity funds. Where such securities are traded in active markets, they are classified within Level 1, as fair values are based on quoted market prices. Where no active market exists for such securities they are typically classified within Level 2 and where pricing is unobservable, Level 3.

For securities in level 3 where pricing is based on unobservable inputs, valuations are sourced from models and / or third parties. Any third party models are reviewed and approved by the Chubb Group’s specialist asset management function on a quarterly basis. Significant uncertainty would be considered to exist in relation to pricing based on unobservable inputs.

No derivative assets or liabilities are held at the reporting date (2023: Nil).

Management performs an analysis of the prices obtained from pricing vendors to ensure that they are reasonable and produce a reasonable estimate of fair value. Management considers both qualitative and quantitative factors as part of this analysis. Examples of analytical procedures performed include reference to recent transactional activity for similar securities, review of pricing statistics and trends and consideration of recent relevant market events.

At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using valuation techniques based on observable market data. All of the investments categorised as Level 3 are fair valued based on the inputs to the valuation technique used.

12.Debtors arising out of direct insurance operations

2024£000

2023£000

Due within one year

96,217

101,701

Total

96,217

101,701

13.Debtors arising out of reinsurance operations

2024£000

2023£000

Due within one year

65,756

82,314

Total

65,756

82,314

14.Other debtors

2024£000

2023£000

Other related party balances (non-syndicate)

5,617

2,861

Other

218

1,497

Total

5,835

4,358

15.Deferred acquisition costs

The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end of the period:

2024

2023

Gross£000

Reinsurance£000

Net£000

Gross£000

Reinsurance£000

Net£000

Balance at 1 January

71,940

(8,784)

63,156

68,973

(10,984)

57,989

Incurred deferred acquisition costs

178,664

(10,094)

168,570

166,678

(12,116)

154,562

Amortised deferred acquisition costs

(170,937)

10,294

(160,643)

(161,882)

14,127

(147,755)

Foreign exchange movements

(981)

116

(865)

(1,829)

189

(1,640)

Balance at 31 December

78,686

(8,468)

70,218

71,940

(8,784)

63,156

16.Claims development

The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred, including claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated have changed from the first estimates made.

As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported for the end of the underwriting year to one year later as a large proportion of premiums are earned in the year of account’s second year of development.

Balances have been translated at exchange rates prevailing at 31 December 2024 in all cases.

Gross:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

£000

Estimate of gross claims

at end of underwriting year

145,188

134,062

151,840

103,578

97,318

174,252

139,374

140,015

one year later

308,551

324,693

308,552

273,439

289,665

318,041

321,000

291,906

two years later

335,412

335,717

342,598

295,499

303,451

294,622

312,273

278,361

three years later

320,296

335,769

339,297

308,340

285,369

298,777

306,303

four years later

301,846

341,620

343,804

324,049

280,325

278,210

five years later

299,884

340,494

360,355

343,270

264,537

six years later

301,458

344,544

369,835

351,391

seven years later

302,873

352,732

368,574

eight years later

295,349

356,716

nine years later

299,659

Estimate of gross claims reserve

299,659

356,716

368,574

351,391

264,537

278,210

306,303

278,361

Provision in respect of prior years

174,887

Less gross claims paid

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

Gross claims reserve

37,001

47,828

42,679

48,145

46,489

75,588

111,438

142,295

232,151

Net:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

£000

Estimate of net claims

at end of underwriting year

114,578

104,747

105,605

81,454

78,009

120,965

115,943

120,132

123,311

140,682

one year later

245,157

253,997

243,190

211,481

231,801

241,825

264,845

261,717

295,141

two years later

271,717

273,421

266,797

224,527

236,501

230,349

262,981

242,020

three years later

261,810

265,987

262,868

228,597

218,533

229,279

262,263

four years later

248,089

259,351

264,562

229,279

216,195

214,178

five years later

246,707

255,118

270,484

229,863

205,971

six years later

248,152

259,782

272,461

228,470

seven years later

249,719

265,918

269,382

eight years later

247,521

266,865

nine years later

245,912

Estimate of net claims reserves

245,912

266,865

269,382

228,470

205,971

214,178

262,263

242,020

295,141

140,682

Provision in respect of prior years

Less net claims paid

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(93,315)

(34,185)

(

)

Net claims reserve

24,916

28,275

30,775

30,572

38,928

61,976

95,980

119,016

201,826

106,497

17.Technical provisions

The table below shows changes in the insurance contract liabilities and assets from the beginning of the period to the end of the period.

2024

2023

Gross provisions£000

Reinsurance

Assets£000

Net£000

Gross provisions£000

Reinsurance

Assets£000

Net£000

Claims outstanding

Balance at 1 January

1,109,398

(233,001)

876,397

1,147,299

(308,124)

839,175

Claims paid during the year

(314,244)

54,799

(259,445)

(289,265)

82,816

(206,449)

Expected cost of current year claims

166,354

(26,379)

139,975

147,988

(22,270)

125,718

Change in estimates of prior year provisions

148,533

(16,522)

132,011

121,994

10,383

132,377

Foreign exchange movements

(19,283)

1,055

(18,228)

(18,618)

4,194

(14,424)

Balance at 31 December

1,090,758

(220,048)

870,710

1,109,398

(233,001)

876,397

No unwinding of discount has been included within the statement of profit or loss.

2024

2023

Gross provisions£000

Reinsurance

Assets£000

Net£000

Gross provisions£000

Reinsurance

Assets£000

Net£000

Unearned premiums

Balance at 1 January

319,594

(48,598)

270,996

300,896

(55,953)

244,943

Premiums written during the year

727,463

(89,158)

638,305

694,185

(98,857)

595,328

Premiums earned during the year

(700,460)

90,658

(609,802)

(669,145)

105,188

(563,957)

Foreign exchange movements

(4,527)

1,639

(2,888)

(6,342)

1,024

(5,318)

Balance at 31 December

342,070

(45,459)

296,611

319,594

(48,598)

270,996

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.

18.Discounted claims

Discounting may be applied to claims provisions where there are individual claims with structured settlements that have annuity-like characteristics, or for books of business with mean term payment greater than four years from the accounting date.

No claims have been discounted in the year (2023:£Nil).

19.Creditors arising out of reinsurance operations

2024£000

2023£000

Due within one year

45,569

82,229

Total

45,569

82,229

20.Other creditors

2024£000

2023£000

Other related party balances (non-syndicates)

33,682

15,875

Other liabilities

2,648

Total

33,682

18,523

21.Cash and cash equivalents

2024£000

2023£000

Cash at bank and in hand

171,864

181,237

Short term debt instruments presented within other financial investments

82,192

95,146

Deposits with credit institutions

32,293

27,090

Bank overdrafts

(136,438)

(137,281)

Total cash and cash equivalents

149,911

166,192

Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the management of its short-term commitments are included in cash and cash equivalents. There are no balances are presented as cash at bank and in hand in the balance sheet but relating to amounts held in accounts with more than three-month maturity from origination.

Included within cash and cash equivalents are the following amounts which are not available for use by the Syndicate: Canadian Regulated Funds £2.3m, Canadian LCTF regulated funds £8.4m, Letter of Credit collateral £0.7m, funds held on behalf of Brokers £5.2m (2023: Canadian Regulated Funds £3.1m, Canadian LCTF regulated funds £0.8m, Letter of Credit collateral £0.7m, funds held on behalf of Brokers £4.4m).

2024£000

2023£000

Cash at bank and in hand

5,902

5,126

Short term debt instruments presented within other financial investments

10,686

3,903

Total cash and cash equivalents not available for use by the syndicate

16,588

9,029

22.Analysis of net debt

At 1 January 2024

£000

Cash flows

£000

Acquired

£000

Fair value and exchange movements

£000

Non-cash changes

£000

At 31 December 2024

£000

Cash and cash equivalents

166,193

(22,086)

5,804

149,911

Total

166,193

(22,086)

5,804

149,911

23.Related parties

The ultimate holding company of the syndicate’s managing agent, Chubb Underwriting Agencies Limited (“CUAL”), is Chubb Limited, a company which is registered in Zurich, Switzerland and quoted on the New York Stock Exchange.

Copies of the ultimate holding company's consolidated accounts can be obtained from Investor Relations at Chubb's executive offices at 1133 Avenue of the Americas, New York, NY 10036.

The principal related reinsurance partner of the syndicate is Chubb Tempest Re, a leading global multi-line reinsurer that is part of the Chubb group. The syndicate may have reinsured, or have been reinsured by, insurance companies in which Chubb Limited has interests and of which it and certain of its subsidiaries are controllers.

During calendar year 2024, a number of outwards reinsurance contracts were effected with group companies. The main excess of loss reinsurance programmes in operation during 2024 were shared with other Chubb companies, including Chubb European Group SE.

The following is a summary of the reinsurance transactions and balances with related parties in 2024 and as at 31 December 2024:

2024

Reinsurance Premium Related

Chubb Tempest Reinsurance

£,000

Chubb European Group SE

£’000

Chubb America

£’000

Other

£’000

Total

£’000

Reinsurance Premiums

7,283

(22)

400

7,661

Reinsurance Commissions

(115)

(17)

(47)

Reinsurers’ share of Unearned Premium Reserve

3,347

259

3,702

Reinsurance Creditor

5,219

(506)

(104)

705

5,314

2024

Reinsurance Recovery Related

Chubb Tempest Reinsurance

£’000

Chubb European Group SE

£’000

Chubb America

£’000

Other

£’000

Total

£’000

Change in reinsurers’ share of Claims Incurred

(13,805)

1,166

(408)

128

(12,919)

Balance of reinsurers’ share of Claims Outstanding

40,808

(275)

3,790

668

44,991

Reinsurance Debtor

4,369

1,739

522

4,189

10,819

2023

Reinsurance Premium Related

Chubb Tempest Reinsurance

£’000

Chubb European Group SE

£’000

Chubb America

£’000

Other

£’000

Total

£’000

Reinsurance Premiums

9,775

403

(4)

401

10,575

Reinsurance Commissions

(291)

(84)

(20)

(395)

Reinsurers’ share of Unearned Premium Reserve

4,450

421

4,945

Reinsurance Creditor

(9,313)

(812)

(105)

961

(9,269)

2023

Reinsurance Recovery Related

Chubb Tempest Reinsurance

£’000

Chubb European Group SE

£’000

Chubb America

£’000

Other

£’000

Total

£’000

Change in reinsurers’ share of Claims Incurred

14,750

771

2,226

(8)

17,739

Balance of reinsurers’ share of Claims Outstanding

41,849

868

3,521

720

46,958

Reinsurance Debtor

9,713

147

2,457

10,689

23,006

The syndicate’s capacity for all years of account is provided entirely by Chubb Capital I Limited, which is a corporate member of Lloyd’s, participating only on Syndicate 2488. Chubb Capital I Limited is a wholly owned subsidiary within the Chubb group.

Managing agency fees of £Nil (2023: £0.6 million) were paid by the syndicate to CUAL. Staff providing services to CUAL and the syndicate are employed by Chubb Services UK Limited (“CSUK”), another Chubb Limited company. CSUK settles expenses on behalf of, and provides services to, the syndicate and CUAL. From the 1 January 2024 expenses settled by CSUK are recharged to CUAL and then onto the Syndicate at a markup, prior to this expenses were recharged by CSUK directly to Syndicate. During 2024 the syndicate incurred expenses of £58.4m from CUAL (of which £15.3m related to claims handling expenses and £43.1m to admin expenses) (2023: £57.3 million from CSUK of which £14.8m related to claims handling expenses and £42.5m to admin expenses) and had an outstanding balance with CSUK of £2.4 million receivable as at 31 December 2024 (2023: £3.8 million payable) and an outstanding balance with CUAL of £22.4m payable as at 31 December 2024 (2023: £1.7m payable).

These disclosure requirements are in addition to the requirement to disclose key management personnel compensation. This disclosure is given in note

24.Off-balance sheet items

The Syndicate benefits from collateral pledged in the form of Funds at Lloyd’s totalling £393.0m (2023: £Nil), as well as a letter of credit totalling £73.4m (2023: £Nil).

25.Post balance sheet events

The amounts that are proposed to be transferred to members are disclosed in note

. There are no other non-adjusting post-balance sheet events.

26.Contingencies and commitments

The Syndicate has no contingencies and commitments to disclose (2023: Nil).

27.Foreign exchange rates

The following currency exchange rates have been used for principal foreign currency transactions:

2024

2023

Start of period rate

End of period

rate

Average

rate

Start of period rate

End of period rate

Average

rate

Sterling

1.00

Euro

1.16

1.21

1.18

1.16

1.15

US dollar

1.26

1.28

1.24

1.26

1.24

Canadian dollar

1.71

1.81

1.75

1.67

1.71

1.68

Australian dollar

1.89

2.00

1.94

1.80

1.89

1.87

Japanese Yen

180.28

194.04

193.53

167.67

180.28

174.97

The average rates listed in the table above are the official Lloyd’s average rates. The Syndicate does not apply average rates to any transactions instead monthly rates are applied to income statement transactions based on the month in which they occur.

28.Funds at Lloyd’s

Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (‘FAL’). These funds are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority requirements and resource criteria. The determination of FAL has regard to a number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has been underwritten. The syndicate’s members have met their FAL requirements by the retention of closed year of account profits in the syndicate. At 31 December 2024 FAL totalled £1,115.1 million (2023: £716.5 million).