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SYNDICATE 2623
ANNUAL REPORT AND ACCOUNTS
YEAR ENDED
CONTENTS
STRATEGIC REPORT OF THE MANAGING AGENT…………………………………………………………… 4
MANAGING AGENT’S REPORT………………………………………………………………………………………… 8
STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES…………………………………………… 14
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SYNDICATE 2623 …………… 15
STATEMENT OF COMPREHENSIVE INCOME ………………………………………………………………… 18
BALANCE SHEET …………………………………………………………………………………………………………… 19
STATEMENT OF CHANGES IN MEMBERS' BALANCES ………………………………………………… 20
CASH FLOW STATEMENT ……………………………………………………………………………………………… 21
NOTES TO THE FINANCIAL STATEMENTS …………………………………………………………………… 22
MANAGING AGENT'S CORPORATE INFORMATION ………………………………………………………… 53
SYNDICATE 2623
31 DECEMBER 2024
3
STRATEGIC REPORT OF THE MANAGING AGENT
Overview
Syndicate 2623 (the ‘syndicate’) continues to write a range of specialised insurance at Lloyd’s. This
syndicate writes business in parallel with Syndicate 623. For the 2024 underwriting year and beyond,
business written domestically by Beazley’s US-based underwriters in prior years is no longer written
through Syndicate 2623. Additionally, the syndicate’s portfolio was rebalanced to cover a smaller share of
Beazley's existing wholesale business written in London and Singapore, with Syndicate 2623 taking a
smaller share of risks that are written in parallel with Syndicate 623.
The capacities of the syndicates managed by Beazley Furlonge Limited ('BFL') are as follows:
Syndicate Number Capacities
2024 £m 2023 £m
623 887.2 818.6
2623 2,299.6 3,794.5
3622 37.0 33.8
3623 1,325.6 —
4321 — 33.1
5623 396.6 339.8
6107 57.8 43.3
Total 5,003.8 5,063.1
The result for Syndicate 2623 for the year ended 31 December 2024 is a profit of $758.4m (2023:
$937.1m).
Year of account results
The 2022 year of account ('YOA') has closed with a gain on capacity of 18.1% despite being adversely
impacted by a number of catastrophe events including Hurricane Ian and Storm Elliott. Beazley has
maintained an active approach to portfolio diversification and this coupled with careful risk selection has
minimised the impact of these events. The 2023 YOA is currently forecasting a positive return on capacity
of 12.5%, Although there were numerous adverse weather events that impacted the syndicate, the
positive return on capacity demonstrates that such events are within the expected range for the syndicate.
The 2024 YOA, is currently projected to close with a positive return on capacity. This YOA is still
developing. Catastrophe events throughout 2025 and the development of 2024 calendar year losses may
still impact the 2024 YOA.
Rating environment
Rate increases for the syndicate softened to 0.2% in 2024 across the portfolio (2023: 5%). Property Risks
experienced modest rate increases at 1.8% (2023: 22%) while MAP Risks rate increases were 1.1%
(2023: 6%). After a prolonged period of high rate increases until year end 2022, Cyber Risks continued to
experience rate decreases in 2023 and 2024 (6.4% and 4.4% respectively). Specialty Risks remained
relatively flat year on year, with small rate increases of 0.3%.
Combined ratio
The combined ratio is a measure of operating performance and represents the ratio of the syndicate's total
costs (excluding foreign exchange movements) to total net earned premium. The syndicate’s combined
ratio in 2024 has increased to 85% (2023: 80%). This has arisen due to a deterioration in both the claims
and expense ratios.
Claims
The claims ratio is a measure of the syndicate's claims experience and represents the ratio of its net
insurance claims to net earned premium. The claims ratio was 47% in 2024 (2023: 43%). There were
more catastrophe losses in 2024 relative to 2023, such as Hurricanes Milton and Helene which have
worsened the claims ratio. The prior year claims ratio included a positive impact from margin releases on
some classes due to a revision in the actuarial methodology in determining risk margin that is held. The
current year claims ratio remains substantially lower than in years prior to 2023. The managing agent
continues to be of the view that the reserves held are appropriate.
SYNDICATE 2623
31 DECEMBER 2024
4
STRATEGIC REPORT OF THE MANAGING AGENT CONTINUED
Prior year releases
During 2024 the syndicate released prior year reserves of $122.0m (2023: $267.9m). The syndicate
experienced a net release on most divisions, offset by a strengthening on the MAP and Specialty Risk
divisions on older years of account. Net (releases)/strengthening are shown by division in the table below:
2024 2023
$m $m
Cyber Risks
(40.0) 25.9
Digital
(26.4) (36.6)
MAP Risks
61.8 (103.1)
Property Risks
(122.5) (37.0)
Specialty Risks
5.1 (117.1)
Total
(122.0) (267.9)
Net operating expenses
Net operating expenses, including business acquisition costs and administrative expenses, were $1,185.7m
(2023: $1,234.5m). The expense ratio is a measure of net operating expenses to net earned premium.
The expense ratio for 2024 was 38% (2023: 37%). The breakdown of these costs is shown below:
2024 2023
$m $m
Brokerage costs
820.2 911.8
Other acquisition costs
89.2 87.1
Total acquisition costs
909.4 998.9
Administrative and other expenses
276.3 235.6
Net operating expenses*
1,185.7 1,234.5
* A further breakdown of net operating expenses can be found in note 4.
Brokerage costs as a percentage of net earned premium are approximately 26% (2023: 27%). Brokerage
costs are deferred and expensed over the life of the associated premiums in accordance with accounting
guidelines. Other acquisition costs comprise costs that have been identified as being directly related to
underwriting activity (e.g. underwriters’ salaries and Lloyd’s box rental). These costs are also deferred in
line with premium earning patterns. Administrative expenses comprise primarily IT costs, facilities costs,
Lloyd’s central costs and other support costs.
The expense ratio is a measure of net operating expenses to net earned premium. The expense ratio for
2024 is 38% (2023: 37%). The managing agent continues to focus on total expense base, allowing for
additional expenses where aligned to underlying business growth or to enhance the syndicates business
model. While the volume of business in the syndicate is lower than prior year, there were incentive
payments that are linked to the syndicates performance as referenced in "Year of account results" above.
Additionally, the syndicate has changed the mix of its reinsurance cover between 2023 and 2024. It is
receiving less overriding commission (which are offset against expenses) from proportional reinsurance
arrangements as it pivots to more non-proportional reinsurance cover. This is contributing to the increase
in expense ratio.
Investment performance
The syndicate’s investments generated a return of $291.5m, or 5.1% in 2024 (2023: a return of $251.5m,
or 4.7%). This year marks the highest contribution from investments in the syndicate's history. Financial
assets fell to $5,549.1m as at 31 December 2024 (2023: $5,942.0m) due to the syndicate writing less
business in 2024. Returns were again driven by strong performance from equity, credit and hedge fund
exposures; and by the level of risk-free yield available in the market, where the interest rate risk on our
assets closely matches our liabilities.
US GDP growth was surprisingly strong, shaking off high short-term interest rates to register
approximately 3% for 2024, led by services and consumption. US government bond yields were volatile,
rising early in the year before falling through Q3, and rising again in Q4 as financial market participants
SYNDICATE 2623
31 DECEMBER 2024
5
STRATEGIC REPORT OF THE MANAGING AGENT CONTINUED
began to digest a possible Republican presidential victory and the Federal Reserve indicating a slower than
expected pace of future cuts. The shape of the yield curve changed, pivoting around the 2yr where yields
were little changed; yield on shorter maturities fell, whilst longer maturities rose. Despite this volatility,
and with most exposures at the short end, the portfolio performed well.
Equity markets again delivered a strong return. The equity portfolio (within shares and other variable yield
and units in unit trusts line in the below table), continues to be focused on US markets, and is selected to
align with the responsible investment commitments, returned in excess of 24%. Performance was strong
throughout the year. Corporate credit exposures performed strongly as well, with both high yield and
investment grade spreads tightening. High yield spreads came close to the historic low of 240bps, before
finishing the year just below 300bps. The hedge fund portfolio also delivered a solid return with low
volatility and correlation to other asset classes.
The yield of the fixed income portfolio (within debt securities and other fixed income securities line in the
below table) at 31 December 2024 was 4.6%, with a duration of 1.6yrs. This level of yield is a positive
starting point for investment returns in 2025. However, there are plenty of risks: economic growth is
diverging; remaining solid in the US, but slowing elsewhere. Geopolitical risks are elevated, and markets
will likely have to weather a shift in US foreign and domestic policy under the new administration. The
investment portfolio remains diversified and well positioned for a range of market outcomes.
The table below details the breakdown of the syndicate’s portfolio, by asset class:
31 Dec 2024 31 Dec 2023
$000 % $000 %
Shares and other variable yield securities
and units in unit trusts
1,353,066 24.4 1,086,882 18.3
Debt securities and other fixed income
securities
3,774,160 68.0 4,461,274 75.1
Participation in investment pools
9,191 0.2 6,863 0.1
Loans and deposits with credit institutions
— — — —
Derivative assets 10,295 0.2 3,227 0.1
Syndicate loans to central fund 26,714 0.5 30,978 0.5
Other investments 277,000 4.9 321,582 5.4
Financial investments at fair value 5,450,426 98.2 5,910,806 99.5
Cash at bank and in hand 98,677 1.8 31,223 0.5
Total 5,549,103 100 5,942,029 100
Reinsurance
Reinsurance is purchased for a number of reasons:
• to mitigate the impact of catastrophes such as hurricanes and non-natural catastrophes such as
cyber attacks;
• to enable the syndicate to put down large lead lines on risks we underwrite; and
• to manage capital to lower levels.
In 2024, the amount spent on outward reinsurance was $475.4m (2023: $730.4m). As a percentage of
gross premiums written it remained constant at 16.2% (2023: 16.2%). Of note, the syndicate is now
benefiting from new cyber reinsurance catastrophe bonds and a cyber industry loss warranty that the
Beazley Group issued during the year.
SYNDICATE 2623
31 DECEMBER 2024
6
STRATEGIC REPORT OF THE MANAGING AGENT CONTINUED
Outlook
The 2023 underwriting year was relatively quiet from a natural catastrophes point of view. It suffered
losses due to the Hawaiian Wildfires, multiple small storms and hurricanes, these had a relatively small
financial impact on this syndicate. This YOA achieved a mix of rate changes across its business mix. MAP
Risks and Property Risks demonstrated double digit rate increases. These were offset by a softening of the
rates on the Cyber Risks book in 2023. The syndicate is expected to produce a positive 12.5% return on
capacity for 2023 underwriting year.
In 2024, the syndicate changed its business mix - reducing its exposure to Cyber Risks and increasing its
exposure to MAP Risks. Most divisions continue to demonstrate rate increases despite difficult market
conditions. The 2024 YOA has experienced some claims events - most notably Hurricanes Milton, Beryl and
Helene. Despite this, and even though it is in the early stages of development, this YOA is expected to
generate a positive return on capacity.
Looking ahead to 2025, the managing agent will continue to explore opportunities for the syndicate. In an
era of accelerating risk, clients need expertise and strong underwriting capabilities to shoulder the burden
of managing risk. Syndicate 2623 is at the forefront of serving this need. The managing agent continues to
search for growth opportunities while taking heed of the increasingly complex risk environment driven by
climate change, political and macro-economic factors.
…………………………
C C J Wong
Chief Financial Officer
6 March 2025
SYNDICATE 2623
31 DECEMBER 2024
7
MANAGING AGENT’S REPORT
The managing agent presents its report for the year ended 31 December 2024.
This annual report is prepared using the annual basis of accounting as required by Statutory Instrument
No 1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and applicable United Kingdom Accounting Standards, including Financial Reporting
Standard 102: The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland
and Financial Reporting Standard 103: Insurance Contracts in accordance with the provisions of Schedule
3 of the Large and Medium-size Companies and Groups (Accounts and Reports) Regulations relating to
insurance companies.
Principal activities
The principal activity of Syndicate 2623 is the transaction of a range of specialised insurance business at
Lloyd’s, including the underwriting of professional indemnity, cyber liability, property, marine, reinsurance,
accident and life, and political risks and contingency business.
Business review
A review of the syndicate’s activities is included in the strategic report.
Risk governance and reporting
BFL’s Board of Directors (the 'Board') has the responsibility for defining and monitoring the risk appetite
within which BFL and the syndicates operate (collectively, ‘Beazley’), with key individuals and committees
accountable for day-to-day management of risks and controls. Regular reporting by the risk management
function in board meetings and senior management committees ensures that risks are monitored and
managed as they arise. Beazley is actively "future proofing" its structure across its three platforms. One of
these platforms is its London Wholesale platform which the managing agent governs. This platform focus
will allow strengthening of the managing agent’s leadership and further enhance platform-specific and
entity governance, while continuing to bolster its risk management structure. The managing agent
continues to evolve its structure to deliver on this governance framework.
Climate change/Responsible business
Led by Beazley plc’s Board and supported by the Boards of BFL, Beazley Insurance dac, and Beazley
Insurance Company Inc, sustainability issues and climate related risks have become regular agenda items
throughout 2024. In March 2021, Beazley launched its first Responsible Business Strategy. This document,
and the subsequent update which is published alongside the Beazley plc annual report and accounts
('ARA'), sets out the goals and targets across a wider range of sustainability issues, including climate
change.
In addition to the summary Responsible Business report, Beazley plc discloses its compliance with the Task
Force on Climate-Related Disclosures' (TCFD) Recommendations and Recommended Disclosures at the
consolidated group level in the Beazley plc ARA produced annually. The 2024 Beazley plc ARA was
published on the Group's website in March 2025.
Although not specifically listed in the risk categories detailed further in this report, the Board of BFL deems
climate risk to be inherently embedded within all risks managed across the syndicate.
Risk management
Beazley prides itself on understanding the drivers of risk across the syndicate. The risk management
function supports and challenges management in effectively managing those risks. During the year,
Beazley continued to enhance, roll out and embed elements of the risk management framework. Beazley
has continued working with our colleagues across the first and second lines of defence to support the
syndicate strategy, including challenging the oversight of climate-related risks (covering physical,
transition and litigation) and journey in digitisation. The details of the performance of the risk management
framework are considered further in this report.
Risk management oversight and framework
The Board delegates direct oversight of the risk management function and framework to its Risk
Committee. The Board delegates executive oversight of the risk management function and framework to
the executive Committee, which fulfils this responsibility primarily through its risk and regulatory
Committee.
The risk management framework establishes the approach to identifying, measuring, mitigating,
monitoring, and reporting on principal risks. The risk management framework supports Beazley's strategy
and objectives.
Beazley has adopted a ‘three lines of defence’ model, in which the risk management function is part of the
second line of defence. Ongoing communication and collaboration across the three lines of defence ensures
that Beazley identifies and manages risks effectively.
SYNDICATE 2623
31 DECEMBER 2024
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MANAGING AGENT’S REPORT CONTINUED
The Board approves the company’s risk appetite statements at least annually and receives updates on
monitoring against risk appetites throughout the year. This includes an assessment of principal risks.
A suite of reports from the risk management function support senior management and the Board in
discharging their oversight and decision-making responsibilities throughout the year. The risk management
function's reports include updates on risk appetite, risk profiles, stress and scenario testing (including
reverse stress testing) and analysis, emerging and heightened risks, and the Own Risk and Solvency
Assessment (ORSA) report for BFL.
The business operates a control environment which supports mitigating risks to stay within risk appetite.
The risk management function reviews and challenges the control environment through various risk
management activities (e.g. risk opinions, risk reviews etc). In addition, the risk management function
works with the capital modelling and exposure management teams, particularly in relation to validation of
the internal model, preparing parts of the ORSA, monitoring risk appetite and the business planning
process.
The risk management plan considers, among other inputs, the inherent and residual risk scores for the
risks in the risk registers. The risk management function also incorporates results from internal audits and
other assurance activities into its risk assessment process. The internal audit function considers the risk
management framework in its audit universe to derive a risk-based audit plan.
The approach to identifying, managing and mitigating emerging risks includes inputs from across the
business, analysis of lessons learned following incidents and industry thought leadership. The approach
considers the potential materiality and likelihood of impacts, which helps prioritise emerging risks which
the company monitors or undertakes focused work on. Key emerging risks in 2024 included geopolitical
and conflict escalation, artificial intelligence, systemic cyber attack, political and social unrest, supply chain
risk and climate change. The Board carries out a robust assessment of the emerging risks at least
annually.
Principal risks
Principal risks are under continuous review with ongoing risk assessments. Whilst the risk profile has
remained broadly stable in 2024, Beazley continue to focus on operational and regulatory risks, to ensure
that the control environment keeps pace with business change and growth initiatives. The table below
summarises the principal risks the company faces, and the control environment, governance and oversight
that mitigate these risks. The approach to managing the risks arising from climate change are set out
within the TCFD section of Beazley plc’s annual Report.
Legend for principal risks table below
Risk outlook
Increasing Stable Decreasing
SYNDICATE 2623
31 DECEMBER 2024
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MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary descriptions Mitigation and monitoring
Insurance
Risk of loss arising from uncertainties
and deviations of the occurrence,
frequency, amount and timing of
insurance premium and claim liabilities
relative to the assumptions at the time
of underwriting. This includes risk from
underwriting such as market cycle,
catastrophe, reinsurance and reserves.
• Market cycle: potential systematic
mispricing of medium- or long-tailed
business that does not support
revenue to invest and cover future
claims;
• Catastrophe: one or more large
events caused by nature (e.g.
hurricane, windstorm, earthquake
and/or wildfire) or mankind (e.g.
coordinated cyber-attack, global
pandemic, losses linked to an
economic crisis, an act of terrorism or
an act of war and/or a political event)
impacting a number of policies, and
therefore giving rise to multiple
losses;
• Reinsurance arrangements:
reinsurance may not be available or
purchases do not support the business
underwritten (e.g. mismatch); and
• Reserving: reserves may not be
sufficiently established to reflect the
ultimate paid losses.
Insurance risk is principally managed through pricing tools, analysis of
macro trends and claim frequency/severity and ensures exposure is
well diversified and not overly concentrated in any one area, or line of
business.
Our strategic approach to exposure management and a
comprehensive internal and external reinsurance programme helps to
reduce volatility of profits in addition to managing net exposure
through the transfer of risk.
Our prudent and comprehensive approach to reserving ensures
adequate provisions are made for the payment of all valid claims. High
calibre claims and underwriting professionals deliver expert service
and claims handling to insureds, ensuring good customer outcomes.
Beazley carries out periodic analysis to identify significant areas of
concentration risk across its business.
Beazley makes extensive use of modelling, including catastrophe
modelling, the use of our Solvency II model and stress and scenario
testing to ensure insurance risk is within our risk appetite.
Insurance risk outlook continues to be stable as BFL manages the
market cycle across all the lines of business.
Credit
The risk of loss resulting from default in
obligations due or changes in the credit
standing of either issuers of securities,
counterparties or any debtors which the
company is exposed to. Exposure to
credit risk largely emanates from the
use of reinsurers, brokers, and
coverholders and our investments, of
which reinsurance asset is the largest
exposure for the Syndicate.
Beazley maintains long-term partnerships with strategic reinsurance
partners to support it throughout the insurance cycle and during
potential catastrophic claim events. Beazley uses a range of traditional
and alternative reinsurance mechanisms to diversify reinsurance credit
risk. All reinsurers must meet stringent internal approval criteria,
overseen by the Reinsurance Security Committee. Credit risk from
brokers and coverholders remains low.
The credit risk outlook therefore remains stable, as Beazley manages
reinsurance, broker, coverholder and investment credit risks,
maintaining low levels of aged and/or bad debt.
Market
The risk of loss resulting from
fluctuations in the level and in the
volatility of market prices of assets,
liabilities and financial instruments.
Investment assets may be impacted by
adverse movements in financial
markets, interest rates, exchange rates,
or external market forces.
Beazley operates a conservative investment strategy with a view to
limiting investment losses that would impact the syndicate’s financial
results. We employ robust policies and tools to manage market risk,
ensuring alignment with regulatory requirements and industry best
practices. Interest rate and foreign exchange risks are managed using
natural hedges and financial instruments, minimizing potential
volatility. The Investment Committee regularly reviews market risk
exposures to ensure that our risk management capabilities remain
agile and effective in responding to evolving market dynamics.
Despite the global and political economic uncertainties, we maintain a
stable market risk outlook, driven by clear political outcomes and
steady growth in the United States, where most of our asset
exposures are concentrated.
Group
The contagion risk that an action or
inaction of one part of the Beazley
Group adversely affect an area of the
Syndicate. This also includes a
deterioration in culture which leads to
inappropriate behaviour, actions and/or
decisions including dilution of culture or
negative impact on the brand.
Risk culture is grounded in principles of transparency, accountability,
and awareness. An effective risk culture reflects a mature risk
management function, encourages prudent risk-taking, and fosters
awareness of existing and emerging risks. The Executive Committee
and the Board oversee Group risk, with regular monitoring conducted
by the Risk Management function and overseen by the Risk
Committee.
Our Group risk outlook remains stable, with the Executive Committee
continuously managing and improving our risk culture through
ongoing monitoring and enhancements.
SYNDICATE 2623
31 DECEMBER 2024
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MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary descriptions Mitigation and monitoring
Liquidity
Investments and/or other assets are
not available or adequate in order to
settle financial obligations when they
fall due.
By actively managing its liquidity needs, Beazley maximizes flexibility
in handling its financial assets and investment strategy. This proactive
approach ensures that clients and creditors are financially protected.
Beazley regularly evaluates the liquidity position of the syndicate,
under the oversight of the Risk Committee.
Our liquidity risk outlook remains stable as we consistently maintain
more than adequate levels of liquidity and capital.
Regulatory and legal
Non-compliance with regulatory and
legal requirements, failing to operate in
line with the relevant regulatory
framework in the territories where the
Syndicate operates. This may lead to
financial loss (fines, penalties),
sanctions, reputational damage, loss of
confidence from regulators, regulatory
intervention, inability to underwrite or
pay claims.
Beazley maintains active ongoing dialogue with its principal regulators.
A suite of compliance controls are in place to support the nature, scale
and complexity of the business which are overseen by the Risk and
Regulatory Committee. Beazley wants to have a trusting and
transparent relationship with regulators, ensuring coordinated
communication and the following of robust processes, policies and
procedures in the business. In addition, key staff, particularly those
who hold defined roles with regulatory requirements, are experienced
and maintain regular dialogue with regulators.
Beazley is implementing a horizon scanning service to support in-
house activity to identify relevant regulatory and legal matters and
emerging policy so the business can consider their potential impacts
on the business.
Considering the needs of our clients in everything our business does is
of utmost importance to Beazley. We deliver good customer outcomes
to our clients throughout the product lifecycle. The Conduct Review
Group oversees this risk.
Beazley has a very low appetite for regulatory and legal risk, therefore
maintaining strong and open relationships with our regulators is of
paramount importance. The outlook for this is increasing as
throughout 2024 and into 2025, we have seen increased engagement
with our regulators as the regulatory environment becomes more
complex and Beazley grows.
SYNDICATE 2623
31 DECEMBER 2024
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MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary descriptions Mitigation and monitoring
Operational
Failures of people, processes and
systems or the impact of an external
event on operations (e.g., a cyber-
attack having a detrimental impact on
operations) including transformation
and change related risks.
Beazley attracts and nurtures talented colleagues who champion
diversity of thought, fostering a culture of empowerment,
collaboration, and innovation. This commitment creates an
environment of employee wellbeing, where high-calibre, motivated,
loyal, and productive individuals are empowered to perform their
duties competently.
Beazley continues investing in technology and re-engineering
processes to support our operations, overseen by the Operations
Committee. Our business continuity, disaster recovery, and incident
response plans ensure the stability of our processes and systems,
enabling our team to consistently deliver optimal outcomes for our
clients.
We expect technology and cyber resilience to continue being key
focus areas. We are dedicated to collaborating with external agencies,
and maintaining robust controls over information security, data, and
operational resilience. We regularly review incident response plans
and continue to invest in cybersecurity training for our employees.
While maintaining a low appetite for operational risk, we observed an
increased frequency of reported risk incidents during 2024, coinciding
with an increasingly complex operating environment.
During 2024, there was one incident in relation to activities of an
individual underwriter which received additional Board and
management scrutiny during the year. The managing agent oversaw
a root cause analysis from the incident and has identified areas to
further enhance processes and controls. Beazley Group will continue
to carry out its medium-term plans to de-risk and simplify the
business; including evolving current infrastructure and automating
processes to support a more robust internal control framework. The
managing agent reviewed legacy areas of concern to ensure that
there is adequate management attention and oversight in place while
more permanent solutions from strategic projects are delivered.
The risk management function continues to work with first line teams
to ensure that controls and processes in place remain appropriate as
the operating landscape evolves.
Our risks and controls are formally monitored and reported through a
risk and control self-assessment process and the use of quantifiable
Key Risk Indicators.
The outlook for this risk is increased as we continue to strengthen
operationally and realise the benefits of ongoing initiatives to
modernise our systems and processes.
Strategic
The risk of loss resulting from
ineffective strategic direction and
implementation that leads to
inadequate profitability, insufficient
capital, financial loss and/or
reputational damage for BFL.
Pervasive risks impacting multiple areas
of Beazley (e.g., reputation, and
sustainability) occurring through real or
perceived action, or inaction, by a
regulatory body, market and/or third-
party provider.
A negative change to Beazley’s
reputation would have a detrimental
impact to the syndicates performance
and public perception.
Beazley consistently addresses key strategic opportunities and
challenges, striving to be the highest performing and most
sustainable specialist insurer. We ensure that we recognize,
understand, discuss, and develop action plans for significant strategic
priorities in a timely manner, while maintaining operational
effectiveness and brand reputation.
Beazley creates an environment that attracts, retains and develops
high performing talent with diverse perspectives, encouraging
exploration, creation, and innovation. By investing in understanding
the complexities of the risks our clients face and deploying our
expertise where it adds value, we thrive. The Executive Committee
and the Board oversee these risks.
Our commitment is to create a sustainable business for our people,
partners, and planet through responsible business goals. We embed
sustainability principles and ambitions, focusing on reducing our
carbon footprint (refer to the Group's TCFD report for more details on
climate-related risks and mitigations), contributing to our social
environment, and practicing good governance. While we consider
market developments, we evaluate each on its individual merits,
weighing both potential opportunities and risks.
As we consolidate and embed our achievements from 2024, our
strategic risk outlook remains stable.
SYNDICATE 2623
31 DECEMBER 2024
12
MANAGING AGENT’S REPORT CONTINUED
Directors
A list of Directors of the managing agent who held office during the year and to the date of this report can
be found on page 53.
Syndicate annual general meeting
In accordance with the Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000) the managing
agent does not propose to hold a syndicate annual meeting this year. Members may object to this proposal
within 21 days of this notice. Any objections must be made in writing to the managing agent.
Disclosure of information to the auditor
The Directors of the managing agent who held office at the date of approval of this Managing Agent’s
Report confirm that, so far as they are each aware, there is no relevant audit information of which the
syndicate’s auditor is unaware; and each Director has taken all the steps that they ought to have taken as
a Director to make themselves aware of any relevant audit information and to establish that the
syndicate’s auditor is aware of that information.
Auditor
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, the auditor will be deemed to be reappointed and Ernst & Young
LLP will therefore continue in office.
On behalf of the Board
…………………………
C C J Wong
Chief Financial Officer
6 March 2025
SYNDICATE 2623
31 DECEMBER 2024
13
STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES
The Directors of the managing agent are responsible for preparing the syndicate financial statements in
accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires
the Directors of the managing agent to prepare their syndicate annual accounts for each financial year.
Under that law they have elected to prepare the annual accounts in accordance with UK Accounting
Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 the
Directors of the managing agent must not approve the annual accounts unless they are satisfied that they
give a true and fair view of the state of affairs of the syndicate and of the statement of comprehensive
income of the syndicate for that period. In preparing these financial statements, the Directors of the
managing agent are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the annual accounts;
• assess the syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading, or have no
realistic alternative but to do so.
The directors of the managing agent are responsible for keeping adequate accounting records that are
sufficient to show and explain the syndicate’s transactions and disclose with reasonable accuracy at any
time the financial position of the syndicate and enable them to ensure that the financial statements comply
with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. They
are responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
company and to prevent and detect fraud and other irregularities.
The Directors of the managing agent are required to comply with the requirements of section 1 of the
Lloyd’s Syndicate Accounts Instructions version 2.1 as modified by the Frequently Asked Questions version
1.1 issued by Lloyd’s (the Syndicate Accounts Instructions).
The Directors of the managing agent are responsible for the maintenance and integrity of the syndicate
and financial information included on the syndicate’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors of the managing agent are responsible for the preparation and review of 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.
On behalf of the Board
…………………………
C C J Wong
Chief Financial Officer
6 March 2025
SYNDICATE 2623
31 DECEMBER 2024
14
Opinion
We have audited the syndicate annual accounts of syndicate 2623 (‘the syndicate’) for the year ended 31
December 2024 which comprise the Statement of Comprehensive Income, the Statement of changes in
Members’ Balances, the Balance Sheet, the Cash Flow statement and the related notes 1 to 25 , including
a summary of significant accounting policies. The financial reporting framework that has been applied in
their preparation is applicable law including The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS 102 “The
Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and Section 1 of the Lloyd’s
Syndicate Accounts Instructions V2.0 as modified by the Frequently Asked Questions Version v1.0 issued
by Lloyd’s (the Syndicate Accounts Instructions).
• give a true and fair view of the syndicate’s affairs as at 31 December 2024 and of its profit for the
year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Syndicate Accounts
Instructions.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Syndicate
Accounts Instructions, and other applicable law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the syndicate annual accounts section of our
report. We are independent of the syndicate in accordance with the ethical requirements that are relevant
to our audit of the syndicate annual accounts in the UK, including the FRC’s Ethical Standard as applied to
other entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
Conclusions relating to going concern
In auditing the syndicate annual accounts, we have concluded that the managing agent’s use of the going
concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to
continue as a going concern for a period of 12 months from when the syndicate annual accounts are
authorised for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report. However, because not all future events or conditions can
be predicted, this statement is not a guarantee as to the syndicate’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report and accounts other than the
syndicate annual accounts and our auditor’s report thereon. The directors of the managing agent are
responsible for the other information contained within the annual report and accounts.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the
extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the syndicate annual accounts or our knowledge obtained in the course of
the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the syndicate annual accounts themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of the other information, we are required to report that
fact.
We have nothing to report in this regard.
SYNDICATE 2623
31 DECEMBER 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 2623
15
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the managing agent’s report for the financial year in which the syndicate
annual accounts are prepared is consistent with the syndicate annual accounts; and
• the managing agent’s report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the syndicate and its environment obtained in the
course of the audit, we have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters where The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you, if in our
opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the syndicate annual accounts are not in agreement with the accounting records; or
• certain disclosures of the managing agents’ emoluments specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities set out on page 14 the
managing agent is responsible for the preparation of the syndicate annual accounts and for being satisfied
that they give a true and fair view, and for such internal control as the managing agent determines is
necessary to enable the preparation of the syndicate annual accounts that are free from material
misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to its ability to
continue in operation and using the going concern basis of accounting unless the managing agent either
intends to cease to operate the syndicate, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these syndicate annual accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed
below. However, the primary responsibility for the prevention and detection of fraud rests with both those
charged with governance of the managing agent and management.
Our approach was as follows:
• We obtained a general understanding of the legal and regulatory frameworks that are applicable to
the syndicate and determined that the most significant are direct laws and regulations related to
elements of Lloyd’s Byelaws and Regulations, and the financial reporting framework (UK GAAP),
and requirements referred to by Lloyd’s in the Syndicate Accounts instructions. Our considerations
of other laws and regulations that may have a material effect on the syndicate annual accounts
included permissions and supervisory requirements of Lloyd’s of London, the Prudential Regulation
Authority (‘PRA’) and the Financial Conduct Authority (‘FCA’).
SYNDICATE 2623
31 DECEMBER 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 2623
16
• We obtained a general understanding of how the syndicate is complying with those frameworks by
making enquiries of management, internal audit, and those responsible for legal and compliance
matters of the syndicate. In assessing the effectiveness of the control environment, we also
reviewed significant correspondence between the syndicate, Lloyd’s of London and other UK
regulatory bodies; reviewed minutes of the Board and Risk Committee of the managing agent; and
gained an understanding of the managing agent’s approach to governance.
• For direct laws and regulations, we considered the extent of compliance with those laws and
regulations as part of our procedures on the related syndicate annual accounts’ items.
• For both direct and other laws and regulations, our procedures involved: making enquiries of the
directors of the managing agent and senior management for their awareness of any non-
compliance of laws or regulations, enquiring about the policies that have been established to
prevent non-compliance with laws and regulations by officers and employees, enquiring about the
managing agent’s methods of enforcing and monitoring compliance with such policies, inspecting
significant correspondence with Lloyd’s, the FCA and the PRA, and involvement of relevant
specialists, including forensics specialists and inquiring about the appointment of external advisers,
including legal counsel, as applicable.
• The syndicate operates in the insurance industry which is a highly regulated environment. As such
the Senior Statutory Auditor considered the experience and expertise of the engagement team to
ensure that the team had the appropriate competence and capabilities, which included the use of
specialists where appropriate.
• We assessed the susceptibility of the syndicate’s annual accounts to material misstatement,
including how fraud might occur by considering the controls that the managing agent has
established to address risks identified by the managing agent, or that otherwise seek to prevent,
deter or detect fraud. We also considered areas of significant judgement, complex transactions,
performance targets, economic or external pressures and the impact these have on the control
environment. Where this risk was considered to be higher, we performed audit procedures to
address each identified fraud risk, including:
• Reviewing accounting estimates for evidence of management bias. Supported by our
Actuaries, we assessed if there were any indicators of management bias in the valuation of
insurance liabilities and the recognition of estimated premium income.
• Evaluating the business rationale for significant and/or unusual transactions.
• These procedures included testing manual journals and were designed to provide reasonable
assurance that the syndicate annual accounts were free from fraud or error.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these
syndicate annual accounts, and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been
undertaken so that we might state to the syndicate’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the syndicate and the syndicate’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Niamh Byrne (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
6 March 2025
SYNDICATE 2623
31 DECEMBER 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 2623
17
2024 2023
Notes $'000 $'000
Gross premiums written
3
Outward reinsurance premiums (475,398 ) (730,354 )
Premiums written, net of reinsurance
Changes in unearned premium
Change in the gross provision for unearned premiums 17 762,458 (301,599 )
Change in the provision for unearned premiums,
reinsurers’ share
17
(117,900 ) (89,286 )
Net change in the provision for unearned premiums 644,558 (390,885 )
Earned premiums, net of reinsurance 3,096,093 3,376,308
Allocated investment return transferred from the
non-technical account
Claims paid
Gross amount 17 (1,648,250 ) (1,573,951 )
Reinsurers’ share 17 307,400 358,813
Net claims paid (1,340,850 ) (1,215,138 )
Change in the provision for claims
Gross amount 17 (43,432 ) (42,476 )
Reinsurers’ share 17 (60,862 ) (205,643 )
Net change in provision for claims (104,294 ) (248,119 )
Claims incurred, net of reinsurance (1,445,144 ) (1,463,257 )
Net operating expenses 4
(1,185,742 ) (1,234,468 )
Balance on the technical account - general business
Investment income
7
Investment expenses and charges
7
(8,007 ) (5,438 )
Realised gains/(losses) on investments
7 85,822 (54,492 )
Unrealised gains on investments 7 39,491 195,932
Total investment return
Allocated investment return transferred to general
business technical account
(291,468 ) (251,485 )
Gain on foreign exchange 694 3,898
Other income 1,014 3,150
Total comprehensive income for the financial year 758,383 937,116
There were no other comprehensive gains or losses in the year.
The notes on pages 22 to 52 form part of these financial statements.
SYNDICATE 2623
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
18
2024
2023
*restated
Assets Notes $'000 $'000
Investments
Financial investments 9 5,450,426 5,910,806
Deposits with ceding undertakings
Reinsurers' share of technical provisions
Provision for unearned premiums 17 264,396 382,064
Claims outstanding 17 1,601,515 1,663,559
Debtors
Debtors arising out of direct insurance operations
11
Debtors arising out of reinsurance operations
12
Other debtors 13 172,747 97,264
Other assets
Cash at bank and in hand 14 98,677 31,223
Prepayments and accrued income
Deferred acquisition costs 15 354,277 542,026
Other prepayments and accrued income 58,352 63,975
Total assets 9,517,058 10,540,635
Liabilities, capital and reserves
Capital and reserves
Members' balances 1,260,803 1,122,886
Liabilities
Technical provisions
Provision for unearned premiums 17 1,589,544 2,352,164
Claims outstanding 17 5,982,650 5,947,372
Creditors
Creditors arising out of direct insurance operations
18
Creditors arising out of reinsurance operations
19 369,452 497,559
Other creditors
20 213,113 492,398
Accruals and deferred income 88,747 116,519
Total liabilities
Total liabilities, capital and reserves 9,517,058 10,540,635
*Certain balances have been restated due to a voluntary change in accounting policy. Refer to note 24.
The notes on pages 22 to 52 form part of these financial statements.
The syndicate annual accounts on pages 18 to 52 were approved by the Board of Beazley Furlonge Limited
on 6 March 2025 and were signed on its behalf by
………………………… …………………
P J Bantick (Director) C C J Wong (Chief Financial Officer)
SYNDICATE 2623
BALANCE SHEET
AS AT 31 DECEMBER 2024
19
2024 2023
$'000 $'000
Members’ balances brought forward at 1 January
Total comprehensive income for the financial year 758,383 937,116
Payments of profit to members' personal reserve funds (620,466 ) (4,719 )
Members' balances carried forward at 31 December 1,260,803 1,122,886
Members participate in syndicates by reference to YOA and their ultimate result, assets and liabilities are
assessed with reference to policies incepting in that YOA in respect of their membership of a particular
year.
The notes on pages 22 to 52 form part of these financial statements.
SYNDICATE 2623
STATEMENT OF CHANGES IN MEMBERS’ BALANCES
31 DECEMBER 2024
20
2024
2023
*restated
Note
$'000 $'000
Cash flows from operating activities
Total comprehensive income 758,383 937,116
Adjustments for:
(Decrease)/increase in gross technical provisions
17
(727,342 ) 377,301
Decrease in reinsurers' share of gross technical provisions
17
Decrease/(increase) in debtors 255,861 (70,040 )
Movement in other assets/liabilities 167,306 (134,758 )
Decrease in creditors (406,380 ) (115,608 )
Investment return
7
(291,468 ) (251,485 )
Foreign exchange 95 (364 )
Net cash flow from operating activities (63,833 ) 1,029,631
Cash flows from investing activities
Purchase of equity and debt securities (4,983,821 ) (4,699,787 )
Sale of equity and debt securities 5,486,021 3,570,761
Investment income received 251,977 55,553
Net cash from investing activities 754,177 (1,073,473 )
Cash flows from financing activities
Transfer to members in respect of underwriting participations
(620,466 ) (4,719 )
Net cash flow from financing activities (620,466 ) (4,719 )
Net increase/(decrease) in cash and cash equivalents 69,878 (48,561 )
Cash and cash equivalents at the beginning of the year 38,085 86,282
Foreign exchange on cash and cash equivalents (95 ) 364
Cash and cash equivalents at the end of the year 14 107,868 38,085
*Certain balances have been restated due to a voluntary change in accounting policy. Refer to note 24.
The notes on pages 22 to 52 form part of these financial statements.
SYNDICATE 2623
CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2024
21
1 Accounting policies
Basis of preparation
Syndicate 2623 (the ‘syndicate’) comprises a member of the Society of Lloyd’s that underwrites insurance
business in the London Market. The managing agent of the syndicate is Beazley Furlonge Limited (‘BFL'),
whose registered address and a principal place of business is 22 Bishopsgate, London, EC2N 4BQ. The
ultimate controlling party of BFL is Beazley plc, a company incorporated in England and Wales.
These syndicate annual accounts have been prepared in accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (the ‘Regulations’), the applicable
Accounting Standards in the United Kingdom and the Republic of Ireland, Financial Reporting Standard 102
(‘FRS 102’) and the applicable Accounting Standard on insurance contracts Financial Reporting Standard
103 (‘FRS 103’) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions version
2.1 as modified by the Frequently Asked Questions version 1.1 issued by Lloyd’s.
The financial statements have been prepared on the historic cost basis, except for financial assets at fair
value through profit or loss ('FVTPL') which are measured at fair value. The principal accounting policies
applied in the preparation of these financial statements are set out below. The policies have been
consistently applied to all periods presented, unless otherwise stated. All amounts presented are stated in
US dollars, being the syndicate’s functional currency, and in thousands, unless noted otherwise.
Previously, these financial statements were presented in millions of US dollars. The change from
presenting in millions to presenting in thousands has been applied for the first time in these financial
statements for the year ended 31 December 2024.
Going Concern
The financial statements of the syndicate have been prepared on a going concern basis. The syndicate's
business activities, together with the factors likely to affect its future development, performance and
position, are set out in the Strategic report contained in the annual report. In addition, Note 2 includes the
syndicate's risk management objectives and the entity’s objectives, policies and processes for managing its
capital. The Syndicate has sufficient capital for each year of account in its Funds at Lloyd’s (FAL). There is
no intention to cease underwriting or cease the operations of the Syndicate.
In assessing the syndicate's going concern position as at 31 December 2024, the managing agent has
considered a number of factors, including the current statement of financial position and the syndicate's
strategic and financial plan. The assessment concluded that, for the foreseeable future, the syndicate has
sufficient capital and liquidity for the 12 months from the date the financial statements are authorised for
issue.
Use of estimates and judgements
The preparation of financial statements requires the use of estimates and judgements that affect the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from those on which
management’s estimates are based. Estimates and assumptions are continually evaluated and are based
on historical experience and other factors. For example, estimates which are sensitive to economic,
regulatory and geopolitical conditions could be impacted by significant changes in the external
environment such as the volatile macroeconomic environment, climate change, international conflicts, and
significant changes in legislation. Any revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected.
Specific to climate change, since responses to it are still developing, it is not possible to consider all
possible future outcomes when determining asset and liability valuations, and timing of future cash flows,
as these are not yet known. Nevertheless, the current management view is that reasonably possible
changes arising from climate risks would not have a material impact on asset and liability valuations at the
year-end date.
(a) Valuation of insurance contract liabilities
The most critical estimate included within the syndicate’s balance sheet is the estimate for insurance
losses incurred but not reported (‘IBNR’), which is included within total technical provisions and reinsurer’s
share of technical provisions in the balance sheet and note 17. This estimate is critical as it outlines the
current liability for future expenses expected to be incurred in relation to claims. If this estimation was to
prove inadequate then an exposure would arise in future years where a liability has not been provided for.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2024
22
22
1 Accounting policies continued
The best estimate of the most likely ultimate outcome is used when calculating notified claims. This
estimate is based upon the facts available at the time, in conjunction with the claims manager’s view of
likely future developments. The total estimate of IBNR as at 31 December 2024 included within claims
outstanding in the balance sheet is $4,417,704k (2023: $4,421,780k).
(b) Valuation of unquoted and illiquid financial assets
Determination of fair value of unquoted and illiquid assets involves judgement in model valuations,
through the incorporation of both observable and unobservable market inputs. These inputs include
assumptions that lead to the existence of a range of plausible valuations. Further detail on the
methodologies and inputs used is described in note 9 and note 10.
(c) Premium estimates
Premium written is initially based on the estimated premium income (‘EPI’) of each contract. Where
premium is sourced through binders, the binder EPI is pro-rated across the binder period. Judgement is
involved in determining the ultimate estimates in order to establish the appropriate premium value and,
ultimately, the cash to be received. EPI estimates are updated to reflect changes in an underwriter's
expectation through consultation with brokers and third-party coverholders, changes in market conditions,
historic experience and to reflect actual cash received for a contract.
Due to the nature of Lloyd’s business and the settlement patterns of the underlying business it is also not
uncommon for some contracts to take a number of years to finalise and settle, and a receivable on the
balance sheet remains. The amount of estimated future premium that remains in insurance receivables
relating to years of account that are more than three years developed at 31 December 2024 is $24,251k
(2023: $19,570k).
Significant accounting policies
The financial statements have been prepared on an annual basis of accounting, whereby the incurred cost
of claims, commissions and related expenses are charged against the earned proportion of premiums, net
of reinsurance as follows:
(a) Premiums written
Gross premiums written comprise premiums on contracts incepted during the financial year together
with adjustments to premiums written in previous accounting periods and estimates for premiums
from contracts entered into during the course of the year. Gross written premiums are stated before
the deduction of brokerage, taxes, duties levied on premiums and other deductions.
(b) Unearned premiums
A provision for unearned premiums represents that part of the gross premiums written that is
estimated will be earned in the following or subsequent financial periods. It is calculated using the
daily pro rata method, under which the premium is apportioned over the period of risk.
(c) Claims provisions and related reinsurance recoveries
Claims represent the cost of claims and claims handling expenses paid during the financial year,
together with the movement in provisions for outstanding claims, claims incurred but not reported
(‘IBNR’) and future claims handling provisions. The provision for claims outstanding comprises
amounts set aside for claims advised and IBNR.
The IBNR amount is based on estimates calculated using widely accepted actuarial techniques (e.g.
chain ladder) which are reviewed quarterly by the group actuary and annually by the independent
syndicate reporting actuary. The techniques generally use projections, based on past experience of
the development of claims over time, to form a view on the likely ultimate claims to be experienced.
For more recent underwriting, regard is given to the variations in the business portfolio accepted and
the underlying terms and conditions. Thus, the critical assumptions used when estimating claims
provisions are that the past experience is a reasonable predictor of likely future claims development
and that the rating and other models used to analyse current business are a fair reflection of the likely
level of ultimate claims to be incurred.
A provision is made at the year-end for the estimated cost of claims incurred but not settled at the
balance sheet date, including the cost of claims incurred but not yet reported to the managing agent.
The managing agent takes all reasonable steps to ensure that it has appropriate information regarding
its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that
the final outcome will prove to be different from the original liability established.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
23
1 Accounting policies continued
(d) Liability adequacy testing
At each reporting date, liability adequacy tests are performed to ensure the adequacy of the claims
liabilities net of deferred acquisition costs and unearned premium reserves. In performing these tests,
current best estimates of future contractual cash flows, claims handling and administration expenses
as well as investment income from the assets backing such liabilities are used.
Any deficiency is subsequently charged to the statement of comprehensive income and a liability for
unexpired risk provision is established.
(e) Acquisition costs
Acquisition costs comprise brokerage, premium levies, and staff related costs of the underwriters
acquiring the business. The proportion of acquisition costs in respect of unearned premiums is
deferred at the balance sheet date and recognised in later periods when the related premiums are
earned.
(f) Foreign currencies
Foreign currency transactions are translated into the functional currency using average exchange
rates applicable to the period in which the transactions take place and where the syndicate considers
these to be a reasonable approximation of the transaction rate. Foreign exchange gains and losses
resulting from the settlement of such transactions and from translation at the period end of monetary
assets and liabilities denominated in foreign currencies are recognised in the statement of
comprehensive income.
(g) 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.
Realised gains and losses on investments carried at market value are calculated as the difference
between sale proceeds and the original cost of the investment. Movements in unrealised gains and
losses on investments represent the difference between the valuation at the balance sheet date, and
the valuation at the previous period end or purchase value during the 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.
(h) Ceded reinsurance
These are contracts entered into by the syndicate with reinsurers under which the syndicate is
compensated for losses on contracts issued by the syndicate and that meet the definition of an
insurance contract. Insurance contracts entered into by the syndicate under which the contract holder
is another insurer (inwards reinsurance) are included with insurance contracts.
Any benefits to which the syndicate is entitled under its reinsurance contracts held are recognised as
reinsurance assets. These consist of balances due from reinsurers relating to claims and also includes
the provision for unearned premiums, reinsurers’ share. Balances due relating to the reinsurers share
of claims are based on calculated amounts of outstanding claims recoveries 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 period and the current security rating of the reinsurer
involved. Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are
recognised as an expense when due
Reinsurance assets are assessed for impairment at each reporting date. If there is objective evidence
of impairment, then the carrying amount is reduced to its recoverable amount and the impairment
loss is recognised in statement of comprehensive income.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
24
1 Accounting policies continued
(i) Financial instruments
Recognition and derecognition
Financial instruments are recognised on the balance sheet at such time that the syndicate becomes a
party to the contractual provisions of the financial instrument. A financial asset is derecognised when:
• the contractual rights to receive cash flows from the financial assets expire;
• the financial assets have been transferred, together with substantially all the risks and
rewards of ownership; or
• despite having retained some, but not substantially all, risks and rewards of ownership,
control of the asset is transferred to another party and the other party has the practical ability
to sell the asset in its entirety to an unrelated third party.
Financial liabilities are derecognised if the syndicate’s obligations specified in the contract expire, are
discharged or cancelled.
Financial assets and liabilities measurement
On acquisition of a financial asset or liability, the syndicate will measure the asset or liability at
transaction price, except for those financial assets and liabilities at FVTPL, which are initially measured
at fair value. The exception to this is when the arrangement constitutes a financing transaction
however, the syndicate does not make use of any such arrangements.
Except for derivative financial investments, all financial investments are designated as FVTPL upon
initial recognition because they are managed and their performance is evaluated on a fair value basis.
Information about these financial instruments is provided internally on a fair value basis to key
management. The investment strategy is to invest and evaluate their performance with reference to
their fair values.
Fair value measurement
Fair value is the price at which an orderly transaction to sell an asset or to transfer a liability would
take place between market participants at the measurement date. Fair value is a market-based
measure and in the absence of observable market prices in an active market, it is measured using the
assumptions that market participants would use when pricing the asset or liability.
The best evidence of the fair value of a financial instrument at initial recognition is the transaction
price, i.e., the fair value of the consideration given or received, unless the fair value of that
instrument is evidenced by comparison with other observable current market transactions in the same
instrument (i.e., without modification or repackaging) or based on a valuation technique whose
variables include only data from observable markets.
When transaction price provides the best evidence of fair value at initial recognition, the financial
instrument is initially measured at the transaction price and any difference between this price and the
value initially obtained from a valuation model is subsequently recognised in statement of
comprehensive income depending on the individual facts and circumstances of the transaction but not
later than when the valuation is supported wholly by observable market data or the transaction is
closed out.
Upon initial recognition, attributable transaction costs relating to financial instruments at FVTPL are
recognised in the statement of comprehensive income when incurred. Financial assets at FVTPL are
continuously measured at fair value, and changes therein are recognised in the statement of
comprehensive income. Net changes in the fair value of financial assets at FVTPL exclude interest and
dividend income, as these items are accounted for separately.
Hedge funds, equity funds and illiquid credit assets
The syndicate participates in a number of hedge funds and related financial instruments for which
there are no readily available quoted market prices. The valuation of these hedge funds is based on
fair value techniques (as described above). The fair value of our hedge fund portfolio is calculated by
reference to the underlying net asset values of each of the individual funds. Consideration is also
given in valuing these funds to any restriction applied to distributions, the existence of side pocket
provisions, and the timing of the latest available valuations. At certain times, the syndicate will have
uncalled unfunded commitments in relation to its illiquid credit assets. These uncalled unfunded
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
25
1 Accounting policies continued
commitments are actively monitored by the syndicate and are disclosed in notes 2 and 9 to the
financial statements. The additional investment into its illiquid credit asset portfolio is recognised on
the date that this funding is provided. These instruments are included within shares and other variable
yield securities and units in unit trusts. The syndicate also invests in a number of collateralised loan
obligations ('CLOs'). The valuation of of these CLOs is based on fair value techniques (as described
above). The CLOs are included within debt securities and other fixed income securities.
(j) Insurance debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance
contract holders. These are classified as debt instruments as they are non-derivative financial assets
with fixed or determinable payments that are not quoted on an active market. Insurance debtors are
measured at amortised cost less any provision for impairments. Insurance creditors are stated at
amortised cost. The syndicate does not have any debtors directly with policyholders, all transactions
occur via an intermediary.
(k) Other debtors
Other debtors principally consist of intercompany debtor balances and sundry debtors and are carried
at amortised cost less any impairment losses.
(l) Other creditors
Other creditors principally consist of amounts due to Syndicate 3623, 6107 and other related entities,
and bank overdraft. These are stated at amortised cost determined using the effective interest rate
method.
(m) Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at their fair value. The best evidence of fair value of a
derivative at initial recognition is the transaction price. Fair values are obtained from quoted market
prices in active markets, recent market transactions, and valuation techniques which include
discounted cash flow models. All derivatives are carried as assets when fair value is positive and as
liabilities when fair value is negative.
Derivative assets and liabilities are offset and the net amount reported in the balance sheet when
there is a legally enforceable right to set off the recognised amounts and the parties intend to settle
on a net basis, or realise the assets and settle the liability simultaneously. Derivative assets are
included within Financial investments in the Balance Sheet. Derivative liabilities are included within
Other creditors.
(n) Impairment of financial assets
Assessment is made at each reporting date whether there is objective evidence that a financial asset
or group of financial assets measured at amortised cost is impaired. A financial asset or group of
financial assets is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that have occurred after the initial recognition of the
assets and that event has an impact on the estimated cash flows of the financial asset or group of
financial assets that can be reliably estimated.
If there is objective evidence that impairment exists, the amount of the loss is measured as the
difference between the assets carrying amount and the value of the estimated future cash flows
discounted at the financial asset’s original effective interest rate. The amount of the loss is recognised
in statement of comprehensive income.
(o) Cash and cash equivalents
Cash and cash equivalents are comprised of cash at bank and in hand, in addition to deposits held at
call with banks and other short-term highly liquid investments with maturities of three months or less
from the acquisition date. Only cash at bank and in hand is presented separately on the face of the
balance sheet, while cash equivalents are included within the 'financial investments' line. Cash and
cash equivalents are shown in aggregate on the cash flow statement and at note 14. These are
carried at amortised cost less impairment losses.
(p) Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate
income tax from trading income. In addition, all UK basic rate income tax (currently at 20%) deducted
from syndicate investment income is recoverable by managing agents and consequently the
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
26
1 Accounting policies continued
distribution made to members or their members’ agents is gross of tax. Capital appreciation falls
within trading income and is also distributed gross of tax.
No provision has been made for any US federal income tax payable on underwriting results or
investment earnings. Any payments on account made by the syndicate during the year have been
included in the balance sheet under the heading ‘other debtors’
No provision has been made for any other overseas tax payable by members on underwriting results.
(q) Pension costs
Pension contributions relating to staff who act on behalf of the syndicate are charged to the syndicate
and included within net operating expenses.
(r) Related party transactions
The syndicate has taken advantage of the exemption contained in FRS 102.1 and has therefore not
disclosed transactions with other wholly owned entities forming part of the Beazley Group.
2 Risk management
The managing agent has identified the risks arising from the syndicates activities and has established
policies and procedures to manage these items in accordance with its risk appetite. The sections below
outline the syndicate’s risk appetite and explain how it defines and manages each category of risk. The risk
management framework is discussed in the managing agent's report.
2.1 Insurance risk
The syndicate’s insurance business assumes the risk of loss from persons or organisations that are directly
exposed to an underlying loss. Insurance risk arises from this risk transfer due to inherent uncertainties
about the occurrence, amount and timing of insurance liabilities. The four key components of insurance
risk are underwriting, reinsurance, claims management and reserving. Each element is considered below.
a) Underwriting risk
Underwriting risk comprises four elements that apply to all insurance products offered by the syndicate:
• cycle risk – the risk that business is written without full knowledge as to the (in)adequacy of rates,
terms and conditions;
• event risk – the risk that individual risk losses or catastrophes lead to claims that are higher than
anticipated in plans and pricing;
• pricing risk – the risk that the level of expected loss is understated in the pricing process; and
• expense risk – the risk that the allowance for expenses and inflation in pricing is inadequate.
The managing agent manages and model these four elements in the following three categories: attritional
claims, large claims and catastrophe events.
The syndicate’s underwriting strategy is to seek a diverse and balanced portfolio of risks in order to limit
the variability of outcomes. This is achieved by accepting a spread of business over time, segmented
between different products, geography and size.
The annual business plans for each underwriting team reflect the syndicate’s underwriting strategy, and
set out the classes of business, the territories and the industry sectors in which business is to be written.
These plans are approved by the Board of BFL and monitored by the underwriting committee.
The managing agents’s underwriters calculate premiums for risks written based on a range of criteria
tailored specifically to each individual risk. These factors include but are not limited to the financial
exposure, loss history, risk characteristics, limits, deductibles, terms and conditions and acquisition
expenses. The managing agent also recognises that insurance events are, by their nature, random, and
the actual number and size of events during any one year may vary from those estimated using
established statistical techniques.
To address this, the syndicate sets out the exposure that it is prepared to accept in certain territories to a
range of events such as natural catastrophes and specific scenarios which may result in large industry
losses. This is monitored through regular calculation of Realistic Disaster Scenarios. The aggregate position
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
27
2 Risk management continued
is monitored at the time of underwriting a risk, and reports are regularly produced to highlight the key
aggregations to which the syndicate is exposed.
The syndicate uses a number of modelling tools to monitor its exposures against the agreed risk appetite
set and to simulate catastrophe losses in order to measure the effectiveness of its reinsurance
programmes.
Stress and scenario tests are also run using these models. The range of scenarios considered includes
natural catastrophe, cyber, marine, liability, political, terrorism and war events.
One of the largest types of event exposure relates to natural catastrophe events such as windstorm or
earthquake. While the increasing risk from climate change impacts the frequency and severity of natural
catastrophes, the managing agent continues to monitor its exposure. Where possible the syndicate
measures geographic accumulations and uses its knowledge of the business, historical loss behaviour and
commercial catastrophe modelling software to assess the expected range of losses at different return
periods. Upon application of the reinsurance coverage purchased, the key gross and net exposures are
calculated on the basis of extreme events at a range of return periods.
To manage underwriting exposures, the syndicate has developed limits of authority and business plans
which are binding upon all staff authorised to underwrite and are specific to underwriters, classes of
business and industry.
These authority limits are enforced through a comprehensive sign-off process for underwriting transactions
including dual sign-off for all line underwriters and peer review for all risks exceeding individual
underwriters authority limits. Exception reports are also run regularly to monitor compliance.
All underwriters also have a right to refuse renewal or change the terms and conditions of insurance
contracts upon renewal. Rate monitoring details, including limits, deductibles, exposures, terms and
conditions and risk characteristics are also captured and the results are combined to monitor the rating
environment for each class of business.
Binding Authority contracts
A proportion of the syndicate’s insurance risks are transacted by third parties under delegated
underwriting authorities. Each third party is thoroughly vetted by the managing agent's coverholder
approval group before it can bind risks, and is subject to rigorous monitoring to maintain underwriting
quality and confirm ongoing compliance with contractual guidelines
b) Reinsurance risk
Reinsurance risk to the syndicate arises where reinsurance contracts put in place to reduce gross insurance
risk do not perform as anticipated, result in coverage disputes or prove inadequate in terms of the vertical
or horizontal limits purchased. Failure of a reinsurer to pay a valid claim is considered a credit risk which is
detailed separately below.
The syndicate’s reinsurance programmes complement the underwriting team business plans and seek to
protect syndicate capital from an adverse volume or volatility of claims on both a per risk and per event
basis. In some cases the syndicate deems it more economic to hold capital than purchase reinsurance.
These decisions are regularly reviewed as an integral part of the business planning and performance
monitoring process.
The Reinsurance Security Committee examines and approves all reinsurers to ensure that they possess
suitable security. The syndicate’s ceded reinsurance team ensures that these guidelines are followed,
undertakes the administration of reinsurance contracts, monitors and instigates our responses to any
erosion of the reinsurance programmes.
c) Claims management risk
Claims management risk may arise within the syndicate in the event of inaccurate or incomplete case
reserves and claims settlements, poor service quality or excessive claims handling costs. These risks may
damage the Beazley brand and undermine its ability to win and retain business or incur punitive damages.
These risks can occur at any stage of the claims life-cycle.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
28
2 Risk management continued
The syndicate’s claims teams are focused on delivering quality, reliability and speed of service to both
internal and external clients. Their aim is to adjust and process claims in a fair, efficient and timely
manner, in accordance with the policy’s terms and conditions, the regulatory environment, and the
business’s broader interests. Prompt and accurate case reserves are set for all known claims liabilities,
including provisions for expenses.
d) Reserving and ultimate reserves risk
Reserving and ultimate reserves risk occurs within the syndicate where established insurance liabilities are
insufficient through inaccurate forecasting, or where there is inadequate allowance for expenses and
reinsurance bad debts in provisions.
To manage reserving and ultimate reserves risk, our actuarial team uses a range of recognised techniques
to project gross premiums written, monitor claims development patterns and stress test ultimate insurance
liability balances. An external independent actuary also performs an annual review to produce a statement
of actuarial opinion for the syndicate.
The objective of the syndicate’s reserving policy is to produce accurate and reliable estimates that are
consistent over time and across classes of business. The estimates of gross premiums written and claims
prepared by the actuarial department are used through a formal quarterly peer review process to
independently test the integrity of the estimates produced by the underwriting teams for each class of
business. These meetings are attended by senior management, senior underwriters, actuarial, claims, and
finance representatives.
An increase or decrease in total claims liabilities would have the following impact on profit and members'
balances':
Sensitivity to insurance risk (claims reserves)
Impact on profit and members'
balances'
2024
$'000
2023
$'000
Claims outstanding - gross of reinsurance 5,982,650 5,947,372
Claims outstanding - net of reinsurance 4,381,135 4,283,813
5% increase in gross claims reserve (299,133) (297,369)
5% decrease in gross claims reserve
299,133 297,369
5% increase in net claims reserve
(219,057) (214,191)
5% decrease in net claims reserve 219,057 214,191
The syndicate monitors its exposure to insurance risk by location. The geographical breakdown of written
premiums is disclosed in note 3.
2.2 Market risk
Market risk arises where the value of assets and liabilities changes as a result of movements in foreign
exchange rates, interest rates and market prices.
Foreign exchange risk
The functional and presentational currency of the syndicate is US dollar. The effect of this on foreign
exchange risk is that the syndicate is exposed to fluctuations in exchange rates for non-dollar denominated
transactions and net assets.
The syndicate deals in four main settlement currencies: US dollars, sterling, Canadian dollars and euros.
Transactions in all currencies are converted to US dollars on initial recognition and revalued at the
reporting date. Remaining foreign exchange risk is still actively managed as described below.
The following table summarises the carrying value of total assets and total liabilities categorised by
currency:
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
29
2 Risk management continued
31 December
2024
CAD $
$'000
EUR €
$'000
UK £
$'000
AUD $
$'000
Other
$'000
Subtotal
$'000
US $
$'000
Total
$'000
Investments 350,975 37,114 669,964 63,399 91,198 1,212,650 4,241,059 5,453,709
Reinsurers'
share of
technical
provisions 60,602 55,350 147,023 — — 262,975 1,602,936 1,865,911
Debtors 15,508 142,802 (19,562) — — 138,748 1,547,384 1,686,132
Other assets 1,513 2,092 4,109 — — 7,714 90,963 98,677
Prepayments
and accrued
income 10,832 18,649 75,177 — — 104,658 307,971 412,629
Total assets
439,430 256,007 876,711 63,399 91,198 1,726,745 7,790,313 9,517,058
Technical
provisions (248,264) (409,743) (874,127) — — (1,532,134) (6,040,060) (7,572,194)
Creditors
13,380 (42,749) (49,398) — — (78,767) (516,547) (595,314)
Accruals and
deferred income
(225) (789) (70,643) — — (71,657) (17,090) (88,747)
Total liabilities (235,109) (453,281) (994,168) — — (1,682,558)
(6,573,697)
(8,256,255)
Total Capital
and Reserves 204,321 (197,274) (117,457) 63,399 91,198 44,187 1,216,616 1,260,803
CAD $
$'000
EUR €
$'000
UK £
$'000
AUD $
$'000
Other
$'000
Subtotal
$'000
US $
$'000
Total
$'000
Investments 431,360 47,395 808,974 64,556 89,164 1,441,449 4,474,346 5,915,795
Reinsurers'
share of
technical
provisions 46,478 62,776 182,143 — — 291,397 1,754,226 2,045,623
Debtors 42,696 114,960 235,465 — — 393,121 1,548,872 1,941,993
Other assets 4,397 4,001 9,192 — — 17,590 13,633 31,223
Prepayments
and accrued
income 17,900 18,381 72,244 — — 108,525 497,476 606,001
Total assets
542,831 247,513 1,308,018 64,556 89,164 2,252,082 8,288,553
10,540,635
Technical
provisions (279,470) (378,162) (905,097) — — (1,562,729) (6,736,807) (8,299,536)
Creditors (22,705) (42,836) (296,856) — — (362,397) (639,297) (1,001,694)
Accruals and
deferred income (1,135) (1,307) (71,945) — — (74,387) (42,132) (116,519)
Total liabilities (303,310) (422,305) (1,273,898) — — (1,999,513)
(7,418,236)
(9,417,749)
Total Capital
and Reserves 239,521 (174,792) 34,120 64,556 89,164 252,569 870,317 1,122,886
Sensitivity analysis - foreign exchange risk
In 2024, the syndicate managed its foreign exchange risk by periodically assessing its non-dollar
exposures and hedging these to a tolerable level while targeting net assets to be predominately US dollar
denominated. As part of this hedging strategy, exchange rate derivatives were used to rebalance currency
exposure across the syndicate. Details of all foreign currency derivative contracts entered into with
external parties are disclosed in note 10. On a forward looking basis an assessment is made of expected
future exposure development and appropriate currency trades put in place to reduce risk.
Fluctuations in the syndicate’s trading currencies against the US dollar would result in a change to profit
and members' balances. The table below gives an indication of the impact on profit and members' balances
of a percentage change in relative strength of US dollar against the value of sterling, Canadian dollar, euro
and Australian dollar, simultaneously.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
30
2 Risk management continued
Impact on profit and members'
balances'
Change in exchange rate of sterling, Australian dollar, Canadian dollar and
euro relative to US dollar
2024
$'000
2023
$'000
Dollar weakens 10% against other currencies (5,263) 14,855
Dollar strengthens 10% against other currencies
5,263 (14,855)
Interest rate risk
Some of the syndicate’s financial instruments, including financial investments and cash and cash
equivalents are exposed to movements in market interest rates.
The syndicate manages interest rate risk by primarily investing in short duration financial investments and
cash and cash equivalents. The investment committee monitors the duration of these assets on a regular
basis.
The syndicate also entered into interest rate futures contracts to manage the interest rate risk on fixed
income portfolios.
The following table shows the average duration at the reporting date of the financial instruments that are
exposed to movements in market interest rates. Duration is a commonly used measure of volatility and we
believe gives a better indication than maturity of the likely sensitivity of our portfolio to changes in interest
rates.
31 December 2024
<1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
Duration
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Debt securities
and other fixed
income securities
1,245,178 1,180,462 711,995 305,885 130,223 200,417 — 3,774,160
Participation in
investment pools
9,191 — — — — — — 9,191
Shares and other
variable yield
securities and
unit trusts*
— — — 442,038 — — — 442,038
Overseas
deposits
277,000 — — — — — — 277,000
Cash at bank and
in hand
98,677 — — — — — — 98,677
Derivative
financial
instruments
10,295 — — — — — — 10,295
Syndicate loans
to central fund
26,714 — — — — — — 26,714
Total
1,667,055
1,180,462
711,995 747,923 130,223 200,417 —
4,638,075
*Excluding equity securities.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
31
2 Risk management continued
31 December 2023
<1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
Duration
$m $m $m $m $m $m $m $m
Debt securities
and other fixed
income securities
1,148,543 1,995,092 686,971 430,595 177,042 23,031 — 4,461,274
Participation in
investment pools
6,863 — — — — — — 6,863
Shares and other
variable yield
securities and
unit trusts*
— — — 356,479 — — — 356,479
Overseas
deposits
257,027 64,517 38 — — — — 321,582
Cash at bank and
in hand
31,223 — — — — — — 31,223
Derivative
financial
instruments
3,227 — — — — — — 3,227
Syndicate loans
to central fund
6,992 23,986 — — — — —
30,978
Total
1,453,875
2,083,595
687,009 787,074 177,042 23,031 —
5,211,626
*Excluding equity securities.
Sensitivity analysis - interest rate risk
The syndicate holds financial assets and liabilities that are exposed to interest rate risk. Changes in
interest yields, with all other variables constant, would result in changes in the capital value of debt and
derivative financial instruments. This will affect reported profits and members balances as indicated in the
below table:
Impact on profit for the
year
Impact on members balances
Shift in yield (basis points) 2024
$'000
2023
$'000
2024
$'000
2023
$'000
50 basis point increase (37,531) (47,337) (37,531) (47,337)
50 basis point decrease
37,531 47,337 37,531 47,337
Price risk
Financial assets and derivatives that are recognised on the balance sheet at their fair value are susceptible
to losses due to adverse changes in prices. This is referred to as price risk.
Financial assets include fixed and floating debt securities, hedge funds, illiquid credit assets, equity funds
and derivative financial assets. The fixed income securities are well diversified across high quality, liquid
securities. The price risk associated with these securities is predominantly interest, foreign exchange and
credit risk related. The sensitivity to price risk that relates to the syndicate’s hedge fund investments,
illiquid credit assets and equity linked funds is presented in the table below. The investment committee has
established comprehensive guidelines with investment managers setting out maximum investment limits,
diversification across industries and concentrations in any one industry or company.
Listed investments are recognised on the balance sheet at quoted bid price. If the market for the
investment is not considered to be active, then the syndicate establishes fair value using valuation
techniques. This includes using recent arm’s length market transactions, reference to current fair value of
other investments that are substantially the same, discounted cash flow models and other valuation
techniques that are commonly used by market participants.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
32
2 Risk management continued
Impact on profit for the year
Impact on members
balances
Change in fair value of hedge
funds, equity linked funds and
illiquid credit assets
2024
$'000
2023
$'000
2024
$'000
2023
$'000
5% increase in fair value
45,551 36,520 45,551 36,520
5% decrease in fair value
(45,551) (36,520) (45,551) (36,520)
2.3 Credit risk
Credit risk arises from the failure of another party to perform its financial or contractual obligations to the
syndicate in a timely manner. The primary sources of credit risk for the syndicate are:
• reinsurers – whereby reinsurers may fail to pay valid claims against a reinsurance contract held by
the syndicate;
• brokers and coverholders – whereby counterparties fail to pass on premiums or claims collected or
paid on behalf of the syndicate;
• investments – whereby issuer default results in the syndicate losing all or part of the value of a
financial instrument and derivative financial instrument; and
• cash at bank and in hand.
The syndicate’s core business is to accept significant insurance risk and the appetite for other risks is low.
This protects the syndicate’s capital from erosion so that it can meet its insurance liabilities.
The syndicate limits exposure to a single counterparty or a group of counterparties and analyses the
geographical locations of exposures when assessing credit risk.
An approval system also exists for all new brokers, and broker performance is carefully monitored. Regular
exception reports highlight trading with non-approved brokers, and the syndicate’s credit control function
frequently assesses the ageing and collectability of debtor balances. Any large, aged items are prioritised
and where collection is outsourced, incentives are in place to support these priorities.
The Investment Committee has established comprehensive guidelines for the syndicate’s investment
managers regarding the type, duration and quality of investments acceptable to the syndicate. The
performance of investment managers is regularly reviewed to confirm adherence to these guidelines.
The managing agent has developed processes to formally examine all reinsurers before entering into new
business arrangements. New reinsurers are approved by the Reinsurance Security Committee, which also
reviews arrangements with all existing reinsurers at least annually. Vulnerable or slow-paying reinsurers
are examined more frequently.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
33
2 Risk management continued
The following tables summarise the syndicate’s concentrations of credit risk:
31 December 2024
AAA
$'000
AA
$'000
A
$'000
BBB
$'000
Other
$'000
Not
rated
$'000
Total
$'000
Investments
Shares and other variable
yield securities and units in
unit trusts
— — — — 442,038 911,028 1,353,066
Debt securities and other
fixed income securities
665,621 1,458,727 1,211,786 320,356 — 117,670 3,774,160
Participation in investment
pools
— — 9,191 — — — 9,191
Loans secured by
mortgages
— — — — — — —
Loans and deposits with
credit institutions
— — — — — — —
Derivative assets
— — — — — 10,295 10,295
Syndicate loans to central
fund
— — 26,714 — — — 26,714
Other investments
— — 277,000 — — — 277,000
Deposits with ceding
undertakings
— — 3,283 — — — 3,283
Total investments
665,621
1,458,727
1,527,974
320,356 442,038
1,038,993
5,453,709
Reinsurers’ share of claims
outstanding
18,095 1,062,742 510,714 4 — 9,960 1,601,515
Debtors arising out of direct
insurance operations
— — — — — 1,053,628 1,053,628
Debtors arising out of
reinsurance operations
311 51,701 87,733 1 — 320,011 459,757
Cash at bank and in hand
38,299 — 60,378 — — — 98,677
Other debtors and accrued
interest
25,100 15,022 12,477 3,299 — 175,201 231,099
Total
747,426
2,588,192
2,199,276
323,660 442,038
2,597,793
8,898,385
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
34
2 Risk management continued
31 December 2023
AAA
$'000
AA
$'000
A
$'000
BBB
$'000
Other
$'000
Not
rated
Total
$'000
Investments
Shares and other variable
yield securities and units
in unit trusts
— — — — 356,478 730,404 1,086,882
Debt securities and other
fixed income securities
1,884,226 837,271 1,372,135 367,642 — — 4,461,274
Participation in
investment pools
— 6,863 — — — — 6,863
Loans secured by
mortgages
— — — — — — —
Loans and deposits with
credit institutions
— — — — — — —
Derivative assets
— — — — — 3,227 3,227
Syndicate loans to central
fund
— — 30,978 — — — 30,978
Other investments
321,582 — — — — — 321,582
Deposits with ceding
undertakings
— — 4,989 — — — 4,989
Total investments
2,205,808
844,134
1,408,102
367,642 356,478 733,631
5,915,795
Reinsurers’ share of claims
outstanding
22,677 1,128,632 502,825 392 — 9,033 1,663,559
Debtors arising out of
direct insurance operations
— — — — — 1,448,262 1,448,262
Debtors arising out of
reinsurance operations
630 75,854 99,447 178 — 220,358 396,467
Cash at bank and in hand
6,426 24,797 — — — 31,223
Other debtors and accrued
interest
14,929 3,601 5,901 1,581 6,293 128,934 161,239
Total
2,250,470
2,052,221
2,041,072
369,793 362,771
2,540,218
9,616,545
Based on all evidence available, debtors arising out of insurance operations and other debtors have not
been impaired and no impairment provision has been recognised in respect of these assets. An analysis of
the overall credit risk exposure indicates that the syndicate has reinsurance assets that are impaired at the
reporting date. The total impairment provision made in respect of these assets at 31 December 2024 was
$19,362k (2023:$19,014k). This provision in respect of overdue reinsurance recoverables is included
within the debtors arising out of reinsurance operations balance and reinsurers' share of outstanding
claims. No other financial assets held at year end were impaired.
Financial investments falling within the unrated category comprise hedge funds and illiquid credit assets
for which there is no readily available market data to allow classification within the respective tiers.
Additionally, some debtors are classified as unrated in accordance with Lloyd’s guidelines.
The syndicate has insurance debtors and reinsurance assets that are past due but not impaired at the
reporting date. An aged analysis of these is presented below:
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
35
2 Risk management continued
31 December 2024
Neither past
due nor
impaired
$'000
Past due but
not impaired
$'000
Gross value of
impaired
assets
$'000
Impairment
allowance
$'000
Total
$'000
Investments
Shares and other variable yield
securities and units in unit trusts
1,353,066 — — — 1,353,066
Debt securities and other fixed
income securities
3,774,160 — — — 3,774,160
Participation in investment pools
9,191 — — — 9,191
Loans secured by mortgages
— — — — —
Loans and deposits with credit
institutions
— — — — —
Derivative assets
10,295 — — — 10,295
Syndicate loans to central fund
26,714 — — — 26,714
Other investments
277,000 — — — 277,000
Deposits with ceding undertakings
3,283 — — — 3,283
Total investments
5,453,709 — — — 5,453,709
Reinsurers’ share of claims
outstanding
1,601,515 — 3,970 (3,970) 1,601,515
Debtors arising out of direct
insurance operations
973,920 79,708 — — 1,053,628
Debtors arising out of reinsurance
operations
404,324 55,433 15,392 (15,392) 459,757
Cash at bank and in hand
98,677 — — — 98,677
Other debtors and accrued interest
231,099 — — — 231,099
Total
8,763,244 135,141 19,362 (19,362) 8,898,385
31 December 2023
Neither past
due nor
impaired
$'000
Past due but
not impaired
$'000
Gross value of
impaired
assets
$'000
Impairment
allowance
$'000
Total
$'000
Investments
Shares and other variable yield
securities and units in unit trusts
1,086,882 — — — 1,086,882
Debt securities and other fixed
income securities
4,461,274 — — — 4,461,274
Participation in investment pools
6,863 — — — 6,863
Loans secured by mortgages
— — — — —
Loans and deposits with credit
institutions
— — — — —
Derivative assets
3,227 — — — 3,227
Syndicate loans to central fund
30,978 — — — 30,978
Other investments
321,582 — — — 321,582
Deposits with ceding undertakings
4,989 — — — 4,989
Total investments 5,915,795 — — — 5,915,795
Reinsurers’ share of claims
outstanding
1,663,559 — 4,122 (4,122) 1,663,559
Debtors arising out of direct
insurance operations
1,288,916 159,346 — — 1,448,262
Debtors arising out of reinsurance
operations
359,792 36,675 14,892 (14,892) 396,467
Cash at bank and in hand
31,223 — — — 31,223
Other debtors and accrued interest
161,239 — — — 161,239
Total
9,420,524 196,021 19,014 (19,014) 9,616,545
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
36
2 Risk management continued
The table below sets out the reconciliation of changes in impairment allowance during the period for reach
class of financial asset at the balance sheet date.
Impairment allowance
Opening
balance
Impairment
charged
during the
year
Impairment
released
during the
year
Foreign
exchange
and other
movements
Total
31 December 2024
$'000 $'000 $'000 $'000 $'000
Debtors arising out of reinsurance operations
14,892 362 — 138 15,392
Reinsurers’ share of outstanding claims
4,122 — — (152) 3,970
Total
19,014 362 — (14) 19,362
Impairment allowance
Opening
balance
Impairment
charged
during the
year
Impairment
released
during the
year
Foreign
exchange
and other
movements
Total
31 December 2023
$'000 $'000 $'000 $'000 $'000
Debtors arising out of reinsurance operations
15,513 — (662) 41 14,892
Reinsurers’ share of outstanding claims
4,108 — — 14 4,122
Total
19,621 — (662) 55 19,014
The table below sets out the age analysis of financial assets that are past due but not impaired at the
balance sheet date:
Past due but not impaired assets
0 - 3
months
past due
3 - 6
months
past due
6 - 12
months
past due
Greater
than 1 year
past due
Total
31 December 2024
$'000 $'000 $'000 $'000 $'000
Debtors arising out of reinsurance operations
— 29,112 6,714 19,607 55,433
Debtors arising out of direct insurance
operations
50,198 9,673 11,398 8,439 79,708
Total
50,198 38,785 18,112 28,046 135,141
Past due but not impaired assets
0 - 3
months
past due
3 - 6
months
past due
6 - 12
months
past due
Greater
than 1 year
past due
Total
31 December 2023
$'000 $'000 $'000 $'000 $'000
Debtors arising out of reinsurance operations
— 15,785 16,626 4,264 36,675
Debtors arising out of direct insurance
operations
118,528 23,365 8,812 8,641 159,346
Total
118,528 39,150 25,438 12,905 196,021
2.4 Liquidity risk
Liquidity risk arises where cash may not be available to pay obligations when due at a reasonable cost.
The syndicate is exposed to daily calls on its available cash resources, principally from claims arising from
its insurance business. In the majority of the cases, these claims are settled from the premiums received.
The syndicate’s approach is to manage its liquidity position so that it can reasonably survive a significant
individual or market loss event. This means that the syndicate maintains sufficient liquid assets, or assets
that can be translated into liquid assets at short notice and without any significant capital loss, to meet
expected cash flow requirements. These liquid funds are regularly monitored using cash flow forecasting to
ensure that surplus funds are invested to achieve a higher rate of return.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
37
2 Risk management continued
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instrument liabilities. 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.
Maturity
Carrying
amount
No maturity
stated
0 - 1 yrs 1 - 3 yrs 3 - 5 yrs >5 yrs Total
31 December 2024
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Claims outstanding
5,982,650 — 1,773,221 2,108,794 1,141,148 959,487 5,982,650
Derivative liabilities
10,044 — 10,044 — — —
10,044
Creditors
585,269 102,931 482,339 — — —
585,270
Other liabilities
88,747 — 88,747 — — —
88,747
—
Total
6,666,710
102,931
2,354,351
2,108,794
1,141,148
959,487
6,666,711
Maturity
Carrying
amount
No maturity
stated
0 - 1 yrs 1 - 3 yrs 3 - 5 yrs >5 yrs Total
31 December 2023
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Claims outstanding
5,947,372 — 1,778,981 2,113,358 1,108,566 946,467 5,947,372
Derivative liabilities
5,680 — 5,680 — — —
5,680
Creditors
996,014 308,199 687,815 — — —
996,014
Other liabilities
116,519 — 116,519 — — —
116,519
—
Total
7,065,585
308,199
2,588,995
2,113,358
1,108,566
946,467
7,065,585
2.5 Capital management
Capital framework at Lloyd’s
The Society of Lloyd’s is a regulated undertaking and subject to the supervision of the Prudential
Regulation Authority under the Financial Services and Markets Act 2000.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to
ensure that Lloyd’s complies with Solvency II, and beyond that to meet its own financial strength, license
and ratings objectives. Although, as described below, the Lloyd’s capital setting processes use a capital
requirement set at syndicate level as a starting point, the requirement to meet Solvency II and Lloyd’s
capital requirements apply at an overall and member level respectively, not at a syndicate level.
Accordingly the capital requirement in respect of Syndicate 2623 is not disclosed in these financial
statements.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital
Requirement ('SCR') for the prospective underwriting year. This amount must be sufficient to cover a 1 in
200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’).
The syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a
one year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of
each syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
A syndicate comprises one or more underwriting members of Lloyd’s. Each member is liable for its own
share of underwriting liabilities on the syndicate(s) on which it participates but not other members’ shares.
Accordingly, the capital requirement that Lloyd’s sets for each member operates on a similar basis. Each
member’s SCR shall thus be determined by the sum of the member’s share of the syndicate SCR to
ultimate. Where a member participates on more than one syndicate, a credit for diversification is provided
to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement
to cover a 1 in 200 year loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital
uplift to the member’s capital requirement, known as the Economic Capital Assessment (‘ECA’). The
purpose of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
38
2 Risk management continued
strength, license and ratings objectives. The capital uplift applied for 2024 was 35% (2023: 35%) of the
member’s SCR to ultimate.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for
that member (funds at Lloyd’s), held within and managed within a syndicate (funds in syndicate) and/or as
the member’s share of the Solvency II members’ balances on each syndicate on which it participates.
3 Analysis of underwriting result
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
2024
$'000 $'000 $'000 $'000 $'000 $'000
Direct Insurance
Third party liability 1,121,827 1,641,635 (707,389) (523,298) (165,629) 245,319
Fire and other damage
to property 663,446 868,749 (242,572) (256,426) (133,093) 236,658
Marine, aviation and
transport 359,951 368,190 (253,122) (158,991) 52,338 8,415
Credit and suretyship 113,623 122,123 (20,179) (50,998) (16,501) 34,445
Total direct insurance 2,258,847 3,000,697 (1,223,262) (989,713) (262,885) 524,837
Reinsurance
acceptances 668,086 688,694 (468,420) (196,029) (83,875) (59,630)
Total Direct and
Reinsurance accepted
2,926,933 3,689,391 (1,691,682) (1,185,742) (346,760) 465,207
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
2024
$'000 $'000 $'000 $'000 $'000 $'000
Additional analysis
Fire and damage to
property of which is:
Specialities 47,315 49,132 12,190 (21,626) (23,672) 16,024
Energy — — — — — —
Third party liability of
which is:
Energy — — — — — —
47,315 49,132 12,190 (21,626) (23,672) 16,024
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
2023
$'000 $'000 $'000 $'000 $'000 $'000
Direct Insurance
Third party liability 2,148,888 2,099,600 (1,098,196) (586,610) (273,067) 141,727
Fire and other damage
to property 1,101,237 919,205 (279,069) (262,752) (173,962) 203,422
Marine, aviation and
transport 328,599 321,782 (101,015) (108,318) 1,418 113,867
Credit and suretyship 142,113 120,802 33,134 (48,404) (53,167) 52,365
Total direct insurance 3,720,837 3,461,389 (1,445,146) (1,006,084) (498,778) 511,381
Reinsurance
acceptances
776,710 734,559 (171,281) (228,384) (167,692) 167,202
Total Direct and
Reinsurance accepted
4,497,547 4,195,948 (1,616,427) (1,234,468) (666,470) 678,583
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
39
3 Analysis of underwriting result continued
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
2023
$'000 $'000 $'000 $'000 $'000 $'000
Additional analysis
Fire and damage to
property of which is:
Specialities 49,933 48,016 37,229 (41,041) (48,095) (3,891)
Energy — — — — — —
Third party liability of
which is:
Energy — — — — — —
49,933 48,016 37,229 (41,041) (48,095) (3,891)
*Included in net operating expenses is income arising from overrider commissions from reinsurance
operations of $63,988K (2023: $105,508K).
All business was concluded in the UK. No gains or losses were recognised in profit or loss during the year
on buying reinsurance (2023: nil). The gross premiums written by destination of risk is presented in the
table below.
Concentration of insurance risk
2024
$'000
2023
$'000
United Kingdom 203,522 259,714
US 1,135,749 2,260,409
Europe 244,633 314,783
Other 674,943 885,931
Total
2,258,847 3,720,837
4 Net operating expenses
2024
$'000
2023
$'000
Acquisition costs 721,557
1,097,121
Change in deferred acquisition costs 187,864
(98,229)
Administrative expenses 340,309
341,084
Reinsurance commission and profit participation (63,988)
(105,508)
Total
1,185,742 1,234,468
Acquisition costs include commissions for direct insurance business as shown below:
2024
$'000
2023
$'000
Total commission for direct insurance business 556,869
861,329
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
40
4 Net operating expenses continued
Administrative expenses include:
2024
$'000
2023
$'000
Fees payable to the syndicate’s auditor for the audit of these annual
accounts
816 743
Fees payable to the syndicate’s auditor and its associates in respect of
other services pursuant to legislation
453 406
Fees payable to the syndicate's auditor in relation to other services pursuant to legislation primarily relate
to the review and audit of syndicate regulatory returns along with the statement of actuarial opinion.
5 Key management personnel compensation
The Directors of BFL, excluding the active underwriter, received the following aggregate remuneration
charged to syndicate 2623 and included within net operating expenses:
2024 2023
$’000 $’000
Directors' emoluments 7,477 9,302
7,477 9,302
The active underwriter received the following aggregate remuneration charged to the Syndicate.
2024 2023
$’000 $’000
Emoluments 3,132 3,589
3,132 3,589
6 Staff numbers and costs
The syndicate has no employees. All staff are employed by Beazley Management Limited ('BML'), a
related company to the managing agent, both of which operate within the Beazley Group. The average
number of persons employed BML and working for the syndicate in some capacity are as follows.
Number of employees
2024 2023
Administration and finance 870 799
Underwriting 239 234
Claims 88 75
Investments 8 8
Total 1,205 1,116
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
41
6 Staff numbers and costs continued
The following amounts were recharged to the syndicate in respect of staff costs:
2024 2023
$’000 $’000
Wages and salaries 98,307 99,331
Social security 35,826 30,844
Pension costs 29,523 25,418
Short term incentive payments 94,641 66,786
Total 258,297 222,379
7 Net investment return
2024 2023
$’000 $’000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
169,420 112,893
From financial instruments classified at amortised cost
Interest on cash at bank
4,742 2,590
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments
109,484 43,056
Losses on the realisation of investments
(23,662) (97,548)
Unrealised gains on investments
151,279 292,001
Unrealised losses on the investments
(111,788) (96,069)
Investment management expenses
(8,007) (5,438)
Total investment return
291,468 251,485
Transferred to the technical account from the non-technical account 291,468 251,485
8 Distribution and open years of account
A distribution of $619,423k to members will be proposed in relation to the closing YOA 2022 (2023:
distribution of $620,466k profit for YOA 2021).
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
42
9 Financial investments
Carrying value Cost
2024 2023 2024 2023
$’000 $’000 $’000 $’000
Shares and other variable yield securities and
units in unit trusts
1,353,066 1,086,882 1,290,539 937,137
Debt securities and other fixed income securities
3,774,160 4,461,274 3,739,120 4,440,160
Participation in investment pools
9,191 6,863 9,177 6,971
Loans and deposits with credit institutions
— — — —
Derivative assets
10,295 3,227 — —
Syndicate loans to central fund
26,714 30,978 26,225 31,439
Other investments
277,000 321,582 275,646 324,097
Total financial investments 5,450,426
5,910,806
5,340,707
5,739,804
The table below presents an analysis of financial investments by their measurement classification.
2024 2023
$’000 $’000
Financial assets measured at fair value through profit or loss 5,450,426 5,910,806
Total financial investments 5,450,426 5,910,806
A breakdown of derivative financial instruments is disclosed in note 10.
Valuation hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole. If the inputs used to measure the fair value of an
asset or a liability could be categorised in different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.
Level 1 – Valuations based on quoted prices in active markets for identical instruments. An active market
is a market in which transactions for the instrument occur with sufficient frequency and volume on an
ongoing basis such that quoted prices reflect prices at which an orderly transaction would take place
between market participants at the measurement date.
Level 2 – Valuations based on quoted prices in markets that are not active, or based on pricing models for
which significant inputs can be corroborated by observable market data, directly or indirectly (e.g. interest
rates, exchange rates). Level 2 inputs include:
• Quoted prices similar assets and liabilities in active markets;
• Quoted prices for identical or similar assets and liabilities in markets that are not active, the prices
are not current, or price quotations vary substantially either over time or among market makers,
or in which little information is released publicly;
• Inputs other than quoted prices that are observable for the asset or liability (for example, interest
rates and yield curves observable at commonly quoted intervals, implied volatilities and credit
spreads); and
• Market corroborated inputs. Included within level 2 are government bonds and treasury bills,
equity funds and corporate bonds which are not actively traded, hedge funds and senior secured
loans.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2024
43
43
9 Financial investments continued
Level 3 – Valuations based on inputs that are unobservable or for which there is limited market activity
against which to measure fair value. The availability of financial data can vary for different financial assets
and is affected by a wide variety of factors, including the type of financial instrument, whether it is new
and not yet established in the marketplace, and other characteristics specific to each transaction. To the
extent that valuation is based on models or inputs that are unobservable in the market, the determination
of fair value requires more judgement. Accordingly the degree of judgement exercised by management in
determining fair value is greatest for instruments classified in level 3. The syndicate uses prices and inputs
that are current as of the measurement date for valuation of these instruments.
Valuation approach
The valuation approach for fair value assets and liabilities classified as Level 2 is as follows:
a) For the level 2 debt securities, our fund administrator obtains the prices used in the valuation from
independent pricing vendors. The independent pricing vendors derive an evaluated price from observable
market inputs. These inputs are verified in their pricing assumptions such as weighted average life,
discount margins, default rates, and recovery and prepayments assumptions for mortgage securities.
b) For our hedge funds , the pricing and valuation of each fund is undertaken by administrators in
accordance with each underlying fund’s valuation policy. Individual fund prices are communicated by the
administrators to all investors via the monthly investor statements. The fair value of the hedge fund
portfolios are calculated by reference to the underlying net asset values of each of the individual funds.
The valuation approach for fair value assets and liabilities classified as Level 3 is as follows:
a) Our illiquid credit fund investments are managed by third party managers (generally closed ended
limited partnerships or open ended funds). While the funds provide full transparency on their underlying
investments, the investments themselves are predominantly in private and unquoted instruments. The
valuation techniques used by the fund managers to establish the fair value of the underlying private/
unquoted investments may incorporate discounted cash flow models or a more market-based approach,
whilst the main inputs might include discount rates, fundamental pricing multiples, recent transaction
prices, or comparable market information to create a benchmark multiple.
b) The syndicate loans are loans provided to the Central Fund at Lloyd’s. These instruments are not
tradeable and are valued using discounted cash flow models, designed to appropriately reflect the credit
and liquidity risk of the instruments.
c) Certain collateralised loan obligation securities included within "Debt securities and other fixed income
securities" have been classified within level 3. These represent instruments which were issued late in 2024
and have been priced at par, predominantly as these had not settled at the balance sheet date. As this is
deemed to be an unobservable input these have been classified within level 3. We expect these
instruments to move into Level 2 in the near term as these begin to be priced by our pricing vendors using
models with observable market inputs.
The table below shows the fair values of financial instruments at 31 December 2024, including their levels
in the fair value hierarchy:
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
44
9 Financial investments continued
2024
Level 1 Level 2 Level 3
Assets
held at
amortised
cost
Total
$’000 $’000 $’000 $’000 $’000
Shares and other variable yield
securities and units in unit trusts
538,432 688,939 125,695 — 1,353,066
Debt securities and other fixed income
securities
1,601,264 2,124,996 47,900 — 3,774,160
Participation in investment pools
9,191 — — — 9,191
Derivative assets
10,295 — — — 10,295
Syndicate loans to central fund
— — 26,714 — 26,714
Other investments
277,000 — — — 277,000
Total financial investments
2,436,182
2,813,935
200,309 —
5,450,426
Derivative financial liabilities (10,044) — — — (10,044)
Total
2,426,138
2,813,935
200,309 —
5,440,382
2023
Level 1 Level 2 Level 3
Assets
held at
amortised
cost
Total
$’000 $’000 $’000 $’000 $’000
Shares and other variable yield
securities and units in unit trusts
370,588 533,473 182,821 — 1,086,882
Debt securities and other fixed
income securities
2,282,046 2,179,228 — — 4,461,274
Participation in investment pools
6,863 — — — 6,863
Derivative assets
3,227 — — — 3,227
Syndicate loans to central fund
— — 30,978 — 30,978
Other investments
321,582 — — — 321,582
Total financial investments
2,984,306
2,712,701
213,799 —
5,910,806
Derivative financial liabilities (5,680) — — — (5,680)
Total
2,978,626
2,712,701
213,799 —
5,905,126
Transfers between levels in the fair value hierarchy are determined by assessing the categorisation at the
end of the reporting period. The following transfers between levels 1 & 2 for the period ended 31
December 2024 reflect the level of trading activities including frequency and volume derived from market
data obtained from an independent external valuation tool.
Level 1 Level 2
31 December 2024 transfer from level 2 to 1
$’000 $’000
Debt securities and other fixed income securities 267,848 (267,848)
Level 1 Level 2
31 December 2024 transfer from level 1 to 2
$’000 $’000
Debt securities and other fixed income securities
(270,060) 270,060
Additional information is obtained from fund managers relating to the underlying assets within individual
hedge funds. We identified that 80% (2023: 75%) of these underlying assets were level 1 and the
remainder level 2. This enabled us to categorise hedge funds as level 2, and are included within shares
and other variable yield securities and units in unit trusts.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
45
10 Derivative financial instruments
In 2024 and 2023, the syndicate entered into over-the-counter and exchange traded derivative contracts.
The syndicate had the right and the intention to settle each contract on a net basis.
Notional
contract
amount
2024
Fair value
2024
Notional
contract
amount
2023
Fair value
2023
Derivative financial instruments
$’000 $’000 $’000 $’000
Foreign exchange forward contract - assets 452,604 10,295 221,462 3,227
Foreign exchange forward contract -
liabilities
343,507 10,044 400,291 5,680
Foreign exchange forward contracts
The syndicate entered into over-the-counter foreign exchange forward agreements in order to
economically hedge the foreign currency exposure resulting from transactions and balances held in
currencies that are different to the functional currency of the syndicate.
11 Debtors arising out of direct insurance operations
2024 2023
$'000 $'000
Due within one year 1,053,127 1,448,058
Due after one year 501 204
1,053,628 1,448,262
12 Debtors arising out of reinsurance operations
2024 2023
$'000 $'000
Due within one year 459,757 396,467
Due after one year — —
459,757 396,467
13 Other debtors
2024
2023
$'000 $'000
Inter-syndicate balances
Amounts due from Syndicate 623 1,973 6,825
Amounts due from Syndicate 4321 1,211 772
Amounts due from Syndicate 5623 11,262 1,040
Total inter-syndicate balances 14,446 8,637
Net amount due from other related entities
11,328 —
Other
146,973 88,627
172,747 97,264
*Certain balances have been restated due to a voluntary change in accounting policy. Refer to note 24.
The balances listed above are due within one year.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
46
14 Cash and cash equivalents
2024 2023
$'000
$'000
Cash at bank and in hand 98,677
31,223
Short term deposits 9,191 6,862
Total cash and cash equivalents 107,868 38,085
Cash at bank and in hand includes $53.8m (2023: $13.3m) held in Lloyd's Singapore trust accounts which
is only available for use by the syndicate to meet local claim and expense obligations.
Short term deposits disclosed in this table are included within financial investments. Included within cash
and cash equivalents are the following amounts which are not available for use by the syndicate as they
are held for regulatory purposes:
2024 2023
$'000
$'000
Total cash and cash equivalents held in regulated accounts in
overseas jurisdictions
9,191
6,862
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 Reinsurance Net Gross Reinsurance Net
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 542,026 (48,257) 493,769 441,824 (70,901) 370,923
Incurred deferred acquisition
costs 721,557 (13,467) 708,090
1,097,121
(39,790)
1,057,331
Amortised deferred
acquisition costs (909,421) 42,243 (867,178) (998,892) 62,585 (936,307)
Foreign exchange
movements 115 (2) 113 1,973 (151) 1,822
Balance at 31 December
354,277 (19,483) 334,794 542,026 (48,257) 493,769
16 Analysis of net debt
All amounts in $'000
At 1
January
2024
Cash flows Acquired
Fair value and
exchange
movements
Non cash
charges
At 31
December
2024
Cash at bank and in hand
31,223 67,502 — (48) —
98,677
Short term deposits
6,862 2,376 — (47) —
9,191
Other
— — — — —
—
Cash and cash equivalents
38,085 69,878 — (95) — 107,868
Derivative financial liabilities (5,680) 5,680 — (10,044) (10,044)
Total 32,405 75,558 — (95) (10,044) 97,824
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
47
16 Analysis of net debt continued
All amounts in $'000
At 1
January
2023
Cash flows Acquired
Fair value and
exchange
movements
Non cash
charges
At 31
December
2023
Cash at bank and in hand
82,611 (51,677) — 289 —
31,223
Short term deposits
7,900 (1,113) — 75 —
6,862
Other
(4,230) 4,230 — — —
—
Cash and cash equivalents
86,281 (48,560) — 364 — 38,085
Derivative financial liabilities (12,687) 12,687 — (5,680) (5,680)
Total 73,594 (35,873) — 364 (5,680) 32,405
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
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
Claims outstanding
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
5,947,372 (1,663,559) 4,283,813 5,878,367 (1,863,035) 4,015,332
Claims paid during the
year
(1,648,250) 307,400 (1,340,850) (1,573,951) 358,813 (1,215,138)
Expected cost of current
year claims
1,887,819 (320,729) 1,567,090 2,195,804 (464,669) 1,731,135
Change in estimates of
prior year provisions
(196,137) 74,191 (121,946) (579,377) 311,499 (267,878)
Effects of movements in
exchange rate
(8,154) 1,182 (6,972) 26,529 (6,167) 20,362
Balance at 31
December
5,982,650 (1,601,515) 4,381,135 5,947,372 (1,663,559) 4,283,813
2024 2023
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
Unearned
premiums
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
2,352,164 (382,064) 1,970,100 2,043,868 (470,057) 1,573,811
Premium written during
the year
2,926,933 (475,398) 2,451,535 4,497,547 (730,354) 3,767,193
Premiums earned
during the year
(3,689,391) 593,298 (3,096,093) (4,195,948) 819,640 (3,376,308)
Effect of movements in
exchange rate
(162) (232) (394) 6,697 (1,293) 5,404
Balance at 31
December
1,589,544 (264,396) 1,325,148 2,352,164 (382,064) 1,970,100
Refer to note 2 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.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
48
17 Technical provisions continued
The following tables illustrate the development of the estimates of 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.
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Gross amounts
$ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000
12 months
1,042,820 1,122,079 1,440,873 1,432,387 1,485,823 1,814,814 2,089,987 2,473,033 2,579,139 1,555,688
24 months
988,579 1,115,312 1,466,845 1,527,524 1,757,410 2,017,414 2,282,964 2,142,076 2,287,049
36 months
924,095 1,062,131 1,502,821 1,618,391 1,658,057 2,095,252 2,000,972 2,072,602
48 months
887,747 1,028,246 1,468,817 1,605,586 1,667,457 1,916,393 1,882,025
60 months
882,658 1,008,258 1,480,463 1,641,686 1,636,357 1,875,208
72 months
933,187 1,001,826 1,517,739 1,670,378 1,667,481
84 months
952,561 1,006,662 1,504,501 1,665,977
96 months
966,810 1,040,955 1,518,453
108 months
944,953 1,052,994
120 months
939,775
Total ultimate losses
939,775 1,052,994 1,518,453 1,665,977 1,667,481 1,875,208 1,882,025 2,072,602 2,287,049 1,555,688 16,517,252
Provision is respect of
prior years (2014 and
earlier)
153,109
Less paid claims
(880,051) (936,619) (1,384,456) (1,439,960) (1,322,827) (1,363,880) (915,871) (823,882) (461,434) (51,332) (9,580,312)
Gross claims reserves
(unearned)
59,724 116,375 133,997 226,017 344,654 511,328 966,154 1,248,720 1,825,615 1,504,356 7,090,049
Less unearned portion of
ultimate losses
— — — — — — (46,590) (64,415) (166,201) (830,193) (1,107,399)
Gross claims reserves
(earned)
59,724 116,375 133,997 226,017 344,654 511,328 919,564 1,184,305 1,659,414 674,163 5,982,650
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Net amounts
$ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000
12 months
812,530 880,768 1,118,926 1,150,889 1,183,490 1,402,024 1,568,696 1,725,220 2,130,988 1,296,200
24 months
786,417 885,175 1,151,490 1,195,077 1,365,907 1,509,701 1,663,609 1,543,703 1,900,021
36 months
738,870 857,289 1,164,388 1,275,897 1,275,454 1,490,970 1,483,498 1,528,323
48 months
706,207 827,820 1,139,404 1,244,852 1,270,126 1,462,587 1,414,019
60 months
697,510 796,129 1,134,958 1,240,645 1,253,522 1,432,692
72 months
711,188 783,766 1,146,840 1,246,422 1,253,270
84 months
716,058 780,258 1,146,670 1,261,033
96 months
722,829 785,916 1,141,017
108 months
714,594 818,743
120 months
709,862
Total ultimate losses
709,862 818,743 1,141,017 1,261,033 1,253,270 1,432,692 1,414,019 1,528,323 1,900,021 1,296,200 12,755,180
Provision in respect of
prior years (2014 and
earlier)
126,108
Less paid claims
(702,294) (754,013) (1,090,770) (1,133,597) (1,035,013) (1,028,035) (715,278) (671,866) (401,029) (45,254) (7,577,149)
Net claims reserves
(unearned)
7,568 64,730 50,247 127,436 218,257 404,657 698,741 856,457 1,498,992 1,250,946 5,304,139
Less unearned portion of
ultimate losses
— — — — — — (25,847) (43,375) (138,128) (715,654) (923,004)
Net claims reserves
(earned)
7,568 64,730 50,247 127,436 218,257 404,657 672,894 813,082 1,360,864 535,292 4,381,135
18 Creditors arising out of direct insurance operations
2024 2023
$'000 $'000
Due within one year 12,749 11,737
Due after one year — —
12,749 11,737
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
49
19 Creditors arising out of reinsurance operations
2024 2023
$'000 $'000
Due within one year 369,452 497,559
Due after one year — —
369,452 497,559
20 Other creditors
2024 2023
$'000 $'000
Inter-syndicate balances
Due to syndicate 6107 54,450 86,840
Due to syndicate 3622 20 3
Due to syndicate 3623 48,461 217,171
Total inter-syndicate balances 102,931 304,014
Other related party balances (non-syndicate) — 165,663
Derivative liabilities 10,044 5,680
Other 100,138 17,041
Total
213,113 492,398
The above other creditors balances are payable within one year.
21 Related party transactions
Since 2010, Syndicate 2623, alongside Syndicate 623 has ceded part of its international reinsurance
account to Syndicate 6107 at Lloyd's, and since 2017 has also ceded part of its Cyber Risks business to
Syndicate 6107. Syndicate 6107 is a special purpose syndicate managed by BFL and commissions are
received by the syndicates in respect of these transactions.
Receivable/payable positions between this syndicate and other syndicates which share the same managing
agent are set out in the other debtors and other creditors notes.
22 Subsequent events
The syndicate was impacted by the California wildfires which occurred in January 2025. The impact is not
expected to be material for this syndicate. The managing agent continues to monitor this impact.
The 2022 YOA has closed with a profit of $620.5m. It is the intention that these funds will be distributed to
the members reserve funds in May 2024.
23 Funds at Lloyd's
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s
(‘FAL’). These funds are intended primarily to cover circumstances where Syndicate assets prove
insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a
member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority requirements and
resource criteria. The determination of FAL has regard to a number of factors including the nature and
amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of
business that has been underwritten. Since FAL is not under the management of the managing agent, no
amount has been shown in these Financial Statements by way of such capital resources. However, the
managing agent is able to make a call on the Member’s FAL to meet liquidity requirements or to settle
losses.
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
50
24 Changes in accounting policies - presentation
The 2023 syndicate accounts were prepared in line with the relevant accounting standards and regulatory
requirements and received an unqualified audit opinion from the syndicate’s auditor. However, the
managing agent has voluntarily elected to enact certain changes in accounting policy relating to the
presentation of various items in the financial statements for this syndicate for the year ended 31
December 2024. The changes are intended to align the presentation of the syndicate’s accounts with the
proforma disclosures set out by Lloyd's during the year as part of their effort to rationalise and standardise
reporting across the Lloyd’s market. These changes have been applied on a retrospective basis and have
no impact on the measurement of assets or liabilities, reported profit or the combined ratio. Further
details of each change have been included below. This has impacted certain comparative notes also.
Balance sheet reclassification
The amounts under financial liabilities have been reclassified to the other creditors. This change is purely
presentational.
Cash flow statement – presentation and classification
The managing agent has elected to change the presentation and classification of several lines within the
cash flow statement in order to align with the proforma disclosures set out by Lloyd’s. These changes can
be summarised as follows:
• Several lines are now combined under a single heading (Movement in other assets/liabilities)
where previously these were presented separately.
• Purchases and sales of equities are now presented separately where historically these have been
combined.
• Foreign exchange amounts have been reclassified from investing to operating activities and
presented separately.
Balance sheet
Previously disclosed RestatedAdjustment
31-Dec-23 $'000 $'000 $'000
Total assets 10,540,635 — 10,540,635
Total capital and reserves 1,122,886 — 1,122,886
Other Creditors 486,720 5,678 492,398
Financial Liabilities 5,678 (5,678) —
Total liabilities 9,417,749 — 9,417,749
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
51
24 Changes in accounting policies - presentation continued
Statement of cash flows
Previously disclosed Adjustment Restated
31-Dec-23
$'000 $'000 $'000
Increase/decrease in deposits with
ceded undertakings
(452) 452 —
(Increase)/decrease in debtors,
prepayments and accrued income
(94,812) 24,772 (70,040)
Increase/(decrease) in net technical
provisions
664,770 (664,770) —
Increase/(decrease) in gross technical
provisions
— 377,301 377,301
(Increase)/decrease in reinsurers'
share of gross technical provisions
— 287,469 287,469
(Increase)/decrease in deferred
acquisition costs
(100,206) 100,206 —
Increase/(decrease) in creditors,
accruals and deferred income
(117,929) 2,321 (115,608)
Movement in other assets/liabilities
— (134,758) (134,758)
Foreign exchange
— (364) (364)
Net cash flows from operating
activities
1,037,002 (7,371) 1,029,631
Net purchase of investments
(1,136,397) 1,136,397 —
Purchase of equity and debt securities
—
(4,699,787) (4,699,787)
Sale of equity and debt securities
— 3,570,761 3,570,761
Total impact on net cash flow from
investing activities
— — —
Net cash flows from investment
activities
(1,080,844) 7,371 (1,073,473)
Net cash flows from financing
activities
(4,719) — (4,719)
Net increase/(decrease) in cash
and cash equivalents
(48,561) — (48,561)
Cash and cash equivalents at the
end of the year
38,085 — 38,085
25 Foreign exchange rates
The syndicate used the following exchange rates to translate foreign currency assets, liabilities, income
and expenses into US dollars, being the syndicate’s presentational currency:
| 2024 | 2023 | |||||
| Start of period | End of period | Average | Start of period | End of period | Average | |
| Sterling | | | | | | |
| Euro | | | | | | |
| US dollar | | | | | | |
| Canadian dollar | | | | | | |
| Australian dollar | | | | | | |
SYNDICATE 2623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
52
Beazley Furlonge Limited has been the managing agent of Syndicate 2623 throughout the period covered
by this report and the registered office is 22 Bishopsgate, London EC2N 4BQ.
Directors
R A Stuchbery* - Chair
A P Cox - Chief Executive Officer and Active Underwriter
G P Blunden* - (resigned 31/03/2024)
C C R Bannister* - (resigned 31/03/2024)
A J Reizenstein*
N Wall*
L Santori*
R S Anarfi
R J Clark* - (appointed 23/05/2024)
P J Bantick - (appointed 07/06/2024)
C C J Wong - (appointed 17/09/2024)
S M Lake - (resigned 30/06/2024)
R E Quane - (resigned 04/10/2024)
* Non-executive director.
Company secretary
R Yeoman
Managing agent’s registered office
22 Bishopsgate
London
EC2N 4BQ
United Kingdom
Registered number
1893407
Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Banker
Deutsche Bank AG
Winchester House
London
1 Great Winchester Street
EC2N 2DB
SYNDICATE 2623
MANAGING AGENT'S CORPORATE INFORMATION
YEAR ENDED 31 DECEMBER 2024
53
53
