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Accounts disclaimer
Report and Accounts
2024
Hiscox Syndicates
1
Directors and administration –
Hiscox Syndicates 0033 and 6104
2
Chapter 1
Hiscox Syndicate 0033
annual accounts
3
Report of the Directors of the
managing agent
7
Statement of managing
agent’s responsibilities
8
Independent auditors’ report
11
Profit and loss account:
technical account
– general business
12
Profit and loss account:
non-technical account
– general business
13
Balance sheet – assets
14
Balance sheet – liabilities
15
Statement of changes in
members’ balances
16
Statement of cash flows
17
Notes to the accounts
43
Chapter 2
Hiscox Syndicate 0033
underwriting year accounts
44
Report of the Directors of the
managing agent
46
Statement of managing
agent’s responsibilities
47
Independent auditors’ report
50
Profit and loss account:
technical account
– general business
51
Profit and loss account:
non-technical account
– general business
52
Balance sheet
53
Notes to the accounts
58
Seven-year summary
59
Chapter 3
Hiscox Syndicate 6104
annual accounts
60
Report of the Directors of the
managing agent
63
Statement of managing
agent’s responsibilities
64
Independent auditors’ report
67
Profit and loss account:
technical account
– general business
68
Profit and loss account:
non-technical account
– general business
69
Balance sheet – assets
70
Balance sheet – liabilities
71
Statement of changes in
members’ balances
72
Statement of cash flows
73
Notes to the accounts
82
Chapter 4
Hiscox Syndicate 6104
underwriting year accounts
83
Report of the Directors of the
managing agent
85
Statement of managing
agent’s responsibilities
86
Independent auditors’ report
2020 closed year of account
89
Independent auditors’ report
2022 closed year of account
92
Profit and loss account:
technical account and
non-technical account
– general business
94
Balance sheet
96
Notes to the accounts
99
Seven-year summary
1
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Directors and administration
Hiscox Syndicates 0033 and 6104
Managing agent:
Managing agent
of composite Syndicate 0033, aligned Syndicate 3624 and
Special Purpose Arrangement (SPA) 6104. HSL is an
indirectly wholly owned subsidiary of Hiscox Ltd.
Directors
M B Boucher – Non Executive (appointed 1 January 2025)
A Dolphin
T W Harris – Non Executive
T C Huerlimann – Non Executive Chairman
H A Hussain
J Illingworth – Non Executive
S E Kemble
P A Lawrence
K J M Markham
J R Musselle
H Rose
Managing agent’s registered office
22 Bishopsgate
London
EC2N 4BQ
United Kingdom
Managing agent’s company number
02590623
Syndicates 0033 and 6104:
Active underwriters
Syndicate 0033 – P A Lawrence
Syndicate 0033 and 6104 – A Dolphin
Bankers (Syndicate 0033)
Lloyds Bank PLC
Citibank
Royal Bank of Canada
Goldman Sachs
Northern Trust
Investment managers (Syndicate 0033)
AllianceBernstein Limited
Wellington Management Company LLP
Fiera Capital Corporation
Independent registered auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London SE1 2RT
United Kingdom
2
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
2
Chapter 1
Hiscox Syndicate 0033
annual accounts
3
Report of the Directors of the
managing agent
7
Statement of managing
agent’s responsibilities
8
Independent auditors’ report
11
Profit and loss account:
technical account
– general business
12
Profit and loss account:
non-technical account
– general business
13
Balance sheet – assets
14
Balance sheet – liabilities
15
Statement of changes in
members’ balances
16
Statement of cash flows
17
Notes to the accounts
Chapter 1
Hiscox Syndicate 0033
annual accounts
3
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Report of the Directors of the managing agent
Hiscox Syndicate 0033 annual accounts
The Directors of the managing agent present their report
for Syndicate 0033 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. The Syndicate
continues to adopt the going concern basis in preparing the
syndicate annual accounts.
Separate underwriting year accounts for the closed 2022 year
of account of Syndicate 0033 are included following these
annual accounts.
Results
The result for Syndicate 0033 in calendar year 2024 is a profit
of $316.3 million (2023: profit of $402.3 million). The Syndicate
has continued to demonstrate strong performance, with
notable growth in reinsurance, property, and specialty
classes, while reducing its position in casualty due to adverse
pricing trends. Furthermore, the Syndicate has decided to
cease underwriting space business in 2024, in response to
a persistently adverse claims environment. Although the wind
season was active, including Hurricanes Helene and Milton,
these catastrophe events were within our modelled range.
Notable loss activity in upstream energy, space and product
recall, along with the Baltimore bridge loss, was balanced with
prior-year reserve releases. The result has also benefitted from
an investment return which has made a significant contribution
to profit, which is driven by fixed income returns and is primarily
underpinned by coupon income and cash returns.
The Syndicate’s key financial performance indicators during
the year were as follows:
2024
$m
2023
$m
%
change
Gross premiums written
2,333.0
2,348.0
(0.6)
Gross premiums earned
2,297.0
2,288.8
0.4
Net premiums earned
1,408.4
1,375.6
2.4
Total recognised
profit for the year
316.3
402.3
(21.4)
Claims ratio (%)
45.8
38.7
7.1
Commission ratio (%)
19.7
20.9
(1.2)
Expense ratio (%)
20.2
19.4
0.8
Combined ratio (%)
85.7
79.0
6.7
Principal activity
The principal activity of Syndicate 0033 remains the transaction
of general insurance and reinsurance business in the United
Kingdom at Lloyd’s of London and through the Lloyd’s Brussels
platform. Syndicate 0033 is one of the largest composite
Syndicates at Lloyd’s, and has an A.M. Best syndicate rating of A+
(Superior). Syndicate 0033 underwrites a mixture of reinsurance,
property, casualty and marine and energy business, as well as a
range of specialty lines including contingency and terrorism risks.
Syndicate 0033 trades through the Lloyd’s worldwide licences
and rating. It also benefits from the Lloyd’s brand. Lloyd’s and
Lloyd’s Brussels has an A+ (Superior) rating from A.M. Best,
AA- (Very strong) rating from S&P, AA- (Very strong) from Fitch
and AA- (Very strong) from Kroll Bond Rating Agency.
Hiscox ESG Syndicate 3033, a sub-syndicate of Hiscox
Syndicate 0033, provides additional insurance capacity for
clients with strong ESG records, including renewable energy
and storage providers. ESG credentials are assessed using a
combination of proprietary and independent third-party data,
with cover available for various insurance lines and industries
operating anywhere in the world where Lloyd’s licences are
valid. The sub-syndicate 3033 does not need to report its
own annual accounts and the same is reported under annual
accounts for Syndicate 0033.
The geographical and currency split of its business is
shown below:
Geographical split of gross premiums written (%)
2024
2023
UK
7
8
Europe
7
6
North America
65
66
Asia
3
3
Rest of the world
18
17
Geographical premiums written settlement currency (%)
2024
2023
Sterling
11
10
Euro
5
6
US Dollar
81
80
Canadian Dollar
3
4
4
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Review of the business
The result for the year was a profit of $316.3 million
(2023: profit of $402.3 million). A breakdown of divisional
performance is shown below.
Property
The division comprises big-ticket property accounts (covering
both USA and international), property binding authorities
principally focused on the USA, Canada and the Carribean
and insuring household and small commercial risks, and
a product covering flood risk (predominately via our own
proprietary FloodPlus platform). 2024 saw a slowdown on the
rate momentum we had seen across the market, particularly
in open market big-ticket accounts, but pleasingly 2024 still
saw positive rate movement across the property portfolio’s
lines of business. Despite a number of natural catastrophe
and secondary peril events in 2024 (for example, Hurricanes
Helene and Milton both making landfall on the West Coast
of Florida), our attritional losses continue to improve and
come down. The underlying portfolio is strong, following the
re-underwriting which has taken place over the last few years
and this, combined with rate and attritional loss improvements,
as well as some prior-year reserve releases, enabled the
division to deliver a profit in 2024.
Reinsurance
This division covers the Syndicate’s non-marine property
reinsurance business (catastrophe excess of loss including
retrocession, risk excess and pro-rata reinsurance), marine and
aviation reinsurance, and specialty business. The Syndicate
underwrites business for itself and for third-party capital
providers such as insurance companies, other syndicates
(especially Syndicate 6104) and capital market investors.
The division experienced gross premium growth during the
year, driven by property catastrophe underwriting as we
increased our net appetite for the second successive year
to take advantage of ongoing hard market conditions.
Rates have held flat against 2023, which saw the hardest
market in property reinsurance since at least 1993. 2024 has
seen a number of significant catastrophe events, most notably
Hurricanes Helene and Milton, along with the Baltimore
bridge loss. Our exposures have been manageable despite
significant industry-wide losses, showing the effectiveness
of our underwriting strategy. Offsetting these are prior-year
reserve releases on historic events including Hurricane Ian
and Covid-19.
Marine and energy
This division provides cover for marine hull and war, cargo,
marine and energy liability, and energy property risks
comprising upstream, midstream, downstream, power and
renewables. The rating environment has started to soften
across the majority of lines this year, but the business has
performed well. Energy construction projects have continued
to enter the market and we have been well positioned to
support these.
Geopolitical instability and macroeconomic challenges
remain external factors influencing the division, but we have
successfully navigated these throughout 2024.
Specialty
This division brings together a number of lines such as:
terrorism, product recall, personal accident, kidnap and ransom,
contingency, alternative risk and space (now discontinued).
The terrorism line has experienced significant premium growth
this year, driven by favorable trading conditions following major
global events such as the Russia/Ukraine and Israel/Palestinian
conflicts, a notable election year, and ongoing political and
economic instability. We have managed to reduce aggregate
exposure while identifying opportunities for growth in key
regions. Several new initiatives, including a collaboration with
Google to enhance our quoting and binding capabilities, have
supported this line. As we have expanded, a number of new
market entrants have emerged. Consequently, we anticipate
that rates may decrease next year due to increased competition.
Our proactive approach has been a key differentiator in
maintaining our competitive edge.
Product recall has seen several new managing general agents
(MGAs) entering the market with highly competitive and less
favorable terms during 2024. We have maintained our core
book and declined certain accounts due to unfavorable terms,
resulting in a reduction in the size of the book under these
market conditions.
The personal accident account has remained stable in terms
of both premium and rating. We have significantly expanded
our exposure with key relationships and opted not to pursue
some new business under highly competitive terms.
Kidnap and ransom is a unique product from Hiscox, combined
with our third-party response providers in Control Risks.
Divisional performance
Division
2024
gross premium
written
$m
2024
profit
$m
2023
gross premium
written
$m
2023
profit
$m
Reinsurance
568.9
123.4
519.7
137.8
Property
603.5
65.1
599.1
73.5
Specialty
370.6
30.9
378.3
54.4
Marine and energy
409.4
78.8
427.0
71.8
Casualty
314.5
11.1
343.5
53.2
Art and private client
66.1
7.0
80.4
11.6
Total
2,333.0
316.3
2,348.0
402.3
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Report of the Directors
of the managing agent
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
5
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Report of the Directors
of the managing agent
The market is active with some new players, we have certainly
retained our core book. Hiscox discontinued underwriting
space business in November 2024 due to persistent adverse
claims environment.
The contingency market has stabilised after Covid-19, and this
account does not include pandemic coverage. The alternative
risk account consists of several specialist binding authorities
that either cover unique risks not typically written by Hiscox or
offer an attractive multi-line opportunity.
Casualty
The division focuses on big-ticket business in the fields of D&O
(directors and officers’ww), GL (general liability), and cyber
insurance. The focus remains on renewing D&O and cyber
policies that still meet adequate rate criteria. The GL segment
is experiencing rate increases in some areas due to the effects
of social inflation, which is raising settlement values. Overall,
the casualty sector in 2024 aims to maintain its profitability.
Art and private client
This division includes the fine art, specie and European
household accounts written in Lloyd’s. The majority of the
business is written under lineslips and binding authorities.
Some of the business is sourced through the Hiscox regional
offices in the UK and Europe. Fine art constitutes the bulk of
the account and continues to grow organically.
2025 and the future
The plan for 2025 is based on a portfolio that has performed
well in the last few years being well balanced to be able to
withstand reasonable levels of catastrophe activity and still
deliver profits. The Syndicate will continue to seek profitable
growth by rebalancing within the market cycles, such as
seizing energy market opportunities with traditional and
transitional sectors experiencing growth which Hiscox is
well placed to capitalise on, including leveraging the new
ESG sub-syndicate.
The Syndicate is well reserved, has a strong reinsurance
programme with good security and a conservative
investment portfolio. The Syndicate’s £1,700 million capacity
has been maintained in 2025, with a higher capacity utilisation
expected to take advantage of any opportunities where the
market remains attractive.
Capital
One of the main advantages of trading through Lloyd’s is the
considerably lower capital ratios that are available due to the
diversification of business written in Syndicate 0033 and in Lloyd’s
as a whole. The size of the Syndicate is increased or reduced
according to the strength of the insurance environment in its main
classes. At present, Hiscox participates on 72.7% of the Syndicate,
with the remainder being owned by non-aligned members.
The Hiscox Syndicates Limited (HSL) internal capital model
is used to set the Syndicate’s capital. Syndicate capital is
determined through the submission and agreement by Lloyd’s
of an ultimate solvency capital requirement (SCR), which is
subject to an uplift determined by the Franchise Board to
calibrate the capital required by Lloyd’s. Lloyd’s unique capital
structure provides excellent financial security to policyholders
and capital efficiency for members.
This chain of security provides the financial strength that ultimately
backs insurance policies written at Lloyd’s and has three links:
1.
all premiums received by syndicates are held in trust
as the first resource for paying policyholders’ claims;
2.
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 They are set with reference
to the SCR together with the Lloyd’s uplift. Since
FAL is not under the control of the managing agent,
no amount has been shown in the annual accounts.
However, the managing agent is able to make a call
on the members’ FAL to meet liquidity requirements
or to settle losses; and
3.
the central assets are available at the discretion of the
Council of Lloyd’s to meet any valid claim that cannot
be met from the resources of any member further up
the chain.
Lloyd’s also retains the right to request a callable contribution
of up to 5% of capacity from the Syndicate.
Lloyd’s works in co-operation with insurance regulators in
the USA and other parts of the world to further strengthen
the security of a Lloyd’s policy. This has resulted in significant
amounts of the Syndicate’s funds being held in various
trust funds.
We have determined that the Syndicate has sufficient levels of
liquidity to meet its expected funding requirements. However,
we put Names on notice that we may need to make a cash call,
at some time in the future, to improve the Syndicate’s working
capital position.
The Syndicate continues to use the Lloyd’s Brussels platform
to transact European Union risks. Lloyd’s Brussels benefits
from the market’s financial strength through the Central Fund
and has the same financial ratings as Lloyd’s: A.M. Best
A+ (Superior), S&P AA- (Very strong), Fitch AA- (Very strong)
and Kroll Bond Rating Agency AA- (Very strong). The Company
is authorised and regulated by the National Bank of Belgium
and capitalised under Solvency II rules.
Investment report
Investment income for the Syndicate was a gain of
$128.0 million (2023: gain of $116.6 million) equating to
a positive return of 4.8% (2023: positive return of 5.2%).
The Syndicate’s invested assets totalled $2,701.4 million
at 31 December 2024 (2023: $2,504.7 million).
Fixed income returns were primarily driven by coupon income
and cash returns. Additionally, mark-to-market bond returns
were enhanced by falling risk-free rates, with a slight increase
in yields observed in late December.
Principal risks and uncertainties
A description of the principal risks and uncertainties facing
the Syndicate is set out in note 4.
Directors’ interests
None of the Directors of the managing agent who served
during the year ended 31 December 2024 were underwriting
Names at Lloyd’s for the 2022, 2023, 2024 or 2025 years
of account.
6
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Years of account
2019
2020
2021
2022
2023
2024
2025
Capacity (£m)
1,399
1,698
1,699
1,699
1,698
1,696
1,700
Capacity ($m)*
1,753
2,127
2,129
2,129
2,127
2,125
2,130
Hiscox ownership (£m)
1,015
1,233
1,233
1,233
1,233
1,233
1,233
Hiscox ownership (%)
72.6
72.6
72.6
72.6
72.6
72.7
72.5
*Converted at the closing rate at 31 December 2024.
M B Boucher – Non Executive (appointed 1 January)
A Dolphin
T W Harris – Non Executive
T C Huerlimann – Non Executive Chairman
H A Hussain
J Illingworth – Non Executive
S E Kemble
P A Lawrence
K J M Markham
J R Musselle
H Rose
Disclosure of information to the auditors
The Directors of the managing agent who held office at the
date of approval of this managing agent’s report confirm
that, so far as they are each aware, there is no relevant audit
information of which the Syndicate’s auditors are unaware;
and each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of any
relevant audit information and to establish that the Syndicate’s
auditors are aware of that information.
Annual General Meeting
Usually the only formal business conducted at the Syndicate
Annual General Meeting (AGM) is the appointment of the
Syndicate auditors for the following year, and usually the
attendance at the AGM, when it is held, is minimal.
In accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) (the 2008
Regulations) a Syndicate AGM was held in 2016 to appoint
PricewaterhouseCoopers LLP (PwC) as the Syndicate’s
registered auditor. The 2008 Regulations contain provisions
for the re-appointment of the Syndicate’s registered auditor.
Lloyd’s requirements allow managing agents to dispense
with the requirement to hold a Syndicate AGM, providing
certain criteria are met.
This year, we therefore give notice that:
s
Hiscox Syndicates Limited does not propose to hold an
AGM of the members of Syndicate 0033 in 2025;
s
PwC will be deemed to be re-appointed as the Syndicate’s
registered auditor pursuant to the 2008 Regulations;
s
members may object to the matters set out above within
21 days of this notice.
If no objections to this are received from any members within
the specified period, we shall notify Lloyd’s to that effect.
If any objections are received, depending on the level or nature
of such objections, we shall then consider whether to:
1.
apply for Lloyd’s consent not to hold an AGM. Lloyd’s
may give its consent subject to any such conditions and
requirements as it may determine; or
2.
convene an AGM.
By order of the Board
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Report of the Directors
of the managing agent
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
7
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of managing agent’s responsibilities
Hiscox Syndicate 0033 annual accounts
The managing agent is responsible for preparing the Syndicate
Annual Report and Accounts in accordance with applicable law
and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 require the managing
agent to prepare syndicate annual accounts at 31 December
each year in accordance with UK accounting standards and
applicable law (UK Generally Accepted Accounting Practice).
The syndicate annual accounts are required by law to give a
true and fair view of the state of affairs of the Syndicate at that
date and of its profit or loss for that year.
In preparing those syndicate annual accounts, the managing
agent is required to:
s
select suitable accounting policies and then apply them
consistently, subject to changes arising on the adoption
of new accounting standards in the year;
s
make judgements and estimates that are reasonable
and prudent;
s
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in the syndicate annual accounts; and
s
prepare the syndicate annual accounts on the basis that
the Syndicate will continue to write future business unless
it is inappropriate to presume the Syndicate will do so.
The managing agent is responsible for keeping proper
accounting records that disclose with reasonable accuracy,
at any time, the financial position of the Syndicate and enable
it to ensure that the syndicate annual accounts comply with
the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008. It is also responsible
for safeguarding the assets of the Syndicate and hence for
taking reasonable steps for prevention and detection of
fraud and other irregularities.
The managing agent is responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing
the preparation and dissemination of the syndicate annual
accounts may differ from legislation in other jurisdictions.
8
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
To the members of Syndicate 0033
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, Syndicate 0033’s syndicate annual accounts:
s
give a true and fair view of the state of the Syndicate’s
s
s
affairs as at 31 December 2024 and of its profit and
cash flows for the year then ended;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 ‘The Financial Reporting Standard applicable in the
UK and Republic of Ireland’, and applicable law); and
have been prepared in accordance with the requirements
of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the
requirements within the Lloyd’s Syndicate Accounts
Instructions version 2.0 as modified by the Frequently
Asked Questions issued by Lloyd’s version 1
.
1
(‘the
Lloyd’s Syndicate Instructions’).
We have audited the syndicate annual accounts included
within the Report and Accounts (the ‘Annual Report’), which
comprise: balance sheet – assets and the balance sheet –
liabilities as at 31 December 2024; the profit and loss account:
technical account – general business and profit and loss
account: non-technical – general business, the statement
of cash flows, and the statement of changes in members’
balances for the year then ended; and the notes to the
syndicate annual accounts, which include a description of
the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions
and other applicable law. Our responsibilities under ISAs
(UK) are further described in the auditors’ responsibilities
for the audit of the syndicate annual accounts section of our
report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance
with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the
FRC’s Ethical Standard, as applicable to other entities of public
interest, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 6, we have provided no
non-audit services to the syndicate in the period under audit.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the syndicate annual accounts and our
auditors’ report thereon. The managing agent is responsible
for the other information. Our opinion on the syndicate
annual accounts does not cover the other information and,
accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the syndicate annual accounts,
our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the syndicate annual accounts or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report based on
these responsibilities.
With respect to the report of the Directors of the managing
agent (the ‘managing agent’s report’), we also considered
whether the disclosures required by The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008 requires us also to report certain
opinions and matters as described below.
Managing agent’s report
In our opinion, based on the work undertaken in the course
9
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Independent auditors’ report
of the audit, the information given in the managing agent’s
Report for the year ended 31 December 2024 is consistent
with the syndicate annual accounts and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate
and its environment obtained in the course of the audit,
we did not identify any material misstatements in the managing
agent’s report.
Responsibilities for the syndicate annual accounts and
the audit
Responsibilities of the managing agent for the syndicate
annual accounts
As explained more fully in the statement of managing agent’s
responsibilities, the managing agent is responsible for the
preparation of the syndicate annual accounts in accordance
with the applicable framework and for being satisfied that
they give a true and fair view. The managing agent is also
responsible for such internal control as they determine is
necessary to enable the preparation of syndicate annual
accounts that are free from material misstatement, whether
due to fraud or error.
In preparing the syndicate annual accounts, the managing
agent is responsible for assessing the syndicate’s ability to
continue as a going concern, disclosing as applicable, matters
related to going concern and using the going concern basis
of accounting unless it is intended for the syndicate to cease
operations, or it has no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate
annual accounts
Our objectives are to obtain reasonable assurance about
whether the syndicate annual accounts as a whole are free
from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry,
we identified that the principal risks of non-compliance with laws
and regulations related to breaches of regulatory principles,
such as those governed by the Prudential Regulation Authority
and the Financial Conduct Authority, and those regulations
set by the Council of Lloyd’s, and we considered the extent
to which non-compliance might have a material effect on the
syndicate annual accounts. We also considered those laws and
regulations that have a direct impact on the syndicate annual
accounts such as The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the
Lloyd’s Syndicate Instructions. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the
syndicate annual accounts (including the risk of override of
controls), and determined that the principal risks were related
to manual journals and accounting estimates in respect of
premiums and insurance claims outstanding. Audit procedures
performed by the engagement team included:
s
discussions with senior management, including those in
the risk and compliance functions, including consideration
of known or suspected instances of non-compliance with
laws, regulation and fraud;
s
reading key correspondence with Lloyd’s, in relation to
compliance with laws and regulations;
s
reviewing relevant meeting minutes including those of the
Audit Committee;
s
testing journal entries identified in accordance with our
risk assessment;
s
testing and assessing the appropriateness of insurance
claims reserves;
s
identifying and testing estimated premium income on
a sample basis; and
s
designing audit procedures to incorporate unpredictability
around the nature, timing and extent of our testing.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the syndicate
annual accounts. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
10
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Independent auditors’ report
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the
syndicate annual accounts is located on the FRC’s website at:
frc.org.uk/auditorsresponsibilities
. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the syndicate’s members as a body in accordance with
part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 we are required
to report to you if, in our opinion:
s
we have not obtained all the information and explanations
we require for our audit; or
s
adequate accounting records have not been kept by the
managing agent in respect of the Syndicate; or
s
certain disclosures of managing agent remuneration
specified by law are not made; or
s
the syndicate annual accounts are not in agreement with
the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included
within a document to which iXBRL tagging has been applied.
This auditors’ report provides no assurance over whether the
iXBRL tagging has been applied in accordance with section 2
of the Lloyd’s Syndicate Instructions version 2.0.
Thomas Robb
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2025
11
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
technical account – general business
Hiscox Syndicate 0033 annual accounts
Year ended 31 December 2024
Notes
2024
$000
2023
$000
Earned premiums, net of reinsurance
Gross premiums written
5
Outward reinsurance premiums
(934,207 )
(882,880 )
Net premiums written
Change in the provision for unearned premiums:
Gross amount
(35,971 )
(59,283 )
Reinsurers’ share
(30,283 )
Net change in provisions for unearned premiums
(89,566 )
Earned premiums, net of reinsurance
Allocated investment return transferred from/(to) the non-technical account
Claims incurred, net of reinsurance
Claims paid:
Gross amount
10
(999,552 )
(971,765 )
Reinsurers’ share
10
Net claims paid
(518,668 )
(437,564 )
Change in the provision for claims:
Gross amount
(80,527 )
Reinsurers’ share
(46,208 )
(228,158 )
Net change in provisions for claims
(126,735 )
(95,337 )
Claims incurred, net of reinsurance
(645,403 )
(532,901 )
Net operating expenses
6
(561,322 )
(554,734 )
Balance on the technical account for general business
The notes on pages 17 to 42 form an integral part of these annual accounts.
12
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
non-technical account – general business
Hiscox Syndicate 0033 annual accounts
Year ended 31 December 2024
Notes
2024
$000
2023
$000
Balance on the technical account for general business
Investment income
8
Realised gains/(losses) on investments
8
(16,873 )
Unrealised gains on investments
8
Investment expenses and charges
8
(2,462 )
(2,059 )
Total investment return
Allocated investment return transferred (to)/from general business technical account
(127,968 )
(116,574 )
Foreign exchange losses
(13,338 )
(2,207 )
Profit for the financial year
There are no recognised gains or losses in the accounting year other than those dealt with in the technical and non-technical
accounts, therefore no statement of other comprehensive income has been presented.
The notes on pages 17 to 42 form an integral part of these annual accounts.
13
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet – assets
Hiscox Syndicate 0033 annual accounts
At 31 December 2024
Notes
2024
$000
2023
$000
Investments
Financial investments
9
Deposits with ceding undertakings
Reinsurers’ share of technical provisions
Provision for unearned premium
10
Claims outstanding
10, 14
Debtors
Debtors arising out of direct insurance operations
11
Debtors arising out of reinsurance operations
12
Other debtors
13
Other assets
Cash at bank and in hand
19
Other
Prepayments and accrued income
Accrued interest
Deferred acquisition costs
10
Other prepayments and accrued income
Total assets
The notes on pages 17 to 42 form an integral part of these annual accounts.
*Represented to align with current period presentation – see note 1.
*
14
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet – liabilities
Hiscox Syndicate 0033 annual accounts
At 31 December 2024
Notes
2024
$000
2023
$000
Capital and reserves
Members’ balances
Technical provisions
Provision for unearned premium
10
Claims outstanding
10, 14
Creditors
Creditors arising out of insurance operations
15
Creditors arising out of reinsurance operations
16
Other creditors
17
Accruals and deferred income
18
Total liabilities
Total liabilities, capital and reserves
The notes on pages 17 to 42 form an integral part of these annual accounts.
The syndicate annual accounts on pages 11 to 42 were approved by the Board of Hiscox Syndicates Limited and were signed
on its behalf by
Helen Rose
Chief Financial Officer
24 February 2025
*Represented to align with current period presentation – see note 1.
*
15
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of changes in members’ balances
Hiscox Syndicate 0033 annual accounts
Year ended 31 December 2024
2024
$000
2023
$000
Members’ balances brought forward at 1 January
Total recognised gains for the year
Payments of profit to members’ personal reserve funds
(173,649 )
(86,083 )
Losses collected in relation to distribution on closure of underwriting year
Members’ agent fees
(3,003 )
(3,056 )
Members’ balances carried forward at 31 December
Members participate on Syndicates by reference to years of account and their ultimate result, assets and liabilities are assessed
with reference to policies incepting in that year of account in respect of their membership of a particular year.
A profit payment distribution of $262.5 million to members will be proposed in relation to the closing year of account 2022
(2023: profit payment distribution of $173.6 million in relation to the closing year of account 2021). There are no years of account
remaining open after the three-year period.
16
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of cash flows
Hiscox Syndicate 0033 annual accounts
Year ended 31 December 2024
2024
$000
2023
$000
Cash flows from operating activities
Profit for the year
Increase/(decrease) in gross technical provisions
(22,049 )
Decrease in reinsurers’ share of gross technical provisions
Increase in debtors
(612 )
(42,344 )
Decrease in creditors
(61,976 )
(71,208 )
Movement in other assets/liabilities
Investment return
(127,968 )
(116,574 )
Foreign exchange
(3,879 )
Net cash flows from operating activities
Net cash flows from investing activities
Purchase of equity and debt instruments
(1,700,354 )
(1,568,776 )
Sale of equity and debt instruments
Settlement of derivatives
Investment income received
Other
(178 )
(2,515 )
Net cash flows from financing activities
Distribution of profits
(176,652 )
(89,139 )
Collection of losses
Net (decrease)/increase cash and cash equivalents
(65,945 )
Effect of exchange rates on cash and cash equivalents
(1,440 )
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Included within cash and cash equivalents are balances totalling $6.3 million (2023: $19.1 million) not available for immediate use
by the Syndicate.
17
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Notes to the accounts
Hiscox Syndicate 0033 annual accounts
1 Basis of preparation
These annual accounts have been prepared in accordance
with regulation 5 of the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and
applicable accounting standards in the United Kingdom,
Financial Reporting Standard 102, The Financial Reporting
Standard applicable in the United Kingdom and the Republic
of Ireland (FRS 102), Financial Reporting Standard 103 and
Insurance Contracts (FRS 103) where applicable, and the
Lloyd’s Syndicate Accounts Instructions Version 2.0 as modified
by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
These annual accounts are presented in US Dollars, which is the
Syndicate’s functional currency. All amounts have been rounded
to the nearest thousand, unless otherwise indicated. Some
disclosure items, for example, Syndicate capacity, are presented
in Sterling as it is denominated in this currency; US Dollar
amounts are converted at the closing rate at 31 December 2024.
The Directors of the managing agent have prepared the annual
accounts on a going concern basis. In adopting the going
concern basis, the Syndicate’s current and forecast solvency
and liquidity positions for the next 12 months and beyond
has been reviewed. As part of the consideration of the
appropriateness of adopting the going concern basis, the
Directors used scenario analysis to assess the robustness of the
Syndicate’s solvency and liquidity positions. Even in a severe
downside scenario, no material uncertainty in relation to going
concern has been identified. This is due to the Syndicate’s
strong capital and liquidity positions, which provide considerable
resilience to these shocks, underpinned by the Syndicate’s
approach to risk management, which is described in note 4.
In addition to the above, Lloyd’s require the Syndicate to
perform an assessment of certain events on the financial
position of the Syndicate by running specific realistic disaster
scenarios (RDS). This is then translated into a capital
requirement which the members must adhere to. It can be
demonstrated that under the selected RDS scenarios, the
Syndicate will continue to operate and any capital requirements
can be provided for from the members’ funds at Lloyd’s (FAL).
In fact, no capital requirement is set for the Syndicate. Capital
requirements are set at the member level and a member is
not allowed to participate in the Syndicate if they have not met
their capital requirement and the capacity of the Syndicate is
adjusted down to reflect this.
The Syndicate benefits from being part of the Lloyd’s capital
structure, often referred to as the chain of security, which
provides excellent financial security to policyholders and capital
efficiency for members. The three elements that make up the
Lloyd’s capital structure are:
1.
syndicate assets – members’ working capital
All premiums received by the Syndicates are held in trust
by the managing agents as the first resource for paying
policyholders’ claims and to fund regulatory deposits.
Until all liabilities have been provided for, no profits can be
released. Every year, the Syndicates’ reserves for future
liabilities are independently audited and subject to an
actuarial review;
2.
funds at Lloyd’s – members’ capital deposited at Lloyd’s.
Each member, whether corporate or individual, must
provide sufficient capital to support their underwriting
at Lloyd’s. Managing agents are required to assess the
solvency capital requirement (SCR) for each syndicate
that they manage. This sets out how much capital the
syndicate requires to cover its underlying business risks
at a 99.5% confidence level; and
3.
Lloyd’s central capital – Lloyd’s central assets, which
include the Central Fund, are available, at the discretion
of the Council of Lloyd’s, to meet any valid claim that
cannot be met from the resources of any member.
After making enquiries, the Directors have a reasonable
expectation that the Syndicate has adequate resources to
continue in operational existence over a period of at least
12 months from the date of this report. For this reason, the
Syndicate continues to adopt the going concern basis in
preparing its annual accounts.
Representation of comparative information
During 2024, Lloyd’s introduced changes to the syndicate
accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative
information has been represented to ensure consistency with
current year presentation and compliance with the Lloyd’s
Syndicate Accounts Instructions. The changes comprise:
1.
certain financial statement line items have been represented
whilst the underlying amounts remain unchanged. The
principal changes are the representation of money market
funds, previously included in cash at bank and in hand
to form part of financial investments. The comparative
balances in the affected notes 4, 9 and 19 have also been
represented to align with the current period presentation;
18
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
1 Basis of preparation
Representation of comparative information
continued
2.
aggregation changes to align with Lloyd’s reporting
requirements whilst maintaining FRS 102 compliance,
certain items have been aggregated or disaggregated
within the financial statements and related notes.
This includes the presentation of realised and unrealised
gains and losses on investments, which are now
shown on a disaggregated basis in the non-technical
account of the Statement of profit or loss and other
comprehensive income.
2 Accounting policies
The following principal accounting policies have been applied
consistently in dealing with items which are considered material
in relation to the Syndicate’s annual accounts.
2(a) Premiums
Written gross and outwards reinsurance premiums comprise
premiums on contracts incepting during the financial year,
together with adjustments made in the year to premiums
written in prior years. Written premiums are disclosed gross
of commission payable to intermediaries and exclude taxes
and duties levied on premiums.
Premiums written include estimates for premiums due but
not yet received or notified, less an allowance for expected
cancellations. For certain contracts, premium is initially
recognised based on estimates of ultimate premium. This
occurs where pricing is based on variables, which are not
known with certainty at the point of binding the policy. In
determining the estimated premium, use is made of information
provided by brokers and coverholders, past underwriting
experience, the contractual terms of the policy and prevailing
market conditions. Subsequently, adjustments to those
estimates arise as updated information relating to those
pricing variables becomes available, for example, due
to declarations obtained on binding authority contracts,
reinstatement premium on reinsurance contracts or other
policy amendments. Such adjustments are recorded in
the period in which they are determined and impact gross
premiums written in the income statements and premiums
receivable from insureds and cedants recorded on the
balance sheet.
Outwards reinsurance premiums are also disclosed gross
of commissions and profit participations recoverable from
reinsurers. Retroactive insurance contracts that contain
significant insurance risk and that have an insurance
component and a deposit component are unbundled
providing the deposit component can be measured separately.
The deposit component is recorded directly into the balance
sheet within reinsurers’ share of insurance liabilities with a
corresponding amount in creditors arising out of reinsurance
operations. The reinsurers’ share of insurance liabilities relating
to the contracts is remeasured at each reporting period with
movements taken to the reinsurance recoveries in the income
statement. Reinsurance transactions that transfer risk but are
retroactive are included in reinsurance assets. The excess
of estimated liabilities for claims and claim expenses over
the consideration paid is established as a deferred credit at
inception. The deferred amounts are subsequently amortised
using the recovery method over the settlement period of the
reserves and reflected through the claims and claim adjustment
expenses line. In transactions where the consideration
paid exceeds the estimated liabilities for claims and claim
adjustment expenses, a loss is recognised immediately.
2(b) Unearned premiums
The provision for unearned premium comprises the
proportion of gross and outwards reinsurance premiums
written, which is estimated to be earned in the following or
subsequent financial years, computed using the daily
pro-rata method.
2(c) Acquisition costs
Acquisition costs comprise all direct and indirect costs
arising from the acquisition of insurance contracts. Deferred
acquisition costs represent the proportion of acquisition
costs incurred which corresponds to the proportion of
gross premiums written which is unearned at the balance
sheet date.
2(d) Claims
Claims incurred in respect of general business are charged
to profit or loss as incurred, based on the estimated liability
for compensation owed to contract holders or third parties
damaged by the contract holders. They include direct and
indirect claims settlement costs and arise from events that
have occurred up to the balance sheet date, even if they have
not yet been reported to the Syndicate. The Syndicate does
not discount its liabilities for unpaid claims. Liabilities for unpaid
claims are estimated using the input of assessments for
individual cases reported to the Syndicate and statistical
analysis for the claims incurred but not reported, and an
estimate of the expected ultimate cost of more complex
claims that may be affected by external factors, for example,
court decisions.
Claims paid are transactions in the period which have been
signed through Lloyd’s Central Accounting or Lloyd’s Direct
Reporting, adjusted for any material backlogs which may
occur between cash paid and the claims being signed through.
Reinsurers’ share of claims paid are all transactions in the
period which have been signed through the London Outwards
Reinsurance System, adjusted to include an accrual for the
balances which have been billed, but remain unsettled at the
balance sheet date. Reinsurers’ share of claims outstanding
is the amount that it is estimated will be recoverable from
reinsurers based upon the gross claims provisions having
allowed for bad debt. Reinsurance recoveries are estimated
by reviewing individual claims including allowance for claims
incurred but not reported, and assessing the reinsurance
recovery which is expected based on the outwards reinsurance
protections. Amounts recoverable from, or due to, reinsurers
are measured consistently with the amounts associated with
the reinsured insurance contracts and in accordance with
the terms of each reinsurance contract.
While the Directors consider that the gross provisions for
claims and the related reinsurance recoveries are fairly stated
on the basis of the information currently available to them, the
ultimate liability will vary as a result of subsequent information
and events and may result in significant adjustments to the
amounts provided. Adjustments to the amounts of claims
provisions established in prior years are reflected in the annual
accounts for the period in which the adjustments are made.
The methods used, and estimates made, are reviewed regularly.
19
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
2 Accounting policies
2(d) Claims
continued
The benefits to which the Syndicate is entitled under
outwards reinsurance contracts are recognised as
reinsurance assets. These assets consist of short-term
balances due from reinsurers (classified within assets) as
well as longer-term receivables (classified within assets)
that are dependent on the expected claims and benefits
arising under the related reinsured insurance contracts.
Amounts recoverable from, or due to, reinsurers are
measured consistently with the amounts associated
with the reinsured insurance contracts and in accordance
with the terms of each reinsurance contract.
2(e) Unexpired risk
Provision is made for unexpired risks arising from general
business where the expected value of the claims and
expenses attributable to the unexpired periods of policies
in force at the balance sheet date exceeds the unearned
premiums provision in relation to such policies after the
deduction of any acquisition costs deferred. The provision
for unexpired risks is assessed at a business class
level which is the level at which the contracts are
managed together.
2(f) Financial assets and liabilities
Financial assets and liabilities include cash at bank and in
hand, financial investments and debtors and creditors. Financial
investments comprise debt securities and other fixed income
securities, shares and other variable yield securities and units in
unit trusts, syndicate loans to central fund and derivative assets.
i.
Financial investments at fair value through profit
and loss
Financial investments are managed on a fair value through
the profit and loss accounts (FVPL) basis as they are
managed and their performance is evaluated on that
basis in accordance with the Syndicate’s investment
strategy. The Syndicate has elected to measure financial
investments at fair value through the profit and loss
non-technical account.
ii.
Debtors and creditors
Debtors and creditors are primarily non-derivative
financial assets and liabilities with fixed or determinable
payments and not quoted on an active market. These
include amounts due to and from agents, brokers and
insurance contract holders.
Debtors are initially recognised when due at transaction
price, and where applicable are subsequently measured
at amortised cost using the effective interest rate method.
The recoverability of these assets is assessed at each
balance date and appropriate provision made to ensure
that the balances properly reflect the amounts that will
ultimately be received, taking into account counterparty
credit risk and the contractual terms of the contract.
Where receivable is impaired, the Syndicate reduces
the carrying amount of the insurance receivable
accordingly and recognises the impairment loss in the
profit or loss account.
Creditors are initially recognised at transaction price,
and where applicable, are subsequently measured at
amortised cost using the effective interest rate method.
iii.
Derivative financial instruments
Derivative financial instruments are measured at cost for
initial recognition, and subsequently at fair value, with
changes recognised in profit and loss. Transaction
costs incurred in buying and selling derivative financial
instruments are recognised in profit or loss when incurred.
When derivatives are liabilities, they are reported with
other creditors in the balance sheet.
2(g) Investment return
All investment return is initially recognised in the non-technical
account. It is then transferred to the technical account as it
all relates to funds supporting underwriting business.
Realised gains or losses on investments represent the difference
between net sales proceeds and their purchase price.
Unrealised gains and losses on investments represent the
difference between the fair value of investments at the balance
sheet date and their purchase price or their valuation at the
commencement of the year. The movement in unrealised
investment gains/losses includes an adjustment for previously
recognised unrealised gains/losses on investments disposed
of in the accounting period.
2(h) Foreign currency translation
The functional and presentational currency of the Syndicate
is US Dollars which is the currency of the primary economic
environment in which the Syndicate operates.
Transactions denominated in foreign currencies are recorded
at the rates of exchange ruling at the date of the transactions.
At the balance sheet date, monetary assets and liabilities
are translated at the year-end rates of exchange. For the
purpose of foreign currency translation, unearned premiums
and deferred acquisition costs are treated as if they are
monetary items.
Differences arising on translation of foreign currency amounts
relating to insurance operations of the Syndicate are included in
profit/(loss) on foreign exchange in the non-technical account.
2(i) Taxation
Under Schedule 19 of the Finance Act 1993, managing agents
are not required to deduct basic rate income tax from trading
income. In addition, all UK basic rate income tax deducted
from Syndicate investment income is recoverable by managing
agents and consequently the distribution made to members
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 are
included in the balance sheet under the heading ‘other debtors’.
No provision has been made for any overseas tax payable by
members on underwriting results.
2(j) Pension costs
The Hiscox Group has defined contribution and defined benefit
pension schemes. The defined benefit scheme closed to
future accrual with effect from 31 December 2006 and active
members were offered membership of the defined contribution
scheme from 1 January 2007.
20
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
2 Accounting policies
2(j) Pension costs
continued
A defined contribution plan is a pension plan under which the
Group pays fixed contributions into a separate entity and has
no further obligation beyond the agreed contribution rate.
A defined benefit plan is a pension plan that defines an amount
of pension benefit that an employee will receive on retirement,
usually dependent on one or more factors such as age, years
of service and compensation. For defined contribution
plans, the Group pays contributions to publicly or privately
administered pension insurance plans on a contractual
basis. The contributions are recognised as an employee
benefit expense when they are due. Prepaid contributions
are recognised as an asset to the extent that a cash refund
or a reduction in future payments is available. The amount
recognised on the Hiscox Group balance sheet in respect
of defined benefit pension plans is the present value of the
defined benefit obligation at the balance sheet date, less the
fair value of plan assets. Plan assets include insurance
contracts. The calculation of the defined benefit obligation is
performed annually by a qualified actuary using the projected
unit method. As the plan is closed to all future benefit accrual,
each participant’s benefits under the plan are based on their
service to the date of closure or earlier leaving, their final
pensionable earnings at the measurement date and the
service cost is the expected administration cost during the
year. Past service costs are recognised immediately in the
income statement.
Pension contributions relating to Group recharges are
charged to Syndicate 0033 and included within net operating
expenses. Contributions and movement in surpluses or deficits
on the defined benefit scheme, that relate to Syndicate 0033
are allocated equally between all open years of account.
2(k) Bad debts
Bad debts are provided for only where specific information
is available to suggest a debtor may be unable or unwilling to
settle its debt to the Syndicate. The provision is calculated on
a case-by-case basis.
2(l) Reinsurers’ commissions and profit participations
Reinsurers’ commissions and profit participations, which
include reinsurance profit commission and overriding
commission, are treated as a contribution to expenses.
2(m) Cash at bank and in hand
This consists of cash at bank and in hand, deposits held at call
with banks, and other highly liquid investments that are readily
convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value.
2(n) Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s
Brussels on behalf of the Syndicate to settle Part VII claims.
These funds are held at amortised cost in the balance sheet.
3 Judgements and key sources of estimation uncertainty
In the application of the accounting policies, which are
described in note 2, the Directors are required to make
judgements, estimates and assumptions that affect the
amounts reported for assets and liabilities at the balance
sheet date and the amounts reported for revenues and
expenses during the year.
The following judgements, estimations and assumptions
have had the most significant effect on amounts recognised
in the annual accounts.
3(a) Valuation of general insurance contract liabilities
The estimation of the ultimate liability arising from claims made
under insurance contracts is the Syndicate’s most critical
accounting estimate. The carrying amount of the liability is
disclosed in the technical provisions note 10. For general
insurance contracts estimates are made for the expected
ultimate cost of claims notified at the balance sheet date and
the cost of claims incurred but not yet reported. It can take
a significant period of time before the ultimate cost of claims
can be established with certainty, and the final outcome may
be better or worse than that provided. The estimation of these
claims is based on historical experience projected forward. The
Syndicate’s estimate of claims and expenses is mainly achieved
through the application of a number of commonly accepted
actuarial projection methodologies based on the following:
s
the development of previously paid claims, where
payments to date are extrapolated for each prior year;
s
the development of claims based on seasonally adjusted
exposure curves;
s
incurred claims development, where incurred claims to
date for each year are extrapolated based upon observed
development of earlier years; and
s
expected loss ratios.
The claims provisions are initially calculated gross of any
reinsurance recoveries. A separate estimate is made of the
amounts recoverable from the Syndicate’s reinsurance
arrangements including excess of loss and quota share
contracts, having due regard for collectability.
Claims provisions are subject to regular review, both within
the Syndicate and externally. Management discuss and
challenge the actuarial best estimate and booked claims
provisions at the quarterly Reserving Committee meeting,
whose membership includes Directors of the managing
agent. External actuaries are also engaged to calculate an
independent best estimate of the ultimate cost of claims at
31 December annually and present a statement of actuarial
opinion (SAO) against which the Syndicate’s best estimate
is assessed.
The Syndicate tests the adequacy of its unearned premium
liability by comparing current estimates of future claims
and claims handling expenses attributable to the unexpired
periods of policies at the balance sheet date which to the
unearned premium liability net of acquisition costs. As set
out in note 2(e), any deficiency is recognised in the income
statement. The related deferred acquisition costs are first
written down and any additional liability required is then
recognised as an unexpired risk reserve (URR).
3(b) Premium recognition
The gross premiums written are initially based on
estimated premium income (EPI) of each contract. EPI
estimates are based on information provided by brokers
and coverholders, past underwriting experience, the
contractual terms of the policy and prevailing market
conditions. The EPI estimates are reviewed on a regular basis,
and premiums are adjusted over time as needed to match the
actual signed premium. Gross premiums written under binding
authorities are booked as the underlying contracts incept.
21
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
3 Judgements and key sources of estimation uncertainty
3(b) Premium recognition
continued
The Syndicate allocates the expected premium receipts
to each period of gross premiums written on the basis of
the passage of time. But if the expected pattern of release
of risk during the coverage period differs significantly from
the passage of time, for example, a group of contracts that
is exposed to large natural catastrophe risk concentrated in
the first or second half of the year, then the allocation is made
on the basis of the expected timing of claims incurred.
At a portfolio level this is considered to provide a
reasonable estimate for the full year of the pattern of
risk over the coverage period.
Gross premiums written includes an estimation for
reinstatement premiums which is determined based on
incurred losses held in the technical provisions.
3(c) Fair value of financial instruments
The fair value of financial instruments that are not traded
in an active market is determined by using valuation techniques.
HSL uses judgement to select a variety of methods and make
assumptions that are mainly based on market conditions
existing at the end of each reporting period. See note 4 for
discussion of the related risks. See note 9 for an analysis of
the measurement attributes of the financial instruments.
3(d) Pension costs
In light of the recharge for the defined benefit scheme,
obligations are calculated and valued with reference to a
number of actuarial assumptions including mortality, inflation
rates and discount rate, many of which have been subject to
recent volatility.
4 Management of risk
The Syndicate’s overall appetite for accepting and managing
varying classes of risk is defined by the HSL Board. The HSL
Board has developed a governance framework and has set
risk management policies and procedures which include risk
identification, risk management and mitigation and risk reporting.
The objective of these policies and procedures is to protect the
Syndicate’s members, policyholders and other stakeholders
from negative events that could hinder the Syndicate’s delivery
of its contractual obligations and its achievement of sustainable
profitable economic and social performance.
The HSL Board exercises oversight of the development and
operational implementation of its risk management policies
and procedures through the HSL Risk Committee. Ongoing
compliance is monitored through an internal audit function,
shared with other Hiscox Ltd subsidiaries, which has operational
independence, a charter and clear upwards
reporting structures
back into the HSL Audit Committee and HSL Board.
The Syndicate is fundamentally driven by a desire to
originate, retain and service insurance contracts to maturity.
The Syndicate’s cash flows are funded mainly through advance
premium collections and the timing of such premium inflows
is reasonably predictable.
In addition, the majority of material cash outflows are typically
triggered by the occurrence of insured events, although the
timing, frequency and severity of claims can fluctuate.
The principal sources of risk relevant to the Syndicate’s
operations and its annual accounts fall into five broad
categories: climate risk, insurance risk, financial risk,
regulatory risk and operational risk.
Climate risk
Climate risk relates to the range of complex physical, transition
and liability risks arising from climate change. This includes
the risk of higher claims as a result of more frequent and more
intense natural catastrophes; the financial risks which could
arise from the transition to a lower-carbon economy; and the
risk that those who have suffered loss from climate change
might then seek to recover those losses from others who
they believe may have been responsible. Climate-related risk
is not considered a standalone risk, but a cross-cutting risk
with potential to amplify each existing risk type. A transition
plan is being developed which will consider in more detail the
transition risk associated with our portfolios.
By design, the established and embedded HSL risk management
framework provides a controlled and consistent system for the
identification, measurement, mitigation, monitoring and
reporting of risks (both current and emerging) and so is
structured in a way that allows us to continually and consistently
manage the various impacts of climate risk on the risk profile.
This is supported by a Group wide sustainability strategy
and equally robust processes and policies that address
climate-related underwriting risks, such as the Group’s
environmental, social and governance (ESG) exclusions policy
which applies to HSL and represents a commitment to reduce
steadily and eliminate by 2030 both underwriting and investment
exposure to coal-fired power plants and coal mines; Arctic
energy exploration, beginning with the Arctic National Wildlife
Refuge; oil sands; and controversial weapons such as landmines.
ESG Syndicate 3033 is a sub-syndicate designed to provide
additional insurance capacity and support to clients who
demonstrate a responsible ESG record. It brings additional
insurance capacity to those clients to help them cover their
risks and, in time, this should lead to premium savings for those
businesses who show how their ESG performance makes
them a more attractive risk.
We want to partner with businesses who are working towards
the net-zero transition and demonstrating a commitment to
strong governance, as well as having a robust social agenda
toward their employees and the communities within which they
operate. Having a specialised syndicate is an important step in
making that happen and reflects our ambitions when it comes
to sustainability.
We also consider the training and development requirements
of those with oversight responsibilities and accountability for
climate matters to ensure we have appropriate awareness and
expertise to drive progress. In 2024 this included a Board
level training session which aimed to enhance the Board’s
awareness and knowledge of ESG factors within underwriting
risk. More information can be in located in our Task Force on
Climate-related Financial Disclosure (TCFD) report in the
ultimate Group Annual Report and Accounts of Hiscox Ltd.
Insurance risk
The predominant risk to which the Syndicate is exposed is
insurance risk which is assumed through the underwriting
process. Insurance risk can be subcategorised into:
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
22
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
Insurance risk
continued
(i) underwriting risk including the risk of catastrophe and
systemic insurance losses and the insurance cycle and
competition; and (ii) reserving risk.
(i) Underwriting risk
Underwriting risk is defined as the risk that insurance
premiums will not be sufficient to cover future insurance
losses and associated expenses. Underwriting risk also
encompasses people, process and system risks directly
related to underwriting.
The HSL Board sets the Syndicate’s underwriting strategy
and risk appetite, seeking to benefit from identified opportunities
in light of other relevant anticipated market conditions.
Specific underwriting objectives such as aggregation limits,
reinsurance protection thresholds, geographical disaster event
risk exposures and line of business diversification parameters
are prepared and reviewed by the HSL management team in
order to translate the HSL Board’s summarised underwriting
strategy into specific measurable actions and targets.
These actions and targets are reviewed and approved in
advance of each underwriting year. The HSL Board continually
reviews its underwriting strategy throughout each underwriting
year in light of evolving market pricing, loss conditions and as
opportunities present themselves.
The Syndicate’s underwriters and HSL management consider
underwriting risk at an individual contract level, and also from a
portfolio perspective where the risks assumed in similar classes
of policies are aggregated and the exposure evaluated in light of
historical portfolio experience and prospective factors. To assist
with the process of pricing and managing underwriting risk
the Syndicate routinely performs a wide range of activities
including the following:
s
regularly updating the Syndicate’s risk models;
s
documenting, monitoring and reporting against the
Syndicate’s strategy to manage risk;
s
developing systems that facilitate the identification of
emerging issues promptly;
s
utilising sophisticated computer modelling tools to
simulate catastrophes and measure the resultant
potential losses before and after reinsurance;
s
monitoring legal developments and amending the
wording of policies when necessary;
s
regular monitoring of risk exposures across individual
underwriting portfolios and known accumulations of risk;
s
examining the aggregated exposures in advance of
underwriting further large risks; and
s
developing processes that continually factor market
intelligence into the pricing process.
The delegation of underwriting authority to specific individuals,
both internally and externally, is subject to regular reviews.
All underwriting staff and binding agencies are set strict
parameters in relation to the levels and types of business
they can underwrite, based on individual levels of experience
and competence. These parameters cover areas such as
maximum sums insured per insurance contract, maximum
gross premiums written and maximum aggregated exposures
per geographical zone and risk class. All delegations are strictly
controlled through these underwriting guidelines and limits and
extensive monitoring, review and auditing of the agencies.
The Syndicate compiles estimates of losses arising from
realistic disaster events using statistical models, alongside
input from its underwriters.
They also represent areas of potentially significant exposure
for the Syndicate. In addition to understanding the loss the
Syndicate may suffer from an event, it is important to ensure
that the risk models used are calibrated to the risks faced today.
This includes recognising and forecasting inflationary trends,
updating trends in claims payments, and capturing climate
change-related impacts. HSL has a climate risk framework,
which is used to assess where research resources should be
focused, and models updated, and as a result improves not
only the Syndicate’s understanding of the potential impact
of a changing climate but also the Syndicate’s ability
to respond.
The selection of extreme loss scenario events is adjusted
each year and they are not therefore necessarily directly
comparable from one year to the next. The events are
extreme and unprecedented, and as such estimates may
prove inadequate as a result of incorrect assumptions,
model deficiencies, or losses from unmodelled risks. This
means that should a realistic disaster actually occur, the
Syndicate’s final ultimate losses could materially differ from
those estimates modelled by management. The Syndicate’s
insurance contracts include provisions to contain losses,
such as the ability to impose deductibles and demand
reinstatement premiums in certain cases.
In addition, in order to manage the Syndicate’s exposure
to repeated catastrophic events (both man-made and
natural catastrophes), relevant policies frequently contain
payment limits to cap the maximum amount payable from
these insured events over the contract period. In the case
of climate-exposed risks specifically, the vast majority of
underwriting contracts written are annual in nature and
thus can be revised frequently. This flexibility is a key tool
for managing the multi-decade challenge of climate
risks holistically.
The Syndicate also manages underwriting risk by purchasing
reinsurance. Reinsurance protection, such as excess of loss
cover, is purchased to mitigate the effect of catastrophes and
unexpected concentrations of risk. The scope and type of
reinsurance protection purchased may change depending
on the extent and competitiveness of cover available in the
market. The specific insurance risks accepted by the Syndicate
fall broadly into the following main categories: reinsurance
inwards, property and casualty.
The Syndicate also considers climate change to be a
cross-cutting risk with potential to impact each existing risk
type, rather than a standalone risk. These specific categories
are defined for risk review purposes only, as each contains
risks specific to the nature of the cover provided. The following
describes the policies and procedures used to identify and
measure the risks associated with each individual category
of business.
Reinsurance inwards
The Syndicate’s reinsurance inwards acceptances are primarily
focused on large property portfolios held by other insurance
companies predominantly in North America and other developed
economies. This business is characterised more by large
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
23
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
Reinsurance inwards
continued
claims arising from individual events or catastrophes than
the high-frequency, low-severity attritional losses associated
with certain other business written by the Syndicate. Multiple
insured losses can periodically arise out of a single natural or
man-made occurrence. The main circumstances that result in
claims against the reinsurance inwards book are conventional
catastrophes, such as earthquakes or storms, but also includes
other events including fires, explosions and cyber events.
The occurrence and impact of these events are very difficult
to model over the short term which complicates attempts
to anticipate loss frequencies on an annual basis. In those
years where there is a low incidence of severe catastrophes,
claims frequencies on the reinsurance inwards book can be
relatively low.
A significant proportion of the reinsurance inwards business
provides cover on an excess of loss basis for individual events.
The Syndicate agrees to reimburse the cedant once their
losses exceed a minimum level. Consequently, the frequency
and severity of reinsurance inwards claims are related not
only to the number of significant insured events that occur, but
also to their individual magnitude. If numerous catastrophes
occurred in any one year, but the cedant’s individual loss on
each was below the minimum stated, then the Syndicate
would have no liability under such contracts. Maximum gross
line sizes and aggregate exposures are set for each type
of programme.
The Syndicate writes reinsurance risks for periods of mainly
one year so that contracts can be assessed for pricing and
terms and adjusted to reflect any changes in market conditions
and the evolving impact of climate change.
Property risks
The Syndicate directly underwrites a diverse range of property
risks. Property contracts cover fixed and moveable assets such
as ships and other vessels, cargo in transit, energy platforms
and installations, pipelines, other subsea assets, satellites,
commercial buildings, industrial plants and machinery, artwork,
antiques, classic cars and jewellery. These assets are typically
exposed to a blend of catastrophic and other large loss events
and attritional claims arising from conventional hazards such
as collision, flooding, fire and theft. Climate change may give
rise to more frequent and severe extreme weather events (for
example windstorms and river flooding) and it may be expected
that their frequency will increase over time. These form a small
proportion of the Syndicates’s overall portfolio.
For this reason, the Syndicate accepts major property
insurance risks for periods of mainly one year so that each
contract can be repriced on renewal to reflect the continually
evolving risk profile. Risks covered for periods exceeding one
year are certain specialist lines such as marine and offshore
construction projects which can typically have building and
assembling periods of between three and four years.
Casualty risks
The casualty underwriting strategy attempts to ensure that
the underwritten risks are well diversified in terms of type
and amount of potential hazard, industry and geography.
However, the Syndicate’s exposure is more focused towards
professional, general, technological and marine liability risks.
Claims typically arise from incidents such as errors and
omissions attributed to the insured, professional negligence
and general liability losses which can be property damage
or bodily injury in nature. The provision of insurance to cover
allegations made against individuals acting in the course of
fiduciary or managerial responsibilities, including directors and
officers’ insurance, is one example of a casualty insurance risk.
The Syndicate’s casualty insurance contracts mainly experience
low-severity attritional losses. By nature, some casualty losses
may take longer to settle than other categories of business.
In addition, there is increased potential for accumulation
in casualty risk due to the growing complexity of business,
technological advances, and greater interconnectivity and
interdependency across the world due to globalisation.
The Syndicate’s pricing strategy for casualty insurance policies
is typically based on historical claim frequencies and average
claim severities, adjusted for inflation and extrapolated forwards
to incorporate projected changes in claims patterns. In
determining the price of each policy, an allowance is also made
for acquisition and administration expenses, reinsurance
costs, investment returns and the Syndicates’s cost of capital.
The market for cyber insurance is still a relatively immature
one, complicated by the fast-moving nature of the threat, as
the world becomes even more connected. The risks associated
with cyber insurance are multiplying in both diversity and scale,
with associated financial and reputational consequences of
failing to prepare for them. The Syndicate has focused its
cyber expertise on prevention, in addition to the more
traditional recovery product.
(ii) Reserving risk
Reserving risk is defined as the risk that reserves set, in respect
of insurance claim losses, are ultimately insufficient to fully
settle these claims and associated expenses. This definition
also applies to reserves which have been set previously.
The Syndicate’s procedures for estimating the outstanding
costs of settling insured losses at the balance sheet date,
including claims incurred but not yet reported, are detailed in
note 3(a). The Syndicate’s provision estimates are subject to
regular and rigorous review by senior management from all
areas of the business including independent actuaries. The
final provision is approved by the HSL Board.
Similar to the underwriting risk detailed above, the Syndicate’s
reserve risks are well diversified. Short-tailed claims are
normally notified and settled within 12-to-24 months of the
insured event occurring. Those claims taking the longest time
to develop and settle typically relate to casualty risks, where
legal complexities occasionally develop regarding the insured’s
alleged omissions or negligence. The length of time required to
obtain definitive legal judgments and make eventual settlements
exposes the Syndicate to a degree of reserving risk in an
inflationary environment.
The final quantum for casualty claims may not be established
for many years after the event. A significant proportion of the
casualty insurance amounts reserved on the balance sheet
may not be expected to settle within 24 months of the balance
sheet date. Consequently, our approach is not to recognise
favourable experience in the early years of development in
the reserving process when setting the booked reserve.
Certain marine and property insurance contracts, such as
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
24
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
(ii) Reserving risk
continued
those relating to subsea and other energy assets and the
related business interruption risks, can also take longer
than normal to settle. This is because of the length of time
required for detailed subsea surveys to be carried out and
damage assessments agreed, together with difficulties in
predicting when the assets can be brought back into full
production. For the inwards reinsurance lines, there is often
a time lag between the establishment and re-estimation of
case reserves and reporting to the Syndicate. The Syndicate
works closely with the reinsured to ensure timely reporting
and also centrally analyses industry loss data to verify the
reported reserves.
In addressing the impact of inflation HSL focuses on:
s
regular case reserve reviews to ensure adequacy;
s
uplifts to incurred but not reported (IBNR) reserves
to allow for current and future expectations of high
inflation rates;
s
assessment of rate increases against future inflation
to assess loss ratio impacts.
The Syndicate maintains explicit reserve uplifts to allow
for the impact of high inflation in recent years. Loss ratios
are closely monitored to ensure they include an appropriate
allowance for future inflation.
Booked reserves include a net margin of $173.2 million
(2023: $173.9 million), representing 9.8% (2023: 10.6%)
of net booked reserves. This is the margin above the best
estimate to help mitigate the uncertainty within the reserve
estimates. As the best estimate matures and becomes more
certain, the management margin is gradually released in line
with the reserving policy.
The liabilities established could be significantly lower or
higher than the ultimate cost of settling the claims arising. This
level of uncertainty varies between the classes of business
and the nature of the risk being underwritten and can arise
from developments in case reserving for large losses and
catastrophes, or from changes in estimates of claims IBNR.
The table below (a) presents the sensitivity of the value of
insurance liabilities disclosed in the accounts to potential
movements in the assumptions applied within the technical
provisions. Given the nature of the business underwritten
by the Syndicate, the approach to calculating the technical
provisions for each class can vary and as a result the sensitivity
performed is to apply a beneficial and adverse risk margin
to the total insurance liability.
Financial risk
The Syndicate is exposed to financial risk through its
ownership of financial instruments including financial
liabilities. The Syndicate invests in financial assets in order
to fund obligations arising from its insurance contracts and
financial liabilities.
The key financial risk for the Syndicate is that the proceeds
from its financial assets and investment result generated
thereon are not sufficient to fund the obligations.
The most important variables that could result in such an
outcome relate to the interest rate risk, credit risk, liquidity
risk and currency risk. The Syndicate’s policies and procedures
for managing exposure to these specific categories of risk are
detailed below.
(a) Reliability of fair values
The Syndicate has elected to carry all financial investments
at fair value through profit or loss as they are managed
and evaluated on a fair value basis in accordance with
a documented strategy.
All of the financial investments held by the Syndicate are
available to trade in markets and the Syndicate therefore
seeks to determine fair value by reference to published prices
or as derived by pricing vendors using observable quotations
in the most active financial markets in which the assets trade.
The fair value of financial assets is measured primarily with
reference to their closing market prices at the balance
sheet date. The ability to obtain quoted market prices may
be reduced in periods of diminished liquidity. In addition,
those quoted prices that may be available may represent an
unrealistic proportion of market holdings or individual trade
sizes that could not be readily available to the Syndicate.
In such instances, fair values may be determined or partially
supplemented using other observable market inputs such
as prices provided by market makers such as dealers and
brokers and prices achieved in the most recent regular
transaction of identical or closely-related instruments occurring
before the balance sheet date but updated for relevant
perceived changes in market conditions. At 31 December 2024,
the Syndicate held mortgage backed fixed income securities
in its investment portfolio. Together with the Syndicate’s
investment managers, management continues to monitor the
potential for any adverse development associated with this
investment exposure through the analysis of relevant factors
such as credit ratings, collateral, subordination levels and
default rates in relation to the securities held.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
General insurance business sensitivities as at 31 December 2024
2.5%
$000
(2.5)%
$000
5%
$000
(5)%
$000
Claims outstanding – gross of reinsurance
89,074
(89,074)
178,147
(178,147)
Claims outstanding – net of reinsurance
42,860
(42,860)
85,721
(85,721)
General insurance business sensitivities as at 31 December 2023
2.5%
$000
(2.5)%
$000
5%
$000
(5)%
$000
Claims outstanding – gross of reinsurance
87,596
(87,596)
175,193
(175,193)
Claims outstanding – net of reinsurance
40,028
(40,028)
80,057
(80,057)
Table a)
25
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
4 Management of risk
(a) Reliability of fair values
continued
The Syndicate did not experience any material defaults on
debt securities during the year. Valuation of these securities
will continue to be impacted by external market factors including
default rates, rating agency actions and liquidity. The Syndicate
will make adjustments to the investment portfolio as appropriate
as part of its overall portfolio strategy, but its ability to mitigate
its risk by selling or hedging its exposures may be limited by
the market environment. The Syndicate’s future results may
be impacted, both positively and negatively, by the valuation
adjustments applied to these securities.
(b) Interest rate risk
Debt and fixed income investments represent a significant
proportion of the Syndicate’s assets and the HSL Board
continually monitor investment strategy to minimise the risk
of a fall in the portfolio’s market value which could affect the
amount of business that the Syndicate is able to underwrite
or its ability to settle claims as they fall due.
The fair value of the Syndicate’s investment portfolio of debt
and fixed income securities is normally inversely correlated
to movements in market interest rates. If market interest rates
rise, the fair value of the Syndicate’s debt and fixed income
investments would tend to fall and vice-versa if credit spreads
remained constant.
The Syndicate may also, from time to time, enter into interest
rate future contracts in order to minimise the interest rate risk.
The fair value of debt and fixed income assets in the Syndicate’s
balance sheet at 31 December is analysed as follows:
Table b)
31 December
2024
% weighting
31 December
2023
% weighting
Government issued bonds and instruments
17
25
Government supported*
2
2
Asset backed securities
7
4
Mortgage backed instruments – agency
4
10
Mortgage backed securities – non agency
3
2
Corporate bonds
67
57
*Includes supranational debt, agency debt and federal deposit insurance
corporation bank bonds.
The sensitivity analysis for interest rate risk illustrates how
changes in the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market
interest rates at the reporting date. The impact of an increase
or decrease of 50 basis points in interest yields is shown in
the table below. Insurance contract liabilities are not directly
sensitive to the level of market interest rates, as they are
undiscounted and contractually non-interest-bearing.
Table c)
Interest rate risk
2024
impact on
profit
$000
2024
impact on
members’
balance
$000
2023
impact on
profit
$000
2023
impact on
members’
balance
$000
Plus 50 basis points
shift in yield curves
(27,202) (27,202)
(18,854) (18,854)
Minus 50 basis points
shift in yield curves
27,202
27,202
18,854
18,854
(c) Credit risk
The Syndicate has exposure to credit risk, which is the risk
that a counterparty will suffer a deterioration in actual or
perceived financial strength and be unable to pay amounts
in full when due, or that for any other reason they renege on
a contract or alter the terms of an agreement.
The concentrations of credit risk exposures held by insurers
may be expected to be greater than those associated with other
industries, due to the specific nature of reinsurance markets
and the extent of investments held in financial markets. In both
markets, the Syndicate interacts with a number of counterparties
who are engaged in similar activities with similar customer
profiles, and often in the same geographical areas and
industry sectors.
Consequently, as many of these counterparties are themselves
exposed to similar economic characteristics, one single
localised or macroeconomic change could severely disrupt
the ability of a significant number of counterparties to meet
the Syndicate’s agreed contractual terms and conditions.
Key areas of exposure to credit risk include:
s
reinsurers’ share of insurance liabilities;
s
amounts due from reinsurers in respect of claims already paid;
s
amounts due from insurance contract holders;
s
amounts due from insurance intermediaries;
s
counterparty risk with respect to cash and cash
equivalents, and investments and other deposits
including deposits and derivative transactions.
The Syndicate’s maximum exposure to credit risk is represented
by the carrying values of monetary assets and reinsurance
assets included in the balance sheet at any given point in time.
The Syndicate does not use credit derivatives or other products
to mitigate maximum credit risk exposures on reinsurance
assets, but collateral may be requested to be held against
these assets.
The Syndicate structures the levels of credit risk accepted by
placing limits on their exposure to a single counterparty, or
groups of counterparties, and having regard to geographical
locations. Such risks are subject to an annual or more frequent
review. There is no significant concentration of credit risk with
respect to loans and receivables, as the Syndicate has a large
number of internationally dispersed debtors with unrelated
operations. Reinsurance is used to contain insurance risk.
This does not, however, discharge the Syndicate’s liability
as primary insurer. If a reinsurer fails to pay a claim for any
reason, the Syndicate remains liable for the payment to the
policyholder. The creditworthiness of reinsurers is therefore
continually reviewed throughout the year.
The managing agent assesses the creditworthiness of all
reinsurers by reviewing credit grades provided by rating
agencies and other publicly available financial information
detailing their financial strength and performance. The financial
analysis of reinsurers produces an assessment categorised
by S&P rating (or equivalent when not available from S&P).
Despite the rigorous nature of this assessment exercise, and
the resultant restricted range of reinsurance counterparties
with acceptable strength and credit credentials that emerges
therefrom, some degree of credit risk concentration
remains inevitable.
26
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
(c) Credit risk
continued
While the rating agencies provide strong analysis on the financials and governance of a reinsurance security, the HSL Board
also takes account of qualitative factors. The HSL Board considers the reputation of its reinsurance partners and also receives
details of recent payment history and the status of any ongoing negotiations between other Hiscox entities and these third-parties.
The final score that a security receives will determine how much reinsurance credit risk the Syndicate is willing to have
with that security based on the exposure guidelines. This information is used to update the reinsurance purchasing strategy.
Individual operating units maintain records of the payment history for significant brokers and contract holders with whom
they conduct regular business.
The exposure to individual counterparties is also managed by other mechanisms, such as the right of offset, where counterparties
are both debtors and creditors of the Syndicate, and obtaining collateral from unrated counterparties. Management information
reports detail provisions for impairment on loans and receivables and subsequent write-off. Exposures to individual intermediaries
and groups of intermediaries are collected within the ongoing monitoring of the controls associated with regulatory solvency.
The Syndicate also mitigates counterparty credit risk by concentrating debt and fixed income investments in a portfolio of
typically high-quality corporate and government bonds. An analysis of the Syndicate’s major exposures to counterparty credit risk
excluding direct policyholder debtors, based on S&P or equivalent rating at 31 December, is presented in the table below:
Table d)
At 31 December 2024
AAA
$000
AA
$000
A
$000
BBB
$000
Other
$000
Not rated
$000
Total
$000
Debt securities and other fixed income securities
336,727
663,675
865,446
662,270
12,079
35,121 2,575,318
Shares and other variable yield securities
and units in unit trusts
88,482
5,781
9,613
–
–
–
103,876
Syndicate loans to central fund
–
–
22,206
–
–
–
22,206
Derivative assets
–
–
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
–
–
Deposits with ceding undertakings
–
–
3,484
–
–
–
3,484
Reinsurers’ share of claims outstanding
95,531
774,183 978,815
–
–
– 1,848,529
Debtors arising out of direct insurance operations
–
–
–
–
– 537,627
537,627
Debtors arising out of reinsurance operations
39,172 102,290 139,452
–
–
–
280,914
Cash at bank and in hand
–
–
16,073
–
–
–
16,073
Other debtors and accrued interest
4,579
11,957
16,299
–
–
–
32,835
Total
564,491 1,557,886 2,051,388
662,270
12,079
572,748 5,420,862
At 31 December 2023*
AAA
$000
AA
$000
A
$000
BBB
$000
Other
$000
Not rated
$000
Total
$000
Debt securities and other fixed income securities
258,500
814,677
660,605
500,435
16,679
49,079 2,299,975
Shares and other variable yield securities
and units in unit trusts
162,700
4,724
9,877
–
–
–
177,301
Syndicate loans to central fund
–
–
27,389
–
–
–
27,389
Derivative assets
–
–
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
–
–
Deposits with ceding undertakings
–
–
3,662
–
–
–
3,662
Reinsurers’ share of claims outstanding
139,514
617,289 1,145,911
–
–
– 1,902,714
Debtors arising out of direct insurance operations
–
–
–
–
–
519,459
519,459
Debtors arising out of reinsurance operations
52,067
90,061
156,342
–
–
–
298,470
Cash at bank and in hand
–
45
9,988
–
–
–
10,033
Other debtors and accrued interest
5,266
9,110
15,814
–
–
–
30,190
Total
618,047 1,535,906 2,209,588
500,435
16,679
568,538 5,269,193
Within the financial investments, which include debt securities and other fixed income securities, shares and other variable yield
securities and units in unit trusts, deposits with credit institutions, syndicate loans to central fund and cash equivalent assets,
there are exposures to a range of government borrowers, on either a direct or guaranteed basis, and banking institutions.
The Syndicate, together with its investment managers, closely manages its geographical exposures across government issued
and supported debt.
At 31 December 2024 and 2023, the Syndicate held no material debt or fixed income assets that were past due or impaired beyond
their reported fair values. For the current and prior year, the Syndicate did not experience any material defaults on debt securities.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
*Represented to align with current period presentation – see note 1.
27
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
4 Management of risk
continued
(d) Financial assets that are past due or impaired
The Syndicate has no debtors that are impaired at the reporting date. These debtors have been individually assessed for
impairment by considering information such as the occurrence of significant changes in the counterparty’s financial position,
patterns of historical payment information and disputes with counterparties. An analysis of the carrying amounts of past due
or impaired debtors is presented in the table below:
Table e)
At 31 December 2024
Neither past due
nor impaired assets
$000
Past due but not
impaired assets
$000
Gross value of
impaired assets
$000
Impairment
allowance
$000
Total
$000
Debt securities and other fixed income securities
2,575,318
–
–
–
2,575,318
Shares and other variable yield securities
and units in unit trusts
103,876
–
–
–
103,876
Syndicate loans to central fund
22,206
–
–
–
22,206
Derivative assets
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
Deposits with ceding undertakings
3,484
–
–
–
3,484
Reinsurers' share of claims outstanding
1,848,529
–
–
–
1,848,529
Debtors arising out of direct insurance operations
463,979
73,648
–
–
537,627
Debtors arising out of reinsurance operations
280,914
–
–
–
280,914
Cash at bank and in hand
16,073
–
–
–
16,073
Other debtors and accrued interest
32,835
–
–
–
32,835
Total
5,347,214
73,648
–
–
5,420,862
At 31 December 2023*
Neither past due
nor impaired assets
$000
Past due but not
impaired assets
$000
Gross value of
impaired assets
$000
Impairment
allowance
$000
Total
$000
Debt securities and other fixed income securities
2,299,975
–
–
– 2,299,975
Shares and other variable yield securities
and units in unit trusts
177,301
–
–
–
177,301
Syndicate loans to central fund
27,389
–
–
–
27,389
Derivative assets
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
Deposits with ceding undertakings
3,662
–
–
–
3,662
Reinsurers' share of claims outstanding
1,902,714
–
–
– 1,902,714
Debtors arising out of direct insurance operations
515,739
3,720
–
–
519,459
Debtors arising out of reinsurance operations
298,470
–
–
–
298,470
Cash at bank and in hand
10,033
–
–
–
10,033
Other debtors and accrued interest
30,190
–
–
–
30,190
Total
5,265,473
3,720
–
– 5,269,193
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet date:
Table f)
At 31 December 2024
Less than
three months
past due
$000
Between three
and six months
past due
$000
Between six
and 12 months
past due
$000
Greater than
one year
past due
$000
Total
$000
Debtors arising out of direct insurance operations
44,870
18,234
6,488
4,056
73,648
Debtors arising out of reinsurance operations
–
–
–
–
–
Total
44,870
18,234
6,488
4,056
73,648
At 31 December 2023
Less than
three months
past due
$000
Between three
and six months
past due
$000
Between six
and 12 months
past due
$000
Greater than
one year
past due
$000
Total
$000
Debtors arising out of direct insurance operations
729
1,180
1,080
731
3,720
Debtors arising out of reinsurance operations
–
–
–
–
–
Total
729
1,180
1,080
731
3,720
*Represented to align with current period presentation – see note 1.
28
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
4 Management of risk
continued
(e) Liquidity risk
The Syndicate is exposed to daily calls on its available cash resources, mainly from claims arising from insurance and reinsurance
contracts. Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost. The HSL Board
sets limits on the minimum level of cash and maturing funds available to meet such calls and on the minimum level of borrowing
facilities that should be in place to cover unexpected levels of claims and other cash demands.
A significant proportion of the
Syndicate’s investments is in highly-liquid assets which could be converted to cash in a prompt fashion and at minimal expense.
The deposits with credit institutions largely comprise short-dated certificates for which an active market exists and which the
Syndicate can easily access.
The main focus of the investment portfolio is on high-quality, short-duration debt and fixed income securities, and cash.
There are no significant holdings of investments with specific repricing dates.
Notwithstanding the regular interest receipts and also the Syndicate’s ability to liquidate these securities and the majority of its other
financial instrument assets for cash in a prompt and reasonable manner, the contractual maturity profile of the financial assets and
financial liabilities at 31 December was as follows:
Table g)
At 31 December 2024
Less than
one year
$000
Between
one and
three years
$000
Between
three and
five years
$000
Over
five years
$000
Total
$000
Investments
606,168
1,097,638
796,466
204,612
2,704,884
Reinsurers’ share of claims outstanding
691,180
711,430
255,933
189,986
1,848,529
Debtors
749,112
75,661
–
–
824,773
Cash at bank and in hand
16,073
–
–
–
16,073
Accrued interest
26,603
–
–
–
26,603
Other prepayments and accrued income
5,873
–
–
–
5,873
Claims outstanding
(1,335,244) (1,369,635)
(505,185)
(352,876) (3,562,940)
Creditors
(589,609)
(126,589)
(31,899)
(9,103)
(757,200)
Derivative liabilities
–
–
–
–
–
Accruals and deferred income
(58,859)
–
–
–
(58,859)
Total
111,297
388,505
515,315
32,619
1,047,736
At 31 December 2023*
Less than
one year
$000
Between
one and
three years
$000
Between
three and
five years
$000
Over
five years
$000
Total
$000
Investments
696,434
1,347,888
209,602
254,403
2,508,327
Reinsurers’ share of claims outstanding
704,964
696,514
306,820
194,416
1,902,714
Debtors
723,506
105,244
–
–
828,750
Cash at bank and in hand
10,033
–
–
–
10,033
Accrued interest
19,369
–
–
–
19,369
Other prepayments and accrued income
8,655
–
–
–
8,655
Claims outstanding
(1,378,167)
(1,271,781)
(511,212)
(342,690) (3,503,850)
Creditors
(535,043)
(185,476)
(54,163)
(19,234)
(793,916)
Derivative liabilities
(3)
–
–
–
(3)
Accruals and deferred income
(51,674)
–
–
–
(51,674)
Total
198,074
692,389
(48,953)
86,895
928,405
The available headroom of working capital is monitored through the use of a detailed Syndicate cash flow forecast which is
reviewed by management quarterly, or more frequently, as required.
A significant proportion of the financial investments are in highly liquid assets which could be converted to cash in a prompt
fashion and at minimal expense to settle Syndicate liabilities as they fall due. The Directors have a reasonable expectation that
the Syndicate has adequate resources to continue in operation for the foreseeable future. Average contractual maturity analysed
by denominated currency of investments was as follows:
Table h)
At 31 December 2024
2024
years
2023
years
Sterling
1.8
1.6
US Dollar
2.9
3.0
Euro
2.6
2.3
Canadian Dollar
2.0
2.1
*Represented to align with current period presentation – see note 1.
29
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
continued
(f) Currency risk
The majority of the Syndicate’s gross premiums written is in US Dollars, consequently movements in Sterling, Euro and Canadian
Dollar against US Dollar exchange rate may have a material effect on its financial performance and position. The Syndicate’s
financial assets are denominated in the same currencies as its insurance liabilities, in order to reduce currency exchange volatility
from the balance sheet. This profit and loss is distributed or collected in accordance with Lloyd’s rules using a combination of
Sterling and US Dollars. The currency profile of the Syndicate’s financial assets and financial liabilities is as follows:
Table i)
At 31 December 2024
US Dollar
$000
Sterling
$000
Euro
$000
Canadian
Dollar
$000
Total
$000
Investments
2,166,014
234,926
153,320
150,624
2,704,884
Reinsurers share of technical provisions
1,945,013
130,349
39,459
48,877
2,163,698
Debtors
617,883
213,278
(6,991)
603
824,773
Other assets
(78,126)
121,009
24,634
(51,444)
16,073
Prepayments and accrued income
196,622
19,099
13,093
9,368
238,182
Total assets
4,847,406
718,661
223,515
158,028
5,947,610
Technical provisions
(3,897,971)
(374,553)
(185,845)
(104,840) (4,563,209)
Creditors
(581,949)
(145,482)
(7,115)
(22,654)
(757,200)
Accruals and deferred income
(49,218)
(6,736)
(1,037)
(1,868)
(58,859)
Total liabilities
(4,529,138)
(526,771)
(193,997)
(129,362) (5,379,268)
Members’ balances
318,268
191,890
29,518
28,666
568,342
At 31 December 2023*
US Dollar
$000
Sterling
$000
Euro
$000
Canadian
Dollar
$000
Total
$000
Investments
1,915,622
266,688
149,408
176,609
2,508,327
Reinsurers share of technical provisions
1,939,823
138,122
39,997
56,452
2,174,394
Debtors
620,404
193,363
1,441
13,542
828,750
Other assets
10,572
68,522
7,899
(76,960)
10,033
Prepayments and accrued income
190,800
19,693
10,995
11,449
232,937
Total assets
4,677,221
686,388
209,740
181,092
5,754,441
Technical provisions
(3,821,010)
(361,383)
(176,546)
(121,171)
(4,480,110)
Creditors
(625,046)
(135,388)
(11,129)
(22,356)
(793,919)
Accruals and deferred income
(42,603)
(6,056)
(1,113)
(1,902)
(51,674)
Total liabilities
(4,488,659)
(502,827)
(188,788)
(145,429) (5,325,703)
Members’ balances
188,562
183,561
20,952
35,663
428,738
Sensitivity analysis
The Syndicate performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling, Euro
and the Canadian Dollar. This analysis assumes that all other variables, in particular interest rates, remain constant and that
the underlying valuation of assets and liabilities in their base currency is unchanged. During the year, the Syndicate transacted in
a number of over-the-counter forward currency derivative contracts. The impact of these contracts on the sensitivity analysis
is negligible. The impact of a 10% increase or decrease against the following currencies is shown in the table below:
Table j)
Currency risk
2024
impact on
profit
$000
2024
impact on
members’
balance
$000
2023
impact on
profit
$000
2023
impact on
members’
balance
$000
Ten percent increase in US Dollar/Sterling exchange rate
(19,189)
19,189
(18,356)
18,356
Ten percent decrease in US Dollar/Sterling exchange rate
19,189
(19,189)
18,356
(18,356)
Ten percent increase in US Dollar/Euro exchange rate
(2,952)
2,952
(2,095)
2,095
Ten percent decrease in US Dollar/Euro exchange rate
2,952
(2,952)
2,095
(2,095)
Ten percent increase in US Dollar/Canadian Dollar exchange rate
(2,867)
2,867
(3,566)
3,566
Ten percent decrease in US Dollar/Canadian Dollar exchange rate
2,867
(2,867)
3,566
(3,566)
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
*Represented to align with current period presentation – see note 1.
30
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
4 Management of risk
continued
Regulatory risk
The managing agent is required to comply with the requirements of the Prudential Regulation Authority, Financial Conduct Authority
and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s market by overseas regulators, particularly in respect of
US situs business. Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to respond to regulatory
change. HSL devotes considerable resources to meet its regulatory obligations, including compliance, risk management and
internal audit functions.
Operational risk
The Syndicate is exposed to the risk of direct or indirect loss resulting from internal processes, people or systems, or from
external events. This includes cyber security risk as well as major IT, systems or service failures. HSL actively monitors and
controls its operational risks. HSL demonstrated continued resilience, underscoring the benefits of its business model,
disciplined risk management and ongoing investment in technology and infrastructure.
The Syndicate has implemented several operational risk management processes, which include enhancing its defences and
response to information security and cyber threats. The Syndicate regularly reassesses its information security standards and
methodologies to ensure appropriate governance and, consistency in its approach.
In 2024, HSL introduced a new risk system which enables more robust reporting and analysis of operational risk events,
driving greater insight and lessons learnt. Our suppliers are often crucial to our business enabling the delivery of high-quality
service to our customers. We have an established supplier code of conduct which sets out the standards we expect our suppliers
to operate to. Due diligence is carried out not only as part of an initial sourcing exercise but refreshed on an annual basis. We are
investing in supply chain management tools and processes which help us better manage risk, including being part of the Financial
Services Qualification Scheme, utilising ESG ratings and verification tooling.
Capital management
The Syndicate’s objectives in managing its capital are to:
s
satisfy the requirements of its policyholders and regulators; and
s
allocate capital efficiently to support strategic objectives.
Capital framework at Lloyd’s
The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to the supervision of the Prudential Regulatory Authority
(PRA) under the Financial Services and Markets Act 2000 and in accordance with Solvency II legislation. 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, licence and ratings objectives. Although, as described below, Lloyd’s capital
setting processes use a capital requirement set at syndicate level as a starting point, the requirement to meet Solvency II and
Lloyd’s capital requirements applies at overall and member level respectively, not at syndicate level. Accordingly, the capital
requirement is not disclosed in these annual accounts.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its solvency capital requirement (SCR) for the
prospective underwriting year. This amount must be sufficient to cover a one-in-200-year loss, reflecting uncertainty in the
ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The syndicate must also calculate its SCR at the same confidence
level but reflecting uncertainty over a one-year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency II requirements.
The SCRs of each syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group. A syndicate
may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its own share of underwriting
liabilities on the syndicate(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 one-in-200-year loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift
to the member’s SCR requirement, and the resulting capital is known as the economic capital assessment (ECA). The purpose
of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings objectives.
The capital uplift applied for 2024 was 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) or as the member’s share of the members’ balances
on each syndicate on which it participates. The level of FAL/FIS that Lloyd’s requires a member to maintain is determined by
Lloyd’s based on PRA requirements and resource criteria. This capital requirement is based on 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. Resources available to meet members’ and Lloyd’s capital requirements are separately identified
in the statement of changes in members’ balances. Lloyd’s also retains the right to request a callable contribution of up to 5%
of capacity from the Syndicate.
31
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
5 Segmental analysis
An analysis of the underwriting result before investment return is set out below:
2024
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Accident and health
32,778
32,161
(19,609)
(12,646)
(2,050)
(2,144)
Motor – third-party liability
124
126
(30)
(10)
(2)
84
Motor – other classes
–
–
–
–
–
–
Marine aviation and transport
194,730
200,178
(181,163)
(63,761)
90,596
45,850
Fire and other damage to property
972,345
948,830
(382,524)
(276,549)
(248,173)
41,584
Third-party liability
288,056
283,708
(290,690)
(54,742)
69,282
7,558
Credit and suretyship
152,948
146,864
(101,876)
(46,972)
1,408
(576)
Total direct insurance
1,640,981
1,611,867
(975,892)
(454,680)
(88,939)
92,356
Reinsurance
692,039
685,182
(104,187)
(106,642)
(365,083)
109,270
Total
2,333,020
2,297,049 (1,080,079)
(561,322)
(454,022)
201,626
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above
segments into the Lloyd’s aggregate classes of business:
2024
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Fire and other damage to property of which is:
Specialties
134,320
131,016
(15,454)
(42,367)
(46,228)
26,967
Energy
–
–
–
–
–
–
Third-party liability of which is:
Energy
–
–
–
–
–
–
2023
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Accident and health
29,681
28,296
(10,533)
(12,112)
(10,230)
(4,579)
Motor – third-party liability
33
32
(8)
90
1
115
Motor – other classes
–
–
–
–
–
–
Marine aviation and transport
209,367
191,946
(114,060)
(59,382)
(11,445)
7,059
Fire and other damage to property
975,165
916,587
(342,117)
(269,938)
(209,873)
94,659
Third-party liability
317,781
329,444
(198,891)
(65,581)
(26,286)
38,686
Credit and suretyship
152,772
149,632
(62,745)
(48,513)
(11,837)
26,537
Total direct insurance
1,684,799
1,615,937
(728,354)
(455,436)
(269,670)
162,477
Reinsurance
663,241
672,820
(110,590)
(99,298)
(337,450)
125,482
Total
2,348,040
2,288,757
(838,944)
(554,734)
(607,120)
287,959
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above
segments into the Lloyd’s aggregate classes of business:
2023
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Fire and other damage to property of which is:
Specialties
124,848
124,268
(38,631)
(30,382)
(25,771)
29,484
Energy
–
–
–
–
–
–
Third-party liability of which is:
Energy
–
–
–
–
–
–
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
32
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
5 Segmental analysis
continued
All premiums were concluded in the UK. The geographical analysis of direct insurance gross written premiums written by
destination, as a proxy for risk location, is as follows:
2024
$000
2023
$000
United Kingdom
114,597
134,784
European Union member states
113,289
101,088
United States
1,067,542
1,111,967
Rest of the world
345,553
336,960
Total
1,640,981
1,684,799
6 Net operating expenses
2024
$000
2023
$000
Acquisition costs
570,654
577,137
Change in deferred acquisition costs
(3,489)
(2,956)
Administrative expenses
136,929
118,328
Members' standard personal expenses
30,741
28,016
Reinsurers’ commissions and profit participations
(173,513)
(165,791)
Total
561,322
554,734
Brokerage and commissions on direct business written was $334.1 million (2023: $344.5 million).
Profit commission is charged by the managing agent at a rate of 15% on the total recognised gain of the Syndicate if the
rolling seven-year simple average basis is at least 7.5% or more of capacity. If the rolling seven-year average falls below 7.5%
of capacity profit commission will be charged at 12.5%. This calculation is subject to the operation of a two-year deficit clause.
Profit commission is disclosed within acquisition costs.
Profit-related remuneration is charged at 5% on the profit of six major business areas. It is disclosed within acquisition costs.
Also included in administrative expenses is the charge for the Syndicate’s share of the movement in the Group pension defined
benefit deficit of $2.3 million (2023: gain of $4.4 million) calculated by the scheme actuary.
Administrative expenses include fees payable to the auditors and its associates (exclusive of VAT).
2024
$000
2023
$000
Auditors’ remuneration
Fees payable to the Syndicate’s auditor for the audit of the syndicate annual accounts
665
618
Fees payable to the Syndicate’s auditor and its associates in respect of other services pursuant to legislation
279
127
Total
944
745
33
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
7 Staff numbers and costs
The Syndicate and its managing agent have no employees. Staff are employed by Hiscox Underwriting Group Services
Limited (HUGS). The average number of persons employed by HUGS, but working for the Syndicate during the year, analysed
by category, was as follows:
2024
2023
Administration and finance
380
343
Underwriting
160
156
Claims
47
51
Investments
2
2
Total
589
552
The Syndicate did not directly incur staff costs during the year (2023: nil). The following salary and related costs were recharged
during the year:
2024
$000
2023
$000
Wages and salaries
66,314
60,310
Social security costs
7,806
5,855
Other pension costs
8,888
2,127
Total
83,008
68,292
The Directors of HSL received the following aggregate remuneration charged to the Syndicate and included within net
operating expenses:
2024
$000
2023
$000
Directors’ emoluments
2,461
2,559
The active underwriters received the following remuneration charged as a Syndicate expense.
2024
$000
2023
$000
Underwriters emoluments
1,132
1,183
8 Investment return
2024
$000
2023
$000
Interest and similar income
From financial instruments designated at fair value through profit or loss:
Interest income on financial assets
104,389
69,086
Other income from investments
From financial instruments designated at fair value through profit or loss:
Gains on realisation of investments
17,314
5,553
Losses on the realisation of investments
(7,567)
(22,426)
Unrealised gains on investments
35,411
71,404
Unrealised losses on the investments
(19,117)
(4,984)
Investment management expenses
(2,462)
(2,059)
Total investment return
127,968
116,574
Transferred to the technical account from the non-technical account
(127,968)
(116,574)
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
34
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
8 Investment return
continued
The tables below present the average amounts of funds in the year per currency and the average investment return yields in the year.
2024
$000
2023
$000
Average amount of Syndicate funds available for investment during the year:
Sterling
174,590
184,938
Euro
156,742
120,783
US Dollar
2,076,376
1,684,917
Canadian Dollar
225,733
232,038
Total Syndicate funds available for investment
2,633,441
2,222,676
2024
%
2023
%
Annual investment yield
Sterling
4.9
4.7
Euro
4.2
5.4
US Dollar
4.8
5.3
Canadian Dollar
6.6
5.1
Total annual investment yield percentage
4.9
5.3
Syndicate funds include investments and cash. Annual investment yield excludes investment management charges.
9 Financial investments
2024
carrying value
$000
2024
cost
$000
2023
carrying value
$000
2023
cost
$000
Debt securities and other fixed income securities
2,575,318 2,561,022
2,299,975
2,301,405
Shares and other variable yield securities
and units in unit trusts
103,876
103,876
177,301
177,301
Syndicate loans to central fund
22,206
23,019
27,389
29,307
Derivative assets
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
Total financial investments
2,701,400 2,687,917
2,504,665 2,508,013
No financial assets in the current or prior financial year were classified as ‘held for trading’ under FRS 102. The table below
presents an analysis of financial investments by their measurement classification.
2024
$000
2023
$000
Financial assets measured at fair value through profit or loss
2,701,400
2,504,665
Financial assets measured at amortised cost
–
–
Total financial investments
2,701,400
2,504,665
Other financial assets under FRS 102 are cash at bank and in hand, direct insurance and reinsurance debtors, other debtors
and accrued income, which are classified as debtors.
Fair value hierarchy
The Syndicate has classified its financial investments using the fair value hierarchy in accordance with the FRS 102.
The levels within the fair value hierarchy are defined as follows:
s
level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at
the measurement date;
s
level 2 – inputs other than quoted prices included within level 1 that are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly; and
s
level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
*Represented to align with current period presentation – see note 1.
*Represented to align with current period presentation – see note 1.
*
*
*
35
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
9 Financial investments
continued
2024
Level 1
$000
Level 2
$000
Level 3
$000
Assets held at
amortised cost
$000
Total
$000
Debt securities and other fixed income securities
363,474 2,211,844
–
– 2,575,318
Shares and other variable yield securities
and units in unit trusts
103,876
–
–
–
103,876
Syndicate loans to central fund
–
–
22,206
–
22,206
Derivative assets
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
Total financial investments
467,350 2,211,844
22,206
– 2,701,400
Derivative liabilities
–
–
–
–
–
Total
467,350 2,211,844
22,206
– 2,701,400
2023*
Level 1
$000
Level 2
$000
Level 3
$000
Assets held at
amortised cost
$000
Total
$000
Debt securities and other fixed income securities
512,296 1,787,679
–
– 2,299,975
Shares and other variable yield securities
and units in unit trusts
177,301
–
–
–
177,301
Syndicate loans to central fund
–
–
27,389
–
27,389
Derivative assets
–
–
–
–
–
Loans and deposits with credit institutions
–
–
–
–
–
Total financial investments
689,597
1,787,679
27,389
– 2,504,665
Derivative liabilities
–
(3)
–
–
(3)
Total
689,597
1,787,676
27,389
– 2,504,662
The following table sets forth a reconciliation of opening and closing balances for financial instruments classified under level 3
of the fair value hierarchy:
2024
$000
2023
$000
Balance at 1 January
27,389
24,718
Fair value gains or losses through profit and loss
1,089
1,161
Foreign exchange (loss)/gain
(415)
1,510
Purchases
–
–
Settlements
(5,857)
–
Balance at 31 December
22,206
27,389
Unrealised gains in the year on securities held at the end of the year
1,089
1,161
The Syndicate measures the fair value of its financial assets based on prices provided by custodians who obtain market data from
numerous independent pricing services. The pricing services used by the custodian obtain actual transaction prices for securities
that have quoted prices in active markets.
For those securities which are not actively traded, the pricing service uses common market valuation pricing models.
Observable
inputs used in common market valuation pricing models include, but are not limited to, broker quotes, credit ratings, interest rates
and yield curves, prepayment speeds, default rates and other such inputs which are available from market sources.
2024
Gross contract
notional amount
$000
Fair value
of assets
$000
Fair value
of liabilities
$000
Net balance
sheet position
liability
$000
Interest rate future contracts
–
–
–
–
2023
Gross contract
notional amount
$000
Fair value
of assets
$000
Fair value
of liabilities
$000
Net balance
sheet position
asset
$000
Interest rate future contracts
1,447
–
(3)
(3)
Interest rate future contracts
During 2023, the Syndicate used Sterling, Euro and US Dollar government bond futures to informally hedge the interest rate risk
on specific corporate bonds. The investment return in 2024 and 2023 on these futures is disclosed in note 8.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
*Represented to align with current period presentation – see note 1.
36
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
10 Technical provisions
2024
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Claims outstanding:
Balance at 1 January
3,503,850
(1,902,714)
1,601,136
Over/under-provision in respect of prior claims and claim adjustment expenses
(183,769)
132,668
(51,101)
Expected cost of current year claims
1,263,848
(567,344)
696,504
Claims paid for claims settled in year
(999,552)
480,884
(518,668)
Acquisitions, divestments and transfers
–
–
–
Effect of movements in exchange rates
(21,437)
7,977
(13,460)
Balance at 31 December
3,562,940 (1,848,529)
1,714,411
Claims reported and claims adjustment expenses
1,121,159
(541,482)
579,677
Claims incurred but not reported
2,441,781
(1,307,047)
1,134,734
Balance at 31 December
3,562,940 (1,848,529)
1,714,411
Unearned premiums:
Balance at 1 January
976,260
(271,680)
704,580
Premiums written during the year
2,333,020
(934,207)
1,398,813
Premiums earned during the year
(2,297,049)
888,698
(1,408,351)
Effect of movements in exchange rates
(11,962)
2,020
(9,942)
Balance at 31 December
1,000,269
(315,169)
685,100
Deferred acquisition costs:
Balance at 1 January
204,913
(51,674)
153,239
Acquisition costs written
454,175
(181,040)
273,135
Acquisition costs earned
(450,686)
173,513
(277,173)
Effect of movements in exchange rates
(2,696)
342
(2,354)
Balance at 31 December
205,706
(58,859)
146,847
37
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
10 Technical provisions
continued
2023
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Claims outstanding:
Balance at 1 January
3,605,183
(2,074,284) 1,530,899
Over/under-provision in respect of prior claims and claim adjustment expenses
(142,109)
72,277
(69,832)
Expected cost of current year claims
981,053
(378,320)
602,733
Claims paid for claims settled in year
(971,765)
534,201
(437,564)
Acquisitions, divestments and transfers
†
–
(41,635)
(41,635)
Effect of movements in exchange rates
31,488
(14,953)
16,535
Balance at 31 December
3,503,850
(1,902,714)
1,601,136
Claims reported and claims adjustment expenses
1,107,407
(565,523)
541,884
Claims incurred but not reported
2,396,443
(1,337,191)
1,059,252
Balance at 31 December
3,503,850
(1,902,714)
1,601,136
Unearned premiums:
Balance at 1 January
896,976
(298,333)
598,643
Premiums written during the year
2,348,040
(882,880)
1,465,160
Premiums earned during the year
(2,288,757)
913,163
(1,375,594)
Effect of movements in exchange rates
20,001
(3,630)
16,371
Balance at 31 December
976,260
(271,680)
704,580
Deferred acquisition costs:
Balance at 1 January
197,820
(58,540)
139,280
Acquisition costs written
456,757
(158,309)
298,448
Acquisition costs earned
(453,801)
165,791
(288,010)
Effect of movements in exchange rates
4,137
(616)
3,521
Balance at 31 December
204,913
(51,674)
153,239
†
During the prior year, the Syndicate completed a legacy portfolio transfer (LPT) securing coverage for potential adverse development on historical liabilities for
selected lines of business. The Syndicate secured coverage for potential adverse development in respect of insurance liabilities of $50.0 million.
11 Debtors arising out of direct insurance operations
2024
$000
2023
$000
Due within one year
478,759
437,901
Due after one year
58,868
81,558
Total
537,627
519,459
12 Debtors arising out of reinsurance operations
2024
$000
2023
$000
Due within one year
264,121
274,784
Due after one year
16,793
23,686
Total
280,914
298,470
13 Other debtors
2024
$000
2023
$000
Inter syndicate balances
–
–
Amounts owed from fellow subsidiary of managing agent
1,414
1,483
Other
4,818
9,338
Total
6,232
10,821
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
38
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
14 Claims development tables
The claims development tables below have been calculated by converting estimated claims and cumulative payments in Canadian
Dollars, Sterling and Euros to US Dollars at the closing rate of exchange at 31 December 2024. The table is produced on a year of
account basis. Some business is not off-risk after the first 12 months, therefore we would anticipate cumulative claims to increase
in the second year as this business is earned.
Pure underwriting year
Gross of reinsurance
2015
$000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
2023
$000
2024
$000
Estimate of
cumulative claims:
At end of
underwriting
year one
396,580
494,109 1,127,071
971,972 1,076,237
911,164
711,837
759,246 558,971
760,676
One year later
590,112
911,085 1,387,471 1,637,689 1,699,009 1,478,993
1,174,194 1,187,887
950,416
Two years later
587,212
841,423 1,457,854 1,606,489 1,622,860 1,401,237
1,141,523 1,069,865
Three years later
584,504
866,985 1,377,253 1,468,674 1,526,405 1,373,873 1,128,063
Four years later
565,702
877,935 1,360,381 1,437,948
1,425,820 1,326,903
Five years later
575,440
881,502 1,309,469 1,439,415
1,480,351
Six years later
577,621
873,230 1,327,077 1,478,925
Seven years later
573,692
888,941 1,376,167
Eight years later
578,161
875,012
Nine years later
572,461
Cumulative
payments
(524,904) (792,935) (1,192,619) (1,284,929) (1,132,272) (980,988) (692,836) (533,920) (313,816)
(108,473)
Estimated
balance to pay
47,557
82,077
183,548
193,996
348,079
345,915
435,227
535,945 636,600
652,203
Provision in
respect of
prior years
101,793
Total gross provision
included in the balance sheet
3,562,940
Pure underwriting year
Net of reinsurance
2015
$000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
2023
$000
2024
$000
Estimate of
cumulative claims:
At end of
underwriting
year one
284,198 290,308 346,660
367,157
385,842
398,663
344,206 340,755 338,073
365,528
One year later
449,030
586,164 492,877
656,641
753,268
656,930
583,239
614,512 618,377
Two years later
463,016
546,742 520,192
619,392
712,665
607,949
572,836 581,943
Three years later
466,565
556,313 520,740
605,813
659,143
616,029
588,076
Four years later
448,888 558,618 487,761
539,501
582,242
596,671
Five years later
455,323
578,852 420,603
521,936
609,244
Six years later
458,397 522,347 412,951
540,769
Seven years later
416,410
522,777 440,828
Eight years later
415,789 508,063
Nine years later
407,561
Cumulative
payments
(382,934) (478,799) (419,658) (467,607)
(471,400) (448,729) (353,914) (309,029) (202,781)
(71,962)
Estimated
balance to pay
24,627
29,264
21,170
73,162
137,844
147,942
234,162
272,914 415,596
293,566
Provision in
respect of
prior years
64,164
Total net provision
included in the balance sheet
1,714,411
Prior-year development has been further explained under the ‘results’ section of the report of the Directors of the managing agent.
39
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
15 Creditors arising out of direct insurance operations
2024
$000
2023
$000
Due within one year
2,035
21,211
Due after one year
–
–
Total
2,035
21,211
16 Creditors arising out of reinsurance operations
2024
$000
2023
$000
Due within one year
473,520
421,655
Due after one year
158,969
253,634
Total
632,489
675,289
17 Other creditors
2024
$000
2023
$000
Inter syndicate balances
4,668
968
Amounts owed from fellow subsidiary of managing agent
117,603
87,369
Derivative liabilities
–
3
Other
405
9,079
Total
122,676
97,419
18 Accruals and deferred income
2024
$000
2023
$000
Profit commission
–
–
Deferred acquisition costs
58,859
51,674
Accrued expenses
–
–
Total
58,859
51,674
Profit commission accrued at 31 December 2024 is $116.0 million (2023: $83.3 million) and is included under ‘other creditors’
on the balance sheet and also disclosed in Note 20.
19 Cash and cash equivalents
2024
$000
2023
$000
Cash at bank and in hand
16,073
10,033
Short term debt instruments presented within other financial investments
103,876
177,301
Total cash and cash equivalents
119,949
187,334
Only deposits with maturities of three months or less that are used by the Syndicate in the management of its short-term
commitments are included in cash and cash equivalents.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Notes to the accounts
*Represented to align with current period presentation – see note 1.
*
40
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 33
annual accounts
Notes to the accounts
19 Cash and cash equivalents
continued
Included within cash and cash equivalents are the following amounts which are not available for use by the Syndicate because
they are held in regulated bank accounts in overseas jurisdictions.
2024
$000
2023
$000
Cash at bank and in hand
6,130
18,877
Short term debt instruments presented within other financial investments
188
249
Total cash and cash equivalents not available for use by the syndicate
6,318
19,126
20 Related parties
Related companies
Hiscox Syndicates Limited (HSL) manages Syndicate 0033 as well as Syndicate 3624 and Syndicate 6104. Syndicate 3624
purchases some reinsurance from Syndicate 0033 on an arm’s-length basis.
Syndicate 6104, also managed by HSL, is a limited tenancy capacity Special Purpose Arrangement, that supports the
underwriting of Syndicate 0033 by providing reinsurance on an arm’s-length basis for certain classes of property catastrophe
reinsurance, marine, terrorism and cyber risks. Syndicate 0033 receives an overriding commission and profit commission on
the business ceded to Syndicate 6104.
HSL is a wholly owned indirect subsidiary of Hiscox Ltd which is incorporated in Bermuda and listed on the London Stock
Exchange. HSL receives a fixed fee for each pure underwriting year. HSL also receives profit commission and profit-related
remuneration as detailed in note 7.
Hiscox Dedicated Corporate Member Limited, a wholly owned indirect subsidiary of Hiscox Ltd, is a corporate member which
owns capacity in all pure underwriting years of Syndicate 0033.
Hiscox Underwriting Group Services Limited, a wholly owned indirect subsidiary of Hiscox Ltd, is an employment service company
which employs all UK-based staff engaged in Syndicate 0033 activities including underwriters, claims handlers, reinsurance staff
and administrative staff. Hiscox Underwriting Group Services Limited charges a fee for the provision of these staff to Syndicate
0033 on a no profit/no loss basis.
Hiscox Services Ltd, a wholly owned indirect subsidiary of Hiscox Ltd, is service company based in Bermuda. Hiscox Services Ltd
charges a fee for the provision of services to Syndicate 0033 on a no profit/no loss basis.
Hiscox Insurance Company (Bermuda) Limited, a wholly owned direct subsidiary of Hiscox Ltd, is a Class 4 insurer in
Bermuda authorised by the Bermuda Monetary Authority. It supplies some risk modelling services to HSL. Syndicate 0033
purchases a significant amount of reinsurance from Hiscox Insurance Company (Bermuda) Limited; such reinsurances
are on an arm’s-length basis and are in the interests of all the Names on the Syndicate.
Hiscox Insurance Company (Guernsey) Limited, a wholly owned direct subsidiary of Hiscox Ltd, is a non-life insurance company
authorised by the Guernsey Financial Services Commission which predominantly underwrites specialist personal lines business
worldwide. It purchases some reinsurance from Syndicate 0033; such reinsurances are on an arm’s-length basis and are in the
interests of all the Names on the Syndicate.
Hiscox Underwriting Ltd, a wholly owned indirect subsidiary of Hiscox Ltd, is an FCA authorised non-life insurance intermediary
and Lloyd’s Service Company. It places business with Syndicate 0033. It is not obliged to place business with any particular
carrier and these arrangements are subject to review by Hiscox Underwriting Ltd.
Hiscox Agencies Limited, a wholly owned indirect subsidiary of Hiscox Ltd, is a authorised non-life insurance intermediary and
Lloyd’s Service Company. It places business with Syndicate 0033. It is not obliged to place business with any particular carrier
and these arrangements are subject to review by Hiscox Agencies Limited.
Hiscox Inc., a wholly owned indirect subsidiary of Hiscox Ltd incorporated in USA (Delaware), is a US authorised non-life insurance
intermediary and Lloyd’s Service Company. It places business with Syndicate 0033. It is not obliged to place business with any
particular carrier and these arrangements are subject to review by Hiscox Inc.
Hiscox Insurance Services Inc., a wholly owned indirect subsidiary of Hiscox Ltd, is a US authorised non-life insurance
intermediary and Lloyd’s Service Company. It places business with Syndicate 0033. It is not obliged to place business with
any particular carrier and these arrangements are subject to review by Hiscox Insurance Services Inc.
*
*Represented to align with current period presentation – see note 1.
41
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 33
annual accounts
Notes to the accounts
20 Related parties
Related companies
continued
Hiscox Insurance Services (Guernsey) Limited, a wholly owned indirect subsidiary of Hiscox Ltd, is a non-life insurance
intermediary and Lloyd’s Service Company authorised by the Guernsey Financial Services Commission. It places business
with Syndicate 0033. It is not obliged to place business with any particular carrier and these arrangements are subject to review
by Hiscox Insurance Services (Guernsey) Limited.
Hiscox Assure SAS is a regulated French insurance intermediary subject to the supervision of the French Prudential Supervisory
Authority ACPR (Autorité de contrôle prudentiel et de résolution) and Lloyd’s Coverholder. Hiscox Assure SAS is duly authorised
to conduct insurance intermediation activities in other Member States of the European Union and the European Economic Area.
It places business with Syndicate 0033. It is not obliged to place business with any particular carrier and these arrangements are
subject to review by Hiscox Assure SAS.
Hiscox MGA Limited, a wholly owned indirect subsidiary of Hiscox Ltd, is an FCA authorised non-life insurance intermediary and
Lloyd’s Coverholder. It places business with Syndicate 0033. It is not obliged to place business with any particular carrier and
these arrangements are subject to review by Hiscox MGA Limited.
Underwriting divisions
Hiscox Ltd and its subsidiaries organises its core underwriting activities into a number of underwriting divisions. Some of
these divisions underwrite for multiple entities which are partly or wholly owned by Hiscox Ltd including Syndicate 0033, and
business opportunities by using combined knowledge to develop new products and markets. There are certain predetermined
mechanisms for allocating certain types of insurance risks to these carriers which take into account the licences, business plans
and reinsurance programmes of each carrier. These arrangements are structured to take full and proper account of the duties
owed to the members of Syndicate 0033 and to manage appropriately any potential conflicts of interest.
The following balance sheet amounts were outstanding at year-end with related parties:
Balance sheet net assets and (liabilities) outstanding
2024
$000
2023
$000
Hiscox Agencies Limited
(127)
211
Hiscox Assure SAS
(804)
880
Hiscox Inc.
(1,715)
1,223
Hiscox Insurance Company (Bermuda) Limited
164,183
220,415
Hiscox Insurance Company (Guernsey) Limited
(6,650)
(7,994)
Hiscox Insurance Services Inc.
12,155
8,593
Hiscox MGA Limited
(741)
1,832
Hiscox Services Ltd
(311)
–
Hiscox Syndicates Limited
(116,749)
(83,657)
Hiscox Underwriting Group Services Limited
5,394
4,916
Hiscox Underwriting Ltd
1,995
2,874
Syndicate 6104
(54,317)
(23,904)
Other
–
(1)
The following amounts reflected in the profit and loss were transacted with related parties:
Net income and (expenses) reflected in the profit and loss
2024
$000
2023
$000
Hiscox Assure SAS
(4,780)
(3,263)
Hiscox Inc.
(14,157)
(13,167)
Hiscox Insurance Company (Bermuda) Limited
(135,354)
(97,024)
Hiscox Insurance Company (Guernsey) Limited
–
–
Hiscox Insurance Services Inc.
(5,740)
(6,910)
Hiscox Syndicates Limited
(77,911)
(87,278)
Hiscox Underwriting Group Services Limited
(167,124)
(148,907)
Hiscox Underwriting Ltd
(1,212)
(1,310)
Syndicate 6104
32,094
27,642
Other
26
(1,899)
Hiscox Syndicates Limited charged managing agent fees and profit commission to Syndicate 0033 of $13.0 million
(2023: $12.3 million) and $62.3 million (2023: $72.4 million) respectively.
Hiscox Underwriting Group Services Limited charges administrative services to the Syndicate on a no profit/no loss basis.
42
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
21 Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2024
start of period rate
2024
end of period rate
2024
average rate
2023
start of period rate
2023
end of period rate
2023
average rate
US Dollar
Sterling
Euro
Canadian Dollar
22 Syndicate structure
The managing agent of the Syndicate is Hiscox Syndicates Limited whose immediate parent undertaking is Hiscox Holdings
Limited, a company registered in England and Wales. The ultimate parent undertaking of the largest and smallest group of
companies for which Group accounts are drawn up is Hiscox Ltd, Bermuda. Copies of Hiscox Ltd Report and Accounts can
be obtained from Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda.
Chapter 1
2
Hiscox Syndicate 33
annual accounts
Notes to the accounts
43
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
43
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
43
Chapter 2
Hiscox Syndicate 0033
underwriting year accounts
44
Report of the Directors of the
managing agent
46
Statement of managing
agent’s responsibilities
47
Independent auditors’ report
50
Profit and loss account:
technical account
– general business
51
Profit and loss account:
non-technical account
– general business
52
Balance sheet
53
Notes to the accounts
58
Seven-year summary
Chapter 2
Hiscox Syndicate 0033
underwriting year accounts
44
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Report of the Directors of the managing agent
Hiscox Syndicate 0033 underwriting year accounts
The Directors of the managing agent present their report for
the period ended 31 December 2024.
This report comprises the cumulative result to 31 December 2024
for the closed 2022 underwriting year of account of
Syndicate 0033.
The syndicate underwriting year accounts have been
prepared under the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, in
accordance with the Lloyd’s Syndicate Accounting Byelaw
(No. 8 of 2005) and applicable accounting standards in the
United Kingdom. The Syndicate continues to adopt the
going concern basis in preparing the syndicate underwriting
year accounts.
Principal activity and review of the business
2022 account
The 2022 account has closed with a profit of 12.5% after
all personal expenses (except members’ agent’s fees).
The result after including members’ agents fees was a
profit of $262.5 million which will be settled by way of profit
distribution to the members in June 2025. There was a
loss of $15.1 million from the closed years of 2021 and prior
representing approximately (1.7)% of reinsurance to close
(RITC) brought forward at constant exchange rates.
The 2022 year of account is profitable despite picking up
catastrophe losses, mainly Hurricane Ian, and losses
relating to the Russia/Ukraine conflict.
The Syndicate’s capacity is £1,699.3 million ($2,129.1 million)
and capacity utilisation was 79.9% when measured using
the premium income monitoring rate of £1 = $1.38. The 2022
account investment return was a gain of $107.1 million. The
key driver of the investment profit was higher coupon income
and the reversal of prior-year mark-to-market investment
losses. The 2024 calendar year positive return was 4.8%.
2023 account
The 2023 year of account, with capacity of £1.698 million
experienced excellent market conditions in many classes
including property, terrorism and marine and energy.
The reinsurance market exhibited what has been termed
a ‘generational’ hard market in peak peril property classes
with meaningful positive rate across the board.
This provided good opportunities to grow these classes.
However, other classes, such as casualty overall and cyber
in particular, experienced less than favourable conditions.
Therefore the Syndicate actively rebalanced away from
these classes.
Overall catastrophe experience for the 2023 year of account
has been favourable despite losses including the Hawaii
wildfires, Hurricane Hilary, Hurricane Idalia, Canada wildfires
and the Morocco earthquake.
Capacity utilisation is forecast to be 92.5% when measured
using the premium income monitoring rate of £1 = $1.21.
We are forecasting a result in the range 10.4% to 20.4%.
2024 account
2024 year of account, with capacity of £1,696 million,
continues to perform well with losses from an active wind
season and several large losses falling within expectation.
Losses include Hurricane Helene, Hurricane Milton and the
Baltimore bridge loss in addition to large losses in upstream
energy, space and product recall. Hiscox discontinued
underwriting space business in November 2024 due to
persistent adverse claims environment.
Capacity utilisation is forecast to be 92.9% when measured
using the premium income monitoring rate of £1 = $1.27.
We are forecasting a result in the range 3.0% to 13.0%.
The forecast result range takes into account the preliminary
loss estimates resulting from the Los Angeles wildfires,
which occurred in early 2025.
2025 account and the future
The Syndicate is well placed to deliver profit in 2025, and whilst
there is an expectation for a broad softening of the market,
notably on reinsurance, marine and energy, this follows several
years of continued rate increases and terms and conditions
improvements. The Syndicate’s £1,700 million capacity has
been maintained in 2025, with a higher capacity utilisation
expected to take advantage of any opportunities where the
market remains attractive.
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
45
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Syndicate capacity and ownership
Syndicate capacity and ownership is disclosed in Syndicate
0033 annual accounts
Directors’ interests
The Directors of the managing agent and their interests are
disclosed in Syndicate 0033 annual accounts.
Disclosure of information to the auditors
The Directors 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 auditors are unaware; and each Director has
taken all the steps that they ought to have taken as a Director
to make themselves aware of any relevant audit information
and to establish that the Syndicate’s auditors are aware
of that information.
By order of the Board
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Report of the Directors
of the managing agent
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
46
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of managing agent’s responsibilities
Hiscox Syndicate 0033 underwriting year accounts
The Insurance Accounts Directive (Lloyd’s Syndicates and
Aggregate Accounts) Regulations 2008 require the managing
agent to prepare syndicate underwriting year accounts at
31 December in respect of any underwriting year which is
being closed by reinsurance to close which give a true and fair
view of the result of the underwriting year at closure. Detailed
requirements in respect of the underwriting year accounts are
set out in the Lloyd’s Syndicate Accounting Byelaw (No. 8
of 2005).
In preparing the syndicate underwriting year accounts, the
managing agent is required to:
s
select suitable accounting policies and then apply them
consistently and where there are items which affect more
than one year of account, ensure a treatment which is
equitable as between the members of the Syndicate
affected. In particular, the amount charged by way of
premium in respect of the reinsurance to close shall,
where the reinsuring members and reinsured members
are members of the same Syndicate for different years of
account, be equitable as between them, having regard
to the nature and amount of the liabilities reinsured;
s
take into account all income and charges relating to a
closed year of account without regard to the date of
receipt or payment;
s
make judgements and estimates that are reasonable and
prudent; and
s
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in these accounts.
The managing agent is responsible for keeping proper accounting
records that disclose with reasonable accuracy, at any time,
the financial position of the Syndicate and enable it to ensure
that the syndicate underwriting year accounts comply with
the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008. It is also responsible
for safeguarding the assets of the Syndicate and hence for
taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The managing agent is responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing the
preparation and dissemination of syndicate underwriting year
accounts may differ from legislation in other jurisdictions.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
47
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Independent auditors’ report
To the members of Syndicate 0033
2022 closed year of account
Report on the audit of the syndicate underwriting year
financial statements
Opinion
In our opinion, Syndicate 0033’s syndicate underwriting year
financial statements for the 2022 year of account for the 36
months ended 31 December 2024:
s
give a true and fair view of the state of the syndicate’s
affairs as at 31 December 2024 and of its profit for the
2022 closed year of account;
s
have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 ‘The Financial Reporting Standard applicable in the
UK and Republic of Ireland’, and applicable law); and
s
have been prepared in accordance with the requirements
of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005).
We have audited the underwriting year financial statements
included within the Hiscox Syndicate 33 underwriting
year accounts, which comprise: the balance sheet as at
31 December 2024; the profit and loss account: technical
account – general business and the profit and loss account:
non-technical account – general business for the 36 months
then ended; and the notes to the underwriting year financial
statements, which include a description of the significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)), including ISA (UK) 800,
and The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and other applicable
law. Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the underwriting
year financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance
with the ethical requirements that are relevant to our audit of
the underwriting year financial statements in the UK, which
includes the FRC’s Ethical Standard, as applicable to other
entities of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Emphasis of matter – basis of preparation
Without modifying our opinion, we draw attention to note 1
of the underwriting year financial statements, which describes
the basis of preparation. In particular, as these underwriting
year financial statements relate to a closed underwriting year
of account, matters relating to going concern are not relevant to
these underwriting year financial statements. The underwriting
year financial statements are prepared in accordance with
a special purpose framework for the specific purpose as
described in the Use of this report paragraph below. As a result,
the underwriting year financial statements may not be suitable
for another purpose.
Reporting on other information
The other information comprises all of the information in the
underwriting year accounts other than the underwriting year
financial statements and our auditors’ report thereon. The
managing agent is responsible for the other information.
Our opinion on the underwriting year financial statements
does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the underwriting year financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the underwriting year financial
statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of
the underwriting year financial statements or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report based on
these responsibilities.
Responsibilities for the underwriting year financial statements
and the audit
Responsibilities of the managing agent for the underwriting
year financial statements
As explained more fully in the statement of managing agent’s
responsibilities, the managing agent is responsible for the
preparation of the underwriting year financial statements
48
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Independent auditors’ report
in accordance with the applicable framework and for being
satisfied that they give a true and fair view of the result for
the 2022 closed year of account. The managing agent is
also responsible for such internal control as they determine
is necessary to enable the preparation of underwriting year
financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ responsibilities for the audit of the underwriting
year financial statements
Our objectives are to obtain reasonable assurance about
whether the underwriting year financial statements as a whole
are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these underwriting year
financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to breaches of regulatory
principles, such as those governed by the Prudential
Regulation Authority and the Financial Conduct Authority,
and those regulations set by the Council of Lloyd’s, and we
considered the extent to which non-compliance might have
a material effect on the underwriting year financial statements.
We also considered those laws and regulations that have a
direct impact on the underwriting year financial statements
such as The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the underwriting year financial statements
(including the risk of override of controls), and determined
that the principal risks were related to manual journals and
accounting estimates in respect of premiums and insurance
claims outstanding. Audit procedures performed by the
engagement team included:
s
discussions with senior management, including those
in the risk and compliance functions, including the
consideration of known or suspected instances
of non-compliance with laws, regulation and fraud;
s
reading key correspondence with Lloyd’s, in relation to
compliance with laws and regulations;
s
reviewing relevant meeting minutes including those of
the Audit Committee;
s
testing and assessing the appropriateness of insurance
claims reserves;
s
testing journal entries, including revenue journals,
identified in accordance with our risk assessment; and
s
designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the underwriting
year financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit
of the underwriting year financial statements is located on
the FRC’s website at:
frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for
and only for the syndicate’s members as a body in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and
Part C of the Lloyd’s Syndicate Accounting Byelaw
(No. 8 of 2005) and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate
49
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Independent auditors’ report
and Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005), we are required
to report to you if, in our opinion:
s
we have not obtained all the information and explanations
we require for our audit; or
s
adequate accounting records have not been kept by the
managing agent in respect of the syndicate; or
s
the underwriting year financial statements are not in
agreement with the accounting records.
We have no exceptions to report arising from this responsibility
Thomas Robb
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2025
50
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
technical account – general business
Hiscox Syndicate 0033 underwriting year accounts
For the 36 months ended 31 December 2024
Notes
2022 year
of account
$000
Syndicate allocated capacity
2,129,100
Earned premiums, net of reinsurance
Gross premiums written
2,103,450
Outward reinsurance premiums
(835,236)
Earned premiums, net of reinsurance
1,268,214
Reinsurance to close premium received, net of reinsurance
3
891,236
2,159,450
Allocated investment return transferred from/(to) the non-technical account
107,127
Claims incurred, net of reinsurance
Claims paid:
Gross amount
(1,012,282)
Reinsurers’ share
520,795
Net claims paid
(491,487)
Change in provision for claims:
Gross amount
(2,276,733)
Reinsurers’ share
1,268,745
Net change in provisions for claims
(1,007,988)
Claims incurred, net of reinsurance
(1,499,475)
Net operating expenses
7
(473,053)
Balance on the technical account for general business
294,049
The notes on pages 53 to 57 form an integral part of these underwriting year accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
51
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Profit and loss account:
non-technical account – general business
Hiscox Syndicate 0033 underwriting year accounts
For the 36 months ended 31 December 2024
Notes
2022 year
of account
$000
Balance on the technical account for general business
294,049
Investment income
6
87,541
Realised losses on investments
6
(3,455)
Unrealised gains on investments
6
25,628
Investment expenses and charges
6
(2,587)
Total investment return
107,127
Allocated investment return transferred (to)/from general business technical account
(107,127)
Foreign exchange losses
(28,306)
Profit for the 2022 closed year of account
265,743
Members’ agents’ fees advances
(3,256)
Amounts due to members as at 31 December 2024
262,487
There are no recognised gains or losses in the accounting period other than those dealt with in the technical and non-technical
accounts, therefore no statement of other comprehensive income has been presented.
The notes on pages 53 to 57 form an integral part of these underwriting year accounts.
52
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet
Hiscox Syndicate 0033 underwriting year accounts
2022 account at 31 December 2024
Notes
2022 year
of account
$000
Investments
Financial investments
8
1,408,647
Deposits with ceding undertakings
1,787
1,410,434
Reinsurance recoveries anticipated on gross reinsurance to close premium payable
3
1,279,626
Debtors
Debtors arising out of direct insurance operations
9
50,603
Debtors arising out of reinsurance operations
10
73,105
Other debtors
11
3,150
126,858
Other assets
Cash at bank and in hand
7,986
Prepayments and accrued income
Accrued income
18,854
Total assets
2,843,758
Capital and reserves
Members’ balances
(262,487)
Reinsurance to close premium payable – gross amount
3
(2,298,856)
Creditors
Creditors arising out of direct insurance operations
12
(5,266)
Creditors arising out of reinsurance operations
13
(244,860)
Other creditors
14
(32,289)
(282,415)
Accruals and deferred income
–
Total liabilities
(2,581,271)
Total liabilities, capital and reserves
(2,843,758)
The notes on pages 53 to 57 form an integral part of these underwriting year accounts.
The underwriting year accounts on pages 50 to 57 were approved by the Board of Hiscox Syndicates Limited and were signed
on its behalf by
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
53
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Notes to the accounts
Hiscox Syndicate 0033 underwriting year accounts
1 Basis of preparation
These accounts have been prepared in accordance with the
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008, the Lloyd’s Syndicate Accounting
Byelaw (No. 8 of 2005) and applicable Accounting Standards in
the United Kingdom, comprising Financial Reporting Standard
102 ‘The Financial Reporting Standard’ applicable in the United
Kingdom and the Republic of Ireland (FRS 102) as modified
by the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005).
Members participate on a Syndicate by reference to a year
of account and each Syndicate year of account is a separate
annual venture. These accounts relate to the 2022 year of
account which has been closed by reinsurance to close
at 31 December 2024. Consequently, the balance sheet
represents the assets and liabilities of the 2022 year of account
at the date of closure. The underwriting account reflects the
transactions for that year of account during the three-year
period until closure. These accounts cover the three years
from the date of inception of the 2022 year of account to the
date of closure. Accordingly, this is the only reporting period
and so corresponding amounts are not shown.
2 Accounting policies
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the syndicate underwriting year accounts.
The underwriting accounts for each year of account are
normally kept open for three years before the result on that year
is determined. At the end of the three-year period, outstanding
liabilities can normally be determined with sufficient accuracy
to permit the year of account to be closed by payment of a
reinsurance to close premium to the successor year of account.
The accounting policies adopted are the same as those disclosed
in Syndicate 0033 annual accounts with the exception of:
2(d) Claims
Gross claims paid include internal and external claims
settlement expenses and, together with reinsurance recoveries
less amounts provided for in respect of doubtful reinsurers, are
attributed to the same year of account as the original premium
for the underlying policy.
Reinstatement premiums payable in the event of a claim being
made are charged to the same year of account as that to which
the recovery is credited.
The net reinsurance to close premium is determined on the basis
of estimated outstanding liabilities and related claims settlement
costs (including claims incurred but not reported), net of estimated
collectible reinsurance recoveries, relating to the closed year
of account and all prior years of account reinsured therein.
The reinsurance to close contract transfers the liability in
respect of all claims, reinsurance premiums, return premiums
and other payments in respect of the closing year and prior years
to the Names on the next open year in so far as they have not
been provided for in these accounts. It gives the Names on the
next open year the benefit of refunds, recoveries, premiums
due and other income in respect of those years in so far as they
have not been credited in these accounts. The reinsurance
to close is treated as the extinguishment of the related net
insurance liabilities for the closed underwriting year.
2(g) Investment return
The returns on financial investments arising in a calendar year
are apportioned to years of account open during the calendar
year in proportion to the average funds available for investment
on each year of account.
2(h) Foreign currencies
The functional currency of the Syndicate is US Dollars. Assets,
liabilities, revenues and costs denominated in foreign currencies
are recorded at the rates of exchange ruling at the date of the
transactions. At the balance sheet date, monetary assets and
liabilities are translated at the year-end rates of exchange.
Differences arising on translation of foreign currency
amounts relating to insurance operations of the Syndicate
are included in profit/(loss) on foreign exchange in the
non-technical account.
2(o) Operating expenses
Syndicate operating expenses are allocated to the year of
account for which they are incurred. Where expenses are
incurred on behalf of the Syndicate, by an agency company,
these expenses are apportioned to the Syndicate using
varying methods depending on the amount of work performed,
resources used and the volume of business transacted, for
that type of expense.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
54
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
3 Reinsurance premium to close the 2022 and prior years of account
Reported
$000
IBNR
$000
Unearned
premium*
$000
Total
$000
Reinsurance to close premium received
Gross reinsurance to close premium received
823,756
1,360,352
–
2,184,108
Reinsurance recoveries anticipated
(445,678)
(847,194)
– (1,292,872)
Reinsurance to close premium receivable, net of reinsurance
378,078
513,158
–
891,236
Reinsurance to close premium payable
Gross reinsurance to close premium payable
814,390
1,459,747
24,719
2,298,856
Reinsurance recoveries anticipated
(446,707)
(822,182)
(10,737) (1,279,626)
Reinsurance to close premium payable, net of reinsurance
367,683
637,565
13,892
1,019,230
The reinsurance to close has been assumed by the following year of account of the Syndicate.
4 Analysis of underwriting result
2021 and prior
$000
2022
$000
Total
$000
Technical account balance before allocated investment return and net operating expenses
2,840
657,135
659,975
Brokerage and commission on gross premium
(8,619)
(411,504)
(420,123)
Total
(5,779)
245,631
239,852
5 Segmental analysis
Gross
premiums
written
$000
Gross
premiums
earned
$000
Gross
claims
incurred
$000
Net
operating
expenses
$000
Reinsurance
balance
$000
Underwriting
profit/(loss)
$000
Accident and health
28,822
28,822
(12,791)
(10,960)
(3,758)
1,313
Motor – third-party liability
31
31
4
12
(2)
45
Motor – other classes
–
–
–
–
–
–
Marine aviation and transport
182,354
182,354
(44,298)
(59,264)
4,807
83,599
Fire and other damage to property
794,166
794,166
(378,114)
(189,367)
(145,549)
81,136
Third-party liability
318,539
318,539
(308,799)
(82,339)
65,706
(6,893)
Credit and suretyship
147,187
147,187
(88,811)
(42,450)
(8,710)
7,216
Total direct insurance
1,471,099
1,471,099
(832,809)
(384,368)
(87,506)
166,416
Reinsurance
632,351
632,351
(272,098)
(88,685)
(251,062)
20,506
Total
2,103,450
2,103,450
(1,104,907)
(473,053)
(338,568)
186,922
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Notes to the accounts
*Unearned premium is shown net of deferred acquisition costs.
55
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Notes to the accounts
6 Investment return
2022
year of
account
$000
Interest and similar income
From financial instruments designated at fair value through profit or loss:
Interest income on financial assets
87,541
Other income from investments
From financial instruments designated at fair value through profit or loss:
Gains on realisation of investments
11,273
Losses on the realisation of investments
(14,728)
Unrealised gains on investments
45,041
Unrealised losses on the investments
(19,413)
Investment management expenses
(2,587)
Total investment return
107,127
Transferred to the technical account from the non-technical account
(107,127)
Investment return for the 2022 year of account is recognised in the 2022, 2023 and 2024 calendar years. The investment income
and yield for these calendar years is disclosed in the investment return notes in each of the respective syndicate annual accounts.
7 Net operating expenses
The cumulative Syndicate expenses charged in the 2022 underwriting account were made up as follows:
2022
year of
account
$000
Brokerage and commissions
420,123
Other acquisition costs
100,554
Members’ standard personal expenses
28,639
Administrative expenses
74,852
Reinsurers’ commissions and profit participations
(151,115)
Total
473,053
Profit commission is charged by the managing agent at a rate of 15% on the total recognised gain of the Syndicate if the rolling
seven-year simple average basis is at least 7.5% or more of capacity. If the rolling seven-year average falls below 7.5% of capacity
profit commission will be charged at 12.5%. This calculation is subject to the operation of a two-year deficit clause. Profit
commission is disclosed within other acquisition costs.
Profit-related remuneration is charged at 5% on the profit of six major business areas. It is disclosed within other acquisition costs.
Administrative expenses include fees payable to the auditors and its associates (exclusive of VAT).
2022
year of
account
$000
Auditors’ remuneration
Fees payable to the Syndicate’s auditors for the audit of the syndicate 2022 underwriting account
619
Fees payable to the Syndicate’s auditors and its associates in respect of other services pursuant to legislation
137
Total
756
56
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
8 Financial investments
Fair value
$000
Cost
$000
Debt securities and other fixed income securities
1,333,065
1,325,665
Shares and other variable yield securities
and units in unit trusts
53,376
53,376
Syndicate loans to central fund
22,206
23,019
Derivative financial assets
–
–
Loans and deposits with credit institutions
–
–
Total
1,408,647
1,402,060
All financial investments were carried at fair value through profit or loss. No financial assets were classified as ‘held for trading’
under FRS 102.
Other financial assets under FRS 102 are cash at bank and in hand, direct insurance and reinsurance debtors, other debtors and
accrued income, which are classified as loans and receivables.
9 Debtors arising out of direct insurance operations
$000
Due within one year
48,129
Due after one year
2,474
Total
50,603
10 Debtors arising out of reinsurance operations
$000
Due within one year
73,084
Due after one year
21
Total
73,105
11 Other debtors
$000
Amounts owed from fellow subsidiary of managing agent
1,094
Other
2,056
Total
3,150
12 Creditors arising out of direct insurance operations
$000
Due within one year
5,266
Due after one year
–
Total
5,266
13 Creditors arising out of reinsurance operations
$000
Due within one year
147,574
Due after one year
97,286
Total
244,860
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Notes to the accounts
57
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
14 Other creditors
$000
Amounts owed to fellow subsidiary of managing agent
29,575
Derivative liabilities
–
Other
2,714
Total
32,289
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Notes to the accounts
58
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Seven-year summary
Hiscox Syndicate 0033 underwriting year accounts
Year of account
2016
2017
2018
2019
2020
2021
2022
Syndicate allocated capacity in £000
998,840
1,147,315
1,598,258
1,399,156
1,698,078
1,699,385
1,699,337
Syndicate allocated capacity in $000
1,272,223
1,519,389
2,185,139
1,895,157
2,042,618
2,166,377
2,129,100
Number of underwriting members
1,562
1,546
1,551
1,530
1,502
1,485
1,440
Net premiums net of brokerage in $000
553,210
411,279
551,669
555,281
680,962
668,274
848,091
Capacity utilised (%)
90
76
67
84
77
73
79
Net capacity utilised (%)
43
27
25
29
33
31
40
Results for an illustrative share of £10,000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
Gross premiums
14,867
13,051
11,973
14,610
11,653
11,673
12,378
Net premiums
8,978
6,561
6,239
7,150
6,363
6,297
7,463
Reinsurance to close from
an earlier account
7,609
6,600
4,707
5,911
5,942
5,113
5,245
Net claims paid
(4,894)
(4,160)
(3,460)
(3,557)
(2,231)
(2,643)
(2,892)
Reinsurance to close
(7,563)
(6,541)
(5,172)
(7,145)
(6,935)
(5,472)
(5,932)
Profit/(loss) on exchange
(48)
37
33
1
(7)
(72)
(167)
Syndicate operating expenses
(2,987)
(2,625)
(2,423)
(2,529)
(2,312)
(2,320)
(2,615)
Names personal expenses
(368)
(175)
(167)
(171)
(168)
(177)
(169)
Balance on technical account
before investment return
727
(303)
(243)
(340)
652
726
933
Investment return
227
304
260
133
(125)
315
630
Profit/(loss) before members’ agent’s fees
954
1
17
(207)
527
1,041
1,563
Profit/(loss) before members’ agent’s fees £000
749
1
12
(153)
438
817
1,248
Notes to the seven-year summary
1.
The seven-year summary has been prepared from the audited accounts of the Syndicate, however, the table is unaudited.
2.
Personal expenses have been stated at the amount which would be incurred pro-rata by Names writing the illustrative premium income in the Syndicate,
irrespective of any minimum charge applicable. Personal expenses include managing agent fees, central fund contributions, Lloyd’s subscriptions and profit
commissions. These figures exclude members’ agents’ fees.
3.
‘Capacity utilised’ represents gross premiums as a percentage of the allocated capacity. ‘Net capacity utilised’ represents net premiums as a percentage of
the allocated capacity. For these calculations, gross and net premiums are net of brokerage.
4.
Profit commission has been calculated in accordance with the applicable agency agreements.
5.
Premium figures and Syndicate operating expenses are gross of brokerage.
6.
2016 year of account is presented using transactional rates of exchange, the functional and presentation currency of the underwriting year accounts changed
from 1 January 2018, all years of account where the underwriting accounts have been presented in Sterling have been translated at the closing rate prevailing
at 31 December 2018.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
59
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
59
Chapter 3
Hiscox Syndicate 6104
annual accounts
60
Report of the Directors of the
managing agent
63
Statement of managing
agent’s responsibilities
64
Independent auditors’ report
67
Profit and loss account:
technical account
– general business
68
Profit and loss account:
non-technical account
– general business
69
Balance sheet – assets
70
Balance sheet – liabilities
71
Statement of changes in
members’ balances
72
Statement of cash flows
73
Notes to the accounts
Chapter 3
Hiscox Syndicate 6104
annual accounts
60
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Report of the Directors of the managing agent
Hiscox Syndicate 6104 annual accounts
The Directors of the managing agent present their report for Syndicate 6104 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 (the 2008 Regulations).
The Syndicate continues to adopt the going concern basis in preparing the syndicate annual accounts.
Separate underwriting year accounts for the closed 2020 and 2022 year of accounts of Syndicate 6104 are included following
these annual accounts.
Results
The result for Syndicate 6104 in calendar year 2024 is a profit of $31.7 million (2023: $26.9 million). The Syndicate has benefitted
from releasing Covid-19 related reserves from older years of account, as well as prior-year catastrophe reserve releases for several
events including Hurricane Ian and Typhoon Jebi. These releases offset the loss impact of Hurricanes Helene and Milton, and the
Baltimore bridge loss in the current year. Premium growth and positive investment income also contributed to the result for the year.
The Syndicate’s key financial performance indicators during the year were as follows:
2024
$m
2023
$m
%
change
Gross premiums written
75.3
19.6
284.2
Gross premiums earned
66.6
19.5
241.5
Net premiums earned
63.8
17.6
262.5
Total recognised profit for the year
31.7
26.9
17.8
Claims ratio (%)
24.9
(66.1)
91.0
Commission ratio (%)
19.4
17.0
2.4
Expense ratio (%)
11.6
14.2
(2.6)
Combined ratio (%)
55.9
(34.9)
90.8
Principal activity
The principal activity of Syndicate 6104 is the transaction of reinsurance business in the United Kingdom at Lloyd’s of London.
The Syndicate has the following underwriting capacity:
Years of account
2019
2020
2021
2022
2023
2024
2025
Capacity (£m)
55.0
44.4
23.3
12.7
19.4
56.4
78.5
Capacity ($m)*
68.9
55.6
29.2
15.9
24.3
70.7
98.4
*Converted at the closing rate at 31 December 2024.
None of the capacity of the Syndicate is provided by the Hiscox Group.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
61
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Principal activity continued
Syndicate 6104 trades through the Lloyd’s worldwide licences
and rating. It also benefits from the Lloyd’s brand. Lloyd’s and
Lloyd’s Brussels has an A+ (Superior) rating from A.M. Best,
AA- (Very strong) from S&P, AA- (Very strong) from Fitch
and AA- (Very strong) from Kroll Bond Rating Agency. The
geographical and currency split of its business is shown below:
Geographical split of gross premiums written (%)
2024
2023
UK
–
–
Europe
13
9
North America
58
60
Asia
2
3
Rest of the world
27
28
Geographical premiums written settlement currency (%)
2024
2023
Sterling
18
12
Euro
5
5
US Dollar
76
82
Canadian Dollar
1
1
Review of the business
Special Purpose Arrangement 6104 (Syndicate 6104) was
established for the 2008 year of account to provide quota
share reinsurance to Syndicate 0033’s excess of loss property
catastrophe reinsurance account and from the 2019 year
of account it also provided quota share reinsurance to
Syndicate 0033’s cyber account. Since the 2023 year of
account the Syndicate has provided quota share reinsurance
to Syndicate 0033’s applicable excess of loss property
catastrophe reinsurance, marine, terrorism and cyber accounts.
Syndicate 6104 pays a fee and profit commission to
Syndicate 0033 for the business ceded. In addition, Hiscox
Syndicates Limited (HSL) charges a fee of 0.5% of capacity
to Syndicate 6104 from which it must meet all of its
Syndicate expenses.
The Syndicate operates like a normal syndicate in that upon
closure of the account the assets and liabilities are transferred
to the next year of account through the reinsurance to close
(RITC) process. There are, however, certain differences, the
most significant of which is that the capacity, which is all
provided by third-party capital providers, operates on a
limited tenancy basis. Syndicate 6104 only writes one contract
per year, a reinsurance of Syndicate 0033. This contract operates
on a funds-withheld basis with Syndicate 6104 credited
interest on the balance owing by Syndicate 0033.
The 2020 underwriting year, previously in run off, has now
closed at 60 months. The 2022 underwriting year has closed
at 36 months.
The portfolio is underwritten by the Syndicate 0033 reinsurance
underwriting team and includes exposures from all territories
around the world. Due to the nature of the business, the Syndicate
is likely to produce a volatile operating performance.
The cession from Syndicate 0033 increased to a weighted
average of 16.3% in 2024 (2023: 5.3%), reflecting a significant
increase in support from third-party Names and a resulting
increase in stamp capacity. Premium income increased to
$75.3 million (2023: $19.6 million).
2025 and the future
For 2025, the Syndicate has increased stamp capacity to
$98.4 million (£78.5 million). The cession from Syndicate 0033
has increased to a weighted average of 20.5%.
Capital
One of the main advantages of trading through Lloyd’s is the
considerably lower capital ratios that are available in Lloyd’s
as a whole. The size of the Syndicate is increased or reduced
according to the strength of the insurance environment in its
main classes.
The HSL internal capital model has been used to set the
Syndicate’s capital. Syndicate capital is determined through
the submission and agreement by Lloyd’s of an ultimate
solvency capital requirement (SCR) which is subject to an
uplift determined by the Franchise Board to calibrate the
capital required by Lloyd’s. Lloyd’s unique capital structure
provides excellent financial security to policyholders and
capital efficiency for members. This chain of security provides
the financial strength that ultimately backs insurance policies
written at Lloyd’s and has three links:
1.
all premiums received by syndicates are held in trust as
the first resource for paying policyholders’ claims;
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Report of the Directors
of the managing agent
62
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
2.
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.
They are set with reference to the SCR together with
the Lloyd’s uplift. Since FAL is not under the control of
the managing agent, no amount has been shown in the
annual accounts. However, the managing agent is able
to make a call on the members’ FAL to meet liquidity
requirements or to settle losses;
3.
the central assets are available at the discretion of the
Council of Lloyd’s to meet any valid claim that cannot be
met from the resources of any member further up the chain.
Lloyd’s also retains the right to request a callable contribution
of up to 5% of capacity from the Syndicate.
Syndicate 6104 operates on a funds-withheld basis. A
significant loss event could place a strain on Syndicate 0033’s
cash flows. Consequently, we put Names on notice that, in
these circumstances, we may need to make a cash call, at
some time in the future.
Principal risks and uncertainties
A description of the principal risks and uncertainties
facing the Syndicate is set out in the annual accounts
of Syndicate 0033 (note 4).
Directors’ interests
The Directors of the managing agent and their interests are
disclosed in Syndicate 0033 annual accounts.
Disclosure of information to the auditors
The Directors of the managing agent who held office at
the date of approval of this managing agent’s report confirm
that, so far as they are each aware, there is no relevant audit
information of which the Syndicate’s auditors are unaware;
and each Director has taken all the steps that they ought
to have taken as a Director to make themselves aware of
any relevant audit information and to establish that the
Syndicate’s auditors are aware of that information.
Annual General Meeting
Usually the only formal business conducted at the Syndicate
Annual General Meeting (AGM) is the appointment of the
Syndicate auditor for the following year, and usually the
attendance at the AGM, when it is held, is minimal.
In accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 a Syndicate AGM was held in 2016 to appoint
PricewaterhouseCoopers LLP (PwC) as the Syndicates’
registered auditor. The 2008 Regulations allow managing
agents to dispense with the requirement to hold a Syndicate
AGM and contain provisions for the reappointment of the
auditor providing certain criteria are met.
This year, we therefore give notice that:
s
Hiscox Syndicates Limited does not propose to hold an
AGM of the members of Syndicate 6104 in 2025;
s
we propose that PwC are re-appointed as the Syndicate’s
registered auditor for the period of one year from the date
of this Annual Report;
s
members may object to the matters set out above within
21 days of this notice.
If no objections to this are received from any members within
the specified period, we shall notify Lloyd’s to that effect.
If any objections are received, depending on the level or nature
of such objections, we shall then consider whether to:
s
apply for Lloyd’s consent not to hold an AGM. Lloyd’s
may give its consent subject to any such conditions
and requirements as it may determine; or
s
convene an AGM.
By order of the Board
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Report of the Directors
of the managing agent
63
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of managing agent’s responsibilities
Hiscox Syndicate 6104 annual accounts
The managing agent is responsible for preparing the Syndicate
Annual Report and Accounts in accordance with applicable
law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 require the managing
agent to prepare syndicate annual accounts at 31 December
each year in accordance with UK accounting standards and
applicable law (UK Generally Accepted Accounting Practice).
The syndicate annual accounts are required by law to give a
true and fair view of the state of affairs of the Syndicate at that
date and of its profit or loss for that year.
In preparing those syndicate annual accounts, the managing
agent is required to:
s
select suitable accounting policies and then apply them
consistently, subject to changes arising on the adoption
of new accounting standards in the year;
s
make judgements and estimates that are reasonable
and prudent;
s
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in the syndicate annual accounts; and
s
prepare the syndicate annual accounts on the basis that
the Syndicate will continue to write future business unless
it is inappropriate to presume the Syndicate will do so.
The managing agent is responsible for keeping proper
accounting records that disclose with reasonable accuracy,
at any time, the financial position of the Syndicate and enable
it to ensure that the syndicate annual accounts comply with
the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008. It is also responsible
for safeguarding the assets of the Syndicate and hence for
taking reasonable steps for prevention and detection of fraud
and other irregularities.
The managing agent is responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing
the preparation and dissemination of the syndicate annual
accounts may differ from legislation in other jurisdictions.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
64
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
To the members of Syndicate 6104
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, Syndicate 6104’s syndicate annual accounts:
s
give a true and fair view of the state of the Syndicate’s
s
s
affairs as at 31 December 2024 and of its profit and
cash flows for the year then ended;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 ‘The Financial Reporting Standard applicable in the
UK and Republic of Ireland’, and applicable law); and
have been prepared in accordance with the requirements
of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the
requirements within the Lloyd’s Syndicate Accounts
Instructions version 2.0 as modified by the Frequently
Asked Questions issued by Lloyd’s version 1.
1
(‘the
Lloyd’s Syndicate Instructions’).
We have audited the syndicate annual accounts included
within the Reports and Accounts (the Annual Report), which
comprise: balance sheet – assets and the balance sheet –
liabilities as at 31 December 2024; the profit and loss account:
technical account – general business and profit and loss
account: non-technical – general business, the statement
of cash flows, and the statement of changes in members’
balances for the year then ended; and the notes to the
syndicate annual accounts, which include a description
of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions
and other applicable law. Our responsibilities under ISAs
(UK) are further described in the auditors’ responsibilities
for the audit of the syndicate annual accounts section of our
report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance
with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the
FRC’s Ethical Standard, as applicable to other entities of public
interest, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 6, we have provided no non-
audit services to the syndicate in the period under audit.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the syndicate annual accounts and our
auditors’ report thereon. The managing agent is responsible
for the other information. Our opinion on the syndicate
annual accounts does not cover the other information and,
accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the syndicate annual accounts,
our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the syndicate annual accounts or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report based on
these responsibilities.
With respect to the report of the Directors of the managing
agent (the ‘managing agent’s report’), we also considered
whether the disclosures required by The Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 have been included.
Based on our work undertaken in the course of the audit,
The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also
to report certain opinions and matters as described below.
Managing agent’s report
In our opinion, based on the work undertaken in the course of
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
65
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
the audit, of the audit, the information given in the managing
agent’s report for the year ended 31 December 2024 is
consistent with the syndicate annual accounts and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate
and its environment obtained in the course of the audit,
we did not identify any material misstatements in the managing
agent’s report.
Responsibilities for the syndicate annual accounts and
the audit
Responsibilities of the managing agent for the syndicate
annual accounts
As explained more fully in the Statement of managing agent’s
responsibilities, the managing agent is responsible for the
preparation of the syndicate annual accounts in accordance
with the applicable framework and for being satisfied that
they give a true and fair view. The managing agent is also
responsible for such internal control as they determine
is necessary to enable the preparation of syndicate annual
accounts that are free from material misstatement,
whether due to fraud or error.
In preparing the syndicate annual accounts, the managing
agent is responsible for assessing the syndicate’s ability to
continue as a going concern, disclosing as applicable, matters
related to going concern and using the going concern basis
of accounting unless it is intended for the syndicate to cease
operations, or it has no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate
annual accounts
Our objectives are to obtain reasonable assurance about
whether the syndicate annual accounts as a whole are free
from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users
taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry,
we identified that the principal risks of non-compliance with laws
and regulations related to breaches of regulatory principles,
such as those governed by the Prudential Regulation Authority
and the Financial Conduct Authority, and those regulations
set by the Council of Lloyd’s, and we considered the extent
to which non-compliance might have a material effect on the
syndicate annual accounts. We also considered those laws and
regulations that have a direct impact on the syndicate annual
accounts such as The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the
Lloyd’s Syndicate Instructions. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the
syndicate annual accounts (including the risk of override of
controls), and determined that the principal risks were related
to manual journals and accounting estimates in respect of
premiums and insurance claims outstanding. Audit procedures
performed by the engagement team included:
s
discussions with senior management, including
those in the risk and compliance functions, including
consideration of known or suspected instances of
non-compliance with laws, regulation and fraud;
s
reading key correspondence with Lloyd’s, in relation to
compliance with laws and regulations;
s
reviewing relevant meeting minutes including those
of the Audit Committee;
s
testing journal entries identified in accordance with our
risk assessment;
s
testing and assessing the appropriateness of insurance
claims reserves;
s
identifying and testing estimated premium income on
a sample basis; and
s
designing audit procedures to incorporate unpredictability
around the nature, timing and extent of our testing.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected in
the syndicate annual accounts. Also, the risk of not detecting
a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Independent auditors’ report
66
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit
of the syndicate annual accounts is located on the FRC’s
website at:
frc.org.uk/auditorsresponsibilities
. This
description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the syndicate’s members as a body in accordance with
part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 we are required
to report to you if, in our opinion:
s
we have not obtained all the information and explanations
we require for our audit; or
s
adequate accounting records have not been kept by the
managing agent in respect of the Syndicate; or
s
certain disclosures of managing agent remuneration
specified by law are not made; or
s
the syndicate annual accounts are not in agreement with
the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included
within a document to which iXBRL tagging has been applied.
This auditors’ report provides no assurance over whether the
iXBRL tagging has been applied in accordance with section 2
of the Lloyd’s Syndicate Instructions version 2.0.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Independent auditors’ report
Thomas Robb
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2025
67
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
technical account – general business
Hiscox Syndicate 6104 annual accounts
Year ended 31 December 2024
Notes
2024
$000
2023
$000
Earned premiums, net of reinsurance
Gross premiums written
5
75,306
19,553
Outward reinsurance premiums
(2,862)
(1,900)
Net premiums written
72,444
17,653
Change in the provision for unearned premiums:
Gross amount
(8,682)
(79)
Reinsurers’ share
–
–
Net change in provisions for unearned premiums
(8,682)
(79)
Earned premiums, net of reinsurance
63,762
17,574
Allocated investment return transferred from/(to) the non-technical account
4,283
2,847
Claims incurred, net of reinsurance
Claims paid:
Gross amount
10
(19,029)
–
Reinsurers’ share
–
–
Net claims paid
(19,029)
–
Change in provision for claims:
Gross amount
3,123
11,623
Reinsurers’ share
–
–
Net change in provisions for claims
3,123
11,623
Claims incurred, net of reinsurance
(15,906)
11,623
Net operating expenses
6
(19,797)
(5,484)
Balance on the technical account for general business
32,342
26,560
The notes on pages 73 to 81 form an integral part of these annual accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
68
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
non-technical account – general business
Hiscox Syndicate 6104 annual accounts
Year ended 31 December 2024
Notes
2024
$000
2023
$000
Balance on the technical account for general business
32,342
26,560
Investment income
8
4,283
2,847
Total investment return
8
4,283
2,847
Allocated investment return transferred (to)/from the general business technical account
(4,283)
(2,847)
Foreign exchange (losses)/gains
(604)
304
Profit for the financial year
31,738
26,864
There are no recognised gains or losses in the accounting year other than those dealt with in the technical and non-technical
accounts, therefore no statement of other comprehensive income has been presented.
The notes on pages 73 to 81 form an integral part of these annual accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
69
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet – assets
Hiscox Syndicate 6104 annual accounts
At 31 December 2024
Notes
2024
$000
2023
$000
Debtors
Debtors arising out of reinsurance operations
11
124,268
84,046
Other debtors
12
4,668
976
128,936
85,022
Prepayments and accrued income
Deferred acquisition costs
10
2,317
603
2,317
603
Total assets
131,253
85,625
The notes on pages 73 to 81 form an integral part of these annual accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
70
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet – liabilities
Hiscox Syndicate 6104 annual accounts
At 31 December 2024
Notes
2024
$000
2023
$000
Capital and reserves
Members’ balances
54,317
23,904
Technical provisions
Provision for unearned premium
10
12,006
3,257
Claims outstanding
10, 13
49,648
53,081
61,654
56,338
Creditors
Creditors arising out of reinsurance operations
14
5,613
2,748
Other creditors
15
9,669
2,635
15,282
5,383
Total liabilities
76,936
61,721
Total liabilities, capital and reserves
131,253
85,625
The notes on pages 73 to 81 form an integral part of these annual accounts.
The annual accounts on pages 67 to 81 were approved by the Board of Hiscox Syndicates Limited and were signed on its behalf by
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
71
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of changes in members’ balances
Hiscox Syndicate 6104 annual accounts
Year ended 31 December 2024
2024
$000
2023
$000
Members’ balances brought forward at 1 January
23,904
(2,858)
Total recognised gains for the year
31,738
26,864
Payments of profit to members’ personal reserve funds
(1,091)
–
Losses collected in relation to distribution on closure of underwriting year
–
–
Members’ agent fees
(234)
(102)
Members’ balances carried forward at 31 December
54,317
23,904
Members participate on Syndicates by reference to years of account and their ultimate result, assets and liabilities are assessed
with reference to policies incepting in that year of account in respect of their membership of a particular year.
A profit payment distribution of $5.8 million to members will be proposed in relation to the closing year of account 2022
and a profit payment distribution of $25.9 million to members will be proposed in relation to the closing year of account 2020
(2023: profit payment distribution of $1.1 million in relation to the closing year of account 2021). See note 9 the current
reporting year result of years of account remaining open after the three-year period.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
72
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Statement of cash flows
Hiscox Syndicate 6104 annual accounts
Year ended 31 December 2024
2024
$000
2023
$000
Cash flows from operating activities
Profit for the year
31,738
26,864
Increase/(decrease) in gross technical provisions
5,316
(10,803)
(Increase)/decrease in reinsurers’ share of gross technical provisions
–
–
Increase in debtors
(40,222)
(17,658)
Increase in creditors
2,865
1,890
Movement in other assets/liabilities
1,628
(191)
Investment return
4,283
2,847
Foreign exchange
–
–
Net cash flows from operating activities
5,608
2,949
Net cash flows from investing activities
Purchase of equity and debt instruments
–
–
Sale of equity and debt instruments
–
–
Investment income received
–
–
Other
(4,283)
(2,847)
Net cash flows from financing activities
Distribution of profits
(1,325)
(102)
Collection of losses
–
–
Net increase/(decrease) in cash and cash equivalents
–
–
Cash and cash equivalents at the beginning of the year
–
–
Cash and cash equivalents at the end of the year
–
–
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
73
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Notes to the accounts
Hiscox Syndicate 6104 annual accounts
1 Basis of preparation and critical accounting policies
The basis of preparation of these accounts is the same as
disclosed for Syndicate 0033.
These annual accounts are presented in US Dollars, which is
the Syndicate’s functional currency. All amounts have been
rounded to the nearest thousand, unless otherwise indicated.
Some disclosure items, for example, Syndicate capacity are
presented in Sterling as it is denominated in this currency,
US Dollar amounts are converted at the closing rate at
31 December 2024. The functional currency of the
Syndicate is US Dollars.
2 Accounting policies
The principal accounting policies adopted are the same as
those disclosed for Syndicate 0033.
Accounting policies not applied by Syndicate 6104:
2(a) Pension costs
Syndicate 6104 is not recharged for any pension costs.
Additional accounting policies applied by Syndicate 6104:
2(b) Funds withheld
Underlying premiums and claims are settled by Syndicate 0033
with policyholders as they fall due. Within Syndicate 6104
these are accounted for on a funds-withheld basis.
Debtors and creditors arising between Syndicate 6104 and
Syndicate 0033 are not settled until the year of account has
closed. Up to that time the balances are shown separately.
Claims outstanding are also settled when the year of account
closes. Other non-technical transactions are settled when
the year of account closes.
Interest is calculated on the daily paid cash fund experience
balance, held by Syndicate 0033 on behalf of the Syndicate.
Interest on each currency balance is credited at the same
yield earned by Syndicate 0033 in the period for each currency.
3 Judgements and key sources of estimation uncertainty
The judgements and key sources of estimation uncertainty
are the same as those disclosed for Syndicate 0033, with the
exception of:
3(a) Valuation of general insurance contract liabilities
Covid-19 is an unprecedented event for the insurance industry
and the effects of it as a loss event remain both ongoing
and uncertain. In measuring the liabilities the Syndicate has
therefore included an allowance for risk and uncertainties
above the best estimate. The ultimate amounts of these claims
continue to be subject to uncertainty which, combined with
their total size, increases the level of uncertainty in the actuarial
best estimate of the Syndicate beyond the normal range of
uncertainty for insurance liabilities at this stage of development.
Consequently, the held management reserves for the
Syndicate are above the actuarial best estimate such that the
remaining downside uncertainty in the booked reserves is
consistent with the normal range of uncertainty for insurance
liabilities at this stage of development.
3(b) Premium recognition
The Syndicate writes premiums as reported under its reinsurance
contract with Syndicate 0033. The gross premiums written in
Syndicate 0033 are initially based on estimated premium income
(EPI) of each contract. EPI estimates are based on information
provided by the brokers, past underwriting experience and
the contractual terms of the policy. The EPI estimates are
reviewed on a regular basis, and premiums are adjusted over
time as needed to match the actual signed premium. Premiums
in respect of insurance contracts underwritten under binding
authorities are booked as the underlying contracts incept. The
Syndicate allocates the expected premium receipts to each period
of insurance contracts underwritten the basis of the passage
of time. But if the expected pattern of release of risk during the
coverage period differs significantly from the passage of time,
for example a group of contracts that is exposed to large natural
catastrophe risk concentrated in the first or second half of the year,
then the allocation is made on the basis of the expected timing
of claims incurred.
Gross premiums written includes an
estimation for reinstatement premiums which is determined
based on incurred losses held in the technical provisions.
3(c) Fair value of financial investments
The Syndicate does not hold any investments.
4 Management of risk
Syndicate 6104 accepts all business under a quota-share
reinsurance arrangement with Syndicate 0033, which is operated
on a funds-withheld basis in which funds are only received by
the Syndicate when Syndicate 0033 makes a distribution,
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
74
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
4 Management of risk
continued
typically on closure of the year of account. Consequently the majority of the principal risks applying to Syndicate 6104 are
managed within Syndicate 0033 and are disclosed within the Syndicate 0033 annual accounts management of risk, with the
exception of the following disclosures.
Insurance risk
(ii) Reserving risk
Booked reserves include a net margin of $17.5 million (2023: $20.6 million), representing 29.2% (2023: 37.9%) of net booked
reserves. This is the margin above the best estimate to help mitigate the uncertainty within the reserve estimates. As the best
estimate matures and becomes more certain, the management margin is gradually released in line with the reserving policy.
The table below (a) presents the sensitivity of the value of insurance liabilities disclosed in the accounts to potential
movements in the assumptions applied within the technical provisions. Given the nature of the business underwritten by the
Syndicate, the approach to calculating the technical provisions for each class can vary and as a result the sensitivity performed
is to apply a beneficial and adverse risk margin to the total insurance liability.
Table a)
General insurance business sensitivities as at 31 December 2024
2.5%
$000
-2.5%
$000
5%
$000
-5%
$000
Claims outstanding – gross of reinsurance
1,241
(1,241)
2,482
(2,482)
Claims outstanding – net of reinsurance
1,241
(1,241)
2,482
(2,482)
General insurance business sensitivities as at 31 December 2023
2.5%
$000
-2.5%
$000
5%
$000
-5%
$000
Claims outstanding – gross of reinsurance
1,327
(1,327)
2,654
(2,654)
Claims outstanding – net of reinsurance
1,327
(1,327)
2,654
(2,654)
Financial risk
(a) Reliability of fair values
No assets or liabilities are held at fair value.
(b) Interest rate risk
The interest rate risk for this Syndicate is the same as disclosed for Syndicate 0033. It receives investment income from Syndicate
0033 and does not directly hold any financial instruments.
Interest rate risk
2024
impact on
profit
$000
2024
impact on
members’
balance
$000
2023
impact on
profit
$000
2023
impact on
members’
balance
$000
Plus 50 basis points shift in yield curves
(881)
(881)
(449)
(449)
Minus 50 basis points shift in yield curves
881
881
449
449
(c) Credit risk
The credit risk for this Syndicate is the same as disclosed for Syndicate 0033. All assets carrying credit risk are due from
Syndicate 0033, which is rated A+ based on S&P.
Table d)
At 31 December 2024
AAA
$000
AA
$000
A
$000
BBB
$000
Other
$000
Not rated
$000
Total
$000
Debtors arising out of reinsurance operations
–
–
124,268
–
–
–
124,268
Other debtors and accrued interest
–
–
4,668
–
–
–
4,668
Total
–
–
128,936
–
–
–
128,936
At 31 December 2023
AAA
$000
AA
$000
A
$000
BBB
$000
Other
$000
Not rated
$000
Total
$000
Debtors arising out of reinsurance operations
–
84,046
–
–
–
84,046
Other debtors and accrued interest
–
976
–
–
–
976
Total
–
85,022
–
–
–
85,022
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
75
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
4 Management of risk
continued
(d) Financial assets that are past due or impaired
The Syndicate has no assets which are past due or impaired at the reporting date.
(e) Liquidity risk
The liquidity risk for this Syndicate is the same as disclosed for Syndicate 0033. It is also exposed to Syndicate 0033 as all
balances are settled by Syndicate 0033.
Table g)
At 31 December 2024
Less than
one year
$000
Between
one and
three years
$000
Between
three and
five years
$000
Over
five years
$000
Total
$000
Debtors
49,263
79,673
–
–
128,936
Claims outstanding
(12,050)
(37,598)
–
–
(49,648)
Creditors
(5,500)
(9,782)
–
–
(15,282)
Total
31,713
32,293
–
–
64,006
At 31 December 2023
Less than
one year
$000
Between
one and
three years
$000
Between
three and
five years
$000
Over
five years
$000
Total
$000
Debtors
56,295
28,727
–
–
85,022
Claims outstanding
(38,266)
(14,815)
–
–
(53,081)
Creditors
(1,700)
(3,683)
–
–
(5,383)
Total
16,329
10,229
–
–
26,558
(f) Currency risk
The majority of the Syndicate’s gross premiums written is in US Dollars, consequently movements in Sterling, Euro and Canadian
Dollar against US Dollar exchange rate may have a material effect on its financial performance and position. The Syndicate’s
financial assets are denominated in the same currencies as its insurance liabilities, in order to reduce currency exchange volatility
from the balance sheet. This profit and loss is distributed in accordance with Lloyd’s rules using a combination of Sterling and
US Dollars.
Table i)
At 31 December 2024
US Dollar
$000
Sterling
$000
Euro
$000
Canadian
Dollar
$000
Total
$000
Debtors
98,916
22,544
5,646
1,830
128,936
Prepayments and accrued income
1,751
520
25
21
2,317
Total assets
100,667
23,064
5,671
1,851
131,253
Technical provisions
(53,640)
(3,772)
(2,414)
(1,828)
(61,654)
Creditors
(15,444)
162
–
–
(15,282)
Total liabilities
(69,084)
(3,610)
(2,414)
(1,828)
(76,936)
Members’ balances
31,583
19,454
3,257
23
54,317
At 31 December 2023
Debtors
64,022
15,356
4,084
1,560
85,022
Prepayments and accrued income
460
131
9
3
603
Total assets
64,482
15,487
4,093
1,563
85,625
Technical provisions
(51,650)
(1,066)
(3,163)
(459)
(56,338)
Creditors
(5,435)
52
–
–
(5,383)
Total liabilities
(57,085)
(1,014)
(3,163)
(459)
(61,721)
Members’ balances
7,397
14,473
930
1,104
23,904
76
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
4 Management of risk
(f) Currency risk
continued
Sensitivity analysis
The Syndicate performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling,
Euro and the Canadian Dollar. This analysis assumes that all other variables, in particular interest rates, remain constant and that
the underlying valuation of assets and liabilities in their base currency is unchanged. During the year, the Syndicate transacted in
a number of over-the-counter forward currency derivative contracts. The impact of these contracts on the sensitivity analysis is
negligible. The impact of a 10% increase or decrease against the following currencies is shown in the table below:
Table j)
2024
Impact on profit
$000
2024
Impact on
members’ balances
$000
2023
Impact on profit
$000
2023
Impact on
members’ balances
$000
Ten percent increase in USD/GBP exchange rate
(1,945)
1,945
(1,447)
1,447
Ten percent decrease in USD/GBP exchange rate
1,945
(1,945)
1,447
(1,447)
Ten percent increase in USD/EUR exchange rate
(326)
326
(93)
93
Ten percent decrease in USD/EUR dollar exchange rate
326
(326)
93
(93)
Ten percent increase in USD/CAD exchange rate
(2)
2
(110)
110
Ten percent decrease in USD/CAD dollar exchange rate
2
(2)
110
(110)
Operational risk
The Syndicate’s underwriting capacity has fluctuated from $55.6 million for the 2020 year of account and $15.9 million for
the 2022 year of account to $99.0 million for the 2025 year of account, with the cession of applicable excess of loss property
catastrophe reinsurance, marine, terrorism and cyber accounts from Syndicate 0033 also fluctuating in line with this from 22.5%
for the 2020 year of account and 7.1% for the 2022 year of account to a weighted average of 20.5% for the 2025 year of account.
The Syndicate’s operational risk remains aligned with Syndicate 0033.
5 Segmental analysis
An analysis of the underwriting result before investment return is set out below:
2024
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Reinsurance
75,306
66,624
(15,906)
(19,797)
(2,862)
28,059
Total
75,306
66,624
(15,906)
(19,797)
(2,862)
28,059
2023
Gross
written
premium
$000
Gross
premium
earned
$000
Gross claims
incurred
$000
Net operating
expenses
$000
Reinsurance
balance
$000
Underwriting
result
$000
Reinsurance
19,553
19,474
11,623
(5,484)
(1,900)
23,713
Total
19,553
19,474
11,623
(5,484)
(1,900)
23,713
All premiums were concluded in the UK.
6 Net operating expenses
2024
$000
2023
$000
Acquisition costs
21,134
5,325
Change in deferred acquisition costs
(1,700)
43
Members’ standard personal expenses
363
116
Total
19,797
5,484
All administrative expenses are charged to and borne by Syndicate 0033. No brokerage or commissions were borne on direct
business written in the current or prior year.
Members’ standard personal expenses represent a managing agent’s fee payable to Hiscox Syndicates Limited.
Syndicate 0033 has been charged, on behalf of the Syndicate, fees payable to the Syndicate’s auditors for the audit of the
syndicate annual accounts.
77
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
6 Net operating expenses
continued
2024
$000
2023
$000
Auditors’ remuneration
Fees payable to the Syndicate’s auditors for the audit of the syndicate annual accounts
53
50
Fees payable to the Syndicate’s auditors and its associates in respect of other services pursuant to legislation
49
20
Total
102
70
7 Staff costs
All staff are employed by a Hiscox Group service company. No recharge of salaries or Directors’ remuneration is made specifically
to the Syndicate. None of the Syndicate’s active underwriter’s remuneration has been charged to the Syndicate.
8 Investment return
2024
$000
2023
$000
Interest and similar income
From financial instruments designated at fair value through profit or loss:
Interest and similar income
4,283
2,847
Total investment return
4,283
2,847
Transferred to the technical account from the non-technical account
(4,283)
(2,847)
9 Distribution and open years of account
A profit payment distribution of $5.8 million to members will be proposed in relation to the closing year of account 2022
and a profit payment distribution of $25.9 million to members will be proposed in relation to the closing year of account 2020
(2023: profit payment distribution of $1.1 million in relation to the closing year of account 2021).
The table below shows the current reporting year result (total comprehensive income/(loss)) of the years of account remaining
open after the three year period:
2024
$000
2023
$000
2020
25,907
15,238
78
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
2024
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Claims outstanding:
Balance at 1 January
53,081
–
53,081
Over-provision in respect of prior
claims and claim adjustment expenses
(15,830)
–
(15,830)
Expected cost of current year claims
31,736
–
31,736
Claims paid for claims settled in year
(19,029)
–
(19,029)
Effect of movements in exchange rates
(310)
–
(310)
Balance at 31 December
49,648
–
49,648
Claims reported and claims adjustment expenses
–
–
–
Claims incurred but not reported
49,648
–
49,648
Balance at 31 December
49,648
–
49,648
Unearned premiums:
Balance at 1 January
3,257
–
3,257
Premiums written during the year
75,306
(2,862)
72,444
Premiums earned during the year
(66,624)
2,862
(63,762)
Effect of movements in exchange rates
67
–
67
Balance at 31 December
12,006
–
12,006
Deferred acquisition costs:
Balance at 1 January
603
–
603
Acquisition costs written
14,092
–
14,092
Acquisition costs earned
(12,392)
–
(12,392)
Effect of movements in exchange rates
14
–
14
Balance at 31 December
2,317
–
2,317
10 Technical provisions
79
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
2023
Gross
provisions
$000
Reinsurance
assets
$000
Net
$000
Claims outstanding:
Balance at 1 January
64,038
–
64,038
Over-provision in respect of prior claims and claim adjustment expenses
(17,350)
–
(17,350)
Expected cost of current year claims
5,727
–
5,727
Claims paid for claims settled in year
–
–
–
Effect of movements in exchange rates
666
–
666
Balance at 31 December
53,081
–
53,081
Claims reported and claims adjustment expenses
–
–
–
Claims incurred but not reported
53,081
–
53,081
Balance at 31 December
53,081
–
53,081
Unearned premiums:
Balance at 1 January
3,103
–
3,103
Premiums written during the year
19,553
(1,900)
17,653
Premiums earned during the year
(19,474)
1,900
(17,574)
Effect of movements in exchange rates
75
–
75
Balance at 31 December
3,257
–
3,257
Deferred acquisition costs:
Balance at 1 January
633
–
633
Acquisition costs written
2,942
–
2,942
Acquisition costs earned
(2,985)
–
(2,985)
Effect of movements in exchange rates
13
–
13
Balance at 31 December
603
–
603
11 Debtors arising out of reinsurance operations
2024
$000
2023
$000
Due within one year
47,476
56,012
Due after one year
76,792
28,034
Total
124,268
84,046
12 Other debtors
2024
$000
2023
$000
Inter syndicate balances
4,668
976
10 Technical provisions
continued
80
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
13 Claims development tables
The claims development tables below have been calculated by converting estimated claims and cumulative payments in Canadian
Dollars, Sterling and Euros to US Dollars at the closing rate of exchange at 31 December 2024. The table is produced on a year of
account basis. Some business is not off risk after the first 12 months, therefore we would anticipate cumulative claims to increase
in the second year as this business is earned.
Pure underwriting year
Gross of reinsurance
2015
$000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
2023
$000
2024
$000
Estimate of
cumulative claims:
At end of
underwriting
year one
5,251
17,586
62,717
71,847 100,545
38,538
22,663
9,062
5,765
32,047
One year later
3,132
11,729
58,930
79,052
63,543
44,129
20,905
8,908
5,552
Two years later
3,345
8,782
59,986
73,510
51,228
41,244
18,846
5,543
Three years later
2,745
8,082
58,504
64,786
43,573
36,037
17,783
Four years later
2,878
8,180
57,905
64,994
38,766
27,006
Five years later
2,853
7,982
56,681
63,150
38,066
Six years later
2,810
7,937
56,343
61,767
Seven years later
2,836
7,762
55,925
Eight years later
2,835
7,736
Nine years later
2,751
Cumulative
payments
(2,833)
(7,983)
(57,874)
(64,786)
(51,228)
–
(18,846)
–
–
–
Estimated balance
to pay
(82)
(247)
(1,949)
(3,019)
(13,162)
27,006
(1,063)
5,543
5,552
32,047
Provision in
respect of
prior years
(978)
Total gross provision
included in the balance sheet
49,648
Pure underwriting year
Net of reinsurance
2015
$000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
2023
$000
2024
$000
Estimate of
cumulative claims:
At end of
underwriting
year one
5,251
17,586
62,717
71,847 100,545
38,538
22,663
9,062
5,765
32,047
One year later
3,132
11,729
58,930
79,052
63,543
44,129
20,905
8,908
5,552
Two years later
3,345
8,782
59,986
73,510
51,228
41,244
18,846
5,543
Three years later
2,745
8,082
58,504
64,786
43,573
36,037
17,783
Four years later
2,878
8,180
57,905
64,994
38,766
27,006
Five years later
2,853
7,982
56,681
63,150
38,066
Six years later
2,810
7,937
56,343
61,767
Seven years later
2,836
7,762
55,925
Eight years later
2,835
7,736
Nine years later
2,751
Cumulative
payments
(2,833)
(7,983)
(57,874)
(64,786)
(51,228)
–
(18,846)
–
–
–
Estimated balance
to pay
(82)
(247)
(1,949)
(3,019)
(13,162)
27,006
(1,063)
5,543
5,552
32,047
Provision in
respect of
prior years
(978)
Total net provision
included in the balance sheet
49,648
Prior-year development has been further explained under the ‘results’ section of the report of the Directors of the managing agent.
81
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
14 Creditors arising out of reinsurance operations
2024
$000
2023
$000
Due within one year
851
848
Due after one year
4,762
1,900
Total
5,613
2,748
15 Other creditors
2024
$000
2023
$000
Inter syndicate balances
–
8
Amounts owed to fellow subsidiary of managing agent
9,669
2,627
Other
–
–
Total
9,669
2,635
16 Related parties
Hiscox Syndicates Limited (HSL) manages Syndicate 6104 as well as Syndicate 0033 which purchases some reinsurance from
Syndicate 6104 on an arm’s-length basis. Syndicate 6104 pays an overriding commission and profit commission on the business
received from Syndicate 0033. Syndicate 6104 does not sell reinsurance to any other party.
HSL is a wholly owned indirect subsidiary of Hiscox Ltd which is incorporated in Bermuda and listed on the London Stock
Exchange. HSL receives a fixed fee for each pure underwriting year.
The following balance sheet amounts were outstanding at year-end with related parties:
Balance sheet net assets and (liabilities) outstanding
2024
$000
2023
$000
Syndicate 0033
54,317
23,904
The following amounts reflected in the profit and loss were transacted with
related parties
:
Net income and (expenses) reflected in the profit and loss
2024
$000
2023
$000
Hiscox Syndicates Limited
(363)
(117)
Syndicate 0033
(32,094)
(27,642)
HSL charged managing agent fees to Syndicate 6104 of $0.4 million (2023: $0.1 million). Syndicate 0033 owes the Syndicate the
cumulative result due on the quota share reinsurances Syndicate 6104 provides.
17 Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2024
start of period rate
2024
end of period rate
2024
average rate
2023
start of period rate
2023
end of period rate
2023
average rate
US Dollar
1.00
1.00
1.00
1.00
1.00
1.00
Sterling
0.78
0.80
0.78
0.83
0.78
0.81
Euro
0.91
0.97
0.92
0.94
0.91
0.93
Canadian Dollar
1.32
1.44
1.37
1.35
1.32
1.35
18 Syndicate structure
The managing agent of the Syndicate is Hiscox Syndicates Limited whose immediate parent undertaking is Hiscox Holdings
Limited, a company registered in England and Wales. The ultimate parent undertaking of the largest and smallest group of
companies for which group accounts are drawn up is Hiscox Ltd, Bermuda. Copies of Hiscox Ltd report and accounts can
be obtained from Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda.
82
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
82
Chapter 4
Hiscox Syndicate 6104
underwriting year accounts
83
Report of the Directors of the
managing agent
85
Statement of managing
agent’s responsibilities
86
Independent auditors’ report
2020 closed year of account
89
Independent auditors’ report
2022 closed year of account
92
Profit and loss account:
technical account and
non-technical account
– general business
94
Balance sheet
96
Notes to the accounts
99
Seven-year summary
Chapter 4
Hiscox Syndicate 6104
underwriting year accounts
83
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Report of the Directors of the managing agent
Hiscox Syndicate 6104 underwriting accounts
The Directors of the managing agent present their report for the
period ended 31 December 2024.
This report comprises the cumulative result to 31 December 2024
for the 2020 underwriting year of account at 60 months and
the 2022 underwriting year of account at 36 months of
Syndicate 6104.
The syndicate underwriting year accounts have been prepared
in accordance with the Lloyd’s Syndicate Accounting Byelaw
(No. 8 of 2005) and applicable accounting standards in the United
Kingdom. The Syndicate continues to adopt the going concern
basis in preparing the syndicate underwriting year accounts.
Principal activity and review of the business
Special Purpose Arrangement 6104 (Syndicate 6104)
was established for the 2008 year of account to provide
quota share reinsurance to Syndicate 0033’s excess of loss
property catastrophe reinsurance account and from the
2019 year of account it also provided quota share reinsurance
to Syndicate 0033’s cyber account. Since the 2023 year
of account it has provided quota share reinsurance to
Syndicate 0033’s applicable excess of loss property
catastrophe reinsurance, marine, terrorism and
cyber accounts.
Syndicate 6104 pays a fee and profit commission to Syndicate
0033 for the business ceded. In addition, Hiscox Syndicates
Limited (HSL) charges a fee of 0.5% of capacity to Syndicate
6104 from which it must meet all of its syndicate expenses.
The Syndicate operates like a normal syndicate in that upon
closure of the account the assets and liabilities are transferred
to the next year of account through the reinsurance to close
(RITC) process. There are, however, certain differences, the
most significant of which is that the capacity, which is all
provided by third-party capital providers, operates on a
limited tenancy basis. The Syndicate only writes one contract
per year, a reinsurance of Syndicate 0033. This contract
operates on a funds-withheld basis, with Syndicate 6104
credited interest on the balance owing by Syndicate 0033.
The portfolio is underwritten by the Syndicate 0033
reinsurance underwriting team and includes exposures
from all territories around the world. Due to the nature of
the business the Syndicate is likely to produce a volatile
operating performance.
A small amount of very high level attachment US windstorm
and US earthquake industry loss warranty retrocession
protection was purchased with the intention of bringing
the US windstorm and US earthquake net realistic disaster
scenario (RDS) percentages in line with those of the other
main exposures.
2020 account
For 2020, the capacity of the Syndicate declined to £44.4 million
($55.6 million) and so the cession from Syndicate 0033 was
reduced to 22.5%. The account has closed with a cumulative
profit to capacity of 47.0% after all personal expenses (except
members’ agent’s fees). 2020 was a significantly more benign
year from a natural catastrophe perspective compared to the
previous three years with no material natural catastrophe loss
events impacting the Syndicate. However, the 2020 account
was also exposed to Covid-19 through business interruption
reinsurance. Now there is more certainty on these reserves,
the 2020 underwriting year has closed and has RITC to the
host Syndicate at 60 months.
2022 account
For 2022, the capacity of the Syndicate declined to £12.7 million
($15.9 million) and the cession from Syndicate 0033 reduced
in line with this to 12.3%. The account has closed with a
cumulative profit to capacity of 36.9% after all personal expenses
(except members’ agent’s fees). The 2022 account picked
up a number of catastrophe losses following Hurricane Ian.
2022 account also carries reserves in relation to the
Russia/Ukraine conflict.
2023 account
For 2023, to make the Syndicate more compelling to investors,
the strategy was refreshed to diversify the portfolio by
significantly expanding the specialty book, including new
marine and aviation cessions, doubling the cyber cession into
the Syndicate and adding a new risk excess of loss cession.
This was successful, with capacity increased to £19.4 million
($24.3 million) for the 2023 year of account. The cession from
Syndicate 0033 varies by class and the weighted average is
calculated as 5.3% of applicable classes. 2023 account will
pick up losses including the Hawaii wildfires and Hurricane
Idalia. We have set a profit forecast in the range of 27.7% to
37.7% on capacity.
2024 account
In 2024, capacity has increased to £56.4 million ($70.7 million)
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
84
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
and the cession has increased in line with this. The cession
from Syndicate 0033 varies by class and the weighted average
is calculated as 16.3% of applicable classes. 2024 account will
pick up a number of catastrophe losses, including Hurricanes
Helene and Milton. We are forecasting a result in the range
of 2.5% to 17.5% on capacity. The forecast result range takes
into account the preliminary loss estimates resulting from the
Los Angeles wildfires, which occurred in early 2025.
2025 account and the future
Capacity has increased to £78.5 million ($98.4 million) for the
2025 year of account, while keeping the business mix aligned
to 2024. The Syndicate is writing a diversified range of classes
written by Syndicate 0033’s reinsurance division. The cession
from Syndicate 0033 varies by class and the weighted average
is calculated as 20.5% of applicable classes for the 2025
year of account.
Syndicate capacity and ownership
Syndicate capacity and ownership is disclosed in Syndicate
6104 annual accounts.
Directors’ interests
The Directors of the managing agent and their interests are
disclosed in Syndicate 0033 annual accounts.
Disclosure of information to the auditors
The Directors 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 auditors are unaware; and each Director
has taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit
information and to establish that the Syndicate’s auditors
are aware of that information.
By order of the Board
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Report of the Directors
of the managing agent
85
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Statement of managing agent’s responsibilities
Hiscox Syndicate 6104 underwriting accounts
The managing agent is responsible for preparing syndicate
underwriting year accounts and an accompanying managing
agent’s report in accordance with applicable law, Lloyd’s
Bye-laws and United Kingdom Generally Accepted Accounting
Practice. Detailed requirements in respect of the underwriting
year accounts are set out in the Lloyd’s Syndicate Accounting
Byelaw (No. 8 of 2005).
In preparing the syndicate underwriting year accounts, the
managing agent is required to:
s
select suitable accounting policies and then apply them
consistently and where there are items which affect more
than one year of account, ensure a treatment which is
equitable as between the members of the Syndicate
affected. In particular, the amount charged by way of
premium in respect of the reinsurance to close shall,
where the reinsuring members and reinsured members
are members of the same Syndicate for different years of
account, be equitable as between them, having regard to
the nature and amount of the liabilities reinsured;
s
take into account all income and charges relating to
a run-off year of account without regard to the date
of receipt or payment;
s
make judgements and estimates that are reasonable and
prudent; and
s
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in these accounts.
The managing agent is responsible for keeping proper accounting
records that disclose with reasonable accuracy, at any time,
the financial position of the Syndicate and enable it to ensure
that the syndicate underwriting year accounts comply with
the Syndicate Accounting Byelaw (No.8 of 2005). It is also
responsible for safeguarding the assets of the Syndicate
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The managing agent is responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing the
preparation and dissemination of syndicate underwriting year
accounts may differ from legislation in other jurisdictions.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
86
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Independent auditors’ report
To the members of Syndicate 6104
2020 closed year of account
Report on the audit of the syndicate underwriting year
financial statements
Opinion
In our opinion, 6104’s syndicate underwriting year financial
statements for the 2020 year of account for the 60 months ended
31 December 2024 (the ‘underwriting year financial statements’):
s
give a true and fair view of the state of the syndicate’s affairs
as at 31 December 2024 and of its profit for the 2020
closed year of account;
s
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 102
‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland’, and applicable law);
s
have been prepared in accordance with the requirements
of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005).
We have audited the underwriting year financial statements
included within the Hiscox Syndicate 6104 underwriting
year accounts , which comprise: the balance sheet as at
31 December 2024; the profit and loss account: technical
account – general business and the profit and loss account:
non-technical account – general business for the 60 months
then ended; and the notes to the underwriting year financial
statements, which include a description of the significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)), including ISA (UK) 800,
and The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and other applicable
law. Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the underwriting
year financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance
with the ethical requirements that are relevant to our audit of
the underwriting year financial statements in the UK, which
includes the FRC’s Ethical Standard, as applicable to other
entities of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Emphasis of matter – basis of preparation
Without modifying our opinion, we draw attention to note 1
of the underwriting year financial statements, which describes
the basis of preparation. In particular, as these underwriting
year financial statements relate to a closed underwriting year
of account, matters relating to going concern are not relevant to
these underwriting year financial statements. The underwriting
year financial statements are prepared in accordance with
a special purpose framework for the specific purpose as
described in the Use of this report paragraph below. As a result,
the underwriting year financial statements may not be suitable
for another purpose.
Reporting on other information
The other information comprises all of the information in the
Underwriting Year Accounts other than the underwriting year
financial statements and our auditors’ report thereon.
The managing agent is responsible for the other information.
Our opinion on the underwriting year financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the underwriting year financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the underwriting year financial
statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement,
we are required to perform procedures to conclude whether
there is a material misstatement of the underwriting year
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
Responsibilities for the underwriting year financial statements
and the audit
Responsibilities of the managing agent for the underwriting
year financial statements
As explained more fully in the statement of managing agent’s
responsibilities, the managing agent is responsible for the
preparation of the underwriting year financial statements in
accordance with the applicable framework and for being
satisfied that they give a true and fair view of the result for
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
87
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
the 202
0
closed year of account. The managing agent is
also responsible for such internal control as they determine
is necessary to enable the preparation of underwriting year
financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ responsibilities for the audit of the underwriting
year financial statements
Our objectives are to obtain reasonable assurance about
whether the underwriting year financial statements as a whole
are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these underwriting year financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to breaches of regulatory principles,
such as those governed by the Prudential Regulation Authority
and the Financial Conduct Authority, and those regulations set
by the Council of Lloyd’s, and we considered the extent
to which non-compliance might have a material effect on the
underwriting year financial statements.
We also considered those laws and regulations that have
a direct impact on the underwriting year financial statements
such as The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the underwriting year financial statements
(including the risk of override of controls), and determined
that the principal risks were related to manual journals and
accounting estimates in respect of premiums and insurance
claims outstanding. Audit procedures performed by the
engagement team included:
s
discussions with senior management, including those
in the risk and compliance functions, including the
consideration of known or suspected instances of
non-compliance with laws, regulation and fraud;
s
reading key correspondence with Lloyd’s, in relation to
compliance with laws and regulations;
s
reviewing relevant meeting minutes including those of
the Audit Committee;
s
testing and assessing the appropriateness of insurance
claims reserves;
s
testing journal entries, including revenue journals,
identified in accordance with our risk assessment;
s
designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the underwriting
year financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of
the underwriting year financial statements is located on the
FRC’s website at:
frc.org.uk/auditorsresponsibilities
. This
description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the syndicate’s members as a body in accordance with
part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and Part C of the
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005) and for
no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent
in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005), we are required
to report to you if, in our opinion:
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
88
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
s
we have not obtained all the information and explanations
we require for our audit; or
s
adequate accounting records have not been kept by the
managing agent in respect of the syndicate; or
s
the underwriting year financial statements are not in
agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Thomas Robb
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2025
89
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Independent auditors’ report
To the members of Syndicate 6104
2022 closed year of account
Report on the audit of the syndicate underwriting year
financial statements
Opinion
In our opinion, 6104’s syndicate underwriting year financial
statements for the 2022 year of account for the 36 months
ended 31 December 2024 (the ‘underwriting year
financial statements’):
s
give a true and fair view of the state of the syndicate’s
affairs as at 31 December 2024 and of its profit for the
2022 closed year of account;
s
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 102
‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland’, and applicable law); and
s
have been prepared in accordance with the requirements
of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005).
We have audited the underwriting year financial statements
included within the Hiscox Syndicate 6104 underwriting
year accounts, which comprise: the balance sheet as at
31 December 2024; the profit and loss account: technical
account – general business and the profit and loss account:
non-technical account – general business for the 36 months
then ended; and the notes to the underwriting year financial
statements, which include a description of the significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)), including ISA (UK) 800,
and The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and other applicable
law. Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the underwriting
year financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance
with the ethical requirements that are relevant to our audit of
the underwriting year financial statements in the UK, which
includes the FRC’s Ethical Standard, as applicable to other
entities of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. our other
ethical responsibilities in accordance with these requirements.
Emphasis of matter – basis of preparation
Without modifying our opinion, we draw attention to note 1
of the underwriting year financial statements, which describes
the basis of preparation. In particular, as these underwriting
year financial statements relate to a closed underwriting year
of account, matters relating to going concern are not relevant to
these underwriting year financial statements. The underwriting
year financial statements are prepared in accordance with
a special purpose framework for the specific purpose as
described in the Use of this report paragraph below. As a result,
the underwriting year financial statements may not be suitable
for another purpose.
Reporting on other information
The other information comprises all of the information in the
Underwriting Year Accounts other than the underwriting year
financial statements and our auditors’ report thereon.
The managing agent is responsible for the other information.
Our opinion on the underwriting year financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the underwriting year financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the underwriting year financial
statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement,
we are required to perform procedures to conclude whether
there is a material misstatement of the underwriting year
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
Responsibilities for the underwriting year financial
statements and the audit
Responsibilities of the managing agent for the underwriting
year financial statements
As explained more fully in the statement of managing agent’s
responsibilities, the managing agent is responsible for the
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
90
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
preparation of the underwriting year financial statements
in accordance with the applicable framework and for being
satisfied that they give a true and fair view of the result for
the 2022 closed year of account. The managing agent is
also responsible for such internal control as they determine
is necessary to enable the preparation of underwriting year
financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ responsibilities for the audit of the underwriting year
financial statements
Our objectives are to obtain reasonable assurance about
whether the underwriting year financial statements as a whole
are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these underwriting year
financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry,
we identified that the principal risks of non-compliance with laws
and regulations related to breaches of regulatory principles,
such as those governed by the Prudential Regulation Authority
and the Financial Conduct Authority, and those regulations
set by the Council of Lloyd’s, and we considered the extent
to which non-compliance might have a material effect on the
underwriting year financial statements. We also considered
those laws and regulations that have a direct impact on the
underwriting year financial statements such as The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008. We evaluated management’s
incentives and opportunities for fraudulent manipulation of
the underwriting year financial statements (including the risk
of override of controls), and determined that the principal risks
were related to manual journals and accounting estimates in
respect of premiums and insurance claims outstanding. Audit
procedures performed by the engagement team included:
s
discussions with senior management, including those
in the risk and compliance functions, including the
consideration of known or suspected instances
of non-compliance with laws, regulation and fraud;
s
reading key correspondence with Lloyd’s, in relation to
compliance with laws and regulations;
s
reviewing relevant meeting minutes including those
of the Audit Committee;
s
testing and assessing the appropriateness of insurance
claims reserves;
s
testing journal entries, including revenue journals,
identified in accordance with our risk assessment; and
s
designing audit procedures to incorporate
unpredictability around the nature, timing or extent
of our testing.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the underwriting
year financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of
the underwriting year financial statements is located on the
FRC’s website at:
frc.org.uk/auditorsresponsibilities
. This
description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the syndicate’s members as a body in accordance with
part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and Part C of the
Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005) and for
no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent
in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
91
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
and Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005), we are required
to report to you if, in our opinion:
s
we have not obtained all the information and explanations
we require for our audit; or
s
adequate accounting records have not been kept by the
managing agent in respect of the Syndicate; or
s
the underwriting year financial statements are not in
agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Thomas Robb
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Independent auditors’ report
92
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Profit and loss account:
technical account and non-technical account – general business
Hiscox Syndicate 6104 underwriting accounts
2020 year of account for the 60 months ended 31 December 2024
Notes
Calender year
$000
2020 year of
account
cumulative
balance
$000
Syndicate allocated capacity
55,582
Earned premiums, net of reinsurance
Gross premiums written
593
45,393
Outward reinsurance premiums
–
(1,015)
Earned premiums, net of reinsurance
593
44,378
Reinsurance to close premium received, net of reinsurance
3
–
38,484
593
82,862
Allocated investment return transferred from/(to) the non-technical account
6
831
1,655
Claims incurred, net of reinsurance
Claims paid:
Gross amount
–
(41,365)
Reinsurers’ share
–
–
Net claims paid
–
(41,365)
Change in provision for claims:
Gross amount
11,807
(3,916)
Reinsurers’ share
–
–
The amount retained to meet all known and unknown outstanding liabilities,
net of reinsurance
11,807
(3,916)
Claims incurred, net of reinsurance
11,807
(45,281)
Net operating expenses
7
(2,131)
(11,975)
Balance on the technical account for general business
11,100
27,261
2020 year of account for the 60 months ended 31 December 2024
Notes
Calender year
$000
2020 year of
account
cumulative
balance
$000
Balance on the technical account for general business
11,100
27,261
Investment income
6
831
1,655
Total investment return
831
1,655
Allocated investment return transferred (to)/from general business technical account
(831)
(1,655)
Foreign exchange losses
(434)
(1,113)
Profit for the 2020 closed year of account
10,666
26,148
Members’ agents’ fees advances
–
(241)
Amounts due to members as at 31 December 2024
10,666
25,907
There are no recognised gains or losses in the accounting period other than those dealt with in the technical and non-technical
accounts, therefore no statement of other comprehensive income has been presented.
The notes on pages 96 to 98 form an integral part of these underwriting year accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
93
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
2022 year of account for the 36 months ended 31 December 2024
Notes
2022
year of
account
$000
Syndicate allocated capacity
15,882
Earned premiums, net of reinsurance
Gross premiums written
14,094
Outward reinsurance premiums
–
Earned premiums, net of reinsurance
14,094
Reinsurance to close premium received, net of reinsurance
3
19,040
33,134
Allocated investment return transferred from/(to) the non-technical account
6
812
Claims incurred, net of reinsurance
Claims paid:
Gross amount
(19,029)
Reinsurers’ share
–
Net claims paid
(19,029)
Change in provision for claims:
Gross amount
(4,454)
Reinsurers’ share
–
Net change in provisions for claims
(4,454)
Claims incurred, net of reinsurance
(23,483)
Net operating expenses
7
(4,538)
Balance on the technical account for general business
5,925
2022 year of account for the 36 months ended 31 December 2024
Notes
2022
year of
account
$000
Balance on the technical account for general business
5,925
Investment income
6
812
Total investment return
812
Allocated investment return transferred (to)/from general business technical account
(812)
Foreign exchange losses
(61)
Profit for the 2022 closed year of account
5,864
Members’ agents’ fees advances
(57)
Amounts due to members as at 31 December 2024
5,807
There are no recognised gains or losses in the accounting period other than those dealt with in the technical and non-technical
accounts, therefore no statement of other comprehensive income has been presented.
The notes on pages 96 to 98 form an integral part of these underwriting year accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Profit and loss account:
technical account and non-technical
account – general business
94
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Balance sheet
Hiscox Syndicate 6104 underwriting accounts
2020 account at 31 December 2024
Notes
2020
year of
account
$000
Reinsurance recoveries anticipated on gross reinsurance to close premium payable
3
–
Debtors
Debtors arising out of reinsurance operations
8
36,127
Other debtors
9
1,119
37,246
Total assets
37,246
Capital and reserves
Members’ balances
(25,907)
Reinsurance to close premium payable – gross amount
3
(7,569)
Creditors
Creditors arising out of reinsurance operations
10
(851)
Other creditors
11
(2,919)
(3,770)
Total liabilities
(11,339)
Total liabilities, capital and reserves
(37,246)
The notes on pages 96 to 98 form an integral part of these underwriting year accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
95
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
2022 account at 31 December 2024
Notes
2022
year of
account
$000
Reinsurance recoveries anticipated on gross reinsurance to close premium payable
3
–
Debtors
Debtors arising out of reinsurance operations
8
11,349
Other debtors
9
669
12,018
Total assets
12,018
Capital and reserves
Members’ balances
(5,807)
Reinsurance to close premium payable – gross amount
3
(4,480)
Creditors
Creditors arising out of reinsurance operations
10
–
Other creditors
11
(1,731)
(1,731)
Total liabilities
(6,211)
Total liabilities, capital and reserves
(12,018)
The notes on pages 96 to 98 form an integral part of these underwriting year accounts.
The underwriting year accounts on pages 92 to 98 were approved by the Board of Hiscox Syndicates Limited and were signed
on its behalf by
Helen Rose
Chief Financial Officer
24 February 2025
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Balance sheet
96
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Notes to the accounts
Hiscox Syndicate 6104 underwriting accounts
1 Basis of preparation
The basis of preparation of these accounts are the same as disclosed for Syndicate 0033 underwriting accounts with the exception of:
2020 year of account has closed at 60 months development, consequently, the underwriting accounts represents the
transactions for the 2020 year of account on 60 months development basis.
2 Accounting policies
The principal accounting policies adopted are the same as those disclosed for Syndicate 0033 underwriting year accounts with
the exception of:
2020 year of account has now closed by a payment of reinsurance to close premium to the successor year of account at 60 months.
3 Reinsurance premium to close the 2022 and prior years of account
2020 year of account
Reported
$000
IBNR
$000
Unearned
premium
$000
Total
$000
Reinsurance to close premium received
Gross reinsurance to close premium received
–
38,484
–
38,484
Reinsurance recoveries anticipated
–
–
–
–
Reinsurance to close premium receivable, net of reinsurance
–
38,484
–
38,484
Reinsurance to close premium payable
Gross reinsurance to close premium payable
–
7,569
–
7,569
Reinsurance recoveries anticipated
–
–
–
–
Reinsurance to close premium payable, net of reinsurance
–
7,569
–
7,569
2022 year of account
Reported
$000
IBNR
$000
Unearned
premium
$000
Total
$000
Reinsurance to close premium received
Gross reinsurance to close premium received
–
19,040
–
19,040
Reinsurance recoveries anticipated
–
–
–
–
Reinsurance to close premium receivable, net of reinsurance
–
19,040
–
19,040
Reinsurance to close premium payable
Gross reinsurance to close premium payable
–
4,480
–
4,480
Reinsurance recoveries anticipated
–
–
–
–
Reinsurance to close premium payable, net of reinsurance
–
4,480
–
4,480
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
97
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
4 Analysis of underwriting result
2020 year of account
2019 and prior
$000
2020
$000
2020 year
of account
cumulative
balance
$000
Technical account balance before allocated investment return and net operating expenses
8,614
28,967
37,581
Brokerage and commission on gross premium
378
(9,140)
(8,762)
Total
8,992
19,827
28,819
2022 year of account
2021
$000
2022
$000
2022 year
of account
$000
Technical account balance before allocated investment return and net operating expenses
1,083
8,568
9,651
Brokerage and commission on gross premium
(9)
(2,712)
(2,721)
Total
1,074
5,856
6,930
5 Segmental analysis
All business written by the Syndicate is reinsurance. All premiums were concluded in the UK.
6 Investment return
2020
year of
account
2022
year of
account
Interest and similar income
From financial instruments designated at fair value through profit or loss:
Interest and similar income
1,655
812
Total investment return
1,655
812
Transferred to the technical account from the non-technical account
(1,655)
(812)
Investment return for the 2020 year of account is recognised in the 2020, 2021, 2022, 2023 and 2024 calendar years. Investment
return for the 2022 year of account is recognised in the 2022, 2023 and 2024 calendar years. The investment income and yield for
these calendar years is disclosed in the investment return notes in each of the respective syndicate annual accounts.
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Notes to the accounts
98
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
7 Net operating expenses
The cumulative Syndicate expenses charged in the 2020 and 2022 underwriting accounts were made up as follows:
2020
year of
account
$000
2022
year of
account
$000
Brokerage and commissions
8,762
2,721
Other acquisiton costs
2,918
1,731
Members’ standard personal expenses
295
86
Total
11,975
4,538
All administration expenses are charged to and borne by Syndicate 0033. No brokerage or commissions were borne on direct
business written but arises as a share of Syndicate 0033 through the reinsurance arrangement.
Administrative expenses include fees payable to the auditors and its associates (exclusive of VAT).
2020
year of
account
$000
2022
year of
account
$000
Auditors’ remuneration
Fees payable to the Syndicate’s auditors for the audit of the syndicate underwriting account
43
48
Fees payable to the Syndicate’s auditors and its associates in respect of other services pursuant
to legislation
22
22
Total
65
70
8 Debtors arising out of reinsurance operations
2020
year of
account
$000
2022
year of
account
$000
Due from intermediaries
36,127
11,349
9 Other debtors
2020
year of
account
$000
2022
year of
account
$000
Other
1,119
669
10 Creditors arising out of reinsurance operations
2020
year of
account
$000
2022
year of
account
$000
Amounts due to intermediaries
851
–
11 Other creditors
2020
year of
account
$000
2022
year of
account
$000
Amounts owed to fellow subsidiary of managing agent
2,919
1,731
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Notes to the accounts
99
Hiscox Syndicates 0033 and 6104
Report and Accounts 2024
Chapter 2
43
Hiscox Syndicate 0033
underwriting year accounts
Chapter 3
59
Hiscox Syndicate 6104
annual accounts
Year of account
2016
2017
2018
2019
2020
2021
2022
Syndicate allocated capacity in £000
55,534
54,490
55,847
54,971
44,363
23,272
12,676
Syndicate allocated capacity in $000
70,734
72,161
76,354
74,458
55,582
29,667
15,882
Number of underwriting members
1,409
1,389
1,296
1,277
1,080
597
278
Net premiums net of brokerage in $000
28,300
35,023
37,766
43,349
35,616
20,503
11,373
Capacity utilised (%)
45
51
51
59
66
69
72
Net capacity utilised (%)
40
49
49
58
64
69
72
Results for an illustrative share of £10,000
2016
$000
2017
$000
2018
$000
2019
$000
2020
$000
2021
$000
2022
$000
Gross premiums
8,450
8,716
8,540
10,039
10,232
10,797
11,119
Net premiums
7,861
8,327
8,385
9,883
10,003
10,797
11,119
Reinsurance to close from
an earlier account
(456)
1,530
10,838
13,735
8,675
–
15,021
Net claims paid
458
(1,533)
(10,844)
(13,247)
(9,324)
–
(15,012)
Reinsurance to close
(1,523)
(11,125)
(13,095)
(8,013)
(883)
(8,177)
(3,514)
Profit/(loss) on exchange
(50)
56
(382)
(225)
(251)
(161)
(48)
Syndicate operating expenses
(2,765)
(1,900)
(1,623)
(1,993)
(2,633)
(1,987)
(3,512)
Names personal expenses
(68)
(66)
(69)
(66)
(66)
(68)
(68)
Balance on technical account
before investment return
3,457
(4,711)
(6,790)
74
5,521
404
3,986
Investment return
230
73
113
197
373
113
641
Profit/(loss) before members’ agent’s fees
3,687
(4,638)
(6,677)
271
5,894
517
4,627
Profit/(loss) before members’ agent’s fees £000
2,895
(3,502)
(4,883)
200
4,704
406
3,693
Notes to the seven-year summary
1.
The seven-year summary has been prepared from the audited accounts of the Syndicate however the table is unaudited.
2.
Personal expenses have been stated at the amount which would be incurred pro-rata by Names writing the illustrative premium income in the Syndicate,
irrespective of any minimum charge applicable. Personal expenses include managing agent fees, central fund contributions, Lloyd’s subscriptions and profit
commissions. These figures exclude members’ agents’ fees.
3.
‘Capacity utilised’ represents gross premiums as a percentage of the allocated capacity. ‘Net capacity utilised’ represents net premiums as a percentage of
the allocated capacity. For these calculations, gross and net premiums are net of brokerage.
4.
Profit commission has been calculated in accordance with the applicable agency agreements.
5.
Premium figures and Syndicate operating expenses are gross of brokerage.
6.
2016 year of account is presented using transactional rates of exchange, the functional and presentation currency of the underwriting year accounts changed
from 1 January 2018, all years of account where the underwriting accounts have been presented in Sterling have been translated at the closing rate prevailing
at 31 December 2018.
7.
2020 year of account previously in run off has now closed at 60 months.
Seven-year summary
Hiscox Syndicate 6104 underwriting year accounts
Chapter 1
2
Hiscox Syndicate 0033
annual accounts
Chapter 4
82
Hiscox Syndicate 6104
underwriting year accounts
Hiscox
22 Bishopsgate
London EC2N 4BQ
United Kingdom
T +44 (0)20 7448 6000
E enquiry@hiscox.com
www.hiscoxgroup.com
Hiscox Syndicates Limited is authorised by the
Prudential Regulation Authority and regulated by
the Financial Conduct Authority and Prudential
Regulation Authority.
22994 02/25