Syndicate Accounts

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Classification: Unclassified

Lloyd’s Syndicate

Antares 1274

Annual Report and Accounts for the year ended

31 December 2024

Contents

Directors and Administration....................................................................................................4

Managing Agent’s report..........................................................................................................5

Statement of Managing Agent’s responsibilities......................................................................9

Independent auditor’s report to the members of Antares 1274..............................................10

Statement of profit or loss and other comprehensive income:...............................................15

Balance sheet – Assets.........................................................................................................17

Balance sheet (cont’d) – Liabilities........................................................................................18

Statement of changes in members’ balances........................................................................19

Statement of cash flows.........................................................................................................20

Notes to the financial statements – (forming part of the financial statements).....................21

Directors and Administration

Managing Agent:

Antares Managing Agency Limited

Directors

M C Graham

Ahmed El Tabbakh*

M Van Der Straaten*

J L Lye (resigned 11 November 2024)

M Rajoo-Oakley

H R McKinlay**

R J Camp

R A Keers

B B Secrett**

G Sah (resigned 1 August 2024)

K M Felisky** (joined 1 March 2024)

M J Campbell (joined 26 February 2025)

* Non-Executive Director

** Independent Non-Executive Director

Secretary

Amy Rose-McMullen

Managing Agent’s Registered Office

21 Lime Street

London, EC3M 7HB

Managing Agent’s Registered Number

6646629

Syndicate 1274:

Active Underwriter

J L Lye

Banker

Lloyds TSB Bank plc

25 Gresham Street

London, EC2V 7HN

Registered Auditor

KPMG LLP

15 Canada Square

London E14 5GL

Managing Agent’s Report

The Directors of Antares Managing Agency Limited (‘the Managing Agent’) present their Report for the year ended 31 December 2024.

Directors

The names of the Directors who served during the year can be found in the Directors and Administration information on page 4.

Directors’ Interests

None of the Directors hold any interests in Antares Managing Agency Limited.

The Managing Agent

The Managing Agent is Antares Managing Agency Limited (AMAL), whose registered office is 21 Lime Street, London, EC3M 7HB and registered number is 6646629.

Results and Review of the Business

Syndicate 1274 is a provider of global insurance and reinsurance products. The Syndicate is fully aligned with 100% of its capacity provided by Qatar Insurance Company QSPC (“QIC” formerly Qatar Insurance Company SAQ), a publicly listed composite insurer listed on the Qatar Exchange.

Antares Global Management Limited (“AGML”) provides insurance services to the Syndicate under an outsourcing agreement with AMAL.

In line with QIC’s strategy, the objective of the Syndicate is to contribute to profitable growth. The Syndicate provides a worldwide, diversified, range of insurance and reinsurance products and is dedicated to providing an efficient and effective service to its clients ensuring quality, security, continuity and a consistent approach to risk transfer.

$000

2024

2023

Gross Premium Written

597,810

599,087

Net Premium Earned

530,764

527,113

Net Claims Incurred

(295,027)

(285,589)

Net Commission

(137,341)

(127,439)

Net Underwriting Result

98,396

114,085

Operating Expenses

(69,829)

(56,997)

Net Foreign Exchange

(5,369)

397

Investment Return

37,643

48,975

Net Profit

60,841

106,460

Ratios:

Claims Ratio

55.59%

54.18%

Commission Ratio

25.88%

24.18%

Expense Ratio

13.16%

10.81%

Combined Ratio

94.63%

89.17%

The above ratios have been calculated using net earned premium.

In 2024, the Syndicate made a profit of $61m (2023: $106m).

Premiums

The whole account gross written premium is in line with the prior year at $598m (2023: $599m).

Claims

Net claims incurred were $295m (2023: $286m) with the Claims Ratio increasing from 54% to 56%.

Managing Agent’s Report

The increase in the Claims Ratio is driven by an increase in large losses in 2024 (including the Baltimore Bridge loss) and an increase in catastrophe losses (including Hurricane Helene, Hurricane Milton and the Israel Lebanon conflict) partially offset by lower attritional losses in the year.

Commissions

The Syndicate continued to manage commissions with the acquisition ratio 26% (2023: 24%) increase on prior year driven by profit commissions payable.

Expenses

Operating expenses increased to $70m (2023: $57m) and the expense ratio followed at 13% (2023: 11%) driven by inflation and headcount.

Investments

Overall, investments contributed a profit of $38m to the result (2023: $49m), representing a 3.6% return (2023: 5.1%).

The driver of the investment result is the coupon interest with a small unrealised gain element also included.

Financial Instruments

Details of financial instruments are provided in Note 3 to the accounts.

Going Concern

The Directors of the Managing Agent have assessed the Syndicate’s ability to continue as a going concern by considering, amongst other things, the Syndicate’s reserve strength, available capital, future business plan and any expected material changes to its operations. Based on the assessment the directors have reasonable expectation that the syndicate has adequate resources to continue in operational existence for a period of at least twelve months from when the financial statements are authorised for issue.

Post Balance Sheet Events and Future Developments

There are no adjusting events that are material to the operations of the Syndicate that have occurred since the reporting date (Note 25).

However, the non-adjusting post balance sheet California wildfire event in early January 2025 is of a material nature to which the syndicate has net exposure in the range of $46m-$79m.

Principal Risk and Uncertainties

The Syndicate’s activities expose the business to a number of risks which have the potential to affect the achievement of the business objectives. The Board of the Managing Agency (the AMAL Board) is responsible for maintaining an appropriate structure for managing these risks and acknowledges that it is not possible to eliminate risk(s) entirely. However, the AMAL Board seeks to manage risk in line with risk appetite by maintaining effective systems and controls.

Risk Categories

The Syndicate is exposed to risk in the following categories:

Underwriting Risk is defined as the risk that the frequency and severity of insured events exceeds the expectations of Syndicate 1274 at the time of underwriting.

Reserving Risk is defined as the risk of loss due to the previously established reserves for claims reported on previously exposed business turning out to be incorrect in terms of quantum or timing.

Claims Management Risk is the risk of loss or regulatory breach due to inappropriate claim management process and/or inadequate governance.

Managing Agent’s Report

Credit Risk is defined as the risk of loss due to counterparty default or failure to fulfil their obligations. This is the risk of loss or of adverse change in Syndicate 1274 financial position, resulting from fluctuations in the credit standing of issuers of securities, counterparties and any debtors to which AMAL is exposed, in the form of counterparty default risk, spread risk, or market risk concentrations.

Market Risk is defined as the risk of loss, or of adverse change in the financial situation, resulting directly or indirectly from fluctuations in the volatility of market prices of assets, liabilities and financial instruments. It is the risk that the value of Syndicate 1274 basic own funds changes unfavourably, due to economic factors such as variations in interest rates.

Liquidity Risk is defined as the risk of loss, or inability to realise investments and other assets, in order to settle financial obligations when they fall due.

Operational Risk is defined as the risk of loss arising from inadequate or failed internal processes, people, and systems or from external events impacting Syndicate 1274’s ability to operate. This risk encompasses all functions rendered in the course of conducting business. This includes legal and regulatory risk, but excludes risks arising from strategic and reputational risk.

Regulatory Risk is the risk that the Managing Agency fails to meet the regulatory requirements of the Financial Conduct Authority, the Prudential Regulation 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. Antares Managing Agency Limited has a Compliance department that monitors regulatory developments and assesses the impact on Agency policy.

Strategic Risk is defined as the risk to earnings or capital arising from adverse business decisions or improper implementation of those decisions. This risk is a function of the compatibility between AMAL’s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, the quality of implementation and appropriateness of response to changing business conditions. This includes reputational risk that is recognised as a by-product of inappropriate and/or inadequate management and mitigation of other risk categories.

Group Risk is the possibility that the operation of one part of the Group adversely affects another. Group risk includes: negative publicity; inadequate communication within the organisation; undue influence from fellow subsidiaries; holding companies or stakeholders; financial pressures to make funds available to the Group; and financial restraint leading to shortcomings in core activities. The overall strategy is to minimise Group risk by ensuring that there are clear lines of authority and communication between related parties, and that any intra-Group agreements are formed objectively and clearly understood by all parties.

Climate Change Risk

Climate Change, and the response to climate change is an evolving risk area which has potential to impact AMAL along with the wider insurance industry. This risk could impact not only the physical environment, but also the liability environments in which we operate. There may also be potential transition risks arising from the transition to low carbon economy. Such impacts could be short or long term in nature, and potentially affect our other key risk types described above.

AMAL has a process to monitor the risks arising from climate change on an ongoing basis. This includes the monitoring of qualitative and quantitative considerations across the business (including the utilisation of scenario testing where feasible). Climate change risks are considered as part of our wider ongoing risk management processes, as is the case for the other potential risks impacting the organisation. We continue to monitor developments in this space, including regulatory expectations in this area.

Managing Agent’s Report

Risk Governance

The AMAL Board is ultimately responsible for ensuring the effective management and control of risk affecting the Syndicate. The AMAL Board is committed to maintaining sound risk management and control systems that are suitable, effective and proportionate to protect the interests of all stakeholders. The AMAL Board has, for practical reasons, delegated its day-to-day responsibility for different aspects of the risk management to committees and the senior management.

Refer to Note 3 Risk Management for more information on how the Syndicate 1274 monitors, controls, mitigates and manages the risks described above.

Business Outlook

The Syndicate Business Forecast for 2025 year of account has been approved by Lloyd’s and management are continuing to focus on growth and profit. The stamp capacity for 2025 year of account is $536m.

Disclosure of Information to the Auditors

The Directors each confirm that:

•so far as they are aware, there is no relevant audit information of which the Syndicate's auditors are unaware; and

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

Auditors

Pursuant to section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.

By order of the Board

Amy Rose-McMullen

Company Secretary

6 March 2025

Statement of Managing Agent’s responsibilities

The Directors of the Managing Agent are responsible for preparing the Syndicate annual report and annual 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 as at 31 December each year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland). The annual accounts are required by law to give a true and fair view of the state of affairs of the syndicate as at that date and of its profit or loss for that year.

Under Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 the directors of the Managing Agent must not approve the annual accounts unless they are satisfied that they give a true and fair view of the state of the affairs of the Syndicate and of the profit or loss of the Syndicate for that period. In preparing these annual accounts, the Directors of the Managing Agent are required to:

1.select suitable accounting policies and then apply them consistently;

2.make judgements and estimates that are reasonable and prudent;

3.state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the annual accounts;

4.assess the Syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

5.prepare the annual accounts on the basis that the syndicate will continue to write future business unless it is inappropriate to presume that the syndicate will do so.

The Directors of the Managing Agent are responsible for keeping proper accounting records which 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. They are responsible for such internal control as they determine is necessary to enable the preparation of the annual accounts that are free from material misstatement, whether due to fraud or error and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Syndicate and to prevent and detect fraud and other irregularities.

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

The Directors of the Managing Agent is responsible for the maintenance and integrity of the corporate and financial information included on the business’ website. Legislation in the United Kingdom governing the preparation and dissemination of annual accounts may differ from legislation in other jurisdictions.

Independent Auditor’s Report to the Members of Antares 1274

Opinion

We have audited the Syndicate annual accounts of Syndicate 1274 (“the Syndicate”) for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, Statement of Financial Position – Assets, Statement of Financial Position – Liabilities, Statement of Changes in Members’ Balances, Statement of Cash Flows, and related notes, including the accounting policies in note 2.

In our opinion the Syndicate annual accounts:

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

•have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and

•have been prepared in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and Sections 1 and 5 of the Syndicate Accounts Instructions Version 2.0 issued by Lloyd’s, as modified by the Syndicate Accounts Frequently Asked Questions Version 1.1 dated 18 February 2025 issued by Lloyd’s (together “the Syndicate Accounts Instructions”).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), applicable law, and, under the terms of our engagement letter dated 3 August 2022, the Syndicate Account Instructions. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Syndicate in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to other entities of public interest. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The Directors of the Managing Agent (“the Directors”) have prepared the Syndicate annual accounts on the going concern basis as they do not intend to cease underwriting or to cease its operations, and as they have concluded that the Syndicate’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year] from the date of approval of the Syndicate annual accounts (“the going concern period”).

In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s business model and analyzed how those risks might affect the Syndicate’s financial resources or ability to continue operations over the going concern period, including reviewing correspondence with Lloyd’s to assess whether there were any known impediments to establishing a further year of account.

Our conclusions based on this work:

•we consider that the Directors’ use of the going concern basis of accounting in the preparation of the Syndicate annual accounts is appropriate; and

•we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Syndicate’s ability to continue as a going concern for the going concern period.

Independent Auditor’s Report to the Members of Antares 1274

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Syndicate will continue in operation.

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

•Enquiring of directors, the audit committee, internal audit, legal, risk and compliance, management and inspection of policy documentation as to the Syndicate and Managing Agent’s high-level policies and procedures to prevent and detect fraud including the internal audit function, and the Syndicate and Managing Agent’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

•Reading board, audit committee, other relevant meeting minutes.

•Considering remuneration incentive schemes and performance targets for management directors.

•Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular:

•the risk that management may be in a position to make inappropriate accounting entries; and

•the risk of bias in accounting estimates and judgements such as the valuation of incurred but not reported insurance loss reserves and the valuation of premium estimates.

We did not identify any additional fraud risks.

We performed procedures including:

•Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted by senior management and inactive users, journals posted without a user identify, those posted to seldom used accounts, those posted with unusual descriptions; unusual entries posted to cash and revenue.

•Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

Independent Auditor’s Report to the Members of Antares 1274

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the Syndicate annual accounts from our general commercial and sector experience, and through discussion with the directors and others management (as required by auditing standards), and from inspection of the Syndicate and Managing Agent’s regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.

As the Syndicate is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the annual return varies considerably.

Firstly, the Syndicate is subject to laws and regulations that directly affect the annual return including financial reporting legislation ( such as the Insurance Accounts Directive, (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and the Lloyd’s Syndicate Accounts Instructions) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Syndicate is subject to many other laws and regulations where the consequences of noncompliance could have a material effect on amounts or disclosures in the Annual Return, for instance through the imposition of fines or litigation or the loss of the Syndicate’s license to operate.

We identified the following areas as those most likely to have such an effect: regulatory capital and liquidity, conduct and financial crime, health and safety, data protection laws, anti-bribery, employment law, money laundering, foreign corrupt practices, environmental protection legislation, and misrepresentation recognising the financial and regulated nature of the Syndicate’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the annual return, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed noncompliance with laws and regulations is from the events and transactions reflected in the annual return, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations

Independent Auditor’s Report to the Members of Antares 1274

Other information - Report of the Directors of the Managing Agent

The Directors are responsible for the Report of the Directors of the Managing Agent. Our opinion on the Syndicate annual accounts does not cover that report and we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the Report of the Directors of the Managing Agent and, in doing so, consider whether, based on our Syndicate annual accounts audit work, the information therein is materially misstated or inconsistent with the Syndicate annual accounts or our audit knowledge. Based solely on that work:

•we have not identified material misstatements in the Report of the Directors of the Managing Agent;

•in our opinion the information given in the Report of the Directors of the Managing Agent is consistent with the Syndicate annual accounts; and

•in our opinion the Report of the Directors of the Managing Agent has been prepared in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.

Matters on which we are required to report by exception

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

•adequate accounting records have not been kept on behalf of the Syndicate; or

•the Syndicate annual accounts are not in agreement with the accounting records; or

•certain disclosures of Managing Agent’s emoluments specified by law are not made; or

•we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

Responsibilities of the Directors of the Managing Agent

As explained more fully in their statement set out on page 9, the Directors of the Managing Agent are responsible for: the preparation of the Syndicate annual accounts in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Syndicate Accounts Instructions, and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of Syndicate annual accounts that are free from material misstatement, whether due to fraud or error; assessing the Syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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

Independent Auditor’s Report to the Members of Antares 1274

A fuller description of our responsibilities is provided on the FRC’s website at

www.frc.org.uk/auditorsresponsibilities

The Directors of the Managing Agent are required, under the Syndicate Accounts Instructions, to include these financial statements within a document to which XBRL tagging has been applied. This auditor’s report provides no assurance over whether the XBRL tagged document has been prepared in accordance with those requirements.

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Syndicate’s members, as a body, in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the terms of our engagement letter by the Managing Agent. Our audit work has been undertaken so that we might state to the Syndicate’s members those matters we are required to state to them in an auditor’s report and the further matters we are required to state to them in accordance with the terms agreed with the Managing Agent and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Syndicate and the Syndicate’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Umar Jamil

for and on behalf of KPMG LLP, Senior Statutory Auditor

Chartered Accountants

15 Canada Square

London

E14 5GL

6 March 2025

Statement of profit or loss and other comprehensive income:

Technical account – General business

For the year ended 31 December 2024

Note

2024

$000

2023

$000

Gross premiums written

597,810

599,087

Outwards reinsurance premiums

(57,521)

(65,182)

Premiums written, net of reinsurance

540,289

533,905

Changes in unearned premium

Change in the gross provision for unearned premiums

(13,116)

3,431

Change in the provision for unearned premiums reinsurers’ share

3,591

(10,223)

Net change in provisions for unearned premiums

(9,525)

(6,792)

Earned premiums, net of reinsurance

530,764

527,113

Allocated investment return transferred from the non-technical account

37,643

48,975

Claims paid

Gross amount

(351,201)

(292,515)

Reinsurers’ share

50,002

29,533

Net claims paid

(301,199)

(262,982)

Change in the provision for claims

Gross amount

23,519

(52,813)

Reinsurers’ share

(17,347)

30,206

Net change in provisions for claims

6,172

(22,607)

Claims incurred, net of reinsurance

(295,027)

(285,589)

Net operating expenses

(207,170)

(184,436)

Balance on the technical account – general business

66,210

106,063

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

Non-technical account – General business

For the year ended 31 December 2024

The Syndicate has no Other comprehensive income other than profit for the year. All operations relate to continuing activities.

Note

2024$000

2023$000

Balance on the technical account – general business

66,210

106,063

Investment income

35,497

28,522

Realised losses on investments

(2,488)

(2,293)

Unrealised gains on investments

6,887

24,078

Investment expenses and charges

(2,253)

(1,332)

Total investment return

37,643

48,975

Allocated investment return transferred to the general business technical account

(37,643)

(48,975)

(Loss)/gain on foreign exchange

(5,369)

397

Profit for the financial year

60,841

106,460

Total comprehensive income for the year

60,841

106,460

Balance sheet – Assets

As at 31 December 2024

Note

2024$000

2023$000

Financial investments

878,476

890,821

Deposits with ceding undertakings

2,922

2,612

Investments

881,398

893,433

Provision for unearned premiums

28,742

25,247

Claims outstanding

182,182

201,621

Reinsurers’ share of technical provisions

210,924

226,868

Debtors arising out of direct insurance operations

186,068

201,940

Debtors arising out of reinsurance operations

121,807

118,176

Other debtors

1,515

365

Debtors

309,390

320,481

Cash at bank and in hand

107,124

74,707

Other

53,606

64,735

Other assets

160,730

139,442

Accrued interest and rent

186

Deferred acquisition costs

65,430

61,354

Other prepayments and accrued income

2,486

2,060

Prepayments and accrued income

68,008

63,600

Total assets

1,630,450

1,643,824

Balance sheet (cont’d) – Liabilities

As at 31 December 2024

Note

2024$000

2023$000

Members’ balances

135,523

110,873

Total capital and reserves

135,523

110,873

Provision for unearned premiums

273,754

265,854

Claims outstanding

1,100,591

1,141,380

Technical provisions

1,374,345

1,407,234

Creditors arising out of direct insurance operations

40,208

41,651

Creditors arising out of reinsurance operations

49,631

62,145

Other creditors including taxation and social security

27,522

18,938

Creditors

117,361

122,734

Accruals and deferred income

3,221

2,983

Total liabilities

1,494,927

1,532,951

Total liabilities, capital and reserves

1,630,450

1,643,824

The Syndicate financial statements on pages 15 to 55 were approved by the board of Antares Managing Agency Limited on 6 March 2025 and were signed on its behalf by:

R A KeersFinance Director

6 March 2025

Statement of changes in members’ balances

For the year ended 31 December 2024

2024$000

2023$000

Members’ balances brought forward at 1 January

110,873

(11,879)

Total comprehensive income for the year

60,841

106,460

Payments of profit to members’ personal reserve funds

(36,191)

Losses collected in relation to distribution on closure of underwriting year

16,292

Members’ balances carried forward at 31 December

135,523

110,873

Statement of cash flows

For the year ended 31 December 2024

Note

2024$000

2023$000

Cash flows from operating activities

Profit for the financial year

60,841

106,460

Adjustments:

(Decrease)/increase in gross technical provisions

(10,404)

49,382

Increase/(decrease) in reinsurers’ share of gross

technical provisions

13,756

(19,984)

(Decrease) in debtors

(467)

(25,167)

(Decrease) in creditors

(6,050)

(40,609)

Movement in other assets/liabilities

8,927

4,386

Investment return

(37,643)

(48,976)

Net cash flows from operating activities

28,960

25,492

Cash flows from investing activities

(Purchase) of equity and debt instruments

(241,937)

(229,641)

Sale of equity and debt instruments

244,899

151,380

(Purchase) of derivatives

(478)

(6,036)

Sale of derivatives

3,325

13,389

Investment income received

33,008

26,229

Other

(2,665)

(1,877)

Net cash inflows/(outflows) from investing activities

36,152

(46,556)

Cash flows from financing activities

Distribution of profit

(36,191)

Collection of losses

16,292

Net cash (outflows)/inflows from financing activities

(36,191)

16,292

Net increase/(decrease) in cash and cash equivalents

28,921

(4,772)

Cash and cash equivalents at the beginning of the year

77,357

81,789

Foreign exchange on cash and cash equivalents

1,542

340

Cash and cash equivalents at the end of the year

107,820

77,357

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

1.Basis of preparation

The Managing Agent of Syndicate 1274 is Antares Managing Agency Limited (“AMAL”), whose registered office is 21 Lime Street, London, EC3M 7HB and registered number is 6646629. AMAL’s ultimate parent company is Qatar Insurance Company QSPC (“QIC”), Doha, Qatar, P.O. Box 666, Tamin St, West Bay, an insurance group listed on the Qatar Exchange.

Antares Global Management Limited is a service company within the QIC group providing services to fellow subsidiaries including AMAL and Syndicate 1274.

The principal activity of Syndicate 1274 is the transaction of general insurance and reinsurance business in the London Market.

The accounts for the year ended 31 December 2024 were approved by the Antares Managing Agency Board of directors on 6 March 2025.

These annual accounts have been prepared in accordance with The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and applicable United Kingdom Accounting Standards, including Financial Reporting Standard 102 – “The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland” (“FRS 102”) and Financial Reporting Standard 103 Insurance Contracts (“FRS103”) and in accordance with the provisions of Schedule 3 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations relating to insurance companies and the Lloyds Syndicate Accounts Instructions Version 2.0 as modified by the frequently Asked Questions Version 1.1 issued by Lloyds.

The accounts have been prepared on a historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in the accounting policies below. The Syndicate presents its annual accounts as an individual undertaking and not about its group.

The Syndicate’s functional currency and presentational currency is US Dollars and the level of rounding used is the nearest thousand.

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

a) Reclassification changes: Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The principal change is the reclassification of overseas deposits, previously shown as a separate balance sheet item, to form part of other assets. The comparative balances have also been represented to align with the current period presentation.

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

The reclassification and aggregation changes have been applied retrospectively and had no impact on previously reported profit or (loss), total comprehensive income/(loss), total assets, total liabilities, or total capital and reserves.

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

2.Accounting policies

(a)Premiums written

Premiums written comprise premiums on contracts incepted during the financial year as well as adjustments made in the year to premiums written in prior accounting periods. Premiums are shown gross of brokerage payable and exclude taxes and duties levied on them. Premiums include estimates for pipeline premiums, representing amounts due to the Syndicate not yet notified.

(b)Unearned premiums

Written premiums are recognised as earned according to the risk profile of the policy. Unearned premiums represent the proportion of premiums written in the year that relate to unexpired terms of policies in force at the balance sheet date, calculated on the basis of established earnings patterns or time apportionment as appropriate.

(c)Reinsurance premium ceded

Outwards reinsurance premiums are earned according to the type of policy. For losses occurring during (LOD) contracts the premium is earned on a straight line basis over the period of coverage. For risks attaching during (RAD) contracts the premium is earned in line with the gross premiums earned to which the risks attaching contract relates.

(d)Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with FRS 102 and 103 requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenue and expenses during the year. The estimates and associated assumptions are based on historical experience and other factors as deemed reasonable and appropriate. The results of these factors allow judgements to be made in respect of the carrying values of assets and liabilities that are not readily apparent from other sources. The nature of estimation means that actual outcomes could differ from those estimates. Uncertainties exist where current valuations are dependent on estimates of future results.

The Syndicate’s areas of estimation primarily relate to premium estimates, valuation of liabilities in respect of insurance and reinsurance contracts and valuation of investments.

The estimates and assumptions are reviewed on an ongoing basis. To the extent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of equity, it shall be recognised by adjusting the carrying amount of the related assets, liability or equity item in the period of change.

(d) (i) Premium estimates

In the syndicate, the majority of the estimation arises within the binder and lineslip estimates where the premium amounts are dependent on the volume of policies that are insured under the binder / lineslip over the coverage period. In these cases underwriters estimate an initial premium Income (EPI) volume and then adjust throughout the life of the binder / lineslip as and when new

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

information becomes available. The process of determining the EPI is based on a number of factors, which can include:

•coverholder business plan documents supplied prior to binding;

•historical trends of business written;

•current and expected market conditions for this line of business; and

•life to date bordereaux submissions versus expectation.

As the year of account matures, the premium estimates are moved to ultimate premium. At a class of business level, ultimate premium is the total premium expected for all business. For older year of account, this estimation is based on statistical methods, where historical patterns comparing the booked premium against the ultimate over time are used to project the ultimate for those years believed to not yet be fully booked. For the middle year of account, the ultimate premium estimates are based on the combination of statistical methods for the lines of business that are more than 70% developed while others on underwriter information provided, with validations performed by internal actuaries using the statistical methods and by way of discussion with the underwriting teams for each class of business. For those classes of business where inwards reinstatement premiums are likely to be material to the ultimate premium estimate, these are explicitly modelled as a function of the ultimate claims for a year of account. Reinsurance premiums are estimated by reinsurance type: proportional and non-proportional.

(d) (ii) Claims provisions and related recoveries

Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or not, including related direct and indirect claims handling costs and adjustments to claims outstanding from previous years.

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

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

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

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

The Directors consider that the provisions for gross claims and related reinsurance recoveries are fairly stated on the basis of the information currently available to them. However, the ultimate liability will vary as a result of subsequent information and events and this may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provisions

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

established in prior years are reflected in the annual accounts for the period in which the adjustments are made. The methods used, and the estimates made, are reviewed regularly.

(d) (iii) Financial investments

The Syndicate classifies its investments as financial assets measured at fair value through profit or loss.

The Syndicate investments are initially recorded at fair value. Subsequent to initial recognition, these investments are re-measured at fair value at each reporting date. Fair value adjustments and realised gains and loss are recognised in the Income Statement.

The Syndicate uses the following hierarchy for determining the fair value of financial instruments by valuation technique:

•Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

•Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

•Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

Refer to Note 10 Financial Investments for details on the Fair Value Hierarchy and fair value measurement criteria.

The Syndicate measures the fair value of its financial assets based on market data from independent pricing services. The pricing services used obtain the actual transaction prices for securities that have quoted prices in active markets. For those securities which are not actively traded, the pricing services use 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.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of the derivatives are recognised in profit or loss in finance costs as appropriate. The syndicate does not apply hedge accounting.

(e)Unexpired Risks Provision

A provision for unexpired risks is made where claims and related expenses arising after the end of the financial period in respect of contracts concluded before that date, are expected to exceed the unearned premiums and premiums receivable under these contracts, after the deduction of any acquisition costs deferred.

The provision for unexpired risks is calculated by reference to classes of business which are managed together, after taking into account relevant investment return.

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

(f)Deferred Acquisition Costs

Acquisition costs, comprising commission and underwriters costs related to the acquisition of new insurance contracts, are deferred to the extent that they are attributable to premiums unearned at year end.

(g)Financial Assets/Liabilities

All financial assets/liabilities are recognised initially at fair value. Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, the Syndicate currently has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(h)Foreign Currencies

The Syndicate’s functional currency and presentational currency is US Dollars.

Foreign currency transactions are recorded in the functional currency using the exchange rates prevailing at the date of the transactions, or at the average rate for the period when this is a reasonable approximation. Monetary assets and liabilities (which include all assets and liabilities arising from insurance contracts including unearned premiums and deferred acquisition costs) denominated in foreign currencies are translated at period end exchange rates. Non-monetary assets and liabilities carried at historical cost denominated in a foreign currency are translated at historic rates. Non-monetary assets and liabilities carried at estimated fair value denominated in a foreign currency are translated at the exchange rate at the date the estimated fair value was determined.

Exchange differences are recorded in the non-technical account.

(i)Investment Return

Investment return comprises all investment income, realised investment gains and losses and movements in unrealised gains and losses, net of investment expenses, charges and interest.

Realised gains and losses on investments are calculated as the difference between sale proceeds and purchase price. Unrealised gains and losses on investments represent the difference between the valuation at the balance sheet date and their valuation at the previous balance sheet date, or purchase price, if acquired during the year, together with the reversal of unrealised gains and losses recognised in earlier accounting periods in respect of investment disposals in the current period.

Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical account to the general business technical account. Investment return has been wholly allocated to the technical account as all investments relate to the technical account.

(j)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.

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

No provision has been made for any United States Federal Income Tax payable on underwriting results or investment earnings. Any payments on account made by the Syndicate 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.

(k)Pension Costs

Antares Global Management Limited operates a defined contribution scheme for staff working on behalf of Antares Syndicate 1274. Pension contributions relating to these members of staff are charged to the Syndicate and included within net operating expenses.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in fair value and are used by the Syndicate in the management of its short-term commitments.

3.Risk and capital management

Risk management framework

Principal Risk and Uncertainties

The Syndicate’s activities expose the business to a number of risks which have the potential to affect the achievement of the business objectives. The Board is responsible for maintaining an appropriate structure for managing these risks and acknowledges that it is not possible to eliminate risk entirely. However, the Board seeks to manage risk in line with risk appetite by maintaining effective systems and controls.

The Syndicate is exposed to risk in the following categories:

A.Insurance risk

Insurance Risk: Underwriting Risk is defined as: “The risk that the frequency and severity of insured events exceeds the expectations of Syndicate 1274 at the time of underwriting”.

Reinsurance is an important risk mitigation tool employed by the Syndicate to reduce its exposure to Underwriting Risk. Reinsurance strategy is developed as part of the Three Year Business Plan and the Annual Business Plan, with reference to the overall risk appetite of the Syndicate, historical and projected future reinsurance costs, and potential sources of capital. The reinsurance strategy is approved by the AMAL Board and implemented by senior management.

The other risk mitigation techniques/tools in respect of the Underwriting Risk include: increasing diversification; altering limits and attachment points; and changing product mix (including classes of business and territories).

Underwriting Risk is managed through underwriting authorities, and both peer and independent expert review procedures. Pricing is determined through the use of bespoke pricing models. Underwriting authorities are monitored through systems which report adherence to individual underwriter limits (including contract limits and jurisdiction restrictions). Any delegated underwriting authorities are subject to diligence review, and regular audit.

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

Exposure limits, including model based and Realistic Disaster Scenario (RDS) methodologies are set to limit the exposure to underwriting risk. Aggregate and Class of Business exposures are assessed and monitored, in line with the Exposure Management Framework, to control the risk from the underwriting activities.

Detailed underwriting management information is prepared regularly, including metrics for the main components of risk. These include pricing, loss ratio selection, experience variations, cycle management, reinsurance protection and catastrophe modelling through proprietary software.

Insurance Risk: Reserving Risk is defined as: “The risk of loss due to the previously established reserves for claims reported on previously exposed business being incorrect in terms of quantum or timing”.

The Reserving Policy is approved by the AMAL Board and Technical Provisions Framework is approved by the Finance Committee. These set out the detailed principles, methodologies, practice and governance arrangements for the estimation of reserves and technical provisions.

The reserving policy seeks to ensure consistency in reserving from year to year, and the equitable treatment of capital providers on closure of a Syndicate Year of Account.

When setting reserves, the Syndicate’s actuarial function undertakes a process that includes data validation, ensuring the data used for estimating reserves is complete, accurate and understood; use of traditional actuarial methods; consideration of claims watch-lists; and engagement with underwriting, reinsurance and claims business functions to discuss actuarial findings and validate views.

Peer review within the actuarial function is completed prior to presentation of the proposed reserves to the Reserving Committee for challenge. The Reserving Committee comprises knowledgeable stakeholders from across the business, allowing for broad discussion of the drivers of premium and claim estimates.

Reserving risk is monitored by the robust application of actuarial methodologies, sign-off procedures, quarterly tracking of projected ultimate loss ratios and reassessment of methodologies where appropriate.

Specific areas of uncertainty within reserving include, but are not limited to future economic and social inflation, more material due to the ongoing heightened inflation environment; and ongoing conflicts and political tensions that require detailed monitoring of potential exposures and for which claims reporting may be delayed.

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

Sensitivity to insurance risk

The following table presents the sensitivity of the value of insurance liabilities disclosed in the accounts to potential movements in the assumptions applied within the technical provisions. Given the nature of the business underwritten by the Syndicate, the approach to calculating the technical provisions for each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse risk margin to the total insurance liability

General insurance business sensitivities as at 31 December 2024

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

55,030

(55,030)

Claims outstanding – net of reinsurance

45,920

(45,920)

General insurance business sensitivities as at 31 December 2023

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

57,069

(57,069)

Claims outstanding – net of reinsurance

46,988

(46,988)

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

B. Financial risk

a. Credit Risk

Credit Risk is defined as: “The risk of loss due to counterparty default or failure to fulfil their obligations”. This is the risk of loss or of adverse change in the Syndicate’s financial position, resulting from fluctuations in the credit standing of issuers of securities, counterparties and any debtors to which the Syndicate is exposed, in the form of counterparty default risk, spread risk, or market risk concentrations.

Syndicate Investment Guidelines are approved by the AMAL Board and include details of permitted securities (including limits), minimum credit ratings and maximum concentrations, to mitigate credit and counterparty default risk exposures in respect of the investment portfolio. Adherence to these guidelines is monitored on a monthly basis.

The Syndicate deals primarily with brokers that are registered with Lloyd’s and with which it has a current, signed Terms of Business Agreement (TOBA). The financial standing of the brokers, their payment performance and adherence to approved procedures is monitored and all exceptions are escalated to the Finance Committee, which recommends a bad and doubtful debt provision to be applied against amounts due from brokers.

The Security Committee sets reinsurer exposure thresholds based on credit ratings. This is supported by placing limits on exposure to a single reinsurer in respect of the largest Realistic Disaster Scenario exposures. Reinsurer exposures are monitored on a regular basis and reported to the Security Committee, which considers the ongoing appropriateness of the thresholds and agrees strategies for reducing exposure in respect of any breaches. The Finance Committee monitors the payment performance of approved reinsurers and sets out bad debt write-off provisions. All Outward commutation agreements are approved by the Security Committee and if required by the board.

The Syndicate’s maximum exposure to counterparty credit risk analysed by credit quality is detailed below.

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

Year 2024

AAA$000

AA$000

A$000

BBB$000

Other$000

Not rated$000

Total$000

Shares and other variable yield securities and units in unit trusts

33,550

Debt securities and other fixed income securities

767

248,980

234,846

283,046

152

3,238

771,029

Participation in investment pools

28,791

38,157

421

67,369

Derivative assets

297

Syndicate loans to central fund

6,231

Other investments

Deposits with ceding undertakings

2,922

Reinsurers’ share of claims outstanding

63,412

112,042

6,728

182,182

Debtors arising out of direct insurance operations

186,068

Debtors arising out of reinsurance operations

42,397

74,912

4,498

121,807

Cash at bank and in hand

50,119

56,900

105

107,124

Other debtors and accrued interest

25,303

19,965

8,338

4,093

57,699

Total

104,980

412,911

481,622

291,384

186,325

59,056

1,536,278

Year 2023

AAA$000

AA$000

A$000

BBB$000

Other$000

Not rated$000

Total$000

Shares and other variable yield securities and units in unit trusts

39,127

Debt securities and other fixed income securities

754

278,804

206,095

277,038

383

3,916

766,990

Participation in investment pools

31,423

39,188

650

71,261

Derivative assets

5,353

Syndicate loans to central fund

8,089

Other investments

Deposits with ceding undertakings

2,612

Reinsurers’ share of claims outstanding

73,308

122,296

5,929

201,621

Debtors arising out of direct insurance operations

201,940

Debtors arising out of reinsurance operations

42,968

71,682

3,475

118,176

Cash at bank and in hand

25,300

18,011

31,241

155

74,707

Other debtors and accrued interest

28,269

25,598

10,868

2,611

67,346

Total

85,746

477,877

433,926

288,045

202,478

69,150

1,557,222

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

Financial assets that are past due or impaired

The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not impaired at the reporting date.

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

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2024

$000

Shares and other variable yield securities and units in unit trusts

33,550

Debt securities and other fixed income securities

771,029

Participation in investment pools

67,369

Derivative assets

297

Syndicate loans to central fund

6,231

Other investments

Deposits with ceding undertakings

2,922

Reinsurers' share of claims outstanding

182,182

Debtors arising out of direct insurance operations

176,651

9,417

186,068

Debtors arising out of reinsurance operations

116,974

4,833

121,807

Other debtors and accrued interest

57,699

Cash at bank and in hand

107,124

Total

1,522,028

14,250

1,536,278

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

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2023

$000

Shares and other variable yield securities and units in unit trusts

39,127

Debt securities and other fixed income securities

766,990

Participation in investment pools

71,261

Derivative assets

5,353

Syndicate loans to central fund

8,089

Other investments

Deposits with ceding undertakings

2,612

Reinsurers' share of claims outstanding

201,621

Debtors arising out of direct insurance operations

192,307

9,633

201,940

Debtors arising out of reinsurance operations

109,134

9,042

118,176

Other debtors and accrued interest

67,346

Cash at bank and in hand

74,707

Total

1,538,547

18,675

1,557,222

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

Past due but not impaired

0-3 months past due

3-6 months past due

6-12 months past due

Greater than 1 year past due

Total

2024

$000

Shares and other variable yield securities and units in unit trusts

Debt securities and other fixed income securities

Participation in investment pools

Derivative assets

Syndicate loans to central fund

Other investments

Deposits with ceding undertakings

Reinsurers' share of claims outstanding

Debtors arising out of direct insurance operations

7,296

312

119

1,690

9,417

Debtors arising out of reinsurance operations

2,374

288

2,171

4,833

Other debtors and accrued interest

Cash at bank and in hand

Total

9,670

600

2,290

1,690

14,250

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

b. Liquidity risk

Liquidity Risk is defined as: “The risk of loss, or inability to realise investments and other assets, in order to settle financial obligations when they fall due.”

Liquidity policy includes a specific requirement to hold sufficient funds in working capital to meet the following quarter’s estimated claims liabilities and this position is reviewed by the Finance Committee on a quarterly basis. Additionally, an annual stress test is performed to ensure that sufficient liquidity is maintained in order to meet a Realistic Disaster Scenario (“RDS”) event without unnecessary cost to AMAL. Rolling 12-month cash flow projections, in each of the underlying main operating currencies, are prepared quarterly, reviewed against available liquid funds and used in the quarterly balance sheet asset liability matching exercise. The review recognises the restrictions placed on funds committed to meet Lloyd’s overseas trust fund requirements. Liquidity requirements for all accounts and respective currency amounts are determined periodically via a process of analysis of historic daily settlements.

Past due but not impaired

0-3 months past due

3-6 months past due

6-12 months past due

Greater than 1 year past due

Total

2023

$000

Shares and other variable yield securities and units in unit trusts

Debt securities and other fixed income securities

Participation in investment pools

Derivative assets

Syndicate loans to central fund

Other investments

Deposits with ceding undertakings

Reinsurers' share of claims outstanding

Debtors arising out of direct insurance operations

7,412

212

2,009

9,633

Debtors arising out of reinsurance operations

1,680

7,284

9,042

Other debtors and accrued interest

Cash at bank and in hand

Total

9,092

290

7,284

2,009

18,675

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

A table showing the undiscounted expected timing of future cash flows is as follows (insurance contract liabilities and reinsurance contract assets have been analysed based on actuarial cash flow estimates):

Provisions, reinsurance and other payables includes $6.1m of derivatives liabilities (2023: $2.0m). Derivative liabilities are included in Other Creditors in the balance sheet.

000

Undiscounted net cash flows

Year 2024

No maturity stated$000

0-1 yrs$000

1-3 yrs$000

3-5 yrs$000

>5 yrs$000

Total$000

Claims outstanding

422,734

529,475

96,905

51,477

1,100,591

Derivative liabilities

6,102

Creditors

103,715

5,658

1,660

226

111,259

Other credit balances

Total

532,551

535,133

98,565

51,703

1,217,952

000

Undiscounted net cash flows

Year 2023

No maturity stated$000

0-1 yrs$000

1-3 yrs$000

3-5 yrs$000

>5 yrs$000

Total$000

Claims outstanding

458,462

520,863

87,492

74,563

1,141,380

Derivative liabilities

2,571

Creditors

110,420

7,307

2,143

292

120,162

Other credit balances

Total

571,453

528,170

89,635

74,855

1,264,113

c. Market risk

Market Risk is defined as: “The risk of loss, or of adverse change in the financial situation, resulting directly or indirectly from fluctuations in the volatility of market prices of assets, liabilities and financial instruments”. Market risk is driven by interest rate risk, spread risk, and currency risk as follows:

Interest Risk: the sensitivity of the values of assets, liabilities and financial instruments to changes in the term structure of interest rates, or in the volatility of interest rates.

Interest rate risk is the risk that the value and/or future cash flows of a financial instrument will fluctuate due to changes in interest rates. The Syndicate’s exposure to interest rate risk is spread across the Syndicate’s investment portfolio, and cash and cash equivalents.

In managing interest rate risk, the Syndicate currently invests in short duration financial investments, cash and cash equivalents. Interest rate risk is controlled by imposing maximum

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

duration limits to the conventional fixed income assets, as defined in the investment guidelines provided to investment managers.

Duration is a commonly used measure of risk and gives an indication of the likely sensitivity of the Syndicate’s portfolio of fixed interest securities to changes in interest rates. The average duration for investment assets is 4.02 years (2023: 2.67 years). These are unaudited figures.

The Syndicate’s financial assets comprise a portfolio of fixed income securities, UCITS funds and bank deposits. The portfolio of fixed income securities is managed by professional fund managers, under a segregated investment mandate, and in accordance with guidelines approved by the

AMAL Board. The guidelines permit investment in a range of fixed income investment products, including government securities, corporate bonds and asset backed securities, as well as a modest allocation to equities and other alternative investments.

Spread Risk: the sensitivity of the values of assets, liabilities and financial instruments to changes in the level or in the volatility of credit spreads over the risk-free interest rate term structure.

Volatility (spread risk) is controlled by imposing Value at Risk (VaR) limits, at a specified confidence level and time period, to the overall investment funds. This is reviewed on a quarterly basis by the Investment Committee.

Currency Risk: the sensitivity of the values of assets, liabilities and financial instruments to changes in the level, or in the volatility of, currency exchange rates.

The Syndicate underwrites a significant proportion of business in currencies other than US Dollars, which gives rise to a potential exposure to currency risk. In addition, the Syndicate has a natural currency mismatch, as a higher proportion of its expenses are incurred in Sterling.

The most significant non-US Dollar currency exposure relates to Sterling and Euro.

Currency risk is controlled through an Asset Liability Matching (ALM) process. The ALM process is performed on a quarterly basis to achieve alignment of assets and liabilities in currency, to address any mismatch between currency premiums and claims, and the natural mismatch between US Dollar income and Sterling expenses. The income and expenditure process is performed on an annual basis and, in particular, endeavours to align the currency mix of outward reinsurance premiums paid with that of related inwards premium received. Benchmarks are broadly in line with average liabilities on the main trust fund assets, and deliberate mismatching, within limits, is viewed as a valid strategy to limit any losses arising from interest rate risk and, where possible, to enhance returns.

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

If the Sterling and the Euro were to weaken against the US Dollar by 10%, with all other variables constant, loss and receivable from members would be higher by an estimated $4.6m (2023: higher $1.6m). This analysis is based on the current information available and the assumptions in making this assessment are:

•There is no active hedging of currency during the period

•The analysis includes an estimate of the impact on foreign borrowings

•The impact of foreign exchange movements on non-monetary items is assumed to be nil

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

Sterling

US dollar

Euro

Canadian dollar

Australian dollar

Japanese Yen

Other

Total

2024

$000

Investments

74,334

719,475

41,708

46,344

(465)

881,398

Reinsurers' share of technical provisions

53,032

133,570

9,947

6,077

5,189

156

2,953

210,924

Debtors

51,067

187,117

43,659

2,838

9,437

3,007

12,265

309,390

Other assets

26,413

76,406

1,428

30,794

25,557

126

160,730

Prepayments and accrued income

12,223

40,023

8,304

1,776

2,567

680

2,435

68,008

Total assets

217,069

1,156,591

105,046

87,829

42,752

3,969

17,194

1,630,450

Technical provisions

(199,777)

(893,527)

(128,660)

(44,803)

(49,828)

(15,225)

(42,525)

(

)

Creditors

(35,101)

(52,841)

(11,755)

(1,369)

(3,459)

(1,647)

(11,189)

(117,361)

Accruals and deferred income

(1,718)

(1,503)

(3,221)

Total liabilities

(236,596)

(947,871)

(140,415)

(46,172)

(53,287)

(16,872)

(53,714)

(

)

Total capital and reserves

(19,527)

208,720

(35,369)

41,657

(10,535)

(12,903)

(36,520)

135,523

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

Sensitivity analysis to market risks

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

2024Impact on results before tax$000

2024Impact on

members’

balances$000

2023Impact on results before tax$000

2023Impact on

members’

balances$000

Interest rate risk

+ 50 basis points shift in yield curves

(15,116)

(15,673)

- 50 basis points shift in yield curves

15,215

15,677

Sterling

US dollar

Euro

Canadian dollar

Australian dollar

Japanese Yen

Other

Total

2023

$000

Investments

120,193

612,708

77,885

50,976

20,952

11,133

(414)

893,433

Reinsurers' share of technical provisions

64,445

155,156

3,383

2,274

740

185

685

226,868

Debtors

72,861

159,617

42,635

4,102

13,464

4,591

23,211

320,481

Other assets

51,014

26,438

10,491

20,102

27,791

1,030

2,576

139,442

Prepayments and accrued income

11,750

35,749

8,811

1,500

2,485

746

2,559

63,600

Total assets

320,263

989,668

143,205

78,954

65,432

17,685

28,617

1,643,824

Technical provisions

(226,786)

(893,808)

(122,737)

(42,914)

(56,190)

(15,814)

(48,985)

(

)

Creditors

(75,362)

48,329

(43,936)

(2,159)

(24,571)

(12,865)

(12,170)

(122,734)

Accruals and deferred income

(588)

(2,395)

(2,983)

Total liabilities

(302,736)

(847,874)

(166,673)

(45,073)

(80,761)

(28,679)

(61,155)

(

)

Total capital and reserves

17,527

141,794

(23,468)

33,881

(15,329)

(10,994)

(32,538)

110,873

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

C. Capital management

i.Capital framework at Lloyd’s

The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to supervision by the Prudential Regulatory Authority (PRA) under the Financial Services and Markets Act 2000, and in accordance with the Solvency II Framework.

Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that Lloyd’s would comply with the Solvency II requirements, and beyond that to meet its own financial strength, licence and ratings objectives.

Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level as a starting point, the requirement to meet Solvency II and Lloyd’s capital requirements apply at overall and member level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of Antares 1274 is not disclosed in these financial statements.

Lloyd’s capital setting process

In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital Requirement (SCR) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each Syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.

A syndicate 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 Syndicates on which it is participating but not other members’ shares. Accordingly, the capital requirements that Lloyd’s sets for each member operates on a similar basis.

Each member’s SCR shall thus be determined by the sum of the member’s share of the Syndicate SCR ‘to ultimate’. Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s capital requirement, known as the Economic Capital Assessment (ECA). The purpose of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings objectives. The capital uplift applied for 2024 was 35% (2023: 35%) of the member’s SCR ‘to ultimate’. This is an unaudited percentage.

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 (FAL), assets held and managed within a syndicate (FIS), or as the member’s share of the members’ balances on each syndicate on which it participates.

Accordingly, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported on the balance sheet on page 18, represent resources available to meet members’ and Lloyd’s capital requirements.

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

4.Analysis of underwriting result

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

2024

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Direct insurance

Accident and health

17,581

13,514

(4,474)

(5,952)

(647)

2,441

Motor (third party liability)

(2)

169

(220)

(10)

Motor (other classes)

(1)

1,937

(1,645)

291

Marine, aviation, and transport

150,787

148,591

(77,129)

(48,903)

(7,355)

15,204

Fire and other damage to property

67,006

51,116

(30,363)

(18,044)

(3,264)

(555)

Third party liability

151,520

148,573

(

)

(62,852)

24,817

(7,764)

Miscellaneous

30,088

39,237

(11,509)

(14,214)

(3,054)

10,460

Total direct insurance

416,979

401,028

(

)

(149,922)

8,632

20,067

Reinsurance acceptances

180,831

183,666

(88,011)

(57,248)

(29,907)

8,500

Total

597,810

584,694

(

)

(207,170)

(21,275)

28,567

2024

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Additional analysis

Fire and damage to property of which is:

Specialities

9,534

5,491

(4,848)

(1,630)

1,271

284

Energy

219

888

(203)

(166)

(67)

452

Third party liability of which is:

Energy

175

725

(291)

(132)

(45)

257

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

2023

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Direct insurance

Accident and health

11,657

12,302

(3,439)

(5,423)

(1,263)

2,177

Motor (third party liability)

(155)

(129)

340

Motor (other classes)

(3,984)

(1)

3,866

(116)

Marine, aviation, and transport

164,540

165,539

(

)

(52,426)

(3,658)

(3,995)

Fire and other damage to property

53,026

54,398

(21,498)

(18,039)

(6,176)

8,685

Third party liability

149,116

157,443

(

)

(47,011)

7,824

(3,976)

Miscellaneous

36,123

38,040

(17,474)

(13,116)

(4,667)

2,783

Total direct insurance

414,465

427,725

(

)

(136,145)

(3,734)

5,614

Reinsurance acceptances

184,622

174,793

(63,096)

(48,291)

(11,932)

51,474

Total

599,087

602,518

(

)

(184,436)

(15,666)

57,088

2023

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Additional analysis

Fire and damage to property of which is:

Specialities

2,649

1,217

(1,915)

(297)

990

(5)

Energy

1,028

1,183

(1,056)

(220)

(59)

Third party liability of which is:

Energy

1,296

1,038

(708)

(192)

(5)

133

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

2024$000

2023$000

United Kingdom

204,303

192,181

European Union Member States

49,329

62,531

181,816

173,742

Rest of the world

162,362

170,633

Total gross premiums written

597,810

599,087

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

5.Net operating expenses

2024$000

2023$000

Acquisition costs

151,505

141,796

Change in deferred acquisition costs

(5,353)

(3,808)

Administrative expenses

61,230

50,974

Reinsurance commissions and profit participation

(212)

(4,526)

Net operating expenses

207,170

184,436

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

2024$000

2023$000

Total commission for direct insurance business

107,387

109,409

Administrative expenses include:

2024$000

2023$000

Auditors’ remuneration:

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

958

689

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

109

164

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

6.Key management personnel compensation

The directors of Antares Managing Agency Limited received the following aggregate remuneration charged to the Syndicate and included within net operating expenses:

2024$000

2023$000

Directors’ emoluments

4,133

3,047

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

7.Staff costs

The syndicate and managing agent have no employees. Staff are employed by Antares Global Management Limited and costs are recharged to the Managing Agent who in turn recharges to the syndicate.

The following amounts were recharged by the managing agency to the Syndicate in respect of payroll costs:

2024$000

2023$000

Wages and salaries

34,053

27,288

Social security costs

4,760

3,548

Other pension costs

2,732

2,573

Other short term incentive costs

5,379

2,689

Total

46,924

36,098

2024$000

2023$000

Emoluments

674

403

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

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

35,497

28,522

Other income from investments

From financial instruments designated at fair value through profit or loss

Gains on the realisation of investments

6,041

6,056

Losses on the realisation of investments

(8,529)

(8,349)

Unrealised gains on investments

21,561

34,385

Unrealised losses on the investments

(14,674)

(10,307)

Investment management expenses

(2,253)

(1,332)

Total investment return

37,643

48,975

Transferred to the technical account from the non-technical account

37,643

48,975

9.Distribution and open years of account

A distribution to members of $65.6m will be proposed in relation to the closing year of account (2022) (2023: $36m distribution in relation to the closing year of account (2021)).

10.Financial investments

Carrying value

Cost

2024$000

2023$000

2024$000

2023$000

Shares and other variable yield securities and units in unit trusts

33,550

39,127

34,199

40,622

Debt securities and other fixed income securities

771,029

766,990

792,446

793,603

Participation in investment pools

67,369

71,262

67,692

72,157

Derivative assets

297

5,353

297

5,353

Syndicate loans to central fund

6,231

8,089

6,231

8,089

Total financial investments

878,476

890,821

900,865

919,824

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

878,476

890,821

Total financial investments

878,476

890,821

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

The table below analysis the derivative assets and liabilities by type:

2024Notional amount$000

2024Fair value$000

2023Notional amount$000

2023Fair value$000

Foreign exchange forward contracts

138,572

(5,805)

191,677

2,782

Total

138,572

(5,805)

191,677

2,782

Fair value hierarchy

•Level 1 – Fair values are measured using quoted prices (unadjusted) in active markets for identical instruments.

•Level 2 – When quoted prices are unavailable, fair values are measured using the price of a recent transaction for an identical instrument. The price can be adjusted if it can be demonstrated that the last transaction price is not a good estimate of fair value.

•Level 3 – Fair values measured using valuation techniques. The objective of using a valuation technique is to estimate what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations.

The Syndicate measures the fair value of its financial assets based on prices provided by investment managers (who obtain market data from independent pricing services). These are reviewed by the finance team. The pricing services used by the investment manager obtain the actual transaction prices for securities that have quoted prices in active markets. For those securities which are not actively traded, the pricing services use 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

The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting date by its level in the fair value hierarchy:

2024

Level 1$000

Level 2$000

Level 3$000

Assets held at amortised cost

Total$000

Shares and other variable yield securities and units in unit trusts

15,073

18,477

33,550

Debt securities and other fixed income securities

736,399

34,630

771,029

Participation in investment pools

421

66,948

67,369

Derivative assets

297

Syndicate loans to central fund

6,231

Total financial investments

736,820

116,651

25,005

878,476

Derivative liabilities

(6,102)

Total

736,820

116,651

18,903

872,374

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

2023

Level 1$000

Level 2$000

Level 3$000

Assets held at amortised cost

Total$000

Shares and other variable yield securities and units in unit trusts

17,206

21,921

39,127

Debt securities and other fixed income securities

729,321

37,669

766,990

Participation in investment pools

650

70,612

71,262

Derivative assets

5,353

Syndicate loans to central fund

8,089

Total financial investments

729,971

125,487

35,363

890,821

Derivative liabilities

(2,571)

Total

729,971

125,487

32,792

888,250

Level 1 of the hierarchy includes all government bonds/bills and corporate bonds only which are measured based on prices representing actual and regularly occurring market transactions. Level 2 of the hierarchy includes all other financial assets except those included in Level 3.

Debt securities that are not listed on a recognised exchange or traded in an established over-the-counter market are classified as level 1 where the external investment manager is comfortable that there is an active market. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Management recognises that there can be judgement in the selection of methodologies relating to pricing models used. The factors considered where judgment arises in respect to the fair value of securities, amongst others, are the volume of trading of a security with a market to deem such a market to be active for that instrument; consideration of the bid-ask spreads particularly for corporate bonds; the number of executable quotes considered in determining fair value.

The Syndicate asset portfolio in respect of the level 3 investments primarily consists of Private Equity instruments and Syndicate loan. The Syndicate has valued Private Equity instruments based on the latest available audited statements/financial statements provided by investment managers as of 30 September 2024 and accounted for any subsequent contributions/distributions after the September NAV’s during the last quarter of 2024. In addition, management has assessed the movement in a range of broader market indices which, although not directly comparable, maybe used as an indicative benchmark to determine if the NAV’s reported by fund managers would be significantly different as of 31 December 2024. Based on this assessment Management has concluded the NAV’s reported by investment managers would fairly represent their current fair value as of 31 December 2024.

There were transfers between Level 1 and Level 2 in 2023, however there have been no transfers between Level 1 and Level 2 in 2024.

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

11.Debtors arising out of direct insurance operations

2024$000

2023$000

Due within one year

186,068

201,940

Total

186,068

201,940

12.Debtors arising out of reinsurance operations

2024$000

2023$000

Due within one year

121,807

118,176

Total

121,807

118,176

13.Other debtors

2024$000

2023$000

Other

1,515

365

Total

1,515

365

14.Deferred acquisition costs

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

2024

2023

Gross$000

Reinsurance$000

Net$000

Gross$000

Reinsurance$000

Net$000

Balance at 1 January

61,354

(2,031)

59,323

62,265

(5,555)

56,710

Incurred deferred acquisition costs

5,353

528

5,881

3,808

3,524

7,332

Foreign exchange movements

(1,277)

(4,719)

Balance at 31 December

65,430

(1,503)

63,927

61,354

(2,031)

59,323

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

15.Claims development

Claims related risks are managed through a number of control activities and Key Performance Indicators that range from claim authority and claims processing time to potential significant loss event reporting and outstanding case reserve monitoring. Claims development tables are shown on an underwriting year basis; these set out the development of claims over time on a gross and net of reinsurance basis (without any adjustment for any impact from changes to projected premiums). These claims are shown on an earned basis for each successive development year. Balances have been translated at exchange rates prevailing at 31 December 2024 in all cases.

Gross:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

$000

Estimate of gross claims

at end of underwriting year

99,522

111,971

207,097

160,380

147,613

143,078

122,514

179,287

one year later

188,492

262,874

379,109

362,439

345,493

277,196

234,530

303,342

two years later

210,495

533,218

433,949

405,967

369,864

258,287

267,477

266,187

three years later

216,264

477,785

463,420

412,337

375,464

243,561

260,789

four years later

221,817

507,987

482,702

442,120

375,997

256,801

five years later

226,383

509,098

484,425

469,929

393,234

six years later

232,533

498,587

508,881

499,591

seven years later

237,396

512,563

534,799

eight years later

238,380

518,076

nine years later

244,052

Estimate of gross claims reserve

244,052

518,076

534,799

499,591

393,234

256,801

260,789

266,187

3,371,971

Provision in respect of prior years

49,510

Less gross claims paid

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(

)

(2,320,890)

Gross claims reserve

25,678

74,914

76,827

101,068

82,966

97,288

121,753

142,177

1,100,591

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

Net:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

$000

Estimate of net claims

at end of underwriting year

92,849

102,634

146,413

147,201

126,306

118,361

110,030

170,611

123,531

158,170

one year later

182,122

239,880

147,201

316,656

286,916

239,018

211,471

265,672

229,634

two years later

207,128

272,439

336,016

364,630

298,817

231,513

236,887

246,521

three years later

210,758

263,350

353,871

362,299

302,427

226,544

234,787

four years later

216,302

280,851

374,556

395,411

300,148

235,261

five years later

221,938

288,357

379,537

410,777

310,729

six years later

229,938

291,867

394,684

426,045

seven years later

234,832

298,819

405,222

eight years later

235,740

300,503

nine years later

240,078

Estimate of net claims reserves

240,078

300,503

405,222

426,045

310,729

235,261

234,787

246,521

229,634

158,170

Provision in respect of prior years

42,276

Less net claims paid

(216,465)

(276,942)

(354,656)

(352,319)

(247,546)

(152,174)

(127,637)

(114,669)

(44,175)

(24,234)

(

)

Net claims reserve

23,613

23,561

50,566

73,726

63,183

83,087

107,150

131,852

185,459

133,936

918,409

16.Technical provisions

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

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Claims outstanding

Balance at 1 January

1,141,380

(201,621)

939,759

1,075,038

(168,110)

906,928

Claims paid during the year

(351,201)

50,002

(

)

(292,515)

29,533

(262,982)

Expected cost of current year claims

327,682

(32,655)

295,027

345,328

(59,739)

285,589

Foreign exchange movements

(17,270)

2,092

(15,178)

13,529

(3,305)

10,224

Balance at 31 December

1,100,591

(182,182)

918,409

1,141,380

(201,621)

939,759

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

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Unearned premiums

Balance at 1 January

265,855

(25,247)

240,608

266,207

(35,328)

230,879

Premiums written during the year

597,810

(57,521)

540,289

599,086

(65,182)

533,904

Premiums earned during the year

(584,694)

53,930

(

)

(602,517)

75,404

(527,113)

Foreign exchange movements

(5,217)

(5,121)

3,078

(141)

2,937

Balance at 31 December

273,754

(28,742)

245,012

265,854

(25,247)

240,607

17.Discounted Claims

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

The claims have been discounted as follows:

Average discounted rates

Average mean term of liabilities

2024

2023

2024

2023

Class of business

Accident and health

Motor (third party liability)

Motor (other classes)

31.8

32.6

Marine, aviation, and transport

Fire and other damage to property

Third party liability

Miscellaneous

The period that will elapse before claims are settled is determined using impaired life mortality tables. The claims provision before and after discounting are as follows:

Undiscounted claims

Effect of discounting

After discounting

2024$000

2023$000

2024$000

2023$000

2024$000

2023$000

Gross claims provisions

82,870

81,920

45,874

45,319

36,996

36,601

Reinsurers share of total claims

72,237

73,564

39,945

40,666

32,292

32,898

Net claims provisions

155,107

155,484

85,819

85,985

69,288

69,499

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

18.Creditors arising out of direct insurance operations

2024$000

2023$000

Due within one year

40,208

41,651

Total

40,208

41,651

19.Creditors arising out of reinsurance operations

2024$000

2023$000

Due within one year

42,085

52,403

Due after one year

7,546

9,742

Total

49,631

62,145

20.Other creditors

2024$000

2023$000

Other related party balances (non-syndicates)

21,163

14,179

Derivative liabilities

6,102

2,571

Other liabilities

257

2,188

Total

27,522

18,938

21.Cash and cash equivalents

2024$000

2023$000

Cash at bank and in hand

107,124

74,707

Short term debt instruments presented within other financial investments

696

2,650

Total cash and cash equivalents

107,820

77,357

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

22.Analysis of net debt

At 1 January 2024

Cash flows

Acquired

Fair value and exchange movements

Non-cash changes

At 31 December 2024

Cash and cash equivalents

77,357

35,807

1,542

(6,886)

107,820

Total

77,357

35,807

1,542

(6,886)

107,820

23.Related parties

During the year the Syndicate entered into transactions in the ordinary course of business with Qatar Insurance Company QSPC (QIC) as well as Antares Reinsurance Company Limited (ARE), a subsidiary of QIC. QIC is the ultimate parent of Antares Underwriting Limited, the single corporate member. that supports the capacity of Syndicate 1274

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

Qatar Reinsurance Company

Qatar Reinsurance Company Limited

Total

2024

$000

Gross Written Premium

238

(7)

231

Reinsurance Written Premium

972

10,346

11,318

Gross Claims Paid

100

102

Reinsurance Recoveries

4,241

1,049

5,290

Gross Claims Outstanding

5,741

387

6,128

Reinsurance Claims Outstanding

7,916

14,895

22,811

Due from Related Party

819

(410)

409

Due to Related Party

178

Total

20,205

26,262

46,467

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

Qatar Reinsurance Company

Qatar Reinsurance Company Limited

Total

2023

$000

Gross Written Premium

(503)

(99)

(602)

Reinsurance Written Premium

1,541

16,138

17,679

Gross Claims Paid

260

274

Reinsurance Recoveries

2,892

2,698

5,590

Gross Claims Outstanding

4,581

198

4,779

Reinsurance Claims Outstanding

13,400

21,148

34,548

Due from Related Party

819

240

1,059

Due to Related Party

(170)

Total

22,820

40,337

63,157

The Syndicate has relationships with fellow London Market groups with which the NEDS have more than one appointment. During 2024, Related Party premiums of $0.2m, and Outwards Reinsurance Premiums of $0.98m went through the Statement of Profit and Loss and there were Reinsurance Debtors of $0.5m.

24.Off-balance sheet items

The Syndicate has not been party to any arrangement, which is not reflected in its balance sheet, where material risks and benefits arise for the Syndicate.

25.Post balance sheet events

The non-adjusting post balance sheet California wildfire event in early January 2025 is of a material nature to which the syndicate has net exposure in the range of $46m-$79m.

26.Contingencies and Commitments

The syndicate has no contingencies or commitments.

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

27.Foreign exchange rates

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

2024

2023

Start of period rate

End of period

rate

Average

rate

Start of period rate

End of period rate

Average

rate

Sterling

0.79

0.80

0.78

0.83

0.79

0.80

Euro

0.91

0.97

0.92

0.94

0.91

0.92

US dollar

1.00

Canadian dollar

1.32

1.44

1.37

1.36

1.32

1.35

Australian dollar

1.47

1.62

1.51

1.47

1.50

Japanese Yen

141.05

157.21

150.86

131.15

141.05

140.50

28.Funds at Lloyd’s

Every member at Lloyd’s is required to hold capital which is held in trust and known as Funds at Lloyd’s (FAL). These funds are intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on FCA/PRA requirements and resource criteria. The amount of FAL has regard to a number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not under the management of the Managing Agent, no amount has been shown in these annual accounts by way of such capital resources. However, the Managing Agent is able to make a call on the members’ FAL to meet liquidity requirements or to settle losses.

29.Management of Other Risks

In addition to Insurance and Market risk detailed in note 3, other risks are as follows;

Operational Risk is defined as: “The risk of loss arising from inadequate or failed internal processes, people, systems or from external events impacting the Syndicate’s ability to operate. This risk encompasses all functions rendered in the course of conducting business. This includes legal and regulatory risk, but excludes risks arising from strategic and reputational risk”.

AMAL has formally documented policies and procedures for all key aspects of the business that define the end-to-end business processes, provide guidelines, put in place appropriate governance structures and include control activities to ensure the robustness of the business operations. Internal Audit provides independent assurance over the robustness of the business operations and compliance with the internal policies/procedures.

Regulatory Risk is the risk that the Managing Agency fails to meet the regulatory requirements of the PRA, FCA and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s market by overseas regulators, particularly in respect of US situs business. AMAL has a Compliance department that monitors regulatory developments, ensures adherence to regulatory requirements and assesses the impact on agency policy.

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

Strategic Risk is defined as: “The risk to earnings or capital arising from adverse business decisions or improper implementation of those decisions. This risk is a function of the compatibility between the Group’s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, the quality of implementation and appropriateness of response to changing business conditions. This includes reputational risk that is recognised as a by-product of inappropriate/inadequate management and mitigation of other risk categories”.

The Syndicate mitigates this risk through a variety of planning techniques including robust business planning, stress and scenario testing and capital contingency planning.

Risk Governance

The AMAL Board is ultimately responsible for ensuring the effective management and control of risk affecting the Syndicate. The AMAL Board is committed to maintaining sound risk management and control systems that are suitable, effective and proportionate to protect the interests of all stakeholders, including those of its capital providers and policyholders. The AMAL Board has, for practical reasons, delegated its day-to-day responsibility for different aspects of the risk management to committees and the senior management.

The AMAL Board utilises a “Three Lines of Defence” model for risk governance.

First Line: Those individuals undertaking any activity or making decisions on behalf of Antares are responsible for managing the risk that is attached to that activity. They are the ‘first risk managers’.

Second Line: Those functions and executive level committees responsible for the provision of the risk management framework and policies within which the First Line is expected to operate and who are responsible for providing assurance to the Board of adherence to that framework.

Third Line: Oversight of the above by the Board, Audit Committee together with Internal Audit. The majority of risk reporting is through the Risk, Actuarial and Exposure Management Departments, that routinely engage individual business units and report to the Board and its Committees.

Risk Appetite

Risk Appetite is the amount of risk that the AMAL Board is prepared to take in pursuit of its objectives. Although set by the AMAL Board, Risk Appetite is driven by key stakeholders and includes both qualitative and quantitative statements.

The Risk Appetite Statement covers all material risk categories (Underwriting, Reserve, Credit, Market, Liquidity and Operational Risk). In addition, it details the approved Risk Appetite and Risk Tolerances based upon the extent to which the risks could impact the business.

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

Risk Monitoring and controls

Risk management processes are based on risk identification; assessment and quantification; response; and monitoring and reporting.

All risk categories are identified in the risk register. Supporting controls mitigate the inherent impact of the risks to a residual level that is within the approved risk appetite and tolerance levels. All risk categories and related controls are assigned risk owners and control owners that are responsible for managing the risks.

The risk register is maintained through regular review by the Risk Department and through the monthly self-certification process by the risk and control owners. The Risk Department provides regular reports on key risk issues and actions required to the AMAL Board and its Committees.