Syndicate Accounts

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Classification: Unclassified

RiverStone

Syndicate 3500

Annual Report and Accounts for the year ended

31 December 2024

Contents

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

Strategic report of the Managing Agent...................................................................................5

Managing Agent’s report..........................................................................................................8

Statement of Managing Agent’s responsibilities....................................................................10

Independent auditor’s report to the members of Syndicate 3500..........................................11

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

RiverStone Managing Agency Limited

Park Gate

161 – 163 Preston Road

Brighton

East Sussex

United Kingdom

BN1 6AU

Directors of Managing Agent

K. Shah – Independent Non-Executive Director

N. Smith – Independent Non-Executive Director

H. Thomas – Independent Non-Executive Director

J. Vazquez – Independent Non-Executive Director

T. Ambridge – Non-Executive Director

M. J. Bannister

A. R. Creed

L. R. Tanzer (Resigned 12th December 2024)

C. K. Pritchard

P. Prebensen – Non-Executive Director

N. S. Taylor

J. C. P. Insley (Appointed 12th September 2024)

Independent Auditor

Deloitte LLP

2 New Street Square

London

EC4A 3BZ

Website

https://www.rsml.co.uk

Strategic report of the Managing Agent

The Directors of RiverStone Managing Agency Limited (“RiverStone Managing Agency”) present their Strategic Report for Syndicate 3500 for the year ended 31st December 2024 (“the Financial Year”).

Principal Activity

Syndicate 3500 was originally formed in 2003 to accept the reinsurance to close of the 2000 and prior years of account of Syndicate 271 and the 2001 and prior years of account of Syndicate 506. Since forming the Syndicate has completed 28 further deals, the latest is detailed below

Effective 1st October 2024, Syndicate 3500 entered into the following transaction:

•the loss portfolio transfer reinsurance of certain lines of business originally written in the 1993 -2022 underwriting years of QBE Syndicates 386 and 2999. This transaction resulted in the transfer to Syndicate 3500 of gross and net technical provisions of $225.4 million.

RiverStone Managing Agency and its immediate parent company RiverStone Holdings Limited (“RiverStone Holdings”) are wholly owned subsidiaries of RiverStone International Holdings Limited. The majority of the shares in RiverStone International are held by CVC Capital Partners Strategic Opportunities II LP.

RiverStone Managing Agency is the managing agent for Syndicate 3500 and its overall strategic objective in administering the run-off of the portfolios under its management remains the payment of all valid claims in a timely manner and the expedient collection of all amounts due from all reinsurers. Additionally, RiverStone Managing Agency actively pursues opportunities to acquire further run-off portfolios for Syndicate 3500 through reinsurance to close or retroactive reinsurance transactions.

RiverStone Managing Agency delegates most of its day-to-day management functions under a service agreement with RiverStone Management Limited (“RiverStone Management”), a fellow subsidiary of RiverStone Holdings. Provision of services under this agreement is monitored by regular reporting to the board of directors of RiverStone Managing Agency (“the Board”), which includes analysis of performance against key performance indicators.

The sole corporate member for Syndicate 3500 is RiverStone Corporate Capital Limited (“RiverStone Corporate Capital”). In addition to capital held at RiverStone Corporate Capital, additional capital support for Syndicate 3500 is currently provided by RiverStone Insurance (UK) Limited, and by way of third-party letters of credit and reinsurance.

Business Review

Restatement of Financial Statements

During the year, the Syndicate has elected to change its accounting policy for the treatment of retroactive Quota Share (“QS”) reinsurance contracts. The 2023 comparative figures have been restated to show the effect of this change in accounting policy. The profit and loss account and Note 6 analysis of underwriting result have been restated under the new policy. There is no impact to the balance sheet, or to total comprehensive income.

Under the new policy the Syndicate will treat a retroactive QS contract as a portfolio transfer in accordance with the FRS 103 definition of a portfolio transfer, directly to the balance sheet. Only premium related to unexpired risks will be recognised as written premium.

The treatment more meaningfully reflects in the profit and loss account the economic substance of the transaction and the nature of the risks undertaken through retroactive reinsurance contracts.

Except for the change in the presentation of the statement of profit or loss, the new accounting policy does not result in any change in how the risks undertaken by the Syndicate are measured in the Syndicate’s balance sheet, at initial recognition or subsequently.

Results and Performance

The measures set out below reflect the Syndicate’s key performance indicators.

The profit for the 2024 financial year, on an annual accounting basis, is $247.5 million (2023: profit of $305.1 million). The balance on the technical account for general business for the year was a profit of $257.8 million (2023: profit of $302.9 million). This comprises net earned premiums of $55.8 million (2023: $110.0 million), net incurred claims of $133.9 million (2023: $62.3 million), allocated investment return of $110.1 million (2023: $165.1 million) and other technical income of $4.1 million (2023: $10.8 million) partially offset by net operating expenses of $46.1 million (2023: $45.2 million).

The profit for the financial year of $247.5 million (2023: profit of $305.1 million) comprises net investment gains of $0.5 million (2023: nil million), foreign exchange losses of $10.8 million (2023: gain of $2.1 million), and the gain on the technical account for general business.

Member’s balances decreased to $330.9 million at 31st December 2024 (2023: $364.8 million) due to the 2024 total comprehensive profit, distribution of $314.1 million and net movement on Funds in Syndicate (FIS) of $32.8 million.

Total outstanding claims, gross of reinsurance, were $3.0 billion as at 31st December 2024 (2023: $4.4 billion). Total cash, deposits and investments were $2.4 billion at 31st December 2024 (2023: $3.5 billion). Movements in outstanding claims and cash balances predominantly arise as a result of core claims settlement activity during the Financial Year.

Principal Risks and Uncertainties

The process of risk acceptance and risk management is addressed through a framework of policies, procedures and internal controls. Key policies are subject to annual review and approval by the Board, executive committees, risk management and internal audit. Compliance with regulatory, legal and ethical standards is a high priority for Syndicate 3500 and RiverStone Managing Agency. The compliance, legal and finance departments of RiverStone Management take on an important oversight role in this regard. The Board is responsible for ensuring that a proper internal control framework exists to manage financial risks and that controls operate effectively; it is assisted in discharging these responsibilities by the RiverStone Holdings UK Risk Committee.

The risks that Syndicate 3500 is exposed to and their impact on economic capital have been assessed. This process is risk based and uses Solvency UK principles to manage capital requirements and to ensure that there is sufficient financial strength and capital adequacy to support the obligations to policyholders, regulators and other stakeholders.

The principal risks faced by Syndicate 3500 arise from fluctuations in the severity of claims compared with expectations, late reporting of claims, inadequate reserving, claims inflation and inadequate reinsurance protection (including the credit worthiness of major reinsurers). Syndicate 3500’s assets and liabilities are also exposed to market risk, including the impact of changes to interest rates, equity price fluctuations and adverse changes in exchange rates.

Strategy and Future Developments

The Board’s strategy for Syndicate 3500 is the efficient and economic management of all existing liabilities. The Board intends to continue to actively pursue run-off acquisition opportunities for Syndicate 3500 through reinsurance to close or retroactive reinsurance transactions.

Sustainability at RiverStone

RiverStone Managing Agency recognises environmental, social and governance (ESG) as a significant issue for society and the economy both present and future and aims to integrate sustainability considerations into business strategy, operations and decision-making processes. This year, RiverStone Managing Agency has made significant strides in evolving the ESG framework and conducted a comprehensive refresh of the materiality assessment for the UK. A double materiality approach has been adopted which considers not only how ESG factors impact financial performance but also how operations affect society and the environment.

RiverStone Managing Agency recognises that it is still in the early stages of its journey and expects to learn and evolve through careful measurement and monitoring of the key metrics material to the business.

Performance Measurements

RiverStone Managing Agency has made continued progress throughout the year in relation to key elements of its strategy, through both the continued proactive management of the existing liabilities and the acquisition of further run-off portfolios by its managed syndicate.

The Board considers the following metrics in assessing the performance of the Syndicate and is satisfied with the overall ongoing operation of the Syndicate:

2024

2023

Restated*

$000

Written and earned premiums net of reinsurance

55,824

109,966

Claims incurred, net of reinsurance

133,895

(62,289)

Net operating expenses

(46,136)

(45,200)

Net investment return

110,612

165,141

Gross outstanding claims

3,012,070

4,401,513

Approved by Order of the Board

Park Gate, 161 Preston RoadA.R. Creed

Brighton, East SussexUK Chief Executive Officer

United Kingdom, BN1 6AU5th March 2025

Managing Agent’s report

The Directors of RiverStone Managing Agency Limited (“RiverStone Managing Agency”) present their report for Syndicate 3500 for the year ended 31st December 2024 (“the Financial Year”).

Reporting Basis

The Directors of the managing agent, RiverStone Managing Agency, present their report and the audited financial statements for the year ended 31st December 2024.

The Directors are responsible for preparing the Directors’ report and the financial statements in accordance with applicable law and regulations.

These Syndicate Annual financial statements are prepared using the annual basis of accounting as required by Statutory Instrument 1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008 Regulations”) and in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS102”) and Financial Reporting Standard 103, “Insurance Contracts” (“FRS103”).

Directors

The Directors of RiverStone Managing Agency holding office during the period from 1st January 2024 to the date of this report were as follows:

K. Shah – Independent Non-Executive Director

N. Smith – Independent Non-Executive Director

H. Thomas – Independent Non-Executive Director

J. Vazquez – Independent Non-Executive Director

T. Ambridge – Non-Executive Director

M. J. Bannister

A. R. Creed

L. R. Tanzer (Resigned 12th December 2024)

K. Pritchard

P. Prebensen – Non-Executive Director

N. S. Taylor

J. C. P. Insley (Appointed 12th September 2024)

Annual General Meeting

The Directors do not propose to hold an annual general meeting for Syndicate 3500. A meeting will be convened should the sole direct corporate member of Syndicate 3500 request one.

Independent Auditor

Deloitte LLP (“Deloitte”) have indicated their willingness to continue in office.

Investment Policy and Management

All assets continue to be invested in a manner to maximise return within agreed investment policies established by RiverStone Managing Agency. These investments are managed within the risk constraints and credit guidelines agreed by the Board. The investment policy and performance of funds are reviewed regularly by the Board. Syndicate 3500 has not been involved in the lending of investments to the securities market.

Financial Instruments

As described in Note 5 to the financial statements, Syndicate 3500 is exposed to financial risk through its financial assets and liabilities, including its reinsurance assets and policyholder liabilities. In particular, a key financial risk is that the proceeds from financial and reinsurance assets are not sufficient to fund the obligations arising from insurance policies as they fall due. The most important components of this financial risk are market risk (including interest rate risk, equity risk and currency risk), credit risk and liquidity risk. Syndicate 3500 manages this risk within its overall risk management framework.

Post balance sheet events

Syndicate 3500 has entered into two reinsurance to close transactions effective 1 January 2025 as detailed in Note 25.

Approved by Order of the Board

Park Gate, 161 Preston RoadA.R. Creed

Brighton, East SussexUK Chief Executive Officer

United Kingdom, BN1 6AU5th March 2025

Statement of Managing Agent’s responsibilities

The 2008 Regulations require RiverStone Managing Agency to prepare Syndicate Annual Accounts at 31st December each year which give a true and fair view of the state of affairs of Syndicate 3500 and of its profit or loss for that year.

In preparing those Syndicate Annual Accounts, RiverStone Managing Agency is required to:

•select suitable accounting policies, and then apply them consistently, subject to changes arising on the adoption of new accounting standards in the year;

•make judgements and estimates that are reasonable and prudent;

•state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the Syndicate Annual Accounts; and

•prepare the Syndicate Annual Accounts on a going concern basis, unless it is inappropriate to do so.

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

RiverStone Managing Agency confirms that it has complied with the above requirements in preparing the financial statements.

RiverStone Managing Agency is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of Syndicate 3500 and enable it to ensure that the Syndicate Annual Accounts comply with the 2008 Regulations and are prepared in compliance with the Lloyds instructions.

It is also responsible for safeguarding the assets of Syndicate 3500 and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

It is also responsible for the maintenance and integrity of the business’ website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In the case of each person who is a director of RiverStone Managing Agency at the date this Managing Agent’s Report is approved:

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

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

Approved by Order of the Board

Park Gate, 161 Preston RoadA.R. Creed

Brighton, East SussexUK Chief Executive Officer

United Kingdom, BN1 6AU5th March 2025

Independent auditor’s report to the members of Syndicate 3500

Report on the audit of the syndicate annual financial statements

Opinion

In our opinion the syndicate annual financial statements of Syndicate 3500 (the ‘syndicate’):

•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 United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and

•have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and section 1 of the Syndicate Accounts Instructions Version 2.0.

We have audited the syndicate annual financial statements which comprise:

•the profit and loss account;

•the balance sheet;

•the statement of changes in members’ balances;

•the cash flow statement;

•the statement of accounting policies; and

•the related notes 1 to 28.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable law and the Syndicate Accounts Instructions. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the syndicate annual financial statements section of our report.

We are independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of the syndicate annual financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the managing agent’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The other information comprises the information included in the annual report, other than the syndicate annual financial statements and our auditor’s report thereon. The managing agent is responsible for the other information contained within the annual report. Our opinion on the syndicate annual financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the syndicate annual financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of managing agent

As explained more fully in the managing agent’s responsibilities statement, the managing agent is responsible for the preparation of the syndicate annual financial statements and for being satisfied that they give a true and fair view, and for such internal control as the managing agent determines is necessary to enable the preparation of syndicate annual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the syndicate annual financial statements, the managing agent is responsible for assessing the syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s ability to continue in operation and to use the going concern basis of accounting unless the managing agent intends to cease the syndicate’s operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the syndicate annual financial statements

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

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

www.frc.org.uk/auditorsresponsibilities

. This description forms part of

our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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

We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s documentation of their policies and procedures relating to fraud and compliance with laws and

regulations. We also enquired of management, internal audit, internal general counsel about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and identified the key laws and regulations that:

•had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005); and

•do not have a direct effect on the financial statements but compliance with which may be fundamental to the syndicate’s ability to operate or to avoid a material penalty. These included the requirements of Solvency II.

We discussed among the audit engagement team including relevant internal specialists such as actuarial and IT specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and regulations in the following area, and our procedures performed to address it are described below:

•Valuation of technical provisions includes assumptions and methodology requiring significant management judgement and involves complex calculations, and therefore there is potential for management bias. In response to these risks we involved our actuarial specialists to develop independent estimates of the technical provisions.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

•reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

•performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

•enquiring of management, internal audit and in-house legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and

•reading minutes of meetings of those charged with governance and reviewing internal audit reports, and reviewing correspondence with Lloyd’s and the PRA.

Report on other legal and regulatory requirements

Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008

In our opinion, based on the work undertaken in the course of the audit:

•the information given in the managing agent’s report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•the managing agent’s report has been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we have not identified any material misstatements in the managing agent’s report.

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 in respect of the following matters if, in our opinion:

•the managing agent in respect of the syndicate has not kept adequate accounting records; or

•the syndicate annual financial statements are not in agreement with the accounting records; or

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

We have nothing to report in respect of these matters.

Use of our report

This report is made solely to the syndicate’s members, as a body, in accordance with regulation 10 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been undertaken so that we might state to the syndicate’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the syndicate’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As required by the Syndicate Accounts Instructions Version 2.0, these financial statements will form part of the Electronic Format Annual Syndicate Accounts filed with the Council of Lloyd’s and published on the Lloyd’s website. This auditors’ report provides no assurance over whether the Electronic Format Annual Syndicate Accounts have been prepared in compliance with Section 2 of the Syndicate Accounts Instructions Version 2. We have been engaged to provide assurance on whether the Electronic Format Annual Syndicate Accounts has been prepared in compliance with Section 2 of the Syndicate Accounts Instructions Version 2 and will privately report to the Council of Lloyd’s on this.

Adam Ely FCA (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

5 March 2025

Statement of profit or loss and other comprehensive income:

Technical account – General business/long-term business

For the year ended 31 December 2024

Note

2024

$000

2023

Restated*$000

Gross premiums written

29,343

89,960

Outwards reinsurance premiums

(346)

(19,243)

Premiums written, net of reinsurance

28,997

70,717

Changes in unearned premium

Change in the gross provision for unearned premiums

31,252

32,837

Change in the provision for unearned premiums reinsurers’ share

(4,425)

6,412

Net change in provisions for unearned premiums

26,827

39,249

Earned premiums, net of reinsurance

55,824

109,966

Allocated investment return transferred from the non-technical account

110,157

165,141

Other technical income, net of reinsurance

4,105

10,754

Claims paid

Gross amount

(1,396,259))

(1,601,972))

Reinsurers’ share

370,228

401,052

Net claims paid

(1,026,031))

(1,200,920))

Change in the provision for claims

Gross amount

1,555,785

1,670,829

Reinsurers’ share

(395,859)

(407,620)

Net change in provisions for claims

1,159,926

1,263,209

Claims incurred, net of reinsurance

133,895

62,289

Net change in other technical provisions

303,981

348,150

Net operating expenses

(46,136)

(45,200)

Balance on the technical account – general business

257,845

302,950

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

Non-technical account – General business/long-term business

For the year ended 31 December 2024

*Restated for the change in accounting policy set out in note 3b(iv)

The results above area all derived from continuing operations.

Note

2024

$000

2023

Restated*$000

Balance on the technical account – general business

257,845

302,950

Investment income

105,102

123,523

Realised (losses)/gains on investments

(3,974)

2,417

Unrealised gains on investments

10,654

41,012

Investment expenses and charges

(1,170)

(1,811)

Total investment return

110,612

165,141

Allocated investment return transferred to the general business technical account

(110,157)

(165,141)

(Loss)/gain on foreign exchange

(10,813)

2,141

Profit for the financial year

247,487

305,091

Total comprehensive income for the year

247,487

305,091

Balance sheet – Assets

As at 31 December 2024

Note

2024

$000

2023

Restated*$000

Financial investments

2,090,505

2,714,294

Deposits with ceding undertakings

22,989

259,976

Investments

2,113,494

2,974,270

Provision for unearned premiums

12,366

17,008

Claims outstanding

671,290

1,087,835

Reinsurers’ share of technical provisions

683,656

1,104,843

Debtors arising out of direct insurance operations

233,118

199,070

Debtors arising out of reinsurance operations

293,505

464,085

Other debtors

20,073

16,012

Debtors

546,696

679,167

Cash at bank and in hand

43,685

166,570

Other

244,675

315,431

Other assets

288,360

482,001

Accrued interest and rent

18,050

24,910

Deferred acquisition costs

4,299

6,818

Prepayments and accrued income

22,349

31,728

Total assets

3,654,555

5,272,009

Balance sheet (cont’d) – Liabilities

As at 31 December 2024

Note

2024

$000

2023Restated*

$000

Members’ balances

330,933

364,759

Total capital and reserves

330,933

364,759

Provision for unearned premiums

55,426

88,487

Claims outstanding

3,012,070

4,401,513

Other technical provisions

21,750

18,060

Technical provisions

3,089,246

4,508,060

Deposits received from reinsurers

26,501

12,204

Creditors arising out of direct insurance operations

28,987

53,555

Creditors arising out of reinsurance operations

176,312

303,078

Other creditors including taxation and social security

2,576

30,353

Creditors

207,875

386,986

Total liabilities

3,323,622

4,907,250

Total liabilities, capital and reserves

3,654,555

5,272,009

*Restated for a reclassification of balances set out in note 3b(iii)

The financial statements on pages 15 to 48 were approved by the board of RiverStone Managing Agency Limited on 5th March 2025 and were signed on its behalf by the Directors on 5th March 2025:

J. C. P. Insley

UK Chief Financial Officer

Statement of changes in members’ balances

For the year ended 31 December 2024

2024$000

2023$000

Members’ balances brought forward at 1 January

364,759

59,668

Total comprehensive income/(loss) for the year

247,487

305,091

Payments of profit to members’ personal reserve funds

(314,105)

Net movement on funds in syndicate

32,792

Members’ balances carried forward at 31 December

330,933

364,759

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

247,487

305,091

Adjustments:

(Decrease)/increase in gross technical provisions

(1,418,814))

1,427,989

Decrease/(increase) in reinsurers’ share of gross

technical provisions

421,187

(532,904)

Decrease/(increase) in debtors

369,640

(290,180)

(Decrease)/increase in creditors

(179,111)

216,837

Decrease/(increase) in deposits received from reinsurers

14,297

(11,212)

Movement in other assets/liabilities

48,017

(28,900)

Investment return

(110,612)

(165,141)

Other

3 (l)

549,093

(916,703)

Net cash flows from operating activities

(58,816)

4,877

Cash flows from investing activities

Purchase of equity and debt instruments

(2,226,955))

(2,077,916))

Sale of equity and debt instruments

2,346,771

1,957,975

Investment income received

90,600

108,905

Other

2,337

1,896

Net cash flows from investing activities

212,753

(9,140)

Cash flows from financing activities

Distribution of profit

(314,105)

Funds In Syndicate received from/(released to) members

32,792

Net cash flows from financing activities

(281,313)

Net (decrease) in cash and cash equivalents

(127,376)

(4,263)

Cash and cash equivalents at the beginning of the year

168,450

175,414

Foreign exchange on cash and cash equivalents

4,481

(2,701)

Cash and cash equivalents at the end of the year

45,555

168,450

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

1.General Information

Syndicate 3500 is engaged in the runoff of the assets and liabilities associated with previously written insurance and reinsurance business in the Lloyd’s of London general insurance market. Additionally, Syndicate 3500 seeks to acquire new portfolios of run-off business.

Syndicate 3500 is managed by RiverStone Managing Agency Limited (“the Managing Agent”), whose registered office address is Park Gate, 161-163 Preston Road, Brighton, East Sussex, England, United Kingdom, BN1 6AU.

2.Statement of Compliance

The financial statements of Syndicate 3500 have been prepared in accordance with Regulation 5 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS102”) and Financial Reporting Standard 103, “Insurance Contracts” (“FRS103”), and the Lloyd’s Syndicate Accounts Instructions Version 1.2 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.

3.Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a)Basis of Preparation

The preparation of financial statements in conformity with FRS102 and FRS103 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies of Syndicate 3500. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements, are disclosed further below.

These financial statements are prepared on a going concern basis under the historical cost convention.

(b)Restatement of Comparative Information

During 2024, Lloyd’s introduced changes to the syndicate accounts process to rationalise and standardise financial reporting across the market, these can be seen in items i) and ii) below. 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:

i)Reclassification Changes

Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The principal change is the reclassification of the transfer of investment income to the technical account, as previously this was shown in the non-technical account. The comparative balances have also been represented to align with the current period presentation.

Classification: Unclassified

ii)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.

ii)Reclassification of Creditors

The prior year figures for Creditors arising out of Insurance and Reinsurance operations have been restated to better reflect the underlying Insurance/Reinsurance characteristics of the balances shown. The figures before and after the restatement can be seen in the table below. This restatement has no effect on prior year members balances or net assets.

As Presented in Prior Year Financial Statements

$000

Corrected as shown in Current Year Financial Statements

$000

Movement

$000

Creditors arising out of Insurance Operations

112,915

53,555

(59,360)

Creditors arising out of Reinsurance Operations

243,718

303,078

59,360

356,633

iii)Restatement Due to Change in Accounting Policy

The treatment more meaningfully reflects in the profit and loss account the economic substance of the transaction and the nature of the risks undertaken through retroactive reinsurance contracts.

Except for the change in the presentation of the profit and loss account, the new accounting policy does not result in any change in how the risks undertaken by the Syndicate are measured in the Syndicate’s balance sheet, at initial recognition or subsequently. The figures before and after the restatement can be seen in the table below.

As Presented in Prior Year Financial Statements

$000

Restated as shown in Current Year Financial Statements

$000

Movement

$000

Gross premiums written

2,426,384

89,960

(2,336,424)

Outward reinsurance written

(20,822)

(19,243)

1,579

Premiums written, net of reinsurance

2,405,562

70,717

(2,334,845)

Change in the provision for claims

Gross amount

(1,561,557)

1,670,829

3,232,386

Reinsurers’ share

489,921

(407,620)

(897,541)

Net change in provisions for claims

(1,071,636)

1,263,209

2,334,845

1,333,926

Classification: Unclassified

(c)Going Concern

Having addressed the principal risks, the directors of the Managing Agent consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements. The ability of Syndicate 3500 to meet its obligations as they fall due is underpinned by the support provided by Lloyd’s solvency process and its chain of security for any members who are unable to meet their underwriting liabilities. This chain of security includes Funds at Lloyd’s, which are further explained in Note 28.

(d)Insurance Contracts

i)Premiums Written

Premiums written relate to business incepted during the period, together with any difference between recorded premiums for prior years and those previously accrued and include estimates of premiums due but not yet receivable or notified to the Syndicate less an allowance for cancellations. Also included within Premiums written is any amount of unearned premium acquired from transactions undertaken. Premiums written are shown gross of commission payable to intermediaries and exclude related taxes.

Premiums are accreted to the income statement on a pro-rata basis over the term of the related policy, except for those contracts where the period of risk differs significantly from the contract period. In these cases, premiums are recognised over the period of risk in proportion to the amount of insurance protection provided.

The Syndicate treats retroactive QS contracts as a portfolio transfer in accordance with the FRS 103 definition of a portfolio transfer, directly to the balance sheet. Only premium related to unexpired risks will be recognized as written premium. In the case where there is a difference between the premium for the expired claims and the best estimate value assigned on the reserves, this would be recognised as within the line item ‘Change in the provision for claims’.

A QS retroactive reinsurance contract is considered to economically meet the definition of a portfolio claims transfer and in the absence of specific guidance for these contracts in UK GAAP, management has considered that the application of the accounting for portfolio claims transfers set out in FRS 103 IG2.31 results in more relevant information for the users of the financial statements.

Management believe that this disclosure ensures the financial statement information provided to the users of the accounts is more relevant and no less reliable. The treatment more meaningfully reflects in the income statement the economic substance of the transaction and the nature of the risks undertaken by the Company through the retroactive reinsurance contract.

The accounting policy does not obscure the information provided in the income statement with amounts that are not directly reflective of the consideration received for the services provided in managing the expired claims risk and other risks undertaken by the QS retroactive reinsurance contract.

Loss Portfolio Transfers by way of reinsurance are considered to be a single outwards reinsurance contract.

Unearned premiums represent the proportion of premiums written that relate to unexpired terms of policies in force at the balance sheet date. The unearned premium reserve is translated to US Dollars at closing rates of exchange.

Acquisition costs, which represent commission and other related expenses, are allocated over the period in which the related premiums are earned.

ii)Claims Incurred and Reinsurers’ Share

Claims incurred comprise claims and related claims handling expenses paid in the year and changes in provisions for outstanding claims, including provisions for claims incurred but not reported and related expenses, together with any other adjustments to claims from previous years. Where applicable, reductions are made for salvage and other recoveries.

Classification: Unclassified

Provisions for outstanding claims and related reinsurance recoveries are established based on estimates of the ultimate net cost of settlement along with actuarial and statistical projections. Claims provisions are determined based upon previous claims experience, knowledge of events and the terms and conditions of the relevant policies and on interpretation of circumstances. Particularly relevant is experience with similar cases and historical claims payment trends. The approach also includes the consideration of the development of loss payment trends, levels of unpaid claims, judicial decisions and economic conditions.

Syndicate 3500 applies discounting to claims provisions where there are individual claims with structured settlements that have annuity-like characteristics.

Day 1 profits or losses on acquisition of reinsurance to close or loss portfolio transfers are shown through claims incurred and reinsurers’ share.

Provisions for unexpired risks are established based on estimates of the cost of all claims and expenses in connection with insurance contracts in force after the end of the financial year where these costs are estimated to be in excess of the related unearned premiums and any premiums receivable on those contracts. The unexpired risks provision is included within ‘Other technical provisions’.

Whilst the board of directors of the Managing Agent (“the Board”) believes that the provisions for outstanding claims and related reinsurance recoveries including bad debt provisions are fairly stated, these estimates inevitably contain inherent uncertainties because significant periods of time may elapse between the occurrence of an incurred loss, the reporting of that loss to Syndicate 3500, Syndicate 3500's payment of the loss and the receipt of reinsurance recoveries. These uncertainties are inherent in much of the business previously underwritten and assumed by Syndicate 3500. The estimates made are based upon current facts available to Syndicate 3500 and the prevailing legal environment and are subjected to continual review, with any resulting adjustments reported in current earnings. Anticipated reinsurance recoveries are disclosed separately as assets on the balance sheet.

iii)Debtors and creditors arising out of direct and reinsurance operations

Debtors and creditors arising out of direct and reinsurance operations are initially recognised at transaction price or issued amount and are subsequently carried at the recoverable amount. The carrying value is reviewed for impairment at least annually based on historical performance, the terms and conditions of the relevant policies and whenever interpretation of events or circumstances indicate that the carrying amount is greater than the recoverable amount, with the impairment adjustment recorded in the statement of profit and loss. Debtors arising out of direct insurance and reinsurance operations are stated net of specific provisions against doubtful debts.

(e)Syndicate Operating Expenses

All costs relating to the administration and handling of claims are shown as part of gross claims paid. All other administrative costs of Syndicate 3500, including acquisition costs and any member's expenses, are shown as net operating expenses.

(f)Distribution of Profits and Collection of Losses

Lloyd’s operates a detailed set of regulations regarding solvency and the distribution of profits and payment of losses between Syndicates and their members. Lloyd’s continues to require membership of Syndicates to be on an underwriting year of account basis and profits and losses accrue to members according to their membership of a year of account. Normally profits and losses are settled between Syndicate 3500 and members after results for a year of account are finalised after 36 months. This period may be extended if a year of account goes into run-off. Syndicate 3500 may make earlier on account distributions or cash calls according to the cash flow of a particular year of account and subject to Lloyd’s requirements.

Classification: Unclassified

(g)Translation of Foreign Currencies

The financial statements are presented in US Dollars and, unless otherwise stated, are rounded to thousands. Items included in Syndicate 3500’s financial statements are measured using the currency of the primary economic environment in which it operates. Syndicate 3500’s functional currency is US Dollars.

Foreign currency transactions are translated into the functional currency using the average rate of exchange during the year. At each year end foreign currency monetary items are translated using the year end rate of exchange. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account for the year.

(h)Tax

No amount has been provided in these financial statements for tax on trading income. Under Schedule 19 of the Finance Act 1993, managing agents are not required to deduct basic rate income tax from trading income. In addition, all UK basic rate income tax deducted from syndicate investment income is recoverable by managing agents and consequently the distribution made to members or their members’ agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.

No provision has been made for any United States Federal Income Tax payable on underwriting results or investment earnings. Any payments on account made by Syndicate 3500 during the year have been included in the balance sheet under the heading ‘other debtors’.

No provision has been made for any other overseas tax payable by members on underwriting results.

(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 and charges.

Realised gains and losses on investments carried at market value are calculated as the difference between sale proceeds and purchase price. Movements in unrealised gains and losses on investments represent the difference between the valuation at the balance sheet date, together with the reversal of unrealised gains and losses recognised in earlier accounting periods in respect of investment disposals in the current year.

(j)Other Financial Investments

Syndicate 3500 has chosen to apply the recognition and measurement provisions of IAS 39 (as adopted for use in the EU) and the disclosure requirements of FRS 102 in respect of the financial statements.

Syndicate 3500 classifies all of its investments as financial assets at fair value through profit and loss. Management determines the classification of its investments at initial recognition and re-evaluates this at every reporting date.

A financial asset is classified as fair value through profit and loss at inception if it is acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short-term profit-taking, or if so designated by management to minimise any measurement or recognition inconsistency with the associated liabilities. All derivatives are classified as at fair value through profit and loss.

Financial assets designated as at fair value through profit and loss at inception are those that are managed and whose performance is evaluated on a fair value basis. Information about these financial assets is provided internally on a fair value basis to Syndicate 3500’s key management personnel. Syndicate 3500’s investment strategy is to invest in predominantly investment grade fixed income securities, closely matching interest rate and currency liability exposures.

Classification: Unclassified

The fair values of listed investments are based on current bid prices on the balance sheet date. Unlisted investments for which a market exists are also stated at the current bid price on the balance sheet date or the last trading day before that date.

Net gains or losses arising from changes in the fair value of financial assets at fair value through profit and loss are presented in the Profit and Loss Account within ‘Unrealised gains on investments’ or ‘Unrealised losses on investments’ in the year in which they arise.

Syndicate 3500 discloses its investments in accordance with a fair value hierarchy with the following levels:

i)Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date

ii)Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly

iii)Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability

(k)Related Party Transactions

Syndicate 3500 discloses transactions with related parties. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the directors, separate disclosure is necessary to understand the effect of the transactions on the financial statements.

(l)Cashflow Statement

Syndicate 3500 discloses all investment transfers applicable to profit distributions, settlement of reinsurance to close and loss portfolio transfer premiums or intra group transfers within ‘other adjustments’ in the reconciliation to net cashflows from operating activities.

Classification: Unclassified

4.Critical Accounting Judgements and Estimation Uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Syndicate 3500 makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimation of the ultimate gross and ceded liability arising from claims made under insurance contracts is Syndicate 3500’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that Syndicate 3500 will ultimately pay for such claims. Some of these claims are not expected to be settled for many years and there is uncertainty as to the amounts at which they will be settled. The level of provision has been set on the basis of the information that is currently available, including potential outstanding loss advices, experience of development of similar claims and case law.

The most significant assumptions made relate to the level of future claims, the level of future claims settlements, the legal interpretation of insurance policies and the level of claims inflation. Whilst the directors consider that the gross provision for claims and the related reinsurance recoveries is fairly stated on the basis of the information currently available to them, the ultimate liability will vary as a result of subsequent information and events and may result in adjustments to the amount provided.

The Board remain cognisant of the potential impacts of inflation and continue to focus on ensuring that the underwriting and pricing adequately addresses inflationary trends. Reserves continue to be set incorporating the Board’s current view. The potential impact of excess inflation – both macro-economic and social - is explicitly assessed in syndicate reserves and a variety of potential outcomes is reviewed. The diversity of the syndicate reserves in terms of territory and lines of business, combined with the relative maturity of the portfolio, are important considerations when forming this view. Adjustments to the amounts of provision are reflected in the financial statements for the year in which the adjustments are made.

Syndicate 3500 applies discounting to claims provisions where there are individual claims with structured settlements that have annuity-like characteristics.

The Board continues to review the key drivers of claim settlement costs and frequency, and the methods used, and the estimates made, are reviewed regularly. Assumptions, sensitivities and claims development triangles are further detailed in note 16. No other material critical judgements or sources of material estimation uncertainty have been identified.

5.Management of Insurance and Financial Risk

Financial Risk Management Objectives

Syndicate 3500 is exposed to insurance risk through the insurance contracts that it has written and to financial risk through its financial assets, reinsurance assets and policyholder liabilities. In particular, the key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from insurance policies as they fall due. The most important components of this financial risk are market risk (including interest rate risk and currency risk), credit risk and liquidity risk.

Syndicate 3500 has established an overall risk management policy which focuses on the main risks to which it is exposed, paying particular attention to key risks which impact on the overall operation of the business. A risk register is maintained which is updated at least quarterly. All risks on the register are reviewed with key management personnel and the Board reviews the key risks on a quarterly basis.

Classification: Unclassified

(a)Insurance Risk

The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty over the amount of the resulting ultimate claim. By the very nature of an insurance contract, this risk is unpredictable at the outset.

The principal risk that Syndicate 3500 faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. The actual number and amount of claims and benefits arising from insurance contracts will vary from year to year from the level established using statistical techniques.

Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be materially affected by a change in any subset of the portfolio. Syndicate 3500 has a diversified portfolio of insurance risks, which predominantly relate to business previously written.

Syndicate 3500 mitigates insurance risk through the use of reinsurance, both in the form of third party reinsurance associated with the business originally written and reinsurance with affiliated reinsurers.

i)Process for Assessment of Technical Provisions

Syndicate 3500 adopts a consistent process for the calculation of an appropriate provision for the exposures arising from the business it has written. A full reserving analysis is conducted at least annually and the technical provisions recorded on the balance sheet are in line with the Board’s view of the best estimate value of the underlying liabilities.

The technical provisions recorded at the reporting date comprise the estimated ultimate cost of settlement of all claims incurred in respect of events up to that date, whether reported or not, together with related claims handling expenses, less amounts already paid. This is estimated based on known facts at the balance sheet date. The provision is revised as part of a regular ongoing process as claims experience develops, certain claims are settled and further claims are reported.

Syndicate 3500 uses assumptions based on a mixture of internal and market data to measure its claims liabilities. This information is used to project the ultimate number and value of claims, by major class of business, using recognised statistical estimation techniques.

Assumptions are reviewed and tested regularly in the light of actual claims development and general market movements and trends. In accordance with the Lloyd’s Valuation of Liabilities Rules an independent actuary is appointed annually to provide an opinion that the technical provisions comply with the Lloyd’s Valuation of Liabilities Rules and each year of account is no less than the expected future cost of the corresponding claims and claim handling expenses for which the Syndicate is liable. Additionally the Actuarial processes are subject to independent internal audit and risk reviews on a rotational basis.

ii)Sources of Uncertainty in the Estimation of Future Claim Payments

The sources of estimation uncertainty in establishing the ultimate liability arising from claims made under insurance contracts are discussed in Note 4.

The estimated cost of claims includes direct expenses to be incurred in settling claims, net of the expected subrogation value and other recoveries. Syndicate 3500 takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established.

The liability for insurance contracts comprises a provision for claims incurred but not yet reported and a provision for reported claims not yet paid. The estimation of claims incurred but not reported is

Classification: Unclassified

generally subject to a greater degree of uncertainty than the estimates of claims that have already been notified for which there is more information available.

i.Concentration of insurance risk

The concentration of insurance risk before and after reinsurance by the most material classes of business is summarised below, with reference to the carrying amount of outstanding claims (gross and net of reinsurance) arising from insurance contracts.

2024

2023

Gross Claims Outstanding

Net Claims Outstanding

Gross Claims Outstanding

Net Claims Outstanding

$000

Annuities

104,121

95,211

Casualty reinsurance

220,688

171,376

303,190

244,128

Credit and suretyship

28,483

27,407

67,872

36,978

Fire and other damage to property

234,129

156,563

377,533

214,567

General liability

1,738,492

1,410,310

2,408,220

1,920,305

Health insurance

42,959

36,719

38,766

32,393

Income protection

31,700

24,493

52,792

39,585

Legal Expenses

344

1,642

Marine, aviation and transport

271,706

184,510

474,214

316,114

Miscellaneous financial loss

892

11,624

5,545

Motor vehicle liability

101,116

98,400

158,736

170,267

Other motor

26,456

17,601

45,392

44,358

Property reinsurance

70,348

6,342

105,564

9,277

Worker’s compensation

114,386

79,354

212,303

141,044

Claims expense reserve

48,000

44,098

66,514

61,976

Total

3,033,820

2,362,530

4,419,573

3,331,768

ii.Sensitivity to insurance risk

The assumptions that have the greatest impact on gross and net technical provisions are those that affect the expected level of claims in the general liability classes, notably professional indemnity. The largest sensitivities on these classes are in respect of uncertainties around future numbers and amounts of claims. The reserves for these classes will be paid out over several years.

The following table presents the profit and loss impact of the sensitivity of the value of insurance liabilities disclosed in the accounts to potential movements in the assumptions applied within the technical provisions.

General insurance business sensitivities as at 31 December 2024

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

150,604

(150,603)

Claims outstanding – net of reinsurance

117,039

(117,039)

Classification: Unclassified

General insurance business sensitivities as at 31 December 2023

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

220,076

(220,076)

Claims outstanding – net of reinsurance

165,684

(165,684)

(b)Credit Risk

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where Syndicate 3500 is exposed to credit risk are:

•reinsurers’ share of insurance liabilities;

•amounts due from reinsurers in respect of claims already paid;

•amounts due from insurance intermediaries;

•amounts due from corporate bond issuers;

•counterparty risk with respect to derivative transactions; and

•cash at bank and in hand.

As Syndicate 3500 is in runoff, its exposures to other reinsurers and insurance intermediaries are primarily determined by contracts previously written. Syndicate 3500 manages the levels of credit risk from reinsurers and insurance intermediaries by quarterly review of receivable balances by counterparty. Management assesses the creditworthiness of all reinsurers and intermediaries by reviewing credit grades provided by rating agencies and other publicly available financial information. It is Syndicate 3500’s policy to provide for reinsurer bad debts in situations where it does not expect to collect the full amount outstanding due to the financial position of the reinsurer or due to disputes over coverage. In certain circumstances, collateral is held in the form of either deposits or letters of credit from reinsurers.

Syndicate 3500 reduces its exposure to credit risk in relation to investments by entering into transactions with counterparties that are reputable and by settling trades through recognised exchanges.

The assets bearing credit risk are summarised below, together with an analysis by credit rating (AM Best or equivalent):

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

17,077

Debt securities and other fixed income securities

709,301

510,219

556,953

264,063

6,734

2,764

2,050,034

Loans and deposits with credit institutions

1,871

Derivative assets

2,666

Syndicate loans to central fund

18,857

Deposits with ceding undertakings

22,989

Reinsurers’ share of claims outstanding

283,071

251,518

1,210

135,482

671,290

Debtors arising out of reinsurance operations

89,396

95,821

695

7,536

193,448

Cash at bank and in hand

11,815

28,387

3,483

43,685

Other debtors and accrued interest

25,714

28,365

126,246

17,953

8,281

38,116

244,675

Total

735,015

922,866

1,105,308

283,921

15,024

204,458

3,266,592

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

Debt securities and other fixed income securities

524,875

589,186

1,051,340

504,057

12,131

2,681,589

Loans and deposits with credit institutions

1,880

Derivative assets

3,061

Syndicate loans to central fund

27,765

Deposits with ceding undertakings

259,976

Reinsurers’ share of claims outstanding

290,523

604,198

4,614

122,893

65,607

1,087,835

Debtors arising out of reinsurance operations

192,220

39,814

3,161

21,005

256,200

Cash at bank and in hand

9,537

154,299

2,734

166,570

Other debtors and accrued interest

183,212

26,107

24,663

22,502

7,178

51,757

315,419

Total

708,087

1,107,573

2,166,996

537,068

130,071

150,500

4,800,295

Assets arising from reinsurance and insurance contracts held and premium receivable are further analysed as follows:

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

17,077

Debt securities and other fixed income securities

2,050,034

Loans and deposits with credit institutions

1,871

Derivative assets

2,666

Syndicate loans to central fund

18,857

Deposits with ceding undertakings

22,989

Reinsurers' share of claims outstanding

671,290

Debtors arising out of reinsurance operations

46,191

147,257

193,448

Other debtors and accrued interest

244,675

Cash at bank and in hand

43,685

Total

3,119,335

147,257

3,266,592

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

Debt securities and other fixed income securities

2,681,589

Loans and deposits with credit institutions

1,880

Derivative assets

3,061

Syndicate loans to central fund

27,765

Deposits with ceding undertakings

259,976

Reinsurers' share of claims outstanding

1,087,835

Debtors arising out of reinsurance operations

56,993

199,207

256,200

Other debtors and accrued interest

315,419

Cash at bank and in hand

166,570

Total

4,601,088

199,207

4,800,295

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

(c)Liquidity Risk

The primary liquidity risk is the obligation to pay claims to policyholders as they fall due. The projected settlement of these liabilities is modelled, on a regular basis, using a combination of operational cash flow forecasting and actuarial techniques. The Board sets limits on the minimum levels of liquid assets that should be available to cover anticipated liabilities and unexpected levels of demand. The table below analyses the maturity of Syndicate 3500’s financial liabilities and outstanding claims. All liabilities are presented using their expected cash flows.

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

788,063

1,000,131

523,620

776,268

3,088,082

Derivative liabilities

1,584

Deposits received from reinsurers

7,013

8,902

4,586

6,474

26,975

Creditors

54,602

69,303

35,702

50,402

210,009

Total

851,262

1,078,336

563,908

833,144

3,326,650

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

1,127,853

1,431,358

749,389

1,110,972

4,419,572

Derivative liabilities

3,326

Deposits received from reinsurers

3,173

4,027

2,197

2,807

12,204

Creditors

99,752

126,608

69,059

88,242

383,661

Total

1,234,104

1,561,993

820,645

1,202,021

4,818,763

Past due but not impaired

0-3 months past due

3-6 months past due

6-12 months past due

Greater than 1 year past due

Total

2024

$000

Debtors arising out of reinsurance operations

20,142

13,016

10,083

104,016

147,257

Total

20,142

13,016

10,083

104,016

147,257

Past due but not impaired

0-3 months past due

3-6 months past due

6-12 months past due

Greater than 1 year past due

Total

2023

$000

Debtors arising out of reinsurance operations

50,659

27,985

25,438

95,126

199,208

Total

50,659

27,985

25,438

95,126

199,208

(d)Market Risk

i)Interest Rate Risk

Interest rate risk arises primarily from investments in fixed interest securities. In addition, to the extent that claims inflation is correlated to interest rates, liabilities to policyholders are exposed to interest rate risk. Syndicate 3500 works closely with its investment manager to review the duration of the investment portfolio in relation to the estimated mean duration of the liabilities.

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

(30,605)

(30,897)

- 50 basis points shift in yield curves

32,928

32,563

ii)Currency Risk

Syndicate 3500 manages its foreign exchange risk against its functional currency, which is US Dollars. Syndicate 3500 has a proportion of its assets and liabilities denominated in currencies other than US Dollars, the most significant being Pound Sterling, Euro, Australian Dollar and Canadian Dollar. Syndicate 3500 seeks to mitigate the risk by matching the estimated foreign currency denominated liabilities with assets denominated in the same currency, and by the utilisation of forward currency contracts.

The table below shows the expected impact on profit for the year if Pound Sterling, Euro, Australian Dollar and Canadian Dollar weakened by 10% more in the period against the US Dollar with all other variables held constant:

Profit for the year

GBP

EUR

AUD

CAD

2024

$000

Higher (lower)

1,578

955

(616)

1,060

Profit for the year

GBP

EUR

AUD

CAD

2023

$000

Higher (lower)

1,932

422

(1,466)

(5,275)

The results set out above are mainly due to net foreign exchange gains on the translation of financial assets denominated in Pound Sterling, Euro, Australian Dollar and Canadian Dollar, and liabilities denominated in Pound Sterling, Euro, Australian Dollar and Canadian Dollar.

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

576,953

780,872

203,481

318,625

233,563

2,113,494

Reinsurers' share of technical provisions

161,964

360,645

51,687

51,989

57,371

683,656

Debtors

119,250

340,446

50,009

23,826

12,401

868

(104)

546,696

Other assets

9,557

32,129

6,247

64,894

131,956

(355)

43,932

288,360

Prepayments and accrued income

6,912

8,223

2,676

1,645

2,089

804

22,349

Total assets

874,636

1,522,315

314,100

460,979

437,380

513

44,632

3,654,555

Technical provisions

(797,835)

(1,320,322)

(316,471)

(250,626)

(403,981)

(11)

(3,089,246)

Deposits received from reinsurers

(26,501)

Creditors

54,585

(112,533)

(38,894)

(35,372)

(73,440)

(597)

(1,624)

(207,875)

Total liabilities

(769,751)

(1,432,855)

(355,365)

(285,998)

(477,421)

(608)

(1,624)

(3,323,622)

Total capital and reserves

104,885

89,460

(41,265)

174,981

(40,041)

(95)

43,008

330,933

Forward contracts in place

(118,352)

223,414

31,065

(180,086)

43,959

Net

(13,467)

312,874

(10,210)

(5,195)

3,918

(95)

43,008

330,933

Sterling

US dollar

Euro

Canadian dollar

Australian dollar

Japanese Yen

Other

Total

2023

$000

Investments

750,758

1,398,525

272,002

489,497

63,488

2,974,270

Reinsurers' share of technical provisions

249,413

614,418

80,471

100,946

59,595

1,104,843

Debtors

196,020

482,939

31,046

(62,371)

30,778

863

(108)

679,167

Other assets

29,106

102,850

34,743

102,127

153,623

697

58,855

482,001

Prepayments and accrued income

9,797

12,843

3,402

2,846

1,994

846

31,728

Total assets

1,235,094

2,611,575

421,664

633,045

309,478

1,560

59,593

5,272,009

Technical provisions

(1,289,190)

(2,063,173)

(447,986)

(439,334)

(268,364)

(13)

(4,508,060)

Deposits received from reinsurers

(12,204)

Creditors

(25,734)

(216,584)

(45,499)

(46,290)

(49,793)

(863)

(2,223)

(386,986)

Total liabilities

(1,327,128)

(2,279,757)

(493,485)

(485,624)

(318,157)

(876)

(2,223)

(4,907,250)

Total capital and reserves

(92,034)

331,818

(71,821)

147,421

(8,679)

684

57,370

364,759

Forward contracts in place

75,213

(38,389)

67,384

(127,408)

23,200

Net

(16,821)

293,429

(4,437)

20,013

14,521

684

57,370

364,759

iii.Equity Price Risk

The syndicate holds equity funds within shares and variable yield securities. These are priced based on underlying net asset valuation statements and as such no equity risk sensitivity is disclosed below.

2024Impact on results before tax$000

2024Impact on

members’

balances$000

2023Impact on results before tax$000

2023Impact on

members’

balances$000

Equity price risk

5 percent increase in equity prices

5 percent decrease in equity prices

(e)Capital Management

Syndicate 3500 maintains an efficient capital structure comprising only its member’s balance, consistent with its risk profile and the regulatory and market requirements of its business. Syndicate 3500’s objectives in managing its capital are:

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

•to satisfy the requirements of its policyholders and regulators

•to retain financial flexibility by maintaining adequate liquidity

Syndicate 3500 is regulated by the Prudential Regulation Authority, the Financial Conduct Authority and Lloyd’s and is subject to insurance solvency regulations which specify the minimum amount and type of capital that must be held in addition to the insurance liabilities. Syndicate 3500 manages capital in accordance with these rules and performs the necessary tests to ensure continuous and full compliance with such regulations. Syndicate 3500 has complied with all of its capital requirements throughout the year.

The minimum capital required to support Syndicate 3500 is required to be provided by the corporate member, either by assets held in trust by Lloyd’s specifically for that member (“Funds at Lloyd’s”), held within, and managed within, a syndicate (“Funds in Syndicate”) or as the member’s share of the members’ balances on each syndicate on which it participates.

Accordingly, all of the assets less liabilities of the Syndicate, as represented in the member's balance reported on the Balance Sheet, represent resources available to meet member and Lloyd’s capital requirements.

6.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

3,190

3,596

20,288

(2,016)

(3,673)

18,195

Motor (third party liability)

1,578

5,631

6,091

(1,395)

(14)

10,313

Motor (other classes)

677

1,438

3,591

(339)

729

5,419

Marine, aviation, and transport

2,990

3,562

18,916

(2,749)

(752)

18,977

Fire and other damage to property

3,816

8,910

19,642

(3,380)

(8,775)

16,397

Third party liability

10,712

25,167

58,512

(24,521)

(9,895)

49,263

Credit and suretyship

1,883

2,571

11,693

(633)

(1,978)

11,653

Total direct insurance

24,846

50,875

138,733

(35,033)

(24,358)

130,217

Reinsurance acceptances

4,497

9,720

20,793

(6,998)

(6,044)

17,471

Total

29,343

60,595

159,526

(42,031)

(30,402)

147,688

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

2024

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Additional analysis

Fire and damage to property of which is:

Specialities

126

294

647

(111)

(17)

812

Energy

190

(33)

(216)

Third party liability of which is:

Energy

161

374

(157)

(21)

357

2023

Restated*

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

3,607

3,937

(335)

(1,710)

(1,230)

662

Motor (third party liability)

203

7,654

7,215

(199)

(347)

14,323

Motor (other classes)

262

1,037

241

(138)

(312)

828

Marine, aviation, and transport

5,327

6,039

5,900

(2,577)

(6,505)

2,857

Fire and other damage to property

6,635

16,199

15,091

(3,210)

(7,174)

20,906

Third party liability

27,750

42,585

(30,355)

(13,872)

(6,051)

(7,693)

Credit and suretyship

761

15,667

(333)

(544)

14,857

Total direct insurance

44,545

77,518

13,424

(22,039)

(22,163)

46,740

Reinsurance acceptances

45,415

45,279

55,433

(12,407)

2,764

91,069

Total

89,960

122,797

68,857

(34,446)

(19,399)

137,809

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

2023

Restated*

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

203

189

(40)

(13)

339

Energy

125

304

283

(60)

(50)

477

Third party liability of which is:

Energy

255

391

(279)

(128)

(61)

(76)

Gross operating expenses includes other technical income.

All premiums written were in respect of insurance contracts concluded in the UK.

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

2024

$000

2023

Restated*$000

United Kingdom

29,343

89,960

Total gross premiums written

29,343

89,960

7.Net operating expenses

Syndicate operating expenses included within net operating expenses comprise:

2024$000

2023$000

Acquisition costs

782

Change in deferred acquisition costs

2,379

2,025

Administrative expenses

46,896

51,402

Less: recovered under reinsurance protection agreements

(3,921)

(8,227)

Net operating expenses

46,136

45,200

Administrative expenses include:

2024$000

2023$000

Auditors’ remuneration:

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

518

508

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

825

980

The management and administration of RiverStone Managing Agency is carried out by RiverStone Management Limited (“RiverStone Management”), a fellow subsidiary, which also provides these services to other group companies. RiverStone Management recharges costs associated with this management and administration to RiverStone Managing Agency, which in turn recharges them to Syndicate 3500. Certain costs are recovered by Syndicate 3500 under the reinsurance protection agreements it has entered into with affiliated reinsurers.

Operating costs charged to Syndicate 3500 by RiverStone Managing Agency during the year were $58,770,000 (2023: $64,171,000).

Fees payable for the audit of the annual accounts of RiverStone Managing Agency are $18,362 (2023: $17,260). Fees payable for audit-related assurance services provided to the managing agent are $nil (2023: $nil). There were no other fees payable for the provision of other non-audit services.

8.Key management personnel compensation

The Directors, Run-off Manager and other key management personnel of Syndicate 3500 receive no emoluments from RiverStone Managing Agency. The contracts of employment of the U.K. executive Directors and employees are with RiverStone Management which makes charges for the services described above. Emoluments paid by RiverStone Management to the key management personnel of Syndicate 3500 in respect of their services in relation to Syndicate 3500 are summarised below. These amounts represent emoluments based on an apportionment of time.

The directors of RiverStone Managing Agency Limited received the following aggregate remuneration charged to the Syndicate:

2024$000

2023$000

Directors’ emoluments

2,251

2,439

The run-off manager received the following aggregate remuneration charged to the Syndicate.

Further information in respect of the directors of RiverStone Managing Agency is provided in that company’s financial statements.

9.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

103,457

121,762

Dividend income

Interest on cash at bank

1,645

1,709

Other income from investments

From financial instruments designated at fair value through profit or loss

Gains on the realisation of investments

5,853

6,290

Losses on the realisation of investments

(9,827)

(3,873)

Unrealised gains on investments

11,558

60,171

Unrealised losses on the investments

(904)

(19,159)

Investment management expenses

(1,170)

(1,811)

Total investment return

110,612

165,141

Transferred to the technical account from the non-technical account

110,157

165,141

Investment return on Funds in Syndicate

455

An investment return of £110,157,000 was allocated to the technical account, Funds in Syndicate remains in the non-technical account.

2024$000

2023$000

Emoluments

353

426

10.Distribution and open years of account

A distribution to members of $228.3 million will be proposed in relation to the closing year of account (

2022

) (2023: $314.1 million distribution in relation to the closing year of account (

2021

)).

11.Financial investments

Carrying value

Cost

2024$000

2023$000

2024$000

2023$000

Shares and other variable yield securities and units in unit trusts

17,077

Debt securities and other fixed income securities

2,050,034

2,681,588

2,061,656

2,699,787

Loans and deposits with credit institutions

1,871

1,880

1,871

1,880

Deposits with ceding undertakings

22,989

259,976

22,989

259,976

Derivative assets

2,666

3,061

Syndicate loans to central fund

18,857

27,765

18,857

27,765

Total financial investments

2,113,494

2,974,270

2,122,450

2,989,408

The amount ascribable to listed investments is $2,047,269 (2023: $2,681,588).

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

2024$000

2023$000

Financial assets measured at fair value through profit or loss

2,113,494

2,122,450

Total financial investments

2,113,494

2,122,450

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

351,037

1,109

289,878

(265)

Total

351,037

1,109

289,878

(265)

The functional currency of Syndicate 3500 is US Dollars and consequently it is exposed to foreign exchange movements in currencies other than US Dollars. Syndicate 3500 has foreign currency forward contracts in place to provide protection against the impact of potential adverse fluctuations in exchange rates on Syndicate 3500’s net asset positions.

The foreign currency forward contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are forward exchange rates.

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

2024$000

2023$000

Funds in Syndicate (FIS)

33,247

Total funds in syndicate

33,247

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

17,077

Debt securities and other fixed income securities

2,050,034

Loans and deposits with credit institutions

1,871

Derivative assets

2,666

Syndicate loans to central fund

18,857

Total financial investments

2,051,905

38,600

2,090,505

Derivative liabilities

(1,556)

Total

2,051,905

37,044

2,088,949

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

Debt securities and other fixed income securities

2,681,588

Loans and deposits with credit institutions

261,856

Derivative assets

3,061

Syndicate loans to central fund

27,765

Total financial investments

2,943,444

30,826

2,974,270

Derivative liabilities

(3,326)

Total

2,943,444

27,500

2,970,944

Level 3 Pricing

Level 3 valuation techniques are used by Syndicate 3500 in respect of Lloyd’s central fund loan, foreign exchange forward contracts and equity funds, observable inputs include the historical cost of the loan, strike price of the forwards, the prevailing market foreign exchange rates and net asset valuation statements.

Collateralised Cash and Investments

Syndicate 3500 maintains a collateralised letter of credit facility, Lloyd’s trust funds and overseas deposits in respect of its contractual obligations under which Syndicate 3500 is obliged to collateralise its liabilities. The total amount of collateral provided at 31 December 2024 was $1,377 million (2023: $1,935 million).

12.Debtors arising out of direct insurance operations

2024$000

2023$000

Due within one year

233,118

199,070

Total

233,118

199,070

13.Debtors arising out of reinsurance operations

2024$000

2023$000

Due within one year

293,505

464,085

Total

293,505

464,085

14.Other debtors

2024$000

2023$000

Other

20,073

16,012

Total

20,073

16,012

15.Deferred acquisition costs

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

2024

2023

Gross$000

Reinsurance$000

Net$000

Gross$000

Reinsurance$000

Net$000

Balance at 1 January

6,818

9,217

Amortised deferred acquisition costs

(2,379)

(2,076)

Foreign exchange movements

(140)

(323)

Other

Balance at 31 December

4,299

6,818

16.Claims development

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

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

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

Gross:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

$000

Estimate of gross claims

at end of underwriting year

641,678

one year later

923,121

two years later

947,596

three years later

four years later

five years later

six years later

seven years later

eight years later

nine years later

Estimate of gross claims reserve

23,204,373

Provision in respect of prior years

226,857

Less gross claims paid

560,266

66,277

6,283

20,397,410

Gross claims reserve

123,746

262,073

387,961

637,827

332,099

488,308

92,445

3,033,820

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

1,042,421

1,294,705

1,623,026

1,716,850

426,958

292,304

1,021,233

63,892

183,964

225,440

one year later

2,356,716

2,851,106

3,069,740

3,106,605

956,529

497,786

923,121

59,603

158,722

two years later

2,470,187

3,171,660

3,405,883

3,380,310

1,011,560

630,433

947,596

62,494

three years later

2,620,286

3,248,079

3,458,731

3,575,991

1,119,982

676,033

1,048,574

four years later

2,582,266

3,272,700

3,505,028

3,555,078

1,122,611

626,810

five years later

2,634,807

3,381,059

3,508,917

3,525,240

1,108,817

six years later

2,603,768

3,383,057

3,514,981

3,477,326

seven years later

2,610,265

3,364,868

3,486,164

eight years later

2,621,125

3,345,035

nine years later

2,607,844

Estimate of net claims reserves

2,607,844

3,345,035

3,486,164

3,477,326

1,108,817

626,810

1,048,574

62,494

158,722

225,440

16,147,226

Provision in respect of prior years

146,143

Less net claims paid

2,512,393

3,174,617

3,199,540

3,033,949

887,269

472,328

560,266

17,917

66,277

6,283

13,930,839

Net claims reserve

95,451

170,418

286,624

443,377

221,548

154,482

488,308

44,577

92,445

219,157

2,362,530

17.Technical provisions

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

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Claims outstanding

Balance at 1 January

4,401,513

(1,087,836)

2,962,436

(561,535)

2,400,901

Claims paid during the year

(

)

370,228

(

)

(

)

401,052

(1,200,920)

Expected cost of current year claims

25,307

(3,172)

22,135

47,001

(8,094)

38,907

Change in estimates of prior year provisions

(210,773)

77,141

(

)

(154,719)

42,541

(112,178)

Foreign exchange movements

(33,157)

(27,652)

(60,809)

(77,051)

(18,868)

(95,919)

Other

225,439

3,225,818

(942,932)

2,282,886

Balance at 31 December

3,012,070

(671,290)

4,401,513

(1,087,836)

3,313,677

Included within reinsurers’ share of technical provisions – claims outstanding are amounts recoverable from related companies of $101,055,000 (2023: $125,003,000).

The unwind of discount has been included within the statement of profit or loss - technical account – within claims incurred.

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Unearned premiums

Balance at 1 January

88,487

(17,008)

71,479

117,635

(10,404)

107,231

Premiums written during the year

41,728

(14,534)

27,194

Premiums earned during the year

(31,252)

4,425

(26,827)

(74,565)

8,122

(66,443)

Foreign exchange movements

(1,809)

217

(1,592)

3,689

(192)

3,497

Other

Balance at 31 December

55,426

(12,366)

43,060

88,487

(17,008)

71,479

The initial recognition of reinsurers’ share of unearned premium associated with the reinsurance of new liabilities is recognised in the profit and loss account as a gross up to gross premiums written.

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Other technical provisions

Balance at 1 January

18,060

Movements in provision

4,088

18,060

Foreign exchange movements

(398)

Balance at 31 December

21,750

18,060

Refer to Note 5 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the accounts, to potential movements in the assumptions applied within the technical provisions.

18.Discounted claims

Discounting may be applied to claims provisions where there are individual claims with structured settlements that have annuity-like characteristics.

The claims have been discounted as follows:

Average discounted rates

Average mean term of liabilities

2024

2023

2024

2023

Class of business

Motor (third party liability)

Third party liability

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

221,608

227,290

(109,520)

(111,932)

112,088

115,358

Reinsurers share of total claims

(6,129)

(6,647)

979

1,062

(5,150)

(5,585)

Net claims provisions

215,479

220,643

(108,541)

(110,870)

106,938

109,773

19.Creditors arising out of direct insurance operations

2024

$000

2023Restated*

$000

Due within one year

28,987

53,555

Total

28,987

53,555

20.Creditors arising out of reinsurance operations

2024

$000

2023

Restated*$000

Due within one year

176,312

303,078

Total

176,312

303,078

21.Other creditors

2024$000

2023$000

Derivative liabilities

1,556

3,326

Other liabilities

1,020

27,027

Total

2,576

30,353

22.Cash and cash equivalents

2024$000

2023$000

Cash at bank and in hand

43,685

166,570

Deposits with credit institutions

1,870

1,880

Total cash and cash equivalents

45,555

168,450

Included within cash and cash equivalents are the following amounts which are not available for use by the Syndicate because they are held in FIS.

2024$000

2023$000

Cash at bank and in hand

205

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

205

23.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

168,450

(

)

4,481

45,555

Derivative financial liabilities

(3,326)

18,181

(16,411)

(1,556)

Total

165,124

(

)

(11,930)

43,999

24.Related parties

The managing agent of the syndicate, RiverStone Managing Agency, and the corporate member that provides capital to the syndicate, RiverStone Corporate Capital Limited, are wholly owned subsidiaries of RiverStone Holdings Limited which is registered in England and Wales. The ultimate holding company is RiverStone International Holdings Limited (“RiverStone International”) which is registered in Jersey. The majority of the shares in RiverStone International are held by CVC Capital Partners Strategic Opportunities II LP.

The nature of the transactions with the related parties below was primarily the provision of services and insurance transactions. All transactions are entered into on an arm’s length basis.

The following amounts reflected in the profit and loss were transacted with related parties:

2024

2023

$000

RiverStone Managing Agency Limited

(59,568)

(64,171)

RiverStone International subsidiaries (Insurance)

(8,445)

(618)

Total

(68,013)

(64,789)

The following balance sheet amounts were outstanding at year-end:

2024

2023

$000

RiverStone Managing Agency Limited

(14,326)

(18,157)

RiverStone International subsidiaries (Insurance)

(8,598)

(20,038)

RiverStone International subsidiaries (Other)

(32,452)

Total

(55,376)

(38,186)

25.Post balance sheet events

Effective 1st January 2024, Syndicate 3500 entered into two reinsurance to close transactions resulting in the approximate transfer to Syndicate 3500 of gross and net technical provisions of $323.6 million and $266.9 million respectively.

26.Contingencies and commitments

As at 31 December 2024, there were no outstanding commitments or contingent liabilities (2023: nil).

27.Foreign exchange rates

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

2024

2023

Start of period rate

End of period

rate

Average

rate

Start of period rate

End of period rate

Average

rate

Sterling

0.78

0.80

0.78

0.83

0.78

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

1.35

1.32

1.35

Australian dollar

1.47

1.62

1.52

1.47

1.51

Japanese Yen

140.98

157.16

151.48

131.94

140.98

140.59

28.Funds at Lloyd’s

Every member of Lloyd’s is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (“FAL”). These funds are required primarily in case syndicate assets prove insufficient to meet members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s according to the nature and the amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of that business. FAL is not hypothecated to any specific syndicate participation by a member, therefore there are no specific funds available to a Syndicate which can be precisely identified as its capital. Consequently, no amount has been shown in these financial statements by way of capital reserves. In addition to the FAL and any additional funds a member may introduce to meet losses, there is a Central Guarantee Fund controlled by Lloyd’s which they may utilise to meet any syndicate liabilities that are not met by a member.