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Markel
Syndicate 3000
Annual Report and Financial Statements
for the year ended
Syndicate 3000
Annual Report and Financial Statements
for the year ended
31 December 2024
Contents
Directors and Administration
1
Report of the Directors of the Managing Agent
3
Statement of Managing Agent's Responsibilities
14
Independent Auditor's Report to the Member of Syndicate 3000
15
Statement of profit or loss and other comprehensive income
20
Statement of profit or loss and other comprehensive income
21
Statement of financial position
22
Statement of changes in member's balances
24
Statement of cash flows
25
Notes to the Financial Statements
26
Annual Report and Financial Statements for the year ended
31 December 2024
Directors and Administration
Managing Agent
Board of Directors
John W J Spencer
(Chair)
Wai-Fong Au
Andrew J Davies
Alexander W G Finn
Henry G L Gardener
Nicholas J S Line
Kalpana Shah
Simon Wilson
Company Secretary
Lara Teesdale
Managing Agent’s registered office
20 Fenchurch Street
London
EC3M 3AZ
Managing Agent’s registered number
3114590
Syndicate
3000
Active Underwriter
Nicholas J S Line
Bankers
Bank of New York
Barclays Bank PLC
Citibank N.A.
Royal Bank of Canada
Royal Trust
1
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Investment Managers
Markel Gayner Asset Management LLC
Registered Auditor
KPMG LLP, London
Lawyers
Norton Rose Fulbright LLP, London
Directors' Interest
The Syndicate is supported 100% by Markel Capital Limited ("MCAP") and therefore no Director has any
participation.
Syndicate 3000
2
Annual Report and Financial Statements for the year ended
31 December 2024
Report of the Directors of the Managing Agent
The Directors of the Managing Agent submit the financial statements of
Syndicate 3000 for the year ended
31 December 2024.
This annual report is prepared using the annual basis of accounting as required by Statutory Instrument No
1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 and applicable United Kingdom Accounting Standards, including Financial Reporting Standard 102: The
Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (‘FRS102’) and
Financial Reporting Standard 103: Insurance Contracts (‘FRS103’).
Review of the business
Markel Syndicate 3000 (the “Syndicate”) is the Lloyd’s platform for Markel International which is the
international insurance operations for Markel Group Inc. ("Markel" or “Markel Group”). Markel International
also writes business through Markel International Insurance Company Limited (“MIICL”) and Markel
Insurance SE ("MISE").
The principal activity of the Syndicate is the underwriting of general insurance and reinsurance business from
its offices in London and its overseas operations in Canada, Singapore, Labuan, Hong Kong, Dubai, China,
India and Australia offices.
Business profile and units
The Syndicate operates four underwriting units, namely marine and energy, professional and financial risks
and cyber, specialty and reinsurance.
In Canada, Markel Canada Limited ("Markel Canada"), a wholly owned subsidiary of Markel Group,
underwrites a diverse portfolio of property and casualty coverages for Canadian domiciled insureds, which is
placed through the Syndicate.
Markel Canada provides casualty, environmental liability, professional and financial risks, Markel Connect,
property package, life sciences liability, security and protection industry liability, Markel Care and Markel Play.
Our teams working in Singapore, Hong Kong, Kuala Lumpur, Mumbai, Shanghai, Sydney, Melbourne,
Brisbane and Dubai provides cover for marine and energy, professional and financial risks and cyber, and
trade credit risks throughout the Asia Pacific region.
In Asia, the Syndicate's Singapore office operates as a regional hub, supporting the Labuan and Hong Kong
offices. The Syndicate is also a member of Lloyd's platforms in Dubai, China, Japan, India and Australia.
The Syndicate provides non-life reinsurance to Lloyd's Insurance Company S.A ("Lloyd's Brussels"),
supporting European Economic Area ("EEA") clients. Lloyd’s Brussels is authorised and regulated by the
National Bank of Belgium.
The four operating units are:
Marine and Energy
Marine coverage includes primary and excess coverage for cargo, hull and war, marine, energy liability,
specie, and terrorism risks.
Energy offers coverage on a worldwide basis for all aspects of upstream,
downstream, midstream oil and gas activities. Coverage includes business interruption or loss of production
3
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
income, construction of energy related structures, control of wells and physical damage to installations. The
team also offers coverage for renewable energy sources including coverage for the full life-cycle of onshore
and offshore wind farms and solar photovoltaic installations, from procurement to construction to the
completed operations.
The cargo account comprises a broad portfolio of transit and storage risk across many industries on a
worldwide basis (excluding sanctioned territories). The hull and war account offers a full range of products
on a worldwide basis including marine war, specialist tonnage, builders risks, mortgages interest and port
risks. The marine and energy liability account offers a range of traditional marine liability cover as well as
ports and terminals, marine trades, and energy offshore and onshore coverages. The terrorism account
provides protection on a worldwide basis (excluding sanctioned territories) against physical damage,
business interruption and contingency losses directly caused by acts of war, terrorism, and political violence.
The specie account includes a range of cover for jewellers' block and cash in transit, on a worldwide basis.
Professional and Financial Risks and Cyber
The Professional and Financial Risks team provides cover on a worldwide basis. This team underwrites
professional indemnity, entertainment, financial institutions insurance, commercial directors' and officers'
liability ("D&O"), financial technology ("Fintech") cover, technology and media cover and warranty and
indemnity ("W&I"). The Markel Cyber 360 policy is a standalone primary cyber insurance product. Key
coverages include, privacy breach notification, extortion costs cover, regulatory investigations and fines,
cyber and privacy liability, E-media, and professional and technology services liability.
The professional indemnity account services most core, regulated and miscellaneous professions which
include architects and engineers, insurance brokers, recruitment agents and more.
The entertainment team writes a broad book of film and media insurance. Advertising agents' insurance,
commercial producers' insurance and film production insurance are the mainstays of the book and we are
also able to offer both employers' and public liability for companies involved in film shoots.
Financial institutions insurance can provide cover on a stand-alone basis or as a blended package to include
bankers blanket bond, professional indemnity and D&O, depending on the client's requirements. The cover is
provided on a worldwide basis (excluding sanctioned territories).
Commercial D&O offer market leading products which provide a wide range of coverage to ensure protection
for directors and officers of companies of all types and sizes. It covers companies in the FTSE 100 and the
financial services sector along with non-financial industries as well.
Fintech provides cover for a range of fintech companies, including those offering neo banking, payments,
investech, wealthtech, insurtech and lendtech services. The modular 'FintechRisk+' policy gives clients the
flexibility to choose the covers that suit them, including professional liability, D&O liability, theft and cyber
liability and loss.
Technology and media provides modular cover for clients in the technology and telecommunications field,
specialising in media, film, television, patent/intellectual property insurance, as well as information
technology, telecommunications and cyber/privacy risks.
Warranty and indemnity provides cover to clients in mergers and acquisitions, including both funds and
corporations. It covers transactions across most sectors and specialise in professional services, financial
institutions, technology, media, consumer and energy.
Syndicate 3000
4
Annual Report and Financial Statements for the year ended
31 December 2024
International Specialty
Trade Credit and Policital Risk
Our trade credit and political risk teams have extensive experience and knowledge of commercial
counterparty and country risks across a wide variety of trade sectors and markets. The key benefits we
provide for our clients include: security of non-cancellable credit and country limits; balance sheet and cash
flow protection; improved terms for bank financing facilities; and bonds and guarantees to assist with
working capital management.
The trade credit team specialises in insurance solutions with a focus on risk management, providing
insurance coverage to help protect businesses. Coverage includes prepayment cover, insolvency and default,
trade finance solutions, captive reinsurance, syndicated co-insurance solutions and financial institutions.
The political risk team works with clients to manage their cross-border portfolios and overseas investments
with tailored, specialist policies. The key clients include financial institutions, corporates, exporters, and
traders. The account has a broad range of coverage including insolvency or default by either a public or
privately owned entity, licence cancellation, aircraft and vessel repossession, mortgage rights insurance and
currency inconvertibility and exchange transfer.
Equine and Livestock
The equine account offers a wide portfolio of products including bloodstock and equine liability to suit a
broad range of risks, from large stud farms to individual horses.
The livestock account provides a wide range of cover including farm combined, mortality, disease and
business interruption across farm, zoo and other animal interests.
International Casualty
In 2024, Markel launched additional products to support the needs of insureds offering bespoke wordings on
a primary and excess basis, covering environmental liability, general liability, clinical trials, and life sciences.
Clinical trials policies are offered to a number of organisations, including research organisations, universities,
clinical trial sponsors and sites, as well as providing cover for investigator-led studies and charities' clinical
trial exposures.
Markel offers life science insurance for a number of different markets, including but not limited to
pharmaceuticals, medical devices, research and development companies, biotechnology companies, as well
as laboratory exposures and cosmetics.
Reinsurance
This unit includes international casualty treaty, professional lines treaty and specialty treaty business.
The casualty treaty team underwrites a diversified account, including general liability, employers’ liability, and
motor.
Professional liability treaty provides management and professional liability coverage, including medical
malpractice and transaction liability.
Specialty treaty reinsurance provides A&H, aviation, space and marine & energy coverage.
5
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Results and performance
The results for the year, as set out on page 21, show a profit for the financial year of £145.7m (
2023,
£89.5m profit).
As set out on page 7, the underwriting result is a profit of £113.4m (
2023, £52.5m profit). There was an
improvement in the claims loss ratio during the year which was driven by favourable development on prior
year claims reserves.
In the year-ended 31 December 2023, the Syndicate entered into a deal with Marco Capital Ltd for the loss
portfolio transfer (“LPT”) in relation to its UK Motor PPO portfolio with ceded premium totaling £77.8m. A
reinsurance recoverable of £66.7m and ceded commissions of £0.4m were booked in relation to the deal,
resulting in a total underwriting loss of £11.5m.
The investment return was a profit of £38.1m (
2023, £43.3m profit) generating a yield of 4.0% on the
investment portfolio, compared to a yield of
4.1% in
2023. This was primarily driven by favourable price
increases for the Syndicate’s fixed maturity portfolio.
The profit for the financial year of £145.7m (
2023,
£89.5m profit) reflects the underwriting profit described
above and the favourable investment return.
Syndicate 3000
6
Annual Report and Financial Statements for the year ended
31 December 2024
Key Performance Indicators
We set out below our financial key performance indicators. We do not use non-financial key performance
indictors to manage the performance of the Syndicate.
2020
£'m
2021
£'m
2022
£'m
2023
£'m
2024
£'m
Gross written premiums
521.9
482.6
623.6
701.5
785.5
Net written premiums
456.3
406.1
498.2
479.6
619.2
Retention rate
87.4%
84.1%
79.9%
68.4%
78.8%
Net earned premiums
464.4
409.0
465.3
452.6
580.5
Net underwriting profit/(loss)
(145.2)
20.0
(1.6)
52.5
113.4
Claims loss ratio
91.3%
54.5%
61.6%
40.0%
34.9%
Expense ratio
40.0%
40.6%
38.7%
48.4%
45.7%
Combined ratio
131.3%
95.1%
100.3%
88.4%
80.6%
Investment return
33.7
(9.6)
(50.1)
43.3
38.1
Investment yield
3.6%
(0.8)%
(4.2)%
4.1
%
4.0%
Profit/(loss)
(114.0)
10.5
(38.9)
89.5
145.7
Statement of Financial Position
2020
£'m
2021
£'m
2022
£'m
2023
£'m
2024
£'m
Financial investments and cash
942.5
968.1
1,030.9
1,031.9
1,038.9
Gross claims outstanding
1,184.6
1,146.5
1,310.5
1,223.1
1,231.7
Reinsurers' share of claims outstanding
134.5
184.4
256.2
303.5
360.7
Net claims outstanding
1,050.1
962.1
1,054.4
919.6
871.0
Three Year Accounting Data
2020
£'m
2021
£'m
2022
£'m
2023
£'m
2024
£'m
Syndicate Capacity
475.0
486.0
500.0
645.5
736.0
Underwriting result
(60.5)
29.8
105.0
Investment result
(17.0)
12.2
21.7
Result on closure
(77.5)
42.0
126.7
Forecast return at 12 months
0.5%
6.3%
6.8%
12.0%
11.2%
Forecast return at 24 months
0.4%
9.7%
15.9%
15.3%
Return on capacity at closure
(16.3)%
8.6%
25.3%
7
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Underwriting profit of £39.1m over the five year period of 2020 –
2024, generated an average combined
ratio of 98.4%:
The 2020 year was impacted by £152.7m of COVID-19 losses and £18.4m of natural catastrophe losses
on the Derecho storms and Hurricane Laura.
The 2021 year was impacted by £8.2m of natural catastrophe losses, a £7.6m deterioration on the
COVID-19 loss estimates and £4.6m of loss estimates for the South Africa Riots large loss.
The 2022 year was impacted by losses on the Russia Ukraine conflict of £3.8m and a £15.7m
deterioration on the COVID-19 loss estimates. In response to the high inflation environment experienced
there was also an additional £14.8m of reserve loadings included in the losses reported. Partially
offsetting the adverse experience are releases from prior year reserves of £13.6m.
The 2023 year was impacted by prior year reserve releases of £42.6m as a result of favourable claims
development. This is partially offset by £9.4m of net catastrophe losses.
The 2024 year was impacted by prior year reserve releases of £70.2m as a result of more favourable
claims development than originally anticipated, slightly offsetting this were £11.4m of net catastrophe
losses
.
Excluding COVID-19, the Russia Ukraine conflict and natural catastrophe losses there was an underwriting
profit over the five year period of 2020 –
2024 of £275.2m, generating an average combined ratio of 88.4%.
The underwriting performance includes results of business lines that were exited in 2018 and 2020 (Open
Market Property, Contingency) or heavily restructured (Marine). The COVID-19 losses were predominantly
driven by event cancellation impacting our Contingency book. During 2020 the decision was taken to exit this
class of business as part of our underwriting assessment.
Profit of £92.8m over the period 2020 to
2024 is a result of favourable claims development and high
investment returns. An average return on capacity of 7.1% for the 2002 to 2022 closed years of account.
Events since the reporting date
There have been no material events since the reporting date.
Syndicate 3000
8
Annual Report and Financial Statements for the year ended
31 December 2024
Going concern and future outlook
The capital position is subject to internal stress testing
and the Syndicate continues to monitor and take
necessary underwriting actions on its future business. There is no intention to liquidate the Syndicate or to
cease its operations. The 2025 year of account has been established and the Directors expect to establish a
2026 year of account, and are not aware of any reason why this will not be possible. They have also
concluded that the Syndicate’s financial position means that this is realistic. Where there are any short term
liquidity requirements there is support from the Group, as Markel Group has made available a loan facility to
Syndicate 3000. As a result, the Directors have concluded that there are no material uncertainties that could
cast significant doubt over the Syndicate’s ability to continue as a going concern for at least a year from the
date of approval of the financial statements (“the going concern period”).
With disciplined underwriting and a strong asset base, inclusive of the Funds at Lloyd's supporting the
Syndicate's underwriting, the Syndicate is in an excellent position to capitalise on opportunities as they arise.
The Syndicate will continue to apply Markel’s underwriting discipline of underwriting for profit rather than
volume and, accordingly, will decline business where the rates are not acceptable.
The Syndicate will continue to look to develop new lines of business and markets, within the parameters of
the overall underwriting strategy. The Syndicate invests in high-quality corporate, government and municipal
bonds as well as a diverse equity portfolio and plans to continue this investment strategy in 2025.
The Syndicate capacity for the 2025 year of account has increased to £860.9m (2024, £736.0m).
9
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Principal risks and uncertainties
The Syndicate has a risk register detailing the risks to which it is exposed, which includes all business
underwritten by the Syndicate. Risks are grouped under the following categories:
• Underwriting Risk
• Reserving Risk
• Asset Risk
• Credit Risk
• Liquidity Risk
• Solvency Capital Risk
• Operational Risk
The risk and capital management note (note 4) provides a detailed explanation of the above risk categories.
The risks arising from climate change, and Lloyd's of London’s response to it, are multifaceted, occur over an
extended time horizon and are dependent on the severity of the changes in the climate. These risks continue
to develop and the relative impact will be dependent on a number of aspects such as industry changes,
Government policy changes and the speed with which those changes are implemented.
The Board has ultimate responsibility for the Syndicate's approach to responsible business which includes
consideration of climate risks. The Board approved the establishment of a special purpose ‘Responsible
Business Committee’, to report directly to the Board during the 2024 calendar year. The Responsible
Business Committee considers environmental matters, including the impact of these on the Syndicate’s
business, and the impact of the Syndicate’s business on the environment.
Climate risk can be broadly divided into three categories: physical, transition and liability. Physical risk relates
to the change in climate and weather events which have the potential to directly affect the economy. This
includes the risk of higher claims as a result of more frequent and more intense natural catastrophes.
Scenario analysis of differing levels of claims are included within our standard underwriting risk assessment.
Transition risk can occur when moving towards a lower carbon economy and how the speed of the transition
may affect certain sectors and affect financial stability. Liability risk refers to potential increased litigation
against policyholders from individuals or businesses who have experienced losses because of physical or
transition risk.
Potential risks are regularly reviewed by the Risk, Capital and Compliance Committee and risks are addressed
within the underwriting, risk and audit functions, although Responsible Business activity is not segregated
from the other work of these functions, but rather embedded in their operations.
The risks arising from inflation, the impact it has on the economy and the insurance industry’s response to it
form a key consideration going forward. Inflation risks in the current environment are influenced by both
short-to-mid term trends (e.g. the state of the economy, geopolitical events and cybercriminal activity), as
well as by long-term trends (e.g. social/excess inflation, other frequency events such as the impact of new
technology, safety improvements and other severity effects such as repair cost changes out of line with
Retail Price Index/Consumer Price Index). We have considered recent trends in inflation throughout our
strategic planning and business management activities. The impacts of inflation on open years of account as
well as on subsequent years are regularly assessed and considered, with actions and measures presented to
the Risk, Capital and Compliance Committee but equally to key committees regarding Claims, Reserving and
Finance.
The current global landscape is marked by heightened geopolitical tensions and uncertainties. Factors such
as international conflicts, trade disputes, and political instability in key regions can disrupt markets, interrupt
supply chains, affecting the syndicate’s investment returns, and also leading to increased insurance claims.
Additionally, regulatory changes and sanctions can impact our ability to operate in certain jurisdictions. We
Syndicate 3000
10
Annual Report and Financial Statements for the year ended
31 December 2024
monitor developments in these areas and adjust our risk management and business strategies to mitigate
against the potential adverse effects that such events may have on the syndicate. The potential impacts of
changes in the geopolitical environment are regularly assessed and considered, with actions and measures
presented to the Risk, Capital and Compliance Committee but equally to the Underwriting and Finance
Committees.
There are currently 32 risks in the Risk Register. Each risk has an allocated Risk Owner and Risk Manager.
The Risk Owner is responsible for identifying the risks associated with their objectives, assessing the impact
of those risks on their objectives, acting where necessary to mitigate those risks, including (but not limited
to) reporting on appropriate metrics to measure the success and risks related to the achievement of their
objectives. The Risk Manager is responsible for supporting the Risk Owner assess the performance of their
risk and ensure that there is an adequate level of control in place by making recommendations to the Control
Owners. A quarterly confirmation is sought from the Control Owners of these controls to confirm the
effectiveness of the design and operation of their controls.
The Risk, Capital and Compliance Committee meets quarterly to consider compliance with the Board’s risk
appetite and Key Risk Indicators and any risk issues that have arisen. These are summarised in the Chief
Risk Officer's quarterly report to the Board.
An Own Risk and Solvency Assessment report is produced at least annually which is a forward-looking
assessment of the risk profile and adequacy of the Syndicate's capital to meet solvency needs over the
business planning time horizon. The Syndicate is in compliance with Solvency II regulation.
11
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Directors
The Directors of the Managing Agent who served during
2024 and up to the date of this report were as
follows:
John W J Spencer
(Chair)
Wai-Fong Au
Andrew J Davies
Alexander W G Finn
(Appointed 11/01/2024)
Henry G L Gardener
Nicholas J S Line
Kalpana Shah
Anne Whitaker
(Resigned 30/04/2024)
Simon Wilson
Markel maintains liability insurance cover on behalf of the Directors and named officers of the Managing
Agent.
The Syndicate is supported 100% by MCAP and therefore no Director has any participation.
Corporate governance
Markel Syndicate Management Limited ("MSM"), the Lloyd's Managing Agent of the Syndicate, is authorised
by the Prudential Regulation Authority ("PRA"). The Board includes four non-executive Directors and meets
at least quarterly. Sub-committees of the Board include the Executive Committee, Audit Committee, Risk,
Capital and Compliance Committee, Reserving Committee, Finance Committee, Remuneration Committee,
Nominations Committee, Outsourcing Committee and Responsible Business Committee. A number of
Management Committees, including Committees with a divisional focus, report to the Executive Committee.
Financial instruments and risk management
Information on the use of financial instruments by the Syndicate and its management of financial risk is
disclosed in note 4 of the financial statements. In particular, the Syndicate's exposures to price risk, credit
risk and liquidity risk are separately disclosed in that note. The Syndicate's exposure to cash flow risk is
addressed under the headings of 'Asset risk', 'Credit risk' and 'Liquidity risk'.
Carbon policy
As set out in the “Markel Style”, the Syndicate has a commitment to its communities, which we recognise
includes environmental responsibilities. Our goal is to minimise our environmental impact whilst still adhering
to our other principles as expressed in the "Markel Style" and our company profile. The "Markel Style" is a
statement of Markel’s core values which underpin how we do business, influence our behaviour, and govern
our actions.
Through the development of best practices in our business, the Syndicate aims to use no more consumables
than are necessary and recycle the maximum of those we do use. The Directors also believe that embedding
environmental awareness throughout the organisation will be best achieved through a continuous program of
employee education.
Syndicate 3000
12
Annual Report and Financial Statements for the year ended
31 December 2024
Disclosure of information to the Auditor
The Directors of the Managing Agent who held office at the date of approval of this Report of the Managing
Agent confirm that, so far as they are each aware, there is no relevant audit information of which the
Syndicate’s Auditor is unaware; and each Director has taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit information and to establish that the Syndicate’s
Auditor is aware of that information.
Auditor
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd's Syndicate and
Aggregate Accounts) Regulations 2008, the auditor will be deemed to be reappointed and
KPMG LLP will
therefore continue in office.
Annual general meeting
As permitted under the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the sole corporate
member has agreed that no annual general meeting will be held for the Syndicate.
By order of the Board,
Andrew Davies
Director
London
03 March 2025
13
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of Managing Agent's Responsibilities
The Directors of the Managing Agent are responsible for preparing the Syndicate financial statements in
accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the
Directors of the Managing Agent to prepare Syndicate financial statements at 31 December for each financial
year. Under that law they have elected to prepare the financial statements in accordance with UK accounting
standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 the Financial
Reporting Standard applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 the
Directors of the Managing Agent must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Syndicate and of the profit or loss of the Syndicate
for that period. In preparing these financial statements, the Directors of the Managing Agent are required to:
• select suitable accounting policies which are applied consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
• assess the Syndicate's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern;
• use the going concern basis of accounting unless they either intend to cease trading, or have no realistic
alternative but to do so; and
• oversee the preparation and review of the iXBRL tagging that has been applied to the Syndicate Accounts
in accordance with the instructions issued by Lloyd’s, including designing, implementing and maintaining
systems, processes and internal controls to result in tagging that is free from material non-compliance with
the instructions issued by Lloyd’s, whether due to fraud or error.
The Directors of the Managing Agent are responsible for keeping adequate accounting records that are
sufficient to show and explain the Syndicate’s transactions and disclose with reasonable accuracy at any time
the financial position of the Syndicate and enable them to ensure that the Syndicate financial statements
comply with the Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations
2008. They are responsible for such internal control as they determine is necessary to enable the preparation
of Syndicate financial statements that are free from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets
of the company and to prevent and detect fraud and other irregularities.
The Directors of the Managing Agent are responsible for the maintenance and integrity of the Syndicate and
financial information included on the Syndicate’s website. Legislation in the UK governing the preparation
and dissemination of Syndicate financial statements may differ from legislation in other jurisdictions
.
By order of the Board,
Andrew Davies
Director
London
03 March 2025
Syndicate 3000
14
Annual Report and Financial Statements for the year ended
31 December 2024
Independent Auditor's Report to the Member of
Syndicate
3000
Opinion
We have audited the Syndicate financial statements of
Syndicate 3000 ("the Syndicate") for the year ended
31 December 2024 which comprise the Statement of Profit or Loss and Other Comprehensive Income,
Statement of Financial Position, Statement of Changes in Members’ Balances, Statement of Cash Flows, and
related notes, including the accounting policies in note 2.
In our opinion the Syndicate financial statements:
•
give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2024 and of
its profit for the year then ended;
•
have been properly prepared in accordance with UK accounting standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland; and
•
have been prepared in accordance with the requirements of the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and Sections 1 and 5 of the Syndicate
Accounts Instructions Version 2.0 issued by Lloyd’s, as modified by the Syndicate Accounts
Frequently Asked Questions Version 1.1 dated 18 February 2025 issued by Lloyd’s (together “the
Syndicate Accounts Instructions”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”),
applicable law, and, under the terms of our engagement letter dated 17 November 2022, the Syndicate
Account Instructions. Our responsibilities are described below. We have fulfilled our ethical responsibilities
under, and are independent of the Syndicate in accordance with, UK ethical requirements including the FRC
Ethical Standard as applied to other entities of public interest. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion.
Going concern
The Directors of the Managing Agent (“the Directors”) have prepared the Syndicate financial statements on
the going concern basis as they do not intend to cease underwriting or to cease its operations, and as they
have concluded that the Syndicate’s financial position means that this is realistic. They have also concluded
that there are no material uncertainties that could have cast significant doubt over its ability to continue as a
going concern for at least a year from the date of approval of the Syndicate financial statements (“the going
concern period”).
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s business
model and analysed how those risks might affect the Syndicate’s financial resources or ability to continue
operations over the going concern period, including reviewing correspondence with Lloyd’s to assess whether
there were any known impediments to establishing a further year of account.
Our conclusions based on this work:
•
we consider that the Directors’ use of the going concern basis of accounting in the preparation
of the Syndicate financial statements is appropriate; and
•
we have not identified, and concur with the Directors’ assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast significant doubt
on the Syndicate’s ability to continue as a going concern for the going concern period.
15
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
However, as we cannot predict all future events or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the time they were made, the
above conclusions are not a guarantee that the Syndicate will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that
could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk
assessment procedures included:
•
Enquiring of directors, the audit committee, internal audit, legal, risk and compliance,
management and inspection of policy documentation as to the Syndicate and Managing Agent’s high-
level policies and procedures to prevent and detect fraud including the internal audit function, and
the Syndicate and Managing Agent’s channel for “whistleblowing”, as well as whether they have
knowledge of any actual, suspected or alleged fraud.
•
Reading board, audit committee and other relevant meeting minutes.
•
Considering remuneration incentive schemes.
•
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of
fraud throughout the audit.
As required by auditing standards, and our overall knowledge of the control environment, we perform
procedures to address the risk of management override of controls, in particular the risk that management
may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates
and judgements such as incurred but not reported (“IBNR”) reserves. On this audit we do not believe there
is a fraud risk related to revenue recognition because of the limited estimation involved in accruing premium
income.
We did not identify any additional fraud risks.
We performed procedures including:
•
Identifying journal entries to test based on risk criteria and comparing the identified entries to
supporting documentation. These included entries posted with key words, entries with unauthorised
users, entries to seldom used accounts, entries posted by users who have left the company, post-
closing entries, entries posted by senior management and cash management entries.
•
Assessing whether the judgements made in making accounting estimates are indicative of a
potential bias including assessing the appropriateness and consistency of the methods and
assumptions used for reserving. For a selection of classes of business we considered to be high risk,
we performed alternative reprojections to the actuarial best estimate using our own gross loss ratios
and compared these to the Syndicate’s results, assessing the results for evidence of bias.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on
the Syndicate financial statements from our general commercial and sector experience, and through
discussion with the directors and others management (as required by auditing standards), and from
inspection of the Syndicate and Managing Agent’s regulatory and legal correspondence. We discussed with
the directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Syndicate is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements. We communicated
identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
Syndicate 3000
16
Annual Report and Financial Statements for the year ended
31 December 2024
The potential effect of these laws and regulations on the Syndicate financial statements varies considerably.
Firstly, the Syndicate is subject to laws and regulations that directly affect the Syndicate financial statements
including financial reporting legislation (such as the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounts Instructions) and we assessed the
extent of compliance with these laws and regulations as part of our procedures on the related Syndicate
financial statements’ items.
Secondly, the Syndicate is subject to many other laws and regulations where the consequences of non-
compliance could have a material effect on amounts or disclosures in the Syndicate financial statements, for
instance through the imposition of fines or litigation or the loss of the Syndicate’s capacity to operate. We
identified the following areas as those most likely to have such an effect: regulatory capital requirements,
corruption and bribery, recognising the regulated nature of the Syndicate’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and
regulations to enquiry of the directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected
some material misstatements in the Syndicate financial statements, even though we have properly planned
and performed our audit in accordance with auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit
procedures are designed to detect material misstatement. We are not responsible for preventing non-
compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Other information - Report of the Directors of the Managing Agent
The Directors are responsible for the Report of the Directors of the Managing Agent. Our opinion on the
Syndicate financial statements does not cover that report and we do not express an audit opinion or, except
as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the Report of the Directors of the Managing Agent and, in doing so, consider
whether, based on our Syndicate financial statements audit work, the information therein is materially
misstated or inconsistent with the Syndicate financial statements or our audit knowledge. Based solely on
that work:
•
we have not identified material misstatements in the Report of the Directors of the Managing
Agent;
•
in our opinion the information given in the Report of the Directors of the Managing Agent is
consistent with the Syndicate financial statements; and
•
in our opinion the Report of the Directors of the Managing Agent has been prepared in
accordance with the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008.
17
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Matters on which we are required to report by exception
Under the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, we
are required to report to you if, in our opinion:
•
adequate accounting records have not been kept on behalf of the Syndicate; or
•
the Syndicate financial statements are not in agreement with the accounting records; or
•
certain disclosures of Managing Agent’s emoluments specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Responsibilities of the Directors of the Managing Agent
As explained more fully in their statement set out on page 14, the Directors of the Managing Agent are
responsible for: the preparation of the Syndicate financial statements in accordance with the requirements of
the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the
Syndicate Accounts Instructions, and for being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of Syndicate financial statements that are
free from material misstatement, whether due to fraud or error; assessing the Syndicate’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern
basis of accounting unless they either intend to cease operations, or have no realistic alternative but to do
so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the Syndicate financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an
auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the
Syndicate financial statements.
A
fuller
description
of
our
responsibilities
is
provided
on
the
FRC’s
website
at
www.frc.org.uk/auditorsresponsibilities.
The Directors of the Managing Agent are required, under the Syndicate Accounts Instructions, to include
these financial statements within a document to which XBRL tagging has been applied. This auditor’s report
provides no assurance over whether the XBRL tagged document has been prepared in accordance with those
requirements.
Syndicate 3000
18
Annual Report and Financial Statements for the year ended
31 December 2024
The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Syndicate’s members, as a body, in accordance with the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the terms of our engagement
letter by the Managing Agent. Our audit work has been undertaken so that we might state to the Syndicate’s
members those matters we are required to state to them in an auditor’s report and the further matters we
are required to state to them in accordance with the terms agreed with the Managing Agent and for no other
purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Syndicate and the Syndicate’s members, as a body, for our audit work, for this report, or for the
opinions we have formed.
Timothy Butchart (Senior Statutory Auditor)
for and on behalf of
KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
03 March 2025
19
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of profit or loss and other comprehensive income
Technical account - General business
For the year ended
31 December 2024
2024
2023
Notes
£'000
£'000
Gross premiums written
5
Outward reinsurance premiums
(166,224 )
(221,892 )
Premiums written, net of reinsurance
Changes in unearned premium
17
Change in the gross provision for unearned premium
(51,864 )
(30,674 )
Change in the provision for unearned premiums reinsurers' share
Net change in provisions for unearned premiums
(38,749 )
(27,017 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
9
Claims paid
17
Gross amount
(279,824 )
(325,790 )
Reinsurers' share
Net paid claims
(230,656 )
(277,063 )
Change in the provision for claims
17
Gross amount
(25,019 )
Reinsurers' share
Net change in provision for claims
Claims incurred, net of reinsurance
(202,014 )
(181,113 )
Net operating expenses
6
(265,128 )
(218,979 )
Balance on the technical account - general business
The notes on pages 26 to 60 form part of these financial statements.
Syndicate 3000
20
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of profit or loss and other comprehensive income
Non-Technical Account
for the year ended
31 December 2024
Notes
2024
£'000
2023
£'000
Balance on the technical account - general business
Investment income
9
Realised gains/(losses) on investments
9
Unrealised gains/(losses) on investments
9
Investment expenses and charges
9
(2,337 )
(2,284 )
Total investment return
Allocated investment return transferred to the general business technical
account
(38,063 )
(43,322 )
Gain/(loss) on foreign exchange
(5,732 )
(6,385 )
Profit/(loss) for the financial year
Other comprehensive income
Currency translation gain/(loss)
Total comprehensive income/(loss) for the year
The notes on pages 26 to 60 form part of these financial statements.
21
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of financial position
as at
31 December 2024
2024
2023
Notes
£'000
£'000
Financial investments
11
Deposits with ceding undertakings
Investments
Provisions for unearned premiums
17
Claims outstanding
17
Reinsurers' share of technical provisions
Debtors arising out of direct insurance operations
12
Debtors arising out of reinsurance operations
13
Other debtors
14
Debtors
Cash at bank and in hand
22
Other assets
Accrued interest and rent
Deferred acquisition costs
15
Other prepayments & accrued income
Prepayments and accrued income
Total Assets
The notes on pages 26 to 60 form part of these financial statements.
Syndicate 3000
22
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of financial position (cont'd)
as at
31 December 2024
2024
2023
Notes
£'000
£'000
Members' balance
Total Capital and reserves
Provisions for unearned premiums
17
Claims outstanding
17
Technical provisions
17
Creditors arising out of direct insurance operations
19
Creditors arising out of reinsurance operations
20
Other creditors including taxation and social security
21
Creditors
Accruals and deferred income
Total Liabilities
Total liabilities, capital and reserves
The notes on pages 26 to 60 form part of these financial statements.
The Syndicate financial statements on pages 20 to 60 were approved by the Board of Directors on
03 March
2025 and were signed on behalf of Markel Syndicate Management Limited by Andrew Davies, Company
Director.
Andrew Davies
Director
London
03 March 2025
23
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of changes in member's balances
for the year ended
31 December 2024
2024
£'000
2023
£'000
Members' balances brought forward at 1 January
(121,716 )
Total comprehensive income/(loss) for the year
Payments of profit to members' personal reserve funds
(42,025 )
Losses collected in relation to distribution on closure of underwriting year
Members' balance carried forward at
31 December
The notes on pages 26 to 60 form part of these financial statements.
Syndicate 3000
24
Annual Report and Financial Statements for the year ended
31 December 2024
Statement of cash flows
for the year ended
31 December 2024
2024
2023
Note
£'000
£'000
Cash flows from operating activities
Profit/(loss) for the financial year
Adjustments
Increase/(decrease) in gross technical provisions
(12,813 )
Increase/(decrease) in reinsurers' share of gross technical provisions
(66,776 )
(62,743 )
Increase/(decrease) in debtors
(39,451 )
(39,060 )
Increase/(decrease) in creditors
(39,823 )
(14,583 )
Investment return
(38,063 )
(43,322 )
Foreign exchange
Net cash flows from operating activities
(82,900 )
Net cash flows from investing activities
Purchases of equity and debt instruments
(1,476,697 )
(1,056,499 )
Sale of equity and debt instruments
Investment income received
Other
Net cash flow from investing activities
(3,035 )
Cashflow from financing activities
Distribution of profit
(42,025 )
Collection of losses
Net cash flows from financing activities
(42,025 )
Net increase/(decrease) in cash and cash equivalents
(8,408 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(2,534 )
(5,871 )
Cash and cash equivalents at the end of the year
22
The notes on pages 26 to 60 form part of these financial statements.
25
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Notes to the Financial Statements
1
Statement of compliance and basis of preparation
The financial statements have been prepared in accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in
the United Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS
102), Financial Reporting Standard 103 (FRS 103) in relation to insurance contracts, and the Lloyd’s
Syndicate Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version
1.1 issued by Lloyd’s.
The financial statements have been prepared on the historical cost basis, except for financial assets
at fair value through profit or loss that are measured at fair value.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
The Syndicate presents its financial statements in sterling (the 'reporting currency') since they are
subject to regulation in the United Kingdom. Items included in the financial statements are measured
using the currency of the primary economic environment in which the entity operates (the 'functional
currency'). The functional currency of the Syndicate is US dollars.
During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and
standardise financial reporting across the market. As a result, certain comparative information has
been reclassified to ensure consistency with current year presentation and compliance with the
Lloyd's Syndicate Accounts Instructions. The changes comprise:
a) Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain
unchanged.
b) Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items
have been aggregated or disaggregated within the financial statements and related notes. This
includes the presentation of realised and unrealised gains and losses on investments, which are now
shown on a disaggregated basis in the Non- technical account of the Statement of profit or loss and
other comprehensive income.
Going Concern
The Directors have continued to review the capital position, business plans, liquidity and operational
resilience of the Syndicate. The capital position is subject to internal stress testing and the Syndicate
continues to monitor and take necessary underwriting actions on its future business. There is no
intention to liquidate the Syndicate or to cease its operations. The 2025 year of account has been
established and the Directors expect to establish a 2026 year of account, and are not aware of any
reason why this will not be possible. They have also concluded that the Syndicate’s financial position
means that this is realistic. Where there are any short term liquidity requirements there is support
from the Group, as Markel Group has made available a loan facility to Syndicate 3000. As a result,
the Directors have concluded that there are no material uncertainties that could cast significant
doubt over the Syndicate’s ability to continue as a going concern for at least a year from the date of
approval of the financial statements (“the going concern period”).
Syndicate 3000
26
Annual Report and Financial Statements for the year ended
31 December 2024
2
Significant accounting policies
The following significant accounting policies have been applied in the preparation of these financial
statements and are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
2.1 Insurance contracts
Insurance contracts are those contracts that transfer significant insurance risk. The significance of
insurance risk is dependent on both the probability of an insured event and the magnitude of its
potential effect to the policyholder. Once a contract has been classified as an insurance contract, it
remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces
significantly during this period.
2.1.1 Underwriting results
The underwriting result is determined using an annual basis of accounting, whereby the incurred
cost of claims, commission and expenses are charged against the earned proportion of premiums,
net of reinsurance.
2.1.2 Premiums
Premiums written relate to direct and inwards reinsurance business incepted during the year,
together with any difference between booked premiums for prior years and those previously
accrued, and include estimates of premiums not yet due or notified. Premiums are shown gross of
brokerage payable and exclude taxes and duties levied on them. Reinstatement premiums on
inwards business are accreted to the technical account on a pro-rata basis over the term of the
original policy to which they relate.
2.1.3 Provision for unearned premiums
Unearned premiums represent the proportion of premiums written in the year that relates to
unexpired terms of policies in force at the reporting date, calculated on the basis of established
earnings patterns or time apportionment as appropriate. The movement in the provision is taken to
the technical account in order that revenue is recognised over the period of the risk. In the opinion
of the Directors, the resulting provision is not materially different from one based on the pattern of
incidence of risk.
2.1.4 Acquisition costs
Acquisition costs, which represent commission and underwriters' staff costs related to the production
of business, are deferred and amortised over the period in which the related premiums are earned.
Deferred acquisition costs relate to subsequent financial periods and are deferred to the extent that
they are recoverable out of future revenue.
27
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
2.1.5 Provision for unexpired risks
A provision for unexpired risks is made where claims, related expenses and deferred acquisition costs
likely to arise after the end of the financial year in respect of contracts concluded before that date
were expected to exceed the unearned premiums receivable under these contracts. Provision for
unexpired risks is calculated separately by class and includes an allowance for investment income.
Unexpired risk surplus and deficits are offset where, in the opinion of the Directors, the business
classes concerned are managed together. In such cases, a provision for unexpired risks is made only
where there is an aggregate deficit.
2.1.6 Claims
Claims incurred comprise claims and claims handling expenses paid in the year and the change in
provisions for outstanding claims, including provisions for claims incurred but not reported (‘IBNR’)
and related expenses, together with any adjustments to claims from prior years.
Outstanding claims represent the estimated ultimate cost of settling all claims arising from events
which have occurred up to the date of the statement of financial position, including IBNR, less any
amounts paid in respect of those claims. The Syndicate does not discount its liabilities for unpaid
claims, with the exception of period payments orders (“PPOs”). The discount rate used is based upon
an investment return expected to be earned by financial assets which are appropriate in value and
duration to match the provisions for insurance contract liabilities being discounted during the period
expected before the final settlement of such claims.
Claims provisions are established on an individual class of business basis. Management conducts a
quarterly review of each class of business. Claims are projected to the ultimate position and
provision is made for known claims and claims IBNR. Adjustments to the amounts of the claims
provisions established in prior years are reflected in the technical account for the period in which the
adjustments are made.
2.1.7 Reinsurance
Reinsurance premiums ceded and reinsurance recoveries on claims incurred are included in the
respective expense and income accounts. Reinsurance outwards premiums are earned according to
the nature of the cover. ‘Losses occurring during’ policies are earned evenly over the policy period.
‘Risks attaching’ policies are expensed on the same basis as the inwards business being protected.
Reinsurance assets include amounts recoverable from reinsurance companies for paid and unpaid
claims and loss adjustment expenses, and ceded unearned premiums. Amounts recoverable from
reinsurers are calculated with reference to the claims liability associated with the reinsured risks.
Revenues and expenses arising from reinsurance agreements are therefore recognised in accordance
with the underlying risk of the business reinsured.
If a reinsurance asset is impaired the Syndicate reduces its carrying amount accordingly, and will
immediately recognise the impairment loss in the technical account. A reinsurance asset will be
deemed to be impaired if there is objective evidence, as a result of an event that occurred after
initial recognition of that asset, that the Syndicate may not receive all amounts due to it under the
terms of the contract, and that the event has a reliably measurable impact on the amounts that the
Syndicate will receive from the reinsurer.
Reinstatement premiums on outwards business are accreted to the technical account on a pro-rata
basis over the term of the original policy to which they relate.
Syndicate 3000
28
Annual Report and Financial Statements for the year ended
31 December 2024
2.1.8 Net operating expenses
Underwriting acquisition costs, general overheads and other expenses are charged as incurred to the
technical account, net of the change in deferred acquisition costs.
2.2 Financial assets and liabilities
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions
of International Accounting Standard ("IAS 39") Financial Instruments: Recognition and
Measurement (as adopted for use in the UK).
2.2.1 Classification
The accounting classification of financial assets and liabilities determines the way in which they are
measured and changes in those values are presented in the Statement of Profit or Loss. Financial
assets and liabilities are classified upon initial recognition. Subsequent reclassifications are permitted
only in restricted circumstances.
Financial assets and financial liabilities are classified fair value through profit and loss comprise
financial assets and financial liabilities held for trading and those designated as such on initial
recognition. Investments in shares and other variable yield securities, and debt and other fixed
income securities are designated as at fair value through profit or loss on initial recognition, as they
are managed on a fair value basis in accordance with the Syndicate’s investment strategy.
Investments are valued at market value, based on bid price, and deposits with credit institutions are
stated at cost.
2.2.2 Recognition and derecognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual
provisions of the contract. A financial asset is derecognised if the Syndicate‘s contractual rights to
the cash flows from the financial assets expire or if the Syndicate transfers the financial asset to
another party without retaining control of substantially all risks and rewards of the asset. A financial
liability is de-recognised when its contractual obligations are discharged, cancelled, or expired.
Regular way purchases and sales of financial assets are recognised and derecognised, as applicable,
on the trade date, i.e. the date that the Syndicate commits itself to purchase or sell the asset.
2.2.3 Measurement
A financial asset or financial liability is measured initially at fair value plus, for a financial asset or
financial liability not at fair value through profit and loss, transaction costs that are directly
attributable to its acquisition or issue.
Financial assets at fair value through profit or loss are measured at fair value with changes
recognised immediately in profit or loss. Net gains or net losses on financial assets measured at fair
value through profit and loss includes foreign exchange gains/losses arising on their translation to
the functional currency, but excludes interest and dividend income. Loans and receivables and non-
derivative financial liabilities are measured at amortised cost using the effective interest method,
except for Syndicate Loans to the Central Fund which are measured at fair value through profit or
loss.
29
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
2.2.4 Offsetting
Financial assets and financial liabilities are offset, and the net amount presented in the statement of
financial position when, and only when, the Syndicate currently has a legal right to set off the
amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
2.3 Investment Return
Investment income comprises interest and dividends receivable for the year before investment
expenses. Dividends receivable are stated after adding back any withholding taxation deducted at
source. Investment expenses are charged to the Statement of profit or loss and other
comprehensive income: Non-Technical Account on an incurred basis.
Realised gains or losses represent the difference between net sales proceeds and purchase price.
Unrealised gains and losses on investments represent the difference between the current value of
investments at the reporting date and their purchase price. The movement in unrealised investment
gains/losses includes an adjustment for previously recognised unrealised gains/losses on investments
disposed of in the accounting period.
Dividends receivable are accounted for by reference to the date on which the price of the investment
is quoted ex-dividend.
The investment return is initially recorded in the Income Statement: Non-Technical Account. A
transfer is made from the Income Statement: Non-Technical account to the Income Statement:
Technical Account to reflect the investment return on funds supporting underwriting business.
The investment return is initially recorded in the Statement of profit or loss and other comprehensive
income: Non Technical Account. A transfer is made from the Non Technical account to the Technical
Account to reflect the investment return on funds supporting underwriting business.
2.4 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months
or less from the acquisition date that are subject to an insignificant risk of changes in fair value, and
are used by the Syndicate in the management of its short term commitments. Cash and cash
equivalents are carried at amortised cost in the Statement of Financial Position.
2.5 Foreign currency translation
Transactions in foreign currencies are translated at the average rates of exchange for the month of
the transactions.
Monetary assets and liabilities are translated at the rate of exchange at the reporting date or if
appropriate at the forward contract rate. Non monetary assets and liabilities are translated at the
rate of exchange prevailing on recognition.
All exchange differences arising on the translation of the results and financial position in US dollars
(the functional currency) into sterling (the reporting currency) are recognised in the Statement of
Comprehensive Income. Exchange differences on all other currencies are recognised in the
Statement of profit or loss and other comprehensive income: Non Technical Account.
Syndicate 3000
30
Annual Report and Financial Statements for the year ended
31 December 2024
2.6 Taxation
Under Schedule 19 of the Finance Act 1993, Managing Agents are not required to deduct basic rate
income tax from trading income. In addition, all UK basic rate income tax deducted from Syndicate
investment income is recoverable by Managing Agents and consequently the distribution made to
Members or their Members' Agents is gross of tax. Capital appreciation falls within trading income
and is also distributed gross of tax.
No provision has been made for any United States or Canadian Federal Income Tax payable on
underwriting results or investment earnings. Any payments on account made by the Syndicate during
the year are included in the Statement of Financial Position under the heading ‘other debtors’, as the
Syndicate is reimbursed by MCAP for any of the Income Taxes paid.
No provision has been made for any overseas tax payable by the Member on underwriting results.
31
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
3
Critical accounting estimates and judgements in applying
accounting policies
In preparing these financial statements, the Directors of the Managing Agent have made
judgements, estimates and assumptions that affect the application of the Syndicate’s accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to estimates are recognised prospectively.
Estimation and judgement in relation to the valuation of claims recognised under insurance contracts
The estimation of the ultimate liability arising from claims made under insurance contracts is the
Syndicate’s most critical accounting estimate. There are key sources of uncertainty that need to be
considered in the estimate of the amounts that the Syndicate will ultimately pay to settle such
claims. Significant areas requiring estimation and judgement include:
•
Estimates of the amount of any liability in respect of claims notified but not settled, and claims
IBNR to be included within the claims provisions for inwards insurance and reinsurance contracts;
•
The corresponding estimate of the amount of outwards reinsurance recoveries which will
become due as a result of the estimated claims on inwards business.
The adequacy of the outstanding claims provisions is assessed by reference to projections of the
ultimate development of claims in respect of each underwriting year. Management continually
attempts to improve its claims estimation process by refining its ability to analyse claims
development patterns, claims payments and other information, but many reasons remain for
potential adverse development of estimated ultimate liabilities. The process of estimating claims
reserves is a difficult and complex exercise involving many variables and subjective judgements. As
part of the reserving process, historical data is reviewed and the impact of various factors such as
trends in claim frequency and severity, changes in operations, emerging economic and social trends,
inflation and changes in regulatory and litigation environments is considered. Significant delays occur
in notifying certain claims and a large measure of experience and judgement is involved in assessing
outstanding liabilities, the ultimate cost of which cannot be known with certainty at the reporting
date. The reserve for claims outstanding is determined on the basis of information currently
available. However, it is inherent in the nature of the business written that the ultimate liabilities
may vary as a result of subsequent development.
The two most critical assumptions regarding claims provisions are that the past is a reasonable
predictor of the likely level of claims development and that the models used for current business are
fair reflections of the likely level of ultimate claims to be incurred. However, the Directors believe the
process of evaluating past experience, adjusted for the effects of current developments and
anticipated trends, is an appropriate basis for predicting future events. The estimation process has
required reviewing risks and events which are expected to trigger future reported claims and
assessing the potential financial loss of insureds. This has required underwriter, claims and actuarial
experience and management’s professional judgement. Furthermore, there is inherent uncertainty in
relation to the ultimate liability which will vary as a result of subsequent information and events.
There is no precise method, however, for evaluating the impact of any significant factor on the
adequacy of reserves, actual results are likely to differ from original estimates. Management believes
the Syndicate’s provision for gross and reinsurers’ share of claims outstanding is adequate and
represents a reasonable estimate.
Syndicate 3000
32
Annual Report and Financial Statements for the year ended
31 December 2024
4
Risk and capital management
Financial risk management objectives
The Syndicate is exposed to financial risks primarily through its financial assets, reinsurance assets
and policyholder liabilities. The Syndicate’s risks are recorded on a risk register and managed
through the risk management framework. Solvency II principles are used to manage the Syndicate’s
capital requirements and to ensure that it has the financial strength to support the growth of the
business and meet the requirements of policyholders, regulators and rating agencies.
The key financial risks assessed are underwriting risk, reserving risk, asset risk, credit risk, liquidity
risk, capital risk and operational risk.
Underwriting risk
Underwriting Risk is the risk of loss arising from the inherent uncertainties as to the occurrence,
amount and timing of insurance liabilities, focusing on risks that arise from the acceptance of
business.
The Underwriting Risk Policy outlines several key principles and controls to manage this risk, such as
adherence to business plans, prudent maximum line sizes, and peer review processes to ensure
compliance.
Underwriting risk appetites are agreed annually by the Board and adherence to these is monitored at
the Risk, Capital and Compliance Committee. Any exceptions to these risk appetites are reported to
the Board.
The amount of insurance risk we take on any policy is controlled by the use of prudent maximum line
sizes. Each underwriter has a written underwriting authority that details maximum line sizes and
maximum policy duration by class of business and is subject to the peer review processes that are in
place to ensure compliance. We do not permit risks to be written for longer than 18 months (24
months for Marine) without the prior written approval of the Chief Underwriting Officer ("CUO") or
their delegates although we do make certain general exceptions, where we have matching
reinsurance and have agreed this in advance as part of our underwriting strategy. Compliance with
linesize and policy duration is monitored.
The Actuarial Function and underwriting divisions have developed technical pricing models for many
classes of business. Other classes have technical rating guides or other types of benchmark rates.
A key method of monitoring the Syndicate’s aggregate underwriting exposures is the production of a
quarterly “Catastrophe Management Aggregations pack” which sets out our exposures to various
elemental and non-elemental perils. For example, for natural catastrophe risk we monitor and report
the Syndicate’s exposure, both gross and net, to each material region/peril. Underwriting divisions
are given aggregate limits for catastrophe business in each zone and adherence to these is
monitored within the pack. The Syndicate’s aggregate underwriting exposures form part of Risk
Management’s quarterly assessment of risk to the Risk, Capital and Compliance Committee and to
the Board.
The Underwriting Committee has oversight of Underwriting Risk.
33
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Reserving risk
Reserving risk is the risk of loss arising from the inherent uncertainties as to the occurrence, amount
and timing of insurance liabilities, focusing on risks that arise from the quantification of those
liabilities.
The Syndicate adopts a cautious approach to claims reserving, such that reserves are expected to be
more likely to prove redundant than deficient. The reserving policy is to hold a margin above the
Chief Actuary’s best estimate reserve in order to absorb unforeseen adverse reserve development
and to give additional comfort to rating agencies, regulators and policyholders.
Risk appetites in respect of reserving risk are agreed annually by the Board and adherence to these
is monitored at the Risk, Capital and Compliance Committee. Any exceptions to the risk appetites are
reported to the Board.
The Claims Philosophy, Claims Principles and Reserving Philosophy, as set out in the Claims Handling
Guidelines, are approved by the Board and can only be amended with Board consent. The Board are
responsible for approving this policy initially and approving any material changes, if referred by the
Reserving Committee.
An Actuarial reserving exercise occurs quarterly for the reserving basis, and the pricing basis. This
involves internal review within the Actuarial department and discussions with relevant underwriters
and claims staff, including consideration of the impact of factors such as trends in claims frequency
and severity as well as inflation. Pricing basis represents the actuarial reserving "best estimate". The
reserving basis reflects the Markel reserving philosophy of holding reserves that are more likely to be
redundant than deficient. Combined Ratio packs are produced which contain gross and net
projections for all classes of business written at Markel International. The packs are discussed in
detail at the quarterly “Markel International ExCo Pack Review” meetings, which are attended by the
Executive Management, the Divisional Managing Director/Managing Director from each
Division/Branch and the relevant Actuaries.
The Reserving Committee has oversight of Reserving Risk.
The following table presents the profit and loss impact of the sensitivity of the value of insurance
liabilities disclosed in the accounts to potential movements in the assumptions applied within the
technical provisions. Given the nature of the business underwritten by the Syndicate, the approach to
calculating the technical provisions for each class can vary and as a result the sensitivity performed is
to apply a beneficial and adverse risk margin to the total insurance liability. The amount disclosed in
the table represents the profit or loss impact of an increase or decrease in the insurance liability as a
result of applying the sensitivity.
The amount disclosed for the impact on claims outstanding – net
of reinsurance represents the impact on both the profit and loss for the year and member balance.
General insurance business sensitivities as at 31 December
2024
Sensitivity
+5%
£'000
-5%
£'000
Claims outstanding - gross of reinsurance
(29,025)
29,025
Claims outstanding - net of reinsurance
(29,025)
29,025
General insurance business sensitivities as at 31 December
2023
Sensitivity
+5%
£'000
-5%
£'000
Claims outstanding - gross of reinsurance
(22,631)
22,631
Claims outstanding - net of reinsurance
(22,631)
22,631
Syndicate 3000
34
Annual Report and Financial Statements for the year ended
31 December 2024
Credit risk
Credit risk is the risk of loss arising from the inability of a counterparty to fulfil its payment
obligations. The Credit Risk Policy defines our approach to managing this risk.
The Board sets risk appetites for the amount of exposure it is prepared to accept in respect of
reinsurers and brokers. These are monitored through reports to the Risk, Capital and Compliance
Committee and any exceptions are reported to the Board.
The key areas where the Syndicate is exposed to credit risk are:
•
Amounts recoverable from reinsurers
•
Amounts due from insurance intermediaries and insurance contract holders
•
Amounts due from debt securities and other fixed income securities
The Syndicate’s securities portfolio is monitored at the Finance Committee to ensure that credit risk
does not exceed the Syndicate’s risk appetite. In addition, the Syndicate places limits on exposures
to a single counterparty or concentrations of exposures to a specific counterparty. At 31 December
2024, 100% (2023, 100%) of the Syndicate's fixed maturity portfolio is rated 'A' (2023, 'A') or better.
The Syndicate does not hold any financial investments that are past due or impaired as at 31
December 2024 (2023, none).
The Syndicate maintains a robust level of bad debt provision against the possibility of non-payment
from a reinsurer and takes a proactive approach to the collection of reinsurance recoveries, including
the pursuit of commutations. New reinsurers may be required to post collateral depending on their
size, rating and potential debt to the Syndicate. If a reinsurer is not willing to post collateral then
their line size may be reduced to an acceptable level in accordance with their applicable rating and
capital.
The Finance Committee has oversight of Credit Risk.
35
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
The following table analyses the credit rating by investment grade of financial investments, debt
securities and derivative financial instruments, reinsurers’ share of claims outstanding, amount due
from intermediaries, amounts due from reinsurers in respect of settled claims, cash and cash
equivalents, and other debtors and accrued interest that are neither past due, nor impaired.
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
-
-
-
-
-
36,862
36,862
Debt securities and other fixed
income securities
194,262
294,344
51,615
-
-
9,628
549,849
Participation in investment pools
111,504
-
97,849
-
-
1,202
210,555
Loans and deposits with credit
institutions
48,589
5,907
11,713
9,444
6,587
31,357
113,597
Syndicate loan to central fund
-
-
-
-
-
5,097
5,097
Deposits with ceding undertakings
-
-
1,580
-
-
-
1,580
Reinsurers' share of claims
outstanding
2,777
142,435
207,076
1,517
-
6,885
360,690
Debtors arising out of direct
insurance operations
-
-
287,777
-
-
-
287,777
Debtors arising out of reinsurance
operations
-
-
13,046
-
-
-
13,046
Cash at bank and in hand
-
109,557
13,341
-
-
-
122,898
Other debtors and accrued interest
-
-
-
-
-
4,953
4,953
Total
357,132
552,243
683,997
10,961
6,587
95,984
1,706,904
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
64,084
-
36,937
-
-
31,677
132,698
Debt securities and other fixed
income securities
236,109
291,293
124,466
-
-
7
651,875
Participation in investment pools
-
-
-
-
-
-
-
Loans and deposits with credit
institutions
58,564
2,930
9,689
7,485
12,461
41,330
132,459
Syndicate loan to central fund
-
-
-
-
-
6,508
6,508
Deposits with ceding undertakings
-
-
2,300
-
-
-
2,300
Reinsurers' share of claims
outstanding
703
90,957
205,276
-
-
6,600
303,536
Debtors arising out of direct
insurance operations
-
-
243,933
-
-
-
243,933
Debtors arising out of reinsurance
operations
-
-
20,204
-
-
-
20,204
Cash at bank and in hand
-
-
108,334
-
-
-
108,334
Other debtors and accrued interest
-
-
-
-
-
492
492
Total
359,460
385,180
751,139
7,485
12,461
86,614
1,602,339
Syndicate 3000
36
Annual Report and Financial Statements for the year ended
31 December 2024
Financial assets that are past due
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past
due but not impaired at the reporting date.
2024
Neither past due
nor impaired
assets
£'000
Past due but not
impaired assets
£'000
Gross value of
impaired assets
£'000
Total
£'000
Reinsurers' share of claims outstanding
360,691
-
-
360,691
Debtors arising out of direct insurance operations
266,591
21,186
-
287,777
Debtors arising out of reinsurance operations
3,080
9,966
-
13,046
Other debtors and accrued interest
4,953
-
-
4,953
Total
635,315
31,152
-
666,467
2023
Neither past due
nor impaired
assets
£'000
Past due but not
impaired assets
£'000
Gross value of
impaired assets
£'000
Total
£'000
Reinsurers' share of claims outstanding
303,536
-
-
303,536
Debtors arising out of direct insurance operations
222,916
21,017
-
243,933
Debtors arising out of reinsurance operations
946
19,258
-
20,204
Other debtors and accrued interest
492
-
-
492
Total
527,890
40,275
-
568,165
The table below sets out the age analysis of financial assets that are past due but not impaired at
the balance sheet date:
Past due but not impaired
2024
0-3 months
past due
£'000
3-6 months
past due
£'000
6-12 months
past due
£'000
Greater than 1
year past due
£'000
Total
£'000
Debtors arising out of direct
insurance operations
136
2,004
1,470
17,576
21,186
Debtors arising out of reinsurance
operations
4,727
2,037
2,825
377
9,966
Total
4,863
4,041
4,295
17,953
31,152
Past due but not impaired
2023
0-3 months
past due
£'000
3-6 months
past due
£'000
6-12 months
past due
£'000
Greater than 1
year past due
£'000
Total
£'000
Debtors arising out of direct
insurance operations
184
1,997
4,963
13,873
21,017
Debtors arising out of reinsurance
operations
13,619
1,818
3,001
820
19,258
Total
13,803
3,815
7,964
14,693
40,275
37
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Liquidity risk
Liquidity risk is the risk that sufficient liquid financial resources are not maintained to meet liabilities
as they fall due. The Syndicate monitors the projected settlement of liabilities and, in conjunction
with MGAM LLC, sets guidelines on the composition of the portfolio in order to manage this risk.
Liquidity risk appetites are agreed annually by the Finance Committee and adherence to these is
monitored at the Risk, Capital and Compliance Committee. Any exceptions to risk appetite are
reported to the Board.
The liquidity risk appetite is monitored on a quarterly basis through a series of stress tests. These
stress tests are based on potential liquidity related events that could materialise over different time
horizons such as a 1-in-200 year natural or non-natural catastrophe event; or a 25% increase in the
expected gross operating outflows.
The duration of the Syndicate's investment portfolio is managed to match the expected cash
outflows on liabilities. The average duration of liabilities is 3.5 years (2023, 3.6 years).
We monitor compliance regarding the matching of foreign exchange assets and liabilities in a
quarterly foreign exchange meeting with the Markel Group. Where we identify currency mismatches
we would consider appropriate remedial action through currency hedges or swaps. No foreign
exchange forward contracts have been entered into during the year (2023, none).
Currency and Asset/Liability Management risk appetites are agreed annually by the Board and
adherence to these is monitored at the Risk, Capital and Compliance Committee. Any exceptions to
risk appetite are reported to the Board.
The Finance Committee has oversight of Liquidity Risk including the related Currency Risk and
Asset/Liability Management risk.
The maturity analysis presented in the table below shows the remaining contractual maturities for
the Syndicate’s insurance contracts and financial instruments. For insurance and reinsurance
contracts, the contractual maturity is the estimated date when the gross undiscounted contractually
required cash flows will occur. For financial liabilities, it is the earliest date on which the gross
undiscounted cash flows (including contractual interest payments) could be paid assuming conditions
are consistent with those at the reporting date.
Undiscounted net cash flows
2024
No maturity
stated
£'000
0-1 yrs
£'000
1-3 yrs
£'000
3-5yrs
£'000
>5 yrs
£'000
Total
£'000
Claims outstanding
-
(427,345)
(379,470)
(199,596)
(225,241)
(1,231,652)
Creditors
-
(101,303)
-
-
-
(101,303)
Other credit balances
-
(38,529)
-
-
-
(38,529)
Total
-
(567,177)
(379,470)
(199,596)
(225,241)
(1,371,484)
Syndicate 3000
38
Annual Report and Financial Statements for the year ended
31 December 2024
Undiscounted net cash flows
2023
No maturity
stated
£'000
0-1 yrs
£'000
1-3 yrs
£'000
3-5yrs
£'000
>5 yrs
£'000
Total
£'000
Claims outstanding
-
(364,148)
(407,832)
(214,947)
(236,184)
(1,223,110)
Creditors
-
(67,125)
-
-
-
(67,125)
Other credit balances
-
(112,532)
-
-
-
(112,532)
Total
-
(543,805)
(407,832)
(214,947)
(236,184)
(1,402,768)
iii. Currency risk
The Syndicate writes business primarily in Sterling, US dollar, Euro, Canadian dollar, Australian dollar
and Japanese Yen and is therefore exposed to currency risk arising from fluctuations in these
exchange rates.
Foreign exchange risk: We monitor compliance regarding the matching of foreign exchange assets
and liabilities in a quarterly foreign exchange meeting with the Markel Group. Where we identify
currency mismatches we would consider appropriate remedial action through currency hedges or
swaps. No foreign exchange forward contracts have been entered into during the year (2023, none).
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the
reporting date:
2024
Currency Code
GBP'000
USD'000
EUR'000
CAD'000
AUD'000
JPY'000
Other'000
Total'000
Investments
99,784
332,132
52,941
333,082
62,316
2
37,283
917,540
Reinsurers' share of
technical provisions
121,404
196,333
15,644
40,917
23,286
1,675
5,126
404,385
Debtors
13,160
188,695
6,420
28,773
21,581
1,053
53,384
313,066
Other assets
3,623
67,857
2,915
-
21,498
2,309
24,696
122,898
Prepayment and
accrued income
11,076
38,704
3,365
12,075
6,015
22
3,083
74,340
Total assets
249,047
823,721
81,285
414,847
134,696
5,061
123,572
1,832,229
Technical provisions
(265,360)
(730,975)
(91,919)
(271,899)
(101,788)
(7,634)
(68,515)
(1,538,090)
Creditors
(17,143)
(69,650)
(5,830)
(14,721)
(20,266)
(17)
(11,617)
(139,244)
Accruals and
deferred income
-
(583)
-
(5)
-
-
-
(588)
Total liabilities
(282,503)
(801,208)
(97,749)
(286,625)
(122,054)
(7,651)
(80,132)
(1,677,922)
Total Capital and
reserves
(33,456)
22,513
(16,464)
128,222
12,642
(2,590)
43,440
154,307
39
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
2023
Currency Code
GBP'000
USD'000
EUR'000
CAD'000
AUD'000
JPY'000
Other'000
Total'000
Investments
72,730
358,825
40,550
377,864
22,271
-
53,599
925,839
Reinsurers' share of
technical provisions
92,501
179,226
13,153
33,789
13,705
1,742
704
334,820
Debtors
26,081
132,308
4,970
56,826
15,905
683
40,932
277,705
Other assets
7,268
30,277
11,647
(162)
38,428
1,435
19,451
108,344
Prepayment and
accrued income
5,267
32,639
2,994
13,331
5,372
28
3,243
62,874
Total assets
203,847
733,275
73,314
481,648
95,681
3,888
117,929
1,709,582
Technical provisions
(274,237)
(668,064)
(81,168)
(319,954)
(71,784)
(7,018)
(61,479)
(1,483,704)
Creditors
(8,056)
(114,997)
(12,876)
(22,489)
(13,446)
(129)
(7,216)
(179,209)
Accruals and
deferred income
-
(449)
-
-
-
-
-
(449)
Total liabilities
(282,293)
(783,510)
(94,044)
(342,443)
(85,230)
(7,147)
(68,695)
(1,663,361)
Total Capital and
reserves
(78,446)
(50,235)
(20,730)
139,205
10,451
(3,259)
49,234
46,221
Asset Risk
Asset risk is the risk of loss resulting from adverse financial market movements including interest
rates or equity prices.
The Markel International Investment Plan and Strategy detail our policy with regard to different
asset types and concentration limits. Risk appetites are agreed annually by the Board to limit
investment concentration. Adherence to these is monitored at the Risk, Capital and Compliance
Committee. Any exceptions to risk appetite are reported to the Board.
The investment manager’s compliance against the annual Investment Plan is monitored by the
Syndicate Finance team through quarterly reporting and participation in a quarterly Markel Group
Investment Committee and the Finance Committee meetings which the Quarterly Investment report
is considered. Any items outside of our appetite are investigated and where appropriate an action
plan is put in place to bring the investments back into compliance with the Investment Plan.
The principal market risks and how exposure to these risks is managed are as follows:
•
Interest rate risk: The Syndicate works to manage the impact of interest rate fluctuations on the
fixed maturity portfolio. The effective duration of the fixed maturity profile is managed with
consideration given to the estimated duration of policyholder liabilities.
•
Equity price risk: The Syndicate sets limits on the amount of equities that can be held overall
and with any one issuer. The overall equity portfolio is also monitored to ensure that equity risk does
not exceed the Syndicate’s risk appetite.
Syndicate 3000
40
Annual Report and Financial Statements for the year ended
31 December 2024
The Finance Committee has oversight of Asset Risk.
2024
£'000
2024
£'000
2023
£'000
2023
£'000
Impact on
results
before tax
Impact on
member's
balances
Impact on
results
before tax
Impact on
member's
balances
Interest rate risk
+ 50 basis point shift in yield curves
(8,619)
(8,619)
(8,878)
(8,878)
- 50 basis point shift in yield curve
8,621
8,621
8,880
8,880
Equity price risk
5 percent increase in equity prices
1,843
1,843
1,572
1,572
5 percent decrease in equity prices
(1,843)
(1,843)
(1,572)
(1,572)
Operational risk
Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people and
systems or from external events.
The Operational risk policy sets out our approach to managing this risk. Risk appetites are agreed
annually by the Board and adherence to these is monitored at the Risk, Capital and Compliance
Committee. Any exceptions to risk appetite are reported to the Board.
Markel maintains a Risk Register which includes the key Operational Risks faced by the Syndicate.
For each Operational Risk, there is a designated Risk Owner as well as details of the key controls
that are in place to mitigate the risk. There is a quarterly attestation undertaken by Control Owners
in order to confirm that the key controls that they are responsible for are designed and operating
effectively. A summary of the key findings from the quarterly attestation process is issued to
members of Markel International's senior management.
The Risk Management team logs and records operational incidents arising from the failure of people,
processes, systems and external events. The Risk Management team then coordinate with the
identified Event Owner (i.e. the person who is considered to be the key contact within the business
in respect of the incident)
in order to develop an appropriate action plan to strengthen the control
environment to mitigate the likelihood and/or impact of a reoccurrence of the incident. The Risk
Management team monitor the implementation of the action plan through to its completion. The
CRO reports on a number of areas of Operational Risk at the quarterly Risk, Capital and Compliance
Committee, with material issues escalated to the Board.
The Operational Leadership Group has oversight of Operational Risk.
Solvency Capital risk
Solvency Capital risk is the risk of failing to hold sufficient capital to meet regulatory or rating agency
requirements, inefficient allocation of capital, or a failure to obtain an adequate return on capital.
There are various policies and procedures in place which governs our approach to managing
Solvency Capital Risk. A Solvency Capital Risk appetite is agreed annually by the Risk, Capital and
Compliance Committee and adherence to this is monitored at the Risk, Capital and Compliance
Committee. Any exceptions to risk appetite are reported to the Board. This risk appetite monitors the
sufficiency of the level of eligible funds held to meet the board defined economic capital
requirement.
The Risk, Capital and Compliance Committee has oversight of Solvency Capital Risk.
41
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
Capital management
The Society of Lloyd's ("Lloyd's") is a regulated undertaking and subject to supervision by the PRA
under the Financial Services and Markets Act 2000, and in accordance with Solvency II Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally
to ensure that Lloyd’s would comply with the Solvency II requirements, and beyond that to meet its
own financial strength, licence and ratings objectives.
Every member is required to hold capital at Lloyd’s, which is held in trust and known as Funds at
Lloyd's ("FAL"). These funds are intended primarily to cover circumstances where syndicate assets
prove insufficient to meet participating members’ underwriting liabilities.
The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA
requirements and resource criteria. FAL has regard to a number of factors including the nature and
amount of risk to be underwritten by the member and the assessment of the reserving risk in
respect of business that has been underwritten. Since FAL is not under the management of the
Managing Agent, no amount has been shown in these financial statements by way of such capital
resources. However, the Managing Agent is able to make a call on the members' FAL to meet
liquidity requirements or to settle losses.
5
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
2024
Calendar Year
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 & health
1,072
1,056
(317)
(489)
251
501
Motor (third party liability)
-
-
-
-
-
-
Motor (other classes)
-
-
4,212
-
-
4,212
Marine, aviation and transport
151,478
144,825
(54,207)
(52,546)
(19,556)
18,516
Fire and other damage to
property
90,620
83,216
(43,399)
(30,939)
(3,019)
5,859
Third party liability
316,592
300,787
(117,149)
(109,589)
(9,567)
64,482
Credit and suretyship
19,484
14,165
(3,034)
(3,744)
(4,937)
2,450
Total direct insurance
579,246
544,049
(213,894)
(197,307)
(36,828)
96,020
Reinsurance acceptances
206,221
189,554
(90,948)
(67,822)
(13,453)
17,331
Total
785,467
733,603
(304,842)
(265,129)
(50,281)
113,351
Syndicate 3000
42
Annual Report and Financial Statements for the year ended
31 December 2024
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
Calendar Year
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
446
359
(131)
(131)
(13)
84
Energy
29,142
22,713
(9,412)
(8,220)
(3,538)
1,543
Third party liability of which is:
Energy
9,398
11,713
(5,636)
(4,239)
(1,726)
112
2023
Calendar Year
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 & health
1,578
1,483
576
(709)
169
1,519
Motor (third party liability)
-
-
-
-
-
-
Motor (other classes)
-
-
1,626
-
-
1,626
Marine, aviation and transport
127,108
119,121
(34,100)
(42,870)
(14,050)
28,101
Fire and other damage to
property
80,061
75,534
(27,997)
(17,990)
(8,728)
20,819
Third party liability
247,666
246,695
(112,102)
(82,982)
(32,914)
18,697
Credit and suretyship
6,971
4,791
(8,034)
(1,757)
(2,383)
(7,383)
Total direct insurance
463,384
447,624
(180,031)
(146,308)
(57,906)
63,379
Reinsurance acceptances
238,152
223,238
(108,895)
(72,671)
(52,516)
(10,844)
Total
701,536
670,862
(288,926)
(218,979)
(110,422)
52,535
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
Calendar Year
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
427
427
(207)
(86)
8
142
Energy
19,858
18,586
(6,854)
(4,947)
(5,000)
1,785
Third party liability of which is:
Energy
15,609
15,011
(3,845)
(3,995)
(3,182)
3,989
43
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
The gross premiums written for direct insurance by destination of risk is presented in the table
below:
2024
£'000
2023
£'000
United Kingdom
173,454
173,003
European Union Member States
32,405
47,344
US
113,838
100,090
Rest of the world
465,770
381,099
Total gross written premium
785,467
701,536
6
Net operating expenses
2024
£'000
2023
£'000
Acquisition costs
162,409
156,204
Change in deferred acquisition costs
(8,414)
(6,624)
Administrative expenses
119,298
77,153
Members' standard personal expenses
4,821
5,598
Reinsurance commissions and profit participations
(12,986)
(13,352)
Net operating expenses
265,128
218,979
Total commissions for direct insurance business for the year amounted to:
2024
£'000
2023
£'000
Total commission for direct insurance business
138,738
114,935
Administrative expenses include:
2024
£'000
2023
£'000
Auditors' remuneration:
fees payable to the Syndicate's auditor for the audit of these financial statements
634
618
fees payable to the Syndicate's auditor and its associates in respect of other services
pursuant to legislation
194
188
Syndicate 3000
44
Annual Report and Financial Statements for the year ended
31 December 2024
7
Key management personnel compensation
The directors of MSM received the following aggregate remuneration charged to the Syndicate and
included within net operating expenses:
2024
£'000
2023
£'000
Directors' emoluments
1,480
1,241
Fees
-
-
The active underwriter received the following aggregate remuneration charged to the Syndicate.
2024
£'000
2023
£'000
Remuneration of the active underwriter
369
278
8
Staff numbers and costs
The syndicate and managing agent have no employees. Staff are employed by Markel International
Services Limited ("MISL"), Markel Australia PTY Limited, Markel Canada Limited, Markel Corporation
China, Markel International Dubai Limited, Markel International Labuan Limited, Markel International
Singapore Pte Limited and Markel Services India Private Limited
The average number of persons
employed by the service companies above but working for the Syndicate during the year, analysed
by category, was as follows:
Number of employees
2024
2023
Administration and finance
249
150
Underwriting
212
142
Claims
61
46
Total
522
338
The following amounts were recharged by MISL to the Syndicate in respect of payroll costs:
2024
2023
Wages and Salaries
50,044
38,978
Social security costs
1,927
1,319
Other pension costs
1,279
755
Total
53,250
41,052
45
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
9
Investment return
2024
£'000
2023
£'000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
17,044
16,217
From financial assets classified as Available for Sale
Interest and similar income
12,608
13,335
Dividend income
840
522
Interest and similar income
(2)
-
Interest on cash at bank
907
672
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
6,986
5,302
Losses on the realisation of investments
(4,700)
(279)
Unrealised gains on investments
19,558
10,230
Unrealised losses on the investments
(12,852)
(661)
Other relevant gains/(losses)
11
268
Investment management expenses
(2,337)
(2,284)
Total investment return
38,063
43,322
Transferred to the technical account from the non-technical account
38,063
43,322
Syndicate 3000
46
Annual Report and Financial Statements for the year ended
31 December 2024
10
Distribution and open years of account
A distribution payment of £126.7m to the corporate member, to be collected in 2025, has been
proposed in relation to the 2022 year of account (2023, distribution payment of £42.0m in relation to
the 2021 year of account).
The table below shows the current accident year result of the years of account remaining open after
the three year period.
Year of Account
2024
£'000
2023
£'000
2021
-
42,025
2022
126,682
33,693
2023
65,234
(29,497)
2024
(37,609)
-
Calendar Year Result
154,307
46,221
47
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
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
36,862
132,697
24,949
120,880
Debt securities and other fixed income securities
549,849
651,875
580,179
689,261
Participation in investment pools
210,555
-
210,555
-
Loans and deposits with credit institutions
113,597
132,459
113,597
132,459
Syndicate loans to central fund
5,097
6,508
5,097
6,508
Total financial investments
915,960
923,539
934,377
949,108
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
668,543
790,842
Financial assets measured at fair value as available for sale
247,417
132,697
Total financial investments
915,960
923,539
Please refer to Note 22 (Cash and cash equivalents) in respect of the reclassification of £210.6m
from ‘Shares and other variable yield securities and units in unit trusts' to ‘Participation in investment
pools’.
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
•
Level 1 – financial assets that are measured by reference to published quotes in an active
market. A financial instrument is regarded as quoted in an active market if quoted prices are readily
and regularly available from an exchange, dealer, broker, industry group, pricing service or
regulatory agency and those prices represent actual and regularly occurring market transactions on
an arm’s length basis.
•
Level 2 – financial assets measured using a valuation technique based on assumptions that are
supported by prices from observable current market transactions. For example, assets for which
pricing is obtained via pricing services but where prices have not been determined in an active
market, financial assets with fair values based on broker quotes, investments in private equity funds
with fair values obtained via fund managers and assets that are valued using the Syndicate’s own
models whereby the significant inputs into the assumptions are market observable.
•
Level 3 – financial assets measured using a valuation technique (model) based on assumptions
that are neither supported by prices from observable current market transactions in the same
instrument nor are they based on available market data. Therefore, unobservable inputs reflect the
Syndicate's own assumptions about the assumptions that market participants would use in pricing
the asset or liability (including assumptions about risk). These inputs are developed based on the
best information available, which might include the Syndicate’s own data.
Syndicate 3000
48
Annual Report and Financial Statements for the year ended
31 December 2024
The table below analyses financial instruments that are 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
Total
£'000
Shares and other fixed income securities and units in unit trusts
36,862
-
-
36,862
Debt securities and other fixed income securities
38,074
511,775
-
549,849
Participation in investment pools
210,555
-
-
210,555
Loan and deposits with other credit institutions
28,171
85,426
-
113,597
Syndicate loan to central fund
-
-
5,097
5,097
Total assets
313,662
597,201
5,097
915,960
Total
313,662
597,201
5,097
915,960
2023
Level 1
£'000
Level 2
£'000
Level 3
£'000
Total
£'000
Shares and other fixed income securities and units in unit trusts
132,697
-
-
132,697
Debt securities and other fixed income securities
119,214
532,661
-
651,875
Participation in investment pools
-
-
-
-
Loans and deposits with other credit institutions
132,459
-
-
132,459
Syndicate loan to central fund
-
-
6,508
6,508
Total assets
384,370
532,661
6,508
923,539
Total
384,370
532,661
6,508
923,539
12
Debtors arising out of direct insurance operations
Direct insurance operations
2024
£'000
2023
£'000
Due within one year
287,777
243,933
Total
287,777
243,933
13
Debtors arising out of reinsurance operations
Reinsurance operations
2024
£'000
2023
£'000
Due within one year
13,015
20,200
Due after one year
31
4
Total
13,046
20,204
49
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
14
Other debtors
2024
£'000
2023
£'000
Other related party balances (non-syndicate)
4,928
6,961
Other
7,315
6,607
Total
12,243
13,568
Other related party balances (non-Syndicates) wholly relates to balances owed to the Syndicate from
other entities within Markel Group Inc.
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
£'000
£'000
Balance at
1 January
54,845
50,939
Incurred deferred acquisition costs
50,816
47,950
Amortised deferred acquisition costs
(42,402)
(41,326)
Foreign exchange movements
(1,037)
(2,718)
Balance at
31 December
62,222
54,845
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.
Syndicate 3000
50
Annual Report and Financial Statements for the year ended
31 December 2024
Gross outstanding claims provision as at 31 December 2024
Pure underwriting year
2015
£'000
2016
£'000
2017
£'000
2018
£'000
2019
£'000
2020
£'000
2021
£'000
2022
£'000
2023
£'000
2024
£'000
Total
£'000
Estimate of gross claims
At end of underwriting year
112,555
134,157
352,423
196,295
126,060
138,327
120,739
166,611
137,282
166,000
1,650,449
One year later
237,484
298,280
504,162
365,425
425,480
328,333
293,590
298,897
289,776
3,041,427
Two years later
243,771
314,940
533,209
410,314
474,127
344,223
257,704
241,333
2,819,621
Three years later
238,111
315,297
532,116
419,531
495,933
283,158
260,882
2,545,028
Four years later
228,573
309,119
509,374
445,555
506,519
268,737
2,267,877
Five years later
238,620
334,247
535,796
483,195
512,137
2,103,995
Six years later
207,116
353,983
546,394
490,310
1,597,803
Seven years later
255,227
368,374
551,613
1,175,214
Eight years later
265,414
361,712
627,126
Nine years later
271,816
271,816
Estimate of gross claims reserve
271,816
361,712
551,613
490,310
512,137
268,737
260,882
241,333
289,776
166,000
3,414,316
Provision in respect of prior years
160,763
Less gross claims paid
244,181
317,391
509,439
387,676
422,919
189,462
129,326
72,997
60,276
9,760
2,343,427
Gross claims reserve
27,635
44,321
42,174
102,634
89,218
79,275
131,556
168,336
229,500
156,240
1,231,652
Syndicate 3000
51
Annual Report and Financial Statements for the year ended
31 December 2024
Net outstanding claims provision as at 31 December 2024
Pure underwriting year
2015
£'000
2016
£'000
2017
£'000
2018
£'000
2019
£'000
2020
£'000
2021
£'000
2022
£'000
2023
£'000
2024
£'000
Total
£'000
Estimate of net claims
At end of underwriting year
102,486
125,725
214,615
152,066
116,353
120,886
84,683
88,117
92,943
88,319
1,186,193
One year later
218,516
269,865
376,121
314,555
374,311
270,213
214,052
227,324
239,860
2,504,817
Two years later
201,335
288,483
400,025
351,067
415,072
286,999
199,110
185,995
2,328,086
Three years later
195,408
290,326
386,721
358,670
410,581
232,145
199,858
2,073,709
Four years later
187,259
298,467
364,004
382,012
407,272
209,328
1,848,342
Five years later
196,443
328,871
395,720
419,069
414,165
1,754,268
Six years later
174,335
337,906
401,966
425,317
1,339,524
Seven years later
211,693
347,797
408,514
968,004
Eight years later
223,545
344,393
567,938
Nine years later
225,860
225,860
Estimate of gross claims reserve
225,860
344,393
408,514
425,317
414,165
209,328
199,858
185,995
239,860
88,319
2,741,609
Provision in respect of prior years
69,582
Less net claims paid
228,159
302,066
373,488
329,231
335,316
149,434
101,767
57,496
53,865
9,408
1,940,230
Net claims reserve
(2,299)
42,327
35,026
96,086
78,849
59,894
98,091
128,449
185,995
78,911
870,961
52
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
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
Provision for claims
outstanding
Gross
£'000
Reinsurance
£'000
Net
£'000
Gross
£'000
Reinsurance
£'000
Net
£'000
Balance at
1 January
1,223,110
(303,536)
919,574
1,310,517
(256,166)
1,054,351
Claims paid during the year
(279,824)
49,168
(230,656)
(325,790)
48,727
(277,063)
Expected cost of current year
claims
165,505
(75,945)
89,560
154,637
(45,036)
109,601
Change in estimates of prior year
provisions
136,644
(24,190)
112,454
134,289
(107,604)
26,685
Discount unwind
2,694
(2,694)
-
-
44,827
44,827
Effects of movement in exchange
rates
(16,477)
(3,494)
(19,971)
(50,543)
11,716
(38,827)
Balance at
31 December
1,231,652
(360,691)
870,961
1,223,110
303,536
919,574
The unwind of discount has been included within the statement of profit or loss – technical account –
within claims incurred.
2024
2023
Provision for unearned
premiums
Gross
£'000
Reinsurance
£'000
Net
£'000
Gross
£'000
Reinsurance
£'000
Net
£'000
Balance at
1 January
260,594
(31,284)
229,310
241,885
(29,052)
212,833
Premium written during the year
785,467
(166,224)
619,243
701,536
(221,892)
479,644
Premiums earned during the year
(733,603)
153,109
(580,494)
(670,862)
218,235
(452,627)
Foreign exchange movements
(6,020)
705
(5,315)
(11,965)
1,425
(10,540)
Balance at
31 December
306,438
(43,694)
262,744
260,594
(31,284)
229,310
53
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
18
Discounted claims
Discounting may be applied to claims provisions where there are individual claims with structured
settlements that have annuity like characteristics, or for books of business with mean term payment
greater than four years from the accounting date.
The claims have been discounted as follow:
Average discounted rates
Average mean term of liabilities
Class of business
2024
2023
2024
2023
Motor (third party liability)
3.00
3.00
19.9
16.7
In the year-ended 31 December 2023, the Syndicate entered into a deal with Marco Capital Ltd for
the LPT in relation to its UK Motor PPO portfolio. As a result the UK Motor PPO portfolio is now fully
reinsured, resulting in no remaining net liability for the syndicate.
The period that will elapse before claims are settled is determined using adjusted mortality tables.
The claims provisions before 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 provision
83,200
88,950
39,930
44,188
43,270
44,762
Reinsurer share of total claims
(83,200)
(88,950)
(39,930)
(44,188)
(43,270)
(44,762)
Net claims provisions
-
-
-
-
-
-
Syndicate 3000
54
Annual Report and Financial Statements for the year ended
31 December 2024
19
Creditors arising out of direct insurance operations
2024
£'000
2023
£'000
Due within one year
20,143
25,704
Total
20,143
25,704
20
Creditors arising out of reinsurance operations
2024
£'000
2023
£'000
Due within one year
81,160
41,421
Total
81,160
41,421
21
Other creditors
2024
£'000
2023
£'000
Other related party balances (non-Syndicates)
26,065
106,108
Other liabilities
11,876
5,975
Total
37,941
112,083
Other related party balances (non-Syndicates) wholly relates to balances owed from the Syndicate to
other entities within Markel Group Inc.
55
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
22
Cash and cash equivalents
2024
£'000
2023
£'000
Cash at bank and in hand
122,898
108,344
Short term debt instruments presented within other financial investments
210,555
-
Total cash and cash equivalents
333,453
108,344
Only deposits with credit institutions with maturities of three months or less that are used by the
Syndicate in the management of its short term commitments are included in cash and cash
equivalents.
Included within cash and cash equivalents are the following amounts which are not available for use
by the Syndicate because the amounts were held in regulated bank accounts in overseas
jurisdictions:
2024
£'000
2023
£'000
Cash at bank and in hand
266
-
Short term debt instruments presented within other financial investments
100,588
-
Total cash and cash equivalents not available for use by the syndicate
100,854
-
This note discloses all cash, and cash equivalent balances that the Syndicate holds including any
balances that may also classify as financial investments which are reported in Note 11 (Financial
Investments). It has been presented in line with the Lloyd’s requirements and FRS 102 as set out in
Note 1 (Statement of compliance and basis of preparation).
As at 31 December 2024, included in 'Cash and cash equivalents' is a balance of £210.6m relating to
money market investments which represent ‘Cash equivalents’ as these are short-term, highly liquid
investments that are readily convertible, and are subject to insignificant changes in value due to the
nature of the investments. This is also reported in Note 11 (Financial Investments) since these also
represent ‘Participation in investment pools’ given the underlying characteristics of the cash
equivalents.
In the prior year, these investments were classified under ‘Shares and other variable yield securities
and units in unit trusts' (2023: £101.3m), which have been reclassified in 2024 to ‘Participation in
investment pool’ in Note 11, to better reflect the nature of the investments. As a result, we have
updated this year’s disclosure to report these investments as cash equivalents.
This reclassification has been made to better reflect the characteristics of the investments which
represent cash equivalents, with the corresponding presentation and disclosure being made in Note
22 (Cash and cash equivalents) and Note 11 (Financial Investments). The Directors have concluded
that this reclassification is not material to the financial statements and therefore have not restated
the prior year comparative, since it represents a balance sheet reclassification only and has no
impact to total and net asset positions, profit and cash flows made in the year, and KPIs.
Syndicate 3000
56
Annual Report and Financial Statements for the year ended
31 December 2024
23
Analysis of net debt
At 1
January
2024
Cash flows
Acquired
Fair value
and
exchange
movement
Non-cash
changes
At 31
December
2024
Cash and cash equivalents
108,344
227,643
-
(2,534)
-
333,453
Total
108,344
227,643
-
(2,534)
-
333,453
24
Related parties
MISL and Markel Services Incorporated ("MSI") provides services to the Syndicate. The amounts
charged to and balances due from the Syndicate at the year end are:
2024
£'000
2023
£'000
Expenses recharged
(111,788)
(71,722)
Year end balance due from the Syndicate
(7,321)
(7,009)
The Syndicate pays income tax for various territories, the most notable being Canadian and United
States Income Tax, which is reimbursed by MCAP. The Syndicate has paid the following amounts and
balances due from the Syndicate at the year end are:
2024
£'000
2023
£'000
United States and Canadian Income Tax paid by/(reimbursed to) the Syndicate in the year
2,929
(1,463)
United States and Canadian Income Tax reimbursed by MCAP in the year
(3,668)
(4,152)
Other Income Taxes reimbursed to the Syndicate in the year
(518)
(8)
Year end balance (from)/to the Syndicate
(231)
1,026
The following companies provide services to the Syndicate. The amounts charged to and balances
due from the Syndicate at the year end are:
Management
Fees Charged
2024
£'000
YE balance
due (from)/to
the Syndicate
2024
£'000
Management
Fees Charged
2023
£'000
YE balance due
from the
Syndicate
2023
£'000
Markel International Singapore PTE Limited
(8,292)
(2,057)
(4,807)
(1,619)
Markel International Hong Kong Limited
(1,924)
(556)
(1,163)
(478)
Markel International Labuan Limited
(163)
-
(138)
(13)
Markel International Dubai Limited
(2,728)
(212)
(1,506)
(34)
Markel Canada Limited
(1,716)
(1,565)
(1,604)
(1,966)
Markel Services India Private Limted
(2,224)
33
(1,412)
(937)
Markel Australia PTY Limited
(4,614)
205
-
-
The Group have made available a $200m credit revolving facility. As at December 31, 2024 the
Syndicate has not drawn down on this facility (2023, $nil).
57
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
The Syndicate has a reinsurance arrangement with MIICL in relation to its US Wind and Quake,
Japanese Wind and Quake and European Wind exposure, which was in place for the 2014 to the
2021 years of account.
The Syndicate has recognised the following amounts in the year and the balances due from MIICL at
the end of the year relating to these arrangements are:
2024
£'000
2023
£'000
Incurred claims movement
7
(1,045)
Year end balance due to the Syndicate
591
584
The Syndicate has an internal reinsurance in place on the 2021 year of account, which transfers
liability from the Syndicate to MIICL. It has limits of $8m xs $2m and covers all Marine and Energy
classes.
The Syndicate has an internal reinsurance in place on the 2022 Year of account, which transfers
liability from the Syndicate to MIICL. It has limits of $7.5m xs $2.5m and covers all Marine and
Energy classes, as well as
80% of Trade Credit, Political Risk, and Surety classes.
The Syndicate has an internal reinsurance in place on the 2023 Year of account, which transfers
liability from the Syndicate to MIICL. It has limits of $15m xs $5m covering Marine and Energy
classes, limits of $20m xs $5m covering Terrorism classes, as well as 75% of Trade Credit, Political
Risk, and Surety classes.
The Syndicate has an internal reinsurance in place on the 2024 Year of account, which transfers
liability from the Syndicate to MIICL. It has limits of $15m xs $5m covering Marine and Energy
classes, limits of $20m xs $5m covering Terrorism classes, limits of $7.5m xs $2.5m and limits of
$10m xs $10m covering Trade Credit, Political Risk, and Surety classes, and limits of £5m xs £5m
covering 75% of Polictal Financial Risks.
The following reinsurance amounts in the year and balances due to the Syndicate at the end of the
year relating to these are:
2024
£'000
2023
£'000
Premiums ceded to MIICL
(26,701)
(20,739)
Incurred claims movement
12,188
7,187
Year end balance due to the Syndicate
55,316
46,580
Syndicate 3000
58
Annual Report and Financial Statements for the year ended
31 December 2024
The Syndicate has an internal reinsurance in place on the 2023 Year of account, which transfers
liability from the Syndicate to Markel Bermuda Limited ("MBL"). It has limits of $15m xs $5m and
covers the Hull, Cargo and Specie classes.
The Syndicate has an internal reinsurance in place on the 2024 Year of account, which transfers
liability from the Syndicate to MBL. It has limits of $15m xs $5m covering the Hull, Cargo and Specie
classes, limits of CAD$7m xs CAD$3m covering the Canada General Liabilty classes, and limits of
£5m xs £5m covering the Offshore FI and Investment Managers FI classes.
The following reinsurance amounts in the year and balances due to the Syndicate at the end of the
year relating to these are:
2024
£'000
2023
£'000
Premiums ceded to MBL
(12,766)
(1,924)
Incurred claims movement
29
-
Year end balance due to the Syndicate
8,053
2,755
Markel Gayner Asset Management LLC "MGAM LLC" is the Syndicate investment manager. The
following amounts have been charged to the Syndicate:
2024
£'000
2023
£'000
Fees paid
2,337
2,284
Year end balance due from the Syndicate
-
-
Key management personnel
K. Shah is a Director of Just Group plc. Syndicate 3000 has a 12.5% line (2023, 12.5%) representing
£116.00 in gross written premium on an insurance policy with Just Group Plc. There are no
outstanding balances between the Syndicate and Just Group plc.
A. Davies is a Director of Certa Insurance Partners Limited which is a Syndicate 3000 coverholder.
During the year, Syndicate 3000 has underwritten £2,495k (2023, £1,161k) in gross written
premiums and £396k (2023, £1,161k) is receivable at year-end.
59
Syndicate 3000
Annual Report and Financial Statements for the year ended
31 December 2024
25
Foreign exchange rates
2024
2023
Start of
period rate
Year-end rate
Average rate
Start of
period rate
Year-end rate
Average rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
26
Funds at Lloyd's
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at
Lloyd’s (‘FAL’). These funds are intended primarily to cover circumstances where Syndicate assets
prove insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s
requires a member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority
requirements and resource criteria. The determination of FAL has regard to a number of factors
including the nature and amount of risk to be underwritten by the member and the assessment of
the reserving risk in respect of business that has been underwritten. Since FAL is not under the
management of the Managing Agent, no amount has been shown in these Financial Statements by
way of such capital resources. However, the Managing Agent is able to make a call on the Member’s
FAL to meet liquidity requirements or to settle losses.
Syndicate 3000
60