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Syndicate 1084
Annual Report and Accounts 2024
Syndicate 1084
Contents
Syndicate Information 1
Underwriter’s Report 2
Managing Agent’s Report 4
Statement of Managing Agent’s Responsibilities 13
Independent Auditors' Report to the Members of Syndicate 1084 14
Statement of Comprehensive Income for the year ended 31 December 2024 18
Statement of Financial Position as at 31 December 2024 19
Statement of Changes in Members’ Balances for the year ended 31 December 2024 20
Statement of Cash Flows for the year ended 31 December 2024 21
Notes to the Accounts for the year ended 31 December 2024 22
Syndicate 1084
Syndicate Information
1
Directors of the Managing Agent
D C Bendle (resigned 30 October 2024) Chief Operating Officer
R J Callan (resigned 31 March 2024) Chief Financial Officer & Chief Executive Officer
J Faure Senior Independent Non-Executive Director
P A Jardine Chairman and Independent Non-executive Director
R T Milner (appointed 20 May 2024) Chief Executive Officer
A C Pearce Independent Non-Executive Director
H D Spink (appointed 29 November 2024) Chief Operating Officer
N J Stacey Chief Underwriting Officer
Z Wang (resigned 17 December 2024) Group Non-Executive Director
L S Watkins Independent Non-Executive Director
J Wright (appointed 1 April 2024) Chief Financial Officer
Dr H Zuo Group Non-Executive Director
Managing Agent’s company secretary
R N Barnett
Managing Agent’s registered office
52 Lime Street
London
EC3M 7AF
Managing Agent’s registered number
00184915
Managing Agent's independent auditors
KPMG LLP
15 Canada Square
London
E14 5GL
Syndicate active underwriter
K Hunt
Syndicate bankers
The custodians of the Syndicate’s investment funds are:
Citibank N.A.
Royal Bank of Canada
Syndicate investment managers
Goldman Sachs Asset Management International
China Re Asset Management (Hong Kong) Company Limited
Syndicate independent auditors
KPMG LLP
15 Canada Square
London
E14 5GL
Syndicate 1084
Underwriter’s Report
2
Results and performance
The profit for the year is $336.1m (2023: $355.5m), and the combined ratio is 85.6% (2023: 83.3%).
Syndicate 1084’s (the Syndicate) key performance indicators during the year were as follows:
2024
2023
$000
$000
Gross written premium
2,384,759
2,110,337
Net written premium
1,829,484
1,625,429
Net earned premium
1,722,572
1,515,976
Underwriting result
248,882
252,454
Investment return
102,456
116,551
Technical profit for the financial year
351,338
369,005
Non-technical account for the financial year
(15,250)
(13,484)
Profit for the financial year
336,088
355,521
Combined ratio
85.6%
83.3%
Amount due to member
(153,212)
(163,711)
Premiums
For 2024, gross written premium totalled $2,384.8m (2023: $2,110.3m), an increase of $274.5m (13%)
compared to the prior year.
2024 saw another year of notable growth as favourable trading conditions persisted.
US Casualty Reinsurance classes benefitted from material risk adjusted rate increases in response to market-
wide adverse reserve development, and Property Reinsurance classes continued to achieve loss-driven risk
adjusted rate rises, although more subdued than in recent years. Conditions became selectively more
challenging in the Insurance classes, given the cumulative positive rate increases in the last few years,
however price adequacy remained in most lines with terms and conditions generally meeting appetite. This
increase was marginally offset by the prior year containing an element of income in respect of Casualty and
Aviation classes which the Syndicate chose to strategically exit and a reduction in current year Cyber
Reinsurance income due to non-renewals following imposition of war clause restrictions.
Analysis of the gross written premiums by class of business is presented in Note 3: Segmental Analysis in the
notes to the annual accounts.
Net written premiums increased to $1,829.5m in 2024 (2023: $1,625.4m) and net earned premiums to
$1,722.5m (2023: $1,515.9m), with the year-on-year increases consistent with the respective increases in
gross volumes as Syndicate reinsurance protections were substantially unchanged.
Underwriting result
Comparable to 2023, the underwriting result for 2024 is a profit of $248.9m (2023: $252.5m), resulting in a
combined ratio of 85.6% (2023: 83.3%).
The increase in the combined ratio is driven by catastrophe loss experience being marginally more adverse to
the prior year due to an increased frequency of smaller cat losses, and less favourable prior year development,
principally due to strengthening reserves held for potential losses arising from the Russian invasion of Ukraine.
The most notable catastrophe losses in 2024 were from the flooding in Dubai, Hurricanes Milton and Helene,
Typhoon Yagi and hailstorms in Calgary, Canada. A reserve was also booked in 2024 for potential losses
related to the collapse of the Francis Scott Key Bridge in Baltimore, US. Notable Catastrophe events resulting
in losses in 2023 were Cyclone Gabrielle, NZ Floods, the Israel/Gaza conflict and Hawaii Wildfires.
Syndicate 1084
Managing Agent’s Report
4
The Directors of the Managing Agent present their report and the audited annual accounts for the year ended
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 (Lloyd’s Regulations 2008).
The Managing Agent
The Managing Agent is Chaucer Syndicates Limited , whose registered office is 52 Lime Street, London EC3M
7AF and registered number is 00184915.
Principal activities
This report covers the business of the Syndicate, whose principal activity during the year continued to be the
transaction of worldwide general insurance and reinsurance business in the United Kingdom, underwriting at
Lloyd’s of London.
Principal risks and uncertainties
The following paragraphs describe the principal risks and uncertainties facing the Syndicate.
Underwriting risk
Each underwriting division of the Managing Agent undertakes an extensive annual underwriting planning
process in order to determine its targets for premium income and return on capital for the Syndicate.
The detailed stochastic modelling of underwriting risk, both gross and net of reinsurance, using dynamic
financial analysis techniques, assists with the setting and management of risk appetite.
Catastrophe risk is the main component of underwriting risk and the Managing Agent uses Exceedance
Probability (EP) curves as one of the tools for managing this risk. For a defined underwriting portfolio, an EP
curve plots expected probability against loss size. This represents a sliding scale of risk appetite against
associated exceedance probabilities.
Managing risk aggregation
The Managing Agent monitors the aggregation of underwriting exposure using specialist modelling software
tools where appropriate. The Managing Agent monitors the Syndicate’s loss exposure to a suite of natural
catastrophe events (including the prescribed Lloyd's Realistic Disaster Scenarios) and man-made events on
a quarterly basis. Modelled loss caps are set at an underwriting business unit level for each event; this provides
the underwriters with a practical tool for managing exposures.
Concentrations of risk
The Syndicate has exposure to losses arising through the aggregation of risks in geographical areas. This
mainly affects the property, marine and energy portfolios. Events giving rise to such aggregations are typically
natural disasters such as earthquakes or weather-related disasters such as hurricanes, windstorms and
typhoons. Other examples include major terrorism events.
As part of the risk management process, the Managing Agent assesses the Syndicate’s exposures to Realistic
Disaster Scenarios twice a year to enable the Managing Agent to monitor potential accumulations of
underwriting exposure against a pre-determined suite of catastrophic events and to confirm no breach of
underwriting risk appetite.
Maximum lines
Underwriters manage individual risks through adherence to set maximum line sizes.
Underwriting controls
The Managing Agent operates a number of underwriting controls, details of which are set out below.
Monitoring performance against plan
The Managing Agent manages Syndicate performance against plan through quarterly divisional reporting;
utilising centrally prepared underwriting management information packs. Reports are provided to the Syndicate
Underwriting Committee, and then to the Chaucer Underwriting Committee which ultimately reports to the
Managing Agent’s Board. This control process ensures several layers of review for underwriting risks, with
Syndicate 1084
Managing Agent’s Report
5
particular focus on pricing, loss ratio forecasts, risk aggregation, catastrophe modelling and reinsurance
protection.
Emerging risks
Emerging risks are new or future risks where the hazard potential or implications are not yet reliably known.
These risks may evolve over time or hit the business with little warning. Emerging risks could be risks which
have arisen recently or are anticipated in the future or risks which, although known previously may show
changing dynamics with the consequence of unanticipated losses. Emerging risks may not be fully understood
or be allowed for in insurance terms and conditions, pricing, reserving, capital setting or the operational
activities of the Managing Agent. The Managing Agent has a defined emerging risk process to identify, assess
and manage the potential impact of such risks.
Peer, independent and underwriting risk reviews
Peer review is performed on a risk-based sample of business by a fellow underwriter to ensure adherence to
sound underwriting practices. The independent review process involves detailed review of individual
underwriting risks and supporting documentation by experienced specialist individuals independent of the
class of business under review. Themed underwriting reviews are conducted by the Risk Management team
to ensure that underwriting procedures and discipline are followed.
Geopolitical Risks
The Managing Agent is exposed to Geopolitical Risk through elements of its Underwriting portfolio e.g. Political
Risk. Therefore, the Risk Management Function continuously monitor Geopolitical Risks and have a
dashboard containing the most significant Geopolitical Risks which is presented to the quarterly Risk and
Capital Committee. A more extensive list of risks underpins the dashboard and is updated in detail twice a
year. On an ad-hoc basis deep dives may be carried out to gather more information on how Geopolitical Risks
may impact the Managing Agent.
Internal audit
The Managing Agent operates a three lines of defence model, where Internal Audit acts as the third line
providing independent assurance and monitoring the design and operating effectiveness of organisation
controls including those relating to underwriting.
Claims risk
While claims events are inherently uncertain and volatile, the claims department is an experienced team
covering a wide range of business classes. The Managing Agent has various management controls in place
to mitigate claims risk; some of these controls are outlined below.
Claims settlement and reserving authority limits
The Managing Agent employs strict claims handling authority limits. All transactions in excess of an individual
claims handler’s authority are referred in a tiered approach to a colleague with the requisite knowledge and
experience.
Peer review
The Managing Agent currently commissions an external random peer review on a quarterly basis. This review
incorporates both qualitative and quantitative measures and findings are collated and reported to relevant
committees.
Monthly reporting
Reports are produced for different aspects of the claims handling process, including significant movements,
catastrophes, and static claims. These reports are communicated both within the business and with key
external stakeholders, including Lloyd’s Claims Management.
Management of external experts
The Managing Agent appoints third party loss adjusters, surveyors and legal advisors for claims investigation
and assessment services. The development of long-standing relationships with key experts and agreed Terms
of Engagement aim to ensure the Syndicate receives a high quality service. Direct contact with external experts
is actively encouraged. However, this process is not exclusive. If no suitable expert exists on the Managing
Agent’s panel for any one particular claim, an ‘Expert Exception’ process operates to ensure a timely
appointment of an appropriate expert.
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Reserving risk
The reserving policy for the Syndicate seeks to ensure appropriate allowance for reserving risk, consistency
in reserving from year to year and the equitable treatment of capital providers on the closure of a year of
account.
Reserves are set on a two-tier hierarchical basis.
Tier 1: Actuarial best estimate reserves
Actuarial best estimate reserves are prepared on an underwriting year basis and are intended to be true best
estimates, i.e. estimates of expected value claims reserves. These are the basis for internal reporting and the
derivation of expected loss ratios for business planning. The actuarial best estimate reserves are the
responsibility of the Internal Signing Actuary. The Managing Agent’s Actuarial team calculates the reserves in
conjunction with extensive discussions with underwriting, claims and reinsurance staff.
Tier 2: Syndicate reserves
Determination of Syndicate reserves is a two-stage process: first, they are determined on an underwriting year
basis and then they are converted to an annually accounted basis.
(a) Underwriting year Syndicate reserves
Underwriting year Syndicate reserves are prepared on an underwriting year basis and equal the Tier 1 reserves
plus any reserve risk loadings. The intention of such risk loadings is to match areas within the Syndicate where
the perception is that there is a particularly high risk that the best estimate reserve may be inadequate. Such
areas include, but are not limited to, the following:
• new classes of business
• classes where early development is materially better or worse than expected
• classes or events with abnormally skewed claim distributions
• claim events or reserving categories with a poorly understood distribution
To ensure consistency in the application of risk loadings, the starting point in their assessment is, where
possible, formulaic. The formulaic risk loadings are adjusted wherever considered either excessive or
understated. There may also be additional risk loadings in respect of risks not covered by the formulaic basis.
The underwriting year Syndicate reserves provide the basis for all Syndicate results and forecasts.
(b) Annually accounted Syndicate reserves
Annually accounted Syndicate reserves are the underwriting year Syndicate reserves converted to an annually
accounted basis, plus additional loadings.
The Managing Agent’s Board approves all risk loadings within Syndicate reserves.
The assessment of actuarial best estimate reserves is a rolling quarterly process. The underwriting portfolio
comprises a number of heterogeneous business types, each of which is projected to ultimate. Where certain
contracts or claim events obscure development trends, these are split out for separate review. The application
of standard actuarial techniques to the historical attritional, large and catastrophe claims data supports the
estimation of ultimate loss ratios. The analysis also draws on external data or non-standard methodologies
where appropriate. Whenever actual development of premiums or claims within a reserving category during a
quarter is materially different from expected development based on the existing methodology then that
methodology is reassessed and where appropriate amended. The analysis takes credit for reinsurance
recoveries and provides for the possibility of reinsurer failure.
Reserving risk is controlled by the robust application of actuarial methodologies, stepped sign-off procedures,
quarterly tracking of projected ultimate loss ratios and reassessment of methodologies where appropriate,
regular dialogue between actuaries and practitioners and access to a history of loss data. Finally, explicit risk
loadings are applied in respect of the areas of greatest risk within the reserve assessment.
Although the risk loadings provide important protection against adverse developments in reserves, the degree
of subjectivity in the reserving process, the exposure to unpredictable external influences (e.g. the legal
environment) and the quantum of reserves relative to net tangible assets mean that reserving remains a
significant source of risk to the Syndicate.
Syndicate 1084
Managing Agent’s Report
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Financial Risks
Credit risk
The Managing Agent reviews all reinsurer counterparties with whom the Syndicate wishes to conduct business
and sets credit thresholds for the total potential recoveries due from each reinsurer. The review includes an
analysis of the financial strength of the reinsurer, its payment performance record and standing in the market.
Thereafter, management of reinsurer credit risk follows active and regular review of the credit ratings and
financial exposure to all approved reinsurers.
The Syndicate predominantly purchases reinsurance from reinsurers rated strong or better by Standard &
Poor’s (or equivalent). Maximum exposures per reinsurer are set in response to a reinsurer’s rating and net
assets.
Broker credit risk limits are also determined depending on the grading of the relevant broker and exposures
monitored against limits on a monthly basis.
Investment risk
The Managing Agent’s approach is that investment activities are complementary to the primary underwriting
activities of the business and should not therefore divert or utilise financial resources otherwise available for
insurance operations.
The preservation of capital and maintenance of sufficient liquidity to support the business and the
enhancement of investment returns, within a set of defined risk constraints, are at the heart of the financial
market risk policies adopted by the Managing Agent.
Investment risk constraints, which quantify the maximum amount of investment risk permitted over a one-year
time horizon, are approved by the Managing Agent’s Board on an annual basis and are used to derive the
maximum allocation, or risk budget, that can be allocated to each asset class.
The Managing Agent reviews and amends asset allocations in accordance with investment risk constraints.
Due regard is given to the outlook for each asset class because of changes in market conditions and
investment returns. Proposed asset allocations are tested using stochastic modelling techniques prior to formal
adoption.
The Syndicate invests a proportion of funds in fixed income and variable yield securities managed by
professional portfolio managers. Each manager operates within a defined set of investment guidelines and
against an appropriate benchmark.
Refer to Note 12 for more details on the Syndicate’s exposure to investment risk and processes in place for
managing these risks.
Operational risk
Operational risk arises from inadequate or failed internal processes and systems, from people related or
external events. Operational risk excludes strategic and reputation risk, but includes breakdowns in the internal
control environment, human error, legal & regulatory risk and the risk arising from change initiatives. The
Managing Agent seeks to manage this risk through business performance measures, internal controls, disaster
recovery and operational resilience planning and other governing procedures, which are reviewed through a
structured programme of testing of processes and systems by Internal Audit and other assurance processes.
Regulatory and legal risk
Regulatory risk is the risk of loss or reputational damage owing to a breach of regulatory and legal requirements
or failure to respond to regulatory change.
The Managing Agent is required to comply with the requirements of the Prudential Regulatory Authority,
Financial Conduct Authority and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s market
by overseas regulators, particularly in respect of US situs business. The Managing Agent has a Compliance
Officer, who monitors regulatory developments and assesses the impact on agency policy. The Managing
Agent also undertakes a compliance-monitoring programme.
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Legal risk is the risk that exposes the Managing Agent to actual or potential legal proceedings. The Managing
Agent has internal legal risk resource, which monitors legal developments and assesses impact on the
business. The Managing Agent also has access to external legal resource to support on specialised matters.
Conduct risk
Conduct risk is the risk of treating the Syndicate’s customers unethically or unfairly by delivering inappropriate
outcomes due to improper attitudes, systems, controls and governance, including non-compliance with FCA
Consumer Duty and product governance requirements. The Managing Agent operates a suitable risk
management and governance framework across the Syndicate, which monitors the various areas of potential
exposure to conduct risk matters and ensures appropriate design and performance of controls and the effective
escalation and resolution of items as required.
Staff matters
Chaucer Underwriting Services Limited (CUSL), the service company that employs people who perform work
on behalf of the Syndicate, considers its employees to be a key priority. It seeks to provide an environment for
all employees that is rewarding, inclusive and safe, and complies with appropriate employee legislation. During
the year there have been no significant injuries to employees in the workplace or any significant actions taken
by any regulatory bodies with regard to employee matters.
Climate related risks
The Managing Agent’s Board is responsible for the effectiveness and oversight of the risk management system
and the general management and mitigation of risks including climate change risk. It has delegated the detailed
regular oversight of climate related risk management processes and activities to its Risk and Capital
Committee, who monitor the effectiveness of the risk management framework including internal controls. The
Chief Risk Officer is nominated as the Senior Manager responsible for managing the financial risks of climate
change.
The Managing Agent recognises that the Syndicate is likely to be affected by risks arising from climate change
and that those risks may arise over different time horizons. In delivering its strategy for the Syndicate, the
Managing Agent is committed to considering and addressing those risks, including those that are longer term
and extend beyond its usual business and strategy planning timescales.
The Managing Agent has been working to improve the understanding, approach, management, reporting and
disclosure of climate risks. Recent key developments include:
• Development and implementation of underwriting and investment climate risk appetites.
• Annual review of the science of climate change and its relevance to both the syndicate’s material
exposures and that of the global insurance industry.
• Strengthening of the climate risk governance at all levels of the risk governance structure.
• An updated validation of the North Atlantic hurricane model and a complete review of the Syndicate’s
view of risk for this peril considers climate change that has already occurred up to and including 2023.
• A review of scientific research for Japan Typhoon risk and how it is changing with climate change,
along with stress testing has led to updating Our Own View of Risk to consider current climate change
that has already occurred.
• The Managing Agent published a whitepaper on changing wildfire risk for North America to support
the Syndicate’s View of Risk. This informs how climate change is changing the peril across all time
horizons.
• Carried out a detailed literature review of scientific research on large hail risk in Europe. This will be
used to support the Syndicate’s understanding of this peril and how our Own View of Risk might
change with climate change.
Climate risk strategy
The Managing Agent will continue to develop its strategy to bolster the management of the risks and
opportunities arising from climate change. Planned actions include:
• The Syndicate will support its client base through the transition from fossil fuel exploration and
production to renewable energy production. The Syndicate already underwrites a book of renewable
energy business and this book is targeted to grow.
• Exposure management activities undertaken to date have demonstrated the importance of data
collection, in particular for modelling exposures and assessing loss scenarios. The Managing Agent
will improve exposure data categorisation to improve the assessment of the Syndicate’s exposures to
climate change risk. The Managing Agent will prioritise the assessment of its exposure to vulnerable
Syndicate 1084
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9
regions and will insist that the exposure to these vulnerable regions is adequately priced when
accepting risk.
• The Managing Agent has carried out extensive scenario testing as part of the Prudential Regulation
Authority’s Climate Biennial Exploratory Scenario (CBES) for US hurricane, NA wildfire, US severe
thunderstorm, NA winter storm and flooding, UK flooding, EU windstorm, and Japan typhoon. The
methodologies and processes derived from CBES have enabled the subsequent introduction of
climate risk stress tests and risk appetites.
• The Managing Agent plans to enhance its due diligence process to understand the potential current
and future impacts of climate risks on material existing counterparty arrangements and all future
material counterparty arrangements.
• The Managing Agent will commit to increases of risk appetite where the business is profitably priced
and mix of catastrophe versus non-catastrophe exposure and reserving risk is appropriate. However,
risk appetites will not increase where it may lead to increased exposure to climate change risks where
it is not profitable to do so.
Scenario Testing
In 2024 the Risk Management Function developed a Materiality Assessment for Climate Change Risk which
will be reviewed annually. The baseline scenario used for the Materiality Assessment was an adapted Network
for Greening the Financial System (NGFS) climate pathway. These adapted NGFS pathways were adopted
by Chaucer Group in 2021 for the CBES return to the BoE and have been the basis for all subsequent climate
change risk developments and analysis.
The Managing Agent undertook detailed quantitative scenario tests for several risk categories including
Underwriting, Investment and Liability Risks Tests were completed according to three pre-defined scenarios
known as Early, Late, and No Action. The first two reflected different pathways to net-zero UK greenhouse gas
emissions by 2050. The third scenario reflected a situation where governments globally are unwilling or unable
to bring about effective policy change.
The methodologies and processes derived from CBES have enabled the subsequent introduction of climate
risk stress tests and risk appetites for insurance and investment risk.
The insurance stress test now enables the Managing Agent to understand the Syndicate’s Climate Risk
Vulnerability for key meteorological perils in North America, Europe, and Japan and for a risk appetite to be
set. Similarly, investment risk stress have been introduced and enabled the setting of a Climate Value at Risk
(CVaR) appetite.
These investment stress tests were reviewed and approved by the Risk and Capital Committee in 2023 and
are now monitored on an ongoing basis as part of Own View of Risk development. The investment stress tests
are regularly reviewed by the Risk and Capital Committee.
Specifically, the scenario testing process included:
• Physical scenario tests on key climate change impacted perils for Property exposures on a range of
time horizons, according to Early, Late and No Additional Action scenario.
• Determining the financial impacts from climate change scenario tests for asset sectors and
counterparty projections for a range of time horizons according to Early, Late and No Additional Action
scenario.
• Assessment of potential exposure to climate-related litigation for seven predefined legal cases for the
Syndicate’s largest three insured climate related sectors in-scope for the exercise.
• Calculating the impact of the first two on the Syndicate’s balance sheet at time horizons from year 0
to year 30 projections.
Risk appetites
Risk appetites serve a strategic purpose by enabling the Managing Agent to assess the vulnerability of insured
portfolios to climate risk. They are a key tool for management in setting and monitoring strategies on climate
risk and other risk management activities lead from them.
The Managing Agent already has an established set of mature and well embedded definitive risk appetites and
limits across the risk categories which are set annually, monitored regularly, and reported with oversight from
the Risk and Capital Committee. This ensures that the Managing Agent takes certain and considered decisions
about the degree of risk being taken in line with price adequacy and that adjustments can be made to adjust
Syndicate 1084
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the exposure where necessary. For these to be effective it is important that metrics capture all material sources
of risk. To that end, modelling of catastrophe risk needs to factor in the enhanced risk caused by climate
change today. The Managing Agent’s Exposure Management team dedicate considerable resource to ensure
climate change is properly considered in the Managing Agent’s Own View of Risk.
Identification and assessment of climate risks
The major climate risks are recognised as Physical, Transition and Liability risks, which are monitored through
the Managing Agent’s Enterprise Risk Management (ERM) framework processes. The Managing Agent
considers that the financial risks from climate change can be managed through existing 1st, 2nd and 3rd line
of defence frameworks and in particular risk management processes and activities. The ongoing, forward-
looking ORSA process and annual ORSA Report which documents the various risk management and capital
assessment activities also support the Managing Agent in managing climate risk by clearly assessing and
reporting its Own View of Risk.
The Managing Agent has been developing specific risk management tools and processes to address climate
risks and ensure the sustainability of its business and targeted performance of the Syndicate. Existing
strategies implemented to date include:
• Enhanced focus on catastrophe perils where climate change is identified as a driver of increased risk,
including improved modelling capability and reporting;
• Underwriting of renewable energy;
• Enhanced risk management capability and framework specifically adapted to improve understanding
and management of climate change risks;
• Adaptations to processes in the ERM framework ensure that the identification and assessment of long-
term risks is considered with a focus on key risk categories;
• Changes to investment strategy to mitigate the transition risks of climate change;
• Rigorous validation of catastrophe risk models within the business and analysis of trends in event
frequency and severity forming part of the review of model assumptions. Where trends are observed
in recent years, this is reflected in the Solvency Capital Requirement (SCR) modelling. Climate change
is also considered as part of the risk driver framework used for setting correlations between classes.
Classes which are deemed to be at higher risk of the effects of climate change, such as Property and
Property Treaty, will likely score more highly against this risk driver when setting assumptions.
• Formation of a Sustainability Group and the ongoing development of a Sustainability Report and
objectives which will contribute to the mitigation of climate-related operational risks;
• Development of Own View of Risk which is core to managing climate risk; and
• Production of a quarterly Climate Change Risk Dashboard highlighting the material climate risk
exposures categorising these risks into Physical, Transitional and Litigation risk types, recognising the
time horizon around expected emergence of issues.
Whilst existing approaches are an effective foundation, the characteristics of climate risks, including time-
horizon and potential to impact all risk categories require that new approaches are also developed to
supplement the foundation. These developments are being undertaken with reference to the PRA’s
Supervisory Statement 3/19.
Transition Risks
The Syndicate’s investment portfolio is exposed to transition risk, and in particular, any impacts to the liquidity
of the portfolio as a result of policy changes and/or risks associated with the transition to a low carbon economy.
Risk management actions taken to date include quantitative scenario testing of the investment portfolio to
understand the potential impact to the assets the Syndicate holds, across a range of time horizons.
The Syndicate has a very short-dated portfolio and is a hold to maturity investor. As such, the risk from climate
change on the portfolio is seen as minimal. The periodic reinvestment of a portion of the portfolio provides
flexibility in investment decisions and the ability to react to developing market conditions.
The Syndicate could also be exposed to transition risk arising from uncertainty as to the depth and degree of
alignment between the climate change policies of the different jurisdictions that the Syndicate operates in. In
a scenario where transition targets diverge, chronic and acute physical risks may worsen and have the potential
to impact the Syndicate’s exposures by significantly increasing them if not mitigated. Further, transition risk
could cause much deeper, wider disruption including that to the financial system if industry were forced to
predict when or if transition policies may be introduced across different regions.
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Physical Risks
The Syndicate is materially exposed through its underwriting portfolio to weather events which are being
affected by climate change. In order to assess these effects, the risk of changing climate is viewed over three-
time horizons: current climate change (<5 years), near term (expected in next 5-10 years), and long term (10+
years). Scenarios using recognised emissions pathways or temperature increases are used to evaluate long
term risk, while stress testing is carried out over near-term time horizons based on projection studies and
evolving research trends. The current risk of climate change is assessed on trends with good evidence and
confidence. If material impacts from changes in climate that have already occurred, then the Syndicate’s Own
View of Risk will be updated. Risk management actions taken to date are:
• Quantitative scenario testing of the Syndicate’s major climate-related perils across multiple time
horizons and temperature-rise outcomes to further understand the potential impact to these liabilities.
• Rigorous validation of the North Atlantic hurricane model and a complete review of the view of risk for
this peril in 2024. This update ensure that the risk includes climate change which has occurred to date.
• Thorough literature review of current research into large hail risk and climate change. This will support
the Syndicate in understanding how the latest research can be factored into our various Own View of
Risk for hail.
• Research review and climate change stress testing of the Japan Typhoon model which resulted in a
full review of the view of risk for this peril. After reviewing trends in historical data, published climate
model projections, and scientific consensus. our Own View of Risk was updated to represent a shift
norward in the maximum intensity of typhoons in the model.
• Climate-related liability risk modelling to assess these risks in the underwriting portfolio; and
• Strategic workshops assessing the impact of physical climate change risk and opportunities on key
industries that may be materially affected by physical climate change trends to identify potential gaps
(or unsolved customer problems) where insurance solutions could play a role.
Liability Risks
The Syndicate is exposed to liability risks from climate change through its portfolio of liability products. Risk
management actions taken to date are:
• Scenario testing of the Syndicate’s potential exposure to liability risks arising from climate change,
considering potential litigation risks arising from climate change across the Syndicate’s underwriting
divisions. The only in-scope products, featuring General Liability, have been analysed and assessed
for potential exposure.
• The Managing Agent’s Exposure Management team have developed a risk framework for managing
potential catastrophic liability risk. The core stages of this development have been to improve the data
linked to liability policies, generate potential scenarios, and consider impacted industries, and finally
to quantify the loss.
A model has now been developed which can simulate multi-year liability events against the Syndicate’s
portfolio, defining the total amount of culpability within the event, how this is distributed around sectors of the
economy and into which type of liability policies these could be recovered. These scenarios include climate
change financial risks such as ‘Greenwashing’ and ‘Sea Level Rise’.
Syndicate 1084
Statement of Managing Agent’s Responsibilities
13
The Managing Agent is responsible for preparing the Syndicate annual report and annual accounts in
accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the
Managing Agent to prepare Syndicate annual accounts at 31 December each year in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable
law). The annual accounts are required by law to give a true and fair view of the state of affairs of the Syndicate
as at that date and of its profit or loss for that year.
In preparing the Syndicate annual accounts, the Managing Agent is required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• State whether applicable UK accounting standards have been followed, subject to any material
departures disclosed and explained in the annual accounts; and
• Prepare the annual accounts on the basis that the Syndicate will continue to write future business unless
it is inappropriate to presume that the Syndicate will do so.
The Managing Agent is responsible for keeping proper accounting records, which disclose with reasonable
accuracy at any time the financial position of the Syndicate and enable it to ensure that the Syndicate annual
accounts comply with the 2008 Regulations. It is also responsible for safeguarding the assets of the Syndicate
and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.
The Managing Agent is responsible for the preparation and review of the iXBRL tagging that has been applied
to the annual 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 Managing Agent is responsible for the maintenance and integrity of the corporate and financial information
included on the business’ website. Legislation in the United Kingdom governing the preparation and
dissemination of annual accounts may differ from legislation in other jurisdiction.
Syndicate 1084
Independent auditors’ report to the members of Syndicate 1084
14
Opinion
We have audited the Syndicate annual accounts of Syndicate 1084 (“the Syndicate”) for the year ended 31
December 2024 which comprise the Statement of 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 annual accounts:
• give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2024 and of its profit for
the year then ended;
• have been properly prepared in accordance with UK accounting standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland; and
• have been prepared in accordance with the requirements of the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and Sections 1 and 5 of the Syndicate Accounts
Instructions Version 2.0 issued by Lloyd’s, as modified by the Syndicate Accounts Frequently Asked
Questions Version 1.1 dated 18 February 2025 issued by Lloyd’s (together “the Syndicate Accounts
Instructions”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), applicable
law, and, under the terms of our engagement letter dated 10 June 2024, the Syndicate Account Instructions.
Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are
independent of the Syndicate in accordance with, UK ethical requirements including the FRC Ethical Standard
as applied to other entities of public interest. We believe that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion.
Going concern
The Directors of the Managing Agent (“the Directors”) have prepared the Syndicate annual accounts on the
going concern basis as they do not intend to cease underwriting or to cease its operations, and as they have
concluded that the Syndicate’s financial position means that this is realistic. They have also concluded that
there are no material uncertainties that could have cast significant doubt over its ability to continue as a going
concern for at least a year from the date of approval of the Syndicate annual accounts (“the going concern
period”).
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s business
model and 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 annual accounts is appropriate; and
• we have not identified and concur with the Directors’ assessment that there is not, a material uncertainty
related to events or conditions that, individually or collectively, may cast significant doubt on the
Syndicate’s ability to continue as a going concern for the going concern period.
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:
Syndicate 1084
Independent auditors’ report to the members of Syndicate 1084
15
• 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, there is a fraud risk related to
revenue recognition because of the significant estimates and subjective judgements involved in the
assessment of revenue recognition.
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 or with no description, entries with no User
ID, entries posted to accounts that contain significant estimates, entries posted or approved by
unauthorised users, entries posted by and approved by the same individual, entries to seldom used
accounts, post-closing entries and entries containing unusual debits and credits.
• 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 majority 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 annual accounts from our general commercial and sector experience, and through discussion with
the directors and others management (as required by auditing standards), and from inspection of the Syndicate
and Managing Agent’s regulatory and legal correspondence. We discussed with the directors and other
management the policies and procedures regarding compliance with laws and regulations.
As the Syndicate is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements. We communicated
identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the Syndicate annual accounts varies considerably.
Firstly, the Syndicate is subject to laws and regulations that directly affect the Syndicate annual accounts
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
annual accounts 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 annual accounts, 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.
Syndicate 1084
Independent auditors’ report to the members of Syndicate 1084
15
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 annual accounts, 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 Syndicate annual accounts, 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 annual accounts does not cover that report and we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the Report of the Directors of the Managing Agent and, in doing so, consider
whether, based on our Syndicate annual accounts audit work, the information therein is materially misstated
or inconsistent with the Syndicate annual accounts or our audit knowledge. Based solely on that work:
• we have not identified material misstatements in the Report of the Directors of the Managing Agent;
• in our opinion the information given in the Report of the Directors of the Managing Agent is consistent with
the Syndicate annual accounts; and
• in our opinion the Report of the Directors of the Managing Agent has been prepared in accordance with
the requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008.
Matters on which we are required to report by exception
Under the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, we
are required to report to you if, in our opinion:
• adequate accounting records have not been kept on behalf of the Syndicate; or
• the Syndicate annual accounts are not in agreement with the accounting records; or
• certain disclosures of Managing Agent’s emoluments specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Responsibilities of the Directors of the Managing Agent
As explained more fully in their statement set out on page 13, the Directors of the Managing Agent are
responsible for: the preparation of the Syndicate annual accounts, including in accordance with the
requirements of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 and the Syndicate Accounts Instructions, and for being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the preparation of Syndicate annual accounts that
are free from material misstatement, whether due to fraud or error; assessing the Syndicate’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern
basis of accounting unless they either intend to cease operations, or have no realistic alternative but to do so.
Syndicate 1084
Statement of Comprehensive Income for the year ended 31 December
2024
18
| 2024 | 2023 | ||
| Note(s) | $000 | $000 | |
| Technical Account – General Business | |||
Gross premiums written | 3 | ||
Outward reinsurance premiums | ( | ( | |
| Premiums written, net of reinsurance | |||
Changes in unearned premium | |||
Change in the gross provision for unearned premiums | 19 | ( | ( |
| Change in the provision for unearned premiums reinsurers’ share | 19 | ||
| Net change in provision for unearned premiums | ( | ( | |
| Earned premiums, net of reinsurance | |||
Allocated investment return transferred from the Non-Technical Account | |||
Claims paid | |||
Gross amount | 19 | ( | ( |
| Reinsurers’ share | 19 | ||
| Net claims paid | ( | ( | |
Change in the provision for claims | |||
Gross amount | 19 | ( | ( |
| Reinsurers’ share | 19 | ( | |
| Net change in provision for claims | ( | ( | |
| Claims incurred, net of reinsurance | ( | ( | |
Net operating expenses | 3, 5 | ( | ( |
Other technical charges, net of reinsurance | 9 | ( | |
| Balance on the Technical Account – General Business | |||
| Non-Technical Account – General business | |||
Investment income | 10 | ||
Realised gains on investments | 10 | ||
Unrealised gains on investments | 10 | ||
Investment expenses and charges | 10 | ( | ( |
Total investment return | |||
Allocated investment return transferred to the general business technical Account | ( | ( | |
| Loss on foreign exchange | ( | ( | |
| Total comprehensive income for the year |
All the amounts above are in respect of continuing operations.
Syndicate 1084
Statement of Financial Position as at 31 December 2024
19
| 2024 | 2023 | ||
| Note(s) | $000 | $000 | |
Assets | |||
| Investments | |||
Financial investments | 12, 13 | ||
Deposits with ceded undertakings | |||
| Reinsurers’ share of technical provisions | |||
Provision for unearned premiums | 19 | ||
Claims outstanding | 19, 21 | ||
| Debtors | |||
Debtors arising out of direct insurance operations - intermediaries | 14 | ||
Debtors arising out of reinsurance operations | 15 | ||
Other debtors | 16 | ||
| Other assets | |||
Cash at bank and in hand | |||
Other | 17 | ||
| Prepayments and accrued income | |||
Accrued interest and rent | |||
Deferred acquisition costs | 18 | ||
Other prepayments and accrued income | |||
| Total assets | |||
| Capital and reserves | |||
| Member’s balances | |||
Total capital and reserves | |||
| Liabilities | |||
| Technical provisions | |||
Provision for unearned premiums | 19 | ||
Claims outstanding | 12, 19, 21 | ||
| Creditors | |||
Creditors arising out of direct insurance operations | 22 | ||
Creditors arising out of reinsurance operations | 23 | ||
Other creditors including taxation and social security | 24 | ||
| Accruals and deferred income | |||
Total liabilities | |||
| Total liabilities, capital and reserves |
The annual accounts on pages 18 to 51 were approved by the Board of Chaucer Syndicates Limited on 04
March 2025 and signed on its behalf by:
J Wright
Chief Financial Officer
Syndicate 1084
Statement of Changes in Members’ Balances for the year ended 31
December 2024
20
| 2024 | 2023 | |
| $000 | $000 | |
| Members’ balance brought forward at 1 January | ( | |
Total recognised gains for the year | ||
Payments of profit to members' personal reserve funds | ( | ( |
Other | ( | |
| Members’ balance carried forward at 31 December |
Syndicate 1084
Statement of Cash Flows for the year ended 31 December 2024
21
| 2024 | 2023 | ||
| Note | $000 | $000 | |
| Cash flows from operating activities | |||
Total comprehensive income | |||
Adjustments: | |||
Increase in gross technical provisions | |||
(Decrease) / increase in reinsurers' share of technical provisions | ( | ||
Increase in debtors | ( | ( | |
Increase / (decrease) in creditors | ( | ||
Movement in other assets/liabilities | |||
Investment return | 10 | ( | ( |
Foreign exchange | |||
Other | ( | ||
| Net cash flows from operating activities | |||
Cash flows from investing activities | |||
Purchase of equity and debt instruments | ( | ( | |
Sale of equity and debt instruments | |||
Investment income received | |||
Other | ( | ||
| Net cash flows from investing activities | ( | ( | |
| Cash flows from financing activities | |||
Distribution profit | ( | ( | |
Open year profit release | ( | ||
| Net cash flows from financing activities | ( | ( | |
Net decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the beginning of the year | |||
Foreign exchange on cash and cash equivalents | ( | ||
| Cash and cash equivalents at the end of the year |
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
22
1. Basis of preparation
The Syndicate comprises a group of members of the Society of Lloyd's that underwrites insurance business in
the London Market. The address of the Syndicate’s managing agent is 52 Lime Street, London, EC3M 7AF.
The Syndicate annual accounts 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 (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 Syndicate annual accounts have been prepared in accordance with applicable accounting standards. A
summary of the more important accounting policies is set out below, together with an explanation of where
changes have been made to previous policies on the adoption of new accounting standards in the year.
The financial statements are presented in USD and all amounts have been rounded to the nearest thousand,
unless otherwise indicated.
Restatement of comparative information
During 2024, Lloyd's introduced changes to the Syndicate accounts process to rationalise and standardise
financial reporting across the market. As a result, certain comparative information has been restated to ensure
consistency with current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions.
The changes comprise:
a) Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged.
The principal change is the reclassification of holdings in collective investment schemes, previously shown in
cash flows from investing activities, to form part of cash and cash equivalents in the Statement of Cash Flows.
The comparative balances in Note 25 have also been reclassified to align with the current period presentation.
b) Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been
aggregated or disaggregated within the financial statements and related notes. This includes:
• The presentation of realised and unrealised gains and losses on investments, which are now shown
on a disaggregated basis in the Non-Technical Account of the Statement of Comprehensive Income;
• The presentation of deposits with ceding undertakings, which is now shown on a disaggregated basis
in investments on the Statement of Financial Position;
• The presentation of Energy and Miscellaneous classes of business, which are now shown on an
aggregated and disaggregated basis respectively in Note 3;
• The presentation of gross premiums written by location of risk, which is now shown for direct gross
premiums written only in Note 3;
• The presentation of staff numbers, which is now shown to aggregate other staff into the administration
and finance category and disaggregate Investment staff from this same category in Note 7;
• The presentation of interest and similar income, which is now shown on an aggregated basis to include
income from financial assets at fair value through profit and loss in Note 10;
• The presentation of overseas deposits, which is now shown on an aggregated basis in credit risk
disclosure in Note 12;
• The presentation of syndicate loans to central fund, which is now shown on a disaggregated basis in
the financial instruments and financial investments in Notes 12 and 13;
• The presentation of deferred acquisition costs is now shown separately from the technical provisions
and the movements in the balance is now shown on a disaggregated basis in Note 18; and
• The presentation of the movements in technical provisions, which are now shown on a disaggregated
basis in Note 19;
The reclassification and aggregation changes have been applied retrospectively and had no impact on
previously reported total comprehensive income, total assets, total liabilities, or total capital and reserves.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
23
1. Basis of preparation (continued)
Going concern
The Syndicate has financial resources to meet its financial needs and manages its portfolio of insurance risk.
The Directors have continued to review the business plans, liquidity and operational resilience of the Syndicate
and are satisfied that the Syndicate is well positioned to manage its business risks in the current economic
environment. The Syndicate’s 2025 Year of Account has opened and the Directors have concluded that the
Syndicate has sufficient resources to, and a reasonable expectation that it will, open a 2026 Year of Account.
The Syndicate has sufficient capital for each year of account in its Funds at Lloyd’s (FAL). There is no intention
to cease underwriting or cease the operations of the Syndicate. Having assessed the principal risks, the
Directors considered it appropriate to adopt the going concern basis of accounting in preparing the accounts.
2. Accounting policies
a) Insurance contracts
Insurance contracts are those contracts that transfer significant insurance risk. Such contracts may also
transfer financial risk.
i) Premiums written
Premiums written comprise premiums on contracts incepted during the financial year as well as adjustments
made in the year to premiums written in prior accounting periods. Premiums are shown gross of brokerage
payable and exclude taxes and duties levied on them. Premium written is initially based on the estimated
premium income (‘EPI’) of each contract. Judgement is involved in determining the ultimate estimates in order
to establish the appropriate premium value and, ultimately, the cash to be received. EPI estimates are updated
to reflect changes in an underwriter’s expectation through consultation with brokers, changes in market
conditions, historic experience and to reflect actual cash received for a contract.
ii) Unearned premiums
Written premiums are recognised as earned according to the risk profile of the policy. Unearned premiums
represent the proportion of premiums written that relate to unexpired terms of policies in force at the balance
sheet date, calculated on the basis of established earnings patterns or time apportionment as appropriate.
iii) Reinsurance premiums ceded
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct or inwards business being reinsured.
iv) Claims provisions and related recoveries
Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or
not, including related direct and indirect claims handling costs and adjustments to claims outstanding from
previous years.
The provision for claims outstanding is assessed on an individual case basis and is based on the estimated
ultimate cost of all claims notified but not settled by the balance sheet date, together with the provision for
related claims handling costs. The provision also includes the estimated cost of claims incurred but not
reported (IBNR) at the balance sheet date based on statistical methods. Refer to reserving risk section in
Managing Agent’s Report for more detail.
These methods generally involve projecting from past experience the development of claims over time to form
a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations
in the business accepted and the underlying terms and conditions. For the most recent years, where a high
degree of volatility arises from projections, estimates may be based in part on output from rating and other
models of the business accepted and assessments of underwriting conditions. The amount of salvage and
subrogation recoveries is separately identified and, where material, reported as an asset.
The reinsurers’ share of provisions for claims is based on the amounts of outstanding claims and projections
for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme in place for
the class of business, the claims experience for the year and the current security rating of the reinsurance
companies involved. A number of statistical methods are used to assist in making these estimates.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
24
2. Accounting policies (continued)
iv) Claims provisions and related recoveries (continued)
The two most critical assumptions as regards claims provisions are that the past is a reasonable predictor of
the likely level of claims development and the rating and other models used for current business are fair
reflections of the likely level of ultimate claims to be incurred.
Finally, the Actuarial Function applies a bespoke approach for allowing for excess IBNR where existing
methods would not otherwise adequately allow for future inflation expectations. In particular, where future
calendar year inflation is forecast to be different to past experience. This approach considers both frequency
and severity and expectations of economic and excess inflation (including social inflation) applied to the
specific drivers of loss for classes written by the Syndicate.
The Directors consider that the provisions for gross claims are fairly stated on the basis of the information
currently available to them. However, the ultimate liability will vary as a result of subsequent information and
events and this may result in significant adjustments to the amounts provided. Adjustments to the amounts of
claims provisions established in prior years are reflected in the accounts for the period in which the adjustments
are made. The methods used, and the estimates made, are reviewed regularly.
v) Unexpired risks provision
A provision for unexpired risks is made where claims and related expenses arising after the end of the financial
period in respect of contracts concluded before that date are expected to exceed the unearned premiums and
premiums receivable under these contracts, after the deduction of any acquisition costs deferred. The provision
for unexpired risks is calculated by reference to classes of business which are managed together, after taking
into account relevant investment return.
vi) Deferred acquisition costs
Acquisition costs, which comprise commission and other costs directly related to the acquisition of new
insurance contracts, are deferred to the extent that they are attributable to premiums unearned at the balance
sheet date.
b) Investment contracts
Amounts paid in respect of certain reinsurance contracts, which principally involve the transfer of financial risk
and not significant insurance risk, are accounted for using deposit accounting, under which amounts paid are
debited directly to the Statement of Financial Position. Investment contract assets are initially recognised at
fair value and subsequently carried in the Statement of Financial Position at amortised cost and shown as
‘Other assets’. Investment contract liabilities are carried in the Statement of Financial Position at amortised
cost and shown within ‘Other creditors including taxation and social security’. Contractual gains and losses are
recognised in other technical income in the Statement of Comprehensive Income using the effective interest
rate method.
c) Net operating expenses
Net operating expenses are recognised on an accruals basis. These comprise the Syndicate’s operating
expenses such as remuneration, office and administrative costs, acquisition costs, Managing Agency costs,
the costs of membership of Lloyd’s and other expenses attributable to the Syndicate’s underwriting.
d) 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.
e) Foreign currencies
The functional and presentation currency of the Syndicate is US Dollars
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the
dates of the transactions.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
25
2. Accounting policies (continued)
e) Foreign currencies (continued)
At each period end foreign currency monetary items are translated using the closing rate. For this purpose all
assets and liabilities arising from insurance contracts (including unearned premiums, deferred acquisition costs
and unexpired risks provisions) are monetary items. Non-monetary items measured at historical cost are
translated using the exchange rate at the date of the transaction and non-monetary items measured at fair
value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at
period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the non-technical account.
f) Financial assets
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions of IAS
39 Financial Instruments: Recognition and Measurement (as adopted for use in the UK).
i. 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 and other comprehensive income.
Financial assets and liabilities are classified on their initial recognition.
The initial classification of a financial instrument shall take into account contractual terms including those
relating to future variations. Once the classification of a financial instrument is determined at initial recognition,
re-assessment is only required subsequently when there has been a modification of contractual terms that is
relevant to an assessment of the classification.
All investments are classified as fair value through profit and loss and are measured at fair value.
The Syndicate does not hold any derivative / non-derivative financial assets or financial liabilities for trading
purposes.
ii. Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of the
instrument. Financial assets are 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 derecognised 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.
iii. 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 or 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 fair value changes
recognised immediately in profit or loss. Net gains or net losses on financial assets measured at fair value
through profit or loss includes foreign exchange gains/losses arising on their translation to the functional
currency but excludes interest and dividend income.
Loans and receivables are measured at amortised cost using the effective interest method, except Syndicate
loans to the Central Fund which are measured at fair value through profit or loss.
Fair value is determined using published bid price quotations of each security. The Directors consider the fair
value through profit and loss option to be appropriate as financial assets are managed and their performance
evaluated on a fair value basis, in accordance with a documented investment strategy and information is provided
internally on that basis to key management personnel. In addition, investment risk is assessed on a total return
basis, which is consistent with the adoption of fair value through profit and loss. Deposits with credit institutions
are stated at cost and overseas deposits are stated at market value (per Lloyd’s valuation).
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
26
2. Accounting policies (continued)
f) Financial assets (continued)
Net gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are
presented in the Statement of Comprehensive Income within ‘Unrealised gains on investments’ or ‘Unrealised
losses on investments’.
iv. Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not at
fair value through profit or loss are impaired. Financial assets are impaired when objective evidence
demonstrates that a loss event has occurred after the initial recognition of an asset, and that the loss event
has an impact on the future cash flows on the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention of
the Syndicate about any significant financial difficulty of the issuer, or significant changes in the technological,
market, economic or legal environment in which the issuer operates.
An impairment loss recognised on an amortised cost asset reduces directly the carrying amount of the impaired
asset. All impairment losses are recognised in profit or loss. An impairment loss is reversed if the reversal can
be related objectively to an event occurring after the impairment loss was recognised. For financial assets
measured at amortised cost the reversal is recognised in profit or loss.
v. Off-setting
Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when,
and only when, the Syndicate currently has a legal right to set off the amounts and intends either to settle on
a net basis or to realise the asset and settle the liability simultaneously.
g) Financial liabilities
Creditors are financial liabilities and are recognised initially at fair value, net of directly attributable transaction
costs. Creditors are subsequently stated at amortised cost, using the effective interest method.
h) Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in
unrealised gains and losses, net of investment expenses, charges and interest.
Realised gains and losses on investments carried at market value are calculated as the difference between
sale proceeds and purchase price. Unrealised gains and losses on investments represent the difference
between the valuation at the balance sheet date and their valuation at the previous balance sheet date, or
purchase price, if acquired during the year, together with the reversal of unrealised gains and losses
recognised in earlier accounting periods in respect of investment disposals in the current period.
Investment return is initially recorded in the Non-Technical Account. A transfer is made from the Non-Technical
Account to the General Business Technical Account. Investment return has been wholly allocated to the
Technical Account as all investments relate to the Technical Account.
i) Taxation
Under Schedule 19 of the Finance Act 1993 Managing Agents are not required to deduct basic rate income
tax from trading income. In addition, all UK basic rate income tax deducted from Syndicate investment income
is recoverable by Managing Agents and consequently the distribution made to members or their members’
agent is gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earning. Any payments on account made by the Syndicate during the year are included in the
statement of financial position under the heading ’Members’ balances’. No provision has been made for any
overseas tax payable by members on underwriting results.
j) Pension costs
CUSL operates a defined contribution scheme. Pension contributions relating to CUSL staff working for the
Syndicate are charged to the Syndicate and included within net operating expenses.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
27
2. Accounting policies (continued)
k) Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate to settle Part
VII claims. These funds are held at amortised cost in the balance sheet.
l) Reinsurers’ commission
Reinsurers’ commissions which include reinsurance profit commission and overriding commission, are treated
as a contribution to expenses.
m) Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract
holders. These are classified as debt instruments as they are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. Insurance debtors are measured at amortised
cost less any provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does
not have any debtors directly with policyholders, all transactions occur via an intermediary.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not quoted
on an active market. Reinsurance debtors are measured at amortised cost less any provision for impairments.
Reinsurance creditors are stated at amortised cost. Reinsurance debtors principally relate to claims recoveries
where the underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily
premiums payable for reinsurance contracts and are recognised as an expense when due.
Other debtors principally consist of amounts due from sundry debtors and are carried at amortised cost less
any impairment losses.
Other creditors principally consist of amounts due to related entities and taxation. These are stated at
amortised cost determined using the effective interest rate method.
n) Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument.
All of the Syndicate’s written contracts and purchased reinsurance contracts transfer significant insurance risk
and therefore are recognised as insurance contracts.
o) Key judgements and uncertainty
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
In applying the accounting policies described in Note 2, the following estimates that have had the most
significant impact on the accounts are:
• Valuation of general insurance contract liabilities (page 23 - 24)
• Measurement of premium written (page 23)
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
28
3. Segmental analysis
An analysis of the underwriting result by class of business before investment return is set out below:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses*
Reinsurance
balance
Total
$000
$000
$000
$000
$000
$000
2024
Direct insurance
Accident and health
2,114
3,999
(1,293)
(405)
(286)
2,015
Motor (third party liability)
6,017
5,375
(3,887)
(1,905)
416
(1)
Motor (other classes)
7,705
6,811
(2,352)
(2,019)
(1,451)
989
Marine, aviation and
transport
205,219
200,440
(162,795)
(70,762)
4,672
(28,445)
Fire and other damage to
property
302,128
279,660
(103,833)
(82,817)
(41,615)
51,395
Third party liability
259,806
240,344
(152,993)
(87,578)
(349)
(576)
Credit and suretyship
130,422
97,455
(28,461)
(50,319)
572
19,247
Legal expenses
202
221
(108)
(68)
(20)
25
Total direct insurance
913,613
834,305
(455,722)
(295,873)
(38,061)
44,649
Reinsurance acceptances
1,471,146
1,408,438
(715,994)
(330,478)
(157,733)
204,233
Total
2,384,759
2,242,743
(1,171,716)
(626,351)
(195,794)
248,882
2023
Direct insurance
Accident and health
5,290
10,816
(9,150)
(2,484)
150
(668)
Motor (third party liability)
3,698
3,771
(2,505)
(1,483)
(9)
(226)
Motor (other classes)
6,286
5,622
(2,516)
(1,941)
(1,541)
(376)
Marine, aviation and
transport
200,216
182,153
(75,886)
(74,864)
(12,405)
18,998
Fire and other damage to
property
267,761
247,291
(89,444)
(78,434)
(53,705)
25,708
Third party liability
233,506
226,376
(107,639)
(84,299)
(11,843)
22,595
Credit and suretyship
76,530
70,054
(10,917)
(30,194)
(22,470)
6,473
Legal expenses
234
228
515
(1,456)
1,261
548
Total direct insurance
793,521
746,311
(297,542)
(275,155)
(100,562)
73,052
Reinsurance acceptances
1,316,816
1,247,070
(521,091)
(286,136)
(260,441)
179,402
Total
2,110,337
1,993,381
(818,633)
(561,291)
(361,003)
252,454
*
Gross operating expenses are not the same as net operating expenses shown in the Statement of Comprehensive Income because
of commissions in respect of outward reinsurance received.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
29
3. Segmental analysis (continued)
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:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Total
$000
$000
$000
$000
$000
$000
2024
Additional analysis
Fire and damage to
property of which is:
Specialities
56,260
52,622
(23,395)
(15,702)
(3,418)
10,107
Energy
16,222
13,984
(2,092)
(3,211)
(2,703)
5,978
Third party liability of which
is:
Energy
6,131
5,974
(4,109)
(1,741)
(630)
(506)
2023
Additional analysis
Fire and damage to
property of which is:
Specialities
60,689
57,375
(15,103)
(18,929)
(11,317)
12,026
Energy
11,581
13,050
(4,039)
(2,356)
(479)
6,176
Third party liability of which
is:
Energy
5,669
5,439
(2,529)
(1,678)
(766)
466
The gross premiums written for direct insurance by location of where contracts were concluded is presented
in the table below:
2024
2023
$000
$000
UK
913,613
793,521
913,613
793,521
4. Movement in prior year’s provision for claims outstanding
There has been no material change to the method of reserving during the year under review.
During 2024 the Syndicate released $47.7m of technical reserves in respect of prior years (2023: $89.2m),
arising predominantly from the Treaty, Property and Casualty divisions (2023: Casualty, Marine and Treaty
divisions). These releases were due to favourable claims development on prior year losses during 2024,
partially offset by reserve strengthening on Political Risk and Violence. Refer to Note 19 for further details.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
30
5. Net operating expenses
2024
2023
$000
$000
Acquisition costs - brokerage and commissions
478,378
420,999
Change in deferred acquisition costs
(26,144)
(22,416)
Administrative expenses
148,778
127,102
Members' standard personal expenses
31,705
29,918
Reinsurance commissions and profit participations
(44,204)
(15,514)
588,513
540,089
Total commissions for direct insurance business for the year amounted to:
2024
2023
$000
$000
Total commission for direct insurance business
178,193
158,293
6. Auditors’ remuneration
2024
2023
$000
$000
Fee payable to the Syndicate’s auditor for the audit of these annual accounts
594
561
Fees payable to the Syndicate’s auditor and its associates in respect of other services
pursuant to legislation
323
296
Other services pursuant to legislation relate to the audit and review of Lloyd’s regulatory returns as required
by Lloyd’s byelaws.
7. Staff numbers and costs
All staff are employed by a related group undertaking, CUSL.
CUSL recharged the following amounts to the Syndicate in respect of staff costs:
2024
2023
$000
$000
Wages and salaries
46,769
42,002
Social security costs
5,887
4,916
Other pension costs
5,387
4,811
58,043
51,729
The average number of employees employed by CUSL, but working for the Syndicate, during the year was as
follows:
2024
2023
Number
Number
Administration and finance
301
270
Underwriting
132
126
Claims
29
29
Investments
1
1
463
426
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
31
8. Emoluments of the Directors of the Managing Agent and Active Underwriter of the Syndicate
The Directors of the Managing Agent and the Active Underwriter received the following aggregate
remuneration for services rendered to the Syndicate:
2024
2023
$000
$000
Directors of Chaucer Syndicates Limited
2,138
1,922
Active Underwriter
410
403
9. Other technical charges, net of reinsurance
Other technical charges of $nil (2023: $0.3m) relate to a reduction in expected recoveries on a reinstatement
premium protection contract held.
10. Investment return
2024
2023
$000
$000
Interest and similar income
From financial assets designated at fair value through profit and loss
Interest and similar income
66,037
52,495
Interest on cash and cash equivalents
11,042
6,472
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
20,922
7,830
Losses on realisation of investments
(4,471)
(6,604)
Unrealised gains on investments
42,286
59,981
Unrealised losses on investments
(30,922)
(2,060)
Investment management expenses, including interest
(2,438)
(1,563)
Total investment return
102,456
116,551
Transferred to the technical account from the non-technical account
102,456
116,551
The investment return was wholly allocated to the technical account.
11. Distribution
A distribution of $19.4m to members will be proposed in relation to the closing year of account 2022 (2023:
$132.8m in relation to the closing year of account 2021).
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
32
12. Financial instruments
Risk policies
a) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
i. Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
ii. Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio and cash and cash equivalents
The most significant proportion of risk within the Syndicate’s fixed income portfolio is interest rate risk, which
increases as the duration of each portfolio gets longer. In order to manage this risk duration constraints are
set, relative to a benchmark to provide downside protection for increases in interest rates with duration targets
of minimum 2.5 years and maximum 3.5 years for each portfolio.
The Finance and Investment Committee monitors the duration of these assets on a regular basis, targeting an
investment portfolio duration that, in the event of changes in interest rates, always maintains the internal capital
requirements.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
33
12. Financial instruments (continued)
iii. Currency risk
The Syndicate writes a proportion of insurance business in currencies other than US dollar and is therefore
exposed to currency risk arising from changes in these exchange rates. Assets are held in each of these
currencies to generally match the corresponding liabilities.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Other
Total
2024
$000
$000
$000
$000
$000
$000
$000
$000
Investments
388,302
1,758,867
169,776
170,920
-
-
-
2,487,865
Reinsurers' share of
technical provisions
209,773
1,091,521
-
74,080
-
-
-
1,375,374
Debtors
65,188
851,514
55,254
36,960
43,736
33,230
143,430
1,229,312
Other assets
16,993
45,208
1,203
38,043
68,520
12
37,572
207,551
Prepayments and
accrued income
76,582
192,572
1,133
12,713
595
-
252
283,847
Total assets
756,838
3,939,682
227,366
332,716
112,851
33,242
181,254
5,583,949
Technical provisions
1,055,303
3,653,996
10,543
235,426
1,661
1,967
-
4,958,897
Creditors
100,387
342,773
185
(9,178)
-
-
1,328
435,494
Accruals and deferred
income
18,217
17,335
27
767
-
-
-
36,346
Total liabilities
1,173,907
4,014,104
10,755
227,015
1,661
1,967
1,328
5,430,737
Total capital and
reserves
(417,069)
(74,422)
216,611
105,701
111,190
31,275
179,926
153,212
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Japanese
Yen
Other
Total
2023
$000
$000
$000
$000
$000
$000
$000
$000
Investments
299,264
1,554,432
168,425
192,189
-
-
-
2,214,310
Reinsurers' share of
technical provisions
221,405
939,147
-
83,087
-
-
-
1,243,639
Debtors
61,078
806,233
57,270
33,036
38,771
38,513
139,449
1,174,350
Other assets
16,582
36,787
9,038
38,709
72,991
47
47,841
221,995
Prepayments and
accrued income
67,646
160,521
988
13,776
241
-
-
243,172
Total assets
665,975
3,497,120
235,721
360,797
112,003
38,560
187,290
5,097,466
Technical provisions
997,321
3,223,834
10,627
256,550
1,626
1,852
-
4,491,810
Creditors
119,586
279,604
(989)
17,868
(123)
(84)
-
415,862
Accruals and deferred
income
12,576
12,471
76
956
4
-
-
26,083
Total liabilities
1,129,483
3,515,909
9,714
275,374
1,507
1,768
-
4,933,755
Total capital and
reserves
(463,508)
(18,789)
226,007
85,423
110,496
36,792
187,290
163,711
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
34
12. Financial instruments (continued)
iv. Sensitivity analysis to market risks
The analysis below is performed for reasonably possible movements in market indices on financial instruments
with all other variables held constant, showing the impact on the result before tax due to changes in fair value
of financial assets and liabilities (whose fair values are recorded in the profit and loss account) and members’
balances.
The sensitivities shown in the table below indicate the estimated impact on result from parallel shifts in the yield
curve.
2024
2023
Impact on
results
before tax
Impact on
Member’s
balances
Impact on
results
before tax
Impact on
Member’s
balances
$000
$000
$000
$000
Interest rate risk
+ 50 basis points shift in yield curves
(35,059)
(35,059)
(28,717)
(28,717)
- 50 basis points shift in yield curves
35,053
35,053
28,716
28,716
Currency risk
10 percent increase in US dollar/GBP exchange rate
37,915
37,915
42,137
42,137
10 percent decrease in US dollar/GBP exchange rate
(46,341)
(46,341)
(51,501)
(51,501)
10 percent increase in US dollar/Euro exchange rate
(19,692)
(19,692)
(20,546)
(20,546)
10 percent decrease in US dollar/Euro exchange rate
24,068
24,068
25,112
25,112
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain
unchanged. A 10% increase (or decrease) in exchange rates and a 50 basis point increase (or decrease) in
yield curves have been selected on the basis that these are considered to be reasonably possible changes in
these risk variables over the following year. However, the occurrence of a change in a single market factor
may lead to changes in other market factors as a result of correlations.
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting
date and may vary at the time that any actual market movement occurs. As investment markets move past
pre-determined trigger points, action would be taken which would alter the Syndicate’s position.
b) Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its
insurance contracts and financial liabilities. The Syndicate is subject to calls on cash resources, mainly in
respect of claims on insurance business, on a daily basis.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i. Management of liquidity risk
The Managing Agent operates and maintains a liquidity risk policy designed to ensure that cash is available to
settle liabilities and other obligations when due without excessive cost to the business.
The liquidity risk policy sets limits for cash required to meet expected cash flows. It includes a contingency
funding plan, which details the process and provisions for liquidating assets and/or raising additional funds
required to meet liabilities in extreme circumstances.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
35
12. Financial instruments (continued)
ii. Maturity analysis of syndicate liabilities
The expected payment profile of undiscounted liabilities is as follows:
Maturity band (Years)
<1
1-3
3-5
>5
Total
$000
$000
$000
$000
$000
Creditors
278,292
69,943
35,097
52,162
435,494
Claims outstanding
1,197,893
1,243,307
591,419
713,685
3,746,304
At 31 December 2024
1,476,185
1,313,250
626,516
765,847
4,181,798
Creditors
245,219
111,796
36,098
22,749
415,862
Claims outstanding
1,146,224
1,116,457
531,283
622,983
3,416,947
At 31 December 2023
1,391,443
1,228,253
567,381
645,732
3,832,809
c) Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual
obligation.
The Syndicate is exposed to credit risk in respect of the following:
• Debt securities and other fixed income securities;
• Reinsurers’ share of claims outstanding;
• Debtors arising out of direct insurance operations;
• Debtors arising out of reinsurance operations;
• Cash and cash equivalents; and
• Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
i. Management of credit risk
The Syndicate holds the majority of its investments in investment grade securities and money market funds,
managed by the external portfolio manager. The Investment manager may expose the Syndicate to credit risk
as a tactical enhancement to fixed income returns when suitable opportunities arise within the risk budget set
for the manager. The Investment managers mitigate credit risk through diversification and by setting maximum
limits for individual counterparties.
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single counterparty
and maintains an authorised list of acceptable cash counterparties.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the individual
business units as part of their credit control processes. All intermediaries must meet minimum requirements
established by the Syndicate. The credit ratings and payment histories of intermediaries are monitored on a
regular basis. The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating
information and by internal investigations. The impact of reinsurer default is regularly assessed and managed
accordingly.
ii. Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The Syndicate does not hold any collateral as security or purchase any credit enhancements (such as
guarantees, credit derivatives and netting arrangements that do not qualify for offset).
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
36
12. Financial instruments (continued)
The assets bearing credit risk are summarised below, together with an analysis by credit rating:
AAA
AA
A
BBB
Other
Not rated
Total
$000
$000
$000
$000
$000
$000
$000
Shares and other variable yield securities
40,579
-
32,963
-
-
-
73,542
Debt securities and other fixed income
securities
1,098,964
462,007
632,961
199,637
2,604
-
2,396,173
Syndicate loans to central fund
-
15,116
-
-
-
-
15,116
Deposits with ceded undertakings
-
-
3,034
-
-
-
3,034
Reinsurers’ share of claims outstanding
-
447,560
658,842
-
32
1,749
1,108,183
Debtors arising out of direct insurance
operations
-
-
-
-
-
334,956
334,956
Debtors arising out of reinsurance operations
1,213
185,812
502,799
3,368
22,098
177,907
893,197
Cash at bank and in hand
59,452
-
-
-
-
-
59,452
Other debtors and accrued interest
72,839
15,845
14,943
10,374
15,871
40,275
170,147
At 31 December 2024
1,273,047
1,126,340
1,845,542
213,379
40,605
554,887
5,053,800
Shares and other variable yield securities
52,463
-
53,459
-
-
-
105,922
Debt securities and other fixed income
securities
970,769
392,899
499,584
208,893
14,737
-
2,086,882
Syndicate loans to central fund
-
-
19,987
-
-
-
19,987
Deposits with ceded undertakings
-
-
1,519
-
-
-
1,519
Reinsurers’ share of claims outstanding
-
260,105
747,050
-
16
2,095
1,009,266
Debtors arising out of direct insurance
operations
-
-
-
-
-
283,642
283,642
Debtors arising out of reinsurance operations
3,551
142,008
527,412
3,356
23,166
189,396
888,889
Cash at bank and in hand
57,294
-
-
-
-
-
57,294
Other debtors and accrued interest
85,797
12,670
11,399
10,116
20,385
41,854
182,221
At 31 December 2023
1,169,874
807,682
1,860,410
222,365
58,304
516,987
4,635,622
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
37
12. Financial instruments (continued)
iii. Financial assets that are past due or impaired
Debtors arising from direct insurance and reinsurance operations have been individually assessed for
impairment by considering information such as the occurrence of significant changes in the counterparty’s
financial position, patterns of historical payment information and disputes with counterparties.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Gross value
of impaired
assets
Impairment
allowance
Total
$000
$000
$000
$000
$000
Shares and other variable securities
73,542
-
-
-
73,542
Debt securities
2,396,173
-
-
-
2,396,173
Syndicate loans to central fund
15,116
-
-
-
15,116
Deposits with ceded undertakings
3,034
-
-
-
3,034
Reinsurers' share of claims outstanding
1,108,183
-
-
-
1,108,183
Debtors arising out of direct insurance
operations
334,956
-
-
-
334,956
Debtors arising out of reinsurance
operations
863,301
29,896
-
-
893,197
Cash at bank and in hand
59,452
-
-
-
59,452
Other debtors and accrued interest
170,147
-
-
-
170,147
At 31 December 2024
5,023,904
29,896
-
-
5,053,800
Shares and other variable securities
105,922
-
-
-
105,922
Debt securities
2,086,882
-
-
-
2,086,882
Syndicate loans to central fund
19,987
-
-
-
19,987
Deposits with ceded undertakings
1,519
-
-
-
1,519
Reinsurers' share of claims outstanding
1,009,266
-
-
-
1,009,266
Debtors arising out of direct insurance
operations
283,642
-
-
-
283,642
Debtors arising out of reinsurance
operations
852,788
36,101
-
-
888,889
Cash at bank and in hand
57,294
-
-
-
57,294
Other debtors and accrued interest
182,221
-
-
-
182,221
At 31 December 2023
4,599,521
36,101
-
-
4,635,622
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
38
12. Financial instruments (continued)
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
Past due but not impaired
0-3 months
past due
3-6 months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
$000
$000
$000
$000
$000
Shares and other variable securities
-
-
-
-
-
Debt securities
-
-
-
-
-
Syndicate loans to central fund
-
-
-
-
-
Deposits with ceded undertakings
-
-
-
-
-
Reinsurers' share of claims outstanding
-
-
-
-
-
Debtors arising out of direct insurance
operations
-
-
-
-
-
Debtors arising out of reinsurance
operations
-
13,746
4,855
11,295
29,896
Cash at bank and in hand
-
-
-
-
-
Other debtors and accrued interest
-
-
-
-
-
At 31 December 2024
-
13,746
4,855
11,295
29,896
Shares and other variable securities
-
-
-
-
-
Debt securities
-
-
-
-
-
Syndicate loans to central fund
-
-
-
-
-
Deposits with ceded undertakings
-
-
-
-
-
Reinsurers' share of claims outstanding
-
-
-
-
-
Debtors arising out of direct insurance
operations
-
-
-
-
-
Debtors arising out of reinsurance
operations
-
11,957
12,618
11,526
36,101
Cash at bank and in hand
-
-
-
-
-
Other debtors and accrued interest
-
-
-
-
-
At 31 December 2023
-
11,957
12,618
11,526
36,101
13. Financial investments
2024
2023
Cost
Market
value
Cost
Market
value
$000
$000
$000
$000
Shares and other variable yield securities
74,468
73,542
104,695
105,922
Debt securities and other fixed income securities
2,470,652
2,396,173
2,140,315
2,086,882
Syndicate loans to central fund
16,182
15,116
20,283
19,987
2,561,302
2,484,831
2,265,293
2,212,791
The amount ascribable to listed investments is $nil (2023: $nil).
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
39
13. Financial investments (continued)
The table below presents an analysis of financial investments by their measurement classification.
2024
2023
$000
$000
Financial assets measured at fair value through profit or loss
2,484,831
2,212,791
2,484,831
2,212,791
Determination of fair value hierarchy
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.
The following table presents the Syndicate’s assets measured at fair value at 31 December 2024 and at 31
December 2023.
Level 1
Level 2
Level 3
Total
$000
$000
$000
$000
Shares and other variable yield securities and unit trusts
73,542
-
-
73,542
Debt securities and other fixed income securities
264,354
2,131,819
-
2,396,173
Syndicate loans to central fund
-
-
15,116
15,116
At 31 December 2024
337,896
2,131,819
15,116
2,484,831
Shares and other variable yield securities and unit trusts
105,922
-
-
105,922
Debt securities and other fixed income securities
288,142
1,798,740
-
2,086,882
Syndicate loans to central fund
-
-
19,987
19,987
At 31 December 2023
394,064
1,798,740
19,987
2,212,791
Information on the methods and assumptions used to determine fair values for each major category of financial
instrument measured at fair value is provided below.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will
often determine prices by consolidating prices of recent trades for identical or similar securities obtained from
a panel of market makers into a composite price. The pricing service may make adjustments for the elapsed
time from a trade date to the valuation date to take into account available market information. Lacking recently
reported trades, pricing vendors will use modelling techniques to determine a security price.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
40
13. Financial investments (continued)
Some government and supranational securities are listed on recognised exchanges and are generally
classified as level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are generally
based on composite prices of recent trades in the same instrument and are generally classified as level 2 in
the fair value hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or are traded
in an established over-the-counter market are also mainly valued using composite prices. Where prices are
based on multiple quotes and those quotes are based on actual recent transactions in the same instrument
the securities are classified as level 2, otherwise they are classified as level 3 in the fair value hierarchy.
Lloyd’s introduced Syndicate loans to the Central Fund. The proceeds from these loans were used to
strengthen Lloyd’s central resources and to inject capital into Lloyd’s Insurance Company SA (Lloyd’s
Brussels). Loans will not be repaid before 5 years have elapsed. Interest thereon is determined by reference
to the risk-free yield plus a credit spread, and will normally be paid annually on an anniversary of the loan.
These investments have been classified as an equity share for which the fair value cannot be determined using
direct or indirect observable inputs, therefore these have been classified as level 3.
At the reporting date level 1 and level 2 financial assets and liabilities were valued using valuation techniques
based on observable market data. All of the investments categorised as level 3 are fair valued based on the
inputs to the valuation technique used.
14. Debtors arising out of direct insurance operations
2024
2023
$000
$000
Due within one year
296,575
236,681
Due after one year
38,381
46,961
334,956
283,642
15. Debtors arising out of reinsurance operations
2024
2023
$000
$000
Due within one year
680,374
737,897
Due after one year
212,823
150,992
893,197
888,889
16. Other debtors
2024
2023
$000
$000
Other related party balances
764
1,201
Investment sales debtors
-
177
Other debtors
395
441
1,159
1,819
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
41
17. Other
This represents overseas deposits which are lodged as a condition of conducting underwriting business in
certain countries. The funds are required in order to protect policyholders and enable the Syndicate to operate
in these markets. The Syndicate has only restricted access to these funds and no influence over their
investment.
18. Deferred acquisition costs
The table below shows changes in net deferred acquisition costs from the beginning of the period to the end
of the period.
2024
2023
Gross
Reinsurance*
Net
Gross
Reinsurance*
Net
$000
$000
$000
$000
$000
$000
Balance at 1 January
227,471
(22,246)
205,225
201,694
(27,197)
174,497
Incurred deferred
acquisition costs
(478,378)
44,204
(434,174)
(420,999)
15,514
(405,485)
Amortised deferred
acquisition costs
510,887
(50,570)
460,317
438,034
(10,134)
427,900
Foreign exchange
movements
2,978
241
3,219
8,742
(429)
8,313
Balance at 31
December
262,958
(28,371)
234,587
227,471
(22,246)
205,225
*
Reinsurers' share of deferred acquisition cost is included in accruals and deferred income
19. Technical provisions
The table below shows changes in the insurance contract liabilities and assets from the beginning of the period
to the end of the period.
2024
2023
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Claims Outstanding
Balance at 1 January
3,416,947
(1,009,266)
2,407,681
3,372,908
(1,105,218)
2,267,690
Claims paid during the
year
(802,873)
178,706
(624,167)
(811,449)
200,654
(610,795)
Expected cost of
current year claims
1,197,498
(264,670)
932,828
974,521
(162,225)
812,296
Change in estimates of
prior year provisions
(25,782)
(21,914)
(47,696)
(155,888)
66,717
(89,171)
Effect of movements in
exchange rate
(39,486)
8,961
(30,525)
36,855
(9,194)
27,661
Balance at 31
December
3,746,304
(1,108,183)
2,638,121
3,416,947
(1,009,266)
2,407,681
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
42
19. Technical provisions (continued)
2024
2023
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Unearned premiums
Balance at 1 January
1,074,863
(234,373)
840,490
936,488
(222,815)
713,673
Premiums written
during the year
2,384,759
(555,275)
1,829,484
2,110,337
(484,908)
1,625,429
Premiums earned
during the year
(2,242,743)
520,216
(1,722,527)
(1,993,381)
477,405
(1,515,976)
Effect of movements
in exchange rate
(4,286)
2,241
(2,045)
21,419
(4,055)
17,364
Balance at 31
December
1,212,593
(267,191)
945,402
1,074,863
(234,373)
840,490
2023 and prior events
The Syndicate has material exposure to claims arising from the Russia and Ukraine crisis that arose when
Russia invaded Ukraine towards the end of February 2022. The claims could come from issues more directly
linked to Russia’s invasion, for example factories hit by Russian troops or due to aircraft being stranded in
Russia or from the sanctions imposed on Russia by other countries impacting the Political Risks and Credit
division. The current estimated ultimate claims are $380.3m gross (2023: $285.3m) and $193.3m net of
reinsurance (2023: $117.4m). After allowing for inwards and outwards reinstatement premiums this increases
to $209.1m (2023: $136.2m).
The Syndicate also has exposure to losses emanating from the Covid-19 pandemic and the ensuing Global
Economic Crisis. The current estimated ultimate claims are $151.6m gross (2023: $160.1m) and $103.4m net
of reinsurance (2023: $110.0m). After allowing for inwards and outwards reinstatement premiums this reduces
to $99.5m (2023: $106.9m).
2024 events
The Syndicate has exposure to a number of natural catastrophe events that occurred in 2024. The largest of
these is flooding in Dubai. The current estimated ultimate claims for this event is $44.3m gross and $34.0m
net of reinsurance. After inwards and outwards reinstatement premiums this reduces to $30.8m. The syndicate
also has exposure to hurricanes Helene and Milton. Across the two events the current estimated ultimate
claims are $53.2m gross and $43.8m net of reinsurance. After allowing for inwards and outwards reinstatement
premiums this reduces to $39.2m.
The Syndicate also has exposure to non-elemental catastrophe events that occurred in 2024. The largest of
these is the Baltimore Bridge collapse. The current estimated ultimate claims are $53.0m gross and $22.3m
net of reinsurance. After allowing for inwards and outwards reinstatement premiums this reduces to $21.2m.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
43
20. Insurance risk
The Syndicate’s managing agent board has set out policies, processes and controls arising from insurance
contracts. The key summary of these are as follows:
Underwriting risk
The Managing Agent separately defines underwriting risk appetite in respect of market losses and syndicate-
specific losses, with appetite for the former being greater.
Underwriting risk appetite is expressed at the highest level, as a maximum event-specific net underwriting loss
as a percentage of Syndicate capacity for an annual year of account. Where appropriate, stochastic modelling
of underwriting risk using dynamic financial analysis techniques supports this approach.
The Managing Agent Board approves the risk appetite limit, after considering the relativity between ‘willing to
lose’ and potential forecast profitability for each year of account. The risk appetite will therefore reflect the view
of forecast profitability, utilising the Syndicate’s latest business plan assumptions.
Managing risk aggregation
Underwriting exposure is controlled via risk policy coding systems, setting of maximum lines, setting of
jurisdiction limits, strict underwriter authority limits, Realistic Disaster Scenario monitoring, reinsurance
programme design, policy limitations and exclusions, imposed deductibles and policy wording and coverage
clauses. The Managing Agent records and monitors individual risk exposures on a regular basis to ensure
these remain within the policies and guidelines set.
Concentration of insurance risk
Refer to Note 3 Segmental analysis which provides split of gross written premium by region.
The following table shows the impact of a 5% variation in the loss ratio on profit or loss and members' balances:
2024
2023
+5.0%
-5.0%
+5.0%
-5.0%
$000
$000
$000
$000
Claims outstanding – gross of reinsurance
(187,315)
187,315
(170,847)
170,847
Claims outstanding – net of reinsurance
(131,906)
131,906
(120,384)
120,384
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
44
21. Claims development tables
The development of insurance liabilities provides a measure of the Managing Agent’s ability to estimate the ultimate value of claims.
Pure underwriting year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Estimate of gross claims incurred
At end of underwriting year
362,113
299,762
661,365
532,137
498,631
504,554
519,240
570,878
484,205
622,600
One year later
682,143
637,309
1,011,890
888,652
830,973
839,528
1,005,103
968,270
910,320
-
Two years later
727,066
707,018
1,055,609
900,902
787,400
895,279
1,025,041
997,556
-
-
Three years later
709,576
710,164
1,060,937
859,266
832,224
868,672
1,125,154
-
-
-
Four years later
674,917
716,398
1,014,392
925,756
822,995
863,361
-
-
-
-
Five years later
673,074
701,004
1,008,473
950,067
853,425
-
-
-
-
-
Six years later
664,849
703,818
984,512
924,353
-
-
-
-
-
-
Seven years later
656,410
695,199
982,956
-
-
-
-
-
-
-
Eight years later
652,851
697,087
-
-
-
-
-
-
-
-
Nine years later
649,389
-
-
-
-
-
-
-
-
-
Estimate of gross claims reserve
649,389
697,087
982,956
924,353
853,425
863,361
1,125,154
997,556
910,320
622,600
8,626,201
Provision in respect of prior years
199,251
Less gross claims paid
589,430
603,398
845,053
690,690
631,443
519,989
540,877
428,949
179,628
49,691
5,079,148
Gross reserves
59,959
93,689
137,903
233,663
221,982
343,372
584,277
568,607
730,692
572,909
3,746,304
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
45
21. Claims development tables (continued)
Pure underwriting year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Estimate of net claims incurred
At end of underwriting year
236,775
217,120
300,256
273,931
272,251
392,677
385,448
414,701
386,131
474,292
One year later
456,691
474,739
515,218
486,994
539,733
645,703
742,586
786,909
750,707
-
Two years later
485,638
528,125
541,228
497,313
516,614
670,111
741,440
784,911
-
-
Three years later
500,403
540,000
554,873
483,272
545,332
669,303
831,841
-
-
-
Four years later
485,614
487,315
545,660
532,482
551,485
660,297
-
-
-
-
Five years later
423,836
478,962
541,102
560,087
555,417
-
-
-
-
-
Six years later
420,498
478,156
519,688
525,787
-
-
-
-
-
-
Seven years later
414,423
471,035
523,417
-
-
-
-
-
-
-
Eight years later
415,075
474,918
-
-
-
-
-
-
-
-
Nine years later
411,202
-
-
-
-
-
-
-
-
-
Estimate of net claims reserve
411,202
474,918
523,417
525,787
555,417
660,297
831,841
784,911
750,707
474,292
5,992,789
Provision in respect of prior years
138,014
Less net claims paid
377,419
424,002
452,742
386,895
420,004
427,133
435,196
362,210
160,415
46,666
3,492,682
Net reserves
33,783
50,916
70,675
138,892
135,413
233,164
396,645
422,701
590,292
427,626
2,638,121
Gross and net claims incurred that are denominated in non-functional currency are converted to US Dollar as of 31 December 2024, the most recent balance sheet
date, for all years presented.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
46
22. Creditors arising out of direct insurance operations
2024
2023
$000
$000
Due within one year
5,410
6,958
Due after one year
-
14
5,410
6,972
23. Creditors arising out of reinsurance operations
2024
2023
$000
$000
Due within one year
260,150
223,797
Due after one year
157,202
170,643
417,352
394,440
24. Other creditors including taxation and social security
2024
2023
$000
$000
Other related party balances
8,494
11,754
Deposit accounting creditor
2,280
2,447
Investment purchase creditors
967
-
Other liabilities
991
249
12,732
14,450
Deposit accounting creditor relates to liabilities established in connection with contracts which do not transfer
significant insurance risk.
25. Cash and cash equivalents
2024
2023
$000
$000
Cash at bank and in hand
59,452
57,294
Short term debt instruments presented within financial investments
73,542
105,922
132,994
163,216
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 they relate to restricted accounts aligned to trust funds.
2024
2023
$000
$000
Short term debt instruments presented within financial investments
27,286
47,347
27,286
47,347
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
47
26. Analysis of net debt
At 1 January
2024
Cash
flows
Fair value and
exchange
movements
At 31
December
2024
$000
$000
$000
$000
Cash and cash equivalents
163,216
(25,170)
(5,052)
132,994
163,216
(25,170)
(5,052)
132,994
The Syndicate does not have any borrowings, related derivatives and obligations under finance leases.
27. Related parties
a) The following are related party transactions with the Managing Agent, service company and the
capital provider:
Chaucer Syndicates Limited and Chaucer Underwriting Services Limited, wholly owned subsidiaries of China
Reinsurance (Group) Corporation, act as Managing Agent and service company respectively for the Syndicate.
2024
2023
$000
$000
Managing agency fees
13,628
14,147
Expenses recharged
144,521
125,952
Year-end balance due from/(to) Chaucer Syndicates Limited at 31 December
296
(14)
Year-end balance due to Chaucer Underwriting Services Limited at 31 December
(6,588)
(9,448)
The managing agency fees comprise a fixed fee of $2.8m (2023: $1.5m) and a 7.5% mark up on expenses
recharged to the Syndicate via CUSL of $10.8m (2023: $12.6m).
Chaucer Corporate Capital (No. 3) Limited, a wholly owned subsidiary of China Reinsurance (Group)
Corporation, supports the underwriting capacity of the Syndicate as follows:
Year of account
2024
2023
2022
000
000
000
Chaucer Corporate Capital (No. 3) Limited - GBP
1,800
1,500
1,250
Chaucer Corporate Capital (No. 3) Limited - USD
(converted at 31 December 2024 exchange rates)
2,252
1,877
1,564
These transactions are subject to the Managing Agent’s internal controls, which ensure that all are compliant
with Lloyd’s Related Party Bylaw provisions.
b) The following are related party transactions with Chaucer branches and other Chaucer group
companies:
Chaucer Singapore PTE, a wholly owned subsidiary of China Reinsurance (Group) Corporation, provides
underwriting services to the Syndicate.
2024
2023
$000
$000
Fees paid to Chaucer Singapore PTE
3,687
2,933
Balance due to Chaucer Singapore PTE at 31 December
(1,274)
(826)
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
48
27. Related parties (continued)
Chaucer Oslo AS, a wholly owned subsidiary of China Reinsurance (Group) Corporation, provides underwriting
services to the Syndicate. Chaucer Oslo AS was placed into liquidation during 2023.
2024
2023
$000
$000
Fees paid to Chaucer Oslo AS
-
34
Balance due from Chaucer Oslo AS at 31 December
-
-
Chaucer Labuan Limited, a wholly owned subsidiary of China Reinsurance (Group) Corporation, provides
underwriting services to the Syndicate.
2024
2023
$000
$000
Fees paid to Chaucer Labuan Limited
-
55
Balance due to Chaucer Labuan Limited at 31 December
-
(15)
Lonham Limited, a wholly owned subsidiary of China Reinsurance (Group) Corporation, provides underwriting
services to the Syndicate.
2024
2023
$000
$000
Fees received (from)/paid to Lonham Limited
(3)
5
Balance due from Lonham Limited at 31 December
-
85
Sports, Leisure and Entertainment Limited (SLE), a wholly owned subsidiary of China Reinsurance (Group)
Corporation, provides underwriting services to the Syndicate.
2024
2023
$000
$000
Commissions paid to SLE
2,627
2,737
Balance due to SLE at 31 December
(275)
(255)
Chaucer MENA Underwriting Limited, a wholly owned subsidiary of China Reinsurance (Group) Corporation,
provides underwriting services to the Syndicate.
2024
2023
$000
$000
Commissions paid to Chaucer MENA Underwriting Limited
1,849
1,696
Balance due to Chaucer MENA Underwriting Limited at 31 December
(547)
(585)
Chaucer Bermuda Services Limited, a wholly owned subsidiary of China Reinsurance (Group) Corporation,
provides underwriting services to the Syndicate.
2024
2023
$000
$000
Commissions paid to Chaucer Bermuda Services Limited
261
186
Balance due to Chaucer Bermuda Services Limited at 31 December
(86)
(28)
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
49
27. Related parties (continued)
c) The following are related party transactions with the ultimate parent and its subsidiaries outside
the Chaucer group of companies:
China Property & Casualty Reinsurance Company Limited, a wholly owned subsidiary of China Reinsurance
(Group) Corporation, has entered into certain reinsurance policies with the Syndicate.
2024
2023
$000
$000
Outwards reinsurance premium
25,971
37,340
Reinsurance claims recovery
14,050
4,817
Balance due to China Property & Casualty Reinsurance Company Limited at 31 December
(2,874)
(11,957)
China Continent Insurance Company Limited, a wholly owned subsidiary of China Reinsurance (Group)
Corporation, has entered into certain reinsurance policies with the Syndicate.
2024
2023
$000
$000
Gross premium written
960
1,947
Balance due from China Continent Insurance Company Limited at 31 December
1,970
1,704
China Property & Casualty Reinsurance Company Limited, a wholly owned subsidiary of China Reinsurance
(Group) Corporation, has entered into a transaction with the Syndicate that does not meet the definition of a
reinsurance contract. It is considered an insurance contract held and is therefore accounted for within other
technical income and other technical charges.
2024
2023
$000
$000
Other technical charges
-
308
China Re Asset Management (Hong Kong) Company Limited, a wholly owned subsidiary of China Reinsurance
(Group) Corporation, provides investment management services to the Syndicate.
2024
2023
$000
$000
Investment management charges
656
1,171
Amounts held by related parties are unsecured and are expected to be settled in cash and cash equivalents
within one year.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
50
28. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
| 2024 | 2023 | |||||
| Start of Period Rate | End of Period Rate | Average Rate | Start of Period Rate | End of Period Rate | Average Rate | |
| US dollar | ||||||
| Euro | ||||||
Sterling | ||||||
Canadian dollar | ||||||
Australian dollar | ||||||
Japanese Yen |
29. 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. FAL has regard to a number of factors, including the
nature and amount of risk to be underwritten by the member and an 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 accounts 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.
30. Capital
Capital framework at Lloyd’s
The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to the supervision of the Prudential
Regulatory Authority (PRA) under the Financial Services and Markets Act 2000 and in accordance with
Solvency II legislation.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure
that Lloyd’s complies with Solvency II, and beyond that to meet its own financial strength, licence and ratings
objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate
level as a starting point, the requirement to meet Solvency II and Lloyd’s capital requirements apply at overall
and member level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of
the Syndicate is not disclosed in these annual accounts.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirement
(SCR) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss,
reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The syndicate must
also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon
(one year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each syndicate are subject
to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
Syndicate 1084
Notes to the Accounts for the year ended 31 December 2024
51
30. Capital (continued)
A syndicate may comprise one or more underwriting members of Lloyd’s. Each member is liable for its own
share of underwriting liabilities on the syndicate(s) on which it is participating but not other members’ shares.
Accordingly, the capital requirement that Lloyd’s sets for each member operates on a similar basis. Each
member’s SCR shall thus be determined by the sum of the member’s share of the syndicate SCR ‘to ultimate’.
Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the
spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in
200 year loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s
capital requirement, known as the Economic Capital Assessment (ECA). The purpose of this uplift, which is a
Lloyd’s not Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings objectives. The
capital uplift applied for 2024 was 35% (2023: 35%) of the member’s SCR ‘to ultimate’.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that
member (funds at Lloyd’s), held within and managed within a syndicate (funds in syndicate) or as the member’s
share of the members’ balances on each syndicate on which it participates. Accordingly all of the assets less
liabilities of the Syndicate, as represented in the member’s balance reported on the Statement of Financial
Position on page 19, represent resources available to meet member’s and Lloyd’s capital requirements.
31. Ultimate parent company
The Managing Agent’s immediate parent company is Chaucer Capital Investments Limited. The largest and
smallest group of undertakings for which group financial statements are prepared, and in which the results of the
Managing Agent are included, is China Reinsurance (Group) Corporation. The Company considers China
Reinsurance (Group) Corporation to be its ultimate parent company. A copy of the most recent consolidated
financial statements is available from the website of China Reinsurance (Group) Corporation
(www.chinare.com.cn).
32. Post balance sheet events
In January 2025, California experienced a series of wildfires. The Syndicate has experienced underwriting
losses arising from the wildfires and the related recessionary impact, as part of the normal course of its
activities. Uncertainties exist both in respect of the assessment of the initial losses that the Syndicate might be
obliged to pay and of how these will interact with the Syndicate’s reinsurance programme. This increases the
uncertainty of the Syndicate’s total reserves but does not increase that uncertainty significantly beyond the normal
range of uncertainty for the liabilities of an insurance carrier at this stage of development.
