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HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1 2 2 1
at LLOYD’S
Annual Syndicate Accounts
Contents
2
Directors and administration
3
Strategic report of the Directors of the Managing Agent
4
Report of the Directors of the Managing Agent
12
Statement of Managing Agent's responsibilities
14
Independent Auditor’s report to the Member's of Syndicate 1221
15
Income Statement: Technical account - General business
19
Income Statement: Non-technical account
20
Statement of Other Comprehensive Income
20
Statement of Financial Position – Assets
21
Statement of Financial Position – Liabilities
22
Statement of Changes in Member's Balances
23
Statement of Cash Flows
24
Notes to the Financial Statements
25
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1 2 2 1
at LLOYD’S
Directors and Administration
Managing Agent
Directors
C L Bach III
A A Darfoor*
N J Farrer
M R Fisher* (resigned 1 October 2024)
D Garland*
D C Robinson* (resigned 1 March 2024)
D Soni* (appointed 25 October 2024)
C D Sprott
M J Sullivan*
* Non-executive
Managing Agent's Registered Office
8
th
Floor
6 Bevis Marks
London
EC3A 7BA
Managing Agent's Registered Number
01380715
Active Underwriter
Colin D Sprott
Bankers
Citibank N.A.
Royal Bank of Canada
Societe Generale S A
Investment Managers
New England Asset Management Limited
Statutory Auditor
Deloitte LLP, London
Directors’ Interests
None of the Directors of the Managing Agent have any participation in the Syndicate’s premium income
capacity.
Solicitors
Norton Rose Fulbright LLP, London
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1 2 2 1
at LLOYD’S
3
Strategic Report of the Directors of the Managing Agent
The Directors of the Managing Agent (“the Directors” or “the Board”) present their report for Syndicate 1221
(“Syndicate”) for the year ended 31 December 2024, with comparisons based on the prior year ended 31 December
This Strategic Report provides an overview of the Syndicate’s strategic management, business environment,
performance and financial position. In addition, whilst there is no specific requirement to report on the actions
taken to respond to climate change, the Syndicate’s actions are set out within the paragraphs that follow.
Strategic management
In 2024, the Syndicate reported an overall profit and an underwriting combined ratio of 86.1% (2023: 88.0%). The
overall result in 2024 benefitted from the higher yield investment environment and a prior year reserve release of
£19.7m (2023: £13.4). A more detailed review by division is provided in the Market Review paragraphs. Market
conditions continue to be favourable across the majority of our lines of business and the Syndicate recorded rate
rises across most classes of business in 2024 offset by rate reductions in financial lines.
We continued to take advantage of the favourable underwriting environment through 2024 reflected in an 4.4%
increase in gross written premium in 2024. For 2025, we expect to see a tapering of premium rate increases, but
expect the strong underwriting environment to persist. The 2025 Syndicate Business Forecast recorded a £45m
increase in Syndicate capacity from £355m to £400m with growth in existing lines supported by expansion
through Lloyd's Singapore and entry into the Power and Renewables market.
The Hartford Insurance Group, Inc., known as “The Hartford”, a United States based company in Connecticut,
continues to work closely with the Syndicate management. This enables the Syndicate to leverage the wider
Hartford Group resources across a number of functions including Underwriting and Underwriting Operations,
Actuarial, Finance, IT and Claims. As the Syndicate is The Hartford’s main underwriting platform for international
operations outside of the USA, the Syndicate is expected to be an instrumental vehicle for The Hartford’s future
international growth.
The Board is conscious that climate change is likely to significantly impact the global insurance and reinsurance
market, risk assessment, selection and pricing in the future. The potential risk, frequency and severity of loss to
insured parties is likely to increase. For an insurer, climate change presents a mix of opportunities and threats. As a
result, the type and level of cover offered by the Syndicate in the future may vary to that offered at present. By its
very nature, increasing global temperatures leading to rising sea levels from melting glaciers in the Antarctic and
Greenland may result in an increase in variable and extreme wind related weather events, as well as flooding,
drought, and widespread fire damage. The Board is aware that the consequential increase in loss of life, property,
business interruption, increased political violence and litigation is likely to mean that pricing models will need to
be adapted to take account of the resulting change in the natural as well as insurance and reinsurance
environments. This is carefully considered within the Syndicate Business Forecast setting process.
In addition, investment losses have the potential to arise from exposure to industries impacted by climate change.
The Syndicate has a diversified investment portfolio, with limits on exposure to individual issuers and sectors.
The Board's Investment Policy requires the Syndicate's investment managers to actively consider Environmental,
Social and Governance issues ("ESG") as part of the ongoing assessment of the portfolio performance and risk.
Additionally strict limits have been put in place relating to investments in those companies which generate
revenues from coal and oil extracted from tar sands. Coal produces outsized greenhouse gas emissions in relation
to the energy content it produces, contributing to extreme weather and air pollution, and we believe coal-based
business models represent heightened investment risks as the global economy transitions to cleaner energy sources.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
4
Strategic Report of the Directors of the Managing Agent (continued)
Business performance measures
The Syndicate recorded a profit for the year of £73.8m compared to a profit of £83.2m for the prior year. This
profit comprised an underwriting profit of £47.3m (2023: underwriting profit of £39.5m), an overall investment
gain of £32.9m (2023 gain: £41.4m) and foreign exchange loss of £6.5m (2023 profit: £2.4m). The Syndicate’s
combined ratio for 2024 was 86.1% (2023: 88.0%).
The Syndicate’s key financial performance indicators during the year were as follows:
2024 2023 % Growth
£000 £000
Gross premiums written 432,687 414,640 4.4%
Net premiums written 354,604 348,340 1.8%
Net earned premiums 340,476 329,982 3.2%
Net operating expenses 114,847 107,003 7.3%
Investment income 27,426 20,214 35.7%
Combined Ratio 86.1% 88.0%
Note: The combined ratio is the ratio of net claims incurred plus net operating expenses to net premiums earned
and excludes foreign exchange gains and losses. A lower combined ratio represents better performance.
Gross written premiums for 2024 were £432.7m, representing an increase of 4.4% compared to 2023. This
increase was primarily driven by favourable pricing and growth in our Casualty and Marine and Energy divisions
through 2024.
Net written premiums increased by 1.8% and net earned premiums increased by 3.2%, consistent with our growth
in top-line.
Net operating expenses are 33.7% of the combined ratio (2023: 32.4%).
Investment income, which excludes unrealised gains and losses, increased by 35.7% from the prior year due to
more funds under investment and an increase in yields. The overall investment result, which is net of investment
expenses, was a gain of £32.9m compared to a gain of £41.4m in the prior year, driven by the improved yield
environment offset to an extent by the absence of the large unrealised mark to market gains in the bond portfolio
experienced in 2023.
The Syndicate’s combined ratio has improved from 88.0% in 2023 to 86.1% in 2024. The decrease is driven by:
• Increased favourable prior year reserve development, resulting in an improved net incurred claims
ratio of 3.2%
• Offset to an extent by an increase in the expense ratio, driven by investment in headcount and
technology
Member’s Funds
The Member’s Funds stood at £160.0m (2023: £99.2m) at year end, with the increase due to the overall profit for
the year as outlined above. During 2025, Syndicate 1221 will close the 2022 underwriting year with a profit of
£101.8m, compared to a profit of £25.4m on the 2021 year of account, closed during 2024.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
5
Strategic Report of the Directors of the Managing Agent (continued)
Market Review
A review of our five divisions is provided below:
Marine & Energy
During 2024, the Marine portfolio continued to write a broad section of the Marine market, concentrating on
Cargo, Ports & Terminals, Marine & Energy Liability, Specie and Upstream Energy.
Market conditions within the chosen classes were favourable through 2024, achieving rate rises in line with those
experienced in 2023 and during 2025 we expect to enter the Power and Renewables sector of the market..
Financial Lines
Financial Lines covers the Professional class of business, incorporating Errors and Omissions (“E&O”), Directors
and Officers (“D&O”) and Financial Institutions (“FI”). Market conditions have remained in line with the prior
year with rate reductions across both the Commercial and Financial Institutions D&O portfolios, however, we still
believe the overall rating environment to be adequate.
Business is written from both our London and Hong Kong offices, whilst for 2025 we also plan to commence
writing this line of business from our newly opened Singapore office.
Casualty
Casualty comprises of General Liability, Life Sciences and Environmental books of business. During 2024,
General Liability experienced favourable rate change and significant growth over prior year.
Political Risks
Political Risks covers Political Violence and Terrorism (“PV&T”) and Credit and Political Risk (“CPRI”). We
ceased to write Aviation War in 2023 due to lack of improvements in market conditions after the Russia/Ukraine
losses. This line of business is currently exclusively written from our London office, however during 2025 we plan
to commence additionally writing this line from our newly opened Singapore office.
Global Re
Our Global Re division forms part of the wider assumed reinsurance offering of The Hartford, with the Syndicate
providing access to London Market business. The division writes a stable portfolio of business, concentrated on
International Property Treaty.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
6
Strategic Report of the Directors of the Managing Agent (continued)
Market Review (continued)
Principal risks and uncertainties
The Managing Agent has established a robust enterprise-wide Risk Management Framework to identify, assess
and manage the risks it faces. The framework ensures that risks are proactively managed using a number of risk
management techniques, which helps assess threats to objectives.
The Board reviews risk appetites annually as part of the Syndicate’s business planning and capital setting
processes and as an element of its risk management framework. The Board has identified the principal risks facing
the Syndicate and has established documented strategies for their assessment, mitigation and monitoring. A Risk
and Compliance Committee, which is a sub-committee of the Board, meets regularly to assess the effectiveness of
the Risk Management Framework and level of risk against appetite.
The Managing Agent has a Chief Risk Officer, with responsibilities for owning, developing and managing the
Risk Management Framework and its supporting methodologies and tools, ensuring they remain fit-for-purpose in
response to changes within the Managing Agent, the Syndicate and the overall operating environment.
Additionally, the Chief Risk Officer is tasked with overseeing the identification, assessment and management of
new and existing risks through the use of the Risk Management Framework and ensuring the quality of the
outcome of these activities. An overarching Risk Management Policy is in place, supported by a policy that covers
the key categories of risk including the associated risk appetite, key controls and risk governance.
Underwriting Risk
• The risk that a loss may arise from fluctuations in timing, frequency and severity of insured events
relative to plan, and fluctuations in timing and amount of claims settlements.
• To manage this risk, detailed policies and procedures are in place, including underwriting authorities,
limits and guidelines, along with exposure monitoring. Extensive reinsurance is purchased to mitigate
underwriting risk and there is a robust control environment in place around the placement of
reinsurance, including a framework and monitoring.
Reserving Risk
• The risk of insufficient provision for losses that have already occurred.
• In order to manage this risk, regular claims and loss monitoring is performed, as well as a annual
reviews of the Syndicate's reserves by an independent third-party. These results are reviewed,
alongside the Actuarial function assessment, at the Reserve Committee.
Credit Risk
• The risk of losses arising on outstanding contracts should a counterparty default on its obligations or
find other reasons for non-payment.
• There is a framework in place to assess and approve all reinsurers and reinsurance purchases,
including the detailed criteria for consideration. This states that a rating of a minimum of A- from AM
Best, or equivalent, is required in respect of all reinsurance security at the time any such reinsurance is
bound, unless a specific exception is granted. Credit control procedures are in place for all
counterparties, with broker credit risk reported through to the Underwriting & Claims Committee.
Provisions are made for any amounts considered uncollectible.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
7
Strategic Report of the Directors of the Managing Agent (continued)
Principal risks and uncertainties (continued)
Credit risk (continued)
• Investment credit risk is managed conservatively by defining portfolio limits for each investment
grade rating band within the investment guidelines.
Liquidity Risk
• The risk or inability to realise investments and other assets in order to settle its financial obligations
when they fall due.
• In order to manage this risk, the Board has put in place detailed investment guidelines. The guidelines
are used by the investment managers and oversight is maintained by the Board’s Investment
Committee.
• A liquidity framework has also been implemented which calculates a range of macro level liquidity
ratios and reviews them against defined limits on a quarterly basis.
Operational Risk
• The risk the Syndicate suffers a loss as a result of inadequate or failed internal processes, as a result of
people’s actions, system processes or external events.
• In order to mitigate this risk, the managing agent ensures material operational risks are identified and
controls adopted to mitigate these risks, with oversight and challenge from the Risk and Compliance
and Audit Committees.
• During the year the Syndicate has continued to invest in its Operational Resilience framework,
enhancing and testing robust processes to ensure the business can withstand unforeseen interruptions
to its operations with plans to return to servicing customers and claimants within identified impact
tolerance time frames.
Market Risk
• The risk of uncertainty of asset prices, interest rates, foreign exchange rates and other factors related to
financial markets and investment asset management.
• In order to manage this risk, the Managing Agent imposes restrictions on the external investment
manager's investment strategies. Strict limits, by trust fund, are set for types of assets held,
concentration limits and average investment grade ratings. Investments are typically investment grade
bonds and investment grade asset backed securities. Guidelines and benchmarks are set annually and
approved by the Board. Regular reporting is reviewed and monitoring undertaken by the Investment
Committee.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
8
Strategic Report of the Directors of the Managing Agent (continued)
Principal risks and uncertainties (continued)
Concentration Risk
• The risk of losses arising from the correlation and concentration of business written within a
geographical area, of a policy type or of underlying risks covered, or that may arise with respect to
investments in a geographical area, economic sector or individual investments. Concentration risk
refers to an exposure with the potential to produce losses large enough to jeopardise the Syndicate’s
solvency or ability to maintain its core operations.
• The management of this risk is addressed within each risk class, between risk classes and through
robust stress and scenario testing, including the use of specialist catastrophe models.
Strategic Risk
• The risk of incurring losses resulting from an inappropriate strategy being set or the inadequate
implementation of strategy. Strategy is a matter reserved for the Board and monitored on an ongoing
basis by both the Board and the Managing Agent’s Executive Leadership Team. Risk management is a
fundamental aspect of formulating strategy.
Reputational Risk
• The risk of losses through deterioration of the Syndicate or Managing Agent’s reputation (or the
Lloyd’s brand) due to a negative perception of any aspect of the business or business practices,
whether true or not, which could result in a decline of its customer base or costly litigation, or a
negative impact on its revenue.
• In order to manage this risk, the Managing Agent has put in place detailed policies and procedures for
the effective and efficient management of claims and complaints, and for ensuring that customers are
treated fairly and Conduct Risk requirements are followed at all times. The Hartford's Code of Ethics
is reviewed and acknowledged annually by all employees and training is also mandated periodically
on material laws and policies related to ethical behaviour. Regular dialogue is maintained with
regulatory bodies such as Lloyd’s, the Prudential Regulation Authority and the Financial Conduct
Authority.
Regulatory Risk (which is assessed for capital purposes within the Operational Risk category)
• The Managing Agent is required to comply with the requirements of the Prudential Regulation
Authority, Financial Conduct Authority, Lloyd’s and those imposed upon the Lloyd’s market by
overseas regulators where the Syndicate conducts business. Regulatory risk is the risk of loss owing to
changes in current regulatory requirements or the imposition of new requirements. Such changes could
increase capital requirements, increase operational costs, reduce the profitability of business or change
the competitive landscape.
• The Managing Agent employs a Compliance Officer, who monitors regulatory developments and
assesses the impact on the Managing Agent and Syndicate. These activities form part of an annual
plan which includes compliance reviews against established policies, processes and procedures.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
9
Strategic Report of the Directors of the Managing Agent (continued)
Principal risks and uncertainties (continued)
Third Party Risk
• Globalisation has resulted in the third party risk landscape continuing to evolve and become complex,
with vendors being located in different jurisdiction and increased data sharing with third parties partners.
• The Managing Agent has implemented or is committed to implement policies and procedures to allow us
to manage the following risks:
– Cyber security: security risk and threats across our cyber landscape
– Financial stability: how financially viable are critical suppliers
– Operational resilience: third parties ability to change or adapt during times of stress, disruption,
or uncertainty
– Technology risk: management of the oversight, integration and reliance upon new and existing
solutions and vendors
– Data protection/privacy: how and where sensitive information is stored and processed with third
parties and how this is protected.
Climate Change
• The risk that significant changes in the climate have an adverse impact on the Syndicate and Company’s
results and ability to carry on their business activity.
• Lloyd's issued an updated ESG report in May 2024. As part of this guidance they continued to commit
the market to contribute to wider societal efforts to transition to a sustainable and low carbon future.
• The Board is committed to managing and reducing the environmental impact of the Company and
Syndicate in a cost effective and responsible way.
• The Hartford has a goal of net zero greenhouse emissions in alignment with the Paris Climate Accord for
our full range of businesses and operations by 2050. The Hartford further recognizes the role that all
public companies may play as advocates for sound and responsible public policy. For instance, engaging
with our suppliers to educate and collaborate on ways to reduce GHGe is an important part of our net zero
journey.
• The Board has approved investment guidelines with the following criteria relevant to climate change and
the Lloyd's ESG report, which are all met as of 31 December 2024:
– No new investments in the construction and operation of new coal-fired plants,
– No new investments in companies that generate more than 25 percent of their revenues from
thermal coal mining or more than 25 percent of their energy production from coal,
– No new investments in companies that generate more than 25 percent of their revenues directly
from the extraction of oil from tar sands.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
10
Strategic Report of the Directors of the Managing Agent (continued)
Social Change
• The risk that we do not attract the best talent which would have an adverse impact on the Syndicate
results.
• This risk is mitigated by a combination of responses, including strategies that are aimed at increasing our
gender and demographic diversity within the organisation.
– The Board has set a goal of 35% of women in the leadership position, currently 34% ,
(2023: 36%)
– The Board has set a goal of 20% of women in a Board/Executive Committee position,
currently 36%, (2023: 30%)
– The Board has been measuring and tracking our employee demographic and new hires since
the 4th quarter of 2020.
Geopolitical risk
• The Board continues to monitor the potential impact of rising global geopolitical tensions, with respect to
the underwriting portfolio, investment portfolio and operational impacts. Management works closely
with the Group's Global Specialty Insight Center to continually update our view on geopolitical risk and
to inform our responses to events as they unfold and potential scenarios which may or may not be
realised.
• Management is also closely monitoring the risk of cyber-attack and has appropriately increased its
level of preparedness in concert with The Hartford Group. To date, we have not seen any increased threat
activity directed at the Company.
Inflation Risk
• Risk of increases in the cost of goods, services and settlement of claims driven by economic, excess and
social factors.
• The Managing Agent has assessed the types of inflation and the drivers of inflation to our business. This
has been achieved by modelling claims inflation scenarios and considering the potential impact across a
number of different functions and business lines, evaluated by the capital modelling team.
• Managing agents have ensured that there is cross function communication between claims, reserving,
capital and the pricing function. This validates the business appropriateness of our assumptions in
reserving and pricing.
• The Risk Management Framework is reviewed and amended on a regular basis to ensure it remains
appropriate for the company’s business and risk strategies.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
11
Report of the Directors of the Managing Agent
The Directors of the Managing Agent present their report for the year ended 31 December 2024.
This annual report is prepared using the annual basis of accounting as required by Statutory Instrument No 1950
of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the
2008 Regulations”), and applicable United Kingdom Accounting Standards, including Financial Reporting
Standard 102: The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland
(FRS102) and Financial Reporting Standard 103: Insurance Contracts (FRS103).
Directors
The Directors of the Managing Agent who served during the year ended 31 December 2024 and up to the date of
this report are as follows:
C L Bach III
A A Darfoor*
N J Farrer
D Garland*
D Soni*
C D Sprott
M J Sullivan*
* Non-executive
Going Concern
As explained in the Strategic Report, The Syndicate is The Hartford’s main underwriting platform for
international operations outside of the USA and is expected to be an instrumental vehicle for The Hartford’s
future international growth. The Company has spent the last few years remediating its portfolio and is now
concentrating strategy on growing its core lines of business. These efforts are reflected in strong underwriting
results in 2024, supported by an excellent investment return for the year.
During the year, the Board worked with senior management of The Hartford and Lloyd’s to agree the 2025
Syndicate Business Forecast and The Hartford continues to provide capital to support the business plan. The
2025 Syndicate Business Forecast also indicates an expansion of underwriting activities as the Syndicate
underwriting capacity has been increased by £45m to £400m from £355m in 2024.
The Board continues to monitor the impact of the Russia/Ukraine war, there has been no change to the net
reserves, including outwards reinstatement premiums, booked in response to this event which continue to be
held at $35.7m. The Company has also monitored exposure to other recent geopolitical events (e.g. Israel/Gaza)
and has not identified any material losses from these. The Company has adequate financial resources and a
robust business continuity plan in place that is functioning well. Management continues to monitor
developments from both a loss activity and economic sanctions perspective.
Having considered the above, the principal risks set out in the Strategic Report and having made other enquiries
as necessary, the Directors have a sound expectation that the Syndicate has adequate resources and support of its
member to continue in operational existence for the foreseeable future. For these reasons, the Directors consider
it appropriate to continue to adopt the going concern basis in preparing the financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
12
Report of the Directors of the Managing Agent (continued)
Post Balance Sheet events
We believe that the January California Wildfire is unlikely to have any material impact on the estimates made in
drawing up these financial statements.
Strategic management
The principal activity is the transaction of general insurance and reinsurance business in the United Kingdom.
The capacity for Syndicate 1221 (“the Syndicate”) in 2025, 2024, and 2023 was £400m, £355m and £325m
respectively. The Syndicate capacity is gross premium net of commissions and is calculated using Lloyd’s
Syndicate business forecast rates of exchange. Gross written premium in the technical account is calculated at
average rates of exchange.
The Syndicate now manages its business through five divisions comprising Marine & Energy, Casualty,
Financial Lines, Political Risks and Global Re.
Disclosure of information to the auditor
So far as each person who is a Director of the Managing Agent at the date of approving this report is aware,
there is no relevant audit information, being information needed by the auditor in connection with its report, of
which the auditor is unaware; and having made enquiries of fellow Directors of the agency and the Syndicate’s
auditor, each Director has taken all the steps that they are obliged to take as a Director in order to make
themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Re-appointment of Auditor
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd's Syndicate and Aggregate
Accounts) Regulations 2008, the auditor will be deemed to be reappointed and Deloitte LLP will therefore
continue in office. The Managing Agent proposes the re-appointment of Deloitte LLP as the Syndicate auditor.
Directors and Officers Protection
The Hartford maintains a group wide Directors and Officers liability insurance policy that indemnifies the
Directors of the Company if a claim is made against them in their capacity as a Director of the Company.
Managing Agent’s registered office
8
th
Floor, 6 Bevis Marks,
London, EC3A 7BA
Approved and authorised for issue by the Board of Directors.
N J Farrer
Director
4 March 2025
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
13
Statement of Managing Agent’s responsibilities in respect of the Syndicate Financial Statements
The Directors of the Managing agent are responsible for:
• preparing the syndicate financial statements in accordance with applicable law and regulations;
• the preparation and review of the iXBRL tagging that has been applied to the Syndicate Accounts in
accordance with the instructions issued by Lloyd’s, including designing, implementing and
maintaining systems, processes and internal controls to result in tagging that is free from material
non-compliance with the instructions issued by Lloyd’s, whether due to fraud or error
The Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 requires the
directors of the managing agent to prepare their syndicates’ financial statements for each financial year. Under
that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and
applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 the
directors of the managing agent must not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the syndicate and of the profit or loss of the syndicate for that
period. In preparing these financial statements, the directors of the managing agent are required to:
• Select suitable accounting policies 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 financial statements;
• Assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
• Use the going concern basis of accounting unless they either intend to liquidate the Company or to
cease operation, or have no realistic alternative but to do so.
The directors of the managing agent are responsible for keeping adequate accounting records that are sufficient
to show and explain the syndicate’s transactions and disclose with reasonable accuracy at any time the financial
position of the syndicate and enable them to ensure that the financial statements comply with the Insurance
Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008. They are responsible for
such internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other
irregularities.
The directors of the managing agent are responsible for the maintenance and integrity of the syndicate and
financial information included on the syndicate’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Approved and authorised for issue by the Board of Directors.
N J Farrer
Director
4 March 2025
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
14
Independent auditor’s report to the members of Syndicate 1221
Report on the audit of the annal syndicate accounts
Opinion
In our opinion the Annual Syndicate Accounts of Syndicate 1221 (the ‘syndicate’:
• give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and
of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.
We have audited the annual syndicate accounts which comprise:
• the income statement: technical account;
• the income statement: non-technical account;
• the statement of comprehensive income;
• the statement of financial position;
• the statement of changes in member’s balances;
• the statement of cash flows; and
• the related notes 1 to 28.
The financial reporting framework that has been applied in their preparation is applicable law and
United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the auditor's
responsibilities for the audit of the syndicate annual financial statements section of our report.
We are independent of the syndicate in accordance with the ethical requirements that are relevant to
our audit of the annual syndicate accounts in the UK, including the Financial Reporting Council’s (the
‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the managing agent’s use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the syndicate’s
ability to continue in operations for a period of at least twelve months from when the syndicate
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
15
Other information
The other information comprises the information included in the annual report, other than the annual
syndicate accounts and our auditor’s report thereon. The managing agent is responsible for the other
information contained within the annual report. Our opinion on the annual syndicate accounts does
not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the annual syndicate accounts, or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of managing agent
As explained more fully in the managing agent’s responsibilities statement, the managing agent is
responsible for the preparation of the annual syndicate accounts and for being satisfied that they give a
true and fair view, and for such internal control as the managing agent determines is necessary to
enable the preparation of annual syndicate accounts that are free from material misstatement, whether
due to fraud or error.
In preparing the annual syndicate accounts, the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s
ability to continue in operation and to use the going concern basis of accounting unless the managing
agent intends to cease the syndicate’s operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the annual syndicate accounts
Our objectives are to obtain reasonable assurance about whether the annual syndicate accounts as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual syndicate accounts.
A further description of our responsibilities for the audit of the annual syndicate accounts is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s
documentation of their policies and procedures relating to fraud and compliance with laws and
regulations. We also enquired of management, internal audit, insert details of any others within
the entity about their own identification and assessment of the risks of irregularities.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
16
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in,
and identified the key laws and regulations that:
• had a direct effect on the determination of material amounts and disclosures in the financial
statements. These included the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8
of 2005); and
• do not have a direct effect on the financial statements but compliance with which may be
fundamental to the syndicate’s ability to operate or to avoid a material penalty. These
included the requirements of Solvency II.
We discussed among the audit engagement team including relevant internal specialists such as
actuarial and IT specialists regarding the opportunities and incentives that may exist within the
organisation for fraud and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for in the following areas, and
our procedures performed to address them are described below:
• Estimation of pipeline premiums requires significant management judgement and therefore
there is potential for management bias through manipulation of core assumptions. In response
our testing included, on a sample basis, performing a retrospective review over the historical
accuracy of management’s estimates, comparing the percentage of signed premium against
the percentage of signed premium for prior year policies at the same stage of development,
and comparing the estimate against written bordereaux or declarations.
• Valuation of technical provisions includes assumptions and methodology requiring significant
management judgement and involves complex calculations, and therefore there is potential for
management bias. In response to these risks, we engaged actuarial specialists to develop
independent estimates of the highest risk classes and a review of the methodology and
assumptions for the rest of the classes of business.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override. In addressing the risk of fraud through management
override of controls, we tested the appropriateness of journal entries and other adjustments; assessed
whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluated the business rationale of any significant transactions that are unusual or outside the normal
course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
• reviewing financial statement disclosures by testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct
effect on the financial statements;
• performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
• enquiring of management concerning actual and potential litigation and claims, and instances
of non-compliance with laws and regulations; and
• reading minutes of meetings of those charged with governance and reviewing internal audit
reports and reviewing correspondence with Lloyd’s and the PRA.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
17
Report on other legal and regulatory requirements
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the managing agent’s report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
• the strategic report and the managing agent’s report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the syndicate and its environment obtained in the
course of the audit, we have not identified any material misstatements in the strategic report or the
managing agent’s report.
Matters on which we are required to report by exception
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 we are required to report in respect of the following matters if, in our opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the annual syndicate accounts are not in agreement with the accounting records; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with regulation 10 of
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.
Our audit work has been undertaken so that we might state to the syndicate’s members those matters
we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the syndicate’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Syndicate Accounts Instructions Version 2.0, these financial statements will form
part of the Electronic Format Annual Syndicate Accounts filed with the Council of Lloyd’s and
published on the Lloyd’s website. This auditors’ report provides no assurance over whether the
Electronic Format Annual Syndicate Accounts have been prepared in compliance with Section 2 of
the Syndicate Accounts Instructions Version 2. We have been engaged to provide assurance on
whether the Electronic Format Annual Syndicate Accounts has been prepared in compliance with
Section 2 of the Syndicate Accounts Instructions Version 2 and will privately report to the Council of
Lloyd’s on this.
Claire Clough FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
4 March 2025
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
18
Income Statement: Technical account – General business
for the year ended 31 December 2024
| 2024 | 2023 | ||||
| Notes | £'000 | £'000 | £'000 | £'000 | |
Earned premiums, net of reinsurance | |||||
| Gross premiums written | 5 | | | ||
| Outward reinsurance premiums | ( | ( | |||
| Net premiums written | | | |||
| Change in the provision for unearned premiums | 18 | ||||
| Gross amount | ( | ( | |||
| Reinsurers' share | | | |||
| Change in the net provision for unearned premiums | ( | ( | |||
| Earned premiums, net of reinsurance | | | |||
| Other technical income, net of reinsurance | 9 | | | ||
Allocated investment return transferred from the | |||||
non-technical account | | | |||
Claims incurred, net of reinsurance | |||||
Claims paid | |||||
| Gross amount | 18 | ( | ( | ||
| Reinsurers' share | 18 | | | ||
| Net claims paid | ( | ( | |||
| Change in the provision for claims | 18 | ||||
| Gross amount | ( | ( | |||
| Reinsurers' share | | ( | |||
| Change in the net provision for claims | ( | ( | |||
| Claims incurred, net of reinsurance | ( | ( | |||
| Net operating expenses | 6 | ( | ( | ||
| Other technical charges, net of reinsurance | | | |||
Balance on the technical account for general business | | ||||
All operations are continuing.
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
19
Income Statement: Non-technical account
for the year ended 31 December 2024
| 2024 | 2023 | ||
| Notes | £'000 | £'000 | |
| Balance on the technical account for general business | | | |
| Investment income | 9 | | |
| Realised gains on investments | 9 | | |
| Unrealised gains on investments | 9 | | |
| Investment expenses and charges | ( | ( | |
| Total investment return | | | |
Allocated investment return transferred to general business technical account | ( | ( | |
| Investment return on capital provided by members | | | |
| (Loss)/profit on foreign exchange | ( | | |
| Profit for the financial year | | |
Statement of Other Comprehensive Income
for the year ended 31 December 2024
| 2024 | 2023 | |
| £'000 | £'000 | |
| Profit for the financial year | 73,772 | 83,209 |
| Currency translation gain/(loss) | | ( |
| Total comprehensive income for the year | | |
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
20
Statement of Financial Position – Assets
at 31 December 2024
| 2024 | 2023 | ||||
| Notes | £'000 | £'000 | £'000 | £'000 | |
Investments | |||||
| Financial investments | 11 | | | ||
| Deposits with ceding undertakings | | | |||
Other | |||||
| | | ||||
Reinsurers' share of technical provisions | |||||
| Provision for unearned premiums | 18 | | | ||
| Claims outstanding | 18 | | | ||
| | | ||||
Debtors | |||||
| Debtors arising out of direct insurance operations | 12 | | | ||
| Debtors arising out of reinsurance operations | 13 | | | ||
| Other debtors | 14 | | | ||
| | | ||||
Other assets | |||||
| Tangible Assets | | | |||
Cash at bank and in hand | 24 | | | ||
| Other | | | |||
| | | ||||
Prepayments and accrued income | |||||
| Accrued interest and rent | | | |||
| Deferred acquisition costs | 15 | | | ||
| Other prepayments and accrued income | | | |||
| | | ||||
Total assets | |||||
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
21
Statement of Financial Position – Liabilities
at 31 December 2024
| 2024 | 2023 | ||||
| Notes | £'000 | £'000 | £'000 | £'000 | |
Capital and Reserves | |||||
| Called up share capital | — | — | |||
| Members' balances | | | |||
| Total Capital and reserves | | | |||
Technical provisions | |||||
| Provision for unearned premiums | 18 | | | ||
| Claims outstanding | 18 | | | ||
| Long term business provision | — | — | |||
Other technical provisions | |||||
| Provisions for other risks | | | |||
| Deposits received from reinsurers | | | |||
Creditors | |||||
| Creditors arising out of direct insurance operations | 21 | | | ||
| Creditors arising out of reinsurance operations | 22 | | | ||
Other creditors including taxation and social security | | | |||
| Amounts owed to credit institutions | | | |||
| | | ||||
| Accruals and deferred income | | | |||
Total liabilities | |||||
Total liabilities, Capital and reserves | |||||
The financial statements on pages 19 to 62 were approved by the Board of Hartford Underwriting Agency
Limited on 4 March 2025 and were signed on its behalf by
N J Farrer
Director
4 March 2025
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
22
Statement of Changes in Member's Balances
for the year ended 31 December 2024
| 2024 | 2023 | |
| £'000 | £'000 | |
| Member's balance brought forward at 1 January | | |
| Total comprehensive income/(loss) for the year | | |
| Payments of profit to members’ personal reserve funds | | |
| Losses collected in relation to distribution on closure of underwriting year | | |
| Cash calls on open underwriting years | | |
| Members agent fees | | |
| Net movement on funds in syndicate | ( | ( |
| Other | | |
| Member's balance carried forward at 31 December | | |
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
23
Statement of Cash Flows
for the year ended 31 December 2024
| 2024 | 2023 | |
| Notes | £'000 | £'000 |
Cash flows from operating activities | ||
| Profit for the financial year | | |
| Increase in gross technical provisions | | |
(Increase)/decrease in reinsurers' share of gross technical provisions | ( | |
| Decrease/(increase) in debtors | | ( |
| Increase in creditors | | |
| Movement in other assets/liabilities | | ( |
| Investment return | ( | ( |
| 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 (used in) investing activities | ( | ( |
Cash flows used in financing activities | ||
| Distribution profit | ( | |
| Collection of losses | | |
| Funds In Syndicate released to members | ( | ( |
| Net cash flows (used in) financing activities | ( | ( |
| Net increase/(decrease) in cash and cash equivalents | | ( |
| Cash and cash equivalents at beginning of year | | |
| Foreign exchange on cash and cash equivalents | ( | ( |
| Cash and cash equivalents at end of year | | |
There are no restricted funds within cash and cash equivalents.
The accompanying notes form part of these financial statements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
24
Notes to the Financial Statements at 31 December 2024
1. Basis of preparation
Syndicate 1221 (‘the Syndicate’) comprises one member of the Society of Lloyd’s that underwrites insurance
business in the London Market. The address of the Syndicate’s Managing Agent is 8
th
Floor, 6 Bevis Marks,
London, EC3A 7BA.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and applicable Accounting Standards in the United
Kingdom and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102). FRS 102 requires
the application of 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.
This information is included in the consolidated financial statements of The Hartford Insurance Group, Inc. as at
31 December 2024, and these financial statements may be obtained from the Syndicate’s Managing Agent at the
address listed above.
The financial statements have been prepared on the historical cost basis, except for financial assets at fair value
through profit or loss that are measured at fair value.
The financial statements are presented in Pounds Sterling (“GBP ”) which is the Syndicate’s presentational
currency. The Syndicate’s functional currency is United States Dollars (“USD ”). All amounts have been
rounded to the nearest thousand, unless otherwise indicated.
Restatement of comparative information in respect of Lloyd's rationalisation
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:
• Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain
unchanged. The principal change is the reclassification of overseas deposits, previously shown as a
separate balance sheet item, to form part of other assets. The comparative balances in the affected notes
4 and 11 have also been represented to align with the current period presentation.
• Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items
have been aggregated or disaggregated within the financial statements and related notes. This includes
the presentation of realised and unrealised gains and losses on investments, which are now shown on a
disaggregated basis in the Non-technical account of the Statement of profit or loss and other
comprehensive income.
The reclassification and aggregation changes have been applied retrospectively and had no impact on previously
reported profit, total comprehensive income, total assets, total liabilities, or total capital and reserves.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
25
Notes to the Financial Statements at 31 December 2024 (continued)
2. Use of judgements and estimates
In preparing these financial statements, the Directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised in the period in which the
revision has occurred. The most critical accounting estimates are as follows:
Claims provisions and related recoveries
The Syndicate’s estimates for reported and unreported losses and the resulting provisions and related insurance
recoveries are continually monitored and updated based on the latest available information. Adjustments
resulting from updated reviews are reflected in the Income Statement. The process relies on the past being a
reasonable predictor of the likely level of claims development and that the rating and other models used for
current business are fair reflections of the likely level of ultimate claims to be incurred.
The estimation of gross outstanding claims is a judgemental and complex area due to the subjectivity inherent in
estimating the impact of claims events that have occurred but for which the eventual settlement of liability
remains uncertain.
The level of uncertainty varies significantly between classes written by the Syndicate but typically highest for
our long-tailed Financial Lines and Casualty classes of business. To assist with these judgements, the Syndicate
follows standard actuarial methods that are commonly used in the market to estimate our IBNR claims reserves,
including the Bornhuetter-Ferguson (BF) and Chain Ladder methods, with assumptions derived from internal
data and external market data, in particular Lloyd’s Market Association (LMA) data.
The most critical gross estimate included within the Statement of Financial Position is the estimate for losses
incurred but not yet reported (“IBNR”); both gross and reinsurer’s share. This estimate is critical as it outlines
the current liability for future expenses in relation to claims incurred and related recoveries.
The estimate for gross IBNR as at 31 December 2024 is £728.6m (2023: £625.1m) and is included within
technical provisions in the balance sheet. In our IBNR we are currently holding £7.7m (2023: £17.5m) relating
to excess inflation, in response to current market conditions. The estimate for the reinsurers’ share of IBNR is
£204.8m (2023: £155.8m).
Our estimate for net losses arising from the Russia/Ukraine war is currently held at £4.7m of IBNR (2023:
£18.0m), covering losses arising from War on Land, Aviation War and Credit and Political Risk losses. There
continues to be considerable uncertainty around the ultimate outcome in respect of these losses, with potential
loss development and the responsiveness of our reinsurance programme continually monitored by management.
The estimate for unallocated loss adjusted expenses is based on an actuarial study as at 31 December 2024 and
is £18.9m (2023: £17.3m).
Gross written premiums
Gross written premiums are a key estimate for the Syndicate as a proportion of the premium income relates to
pipeline premiums, which represents future premium receivable on in force insurance contracts.
Pipeline premium estimates are based on underwriters’ views of the expected premiums to be generated under
the relevant contracts, taking into account the historical performance and prevailing market conditions. Premium
of £120.0m was written on this basis in 2024 (2023: £111.8m).
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
26
Notes to the Financial Statements at 31 December 2024 (continued)
3. Accounting policies
Premiums written
Gross written premiums 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. Estimates are made for pipeline premiums,
representing amounts due to the Syndicate not yet notified. Premiums are earned on a straight line basis over the
life of the contract with the exception of after the event (“ATE”) contracts. ATE contracts are earned in full once
the outcome of the event is known.
Unearned premiums
Written premiums are recognised as earned according to the earnings profile of the policy. Unearned premiums
represent the proportion of premiums written in the year that relate to unexpired terms of policies in force at the
balance sheet date, calculated on the basis of established earnings patterns or time apportionment.
Reinsurance premium ceded
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related
direct or inwards business being reinsured.
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 that have
been incurred at the reporting date but have not yet been reported (“IBNR”) to the Syndicate at the balance sheet
date.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the
Managing Agent’s in-house actuaries and reviewed by external consulting actuaries. These techniques generally
involve standard actuarial methods (paid and incurred, chain ladder, Bornhuetter Ferguson and initial expected
loss ratios). These project from past experience the development of claims over time in view of the likely
ultimate claims to be experienced and for more recent underwriting, having regard to variations in 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 provision for claims also includes amounts in respect of internal and external claims handling costs.
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.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
27
Notes to the Financial Statements at 31 December 2024 (continued)
3. Accounting policies (continued)
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.
Acquisition costs
Acquisition costs, comprising commission and other costs 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.
Foreign currencies
Income and expenditure in foreign currencies are translated at the average rates of exchange for the period.
Assets and liabilities denominated in foreign currencies are revalued at the rate of exchange at the balance sheet
date or if appropriate at the forward contract rate.
All differences arising on revaluation of foreign currency amounts into the functional currency (USD) are
included in the profit and loss account and all differences relating to the translation from functional currency to
the presentational currency (GBP) are included in the Statement of Other Comprehensive Income.
Investments
Investments are stated at current value at the balance sheet date. For this purpose, listed investments and
overseas deposits are stated at market value and deposits with credit institutions are stated at cost. Unlisted
investments for which a market exists are stated at the average price at which they are traded on the balance
sheet date or the last trading day before that date.
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.
For investments at fair value through profit or loss, realised gains and losses represent the difference between
the net proceeds on disposal and the purchase price. For investments measured at amortised cost, realised gains
and losses represent the difference between the net proceeds on disposal and the latest carrying value (or if
acquired after the last reporting date, the purchase price).
Unrealised gains and losses on investments represent the difference between the fair value at the balance sheet
date and their purchase price. Movements in unrealised investment gains and losses comprise the increase/
decrease in the reporting period in the value of the investments held at the reporting date and the reversal of
unrealised investment gains and losses recognised in earlier reporting periods in respect of investment disposals
of the current period, or the valuation at the beginning of the year; as well as the reversal of previously
recognised unrealised gains and losses in respect of investments disposed of in the current period. Investment
return is initially recorded in the non-technical account. The return is transferred in full to the general business
technical account to reflect the investment return on funds supporting underwriting business.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
28
Notes to the Financial Statements at 31 December 2024 (continued)
3. Accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from
the acquisition date that are subject to an insignificant risk of changes in fair value, and are used by the
Syndicate in the management of its short-term commitments.
Cash and cash equivalents are carried at amortised cost in the statement of financial position. Bank overdrafts
that are repayable on demand and form an integral part of the Company’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
Deposits with ceding undertakings
Deposits with ceding undertakings are measured at cost less allowance for impairment.
Identification and measurement of impairment of financial assets
At each reporting date, the Company 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
Company 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 in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the asset’s
original effective interest rate. Individually significant financial assets are tested for impairment on an individual
basis. The remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.
An impairment loss recognised 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.
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 the member or the member’s agent
is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in the
balance sheet under the heading “Other debtors”. No provision has been made for any other overseas tax
payable by the member on underwriting results.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
29
Notes to the Financial Statements at 31 December 2024 (continued)
3. Accounting policies (continued)
Pension costs
The Company nor Syndicate do not operate any pension schemes. Hartford Management (UK) Limited
(“HMUK”) operates a defined contribution scheme. Pension contributions relating to working on Syndicate
business are charged to the Syndicate as incurred and are included within net operating expenses.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
30
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management
The Board of Directors of the Managing Agent has the responsibility to identify, assess and manage the risks faced by
the Syndicate. The Board carries this out through documented strategies and the establishment and maintenance of the
Syndicate’s Risk Management Framework. The Risk and Compliance Committee, a sub-committee of the Board, meets
regularly to assess the effectiveness of this framework, and the Chief Risk Officer is tasked with its daily oversight.
Within the framework is a number of committees that are responsible for managing risk. These comprise the Reserve
Committee, the Underwriting and Claims Committee, and the Risk Monitoring Committee, as well as the in-house
Actuarial function.
a) Insurance risk
The Insurance Risk faced by the Syndicate is by its very nature unpredictable. The principal causes of insurance risk to
the Company are the under-pricing of premiums, under-reserving and the exposure to catastrophe claims.
Earned premium is calculated based on the inception and expiry dates, and the profile of exposure of policies written.
Net incurred claims are calculated based on reported claims in the period and the movement in earned IBNR, based on
the actuarially calculated ultimate claims reserve.
The following table shows the effect of a five percent increase or decrease in total claims liabilities on profit or loss and
equity.
2024 Sensitivity
+2.5% -2.5% +5.0% -5.0%
£'000 £'000 £'000 £'000
Claims outstanding – gross of
reinsurance (24,580) 24,580 (49,160) 49,160
Claims outstanding – net of
reinsurance (17,948) 17,948 (35,895) 35,895
2023 Sensitivity
+2.5% -2.5% +5.0% -5.0%
£'000 £'000 £'000 £'000
Claims outstanding – gross of
reinsurance (22,699) 22,699 (45,398) 45,398
Claims outstanding – net of reinsurance (16,756) 16,756 (33,512) 33,512
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
31
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
b) Financial risk
The Syndicate is exposed to a range of financial risks through its financial assets and financial liabilities. The key
financial risk is that the proceeds from financial assets will not be sufficient to fund the obligations arising from
insurance policies as they fall due.
The main components of financial risk are credit risk, liquidity risk and market risk (as detailed in the Principal risks
and uncertainties section). These risks arise from the Syndicate's investment and reinsurance assets and its insurance
liabilities.
c) Credit risk
Credit risk is managed and monitored by the Company's Risk Committee. The table below details the Syndicate's
exposure to credit risk by asset type, with reference to the credit rating of the counterparties.
2024 AAA AA A BBB Other
Not
rated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial Investments
Debt securities and other fixed
income 70,803 337,664 327,702
118,209
53 900 855,330
Loans and deposits with credit
institutions — — — — — 23 23
Syndicate loans to central fund — — — — — 3,563 3,563
Deposits with ceding
undertakings — — — — — 1,883 1,883
70,803 337,664 327,702
118,209
53 6,369 860,799
Reinsurers' share of outstanding
claims including IBNR 40,642 — 216,207 — — 8,463 265,312
Debtors arising out of reinsurance
operations 8,969 — 27,952 — — (2,874) 34,047
Debtors arising out of direct
insurance operations — — — — — 125,203 125,203
Overseas deposits 11,161 1,467 2,790 2,355 5,006 25,321 48,101
Cash at bank and in hand — — 30,484 — — — 30,484
Other debtors and accrued interest — — — — — 4,458 4,458
Total credit risk exposure 131,576 339,131 605,136
120,563
5,059 166,940
1,368,404
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
32
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
c) Credit risk (continued)
2023 AAA AA A BBB Other Not rated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial Investments
Debt securities and other fixed
income 93,991 261,769 268,356 95,723 79 868 720,786
Loans and deposits with credit
institutions — — — — — 44 44
Syndicate loans to central fund — — — — — 4,554 4,554
Deposits with ceding
undertakings — — — — — 2,151 2,151
93,991 261,769 268,356 95,723 79 7,617 727,535
Reinsurers' share of outstanding
claims including IBNR 55,607 — 177,668 420 — 4,028 237,722
Debtors arising out of reinsurance
operations 5,866 — 26,631 30 — 5,132 37,659
Debtors arising out of direct
insurance operations — — — — — 120,976 120,976
Overseas deposits 16,573 1,606 2,517 2,113 5,080 31,014 58,903
Cash at bank and in hand — — 24,002 — — — 24,002
Other debtors and accrued interest — — — — — 14,281 14,281
Total credit risk exposure 172,037 263,375 499,174 98,286 5,159 183,048
1,221,079
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
33
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
c) Credit risk (continued)
The table below details the Syndicate's assets which are past due but not impaired.
2024
Neither
past due
nor
impaired
Past due but
not
impaired
assets
Gross value
of impaired
assets
Impairment
allowance Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield securities
and units in unit trusts — — — — —
Debt securities and other fixed income
securities 855,330 — — — 855,330
Participation in investment pools — — — — —
Loans secured by mortgages — — — — —
Loans and deposits with credit
institutions 48,124 — — — 48,124
Derivative assets — — — — —
Syndicate loans to central funds 3,563 — — — 3,563
Other investments — — — — —
Deposits with ceding undertakings 1,883 — — — 1,883
Reinsurers' share of claims outstanding 265,312 — — — 265,312
Debtors arising out of direct insurance
operations 91,022 34,181 — — 125,203
Debtors arising out of reinsurance
operations — — — — —
Other debtors and accrued interest 4,458 — — — 4,458
Cash at bank and in hand 30,484 — — — 30,484
Total 1,300,176 34,181 — — 1,334,357
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
34
Notes to the Financial Statements at 31 December 2024 (continued)
2023
Neither
past due
nor
impaired
Past due but
not impaired
assets
Gross value
of impaired
assets
Impairment
allowance Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield securities
and units in unit trusts — — — —
Debt securities and other fixed income
securities 720,786 — — 720,786
Participation in investment pools — — — —
Loans secured by mortgages — — — —
Loans and deposits with credit
institutions 58,946 — — 58,946
Derivative assets — — — —
Syndicate loans to central funds 4,554 — — 4,554
Other investments — — — — —
Deposits with ceding undertakings 2,151 — — 2,151
Reinsurers' share of claims outstanding 237,722 — — 237,722
Debtors arising out of direct insurance
operations 80,491 40,485 — — 120,976
Debtors arising out of reinsurance
operations 25,741 25,741
Other debtors and accrued interest 7,111 — — — 7,111
Cash at bank and in hand 24,002 — — — 24,002
Total 1,161,504 40,485 — — 1,201,989
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
35
Notes to the Financial Statements at 31 December 2024 (continued)
Past due but not impaired
2024
Up to
three
months
Three
to six
months
Six
months
to one
year
Greater
than
one
year Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield securities
and units in unit trusts — — — — —
Debt securities and other fixed income
securities — — — — —
Participation in investment pools — — — — —
Loans secured by mortgages — — — — —
Loans and deposits with credit
institutions — — — — —
Derivative assets — — — — —
Syndicate loans to central funds — — — — —
Other investments — — — — —
Deposits with ceding undertakings — — — — —
Reinsurers' share of claims outstanding — — — —
Debtors arising out of direct insurance
operations 19,652 5,773 3,631 5,125 34,181
Debtors arising out of reinsurance
operations — — — — —
Other debtors and accrued interest — — — — —
Cash at bank and in hand — — — — —
Total 19,652 5,773 3,631 5,125 34,181
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
36
Notes to the Financial Statements at 31 December 2024 (continued)
Past due but not impaired
2023
Up to
three
months
Three
to six
months
Six
months
to one
year
Greater
than
one
year Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield securities
and units in unit trusts — — — — —
Debt securities and other fixed income
securities — — — — —
Participation in investment pools — — — — —
Loans secured by mortgages — — — — —
Loans and deposits with credit
institutions — — — — —
Derivative assets — — — — —
Syndicate loans to central funds — — — — —
Other investments — — — — —
Deposits with ceding undertakings — — — — —
Reinsurers' share of claims outstanding — — — — —
Debtors arising out of direct insurance
operations 24,550 5,322 5,996 4,617 40,485
Debtors arising out of reinsurance
operations — — — — —
Other debtors and accrued interest — — — — —
Cash at bank and in hand — — — —
Total 24,550 5,322 5,996 4,617 40,485
The table below sets out a reconciliation of changes in impairment allowance during the period for each
class of financial asset at the balance sheet date:
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
37
Notes to the Financial Statements at 31 December 2024 (continued)
2024 1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to income
statement
Foreign
exchange Others 31 Dec
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial investments — — — — — — —
Deposits with ceding
undertakings — — — — — — —
Reinsurers' share of claims
outstanding — — — — — — —
Debtors arising out of direct
insurance operations — — — — — — —
Debtors arising out of
reinsurance operations — — — — — — —
Other debtors and accrued
interest
— — — — — — —
Cash at bank and in hand — — — — — — —
Total — — — — — — —
2023 1 Jan
New
impairment
charges
added in
year
Changes in
impairment
charges
Released
to income
statement
Foreign
exchange Others 31 Dec
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial investments — — — — — — —
Deposits with ceding
undertakings — — — — — — —
Reinsurers' share of claims
outstanding — — — — — — —
Debtors arising out of direct
insurance operations
— — — — — — —
Debtors arising out of
reinsurance operations
— — — — — — —
Other debtors and accrued
interest
— — — — — — —
Cash at bank and in hand — — — — — — —
Total — — — — — — —
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
38
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
d) Liquidity risk
The table below analyses the Syndicate’s monetary assets and liabilities into their relevant maturity groups based on the
period remaining at the year end to their contractual maturities or expected settlement dates. Net liabilities in up to one
year can be covered by selling investments before their maturity date.
Undiscounted net cash flows
2024
No
maturity
stated
Up to 1
Year
1-3
Years
3-5
Years
Over 5
years Total
£'000 £'000 £'000 £'000 £'000 £'000
Claims outstanding — 346,843 350,424 162,975 122,964 983,206
Derivative liabilities — — — — — —
Deposits received from
reinsurers — — — — — —
Creditors — 66,625 — — — 66,625
Other credit balances — 8,453 — — — 8,453
Total — 421,921 350,424 162,975 122,964
1,058,284
Undiscounted net cash flows
2023
Up to 1
Year
1-3
Years
3-5
Years
Over 5
years Total
£'000 £'000 £'000 £'000 £'000 £'000
Claims outstanding — 328,598 321,225 146,205 111,925 907,953
Derivative liabilities — — — — — —
Deposits received from
reinsurers — — — — — —
Creditors — 55,131 — — — 55,131
Other credit balances — 6,784 — — — 6,784
Total — 390,513 321,225 146,205 111,925 969,868
e) Market risk
Foreign currency market risk
It is the Company’s policy to monitor assets and liabilities in the currencies it is exposed to on a monthly basis in order
to minimise foreign currency risk. The following currency exchange rates have been used for principal foreign currency
transactions:
2024 2023
Year-end rate Average rate Year-end rate Average rate
Euro 1.210 1.180 1.154 1.148
US dollar 1.250 1.280 1.275 1.236
Canadian dollar 1.800 1.750 1.681 1.699
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
39
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
e) Market risk (continued)
The table below details the Syndicate’s assets and liabilities, translated into Sterling at 31 December 2024:
2024 GBP USD EUR CAD AUD JPY OTH Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investments 226,567 541,909 —
105,878
2,730 — 29,933 907,017
Reinsurers' share of technical
provisions 45,659 257,569 — 1,961 — — — 305,189
Debtors 62,897 96,015 322 — 16 — — 159,250
Other assets 754 36,307 428 (1,205) 526 — 15 36,825
Prepayments and accrued
income 17,125 35,008 (78) 4,902 (12) — — 56,945
Total assets 353,002 966,808 672
111,536
3,260 — 29,948 1,465,226
Technical provisions (360,097) (805,849) — (64,164) — — —
(1,230,110)
Provisions for other risks — — — — — — — —
Creditors (16,459) (48,822) — (271) (16) — (1,055) (66,623)
Accruals and deferred income (2,985) (5,444) — (25) — — — (8,454)
Total liabilities (379,541) (860,115) — (64,460) (16) — (1,055)
(1,305,187)
Total Capital and reserves 26,539 (106,693) (672) (47,076) (3,244) — (28,893) (160,039)
2023 GBP USD EUR CAD AUD JPY OTH Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investments 206,723 436,561 — 98,195 7,477 — 35,330 784,286
Reinsurers' share of technical
provisions 52,828 215,414 — 2,921 — — — 271,163
Debtors 47,040 108,868 2,710 17 — — 158,635
Other assets 9,282 14,665 1,716 7,500 13 — 88 33,265
Prepayments and accrued
income 13,491 29,908 (82) 4,329 (13) — — 47,633
Total assets 329,364 805,416 1,634
115,655
7,494 — 35,418 1,294,982
Technical provisions (338,739) (737,927) — (57,170) — — —
(1,133,837)
Provisions for other risks — — — — — — — —
Creditors (10,978) (42,395) (296) (902) (30) — (529) (55,130)
Accruals and deferred income (2,635) (4,118) — (32) — — — (6,785)
Total liabilities (349,717) (784,440) (296) (58,072) (30) — (529)
(1,195,752)
Total Capital and reserves 20,353 (20,976) (1,338) (57,583) (7,464) — (34,889) (99,230)
The tables above present the insurance and reinsurance assets and liabilities of the Syndicate by settlement currency.
Approximately 25% of the net technical provisions include claims denominated in Euro, Australian dollar and other
non-settlement currencies.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
40
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
e) Market risk (continued)
Sensitivity analysis to market risks for financial instruments
An analysis of the Syndicate’s sensitivity to interest rate, currency and other price risk is shown below. The table shows
the effect on profit or loss of reasonably possible changes in the relevant risk variable, assuming that all other variables
remain constant, if that change had occurred at the end of the reporting period and had been applied to the risk
exposures at that date.
2024 2023
Profit or loss for
the year
Profit or loss for
the year
£'000 £'000
Interest rate risk
+50 basis points shift in yield curves (12,830) (10,523)
-50 basis points shift in yield curves 13,001 10,596
Equity Price risk
5 percent increase in equity prices — —
5 percent decrease in equity prices — —
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
41
Notes to the Financial Statements at 31 December 2024 (continued)
4. Risk management (continued)
f) Capital Management
Framework at Lloyd’s
The Society of Lloyd’s (“Lloyd’s”) is a regulated undertaking and subject to supervision by the Prudential Regulatory
Authority (“PRA”) under the Financial Services and Markets Act 2000, and in accordance with the Solvency II
Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that
Lloyd’s as a regulated entity complies with Solvency II requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although, as described below, Lloyd’s sets capital at a syndicate level, Solvency II and Lloyd’s capital requirements
only apply at an overall and individual member level and not at the syndicate level. Accordingly, the capital
requirement in respect of Syndicate 1221 is not disclosed in these financial statements.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirement
(“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting
uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its
SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s to
use in meeting Solvency II requirements. The SCR's of each syndicate are subject to review by Lloyd’s and approval by
the Lloyd’s Capital and Planning Group. A syndicate may be comprised of one or more underwriting members of
Lloyd’s. Each member is liable for its own share of underwriting liabilities for the syndicates on which it participates,
but no other member’s shares.
Accordingly, the capital requirements that Lloyd’s sets for each member operates on a similar basis. Each member’s
SCR is determined by the sum of the member’s share of the Syndicate SCR ‘to ultimate’. Where a member participates
on more than one Syndicate, a credit for diversification is provided to reflect the spread of risk, but consistent with
determining an SCR which reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’ for that member. Over
and above this, Lloyd’s applies a capital uplift to the member’s capital requirement, known as the Economic Capital
Assessment (“ECA”). The purpose of this uplift, which is a Lloyd’s, not a Solvency II requirement, is to meet Lloyd’s
financial strength, licence and ratings objectives. The capital uplift applied for 2025 was 35% of the member’s SCR ‘to
ultimate’.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that member
(Funds at Lloyd’s), assets held and managed within a Syndicate (Funds in Syndicate), or as the member’s share of the
member’s 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 22, represents resources available to meet the members and Lloyd’s capital
requirements.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
42
Notes to the Financial Statements at 31 December 2024 (continued)
5. Analysis of underwriting result
An analysis of the underwriting result before investment return is set out below:
2024
Gross
written
premiums
Gross
premiums
earned
Gross
claims
incurred
Net
operating
expenses
Ceded
balance Total
£'000 £'000 £'000 £'000 £'000 £'000
Direct insurance: —
Accident and health — — — — — —
Motor (third party liability) — — — — — —
Motor (other classes) — — — — — —
Marine, aviation, and
transport 123,905 126,814 (87,918) (37,183) 6,146 7,859
Fire and other damage to
property 44,101 44,525 (8,170) (13,722) (14,545) 8,088
Third party liability 175,248 164,643 (84,001) (47,309) (7,255) 26,078
Credit and suretyship 19,263 12,384 (6,407) (1,402) (3,237) 1,338
Legal expenses — — — — — —
Assistance — — — — — —
Miscellaneous 25 25 (2,255) 123 2,180 73
Total Direct Insurance 362,542 348,391 (188,751) (99,493) (16,711) 43,436
Reinsurance accepted 70,145 64,009 (39,797) (15,356) (4,992) 3,864
Total 432,687 412,400 (228,548) (114,849) (21,703) 47,300
Additional Analysis
Fire and other damage to
property which is:
Specialities 12,747 12,410 (1,948) (4,660) (1,691) 4,111
Energy 18,151 17,418 (6,270) (2,035) (5,282) 3,831
Third party liability which is:
Energy 17,322 16,125 (10,804) (6,153) 2,615 1,783
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
43
Notes to the Financial Statements at 31 December 2024 (continued)
5. Analysis of underwriting result (continued)
2023
Gross
written
premiums
Gross
premiums
earned
Gross
claims
incurred
Net
operating
expenses
Ceded
balance Total
£'000 £'000 £'000 £'000 £'000 £'000
Direct insurance: —
Marine, aviation, and
transport 132,872 126,676 (70,498) (37,129) (11,199) 7,850
Fire and other damage
to property 45,786 44,273 (5,570) (14,327) (12,082) 12,294
Third party liability 150,405 141,409 (66,708) (38,548) (19,618) 16,535
Credit and suretyship 9,886 9,524 (4,945) (1,581) (2,505) 493
Legal expenses — — — — — —
Assistance — — — — — —
Miscellaneous 3 3 2,344 (3) (2,280) 64
Total Direct Insurance 338,952 321,885 (145,377) (91,588) (47,684) 37,236
Reinsurance accepted 75,688 68,106 (39,590) (15,415) (10,854) 2,247
Total 414,640 389,991 (184,967) (107,003) (58,538) 39,483
Additional Analysis
Fire and other damage
to property which is:
Specialities 11,606 11,125 (1,160) (4,603) (884) 4,478
Energy 16,711 15,260 (5,293) (2,072) (5,586) 2,309
Third party liability
which is:
Energy 15,382 12,824 (5,582) (4,431) (64) 2,747
The gross premiums written for direct insurance by destination of risk is presented in the table below:
2024 2023
£'000 £'000
United Kingdom 84,400 81,857
European Union Member States 44,919 47,318
US 84,291 81,145
Rest of World 148,932 128,632
Total Gross Premiums Written 362,542 338,952
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
44
Notes to the Financial Statements at 31 December 2024 (continued)
6. Net operating expenses
Net operating expenses include:
2024 2023
£'000 £'000
Acquisition costs 78,758 72,103
Change in deferred acquisition costs (5,964) (4,519)
Administrative expenses 41,016 36,225
Members' standard personal expenses 9,954 9,125
Reinsurance commissions and profit
participations (8,917) (5,931)
114,847 107,003
Total commissions for direct insurance business for the year amounted to:
2024 2023
£'000 £'000
Total commission for direct insurance business
68,700 61,022
Administrative expenses include:
2024 2023
£'000 £'000
Auditor's remuneration
Fees payable to the auditor for the audit of these
financial statements 351 326
Fees payable to the auditor and its associates in
respect of: other services pursuant to legislation 164 159
Impairment losses on debtors:
arising out of direct insurance operations — —
arising out of reinsurance operations — —
Impairment losses on financial instruments:
arising from instrument measured at amortised
cost
— —
arising from instruments measured as available
for sale
— —
515 485
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
45
Notes to the Financial Statements at 31 December 2024 (continued)
7. Key management personnel compensation
The Directors of Hartford Underwriting Agency Limited received the following aggregate remuneration charged
to the Syndicate and are included within net operating expenses:
2024 2023
£'000 £'000
Emoluments 1,889 1,770
Fees — —
1,889 1,770
The active underwriter received the following remuneration charged as a Syndicate expense:
2024 2023
£'000 £'000
Emoluments 587 574
587 574
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
46
Notes to the Financial Statements at 31 December 2024 (continued)
8. Staff numbers and costs
The Company does not directly employ any staff. All employees engaged on Company business are employed
by Hartford Management (UK) Limited (“HMUK”), which charges the Company and other Hartford group
companies with a single management fee for their respective share of group expenses. This fee is included
within net operating expenses. The average number of persons employed by HMUK, but working for the
Syndicate during the year, analysed by category, was as follows:
2024 2023
Administration and finance 81 81
Underwriting 46 43
Claims 17 19
Investments — —
Total 144 143
2024 2023
£'000 £'000
Wages and salaries 21,367,372 17,954,747
Social security costs 2,639,361 2,357,478
Other pension costs 1,782,705 1,610,094
Other short/long term incentive costs 7,692 —
25,797,130 21,922,319
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
47
Notes to the Financial Statements at 31 December 2024 (continued)
9. Investment return
2024 2023
£'000 £'000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income 27,426 20,214
Dividend income — —
From financial instruments classified as Available for Sale — —
Interest and similar income — —
Dividend income — —
From financial instruments at amortised cost — —
Interest and similar income — —
Dividend income — —
Interest on cash at bank — —
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments 3,519 2,817
Losses on the realisation of investments (105) (536)
Unrealised gains on investments 7,322 16,609
Unrealised losses on investments (6,638) —
Other relevant gains/(losses) — —
From financial instruments at amortised cost — —
Gains on the realisation of investments — —
Losses on the realisation of investments — —
Unrealised gains on investments — —
Unrealised losses on the investments — —
Other relevant gains/(losses) — —
Financial liabilities at amortised cost — —
Interest expense — —
Other relevant gain — —
Other relevant loss — —
Investment expenses and charges (197) (321)
Total investment return 31,327 38,783
Transferred to the technical account from the non technical account 31,327 38,783
Impairment losses on debtors recognised in administrative expenses — —
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
48
Notes to the Financial Statements at 31 December 2024 (continued)
10. Distribution and open years of account
2024 2023
2021 — —
2020 — —
2019 — —
2018 — —
2017 — —
2016 — —
2015 — —
2014 — —
2013 — —
2012 — —
11. Financial investments
Market value Cost
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Shares and other variable yield securities and
units in unit trusts — — — —
Debt securities and other fixed income securities 855,330 720,786 873,756 745,408
Participation in investment pools
Loans secured by mortgages — — — —
Loans and deposits with credit institutions 23 44 23 44
Derivative assets
Syndicate loan to central fund 3,563 4,554 3,563 4,554
Other investments — — — —
858,916 725,384 877,342 750,006
2024 2023
£'000 £'000
Financial assets measured at fair value through profit or loss 858,916 725,384
Financial assets measured at fair value as available for sale — —
Financial assets measured at amortised cost
— —
Total financial investments 858,916 725,384
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
49
Notes to the Financial Statements at 31 December 2024 (continued)
11. Financial investments (continued)
As the Syndicate is fully aligned, the Syndicate holds the capital supporting their underwriting in their
Syndicate’s premium trust funds. These funds are known as funds in syndicate (FIS). At 31 December 2024, the
following amount was held as funds in syndicate:
2024 2023
£'000 £'000
Funds in Syndicate (FIS) 54,350 42,768
Total funds in syndicate 54,350 42,768
Financial instruments that are held at fair value through profit or loss are classified using a fair value hierarchy
that reflects the significance of the inputs used in these measurements.
Level 1- The unadjusted quoted price in an active market for identical assets or liabilities that the
entity can access at the measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed
using market data) for the asset or liability either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or
liability.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
50
Notes to the Financial Statements at 31 December 2024 (continued)
2024 Level 1 Level 2 Level 3
Assets held
at
amortised
cost Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield
securities and units in unit trusts — — — — —
Debt securities and other fixed
income securities 31,806 823,525 — — 855,331
Participation in investment pools — — — — —
Loans secured by mortgages — — — — —
Loans and deposits with credit
institutions
— 23 — — 23
Derivative assets — — — — —
Syndicate loan to central fund — — 3,563 — 3,563
Other investments 890 47,211 — — 48,101
Total financial investments 32,696 870,759 3,563 — 907,018
Derivative liabilities — — — — —
Total 32,696 870,759 3,563 — 907,018
2023 Level 1 Level 2 Level 3
Assets held
at amortised
cost Total
£'000 £'000 £'000 £'000 £'000
Shares and other variable yield
securities and units in unit trusts — — — — —
Debt securities and other fixed
income securities 391 720,394 — — 720,785
Participation in investment pools — — — — —
Loans secured by mortgages — — — — —
Loans and deposits with credit
institutions
— 44 — — 44
Derivative assets — — — — —
Syndicate loan to central fund — — 4,554 — 4,554
Other investments 25,814 33,088 — — 58,902
Total financial investments 26,205 753,526 4,554 — 784,285
Derivative liabilities —
Total 26,205 753,526 4,554 — 784,285
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
51
Notes to the Financial Statements at 31 December 2024 (continued)
Movement in level 3 investments
The following table provides an analysis of investments valued with reference to level 3 inputs.
2024 2023
£'000 £'000
At 1 January 4,554 4,554
Purchases — —
Disposals (991) —
Reclassification to Level 2 — —
Reclassification from Level 2 — —
Reclassification to Level 1 — —
Reclassification from Level 1 — —
Fair value (losses)/gains recognised in profit
or loss from continuing operations — —
Foreign exchange — —
At 31 December 3,563 4,554
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
52
Notes to the Financial Statements at 31 December 2024 (continued)
12. Debtors arising out of direct insurance operations
Of the debtors arising out of direct insurance and reinsurance operations, the whole amount is due from
intermediaries.
2024 2023
£'000 £'000
Due within one year 125,203 120,976
Due after one year — —
Total 125,203 120,976
13. Debtors arising out of reinsurance operations
Of the debtors arising out of direct insurance and reinsurance operations, the whole amount is due from
intermediaries.
2024 2023
£'000 £'000
Due within one year 34,025 37,639
Due after one year 22 20
Total 34,047 37,659
14. Other Debtors
2024 2023
£'000 £'000
Inter-Syndicate Balances — —
Other related party balances (non syndicates) 2,870 6,493
Amounts due from members — —
Other 1,588 618
4,458 7,111
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
53
Notes to the Financial Statements at 31 December 2024 (continued)
15. Deferred acquisition costs
2024 2023
Gross Reinsurance Net Gross Reinsurance Net
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 39,136 (6,501) 32,634 35,842 (5,597) 30,245
Incurred deferred
acquisition costs 78,641 (6,258) 72,383 71,805 (3,492) 68,313
Amortised deferred
acquisition costs (72,677) 4,414 (68,263) (67,285) 2,499 (64,786)
Foreign deferred
acquisition costs 882 31 914 (1,226) 89 (1,138)
Other — — — — — —
Balance at 31 December 45,982 (8,314) 37,668 39,136 (6,501) 32,634
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
54
Notes to the Financial Statements at 31 December 2024 (continued)
16. Tangible fixed assets
2024 2023
Fixtures
and
Fittings
Computer
equiment Other Total
Fixtures
and
Fittings
Computer
equiment Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 January — — — — — — — —
Additions — — — — — — — —
Disposals — — — — — — — —
Impairment losses — — — — — — — —
Foreign exchange — — — — — — — —
Other movements — — — — — — — —
Balance at 31
December — — — — — — — —
Depreciation
At 1 January — — — — — — — —
Additions — — — — — — — —
Disposals — — — — — — — —
Impairment losses — — — — — — — —
Foreign exchange — — — — — — — —
Other movements — — — — — — — —
Balance at 31
December — — — — — — — —
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
55
Notes to the Financial Statements at 31 December 2024 (continued)
17. Claims development
Gross:
Pure Underwriting
Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Estimate of ultimate
gross claims £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
at end of underwriting
year 84,156 84,156
129,840
94,623 95,707 93,142 92,978 89,552
102,040
129,992
one year later
184,773
228,044
240,064
243,541
198,761
182,428
267,397
178,333
205,779
—
two years later
178,976
229,260
263,746
261,896
205,016
227,202
262,507
202,816
— —
three years later
195,794
242,438
269,664
251,561
210,400
207,474
248,156
— — —
four years later
214,156
268,017
264,635
269,197
192,050
187,817
— — — —
five years later
209,797
271,528
265,711
269,259
186,455
— — — — —
six years later
218,235
277,966
274,363
276,007
— — — — — —
seven years later
222,588
277,986
272,029
— — — — — — —
eight years later
220,874
279,173
— — — — — — — —
nine years later
228,002
—
— — — — — — — —
Less gross Claims paid
(204,851)
(250,652)
(234,625)
(198,023)
(124,499)
(101,053)
(83,149) (55,225) (23,724) (4,422)
Gross ultimate claims
reserve 23,151 28,521 37,404 77,984 61,956 86,764
165,007
147,591
182,055
125,570
936,003
Gross ultimate claims
reserve for prior years 47,203
Gross claims reserves
983,206
Net:
Pure Underwriting
Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Estimate of ultimate
net claims £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
at end of underwriting
year 58,240 75,866 83,989 67,117 93,252 77,964 87,064 81,937 88,540 94,062
one year later
127,202
151,744
164,559
153,048
160,499
156,531
197,190
161,217
178,303
—
two years later
127,294
154,437
176,092
178,051
159,042
178,072
197,339
173,024
— —
three years later
136,979
164,455
185,336
171,242
157,996
167,324
186,770
— — —
four years later
145,630
180,290
186,715
192,403
150,597
161,438
— — — —
five years later
142,471
180,935
187,216
190,273
147,439
— — — — —
six years later
144,684
184,570
196,471
196,024
— — — — — —
seven years later
146,946
183,060
196,996
— — — — — — —
eight years later
148,426
185,534
— — — — — — — —
nine years later
148,998
— — — — — — — — —
Less net Claims paid
(137,109)
(168,361)
—
(167,895)
—
(148,543)
—
(102,639)
—
(90,765)
—
(76,826)
—
(53,040)
—
(22,469) (4,313)
Net ultimate claims
reserve 11,889 17,173 29,101 47,481 44,800 70,673
109,944
119,984
155,834
89,749
696,628
Net ultimate claims
reserve for prior years 21,266
Net claims reserves
717,894
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
56
Notes to the Financial Statements at 31 December 2024 (continued)
18. 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
Balance at 1 January 907,953 (237,722) 670,231 910,762 (265,861) 644,901
Claims paid during the year
(162,386) 26,429 (135,957) (150,881) 17,697 (133,184)
Expected cost of current claims
131,071 (35,551) 95,520 106,726 (13,864) 92,862
Change in estimates of prior year
provisions
97,477 (14,668) 82,809 78,241 12,393 90,634
Discount unwind
— — — — — —
Effect of movements in exchange
rate
9,092 (3,800) 5,292 (36,895) 11,913 (24,982)
Other
— — — — — —
Balance at 31 December
983,207 (265,312) 717,895 907,953 (237,722) 670,231
Unearned premiums
Balance at 1 January
225,884 (33,443) 192,441 211,827 (28,617) 183,210
Premiums written during the year
432,687 (78,083) 354,604 414,640 (66,300) 348,340
Premiums earned during the year
(412,399) 71,923 (340,476) (389,991) 60,009 (329,982)
Effect of movements in exchange
rate
731 (274) 457 (10,592) 1,465 (9,127)
Other
— — — — — —
Balance at 31 December
246,903 (39,877) 207,026 225,884 (33,443) 192,441
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
57
Notes to the Financial Statements at 31 December 2024 (continued)
19. Provisions for other risks
2024 2023
£'000 £'000
Balance at 1 January — —
Additions during the year — —
Unwind of discount — —
Amounts utilised — —
Unused amounts reversed to the
profit and loss account — —
Effect of movements in exchange
rate — —
Other — —
Balance at 31 December — —
20. Discounted claims
Undiscounted
claims
Effect of
discounting After discounting
2024
£'000
2023
£'000
2024
£'000
2023
£'000
2024
£'000
2023
£'000
Class of business — — — — — —
Accident and health — — — — — —
Marine, aviation and transport — — — — — —
Motor (third party liability) — — — — — —
Motor (other classes) — — — — — —
Fire and other damages to property — — — — — —
Third party liability — — — — — —
Credit and suretyship — — — — — —
Legal expenses — — — — — —
Assistance — — — — — —
Miscellaneous — — — — — —
— — — — — —
Undiscounted
claims
Effect of
discounting After discounting
2024
£'000
2023
£'000
2024
£'000
2023
£'000
2024
£'000
2023
£'000
Gross claims provisions — — — — — —
Reinsurers share of total claims — — — — — —
Net Claims Provisions — — — — — —
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
58
Notes to the Financial Statements at 31 December 2024 (continued)
21. Creditors arising out of direct insurance operations
2024 2023
£'000 £'000
Due within one year 1,328 3,448
Due after one year — —
1,328 3,448
22. Creditors arising out of reinsurance operations
2024 2023
£'000 £'000
Due within one year 53,763 42,294
Due after one year — —
53,763 42,294
23. Other creditors
2024 2023
£'000 £'000
Inter syndicate balances —
0
—
Profit commissions payable —
1
1
—
Other related party balances (non-syndicates) 10,273
0
8,587
Derivative liabilities —
0
—
Other liabilities 1,259
9
802
11,532 9,389
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
59
Notes to the Financial Statements at 31 December 2024 (continued)
24. Cash and cash equivalents
2024 2023
£'000 £'000
Cash at bank and in hand 30,484 24,002
Short term debt instruments presented within other financial investments — —
Deposits with credit institutions — —
Bank overdrafts — —
Total cash and cash equivalents 30,484 24,002
Cash at bank and in hand
Short term debt instruments presented within other financial investments — —
Deposits with credit institutions — —
Bank overdrafts — —
Total cash and cash equivalents not available for use by the syndicate — —
Total cash and cash equivalents held in regulated accounts in
overseas jurisdictions
48,101 58,903
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
60
Notes to the Financial Statements at 31 December 2024 (continued)
25. Analysis of net debt
At 1
January
2024 Cash flows Acquired
Fair value
and
exchange
At 31
December
2024
Cash and cash equivalents
24,002 7,597 — (1,113) 30,486
Derivative financial
— — — — —
Other
— — — — —
Total
24,002 7,597 — (1,113) 30,486
26. Related parties
The ultimate parent company and controlling member is The Hartford Insurance Group, Inc., which is
incorporated in the USA.
The immediate parent company of Hartford Underwriting Agency Limited is Navigators Holdings (UK)
Limited.
All trading with Companies within The Hartford Insurance Group, Inc. have been carried out on an arm’s length
basis with settlement of balances monthly during the normal course of business.
A number of third party reinsurance contracts that cover both the Syndicate and related group companies were
purchased in the year by the Navigators Insurance Company and The Hartford Fire Insurance Company. The
Syndicate is allocated its proportionate share of cost of these contracts which is agreed by local management.
The Syndicate paid Managing Agency fees to Hartford Underwriting Agency Limited ("HUAL") during the
year. Total fees incurred, in respect of services provided, amounted to £7.1m (2023 £6.5m). At the year end, the
amount owing to HUAL was £0.9m (2023: £(4.1)m). .
The Syndicate was recharged expenses of £34.7m (2023: £31.3m) from Hartford Management UK Limited
("HMUK") during the year. At the year end, the amount owed to HMUK was £7.3m (2023: £1.2m).
The Syndicate was recharged expenses of nil (2023: nil) from Navigators Management Company during the
year. At the year end, the amount owing to Navigators Management Company was nil (2023: £(2.3)m).
Hartford Asia Limited (“HAL”) charged a fee of £1.2m (2023: £0.9m) to the Syndicate during the year. The fee
is based on expenses incurred by HAL plus a mark-up of 10% in respect of underwriting services provided by
HAL. At the year end, the amount owing to HAL was £1.3m (2023: £(0.7)m).
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
61
Notes to the Financial Statements at 31 December 2024 (continued)
27. Foreign exchange rates
| 2024 | 2023 | |||||
| Opening rate | Year-end rate | Average rate | Opening rate | Year-end rate | Average rate | |
| Sterling | ||||||
| Euro | ||||||
| US dollar | ||||||
| Canadian dollar | ||||||
| Australian dollar | | |||||
| Japanese Yen |
28. 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 member’s underwriting liabilities.
The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA
requirements and resource criteria. FAL considers a number of factors including the nature and amount of risk to
be underwritten by the member and the assessment of the reserving risk in respect of business that has been
underwritten. Since FAL is not under the management of the Managing Agent, no amount has been shown in
these financial statements by way of such capital resources. However, the Managing Agent is able to make a call
on the member’s FAL to meet liquidity requirements or to settle losses.
HARTFORD
UNDERWRITING AGENCY LIMITED
S Y N D I C A T E 1221
at LLOYD'S
62
