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CONTENTS
1 Syndicate 2791 Annual Report and Accounts 2024
SYNDICATE 2791
Annual Report and Accounts for the year ended
CONTENTS
2 Syndicate 2791 Annual Report and Accounts 2024
Directors and Administration 3
Key Financial Data 4
Managing Agent’s Report 5
Statement of Managing Agent’s Responsibilities 17
Independent Auditor’s Report 18
Income Statement: Technical Account – General Business 22
Income Statement: Non-Technical Account 23
Statement of Comprehensive Income 23
Statement of Financial Position 24
Statement of Cash Flows 25
Notes to the financial statements 26
DIRECTORS AND ADMINISTRATION
3 Syndicate 2791 Annual Report and Accounts 2024
MANAGING AGENT
Managing Agent
Directors
K Allchorne (Non-executive)
C E Dandridge (Non-executive)
A S Foote (Non-executive)
T P Froehlich (Non-executive)
A Kong
T R McDermott
J J Parker
D E S Shipley (Non-executive Chairman)
C J Smelt (Active Underwriter)
R K Trubshaw
N D Williams (appointed 1 January 2024)
Company Secretary
J J Parker
Managing Agent’s Registered Office
110 Bishopsgate
London
EC2N 4AY
Managing Agent’s Registration
Registered in England; number: 03985640
SYNDICATE
Active Underwriter
C J Smelt
Principal Investment Managers
Schroders Investment Management Limited
Statutory Auditor
Deloitte LLP
1 New Street Square
London
EC4A 3HQ
KEY FINANCIAL DATA
All data is at 31 December
4 Syndicate 2791 Annual Report and Accounts 2024
313.5
366.5
517.7
678.4
773.1
0
200
400
600
800
1000
2020 2021 2022 2023 2024
£'m
Gross premium written 2020 to 2024 (£'m)
62
60
67
42
52.7
32
33
28
34
31.0
94%
93%
95%
77%
84%
0
50
100
150
2020 2021 2022 2023 2024
%
Combined ratio 2020 to 2024 (%)
Underwriting ratio Expense ratio
11.0
-1.7
-10.6
25.9
40.9
3.9
-0.6
-2.8
4.9
5.9
-20
-10
0
10
20
30
40
50
-20
-10
0
10
20
30
40
50
2020 2021 2022 2023 2024
% annual return
£'m
Net investment return 2020 to 2024
71.2%
11.3%
8.3%
4.2%
2.1%
0.9%
0.8%
0.8%
0.4%
Total investment asset composition
US Government bonds
Cash/cash liquidity funds
Investment Funds
Gold ETF
Overseas regulatory trust
funds
Commodities
Global Short Bond Fund
Global Equity
Lloyd's Central Fund Loan
MANAGING AGENT’S REPORT
5 Syndicate 2791 Annual Report and Accounts 2024
The directors of the managing agent present their report for the year ended 31 December 2024. The principal activity
of the syndicate is that of writing insurance and reinsurance business.
This annual report is prepared using the annual basis of accounting as required by the Insurance Accounts Directive
(Lloyd’s Syndicate and aggregate accounts) Regulations 2008 (‘the 2008 Regulations’), FRS 102 and FRS 103, being
applicable UK GAAP accounting standards, and in accordance with the provisions of Schedule 3 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations relating to insurance companies.
UNDERWRITER’ S REPORT
A Review of the Calendar Year Result
These financial statements are prepared focusing on the calendar year results under UK Generally Accepted
Accounting Practices (GAAP) for insurance companies.
The 2024 calendar year produced an annually accounted profit of £137.5m (2023: £141.6m) on gross earned
premiums of £760m (2023: £632m) gross of acquisition and reinsurance costs. The net combined ratio was 83.7%
(2023: 76.5%).
Movement on underwriting years of account during the 2024 calendar year
2021 and
prior years
£’000
2022
£’000
2022 and
prior years
£’000
2023
£’000
2024
£’000
Total
£’000
2023
£’000
Gross
written premium
(268)
2,759
2,491
54,710
715,902
773,103
678,436
Net
premium earned 920
14,551
15,471
182,107
405,890
603,468
494,420
Net claims incurred
28,517
(219)
28,298
(79,946)
(266,612)
(318,260)
(209,473)
Acquisition
costs
(150)
(3,425)
(3,575)
(48,383)
(89,304)
(141,262)
(122,097)
29,287
10,907
40,194
53,778
49,974
143,946
162,850
Operating
expenses
318
(11,862)
(11,544)
(13,322)
(20,726)
(45,592)
(46,676)
Investment income
–
19,676
19,676
16,049
5,224
40,949
25,932
Non
-technical account foreign
currency adjustment
(621)
(392)
(1,013)
(842)
69
(1,786)
(471)
Annual accounted profit
28,984
18,329
47,313
55,663
34,541
137,517
141,635
Currency
translation differences
696
800
1,496
2,547
827
4,870
(3,312)
Total
Comprehensive
Income
29,680
19,129
48,809
58,210
35,368
142,387
138,323
A
s previously reported –
22,489
22,489
75,627
–
98,116
(604)
Cumulative
pure year result
29,680
41,618
71,298
133,837
35,368
240,503
137,719
Net annual accounting ratios:
Claims
ratio
53%
42%
Expense ratio
31%
34%
Combined
ratio
84%
77%
MANAGING AGENT’S REPORT
continued
6 Syndicate 2791 Annual Report and Accounts 2024
Gross Written
Premium
Net Written
Premium
Net Earned
Premium
Underwriting
Profit/(Loss)
2024
£’000
£’000
£’000
£’000
Property direct
113,387
87,728
87,782
27,261
Reinsurance property
492,711
367,232
362,236
61,113
Marine
27,948
27,849
27,298
(207)
Motor and specialist
58,456
55,147
52,498
5,674
Liability
73,718
73,718
66,764
3,974
Accident and health
6,883
6,882
6,890
539
Total
773,103
618,556
603,468
98,354
Gross Written
Premium
Net Written
Premium
Net Earned
Premium
Underwriting
Profit/(Loss)
2023
£’000
£’000
£’000
£’000
Property direct
131,721
95,554
82,713
17,263
Reinsurance property
397,112
290,805
279,501
71,751
Marine
26,493
26,419
25,007
6,328
Motor and specialist
54,829
51,702
48,291
12,911
Liability
59,923
59,924
50,213
5,214
Accident and health
8,358
8,353
8,695
2,707
Total
678,436
532,757
494,420
116,174
2024 Overview
There were two major land-falling hurricanes in 2024. Helene struck the Big Bend of Florida, east of Tallahassee,
running north into Georgia and then into the Carolinas, we believe causing ultimate market losses of nearly $20bn.
Milton then struck central Florida, running from Sarasota through to Volusia and largely impacted the same area
which hurricane Ian had struck two years earlier. As such much of the housing stock had already been remediated
and was consequently more resilient. Indicative market losses are less than $20bn. However, it is still very early in
the claims process and we are more comfortable reserving it as a $25bn - $30bn event.
Net earned premium volume was up 25.5% over 2023, the back years, 2021 and prior, contributed £29.0m to the
annual result. All three open years had a positive impact on the GAAP result, particularly 2023 with the lack of
catastrophe claims continued to improve and a positive investment return of £40.9m further boosted the profit.
2025 Trading Conditions
The market psychology shifted in the run up to 1/1 2025, with considerable softening in terms and conditions. Whilst
only around 20% of the catastrophe book renews at this time, year on year we cut back markedly, although we were
able to defend our core regional account to a reasonable degree. Our view is that many in the market have drawn
false comfort from the fact that Milton in particular was a ‘near-miss’. We believe that the demonstrably elevated
incidence of hurricane activity in the Gulf over the last decade shows that our frequency loads actually need to be
increased further rather than reduced. As such we have moved our technical price from 179% to 200% of the indexed
historic mean for hurricane risk: which is the maximum calculated level assuming the last 5 years is now the new
norm.
Hence, until the California Wildfires erupted, we were looking to adopt a much more defensive stance, and it was
likely that premium volume would fall short of forecast. We now anticipate that, should many of the large Nationwide
covers - most of whom we don’t write due to inadequate technical pricing and extremely broad coverage – incur
meaningful loss for really the first time since hurricane Katrina in 2005, then the market psychology should shift back
to a much more risk averse position. That the loss has happened so early in the year should cause many in the market
to hesitate before discounting price ahead of the US hurricane season, particularly if they only have one (or even no)
limit left of retrocession protection.
I am pleased to report that the small property binder book is developing into a substantial account with the core
book having the potential to support the syndicate when the market turns. It has performed well in the 2024
hurricanes and early estimates suggest the wildfire losses will be within expectations. Paul and his team apply a
rigorous approach to the underwriting of existing and potential coverholders and carefully manage the balance of
MANAGING AGENT’S REPORT
continued
7 Syndicate 2791 Annual Report and Accounts 2024
fire to catastrophe exposed business. To aid the team, we are looking to develop improved management information
systems to increase the efficiency of their process.
We continue to see attractive insurance opportunities in the General Liability market, albeit in limited sub classes.
Our strong analytical underwriting, together with a robust process of peer review which provides challenge and
supportive guidance, is resulting in a casualty book that is evolving and constantly being refined. Although early,
given the tail of the liability book, I am quietly confident that our expansion into the general liability space balances
risk and reward.
During 2025, we moved to a modern new, open plan office, which has been welcomed by staff. It feels like we have
finally made the mental transition after 25 years from start up to mature business. This transition has been further
reinforced with a limited number of targeted hires plus an ongoing emphasis on developing existing staff to ensure
we have the expertise and resources for the next generation of MAP.
David’s retirement from the board of MAP after 25 years is the end of an era. He has been a great mentor and
thoroughly supportive of me personally and, alongside Richard and Aidan, has created and grown a successful and
resilient business. I am sure that Kevin will provide equally constructive challenge and guidance as he, subject to
regulatory approval, steps into David’s role as chair of the managing agency.
The substantial incoming portfolio that 2791 inherits for the 2025 YOA is adequately priced and well underwritten.
MAP’s key principles of pricing discipline, cycle management, underwriter autonomy, exposure management and
alignment of interest are unchanged.
In conjunction with the hurricane and wildfire losses to the market, the outlook for 2025 is positive and the
syndicate’s forecast for the coming year should be realistic and achievable.
MANAGING AGENT’S REPORT
continued
8 Syndicate 2791 Annual Report and Accounts 2024
FINANCIAL REPORT
Investment Return
The investment return for 2024 was +6.4%, +£49.0m (2023: +5.1%, +£28.9m). Net of investment expenses, including
fund incentive fees, the return was +5.9%, +£45.4m (2023: +4.9%, +£27.7m).
In line with our underwriting, the vast majority (90%) of syndicate investment assets are held in US Dollars. And within
this, the vast majority of the US Dollars have been invested in short duration US Treasury securities.
As mentioned in the investment narrative last year, the position going into 2024 was to keep the portfolio short, at
the highest yielding part of the curve given its inverted nature, until there is more certainty as to how the Fed will
act. No certainty came and so the portfolio remained short. The market had initially priced in several rate cuts
throughout the year, but it was not until September that the first of three 25bps cuts materialised. The yield curve
did return to normal but there has not been enough of a steepening to warrant extending the duration of the portfolio
given the uncertainty as to how the future will pan out. The other decision around the debt portfolio required less of
a discussion in terms of whether to add credit or not. With US corporate spreads tightening to levels not seen for
over 25 years the reward premium for taking on the additional risk was even less attractive than before and not one
that the Investment Committee was willing to take.
Outside of credit markets, the investment committee were able to identify more attractive ways of adding risk to the
portfolio throughout the year. The ability to do so was driven by the strong underwriting profits being forecast on the
2022 and 2023 years of account, increasing confidence that additional volatility in the portfolio was more easily
tolerated, along with strong cash inflows due to the favourable underwriting conditions on 2024 year of account.
In April, further funds were transferred into the global long/short equity only fund, six months after our initial
investment in October 2023. The fund continued as it had begun with it outperforming expectations with a net return
for the year of +35.6%. The high conviction long positions in the energy infrastructure sector performing especially
well as large-capitalised technology stocks looked to secure their future energy supply. This fund made up 4.7% of
the total portfolio by year end.
The Investment Committee took the decision to invest no further funds into the long-end of the US Treasury curve
given the level of uncertainty around future inflation levels, and the volatility in global markets and ongoing
geopolitical tensions. This decision was vindicated by the yield on the 20-year treasury swaying between 4% and 5%
throughout the year. The holdings, 2.3% of the portfolio at year end, ended the year with a -8.7% return but the
Investment Committee continue to believe that the US may see an underperformance in terms of growth which could
impact inflationary expectations, thus resulting in the yield at the long end falling.
As a direct result of some of these concerns, the Investment Committee took the decision to continue the monthly
investment into gold, via the ETFs, on the basis that gold is considered a safe-haven asset when markets are spooked.
The holdings in gold performed very well over 2024 with a +26.5% return. The price of gold rose from around
$2,080/oz at the end of 2023 to $2,610/oz at the end of 2024, it’s best performance in 14 years. Central banks
continued to invest in gold, possibly as a diversifier from having too much reliance on US Treasuries, and almost
certainly at least partially because of the safe haven characteristic gold offers that few other assets can replicate.
The existing holding in a multi asset hedge fund that invests in, among other areas, early-stage mining companies has
not yet delivered. The performance of the S&P 500 through 2024 would have attracted the markets attention but
possibly in 2025 we may see a rotation out of the mega cap tech stocks and into the undervalued commodity sector,
which the fund is very well positioned for.
It is the view of the Investment Committee that there could be a gentle move away from the overvalued US equity
market and this has led to investment into two new funds in the latter part of 2024. One of the funds is a long only
Japanese equity fund (1.6% of the portfolio). The culture within Japan is shifting in terms of asset heavy corporations
unlocking shareholder value and the experienced external portfolio managers look to take selective positions in order
to help this process along through activist intervention. The other fund is a UK Investment Trust (1.5% of the portfolio)
that invests in the out of favour UK small cap sector. There is a belief the fracturing European Union along with a
stable UK Government, after years of turmoil, will attract the attention of the market once again. However, we are
the first to admit that this may be a test of patience to hold the position long enough to see the gains come through,
but we are confident there is value to be had. As a result of the longer-term strategic nature of these holdings, neither
were able to contribute towards the return in 2024 but we are optimistic that returns will materialise through 2025
and beyond.
MANAGING AGENT’S REPORT
continued
9 Syndicate 2791 Annual Report and Accounts 2024
Continuing with the thesis of a rotation away from the US equity market, the syndicate expanded its commodity
exposure further with a series of ETFs focusing on copper, uranium, silver and liquified natural gas. This strategy is
managed by our US investment consultant, who also manage our new global equity holding. This consists of fifty or
so value orientated global equity positions across numerous sectors that follows a strategy devised by a value focused
investment manager, looking to prosper from a move away from the US exceptionalism. The US can only continue to
be the darling pick if the global economy is there to cheerlead and with flagging growth elsewhere, the effects of
higher interest rates not fully filtering through, debt levels seemingly continuing to rise, the headwinds to US growth
are tangible... and that is before you even consider the effects of trade tariffs being implemented.
As mentioned earlier on in this narrative, our level of risk is correlated to the level of expected underwriting profit.
Following the Californian wildfires, it is unlikely that there will any further risk added to the portfolio in the short
term. That said, the syndicate is comfortable with its current tilt towards safety with the small plays in relatively niche
areas of opportunity.
Euros continue to be held across cash and a global short bond fund with a duration of 2.2 years. The composition of
global government and corporate bonds saw a net return of +3.1% for the fund. A Euro liquidity fund with a new
counterparty was set up in early 2024 as a means of obtaining a return on cash compared to the meagre interest rates
that banks currently offer.
The Canadian business continues to be swept over to a money market fund offering an attractive daily yield and given
the insurance regulatory requirements, there are no plans to pursue any other strategy. For the first time, we have
had to convert USD to CAD to fulfil the regulatory requirements following high Canadian losses experienced during
2024, e.g. Calgary hailstorms. The return on our Canadian assets was +4.8% for 2024.
Finally, the Sterling balance, not held in the Investment Trust mentioned above, has been held in cash with surplus
held in a newly set up GBP liquidity fund. The GBP settlement underwriting income has been strong enough to cover
the administrative expenses of the syndicate.
The table below sets out the returns by asset class in our portfolio:
2024
2023
Closing assets as a
Closing assets as a
proportion of
proportion of
A
sset class
Return
%
portfolio
%
Return
%
portfolio
%
Cash/cash
liquidity funds
Ll
oyd’s central fund loan
Commodities
Global short bond fund
Global equity
Gold ETF
Investment funds
Overseas regulatory trust funds
4.2
10.0
6.2
(0.1)
3.4
26.5
24.9
4.4
11.3
0.4
0.9
0.8
0.8
4.2
8.3
2.1
3.5
9.0
-
2.8
-
12.8
18.0
4.8
20.6
0.6
-
1.2
-
3.4
3.4
3.1
US government bonds
4.4
71.2
4.7
67.7
Return
6.4
5.1
Return
after charges
5.9
4.9
MANAGING AGENT’S REPORT
continued
10 Syndicate 2791 Annual Report and Accounts 2024
The key characteristics for each class are described below:
Cash and cash liquidity funds
These comprise either cash at bank, money market sweep accounts or liquidity funds. The cash is spread across four
different major banks. Both the USD cash and the CAD cash are swept to overnight money market accounts held by
another counterparty. Surplus EUR and GBP cash are invested in a very short duration liquidity fund, managed by
another counterparty, which can be redeemed immediately if required
.
US Government bonds
These comprise of US Treasury notes and bills. The majority of the portfolio remained in a monthly laddered
structure of 6 months. Separate positions have been gradually built up throughout the year with maturities
coinciding with large expected profit distributions in March 2025 and March 2026. A well-established UK investment
manager manages this part of the portfolio and at the year end the duration was 0.5 years.
A further portion is invested in 20 year plus US Treasury bonds (duration 17.5 years) which is managed by a US
investment manager that specialises in the long end of the curve.
At the end of the year the Government bonds had a combined duration of around 1.1 years (2023: 1.5 years).
Global bond fund
Excess Euros are invested in a Global bond fund with a duration at the year end of 2.2 years (2023: 1.8years). The
fund contains a mixture of both corporate and government bonds from around the world, hedged back to Euros.
Lloyd’s Central fund loan
In order to capitalise the Brussels office, Lloyd’s required all managing agents to loan them an amount relevant to
their forecast gross gross written premium for 2019 and 2020 underwriting years. As annual interest payments are
subject to the discretion of the Council of Lloyd’s, as is the loan repayment after a minimum of five years, we
account for the loan under FRS102 as an equity instrument at fair value rather than a loan. The first tranche was
repaid in March 2024. The second and final tranches are expected to be repaid in June 2025 and November 2025, as
communicated by Lloyd’s, pending PRA approval.
Investment Funds
Comprise of:
- Open ended long/short equity only fund which is managed by a US investment manager who specialises in
the energy and consumer sectors. The majority of the investment fund balance is in this fund. Can be
redeemed on a quarterly basis with a 25% investment gate.
- Open ended global macro hedge fund that invests around several macro-economic themes using a multi
asset approach. This US investment manager also manages a precious metals fund that we invested in. This
fund uses in house expertise to select young mining companies to invest in which are at the start of their
business cycle. Both funds have a partial lock up of 3 years.
- The remnants of an open-ended distressed credit / hedge fund managed by an US specialist manager. This
is made up of a varied array of discrete illiquid assets which are expected to be liquidated gradually over
several years.
- Long only Japanese equity UCITS fund, managed by a US investment manager, which looks for undervalued
companies that, via activist intervention, can release shareholder value. No redemption constraints.
- Long only UK small cap equity investment trust, listed on the FTSE 250, managed by a value orientated UK
investment manager.
Overseas regulatory trust funds
Separately regulated trust funds set up to satisfy local regulatory requirements. Each of these funds is managed
conservatively by Lloyd’s.
MANAGING AGENT’S REPORT
continued
11 Syndicate 2791 Annual Report and Accounts 2024
Gold ETF
Shares of two separate gold trusts that hold only physical gold in direct relation to the number of shares bought and
sold, providing direct exposure to the price of gold. Further investment was made throughout the year.
Global Equity
Securities managed on our behalf by our US investment consultant that follows a value-based strategy. All securities
purchased are listed on global equity markets.
Commodities
Securities managed on our behalf by our US investment consultant in order to provide exposure to the price of
various commodities, such as, but not limited to, silver, copper, uranium and liquid natural gas. The securities are a
combination of physical commodity ETFs, listed equity in a global mining company, and ETFs that have exposure to
companies that have strong correlation to the price of selected commodities.
Valuation risk
Investments are marked to market at bid prices at each period end with all changes taken through the underwriting
account. Prices are supplied by external custodians for all investments with the exception of the Lloyd’s central fund
loan which is valued on a modelled basis using a valuation model supplied indirectly by an independent bank. The
custodians obtain prices from independent sources, with each custodian having an audit of their pricing and control
systems. The pricing sources use market prices, or where it is more appropriate in illiquid markets, pricing models.
We reconcile the custodian’s overall prices to our manager’s records to check for reasonableness. We also conduct a
review of the proportion of assets that each manager deems to have a restricted market for valuation purposes.
These reviews revealed no significant pricing issues.
Currency Translation Differences
Around 90% of the syndicate’s assets are held in US dollars but, as results are published in sterling, changes in the
GBP:USD exchange rate can significantly alter the reported sterling result. However, capital providers receive
distributions in both currencies and are therefore by currency distribution unaffected by the accounting exchange
loss booked.
The accounting exchange gain for the year is £4.9m (2023: £3.3m loss). This principally reflects the strengthening of
the US dollar against sterling from the opening rate of 1.27 to the current year end rate of 1.25 and is further
detailed in note 12. We do not seek to hedge exchange exposure.
Reinsurance Balances
There are no provisions for bad debts on the syndicates’ reinsurance balances.
An analysis of the security rating for the reinsurance balances on our statement of financial position at 31 December
is set out below:
Debt table by security rating
On paid
claims
On outstanding
claims
On
IBNR
2024
Total
2023
total
Standard & poor’s rating
£'m
£'m
£'m
£'m
£'m
AA
5.3
11.0
48.2
64.5
48.0
A
70.5
18.2
21.0
109.7
122.8
75.8
29.2
69.2
174.2
170.8
Of the total reinsurance debtors rated A in the table above, the amounts owed by Syndicate 6103 are £123.9m
(2023: £117.6m).
Our reinsurance security committee has authorised the use of a number of the insurance companies set up after the
2005 hurricanes. These companies have either no, or a low, Standard and poor’s security rating. As a result they are
only accepted on to the syndicate’s reinsurance programme if they offer acceptable alternative direct security (Letters
of Credit or syndicate specific trust accounts).
MANAGING AGENT’S REPORT
continued
12 Syndicate 2791 Annual Report and Accounts 2024
Solvency Capital Requirement
The managing agent is required to provide a Solvency Capital Requirement (SCR) to Lloyd’s which sets the capital
required to be held by the members of the syndicate for the prospective underwriting year. Lloyd’s syndicate SCRs are
combined to provide the basis of the Lloyd’s internal model which the Prudential Regulation Authority originally
approved in December 2016.
This amount is derived from the syndicate’s loss distribution, which is calculated internally. It is the loss at the 99.5th
confidence level, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The
syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one-year time
horizon (one-year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each syndicate are subject
to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group. A syndicate may be comprised of one or
more underwriting members of Lloyd’s. Each member is liable for its own share of underwriting liabilities on the
syndicate on which it is participating but not another member’s shares. Accordingly, the capital requirement that
Lloyd’s sets for each member operates on a similar basis. Each member’s SCR shall thus be determined by the sum of
the member’s share of the syndicate SCR ‘to ultimate’. Where a member participates on more than one syndicate, a
credit for diversification is provided to reflect the spread of risk for that member. Over and above this, Lloyd’s applies
a capital uplift to the member’s capital requirement, known as the Economic Capital Requirement (ECR). The purpose
of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings
objectives. The capital uplift applied for 2024 is 35% (2023: 35%) of the member SCR ‘to ultimate’.
The syndicate's current capital requirement has been established using our internal Solvency II model which has been
run within the capital regime as prescribed by Lloyd’s. The internal model uses sophisticated mathematical models
reflecting key risks within the syndicate. The risks are principally Insurance (catastrophes, pricing and reserving),
Market (equity, liquidity, currency, interest rate and spread), Credit (brokers, investment and reinsurance) and
Operational. The following table sets out the syndicate’s ECR which is unaudited:
2025
2024
£’m
£’m
2791
547.8
511.9
European Union Business
To ensure continued market access for syndicates to European (re)insurance business post ‘Brexit’, Lloyd’s established
a Belgian subsidiary – Lloyd’s Insurance Company S.A. (LIC) – authorised and regulated as an insurance entity by the
national Bank of Belgium and regulated by the Belgian Financial Services and Markets Authority.
This 100% owned European domiciled subsidiary is capitalised in accordance with Solvency II rules and is licensed to
write non-life risks across the European economic area (EEA).
From its establishment all ‘live’ business underwritten by Lloyd’s Insurance Company S.A. has been 100% reinsured
back to the originating Lloyd’s syndicate.
The insurance debtors in note 15, insurance creditors in note 18 and the net technical provisions analysis at 31
December 2024 by class of business in note 4 now reflect the transferred business under inwards reinsurance.
Future Developments
The syndicate continues to transact the majority of its business in the classes of general insurance and reinsurance
that it has transacted historically.
Research and Development
The type of insurance risk the syndicate writes are often bespoke to an insured and in the ordinary course of business
we develop and research new policies, wording or coverages to meet our insured’s needs.
MANAGING AGENT’S REPORT
continued
13 Syndicate 2791 Annual Report and Accounts 2024
RISK MANAGEMENT
We have established a risk management framework whose primary objective is to protect the syndicate from events
which negatively impact current and future returns.
Principal Risks and Uncertainties
Insurance risk
Insurance risk includes the risks that a policy will be written for too low a premium or provide inappropriate cover,
that the frequency or severity of insured events will be higher than expected, or that estimates of claims subsequently
prove to be insufficient. Underwriting strategy is agreed by MAP’s Board and set out in the Syndicate Business plan
which is submitted to Lloyd’s each year. Processes are in place to identify, quantify and manage aggregate exposures
and technical prices within each of our underwriting classes. Reinsurance is purchased where appropriate to our risk
appetite and reduces the retained financial impact of catastrophic loss. Reserves set are subject to stress testing and
independent review.
Credit risk
Credit risk is the risk of default or the inability of one or more of the syndicate’s reinsurers or brokers to settle their
debts as they fall due.
Reinsurance is only placed with security that meets the criteria agreed by the Board where possible collateral in the
form of trust funds is requested before reinsurance is placed with some reinsurers. Use is made of independent rating
agencies. Business is only accepted through accredited Lloyd’s brokers who are reviewed by the agency’s Security
Committee and business accepted via binding authority is subject to a process of rolling review. Aggregate exposure
to any counterparty is monitored regularly and a robust system of credit control is in place, itself subject to the
agency's Security Committee. Exposure to investment counterparties is monitored by a specialist investment
reporting company and reviewed by the Investment Committee. This Committee includes a non-executive director
with expertise in US fund management. Investment guidelines are set and monitored in view of the syndicate’s liability
exposures and their durations.
Liquidity risk
This is the risk that the syndicate will not be able to meet its liabilities as they fall due, owing to a shortfall in cash.
Liquidity management forms an important part of the financial management practices of the syndicate. Cash flow
projections and budgetary controls are maintained and reported upon to the Board.
Market risk
Market risk is the potential adverse financial impact of changes in value of financial instruments caused by
fluctuations in foreign currency, interest rates or equity prices. The potential impact of market risk elements is
reported to the Board and the potential financial impact of changes in market value is monitored through the use of
an economic scenario generator in the capital setting process. This risk is managed by spreading the investments over
a number of investment managers who each specialise in a market sector or type of investment evaluation.
Foreign currency exchange risk
We operate from the United Kingdom but over 90% of our premiums and claims are settled in currencies other than
sterling. Our reported financial results are denominated in sterling and are therefore affected by the exchange rate
against sterling of our main currency assets (US dollars, euros and Canadian dollars). The syndicate settles its surplus
assets in both sterling and US dollars as each underwriting year closes or earlier if a solvency transfer is approved.
We do not therefore seek to hedge the US dollar exposure. Other currencies are tracked against sterling to ensure
the amount of exposure is monitored and if needed appropriate action taken.
Interest rate risk
Interest rate risk is the potential adverse financial impact of changes in value of assets and liabilities caused by rising
or falling market interest rates. For example, debt and fixed income securities are exposed to actual fluctuations or
changes in market perception of current or future interest rates. Exposure to interest rate risk is monitored through
the use of Value-at-Risk analysis, scenario testing, stress testing and duration reviews. Interest rate risk is managed
by matching of assets and liabilities to within five years.
MANAGING AGENT’S REPORT
continued
14 Syndicate 2791 Annual Report and Accounts 2024
Operational risk
Operational risk is the potential adverse financial and reputational impact of inadequate or failed internal processes,
people and systems or from external events. An internal risk assessment process has been developed to assess the
potential impact and probability of certain events and a system of internal controls has been implemented to mitigate
the risks. These controls have been monitored by Senior Management and the Board whilst their ongoing
effectiveness is validated through both the ongoing risk assessment and internal audit process.
Regulatory risk
The managing agent and the syndicate are required to comply with the requirements of the Prudential Regulation
Authority (PRA), Financial Conduct Authority (FCA) and Lloyd’s. Lloyd’s requirements include those imposed on the
Lloyd’s market by overseas regulators, particularly in respect of US situs business. Regulatory risk is the risk of loss
owing to a breach of regulatory requirements or failure to respond to regulatory change. The managing agent has a
Risk and Assurance Director who monitors regulatory developments and assesses the impact on agency policy. They
are supported by a Compliance Manager who carries out a compliance monitoring program.
The managing agent continues to monitor its performance, capital strength, financial and reputational credibility
against “the principles” for doing business at Lloyd’s. We remain committed to nurturing a positive relationship with
Lloyd’s, ensuring open channels of communication are maintained.
Climate change risk
Stress tests have been carried out as part of the ORSA process (and detailed in the Quarterly Risk Report and Annual
ORSA Report), which assess the potential impact of climate change across the major risk categories (Underwriting,
Reserving, Market, Operational and Credit Risk). It was not thought that any of the scenarios stress tested would
materially impact capital or profitability over a one-year time horizon. The Executive and Risk Committee reviewed
the climate change stress testing as part of the ORSA report.
CORPORATE GOVERNANCE
Directors and Directors’ Interests
The directors of the managing agent who served during the year ended 31 December 2024 together with their
participations on the syndicate were as follows:
2024 year of
account
2023 year of
account
£’000
£’000
K A llchorne (Non-executive)
–
–
C E Dandridge (Non-executive)
–
–
A S Foote (Non-executive)
(1)
811
593
T P Froehlich (Non-executive)
–
–
A Kong
(1) (2)
3,470
2,945
T
R McDermott
–
–
J J Parker
(1)
25
19
D E S Shipley (non-executive Chairman)
(1)
9,962
7,277
C J Smelt
(1) (2)
3,819
2,791
R K Trubshaw
N D Williams (Appointed 1 January 2024)
(1)
16,031
553
11,718
–
(1)
participate via MAP Capital Limited and/or Nomina No 208 LLP and/or Nomina No 570 LLP, unaligned corporate members.
(2) include participations of related parties.
The total capacity of the 2024 year of account of the syndicate was £647.8m (2023: £473.6m).
MANAGING AGENT’S REPORT
continued
15 Syndicate 2791 Annual Report and Accounts 2024
Governance Framework
MAP maintains a clear organisational and governance framework with the role and responsibility of the Board, sub-
committees, directors and senior staff clearly defined and documented.
An established risk management framework operates in respect of the identification, assessment, management and
monitoring of all core areas of risk to which the business is exposed in its day-to-day activities (insurance risk, market
risk, reserving risk, credit risk, liquidity risk and operational risk) with defined and articulated risk appetites in all
areas.
MAP operates a three lines of defence approach to its operations. the first line of defence is the day-to-day operational
level controls; the second line of defence being a framework for monitoring and managing risks and controls; and the
third being challenge through both:
• oversight committees each comprising a majority of non-executive directors; and
• independent assurance review through the Internal Audit Function.
The Committee Structure is shown below:
Day-to- Day
Operational
Control s
Reappointment of Auditors
Deloitte LLP are deemed to be reappointed as the syndicate’s auditors.
Disclosure of Information to the Auditors
So far as each person who was 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. Having made enquiries of fellow directors of the agency and the syndicate’s auditor, each director
has taken all the steps that he/she is obliged to take as a director in order to make himself/herself aware of any
relevant audit information and to establish that the auditor is aware of that information.
MANAGING AGENT’S REPORT
continued
16 Syndicate 2791 Annual Report and Accounts 2024
Annual General Meeting
As permitted under the Syndicate Meetings (amendment no.1) Byelaw (no.18 of 2000) MAP does not propose holding
a Syndicate Annual General Meeting of the members of the syndicate. Members may object to this proposal within
21 days of the issue of these accounts. Any such objection should be addressed to J J Parker, Risk & Assurance Director
at the registered office of Managing Agency Partners Limited.
This managing agent's report was approved by the Board of Managing Agency Partners Limited on 28 February 2025
and signed on its behalf by:
C J Smelt J J Parker
Active Underwriter Company Secretary
Managing Agency Partners Limited
London
3 March 2025
STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES
17 Syndicate 2791 Annual Report and Accounts 2024
The managing agent is responsible for preparing the syndicate annual accounts in accordance with applicable law
and regulations.
The insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the managing
agent to prepare syndicate annual accounts at 31 December each year in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The annual accounts are
required by law to give a true and fair view of the state of affairs of the syndicate as at that date and of its profit or
loss for that year.
In preparing the syndicate annual accounts, the managing agent is required to:
1. select suitable accounting policies which are applied consistently;
2. make judgements and estimates that are reasonable and prudent;
3. state whether applicable UK accounting standards have been followed, subject to any material departures
disclosed and explained in the annual accounts; and
4. prepare the annual accounts on the basis that the syndicate will continue to write future business unless it
is inappropriate to presume that the syndicate will do so.
The managing agent is responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the syndicate and enable it to ensure that the syndicate annual accounts comply
with the 2008 Regulations. It is also responsible for safeguarding the assets of the syndicate and hence for taking
reasonable steps for prevention and detection of fraud and other irregularities.
The managing agent is responsible for the maintenance and integrity of the corporate and financial information
included on the business’s website. Legislation in the United Kingdom governing the preparation and dissemination
of annual accounts may differ from legislation in other jurisdictions.
The Directors of the managing agent are responsible for the preparation and review of the iXBRL tagging that has
been applied to the Syndicate Accounts in accordance with the instructions issued by Lloyd’s, including designing,
implementing and maintaining systems, processes and internal controls to result in tagging that is free from material
non-compliance with the instructions issued by Lloyd’s, whether due to fraud or error.
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report to the members of Syndicate 2791
Report on the audit of the syndicate annual financial statements
Opinion
In our opinion the syndicate annual financial statements of Syndicate 2791 (the ‘syndicate’):
• give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit for
the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,
including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and section 1 of the Syndicate Accounts Instructions
Version 2.0 as modified by the Frequently Asked Questions Version [1.1] issued by Lloyd's (the "Lloyd's
Syndicate Accounts Instructions").
We have audited the syndicate annual financial statements which comprise:
• the income statement: technical account – general business;
• the income statement: non-technical account;
• the statement of comprehensive income;
• the statement of financial position;
• the statement of cash flows; and
• the notes to the accounts on pages 26 to 55.
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 syndicate annual financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the managing agent’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue in
operations for a period of at least twelve months from when the syndicate financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the syndicate annual
financial statements and our auditor’s report thereon. The managing agent is responsible for the other information
contained within the annual report. Our opinion on the syndicate annual financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the syndicate annual financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement themselves.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
INDEPENDENT AUDITOR’S REPORT
continued
19 Syndicate 2791 Annual Report and Accounts 2024
Responsibilities of managing agent
As explained more fully in the managing agent’s responsibilities statement, the managing agent is responsible for the
preparation of the syndicate annual financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the managing agent determines is necessary to enable the preparation of syndicate
annual financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual financial statements, the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s ability to
continue in operation and to use the going concern basis of accounting unless the managing agent intends to cease
the syndicate’s operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual financial statements
Our objectives are to obtain reasonable assurance about whether the syndicate annual financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these syndicate annual financial statements.
A further description of our responsibilities for the audit of the syndicate annual financial statements is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities
. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s documentation
of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of
management about their own identification and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and identified
the key laws and regulations that:
• had a direct effect on the determination of material amounts and disclosures in the financial statements.
These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts), Regulations
2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005); and
• do not have a direct effect on the financial statements but compliance with which may be fundamental to
the syndicate’s ability to operate or to avoid a material penalty. These included the requirements of Solvency
II.
We discussed among the audit engagement team including relevant internal specialists such as actuarial and IT
specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and
where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and
regulations in the following areas, and our procedures performed to address them are described below:
• Auditing standards require that we presume there to be a significant risk of fraud relating to the recognition
of revenue. We relate this significant risk to the estimation of pipeline premiums on proportional
reinsurance and delegated authority business, specifically the estimated premium income factor adjustment
that is applied by management at a block of business level. In response, our testing included, comparing
management’s prior year estimated premium adjustments to the current year and challenging the validity
of the rationale behind the adjustments for each block of business.
• Valuation of technical provisions includes assumptions requiring significant management judgement and
involves complex calculations, and therefore there is potential for management bias. There is also a risk of
overriding controls by making late adjustments to the technical provisions. In response to these risks, we
involved our actuarial specialists to develop independent estimates of the technical provisions. In addition,
significant management judgement is exercised in the valuation of Catastrophe IBNR reserves given
INDEPENDENT AUDITOR’S REPORT
continued
20 Syndicate 2791 Annual Report and Accounts 2024
uncertainties in estimating claims emergence relating to event frequency and severity, data limitations and
reinsurance recoveries. We assessed a sample of Catastrophe IBNR reserves classified as significant risk by
inspecting case documentation, challenging management judgements, and performing benchmarking where
possible.
• We have identified short tail and long tail specific claims reserves as a significant risk and fraud risk due to
the wide range of outcomes that may be supportable for each claim. For a sample of these specific claims
we: obtained and inspected case documentation for each loss; challenged management on any areas of
judgement made when interpreting case information; considered the completeness of information used in
determining the carried reserve; considered the overall level of consistency year on year in the valuation of
specific reserves; and reviewed claims files to identify evidence of changes in the reserve held during 2024
and assessed whether these changes are appropriate.
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, reviewing internal audit reports, and
reviewing correspondence with Lloyd’s.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the managing agent’s report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the managing agent’s report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the syndicate and its environment obtained in the course of the
audit, we have not identified any material misstatements in the managing agent’s report.
Matters on which we are required to report by exception
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required
to report in respect of the following matters if, in our opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the syndicate annual financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with regulation 10 of The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been undertaken
so that we might state to the syndicate’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the syndicate’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
INDEPENDENT AUDITOR’S REPORT
continued
21 Syndicate 2791 Annual Report and Accounts 2024
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.
Ben Newton, ACA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
3 March 2025
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
22 Syndicate 2791 Annual Report and Accounts 2024
TECHNICAL ACCOUNT – GENERAL BUSINESS
Note
2024
£’000
2023
£’000
Earned premiums, net of reinsurance
Gross premiums written
4
Outward reinsurance premiums
(154,547 )
(145,679 )
Net premiums written
Change in the provision for unearned premiums:
Gross amount
(13,392 )
(46,434 )
Reinsurers’ share
(1,696 )
Change in the net provision for unearned premiums
(15,088 )
(38,337 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical account
10
Other technical income, net of reinsurance
Claims incurred, net of reinsurance
Claims paid
Gross amount
4,6
(229,088 )
(252,841 )
Reinsurers’ share
Net claims paid
(187,556 )
(169,678 )
Change in the provision for claims
Gross amount
4
(148,417 )
Reinsurers’ share
(61,614 )
Change in the net provision for claims
(130,704 )
(39,795 )
Claims incurred, net of reinsurance
(318,260 )
(209,473 )
Net operating expenses
7
(186,854 )
(168,773 )
Other technical charges, net of reinsurance
Balance on the technical account for general business
All operations are continuing.
Management
Committee
MANAGING AGENCY PARTNERS Board of Directors
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
23 Syndicate 2791 Annual Report and Accounts 2024
| NON-TECHNICAL ACCOUNT | 2024 | 2023 | |
| Note | £’000 | £’000 | |
| Balance on the general business technical account | |||
| Investment income | 10 | ||
| Realised gains/(losses) on investments | 10 | ||
| Unrealised gains/(losses) on investments | 10 | ||
| Investment expenses and charges | 10 | ( | ( |
| Total investment return | |||
| Allocated investment return transferred to general business technical account | ( | ( | |
| Non-technical account foreign exchange | 12 | ( | ( |
| Profit for the financial year | | ||
| Exchange differences on foreign currency translation | 12 | ( | |
| Total comprehensive income for the year | |
| STATEMENT OF CHANGES IN MEMBERS’ BALANCES | 2024 | 2023 |
| £’000 | £’000 | |
| Members’ balances brought forward at 1 January | ||
| Total comprehensive income for the year | ||
| Members’ agents fees 2021 (2020) year of account | ( | ( |
| Payments of profit to members’ personal reserve funds for the 2021 (2020) year of account | ( | ( |
| Members’ balances carried forward at 31 December |
STATEMENT OF FINANCIAL POSITION
as at 31 December 2024
24 Syndicate 2791 Annual Report and Accounts 2024
| 2024 | 2023 | ||
| Note | £’000 | £’000 | |
| Investments | |||
| Financial investments | 13,20 | ||
| Deposits with ceding undertakings | 14 | ||
| Reinsurers’ share of technical provisions | |||
| Provision for unearned premiums | 5 | ||
| Claims outstanding | 6 | ||
| Debtors | |||
| Debtors arising out of direct insurance operations | 15 | ||
| Debtors arising out of reinsurance operations | 15 | ||
| Other debtors | 16 | ||
| Other assets | |||
| Cash at bank and in hand | 20 | ||
| Prepayments and accrued income | |||
| Accrued interest | |||
| Deferred acquisition costs | 17 | ||
| Other prepayments and accrued income | |||
| Total assets | |||
| Capital and reserves | |||
| Members’ balances | |||
Technical provisions | |||
| Provision for unearned premiums | 5 | ||
| Claims outstanding | 6 | ||
| Creditors | |||
| Creditors arising out of direct insurance operations | 18 | ||
| Creditors arising out of reinsurance operations | 18 | ||
| Other creditors | 19 | ||
| Accruals and deferred income | |||
| Total liabilities |
The financial statements on pages 22 to 55 were approved by the board of managing agency Partners Limited on 28
February 2025 and were signed on its behalf by:
C J Smelt T R McDermott
Active Underwriter Finance Director
3 March 2025
STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
25 Syndicate 2791 Annual Report and Accounts 2024
| 2024 | 2023 | |||
| Note | £’000 | £’000 | ||
| Cash flows from operating activities | ||||
| Profit/(loss) for the financial year | ||||
| Adjustments: | ||||
| Movement in gross technical provisions | ( | |||
| Movement in reinsurers’ share of gross technical | provisions | ( | ||
| Movement in debtors | ( | ( | ||
| Movement in creditors | ||||
| Movement in deposits received from reinsurers | ||||
| Investment return | ( | ( | ||
| Movement in other assets/liabilities | ( | ( | ||
| Foreign exchange | ( | ( | ||
| Other | ||||
| Net cash inflow from operating activities | ||||
| Cash flow from investing activities | ||||
| Purchase of equity and debt instruments | ( | ( | ||
| Sale of equity and debt instruments | ||||
| Investment income received | ||||
| Foreign exchange | - | - | ||
| Other | ||||
| Net cash (outflow) from investing activities | ( | ( | ||
| Cash flows from financing activities | ||||
| Payments of profit to members’ personal reserve | funds | ( | ( | |
| Net Cash (outflow) from financing activities | ( | ( | ||
| Movement in cash and equivalents | ||||
| Cash and cash equivalents at 1 January | ||||
| Foreign exchange on cash and cash equivalents | ( | ( | ||
| Cash and cash equivalents at 31 December | 20 |
NOTES TO THE ACCOUNTS
continued
26 Syndicate 2791 Annual Report and Accounts 2024
1. Basis of Preparation and Statement of Compliance
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United Kingdom and
the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard 103
(FRS 103) in relation to insurance contracts, and the Lloyd’s Syndicate Accounts Instructions Version 2.0 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative information has been restated to ensure consistency
with current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions. The changes
comprise:
a) Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged.
The principal change is the reclassification of acquisition costs, previously shown as a separate item on the income
statement, to form part of net operating expenses. The comparative balances in the affected notes 7 have also
been represented to align with the current period presentation.
b) Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been
aggregated or disaggregated within the financial statements and related notes. This includes the presentation of
realised and unrealised gains and losses on investments, which are now shown on a disaggregated basis in the
non-technical account of the statement of profit or loss and other comprehensive income.
The reclassification and aggregation changes have been applied retrospectively and had no impact on previously
reported profit, total comprehensive income, total assets, total liabilities, or total capital and reserves.
The functional currency is US dollars, but the financial statements are prepared in sterling which is the
presentational currency of the syndicate and rounded to the nearest £’000. As permitted by FRS 103 the syndicate
continues to apply the existing accounting policies that were applied prior to this standard for its insurance
contracts.
The financial statements are prepared under the historical cost convention except for certain financial
instruments which are measured at fair value.
The result for the year is determined on the annual basis of accounting in accordance with UK GAAP.
Syndicate 2791 cedes business under a quota-share treaty to Syndicate 6103 which operates on a funds withheld
basis with Syndicate 2791. Syndicate 6103 is also managed by the managing agent, MAP. Syndicate 6103 holds no
cash or investments. All the syndicate’s funds are held by Syndicate 2791 which makes payments of liabilities on
Syndicate 6103’s behalf. Debtors and creditors between the syndicates are grossed up in the syndicate statement
of financial position and upon the closure of each year of account, normally after 36 months, the assets and
liabilities of that closing year are netted off as part of the commutation settlement with Syndicate 6103.
2. Judgements and Key Sources of Estimation Uncertainty
The preparation of the financial statements require management to make judgements, estimates and assumptions
that affect the amounts reported for assets and liabilities as at the statement of financial position date and the
amounts reported for revenues and expenses during the year.
In the course of preparing the financial statements no judgements have been made in the process of applying the
syndicate's accounting policies, other than those involving estimations that have had a significant effect on the
amounts recognised in the financial statements.
However, the nature of estimation means that actual outcomes could differ from those estimates.
The following are the syndicate’s key sources of estimation uncertainty:
Insurance contract technical provisions (see notes 6 & 28)
For insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at the
reporting date and for the expected ultimate cost of claims incurred but not yet reported (IBNR) at the reporting
date. It can take a significant period of time before the ultimate claims cost can be established with certainty and
for some types of policies, IBNR claims form the majority of the liability in the statement of financial position.
NOTES TO THE ACCOUNTS
continued
27 Syndicate 2791 Annual Report and Accounts 2024
2. Judgements and Key Sources of Estimation Uncertainty (continued)
The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection
techniques, such as Chain Ladder, Bornheutter-Ferguson methods and individual reserving at contract level.
The main assumption underlying these techniques is that past claims development experience can be used to
project future claims development and hence ultimate claims costs. 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 statement of financial position date, together with the provision for related claims handling costs.
The provision also includes the estimated cost of claims IBNR at the statement of financial position date based on
statistical methods.
These methods generally involve projecting from past experience of the development of claims over time to form
a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations
in the business accepted and the underlying terms and conditions. For the most recent years, where a high degree
of volatility arises from projections, estimates may be based in part on output from pricing and other models of
the business accepted and assessments of underwriting conditions.
The two most critical assumptions as regards claims provisions are that the past is a reasonable predictor of the
likely level of future claims development and that the rating and other models used for current business are fair
reflections of the likely level of ultimate claims to be incurred.
The directors consider that the provisions for gross claims and related reinsurance recoveries are fairly stated on
the basis of the information currently available to them. However, the ultimate liability will vary as a result of
subsequent information and events and this may result in significant adjustments to the amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in the financial
statements for the period in which the adjustments are made. In addition, where contracts are yet to expire, or
where losses are not settled until several years after the expiration of the policy in question, the estimates are
considered to be more volatile and consequently are subjected to additional management judgemental prudence
adjustments. The methods used, and the estimates made, are reviewed regularly.
Where the amount of any material salvage and subrogation recoveries is separately identified it is reported as an
asset.
Changes in assumptions, quantum or complexity of claims can affect the value of these provisions.
Estimates of future premiums (see notes 5 & 15)
For certain insurance contracts, premium is initially recognised based on estimates of ultimate premiums. These
estimates are judgemental and the main assumption underlying these estimates is that past premium
development can be used to project future premium development.
Estimates include an element of judgement with regard to the level of claims affected future premiums receivable
by the syndicate. The methods used for assessing future premiums generally involve projecting from past
experience, based on the development of claims and the related inwards premiums receivable against these
claims. The directors consider whether the estimates of gross future premium are fairly stated on the basis of the
information currently available to them. However, the ultimate premium receivable can vary as a result of
subsequent information or events and this may result in significant adjustments.
Fair value of financial assets and derivatives determined using valuation techniques (see notes 13 & 28)
Where the fair values of financial assets and financial liabilities recorded on the statement of financial position
cannot be derived from active markets, they are determined using a variety of valuation techniques.
These valuation techniques include using recent arm’s length transactions between knowledgeable, willing parties
(if available), reference to the current fair value of other instruments that are substantially the same, discounted
cash flow analyses and option pricing models. The chosen valuation technique makes maximum use of market
inputs and relies as little as possible on estimates. It incorporates all factors that market participants would
consider in setting a price, and is consistent with accepted economic methodologies for pricing financial
instruments. Inputs to valuation techniques reasonably represent market expectations and measures of the risk-
return factors inherent in the financial instrument.
Changes in assumptions about these factors could affect the reported fair value of financial instruments.
NOTES TO THE ACCOUNTS
continued
28 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies
Insurance contracts
An insurance contract (including inwards reinsurance contract) is defined as a contract containing significant
insurance risk. Insurance risk is considered significant if, and only if, an insured event could cause the syndicate
to pay significant additional benefits. Such contracts remain insurance contracts until all rights and obligations
are extinguished or expire.
Premiums written
Premiums written comprise premiums on contracts incepted during the financial year as well as adjustments
made in the year to premiums written in prior accounting periods. Estimates are made for pipeline premiums,
representing amounts due to the syndicate not yet received at the statement of financial position. Differences
between such estimates and actual amounts will be recorded in the period in which the actual amounts are
determined.
Premiums are disclosed before the deduction of acquisition costs and taxes or duties levied on them.
Premiums for contracts where the syndicate delegates underwriting authority to another party (e.g. binding
authorities, lineslips or proportional treaties) use an estimate of the proportion of premiums incepted at the
reference date as an estimate based on historical inception patterns, if no pattern exists business is assumed to
incept evenly over the term of the delegated authority.
Unearned gross premiums
Written premiums are recognised evenly over the term of the contract for those contracts where the incidence
of risk does not vary over the term. Contracts where the incidence of risk differs over the term are earned based
on the risk profile of the policy. Unearned premiums represent the proportion of premiums written in the year
that relate to unexpired terms of policies in force at the statement of financial position date, calculated on the
basis of established earnings patterns or time apportionment as appropriate.
Acquisition costs and deferred acquisition costs
Acquisition costs, comprising commission and other direct or indirect costs related to the acquisition of insurance
contracts are deferred to the extent that they are attributable to premiums unearned at the statement of financial
position date. The value of commission paid to insurance intermediaries is determined based on the contractual
amounts recorded in all contracts. Where, however, policies are issued and the insured agrees to pay a fee directly
to the intermediary without reference to the insurer, the written premium comprises the premium payable to the
insurer and accounting for broker acquisition costs is inappropriate.
An element of underwriters costs are transferred from administrative expenses to other acquisition costs as they
are considered to be appropriate indirect costs arising from the conclusion of insurance contracts and are
connected with the processing of proposals and the issuing of policies. The amount transferred is based on
underwriters headcount and an estimate of time spent on the administration of insurance policies written and is
earned in line with premium.
Reinsurance premium ceded
Outwards reinsurance purchased consists of excess of loss contracts and proportional reinsurance contracts.
Initial excess of loss premiums are accounted for in the year of inception. Premiums ceded to reinstate reinsurance
cover or additional premiums payable on loss are recognised when they may be assessed with reasonable
certainty. Proportional outward reinsurance premiums are accounted for in the same accounting period as the
premiums for the related direct or inwards business being reinsured.
Reinsurers' commissions and profit participations
Overriders and fees due from reinsurers are accrued in accordance with the contractual terms of each
arrangement and earned over the policy contract period.
Profit commission receivable from reinsurers is accounted for in the period the related profit is recognised.
Unearned reinsurance premium
Reinsurance premiums paid to purchase excess of loss reinsurance contracts are earned evenly over the period
at risk. Proportional reinsurance premiums are earned in the same accounting period as the inwards business
being reinsured.
NOTES TO THE ACCOUNTS
continued
29 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies (continued)
Claims provisions and related recoveries
Claims paid comprise claims and claim handling expenses paid during the period.
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 and class basis, as
appropriate, and is based on the estimated ultimate cost of all claims notified but not settled by the statement
of financial position date, together with the provision for related claims handling costs. The provision also includes
the estimated cost of claims incurred but not reported (IBNR) at the statement of financial position date based
on statistical methods. Separate reserves are established for each year of account.
Claims provisions and related recoveries (continued)
Minor loss funds are simply treated as claims paid. Where material, loss fund cash flows are reflected as debtors
within prepayments and accrued income. Related claims paid are subsequently booked within the income
statement with equivalent rolling cash top-ups maintaining the quantum of the loss fund. As claims paid
develop and outstanding liabilities reduce, the level of the loss funds held in the balance sheet is reduced and
funds returned to the syndicate.
The reinsurers’ share of provisions for claims is based on the amounts of outstanding claims and projections for
IBNR, net of a provision for reinsurance bad debt, having regard to the reinsurance programme in place for each
class of business, the claims experience for the year and the current security rating of the reinsurance entities
involved. A number of statistical methods are used to assist in making these estimates.
Future unallocated loss adjustment expenses
An accrual for all future unallocated loss adjustment expenses (ULAE) is made. The ULAE is comprised of those
costs which are related to the settlement of earned claims but which are not directly attributable to individual
claims. ULAE expenses are undiscounted and include the expenses of managing the run-off of the business on the
basis the business is a going concern. Costs of administration of the reinsurance programme are included in the
gross ULAE. Separate reserves are established for each year of account.
Legal provisions
The syndicate may be subject to legal disputes in the normal course of business. Provisions for such events and
their related costs are recognised within expenses and accruals where there is an expected present obligation
relating to a past event or evidence exists of the requirement for a general provision that can be measured reliably
and it is probable that an outflow of economic benefit will be required to settle an obligation.
The directors of the managing agent do not expect the outcome of these claims, either individually or in
aggregate, to have a material effect upon the syndicate’s operations or financial position. As allowed by FRS 102,
further disclosure has not been given as it may seriously prejudice the outcome of any legal proceedings.
Insurance receivables and payables
Insurance receivables and payables are recognised when due and measured on initial recognition at the fair value
of the consideration received. They are derecognised when the obligation is settled, cancelled or expired.
Bad debt
Bad debts are provided for only where specific information becomes available to suggest a debtor may be unable
or unwilling to settle its debts to the syndicate. Specific information may be directly attributed to the debtor
company or may be indirect information from a rating agency or other source. The provision is calculated on a
case-by-case basis.
Unexpired risks provision
A provision for unexpired risks may be made, if necessary, where claims and related expenses arising after the
end of the financial period in respect of contracts concluded before that date exceed unearned premiums and
premiums receivable, after the deduction of any deferred acquisition costs.
The assessment of whether an unexpired risk provision is required is based on information available at the
statement of financial position date, which may include evidence of relevant previous claims experience on similar
contracts. The assessment is not required to take into account any new claims events occurring after the
statement of financial position date as these are non-adjusting events.
NOTES TO THE ACCOUNTS
continued
30 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies (continued)
The provision for unexpired risks is calculated by reference to all classes of business, which are all managed
together on a year of account basis, after taking into account relevant future investment return. The provision for
unexpired risks is included in technical provisions in the statement of financial position.
Foreign currency translation
Financial Reporting Standard 102 requires each entity to identify its functional currency and a presentational
currency. The functional currency is identified as the currency of the primary economic environment in which the
entity operates. The functional currency of this syndicate is US dollars as the majority of the underwriting
business, cash flows and expenses are in US dollars. We have chosen to maintain our presentational currency as
sterling as the syndicate is based in the UK, complies with UK reporting standards and to enable simpler
comparisons to other Lloyd’s insurance syndicates.
The syndicate records transactions in four settlement currencies being Sterling, US dollars, Canadian dollars and
Euros and when reported these currencies are translated in the income statement at the average rates of
exchange for the period. Underwriting transactions denominated in other foreign currencies are included at the
rate of exchange ruling at the date the transaction is processed.
As permitted by FRS 103, the syndicate has continued with its existing accounting policy to treat non-monetary
assets and liabilities arising from insurance contracts (which include items such as unearned premiums and
deferred acquisition costs) the same as monetary assets and liabilities. Consequently, all assets and liabilities
denominated in foreign currencies are translated at the rate of exchange at the statement of financial position
date, or if appropriate, at the forward contract rate.
Exchange differences from the functional currency (US dollars) arising from the retranslation of opening balances
and between average and year-end rates to the presentational currency are included in the statement of
comprehensive income.
All other exchange differences are included in the general business non-technical account.
The following rates of exchange have been used in the preparation of these accounts:
2024
2023
Start of
period rate
End of period
rate
Average rate
Start of period
rate
End of period
rate
Average
rate
Canadian dollar
Euro
Financial investments
As permitted by FRS 102, the syndicate has elected to apply the recognition and measurement provisions of IAS
39 – Financial Instruments (as adopted for use in the EU) to account for all of its financial instruments.
Financial instruments recognition and derecognition
Financial instruments are recognised in the statement of financial position at such time as the syndicate becomes
a party to the contractual provisions of the financial instrument. Purchases and sales of financial assets are
recognised on the trade date, which is the date the syndicate commits to purchase or sell the asset. A financial
asset is derecognised when the contractual rights to receive cash flows from the financial assets expire, or where
the financial assets have been transferred, together with substantially all the risks and rewards of ownership.
Financial liabilities are derecognised if the group’s obligations specified in the contract expire, are discharged or
cancelled.
Derivative financial instruments
The syndicate does not have any derivative financial instruments. As the syndicate has no derivatives it has not
designated any derivatives as fair value hedges, cash flow hedges or net investment hedges.
NOTES TO THE ACCOUNTS
continued
31 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies (continued)
Investment values
Financial investments are valued at fair value. Fair value is the amount for which an asset could be exchanged, or
a liability settled, between knowledgeable, willing parties in an arm’s length transaction on the measurement
date.
Listed investments
Listed and other quoted investments are stated at current bid value at the statement of financial position date.
For this purpose, listed and quoted investments are stated at market value and deposits with credit institutions
are stated at cost.
The cost of syndicate investments is the amount paid on the purchase date for those investments still held at the
statement of financial position date.
Deposits
All deposits with credit institutions are stated at cost.
Unlisted investments
Some investments are not listed, or in a market not regarded as active because:
• quoted prices are not readily and regularly available; or
• prices do not represent actual and regularly occurring market transactions on an arm’s length basis.
In such circumstances the syndicate then seeks to establish fair value by using third party administrators with
experience in valuing such assets using valuation techniques as described below:
• using recent arm’s length transactions between knowledgeable, willing parties (if available);
• reference to the current fair value of other instruments that are substantially the same; and
• discounted cash flow analyses and option pricing models.
The chosen valuation technique makes maximum use of market inputs and relies as little as possible on estimates.
It incorporates all factors that market participants would consider in setting a price, and is consistent with
accepted economic methodologies for pricing financial instruments. Inputs to valuation techniques reasonably
represent market expectations and measures of the risk-return factors inherent in the financial investment.
The syndicate participates in a distressed credit / hedge fund, a global macro hedge fund and a precious metals
fund. These funds contain illiquid assets for which there are no available quoted market prices. The valuation of
these underlying assets are based on fair value techniques (as described above), predominately the discounted
cashflow approach, and are derived by a third party. The fair value of these fund portfolios is calculated by
reference to the underlying net asset values (NAVs) of each of the underlying assets.
The syndicate participates in central fund loans which are equity financial instruments for which there are no
available quoted market prices. The valuation of these loans is also based on fair value techniques and is
calculated by reference to the original cost, date of issuance, expected redemption date and market valued
discount rate for each of the individual loans.
Deposits with ceding undertakings
Deposits with ceding undertakings are measured at cost less allowance for impairment.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand and short
term deposits with an original maturity date of three months or less. For the purpose of the statement of cash
flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
NOTES TO THE ACCOUNTS
continued
32 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies (continued)
Fair value of financial assets
The syndicate uses the following hierarchy for determining the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets that we can assess at the valuation date.
Level 2: other techniques used for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.
Level 3: techniques are used which use inputs that have a significant effect on the recorded fair value that are not
based on observable market data.
For assets held in investment funds with limited look through to individual underlying assets, the syndicate has
adopted the following rules for the fair value hierarchy:
Rules for funds
Fair value level
adopted
1. If the underlying assets are 100% short term bonds or cash.
Level 1 or 2
2. If the security is a fund which is subscribed/redeemed on a daily basis.
Level 2
3. If the security is a non-publicly tradable fund which has fair value statement available and
95% + of the fund is determined by the administrator to be Level 1.
Level 2
4. If security is a fund which has a lock up period of 3 months of more.
Level 3
5. If the security is a non-publicly tradable fund which has a fair value statement available and
less than 95% of the fund is determined by the administrator to be Level 1.
Level 3
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial
position if, and only if:
• there is a currently enforceable legal right to offset the recognised amounts; and
• there is an intention to settle on a net basis, to realise the assets and settle the liabilities.
Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in
unrealised gains and losses, net of investment management expenses, charges and interest payable.
Realised gains and losses on investments carried at market value are calculated as the difference between sale
proceeds and purchase price.
Movements in unrealised gains and losses on investments represent the difference between their valuation at
the statement of financial position date and their purchase price or, if they have been previously valued, their
valuation at the last statement of financial position date, together with the reversal of unrealised gains and losses
recognised in earlier accounting periods in respect of investment disposals in the current period.
As detailed above with regard to funds withheld on behalf of Syndicate 6103, investment income earned in the
period is reduced by the amount payable to Syndicate 6103.
Purchases and sales of investments are recognised on the trade date, which is the date the syndicate commits to
purchase or sell the assets. Funds receivable or payable after the trade date are recorded in debtors and creditors
respectively until settled.
Allocation of investment return
Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical
account to the general business technical account. Investment return has been wholly allocated to the technical
account as all investments relate to the technical account.
Investment management expenses
These comprise contractual fees and profit commissions payable to external third party investment managers for
managing the syndicate’s investment funds. They are accrued in the period to which they relate.
NOTES TO THE ACCOUNTS
continued
33 Syndicate 2791 Annual Report and Accounts 2024
3. Accounting Policies (continued)
Overseas deposits
Overseas deposits lodged as a condition of conducting underwriting business in certain countries in compliance
with Lloyd’s licences are stated at the market value, based on a bid price, ruling at the statement of financial
position date.
Lloyd's central fund loan
The syndicate has made a loan to Lloyd's whose principle use is for tier 1 capitalising of Lloyd’s EU subsidiary,
Lloyd’s Insurance company S.A. The loan is anticipated to be repayable after five years but this is not guaranteed.
It generates interest income to the syndicate, adjusted on a rate over the base rate. Both the repayment of the
loan and the payment of interest is subject to Council of Lloyd's approval. As the loan is not unconditionally
recoverable it is treated as an equity Instrument in line with FRS 102 in the balance sheet line - Shares and other
variable yield securities. The asset is valued at fair value (level 3) and that fair value is reviewed annually. Interest
income on the loan is accrued on the date the payment is approved by the council of Lloyd's.
Operating expenses
Where expenses are incurred by or on behalf of the managing agent on the administration of managed syndicates,
these expenses are apportioned using varying methods depending on the type of expense. Expenses which are
incurred jointly for the agency company and managed syndicates are apportioned between the agency company
and the syndicates on bases depending on the amount of work performed, resources used and the volume of
business transacted. Syndicate operating expenses are allocated to the year of account for which they are
incurred.
An element of underwriters costs are transferred from administrative expenses to other acquisition costs as
detailed in the acquisition costs accounting policy note.
Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax
from trading income. In addition, all UK basic rate income tax deducted from syndicate investment income is
recoverable by managing agents and consequently the distribution made to members or their members’ agents
is gross of tax.
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 are included in the
statement of financial position under the heading ‘other debtors’.
No provision has been made for any overseas tax payable by members on underwriting results.
Pension costs
MAP operates a defined contribution scheme. Pension contributions relating to syndicate staff are charged to the
syndicate and included within net operating expenses.
Profit commission
Profit commission is charged by the managing agent at a rate of 20% of profit subject to a hurdle rate (whereby
the profit commission rate reduces to 17.5%) and the operation of a deficit clause. This is charged to the syndicate
on an earned basis but does not become payable until after the year of account closes, normally at 36 months.
When the syndicate makes a loss that loss will be debited by year of account until fully utilised reducing the
following two years of account’s results for the purpose of calculating profit commission.
NOTES TO THE ACCOUNTS
continued
34 Syndicate 2791 Annual Report and Accounts 2024
4. Segmental Analysis
An analysis of the technical account before investment return is set out below:
2024
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expense
Reinsurance
balance
Underwriting
result
Direct insurance
£’000
£’000
£’000
£’000
£’000
£’000
Accident and health
5,923
5,883
(2,626)
(2,485)
(1)
771
Motor (third party
liability)
(25)
157
(173)
(60)
(7)
(83)
Motor (other classes)
36,908
35,918
(19,716)
(11,172)
(3,164)
1,866
Marine, aviation,
transport
19,764
19,407
(8,123)
(6,640)
(342)
4,302
Fire and other damage
to property
107,080
107,467
(34,213)
(35,967)
(14,219)
23,068
Third party liability
62,924
55,722
(45,759)
(10,890)
(138)
(1,065)
Credit and suretyship
469
452
1,619
(541)
-
1,530
Legal expenses
-
-
8
(2)
-
6
Assistance
-
-
-
-
-
-
Miscellaneous
-
-
-
-
-
-
233,043
225,006
(108,983)
(67,757)
(17,871)
30,395
Reinsurance
acceptances
540,060
534,705
(268,522)
(119,097)
(79,127)
67,959
Total
773,103
759,711
(377,505)
(186,854)
(96,998)
98,354
2023
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expense
Reinsurance
balance
Underwriting
result
Direct insurance
£’000
£’000
£’000
£’000
£’000
£’000
Accident and health
7,067
7,387
(2,455)
(3,667)
(6)
1,259
Motor (third party
liability)
(119)
256
20
(138)
(4)
134
Motor (other classes)
36,410
33,116
(11,829)
(11,642)
(3,344)
6,301
Marine, aviation,
transport
20,789
17,798
(6,178)
(6,607)
27
5,040
Fire and other damage
to property
117,399
103,052
(38,184)
(31,892)
(13,456)
19,520
Third party liability
45,501
37,789
(27,077)
(8,302)
(93)
2,317
Credit and suretyship
366
369
1,372
(486)
-
1,255
Legal expenses
-
-
7
(1)
-
6
Assistance
-
-
-
-
-
-
Miscellaneous
-
-
-
-
-
-
227,413
199,767
(84,324)
(62,735)
(16,876)
35,832
Reinsurance
acceptances
451,023
432,235
(146,698)
(106,038)
(99,157)
80,342
Total
678,436
632,002
(231,022)
(168,773)
(116,033)
116,174
All premiums were concluded in the UK.
The business class split reported is a statutory reporting requirement but the business is managed by its own
business classes and hence an element of allocation is used.
NOTES TO THE ACCOUNTS
continued
35 Syndicate 2791 Annual Report and Accounts 2024
The geographical analysis of direct premiums written, by location of risk is as follows:
2024
2023
£’000
£’000
UK
26,052
29,277
EU countries
6
(12)
US
170,106
161,186
Other
36,879
36,962
Total
233,043
227,413
5. Provision for Unearned Premiums
Gross
Reinsurers’
share
Net
£’000
£’000
£’000
At 1 January 2024
192,772
(34,003)
158,769
Premiums written in year
773,103
(154,547)
618,556
Premiums earned in year
(759,711)
156,243
(603,468)
Foreign exchange
1,944
(390)
1,554
At 31 December 2024
208,108
(32,697)
175,411
At 1 January 2023
154,998
(27,551)
127,447
Premiums written in year
678,436
(145,679)
532,757
Premiums earned in year
(632,002)
137,582
(494,420)
Foreign exchange
(8,660)
1,645
(7,015)
At 31 December 2023
192,772
(34,003)
158,769
Provision for unearned premiums include £5.5m (2023: £4.8m) in respect of Syndicate 6103.
6. Claims
Gross
Reinsurers’
share
Net
£’000
£’000
£’000
At 1 January 2024
545,891
(79,540)
466,351
Expected cost of current year claims
445,078
(71,749)
373,329
Change in estimates of prior year provisions
(67,573)
12,504
(55,069)
Claims paid during year
(229,088)
41,532
(187,556)
Foreign exchange
8,166
(1,203)
6,963
At 31 December 2024
702,474
(98,456)
604,018
At 1 January 2023
596,911
(147,429)
449,482
Expected cost of current year claims
286,380
(43,589)
242,791
Change in estimates of prior year provisions
(55,358)
22,040
(33,318)
Claims paid during year
(252,841)
83,163
(169,678)
Foreign exchange
(29,201)
6,275
(22,926)
At 31 December 2023
545,891
(79,540)
466,351
Claims outstanding includes £53.4m (2023: £35.0m) in respect of Syndicate 6103.
NOTES TO THE ACCOUNTS
continued
36 Syndicate 2791 Annual Report and Accounts 2024
7. Net Operating Expenses
2024
2023
£’000
£’000
Acquisition costs
146,319
131,341
Change in deferred acquisition costs
(5,057)
(9,244)
Administrative expenses
10,044
10,867
Members’ standard personal expenses
44,413
42,376
Reinsurance commissions and profit participation
(8,865)
(6,567)
At 31 December
186,854
168,773
Members’ standard personal expenses includes managing agent’s profit commission charge of £34.5m (2023:
£35.0m).
Total commissions for direct insurance business for the year amounted to:
2024
2023
£’000
£’000
Total commission for direct insurance business
(53,250)
(50,982)
Administrative expenses include:
2024
2791
6103
Total
Administrative expenses include:
£’000
£’000
£’000
Auditors’ remuneration
Fees payable to the Syndicate’s auditor for the audit of these financial
statements
303
20
323
Audit related assurance
109
20
129
412
40
452
2023
2791
6103
Total
Administrative expenses include:
£’000
£’000
£’000
Auditors’ remuneration
Fees payable to the Syndicate’s auditor for the audit of these financial
statements
267
17
284
Audit related assurance
105
19
124
372
36
408
Audit related assurance includes reporting required by law and regulation, reviews of interim financial information
and reporting on regulatory returns.
Personal expenses comprise managing agent’s fees, Lloyd’s subscriptions and central fund contributions.
8. Staff Costs and Numbers
All staff are employed by the managing agent. the following amounts were recharged to the syndicate in respect
of salary costs:
2024
2023
£’000
£’000
Wages and salaries
8,694
7,133
Social security costs
741
669
Other pension costs
639
528
10,074
8,330
Included above are the employment costs of underwriters attributable to acquisition of business and those of
claims staff treated within the technical account as Acquisition Costs and Loss Adjustment Expenses
respectively.
NOTES TO THE ACCOUNTS
continued
37 Syndicate 2791 Annual Report and Accounts 2024
8. Staff Costs and Numbers (continued)
The average number of employees employed by the managing agent but working for the syndicate during the
year was as follows:
2024
2023
Administration and finance
17
19
Underwriting
31
29
Claims
7
8
55
56
Profit related remuneration in respect of all directors and staff is wholly paid and borne by the managing agent.
9. Emoluments of the Directors of Managing Agency Partners Ltd
The directors of MAP received the following aggregate remuneration charged to the syndicate and included
within net operating expenses:
2024
2023
£’000
£’000
Emoluments
2,033
1,399
The active underwriter received the following remuneration charged as a syndicate expense:
2024
2023
£’000
£’000
Emoluments – Active Underwriter
325
306
10. Investment Return
2024
2023
£’000
£’000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
31,117
15,856
Dividend income
-
-
From financial assets classified as Available for Sale
Interest and similar income
-
-
Dividend income
-
-
From financial assets at amortised cost
Interest and similar income
-
-
Dividend income
-
-
Losses on the realisation of investments
(68)
(1,344)
31,049
14,512
Net unrealised gains and losses on investments
17,907
14,351
Investment expenses and charges
Investment management expenses, including interest payable
(3,572)
(1,183)
Investment return payable to Syndicate 6103
(4,435)
(1,748)
(8,007)
(2,931)
Total investment return
40,949
25,932
The investment return was wholly allocated to the technical account.
All investment return arises from investments designated as fair value through profit and loss.
The syndicate is now disclosing losses on the realisation of investments within investment income rather than
investment expenses and charges. There is no change to the total investment return.
NOTES TO THE ACCOUNTS
continued
38 Syndicate 2791 Annual Report and Accounts 2024
11. Calendar Year Investment Yield
Average syndicate funds available for investment:
2024
2023
£’000
£’000
Sterling
23,319
21,500
US dollars
903,818
591,371
Canadian dollars
59,255
47,408
Euros
31,412
21,961
Combined sterling average syndicate funds available for investment
789,908
545,727
Investment return – gross of investment expenses and return payable to Syndicate 6103
Investment return – net of investment expenses, gross of return payable to Syndicate
6103
48,957
45,384
28,862
27,680
Analysis of calendar year investment yield by currency, net of investment expenses:
Sterling
0.1%
3.7%
US dollars
6.4%
5.3%
Canadian dollars
4.8%
4.7%
Euros
2.8%
1.3%
Combined
5.9%
4.9%
12. Exchange Gains and Losses
Exchange gains and losses arise as follows:
2024
2023
£’000
£’000
On balances brought forward: from opening to closing rates
495
(746)
On transactions during calendar year: from average to year-end rates
2,589
(3,037)
3,084
(3,783)
Represented by:
Non-technical account foreign exchange
(1,786)
(471)
Exchange differences on foreign currency translation
4,870
(3,312)
3,084
(3,783)
13. Financial Investments
Market Value
Cost
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Investments:
Shares and other variable yield securities and units in unit trusts
226,489
141,763
206,059
137,373
Debt securities and other fixed income securities
679,335
446,997
680,885
447,911
Participation in investment pools
4,088
3,994
3,501
3,508
Deposits with credit institutions
312
724
312
724
Derivative assets
-
-
-
-
Syndicate loan to central fund
3,412
4,015
3,538
4,307
Other investments
19,635
20,404
19,567
19,847
933,271
617,897
913,862
613,670
Within “Shares and other variable yield securities and units in unit trusts” and “Participation in investment
pools” £68.4m (2023: £30.9m) are listed on a recognised exchange. These comprise 7.3% (2023: 5.0%) of the
total market value of investments.
The table below presents an analysis of financial investments by their measurement classification:
2024
2023
£’000
£’000
Financial assets measured at fair value through profits or loss
933,271
617,897
Financial assets measured at fair value as available for sale
-
-
Financial assets measured at amortised cost
-
-
Total financial investments
933,271
617,897
NOTES TO THE ACCOUNTS
continued
39 Syndicate 2791 Annual Report and Accounts 2024
13. Financial Investments (continued)
The following table shows financial investments recorded at fair value analysed between the three levels in the
fair value hierarchy:
2024
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in unit trusts
154,675
68,440
3,374
226,489
Debt securities and other fixed income securities
-
679,335
-
679,335
Participation in investment pools
-
3,581
507
4,088
Deposits with credit institutions
312
-
-
312
Derivative assets
-
-
-
-
Syndicate loan to central fund
-
-
3,412
3,412
Other investments
-
216
19,419
19,635
Total assets
154,987
751,572
26,712
933,271
Derivative liabilities
-
-
-
-
Total
154,987
751,572
26,712
933,271
2023
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in unit trusts
111,663
8,188
21,912
141,763
Debt securities and other fixed income securities
-
446,997
-
446,997
Participation in investment pools
-
3,397
597
3,994
Deposits with credit institutions
724
-
-
724
Derivative assets
-
-
-
-
Syndicate loan to central fund
-
-
4,015
4,015
Other investments
-
248
20,156
20,404
Total assets
112,387
458,830
46,680
617,897
Derivative liabilities
-
-
-
-
Tota l
112,387
458,830
46,680
617,897
14. Deposits with Ceding Undertakings
This balance represents a claims float held by Lloyds Insurance Company, Brussels (LIC) to settle Part VII claims.
15. Debtors Arising Out of Insurance Operations
2024
2023
£’000
£’000
Arising out of direct insurance
Due from intermediaries – within one year
51,960
41,297
Due from intermediaries – after one year
120
291
52,080
41,588
Arising out of reinsurance operations
Due from intermediaries – within one year
233,070
186,145
Due from intermediaries – after one year
23,936
46,344
257,006
232,489
Debtors arising out of reinsurance operations of £257.0m (2023: £232.5m) include funds due in respect of
Syndicate 6103 of £80.1m (2023: £90.4m).
NOTES TO THE ACCOUNTS
continued
40 Syndicate 2791 Annual Report and Accounts 2024
16. Other Debtors
2024
2023
£’000
£’000
Due within one year
Outstanding settlements on investments
Inter-syndicate loan
140
-
21,977
795
Reinsurers’ profit commission and overrider receivable
5,572
3,526
Non-standard personal expenses due from members (overseas taxation)
85
40
Members’ agents fees funded
1,500
1,505
Sundry debtors
44
22
7,341
27,865
Due after one year
Inter-syndicate loan
-
238
Reinsurers’ profit commission and overrider receivable
6,750
5,752
Non-standard personal expenses due from members (overseas taxation)
2,083
292
Members’ agents fees funded
3,940
3,167
12,773
9,449
20,114
37,314
17. Deferred acquisition costs
2024
2023
Gross
Reinsurance
Net
Gross
Reinsurance
Net
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 1 January
42,445
-
42,445
35,072
-
35,072
Incurred deferred acquisition costs
146,319
-
146,319
131,341
-
131,341
Amortised deferred acquisition costs
(141,262)
-
(141,262)
(122,097)
-
(122,097)
Foreign exchange movements
368
-
368
(1,871)
-
(1,871)
Other
-
-
-
-
-
-
47,870
-
47,870
42,445
-
42,445
18. Creditors Arising Out of Insurance Operations
2024
2023
£’000
£’000
Arising out of direct insurance
Due to intermediaries – within one year
4,050
4,915
Due to intermediaries – after one year
120
118
4,170
5,033
Arising out of reinsurance operations
Reinsurance accepted – due within one year
12,399
10,274
Reinsurance accepted – due after one year
37
-
Reinsurance ceded – due within one year
87,670
63,129
Reinsurance ceded – due after one year
141,358
115,071
241,464
188,474
Creditors in respect of reinsurance operations of £241.5m (2023: £188.5m) include withheld funds due to Syndicate
6103 of £198.2m (2023: £157.3m).
19. Other Creditors
2024
2023
£’000
£’000
Managing agent’s profit commission
60,125
34,430
Outstanding settlements on investments
Inter-syndicate loan
74,399
3,231
-
-
Sundry creditors
6
3
137,761
34,433
Of the managing agent's profit commission creditors above £42.3m (2023: £24.5m) fall due after one year.
NOTES TO THE ACCOUNTS
continued
41 Syndicate 2791 Annual Report and Accounts 2024
20. Cash and Cash Equivalents
2024
2023
£’000
£’000
Cash at bank and in hand
92,185
20,328
Short term deposits with financial institutions
15
28
92,200
20,356
21. Related Parties
The managing agency (MAP), the managed Syndicates 2791 and 6103 and the directors of MAP are all related
parties.
• MAP's relationship to the syndicates is governed by a managing agent’s agreement.
• The syndicates relationship to each other is governed by a reinsurance contract for each year of account.
• Some of the directors of the managing agency own shares in the ultimate parent of the managing agent
and receive remuneration from the managing agent based on MAP’s profitability.
• The directors also participate alongside other capital providers in the syndicate via the following
unrelated entities: MAP Capital Limited, Nomina No 208 LLP and Nomina No 570 LLP.
• An investment fund in which the syndicate formerly held investments participated in the syndicate’s
capital and is deemed a related party by virtue of its participation in Syndicate 2791.
MAP's relationship to the syndicates
Managing agency fees amounting to £4.9m were paid to MAP during 2024 (2023: £3.6m) and profit commission
of £34.5m (2023: £35.1m) is also due to the managing agent in respect of the results for this calendar year.
Expenses totaling £18.6m (2023: £12.1m) have been recharged during the year. The key management
compensation charged to the syndicate is disclosed in note 9. No profit related remuneration is payable by the
syndicate to employees of MAP. The managing agency agreement contract setting out fees and profit
commission payable to the managing agent is under standard terms set out by Lloyd’s.
The syndicates relationship to each other
The underwriting business of Syndicate 6103 is derived solely under a reinsurance contract with Syndicate
2791. Under the terms of this contract:
• Syndicate 6103 is obliged to accept 30% for 2024, 2023 and 2022 years of account of all business written
by Syndicate 2791 under certain categories of its property catastrophe book depending on the year of
account. Syndicate 2791 retains the balance of this book net for its own account.
• Syndicate 2791 receives a ceding commission of 5% and an overriding commission of 1% of gross written
premiums ceded to Syndicate 6103 to cover personal expenses of Syndicate 6103 names borne by
Syndicate 2791.
• A profit commission of 15% of profits, as defined in the contract, is payable to MAP.
• All funds are retained and invested by Syndicate 2791 on behalf of Syndicate 6103 and interest is payable
(or charged on negative balances) to Syndicate 6103 at rates agreed.
Under the terms of the reinsurance contract the balance owed from Syndicate 2791 to Syndicate 6103 at the end
of the period is £53.8m (2023: £22.0m) and will be settled through the Lloyd’s distribution process. Profit
commission in respect of Syndicate 6103, for all years of account, at the end of the period of £5.0m (2023: £4.0m)
will be settled by Syndicate 2791 from funds withheld as each year of account is commuted. There are no other
conditions or guarantees offered by Syndicate 2791 to Syndicate 6103 under the reinsurance contract.
NOTES TO THE ACCOUNTS
continued
42 Syndicate 2791 Annual Report and Accounts 2024
21. Related Parties (continued)
During the year, the following transactions between the syndicates occurred:
2024
2023
£’000
£’000
Premiums receivable
(79,335)
(61,888)
Paid claims
22,914
34,111
Ceding commission
3,664
3,340
Overriding commission
717
565
Net interest received
(4,435)
(1,748)
Reinsurance to close premium – 2022 (2021) year of account
8,737
3,694
Balance owed (to)/by Syndicate 2791 (by)/to Syndicate 6103 at the end of the period:
Due within one year
(425)
(2,430)
Due after one year
54,212
24,476
The directors’ ownership of MAP
The managing agent, MAP, is a wholly owned subsidiary of Managing Agency Partners Holdings Limited, the
equity of which is 90.1% owned by MAP Equity Limited, a company that is entirely owned by the staff of the
managing agent and syndicate.
The directors’ interests in the ordinary share capital of MAP Equity Limited, which has an issued share capital of
250,000 £1 shares, during the year, were as follows:
A Shares
B Shares
(voting)
(non-voting)
A Kong
22,000
-
T R McDermott
-
3,750
J J Parker
-
2,500
C J Smelt
5,000
5,000
R K Trubshaw
N D Williams (appointed 1 January 2024)
33,000
-
-
6,250
The directors’ participations in the syndicate
Messrs. Foote, Kong, Parker, Shipley, Smelt, Trubshaw and Williams, or their related parties, participate on
Syndicate 2791 via a dedicated, but unaligned to the managing agent, corporate member MAP Capital Limited
and/or corporate member Nomina No 208 LLP and/or corporate member Nomina No 570 LLP.
For the 2024 year of account MAP Capital Limited provided £89.9m (2023: £68.0m) of capacity on Syndicate
2791 representing 13.9% (2023: 14.4%) of capacity.
For the 2024 year of account Nomina No 208 LLP has provided £16.9m (2023: £13.1m) of capacity representing
2.6% (2023: 2.8%).
For the 2024 year of account Nomina No 570 LLP has provided £6.2m (2023: £4.7m) of capacity representing
1.0% (2023: 1.0%).
MAP has no direct or indirect interest in MAP Capital Limited, Nomina No 208 LLP or Nomina No 570 LLP. All
capital is provided on an arm’s length basis.
There are no other transactions or arrangements requiring disclosure.
22. Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (FAL).
These funds are intended primarily to cover circumstances where syndicate assets prove insufficient to meet
participating members’ underwriting liabilities.
The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA requirements
and resource criteria. FAL has regard to a number of factors including the nature and amount of risk to be
underwritten by the member and the assessment of the reserving risk in respect of business that has been
underwritten. Since FAL is not under the management of the managing agent, no amount has been shown in
these financial statements by way of such capital resources. However, the managing agent is able to make a call
on the members’ FAL to meet liquidity requirements or to settle losses.
NOTES TO THE ACCOUNTS
continued
43 Syndicate 2791 Annual Report and Accounts 2024
23. Distribution and open years of account
A distribution of £69.8m to members will be proposed in relation to the closing year of account (2022) (2023:
£38.1m in relation to the closing year of account 2021).
There are no years of account remaining open after the three-year period.
24. Contingent Liabilities
Letters of credit
The syndicate has provided letters of credit to certain insureds and reinsureds to cover losses that might arise on
their contracts written in the ordinary course of business. These amount to US$0.4m; the letters of credit are fully
collateralised with cash deposits held by Citibank, on the syndicate’s account, of US$0.4m. The terms of these
evergreen letters of credit are that the syndicate must put up 105% of assets as collateral and are held as long as
the insureds and reinsureds have outstanding liabilities.
25. Events After the Reporting Period
In accordance with the reinsurance contract with Syndicate 6103, the 2022 year of account of that syndicate will
be commuted. An RITC will be effected with this syndicate and the reserves carried for the 2022 year of account
(amounting to £8.4m) transferred to this syndicate during 2025.
From 7
th
January 2025 to 31st January 2025, a series of wildfires devastated the Los Angeles metropolitan area,
exacerbated by drought conditions, low humidity and hurricane-force Santa Ana winds. Whilst the loss is still in
the early stages of being quantified, it is certain there will be a material impact to Syndicate 2791, particularly
affecting the 2024 year of account. Based on a market loss of between $30-50bn, the current anticipated net
impact range for the Syndicate will be in region of $100-130m. An initial point estimate for the loss will be
available following our Q1 2025 reserving process.
26. Reinsurance to Close Premium Received from Syndicate 6103
At 1 January 2024, Syndicate 2791 accepted a Reinsurance to close Premium from Syndicate 6103 in respect of
Syndicate 6103’s 2021 year of account. In addition, the reinsurance contact between Syndicate 2791 and
Syndicate 6103 for the 2021 year of account has been commuted with Syndicate 2791 being paid in full for the
liabilities assumed as at 1 January 2024.
27. Items Not Disclosed in the Statement of Financial Position
The syndicate has the right to drawdown on collateral provided by certain reinsurers to the value of £0.4m (2023:
£2.0m). The collateral can be cash mutual funds or treasuries. As those rights have not been exercised this
contingent asset has not been recorded in the statement of financial position. As 6103 operates on a funds
withheld basis, a right of offset applies to 2791 against its recoverable debt of £123.9m (2023: £117.6m). The
syndicate has not been party to any other arrangement which is not reflected in its statement of financial position.
28. Risk Management
Insurance risk
The principal risk the syndicate faces under insurance contracts is that the actual claims and benefit payments,
or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims,
actual benefits paid and subsequent development of long-term claims. Therefore, the objective of the syndicate
is to ensure that sufficient reserves are available to cover these liabilities.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and geographical
areas. The variability of risks is also improved by careful selection and implementation of underwriting strategy
guidelines, as well as the use of reinsurance arrangements.
The syndicate purchases reinsurance as part of its risk mitigation programme. Reinsurance ceded is placed on
both a proportional and non-proportional basis. The syndicate has proportional reinsurance from two main
sources, firstly a surplus treaty on direct property and per risk reinsurance and secondly from Special Purpose
Arrangement 6103 (SPA 6103) on its catastrophe reinsurance book susceptible to United States losses. Both
types of proportional reinsurance are taken out to reduce the overall exposure to certain classes of business.
Non-proportional reinsurance is primarily excess-of-loss reinsurance designed to mitigate the syndicate’s net
exposure to only property catastrophe losses.
Retention limits for the excess-of-loss reinsurance vary by line of business, loss type and territory. Amounts
recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision and are
NOTES TO THE ACCOUNTS
continued
44 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Insurance risk (continued)
in accordance with the reinsurance contracts. Although the syndicate has reinsurance arrangements, it is not
relieved of its direct obligations to its policyholders and thus a credit exposure exists with respect to ceded
insurance, to the extent that any reinsurer is unable to meet its obligations assumed under such reinsurance
agreements. the syndicate’s placement of reinsurance is diversified such that it is neither dependent on a single
reinsurer nor are the operations substantially dependent upon any single reinsurance contract.
The syndicate principally issues the following types of general insurance contracts: accident and health, motor,
third-party liability, marine and property both direct and reinsurance. Risks usually cover twelve months duration.
The most significant insurance risks arise from natural disasters, claim inflation on longer term liabilities and the
potential for under-pricing of insurance risk. Insurance risk exposure is mitigated by diversification across a large
portfolio of insurance contracts and geographical areas. The variability of risks is improved by careful selection
and implementation of underwriting strategies, which are designed to ensure that risks are diversified in terms
of type of risk and level of insured benefits. This is largely achieved through diversification across industry sectors
and geography. Furthermore, strict claim review policies to assess all new and ongoing claims, regular detailed
review of claims handling procedures and frequent investigation of possible fraudulent claims are all procedures
put in place to reduce the risk exposure of the syndicate. The syndicate further enforces a policy of actively
managing and promptly pursuing claims, in order to reduce its exposure to unpredictable future developments
that can negatively impact the business. Inflation risk is mitigated by taking expected inflation into account when
estimating insurance contract liabilities. The syndicate uses its own proprietary pricing models which set a
technical price for each risk based on a required profitability margin. These models are actively back tested against
underwriting performance by line of business and at individual risk level to ensure compliance with the syndicate’s
pricing strategy.
The syndicate has also limited its exposure by imposing maximum claim amounts on certain contracts as well as
the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g. hurricanes,
earthquakes and flood damage). The purpose of these underwriting and reinsurance strategies is to limit exposure
to catastrophes based on the syndicate’s risk appetite as decided by management.
The overall aim is to limit the downside risk to a 10% ultimate loss on stamp capacity following any one of the
Lloyd’s prescribed Realistic Disaster Scenarios (RDS). The downside risk takes into account the net RDS loss, a
reinsurance failure rate, a reinsurance margin over time (i.e. reinsurers will expect pay-back on gross losses) less
anticipated profit on non- catastrophe exposed business – known as inside profit.
The Board monitors and reviews the inside profit calculation which alters due to market conditions and other
factors. The syndicate uses its own proprietary risk management system to assess catastrophe exposure. However,
there is always a risk that the assumptions and techniques used in these models are unreliable or that claims
arising from an unmodelled event are greater than those arising from a modelled event.
As a further guide to the level of catastrophe exposure written by the syndicate, the following unaudited table
shows hypothetical claims arising for various realistic disaster scenarios based on the syndicate’s risk exposures
at 1 January 2025:
Market Loss
(insured)
Estimated
Gross Claims
Estimated Net
Claims (after
Reinst)
RDS
£’m
£’m
£’m
Miami Dade Hurricane
242,841
364
54
Pinellas (West Coast Florida) Hurricane
235,704
454
112
Gulf of Mexico Hurricane
225,399
551
171
North East USA Hurricane
112,371
477
146
San Andreas (San Francisco) Earthquake
106,599
304
83
Elsinore (Los Angeles) Earthquake
97,238
255
93
NOTES TO THE ACCOUNTS
continued
45 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Insurance risk (continued)
The table below sets out the concentration of outstanding liabilities by line of business:
Gross
Technical
Provisions
Reinsurance
Technical
Provisions
Net Technical
Provisions
31 December 2024
£’000
£’000
£’000
Accident and health
10,874
-
10,874
Motor (third party liability)
831
-
831
Motor (other classes)
46,576
6,356
40,220
Marine, aviation and transport
27,919
132
27,787
Fire and other damage to property
123,605
41,064
82,541
Third party liability
131,771
73
131,698
Miscellaneous
1,875
-
1,875
Reinsurance acceptances
567,131
83,528
483,603
910,582
131,153
779,429
Gross
Technical
Provisions
Reinsurance
Technical
Provisions
Net Technical
Provisions
£’000
£’000
£’000
Accident and health
11,182
–
11,182
Motor (third party liability)
981
–
981
Motor (other classes)
46,134
8,321
37,813
Marine, aviation and transport
26,175
260
25,915
Fire and other damage to property
116,864
34,759
82,105
Third party liability
89,731
49
89,682
Miscellaneous
3,347
–
3,347
Reinsurance acceptances
444,249
70,154
374,095
738,663
113,543
625,120
The geographical concentration of the outstanding liabilities is noted below. The disclosure is based on the
currency of the regions in which the business is written. The analysis would not be materially different if based
on the countries in which the risk or counterparties were situated.
Gross
Technical
Provisions
Reinsurance
Technical
Provisions
Net Technical
Provisions
31 December 2024
£’000
£’000
£’000
UK
19,735
103
19,632
EU
31,787
4,517
27,270
USA
794,981
121,541
673,440
Canada
36,003
2,913
33,090
Australia/Japan/Other
28,076
2,079
25,997
910,582
131,153
779,429
Gross
Technical
Provisions
Reinsurance
Technical
Provisions
Net Technical
Provisions
31 December 2023
£’000
£’000
£’000
UK
21,603
334
21,269
EU
29,561
6,807
22,754
USA
631,994
101,889
530,105
Canada
27,982
2,262
25,720
Australia/Japan/Other
27,523
2,251
25,272
738,663
113,543
625,120
NOTES TO THE ACCOUNTS
continued
46 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Insurance risk (continued)
Key assumptions
The principal assumption underlying the liability estimates is that the future claims development will follow a
similar pattern to past claims development experience. This includes assumptions in respect of individual and
average claim costs, claim handling costs, claim inflation factors for each line of business and underwriting year.
Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future,
for example: one off occurrences; changes in market factors such as public attitude to claiming; economic
conditions; as well as internal factors such as portfolio mix, policy conditions and claims handling procedures.
Judgement is further used to assess the extent to which external factors such as judicial decisions and government
legislation could affect the estimates.
Other key circumstances affecting the reliability of assumptions include variation in interest rates, delays in
settlement and changes in foreign currency rates.
Sensitivities
The claim liabilities are sensitive to the key assumptions that follow. It has not been possible to quantify the
sensitivity of certain assumptions such as legislative changes or uncertainty in the estimation process. the
following analysis is performed for reasonably possible movements in key assumptions with all other assumptions
held constant, showing the impact on gross and net liabilities, profit and members’ balances.
The underlying sensitivity analysis is performed by underwriting year and separately for large losses, those
impacting or likely to impact our excess of loss reinsurance programme and those claims not covered by excess
of loss reinsurance. The correlation of assumptions will have a significant effect in determining the ultimate claims
liabilities, but to demonstrate the impact due to changes, the assumptions were changed on an individual basis.
It should be noted that movements in these assumptions are non-linear.
General insurance business sensitivities as at 31 December 2024
2024
£000
2023
£000
Gross outstanding claims
702,474
545,891
Net outstanding claims
Impact of 5% increase in gross outstanding claims
Impact of 5% decrease in gross outstanding claims
Impact of 5% increase in net outstanding claims
Impact of 5% decrease in net outstanding claims
Impact of 5% increase in gross CAT losses
Impact of 5% increase in net CAT losses
Impact of 5% increase in long-tail casualty (gross and net) outstanding claims
604,018
34,366
(34,366)
29,610
(29,291)
10,104
6,926
8,045
466,351
26,476
(26,476)
22,499
(22,476)
11,068
5,896
6,488
Long-tail casualty liabilities are both direct and reinsurance liabilities for the following lines of business:
directors and officers, errors and omissions, medical malpractice and other casualty.
The impact on both profit and members’ balances of the gross reserves is the figure shown above less profit
commission of £6.9m (2023: £5.3m).
The impact on both profit and members’ balances of the net reserves is the figure shown above less profit
commission of £5.9m (2023: £4.5m).
The impact on both profit and members’ balances of the long tail casualty reserves is the figure shown above
less profit commission of £1.6m (2023: £1.3m).
The method used for deriving sensitivity information and significant assumptions did not change from the
previous period.
NOTES TO THE ACCOUNTS
continued
47 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
2024 Losses
Hurricane Helene struck the Big Bend of Florida as a category 4 hurricane on 26 September 2024, east of
Tallahassee, running north into Georgia and then into the Carolinas. Hurricane Milton then struck central Florida
on 9 October 2024 as a category 3 hurricane (having weakened from a Cat 5), running from Sarasota through to
Volusia. The syndicate has material exposure to both Hurricane Helene and Hurricane Milton. The current ultimate
estimated losses for Helene and Milton are gross $83.2m/net $60.1m and gross $100.0m/net $72.8m respectively.
Neither loss is protected by the excess of loss reinsurance programme as they fall below the retention limit. Like
all previous similar losses, there is uncertainty around the ultimate outcome of this loss, but not significantly
beyond the normal range of uncertainty for insurance liabilities at this stage of development.
2022 Losses
Hurricane Ian made landfall in Florida on 28 September 2022 as a category 4 hurricane and then made final
landfall in South Carolina on 30th September 2022 as a category 1 hurricane. The syndicate has material exposure
to Hurricane Ian. The current ultimate estimated losses for Hurricane Ian are gross $160.3m (2023: $168.1m) and
net $77.0m (2023: $83.3m). This loss is protected by both surplus reinsurance and excess of loss cover. Hurricane
Ian remains covered within the excess of loss programme which offers protection for deterioration to the net
ultimate loss. The uncertainty around its ultimate outcome is increased but is not increased beyond the normal
range of uncertainty for insurance reserves at this stage of development.
2021 Losses
The syndicate continues to have material exposure to Hurricane Ida. The current ultimate estimated losses for
Hurricane Ida are gross $147.3m (2022: $146.7m) and net $47.5m (2023: $47.5m). This loss is protected by both
surplus reinsurance and excess of loss covers. Hurricane Ida remains covered within the excess of loss programme
which offers some protection for deterioration to the net ultimate loss. The uncertainty around its ultimate
outcome is increased but is not increased beyond the normal range of uncertainty for insurance reserves at this
stage of development.
The syndicate continues to have material exposure to the Covid-19 pandemic loss mainly on known actively
written business interruption covers. The current ultimate gross loss is $16.7m (2023: $19.6m) and net loss
$16.3m (2023: $19.0m). Due to the nature of the Covid-19 loss there may be areas where active contract
exclusions exist and it is possible these may be disputed by clients or where cover is granted following legal
rulings. The syndicate has and will seek to defend exclusions where appropriate. For Covid-19 loss reserves the
uncertainty around their ultimate outcome is increased but is not increased beyond the normal range of
uncertainty for insurance reserves at this stage of development.
Claims development table
The following tables show the estimates of ultimate claims, including both claims notified and IBNR for each
successive underwriting year at each reporting date, together with cumulative payments to date. The ultimate
claims estimates and cumulative payments are translated to sterling at the rate of exchange that applied to the
statement of financial position at the end the current underwriting year. Each prior year is restated at the
current exchange rates to provide a consistent view of changes to ultimate claims reserves.
The ultimate claims are adjusted for: the unearned proportion of claims, any unallocated future expense claims
costs and cumulative payments to date, to provide the reconciliation to the syndicate’s gross and net statement
of financial position reserves.
In setting claims provisions the syndicate gives consideration to the probability and magnitude of future
experience being more adverse than assumed and exercises a degree of caution in setting reserves where there
is considerable uncertainty. In general, the uncertainty associated with the ultimate claims experience in an
underwriting year is greatest when the underwriting year is at an early stage of development and the margin
necessary to provide the confidence in the provision's adequacy is relatively at its highest. As claims develop,
and the ultimate cost of claims becomes more certain, the relative level of margin maintained may decrease.
However, due to the uncertainty inherent in the estimation process, the actual overall claim provision may not
always be in surplus.
The syndicate has accepted additional liabilities by way of reinsurance to close from Syndicate 6103 at each 36
months and 1 day for the underwriting years 2007 to 2021 inclusive. These liabilities are shown in the claims
triangles below as if they had always been the liabilities of 2791 from the commencement of any underwriting
year which has accepted reinsurance from Syndicate 6103.
NOTES TO THE ACCOUNTS
continued
48 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Claims triangles
Gross insurance contract outstanding claims provision as at 31 December 2024:
2014 and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Estimate of gross claims
12 months
2,824,966
88,461
89,621
124,940
134,353
107,706
197,230
286,718
377,066
301,046
460,974
24 months
2,793,868
78,997
105,027
122,283
130,018
117,000
249,494
298,208
364,979
268,261
-
36 months
2,777,801
77,645
99,803
123,614
133,161
117,025
256,417
283,587
356,724
-
-
48 months
2,763,449
78,107
97,779
127,731
132,856
112,148
261,096
278,623
-
-
-
60 months
2,740,308
78,411
98,186
127,358
130,245
105,131
259,819
-
-
-
-
72 months
2,718,390
73,227
94,747
126,027
127,254
100,983
-
-
-
-
-
84 months
2,701,035
71,571
91,595
123,380
123,426
-
-
-
-
-
-
96 months
2,682,321
69,200
89,765
121,231
-
-
-
-
-
-
-
108 months
2,673,050
67,595
87,435
-
-
-
-
-
-
-
-
120 months
2,663,452
66,560
-
-
-
-
-
-
-
-
-
132 months
2,655,247
-
-
-
-
-
-
-
-
-
-
Total at 31
December
2,655,247
66,560
87,435
121,231
123,426
100,983
259,819
278,623
356,724
268,261
460,974
Less gross paid
claims
Less unearned
portion of ult losses
Add ULAE provision
(2,614,719)
-
1,427
(60,771)
-
212
(80,322)
-
267
(111,975)
-
329
(114,800)
-
361
(83,931)
-
547
(226,289)
-
891
(226,540)
-
1,751
(262,068)
-
2,595
(116,973)
(7,858)
4,351
(57,903)
(127,820)
2,429
Gross claims
liabilities at 31
December
41,955 6,001 7,380 9,585 8,987 17,599 34,421 53,834 97,251 147,781 277,680 702,474
Net insurance contract outstanding claims provision as at 31 December 2024:
2014 and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Estimate of net claims
12 months
2,307,306
79,112
75,153
111,791
128,054
97,678
170,664
207,504
249,226
251,736
381,163
24 months
2,274,869
64,679
80,887
109,736
125,554
111,011
218,632
238,639
261,294
232,802
-
36 months
2,258,629
63,928
78,161
107,291
129,441
112,215
224,237
224,735
257,586
-
-
48 months
2,244,368
65,126
77,670
107,612
129,621
107,264
224,586
219,031
-
-
-
60 months
2,223,353
64,926
77,328
106,177
127,047
100,105
224,302
-
-
-
-
72 months
2,203,054
60,348
75,066
104,853
124,303
96,176
-
-
-
-
-
84 months
2,187,491
50,374
72,683
103,256
120,522
-
-
-
-
-
-
96 months
2,171,175
57,232
71,338
101,182
-
-
-
-
-
-
-
108 months
2,162,148
55,756
69,660
-
-
-
-
-
-
-
-
120 months
2,152,937
55,154
-
-
-
-
-
-
-
-
-
132 months
2,144,799
-
-
-
-
-
-
-
-
-
-
Total at 31
December
2,144,799
55,154
69,660
101,182
120,522
96,176
224,302
219,031
257,586
232,802
381,163
Less net paid claims
(2,105,667)
(50,366)
(64,440)
(92,237)
(112,018)
(78,897)
(192,348)
(170,558)
(183,650)
(97,790)
(45,563)
Less unearned
portion of ult losses
-
-
-
-
-
-
-
-
-
(7,562)
(112,423)
Add ULAE provision
1,427
212
267
329
361
547
891
1,751
2,595
4,351
2,429
Net claims
liabilities at 31
December
40,559 5,000 5,487 9,274 8,865 17,826 32,845 50,224 76,531 131,801 225,606 604,018
NOTES TO THE ACCOUNTS
continued
49 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Currency risk
The tables below set out the underlying currency exposure to the syndicate although it should be noted that
profits are only paid out in sterling and US dollars.
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
19,718
856,407
13,808
37,393
3,241
-
2,704
933,271
Reinsurers’ share of technical
provisions
103
121,541
4,517
2,913
663
24
1,392
131,153
Insurance and reinsurance
receivables
3,802
285,463
5,891
6,703
3,766
483
2,978
309,086
Cash and cash equivalents
3,803
77,741
10,641
-
-
-
-
92,185
Other assets
7,363
57,505
1,509
4,425
1,057
45
1,128
73,032
Tot al
assets
34,789
1,398,657
36,366
51,434
8,727
552
8,202
1,538,727
Technical provisions
(19,735)
(794,981)
(31,787)
(36,003)
(9,292)
(970)
(17,814)
(910,582)
Insurance and reinsurance
payables
(1,984)
(237,530)
(427)
(3,057)
(1,334)
(652)
(650)
(245,634)
Other creditors
(4,155)
(137,822)
-
(31)
-
-
-
(142,008)
Total liabilities
(25,874)
(1,170,333)
(32,214)
(39,091)
(10,626)
(1,622)
(18,464)
(1,298,224)
Members’ balances by currency
8,915
228,324
4,152
12,343
(1,899)
(1,070)
(10,262)
240,503
The largest currency within other financial investments are Swiss Francs.
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
4,015
564,574
8,188
33,983
3,359
–
3,778
617,897
Reinsurers’ share of technical
provisions
334
101,889
6,807
2,262
745
26
1,480
113,543
Insurance and reinsurance
receivables
6,434
248,910
4,978
4,864
4,588
382
3,921
274,077
Cash and cash equivalents
4,727
427
15,174
–
–
–
–
20,328
Other assets
7,797
67,601
1,357
3,889
1,521
39
1023
83,227
Total
assets
23,307
983,401
36,504
44,998
10,213
447
10,202
1,109,072
Technical provisions
(21,603)
(631,994)
(29,561)
(27,982)
(10,075)
(878)
(16,570)
(738,663)
Insurance and reinsurance
payables
(1,515)
(188,354)
(207)
(1,629)
(759)
(427)
(616)
(193,507)
Other creditors
(4,500)
(34,665)
–
(18)
–
–
–
(39,183)
Total liabilities
(27,618)
(855,013)
(29,768)
(29,629)
(10,834)
(1,305)
(17,186)
(971,353)
Members’ balances by currency
(4,311)
128,388
6,736
15,369
(621)
(858)
(6,984)
137,719
The largest currency within other financial investments are Swiss Francs.
NOTES TO THE ACCOUNTS
continued
50 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Currency risk (continued)
2024 impact
on result
2024 impact
on members’
balances
2023 impact
on result
2023 impact on
members’
balances
£’000
£’000
£’000
£’000
Interest rate risk
+50 basis points shift in yield curves
(4,009)
(4,009)
(3,339)
(3,339)
-50 basis points shift in yield curves
4,011
4,011
3,341
3,341
Currency risk
10% increase in GBP/euro exchange rate
377
377
612
612
10% decrease in GBP/euro exchange rate
(461)
(461)
(748)
(748)
10% increase in GBP/USD exchange rate
20,757
20,757
11,672
11,672
10% decrease in GBP/USD exchange rate
(25,369)
(25,369)
(14,265)
(14,265)
Equity price risk
5% increase in equity prices
1,928
1,928
-
-
5% decrease in equity prices
(1,928)
(1,928)
-
-
The interest rate sensitivity analysis is performed for reasonably possible movements in interest rates with all
other variables held constant, showing the impact on profit and members’ balances of the effects of changes in
interest rates on:
- Fixed rate financial assets; and
- Variable rate financial assets.
The first of these measures the impact on profit or loss for the year (for items recorded at fair value through the
income statement) and on members’ balances (for available for sale investments) that would arise in a
reasonably possible change in interest rates at the reporting date on financial instruments at the period end.
The second of these measures the change in interest income or expense over the period of the year attributable
to a reasonably possible change in interest rates, based on floating rate assets and liabilities held at the
reporting date.
The correlation of variables will have a significant effect in determining the ultimate impact on interest rate risk,
but to demonstrate the impact due to changes in variables, the variables were altered on an individual basis.
It should be noted that movements in these variables are non-linear.
The method used for deriving sensitivity information and significant variables did not change from the previous
period. the syndicate has no significant concentration of interest rate risk.
Insurance liabilities are not discounted and therefore not exposed to interest rate risk.
The impact of the above interest rate sensitivity is within our investment parameter guidelines and
management tolerance.
The market rate sensitivity analysis is performed for reasonably possible movements in market prices with all
other variables held constant, showing the impact on profit and members’ balances of the effects of changes in
market prices. The syndicate held a limited portfolio of equities which were subject to price risk as shown in the
table. This exposure benefits members through the enhanced longer term returns on equities compared with
debt securities.
The exposure to equities is managed carefully to ensure that the syndicate’s internal capital requirements are
met at all times, as well as those mandated by the syndicate’s external regulators.
The impact of the above market price sensitivity is within our investment parameter guidelines and
management tolerance.
The Lloyd's central fund loan is treated as an equity instrument but due to it's underlying characteristics it does
not present an equity price risk to the syndicate.
NOTES TO THE ACCOUNTS
continued
51 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Maturity profiles
The maturity analysis presented in the table below shows the estimated contractual maturities for all syndicate
assets and liabilities. For investment funds, an average maturity is applied based on the underlying securities.
Those items with no stated maturity are in respect of accounting timing entries for prepayments, unearned gross
and ceded premium plus related deferred acquisition costs. These four items by their nature generate no future
cash flow.
The maturity of other assets is based on the earliest date on which the gross undiscounted assets are expected
to be received assuming conditions are consistent with those at the reporting date. the estimated timing of
premium debtor balances uses contracted settlement due dates.
The maturity of liabilities is based on undiscounted contractual obligations, including interest payable. The
estimated timing of claim payments uses estimated cash flows from the syndicate’s reserving analysis.
Repayments which are subject to notice are treated as if notice were to be given immediately. Members’ balances
are analysed based on the syndicate closing each year of account 36 months from inception.
No stated
maturity
Up to a
year
1-3 years
3-5 years
>5 years
Total
2024
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
137,605
568,048
202,876
3,239
21,503
933,271
Deposits with ceding undertakings
-
626
–
-
-
626
Reinsurers’ share of technical
provisions:
provision for unearned premiums
32,697
-
-
-
-
32,697
claims outstanding
–
42,155
36,320
11,742
8,239
98,456
Debtors
-
292,372
36,828
-
-
329,200
Cash at bank and in hand
-
92,185
-
-
-
92,185
Accrued interest
-
2,791
356
-
171
3,318
Deferred acquisition costs
47,870
-
-
-
-
47,870
Other prepayments and accrued
income
1,104
-
-
-
-
1,104
Total assets
219,276
998,177
276,380
14,981
29,913
1,538,727
Members’ balances
-
71,298
169205
-
-
240,503
Technical provisions:
provision for unearned premiums
208,108
-
-
-
-
208,108
claims outstanding
-
230,937
220,110
90,866
160,561
702,474
Creditors
-
196,725
186,670
-
-
383,395
Accrual and deferred income
4,247
-
-
-
-
4,247
Total liabilities
212,355
498,960
575,985
90,866
160,561
1,538,727
No stated
maturity
Up to a
year
1-3 years
3-5 years
>5 years
Total
2023
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
52,614
435,433
106,663
-
23,187
617,897
Deposits with ceding undertakings
-
358
-
-
-
358
Reinsurers’ share of technical
provisions:
provision for unearned premiums
34,003
-
-
-
-
34,003
claims outstanding
–
43,608
27,180
6,253
2,499
79,540
Debtors
-
255,307
56,084
-
-
311,391
Cash at bank and in hand
-
20,328
-
-
-
20,328
Accrued interest
-
1,144
778
-
162
2,084
Deferred acquisition costs
42,445
-
-
-
-
42,445
Other prepayments and accrued
income
1,026
-
-
-
-
1,026
Total assets
130,088
756,178
190,705
6,253
25,848
1,109,072
Members’ balances
-
39,604
98,115
-
-
137,719
Technical provisions:
provision for unearned premiums
192,772
-
-
-
-
192,772
claims outstanding
-
227,096
171,210
60,434
87,151
545,891
Creditors
-
88,221
139,719
-
-
227,940
Accrual and deferred income
4,750
-
-
-
-
4,750
Total liabilities
197,522
354,921
409,044
60,434
87,151
1,109,072
NOTES TO THE ACCOUNTS
continued
52 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Credit risk – exposure to credit risk
The following table analyses the credit rating by investment grade of financial investments, debt securities and
derivative financial instruments, reinsurers’ share of claims outstanding, amount due from intermediaries,
amounts due from reinsurers in respect of settled claims, cash and cash equivalents, and other debtors and
accrued interest that are neither past due, nor impaired.
AAA
AA
A
BBB
<BBB
Not rated
Total
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
Shares and other variable
yield securities and unit trusts
38,391
46,389
8,023
-
-
133,686
226,489
Debt securities
-
679,335
-
-
-
-
679,335
Participation in investment
pools
-
3,581
-
-
-
507
4,088
Loans with credit institutions
-
-
-
-
-
-
-
Deposits with credit
institutions
-
-
312
-
-
-
312
Overseas deposits
2
19,195
144
12
229
53
19,635
Derivative assets
-
-
-
-
-
-
-
Syndicate loans to central
fund
-
-
-
-
-
3,412
3,412
Deposits with ceding
undertakings
-
-
626
-
-
-
626
Reinsurers’ share of claims
outstanding
-
39,243
59,213
-
-
-
98,456
Debtors arising out of direct
insurance operations
-
-
-
-
-
52,080
52,080
Debtors arising out of
reinsurance operations
-
-
-
-
-
257,006
257,006
Cash at bank and in hand
-
-
92,185
-
-
-
92,185
Other debtors and accrued
interest
-
3,318
-
-
-
-
3,318
Total
38,393
791,061
160,503
12
229
446,744
1,436,942
AAA
AA
A
BBB
<BBB
Not rated
Total
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
Shares and other variable yield
securities and unit trusts
46,041
49,114
2,003
-
-
44,605
141,763
Debt securities
-
446,997
-
-
-
-
446,997
Participation in investment
pools
-
3,397
-
-
-
597
3,994
Loans with credit institutions
-
-
-
-
-
-
-
Deposits with credit
institutions
-
-
724
-
-
-
724
Overseas deposits
2
19,659
153
28
501
61
20,404
Derivative assets
-
-
-
-
-
-
-
Syndicate loans to central fund
-
-
-
-
-
4,015
4,015
Deposits with ceding
undertakings
-
-
358
-
-
-
358
Reinsurers’ share of claims
outstanding
-
36,563
42,977
-
-
-
79,540
Debtors arising out of direct
insurance operations
-
-
-
-
-
41,589
41,589
Debtors arising out of
reinsurance operations
-
-
-
-
-
232,489
232,489
Cash at bank and in hand
-
-
20,328
-
-
-
20,328
Other debtors and accrued
interest
-
2,084
-
-
-
-
2,084
Total
46,043
557,814
66,543
28
501
323,356
994,285
NOTES TO THE ACCOUNTS
continued
53 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Credit risk – ageing and impairment
The tables below show the maximum exposure to credit risk (including an analysis of financial assets exposed to
credit risk) for the components of the statement of financial position:
Neither past
due nor
impaired
assets
Past due but
not
impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
2024
£’000
£’000
£’000
£’000
£’000
Financial investments:
Shares and other variable yield securities
and unit trusts
229,901
-
-
-
229,901
Debt securities
679,335
-
-
-
679,335
Participation in investment pools
4,088
-
-
-
4,088
Loans with credit institutions
–
-
-
-
-
Deposits with credit institutions
312
-
-
-
312
Overseas deposits
19,635
-
-
-
19,635
Derivative assets
-
-
-
-
-
Deposits with ceding undertakings
Reinsurers’ share of unearned premiums
626
32,697
-
-
-
-
-
-
626
32,697
Reinsurers’ share of claims outstanding
98,456
-
-
-
98,456
Debtors arising out of direct insurance
operations
36,602
15,478
-
-
52,080
Debtors arising out of reinsurance operations
165,678
91,328
-
-
257,006
Other debtors
20,114
-
-
-
20,114
Cash at bank and in hand
Prepayments and accrued income
92,185
52,292
-
-
-
92,185
52,292
Total credit risk
1,431,921
106,806
-
-
1,538,727
Of the £98.5m (2023: £79.54m) reinsurers’ share of claims outstanding, £0.4m (2023: £2.0m) is backed by
undrawn trust fund assets.
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Gross
value of
impaired
assets
Impairment
allowance
Total
2023
£’000
£’000
£’000
£’000
£’000
Financial investments:
Shares and other variable yield securities
and unit trusts
145,778
-
-
-
145,778
Debt securities
446,997
-
-
-
446,997
Participation in investment pools
3,994
-
-
-
3,994
Loans with credit institutions
–
-
-
-
-
Deposits with credit institutions
724
-
-
-
724
Overseas deposits
20,404
-
-
-
20,404
Derivative assets
-
-
-
-
-
Deposits with ceding undertakings
Reinsurers’ share of unearned premiums
358
34,003
-
-
-
-
-
-
358
34,003
Reinsurers’ share of claims outstanding
79,540
-
-
-
79,540
Debtors arising out of direct insurance
operations
29,326
12,262
-
-
41,588
Debtors arising out of reinsurance operations
128,974
103,515
-
-
232,489
Other debtors
37,314
-
-
-
37,314
Cash at bank and in hand
Prepayments and accrued income
20,328
45,555
-
-
-
-
-
-
20,328
45,555
Total credit risk
993,295
115,777
-
-
1,109,072
The syndicate has debtors that are past due but not impaired at the reporting date. The syndicate does not
consider these debtors to be impaired on the basis of the stage of collection of amounts owed to the syndicate.
NOTES TO THE ACCOUNTS
continued
54 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Credit risk – ageing and impairment (continued)
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:
1 Jan
New
impairment
charges
Changes in
impairment
charges
Released
to income
statement
Foreign
exchange
Others
31 Dec
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
-
-
-
-
-
-
-
Overseas deposits
-
-
-
-
-
-
-
Deposits with ceding
undertakings
626
-
-
-
-
-
626
Reinsurers’ share of claims
outstanding
-
-
-
-
-
-
-
Debtors arising out of direct
insurance operations
-
-
-
-
-
-
-
Debtors arising out of
reinsurance operations
-
-
-
-
-
-
-
Cash at bank and in hand
-
-
-
-
-
-
-
Other debtors and accrued
interest
-
-
-
-
-
-
-
Total
626
-
-
-
-
-
626
1 Jan
New
impairment
charges
Changes in
impairment
charges
Released
to income
statement
Foreign
exchange
Others
31 Dec
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Financial investments
-
-
-
-
-
-
-
Overseas deposits
-
-
-
-
-
-
-
Deposits with ceding
undertakings
358
-
-
-
-
-
358
Reinsurers’ share of claims
outstanding
-
-
-
-
-
-
-
Debtors arising out of direct
insurance operations
-
-
-
-
-
-
-
Debtors arising out of
reinsurance operations
-
-
-
-
-
-
-
Cash at bank and in hand
-
-
-
-
-
-
-
Other debtors and accrued
interest
-
-
-
-
-
-
-
Total
358
-
-
-
-
-
358
NOTES TO THE ACCOUNTS
continued
55 Syndicate 2791 Annual Report and Accounts 2024
28. Risk Management (continued)
Credit risk – ageing and impairment (continued)
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
Past due nor impaired
0-3 months
3-6 months
6-12 months
>1 year past
due
2024
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and unit trusts
-
-
-
-
-
Debt securities
-
-
-
-
-
Participation in investment pools
-
-
-
-
-
Loans with credit institutions
-
-
-
-
-
Deposits with credit institutions
-
-
-
-
-
Overseas deposits
-
-
-
-
-
Derivative assets
-
-
-
-
-
Syndicate loans to central fund
-
-
-
-
-
Deposits with ceding undertakings
-
-
-
-
-
Reinsurers’ share of claims outstanding
-
-
-
-
-
Debtors arising out of direct insurance
operations
10,569
3,056
1,853
-
15,478
Debtors arising out of reinsurance
operations
83,129
7,456
744
(1)
91,328
Other debtors
-
-
-
-
-
Cash at bank and in hand
-
-
-
-
-
Total
93,698
10,512
2,597
(1)
106,806
Past due nor impaired
0-3 months
3-6 months
6-12 months
>1 year past
due
2023
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and unit trusts
-
-
-
-
-
Debt securities
-
-
-
-
-
Participation in investment pools
-
-
-
-
-
Loans with credit institutions
-
-
-
-
-
Deposits with credit institutions
-
-
-
-
-
Overseas deposits
-
-
-
-
-
Derivative assets
-
-
-
-
-
Syndicate loans to central fund
-
-
-
-
-
Deposits with ceding undertakings
-
-
-
-
-
Reinsurers’ share of claims outstanding
-
-
-
-
-
Debtors arising out of direct insurance
operations
8,391
2,474
1,397
-
12,262
Debtors arising out of reinsurance
operations
100,385
2,398
732
-
103,515
Other debtors
-
-
-
-
-
Cash at bank and in hand
-
-
-
-
-
Total
108,776
4,872
2,129
-
115,777
