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2
Syndicate 2008
Annual Report and Accounts
For the year ended 31 December 2024
1
Table of Contents
Directors and administration ............................................................................................................................... 2
Report of the directors of the managing agent ............................................................................................... 4
Statement of managing agent’s directors’ responsibilities ............................................................................. 8
Independent auditors’ report to the member of Syndicate 2008 .................................................................. 9
Statement of profit or loss: technical account - general business ............................................................... 13
Statement of profit or loss: non-technical account - general business ....................................................... 14
Statement of financial position – assets ........................................................................................................... 15
Statement of financial position – liabilities ....................................................................................................... 16
Statement of changes in members’ balances ............................................................................................... 17
Statement of cash flows ..................................................................................................................................... 18
Notes .................................................................................................................................................................... 19
2
Directors and administration
Managing agent
Directors
The directors named below held office for the period 1 January 2024 to 31 December 2024.
M Goddard (Chair and Non-Executive)
K Felisky (Non-Executive)
R Sutlow (Non-Executive)
D Truman
B Dimmock
N Shah
S Hextall
M Heap (appointed 1 October 2024)
N Crossley (appointed 18 November 2024)
Former directors who served during the year
M Batterbury (resigned 31 July 2024)
A Elliott (Non-Executive) (resigned 12 September 2024)
3
Directors and administration (continued)
Managing agent’s secretary
F Brook
S Hextall
Managing agent’s registered office
8
th
Floor, One Creechurch Place
London, EC3A 5AY
United Kingdom
Managing agent’s registered number
10595512
Syndicate run-off manager
B Dimmock
Syndicate banker
Citibank, Barclays, Royal Bank of Canada, Bank of New York
Syndicate investment manager
Goldman Sachs Asset Management Limited
Syndicate independent auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
Syndicate consulting actuary
Lane Clark & Peacock LLP
4
Report of the directors of the managing agent
The directors of the managing agent, Enstar Managing Agency Limited (“EMAL”) present their managing
agent’s report for Syndicate 2008 (“the Syndicate”) for the year ended 31 December 2024.
Principal activities
The principal activity of the business of Syndicate 2008 is to provide finality solutions for The Society of Lloyd’s
(“Lloyd’s”) run-off business through either reinsurance to close (“RITC”), quota share agreements, adverse
development cover or loss portfolio transfer (“LPT”).
Business review
The results and financial position for the year ended 31 December 2024 are shown in the tables below.
2024
2022 YOA
2023 YOA
2024 YOA
All YOA's
£’000
£’000
£’000
£’000
Net premiums earned
(8,596)
(937)
-
(9,533)
Total technical charges
38,146
818
-
38,964
Technical profit / (loss)
29,550
(119)
-
29,431
Investment income
23,122
5,117
-
28,239
Non-technical account - other income
826
-
-
826
Net expenses
(18,602)
(659)
-
(19,261)
Profit/(loss) on exchange
1,147
(230)
-
917
Net profit / (loss)
36,043
4,109
-
40,152
2024
2023
£’000
£’000
Total assets
1,408,196
1,783,899
Total liabilities
1,378,540
1,819,921
Members’ balances
29,656
(36,022)
There were two key factors that drove the Syndicate’s £40.2m profit in 2024. The first was a technical profit of
£29.4m driven by reserve releases following actuarial reviews. The technical profit was supplemented by
investment income earned during the year which included interest of £16.9m, realised gains of £17.0m and
unrealised losses of £5.2m.
Syndicate 2008 executed one outwards RITC transaction during the year. On 14 February 2024 Syndicate 2008
signed a Reinsurance to Close Agreement with Syndicate 2003. Syndicate 2003 assumed net reserves of
£10.3m relating to the 2001 and prior underwriting years from Syndicate 2008. Alongside this RITC transaction,
the quota share contract that reinsured these reserves with Fitzwilliam (SAC) Insurance Limited was
commuted.
Over the year, a number of factors have impacted the world economies. Geo-political uncertainty driven by
conflicts has dampened investor confidence and increased market volatility and inflation and interest rates
both remain elevated. The increase in interest rates during the year adversely impacted bond values in the
Syndicate’s fixed income bond portfolio. However, these unrealised losses are expected to materially unwind
as the bonds pull back to par as they reach maturity.
5
Report of the directors of the managing agent (continued)
Principal risks and uncertainties
A description of the principal risks and uncertainties facing the Syndicate is set out in note 4 of the financial
statements.
Climate risk
The Syndicate specialises in run-off and is not a live underwriter of new policies. Exposure to climate-related
risks emanates from the acquired insurance liabilities and the assets that back those liabilities. In assuming
future insurance run-off liabilities, as part of our disciplined due diligence approach, we insist upon informed
excellence in risk selection. This includes consideration of climate-related risk exposures and the impact of
potential concentrations on our existing liabilities, as well as ESG investment risk exposures in our asset
portfolios.
Our Enterprise Risk Management (ERM) framework defines the roles and responsibilities for effective oversight
and management of environmental, social and governance (ESG) and climate-related risks and
opportunities at the Board and senior management levels.
Climate change presents risks and opportunities to the sustainability of our business. The Syndicate’s business
strategy is exposed to the following risks over the short (<2030), medium (<2040) and longer (≥2040) term time
horizons, across three major types of climate risk:
• Physical risks (Short to Longer term): These are the first order risks arising from weather-related events,
such as floods and storms. Their impact may be felt directly through property damage, or indirectly
through subsequent events such as disruption of global supply chains or resource scarcity. Our
operations may be impacted by physical risks affecting key supporting infrastructure and/or our
outsourced service providers. The impact and likelihood of this risk is considered low, given our global
presence and the Business Continuity Framework and procedures we have in place.
• Transition risks (Short to Medium Term): These include financial risks deriving from the transition to a
carbon net zero economy, and for Enstar this includes potential swift, adverse repricing of carbon-
intensive financial assets.
In the near term our investment portfolio could be exposed to the loss of value in specific investments
due to disruption caused by transitioning to a lower carbon emitting economy. The impact could
increase over time if part of the transition to a greener economy is associated with increased
production costs. Certain sectors could be subject to significant impairments due to changing
consumer demand, the repricing of assets or changing regulatory requirements.
Ongoing geo-political tensions in a number of global locations have the potential to accelerate these
traditional risks through the need to diversify existing energy sources, including increased investment
in energy derived from more sustainable sources.
• Liability risks (Short to Medium Term): These include third-party exposures such as claimants who have
suffered climate-change related losses and damage, seeking compensation. Liability risks also include
the unknown and potentially high costs of dealing with losses or damage from physical or transition
risk factors. Liability risks are particularly high for those directors and officers who do not properly
manage and report climate-related risks and commit errors and omissions.
As we acquire liabilities, there is a risk that our current practices and processes do not successfully identify
and/or price the risks arising from Climate Change resulting in actual returns deviating adversely from those
assumed when the transaction was priced.
6
Report of the directors of the managing agent (continued)
Climate risk (continued)
Many of our underlying portfolios contain lines of business that could, at the industry-wide level, be exposed
to significant Climate Change risk (e.g., Environmental claims, Professional Lines, etc.). Given the Syndicate’s
business model of acquiring and efficiently settling legacy claims, we do not underwrite new exposures.
In order to quantify the financial impact of risks/opportunities brought about by the climate-related risks set
out above, we undertake periodic analysis to quantify the potential impact on both our assets and liabilities.
Our independent 2024 stress and scenario testing exercise, indicated that the impact of physical, transition
and liability risks on the Syndicate remains relatively low. Whilst the stress testing did not indicate that any
immediate action was required, we will continue to monitor our exposure to climate-related physical,
transition and liability risks.
Going concern
The directors have performed an assessment of the Syndicate’s ability to continue as a going concern and
concluded that the Syndicate has sufficient financial resources to meet its future obligations. Information on
the capital process and Funds at Lloyd’s is detailed on the capital management section on page 40 and
note 32.
The directors believe that the Syndicate is well positioned to manage its business risks successfully in the current
economic environment. It has a mature portfolio of insurance risk managed by an experienced and stable
team. The directors have continued to review the business plans, liquidity and operational resilience of the
Syndicate during the year.
Directors
The current directors of the managing agent are set out on page 2.
None of the directors participates directly on the Syndicate.
Future developments
The intention of the Board is to continue to pursue reinsurance opportunities and other Lloyd's closure solutions
as they arise, and to manage the ongoing liabilities of the Syndicate as economically and efficiently as
possible.
On 13 January 2025, Syndicate 2008 agreed a ground-up LPT with Atrium Syndicate 609, managed by Atrium
Underwriters Limited. The transaction involves Atrium Syndicate 609’s discontinued portfolios, comprising
Marine Treaty Reinsurance, Property Treaty Reinsurance and US Contractors General Liability.
Under the terms of the LPT, Atrium Syndicate 609 will cede net loss reserves of approximately £157m, based
on Atrium’s carried reserves as at Q3 2024, to Syndicate 2008. The reinsurance relates to business underwritten
in the 2023 and prior years of account.
The transaction completed on 4 March 2025.
On July 29, 2024, Enstar Group Limited ("Enstar") entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Elk Bidco Limited (the “Parent”), an exempted company limited by shares existing under
the laws of Bermuda. The Parent is backed by equity commitments from investment vehicles managed or
advised by affiliates of Sixth Street Partners, LLC (“Sixth Street”). Pursuant to the Merger Agreement, there will
be a series of mergers (collectively, the "Merger") resulting in the Company surviving the Merger as a wholly
owned subsidiary of the Parent. The Merger is expected to close in mid-2025. Following the close of the
transaction, Enstar expects to maintain its current operations and business strategy.
7
Report of the directors of the managing agent (continued)
Disclosure of information to auditors
The directors of the managing agent who held office at the date of approval of this managing agent’s report
confirm that, as far as they are each aware, there is no relevant audit information of which the Syndicate’s
auditors are unaware; and each director has taken all the steps that they ought to have taken in their
capacity as a director to make themselves aware of any relevant audit information and to establish that the
Syndicate’s auditors are aware of that information.
Auditors
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) (the 2008 Regulations), the auditors will be deemed to be reappointed and
PricewaterhouseCoopers LLP will therefore continue in office.
Syndicate meeting
The managing agent confirms that it does not propose to hold an annual general meeting of the member of
the Syndicate.
B Dimmock
Director
For and on behalf of the Board
5 March 2025
8
Statement of managing agent’s directors’ responsibilities
The directors of the managing agent are responsible for preparing the Syndicate Annual Report and
Accounts in accordance with applicable law and regulation.
The Insurance Accounts Directive (Lloyds’s Syndicate and Aggregate Accounts) Regulations 2008 require the
directors of the managing agent to prepare their Syndicate’s annual accounts at 31 December each year
in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law), including Financial Reporting Standard 102 The Financial Reporting Standard
Applicable in the UK and Republic of Ireland (“FRS 102”), and Financial Reporting Standard 103 Insurance
Contracts (“FRS 103”). The Syndicate annual accounts are required by law to give a true and fair view of the
state of affairs of the Syndicate at that date and of its profit or loss for that year.
In preparing the Syndicate’s annual accounts, these annual accounts, the directors of the managing agent
are required to:
● select suitable accounting policies and then apply them consistently;
● state whether applicable United Kingdom Accounting Standards have been followed, subject to any
material departures disclosed and explained in the annual accounts;
● make judgements and accounting estimates that are reasonable and prudent; and
● prepare the annual accounts on the going concern basis unless it is intended for the Syndicate to
cease operations, or no realistic alternative but to do so.
The directors of the managing agent are responsible for keeping adequate accounting records that are
sufficient to show and explain the Syndicate’s transactions and disclose with reasonable accuracy at any
time the financial position of the Syndicate and enable them to ensure that the Syndicate annual accounts
comply with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008. They are 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 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.
The directors are responsible for the maintenance and integrity of the company’s website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
B Dimmock
Director
For and on behalf of the Board
5 March 2025
9
Independent auditors’ report to the member of Syndicate
2008
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 2008’s syndicate annual accounts:
● give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit
and cash flows for the year then ended;
● have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable law); and
● have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s
Syndicate Accounts Instructions V2.0 as modified by the Frequently Asked Questions issued by Lloyd’s
V1.1 (“the Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Annual Report and Financial Statements
(the “Annual Report”), which comprise: the Balance sheet as at 31 December 2024; the Statement of profit
or loss and other comprehensive income, the Statement of cash flows, and the Statement of changes in
members’ balances for the year then ended; and the notes to the syndicate annual accounts, which include
a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s
Syndicate Instructions and other applicable law. Our responsibilities under ISAs (UK) are further described in
the Auditors’ responsibilities for the audit of the syndicate annual accounts section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant
to our audit of the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as
applicable to other entities of public interest, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in note 6, we have provided no non-audit services to the syndicate in the period
under audit.
Conclusions relating to going concern
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
as a going concern for a period of at least twelve months from when the syndicate annual accounts are
authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going
concern basis of accounting in the preparation of the syndicate annual accounts is appropriate.
10
Independent auditors’ report to the member of Syndicate
2008 (continued)
Conclusions relating to going concern (continued)
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as
to the syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual
accounts and our auditors’ report thereon. The Managing Agent is responsible for the other information. Our
opinion on the syndicate annual accounts does not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
syndicate annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material misstatement of the syndicate annual accounts
or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Report of the directors of the managing agent (the “Managing Agent’s Report”), we also
considered whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as
described below.
Managing Agent’s Report
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 year ended 31 December 2024 is consistent with the syndicate annual
accounts and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of
the audit, we did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of managing agent’s directors’ responsibilities, the Managing Agent
is responsible for the preparation of the syndicate annual accounts in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The Managing Agent is also responsible
for such internal control as they determine is necessary to enable the preparation of syndicate annual
accounts that are free from material misstatement, whether due to fraud or error.
11
Independent auditors’ report to the member of Syndicate
2008 (continued)
Responsibilities of the Managing Agent for the syndicate annual accounts (continued)
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s
ability to continue as a going concern, disclosing as applicable, matters related to going concern and using
the going concern basis of accounting unless it is intended for the syndicate to cease operations, or it has no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 accounts.
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.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-
compliance with laws and regulations related to breaches of regulatory principles, such as those governed
by the Prudential Regulation Authority and the Financial Conduct Authority, and those regulations set by the
Council of Lloyd’s, and we considered the extent to which non-compliance might have a material effect on
the syndicate annual accounts. We also considered those laws and regulations that have a direct impact
on the syndicate annual accounts such as The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, and the Lloyd’s Syndicate Instructions. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the syndicate annual accounts
(including the risk of override of controls) and determined that the principal risks were related to
management override of controls, including the potential for management bias in significant
accounting estimates and judgemental areas, particularly in relation to claims outstanding and
valuation of the IBNR component of claims outstanding and the postings of inappropriate journals.
Audit procedures performed by the engagement team included:
• Discussions with management, internal audit and the syndicate’s compliance function, including
consideration of known or suspected instances of non-compliance with laws and regulation and
fraud;
• Reviewing relevant board and committee meeting minutes and correspondence with regulatory
authorities, including Lloyd’s of London and the Prudential Regulatory Authority;
• Challenging assumptions and judgements made by management when determining their significant
accounting estimates, in particular in relation to valuation of the IBNR component of claims
outstanding; and
• Identifying and testing journal entries identified as potential indicators of fraud.
12
Independent auditors’ report to the member of Syndicate
2008 (continued)
Auditors’ responsibilities for the audit of the syndicate annual accounts (continued)
There are inherent limitations in the audit procedures described above. We are less likely to become aware
of instances of non-compliance with laws and regulations that are not closely related to events and
transactions reflected in the syndicate annual accounts. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s member in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we
are required to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the Managing Agent in respect of the
syndicate; or
● certain disclosures of Managing Agent remuneration specified by law are not made; or
● the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging
has been applied. This auditors’ report provides no assurance over whether the iXBRL tagging has been
applied in accordance with section 2 of the Lloyd’s Syndicate Instructions V2.0.
Deepti Vohra (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 March 2025
13
Statement of profit or loss and other comprehensive income
Technical account – General business
For the year ended 31 December 2024
Note | 2024 | 2023 | |
£'000 | £'000 | ||
Gross premiums written | 5 | | |
Outwards reinsurance premiums | ( | ( | |
Premiums written, net of reinsurance | ( | | |
Changes in unearned premium | 18 | ||
Change in the gross provision for unearned premiums | | ||
| Change in the provision for unearned premiums reinsurers’ share | ( | ( | |
Net change in provisions for unearned premiums | | ||
Earned premiums, net of reinsurance | ( | | |
Allocated investment return transferred from the non-technical account | 9 | | |
Other technical income, net of reinsurance | | | |
Claims paid | 18 | ||
Gross amount | ( | ( | |
| Reinsurers’ share | | ||
Net claims paid | ( | ( | |
Change in the provision for claims | 18 | ||
Gross amount | ( | ||
| Reinsurers’ share | ( | | |
Net change in provisions for claims | ( | ||
Claims incurred, net of reinsurance | ( | ||
Changes in other technical provisions, net of reinsurance, not shown under other headings | |||
Other technical provisions, net of reinsurance | | | |
Net change in other technical provisions | | | |
Net operating expenses | 6 | ( | |
| Balance on the technical account – general business | ( |
All operations relate to continuing activities.
The notes on pages 19 to 56 form an integral part of these financial statements.
14
Statement of profit or loss and other comprehensive income
(continued)
Non-technical account – General business
For the year ended 31 December 2024
Note | 2024 | 2023 | |
| £’000 | £’000 | ||
| Balance on the technical account – general business | ( | ||
Investment income | 9 | ||
Realised gains/(losses) on investments | 9 | ( | |
Unrealised (losses)/gains on investments | 9 | ( | |
Investment expenses and charges | 9 | ( | ( |
Total investment return | |||
Allocated investment return transferred to the general business technical account | ( | ( | |
Gain on foreign exchange | |||
Other income | |||
Other expenses | ( | ||
Profit/(loss) for the financial year | ( |
All operations relate to continuing activities.
There are no items of other comprehensive income in the accounting period, therefore no statement of other
comprehensive income has been presented.
The notes on pages 19 to 56 form an integral part of these financial statements.
15
Balance sheet
Assets
As at 31 December 2024
Note | 2024 | 2023 | |
| £’000 | £’000 | ||
Financial investments | 11 | ||
Deposits with ceding undertakings | |||
Investments | |||
Provision for unearned premiums | |||
Claims outstanding | |||
| Reinsurers’ share of technical provisions | 18 | ||
Debtors arising out of direct insurance operations | 12 | ||
Debtors arising out of reinsurance operations | 13 | ||
Other debtors | 14 | ||
Debtors | |||
Cash at bank and in hand | |||
Other assets | |||
Accrued interest and rent | |||
Deferred acquisition costs | 15 | ||
Other prepayments and accrued income | |||
Prepayments and accrued income | |||
Total assets |
The notes on pages 19 to 56 form an integral part of these financial statements.
16
Balance sheet (continued)
Liabilities
As at 31 December 2024
Note | 2024 | 2023 | |
| £’000 | £’000 | ||
| Members’ balances | ( | ||
Total capital and reserves | ( | ||
Provision for unearned premiums | |||
Claims outstanding | |||
Technical provisions | 18 | ||
Deposits received from reinsurers | |||
Creditors arising out of direct insurance operations | 21 | ||
Creditors arising out of reinsurance operations | 22 | ||
Other creditors including taxation and social security | 23 | ||
Creditors | |||
Accruals and deferred income | | ||
Total liabilities | |||
Total liabilities, capital and reserves |
The notes on pages 19 to 56 form an integral part of these financial statements.
The Syndicate’s financial statements on pages 14 to 56 were approved by the Board of Enstar Managing
Agency Limited on 3 March 2025 and were signed on its behalf by:
B Dimmock
Director
5 March 2025
17
Statement of changes in members’ balances
For the year ended 31 December 2024
| 2024 | 2023 | |
| £’000 | £’000 | |
| Members’ balances brought forward at 1 January | ( | ( |
Total comprehensive income/(loss) for the year | ( | |
Losses collected in relation to distribution on closure of underwriting year | ||
| Members’ balances carried forward at 31 December | ( |
The notes on pages 19 to 56 form an integral part of these financial statements.
Members participate on Syndicates by reference to years of account and their ultimate result, assets and
liabilities are assessed with reference to policies incepting in that year of account in respect of their
membership of a particular year.
During 2024 the Syndicate made a £25.5m (2023: nil) cash call from its member, SGL1 No. 1 Limited (“SGL1”).
18
Statement of cash flows
For the year ended 31 December 2024
Note | 2024 | 2023 restated | |
| £’000 | £’000 | ||
Cash flows from operating activities | |||
Profit/(loss) for the financial year | ( | ||
Adjustments: | |||
| (Decrease)/increase in gross technical provisions | ( | ||
Increase/(decrease) in reinsurers’ share of gross technical provisions | ( | ||
Increase/(decrease) in debtors | ( | ||
Increase in creditors | |||
(Decrease)/Increase in deposits received from reinsurers | ( | ||
Movement in other assets/liabilities | |||
Investment return | ( | ( | |
Foreign exchange | |||
Net cash flows from operating activities | ( | ||
Cash flows from investing activities | |||
Purchase of equity and debt instruments | ( | ( | |
Sale of equity and debt instruments | |||
Investment income received | |||
Other | ( | ||
Net cash flows from investing activities | ( | ||
Cash flows from financing activities | |||
Collection of losses | |||
Net cash flows from financing activities | |||
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the year | |||
Foreign exchange on cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the end of the year | 24 |
The notes on pages 19 to 56 form an integral part of these financial statements.
The 2023 Statement of cash flows has been restated to correctly include additional short term deposits with
credit institutions as part of the opening and closing ‘Cash and cash equivalents’ balances. The movement
in these deposits has been removed from ‘other cashflows from investing activities’. The reclassification and
aggregation changes have been applied retrospectively and had no impact on previously reported profit
or loss, total comprehensive income/loss, total assets, total liabilities, or total capital and reserves.
19
Notes (forming part of the financial statements)
1. Basis of preparation
The financial statements have been prepared using the annual basis of accounting as required by Statutory
Instrument No. 1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 and applicable United Kingdom Accounting Standards (UK Generally Accepted
Accounting Practice), including Financial Reporting Standard 102, “The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland” (“FRS102”) and Financial Reporting Standard 103
in relation to insurance contracts (“FRS103”) and the Lloyd’s Syndicate Accounts Instructions Version 2.0 as
modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.
The financial statements have been prepared on the historical cost basis, except for financial assets at fair
value through profit or loss that are measured at fair value.
The financial statements are presented in Pound Sterling (“GBP”), which is the Syndicate’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
The managing agent has prepared the financial statements on the expectation that continued capital
support will be in place such that the Syndicate will continue to write new reinsurance business in future
underwriting years of account.
Restatement of comparative information
During 2024, Lloyd’s introduced changes to the Syndicate accounts process to rationalise and standardise
financial reporting across the market. As a result, certain comparative information has been restated to
ensure consistency with current year presentation and compliance with the Lloyd’s Syndicate Accounts
Instructions. The changes comprise:
a) Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain
unchanged. For example, ‘Other Creditors’ in the 2023 Accounts has become ‘Other creditors including
taxation and social security’ in the 2024 Accounts.
The comparative balances in the affected notes [4,5,6,8,9,11,14] have also been re-presented 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.
c) Correction of error
During the review of financial statement presentation, it was identified that short-term deposits in money
market funds and with credit institutions were being incorrectly classified as investments and not cash
equivalents ((£18.9m). The Syndicate has restated the 2023 Statement of cashflows to correctly include
additional short term deposits with credit institutions as part of the opening and closing ‘Cash and cash
equivalents’ balances. The movement in these deposits has been removed from ‘other cashflows from
investing activities’. The reclassification and aggregation changes have been applied retrospectively and
had no impact on previously reported profit or loss, total comprehensive income/loss, total assets, total
liabilities, or total capital and reserves.
20
Notes (continued)
Going concern
The Directors have performed an assessment of the Syndicate’s ability to continue as a going concern. Having
assessed the Syndicate’s financial position at 31 December 2024, performance for the year then ended and
to the date of signing of the financial statements, we have not found any evidence to suggest that the
Syndicate will have difficulty in meeting future obligations.
The Directors are satisfied that the Syndicate’s operating model is sufficiently flexible to support the continuing
delivery of key services for the foreseeable future.
2. Use of judgements and estimates
In preparing these financial statements, the directors of the managing agent have made judgements,
estimates and assumptions that affect the application of the Syndicate’s accounting policies and the
reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to estimates are recognised prospectively.
The measurement of the provision for claims outstanding involves judgments and assumptions about the
future that have the most significant effect on the amounts recognised in the financial statements.
The provision for claims outstanding comprises the estimated cost of settling all claims incurred but unpaid at
the balance sheet date, whether reported or not. This is a judgemental and complex area due to the
subjectivity inherent in estimating the impact of claims events that have occurred but for which the eventual
outcome remains uncertain. In particular, judgment is applied when estimating the value of amounts that
should be provided for claims that have been incurred at the reporting date but have not yet been reported
(IBNR) to the Syndicate.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the
Syndicate managing agent’s in-house actuaries and is reviewed by external consulting actuaries. These
techniques generally involve projecting from past experience the development of claims over time in view
of the likely ultimate claims to be experienced. The provision for claims also includes amounts in respect of
internal and external claims handling costs.
In arriving at the level of claims provisions no margin is applied over and above the actuarial best estimate.
Further information about the risk that the provision for claims outstanding could be materially different from
the ultimate cost of claims settlement is included in note 4.
3. Significant accounting policies
The following principal accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Syndicate’s financial statements.
A. Premiums written
Premiums written comprise the reinsurance to close and loss portfolio transfer premiums on contracts incepted
during the financial year as well as adjustments made in the year to premiums written in prior accounting
periods by the reinsured Syndicates. Premiums exclude taxes and duties levied on them.
21
Notes (continued)
3. Significant accounting policies (continued)
B. Unearned premiums
Written premiums are recognised as earned according to the risk profile of the policy. Unearned premiums
represent the proportion of premiums written that relate to unexpired terms of policies in force at the
statement of financial position date, calculated on the basis of established earnings patterns or time
apportionment as appropriate.
C. Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs
such as brokerage and commission, and indirect costs such as administrative expenses connected with the
processing of proposals and the issuing of policies. The deferred acquisition cost asset represents the
proportion of acquisition costs which corresponds to the proportion of gross premiums written that is unearned
at the balance sheet date.
D. Claims provisions and related recoveries
Claims incurred comprise claims and claims handling expenses (both internal and external) paid in the year
and the movement in provision for outstanding claims and settlement expenses.
Outstanding claims include an allowance for the cost of claims incurred by the balance sheet date but not
reported until after the year end (IBNR). The calculation of IBNR involves projecting the development of claims
from past experience to form a view of the likely ultimate claims to be incurred. The key sensitivities in this
calculation are the choices of development patterns and loss ratios. The most critical assumption in regard to
claims provisions is that the past is a reasonable predictor of the likely level of claims development in the
future.
Outstanding claims also includes a provision for all claims handling expenses to cover the anticipated future
costs of negotiating and settling claims which have been incurred, whether reported or not, up to the
reporting date. The provision is estimated using forecast expenses and claims development patterns.
Anticipated salvage and subrogation and other recoveries are recognised as other assets.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and
projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme
in place for the class of business, the claims experience for the year and the current security rating of the
reinsurance companies involved. A number of statistical techniques are used to assist in making these
estimates.
Reinsurance assets are assessed for impairment at each balance sheet date. A reinsurance asset is deemed
impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that
the Syndicate may not recover all amounts due, and that event has a reliably measurable impact on the
amount that the Syndicate will receive from the reinsurer. Impairment losses are recognised in profit or loss in
the period in which the impairment loss is recognised.
E. Unexpired risks provision
Provision is made for unexpired risks arising from general insurance contracts where the expected value of
claims and expenses attributable to the unexpired periods of policies in force at the balance sheet date
exceeds the unearned premiums provision in relation to such policies (after the deduction of any deferred
acquisition costs). The provision for unexpired risks is calculated by reference to classes of business which are
managed together.
22
Notes (continued)
3. Significant accounting policies (continued)
F. Foreign currencies
The Syndicate has adopted Pounds Sterling as both its presentational and functional currency. As such, no
differences arise on conversion between the two. This achieves consistency with prior year reporting.
Transactions in foreign currencies are translated to the functional currency using the average rates of
exchange for the period. The Syndicate’s monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the rates of exchange at the statement of financial position
date. For the purposes of foreign currency translation, unearned premiums and deferred acquisition costs are
treated as if they are monetary items.
Differences arising on translation of foreign currency amounts relating to the insurance operations of the
Syndicate are included in the non-technical account.
G. Financial assets and liabilities
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions of IAS
39 Financial Instruments: Recognition and Measurement (as adopted for use in the UK).
i. Classification
The accounting classification of financial assets and liabilities determines the way in which they are measured
and changes in those values are presented in the Statement of profit or loss. Financial assets and liabilities are
classified on their initial recognition. Subsequent reclassifications are permitted only in restricted
circumstances.
Financial assets and financial liabilities at fair value through profit and loss comprise financial assets and
financial liabilities held for trading and those designated as such on initial recognition. Investments in shares
and other variable yield securities, units in unit trusts, and debt and other fixed income securities are
designated as at fair value through profit or loss on initial recognition, as they are managed on a fair value
basis in accordance with the Syndicate’s investment strategy.
Deposits with credit institutions, debtors, and accrued interest are classified as loans and receivables.
ii. Recognition
Financial instruments are recognised when the Syndicate becomes a party to the contractual provisions of
the instrument. Financial assets are derecognised if the Syndicate‘s contractual rights to the cash flows from
the financial assets expire or if the Syndicate transfers the financial asset to another party without retaining
control of substantially all risks and rewards of the asset. A financial liability is derecognised when its
contractual obligations are discharged, cancelled, or expire.
Regular way purchases and sales of financial assets are recognised and derecognised, as applicable, on the
trade date, i.e. the date that the Syndicate commits itself to purchase or sell the asset.
23
Notes (continued)
3. Significant accounting policies (continued)
G. Financial assets and liabilities (continued)
iii. Measurement
A financial asset or financial liability is measured initially at fair value plus, for a financial asset or financial
liability not at fair value through profit and loss, transaction costs that are directly attributable to its acquisition
or issue.
Financial assets at fair value through profit or loss are measured at fair value with fair value changes
recognised immediately in the Statement of profit or loss. Net gains or net losses on financial assets measured
at fair value through profit or loss includes foreign exchange gains/losses arising on their translation to the
functional currency but excludes interest and dividend income.
Loans and receivables and non-derivative financial liabilities are measured at amortised cost using the
effective interest method.
iv. Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not
at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence
demonstrates that a loss event has occurred after the initial recognition of an asset, and that the loss event
has an impact on the future cash flows on the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention
of the Syndicate about any significant financial difficulty of the issuer, or significant changes in the
technological, market, economic or legal environment in which the issuer operates.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
asset’s original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss recognised reduces directly the carrying amount of the impaired asset. All impairment
losses are recognised in the Statement of profit or loss. An impairment loss is reversed if the reversal can be
related objectively to an event occurring after the impairment loss was recognised. For financial assets
measured at amortised cost the reversal is recognised in the Statement of profit or loss.
v. Off-setting
Financial assets and financial liabilities are set off and the net amount presented in the statement of financial
position when, and only when, the Syndicate currently has a legal right to set off the amounts and intends
either to settle on a net basis or to realise the asset and settle the liability simultaneously.
H. Investment return
Investment income comprises interest income, dividends receivable and realised investment gains.
Investment return comprises investment income and movements in unrealised gains and losses on financial
instruments at fair value through profit or loss, less investment management expenses, interest payable,
realised losses and impairment losses.
24
Notes (continued)
3. Significant accounting policies (continued)
H. Investment return (continued)
Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend
date for equity securities. Interest income on financial assets measured at amortised cost is recognised using
the effective interest method. For the purpose of separately presenting investment income and unrealised
gains and losses for financial assets at fair value through profit or loss, interest income is recognised as it
accrues on the next coupon payment.
For investments at fair value through profit or loss, realised gains and losses represent the difference between
the net proceeds on disposal and the purchase price. For investments measured at amortised cost, realised
gains and losses represents the difference between the net proceeds on disposal and the latest carrying
value (or if acquired after the last reporting date, the purchase price).
Unrealised gains and losses on investments represent the difference between the fair value at the statement
of financial position date and their purchase price. Movements in unrealised investment gains and losses
comprise the increase/decrease in the reporting period in the value of the investments held at the reporting
date and the reversal of unrealised investment gains and losses recognised in earlier reporting periods in
respect of investment disposals in the current period, or the valuation at the beginning of the year; as well as
the reversal of previously recognised unrealised gains and losses in respect of investment disposed of in the
current period.
Investment return is initially recorded in the non-technical account. The return is transferred in full to the
general business technical account to reflect the investment return on funds supporting underwriting business.
I. Deposits with ceding undertakings
Deposits with ceding undertakings are funds retained by ceding (re)insurers and those held by Lloyd’s Brussels
on behalf of the Syndicate to settle Part VII claims. These funds are held at amortised cost in the balance
sheet.
J. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less
from the acquisition date that are subject to an insignificant risk of changes in fair value and are used by the
Syndicate in the management of its short-term commitments. Cash and cash equivalents are carried at
amortised cost in the statement of financial position.
K. 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 (currently at 20%) deducted from Syndicate
investment income is recoverable by managing agents and consequently the distribution made to members
or their members’ agents is gross of tax. Capital appreciation falls within trading income and is also distributed
gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included
in the statement of financial position under the heading ‘other debtors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
25
Notes (continued)
3. Significant accounting policies (continued)
L. Pension costs
Enstar (EU) Limited, which employs the staff utilised by EMAL, operates a defined contribution pension scheme.
Pension costs relating to staff performing Syndicate duties are charged to the Syndicate and included within
“net operating expenses”.
M. Deposits received from reinsurers
Deposits received from reinsurers includes other amounts received in advance from reinsurers against future
claims under the Syndicate’s reinsurance arrangements. These funds are held at amortised cost in the
balance sheet.
N. Operating expenses
Where expenses are incurred by the managing agent for the administration of the Syndicate, these expenses
are apportioned appropriately based on type of expense. Expenses that are incurred jointly are apportioned
between the managing agent and the Syndicate on bases depending on the amount of work performed,
resources used, and the volume of business transacted.
O. Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit commission and overriding
commission, are treated as a contribution to expenses.
P. Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract
holders. These are classified as debt instruments as they are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. Insurance debtors are measured at
amortised cost less any provision for impairments. Insurance creditors are stated at amortised cost. The
Syndicate does not have any debtors directly with policyholders, all transactions occur via an intermediary.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not
quoted on an active market. Reinsurance debtors are measured at amortised cost less any provision for
impairments. Reinsurance creditors are stated at amortised cost. Reinsurance debtors principally relate to
claims recoveries where the underlying claim has been settled and the recovery is due. Reinsurance creditors
are primarily premiums payable for reinsurance contracts and are recognised as an expense when due.
Other debtors principally consist of sundry debtors and are carried at amortised cost less any impairment
losses.
Other creditors principally consist of amounts due to related entities, profit commissions payable and other
sundry payables. These are stated at amortised cost determined using the effective interest rate method.
Q. Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant
insurance risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument.
All of the Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk
and therefore are recognised insurance contract.
26
Notes (continued)
4. Risk and capital management
Introduction and overview
This note presents information about the nature and extent of insurance and financial risks to which the
Syndicate is exposed, the managing agent’s objectives, policies and processes for measuring and managing
insurance and financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Board of EMAL sets the risk appetite annually as part of the Syndicate’s business planning and Individual
Capital Assessment process. The Board of the managing agent has established procedures to review and
update the risk register regularly and to monitor performance against the risk appetite using a series of key
risk indicators. The principal risks and uncertainties facing the Syndicate are as follows:
A. Insurance risk
Insurance risk includes the risks that a policy will be written for too low a premium or provide inappropriate
cover (underwriting risk), that the frequency or severity of insured events will be higher than expected (claims
risk), or that estimates of claims subsequently prove to be insufficient (reserving risk). Given that the business
of the Syndicate is reinsuring other Lloyd’s Syndicates, the remaining insurance risk is primarily claims and
reserving risk. Reserve adequacy is monitored through quarterly review.
i. Management of insurance risk
A key component of the management of underwriting risk for the Syndicate is a disciplined underwriting
strategy that is focused on writing quality business and not writing for volume.
Contracts can contain a number of features which help to manage the underwriting risk such as the use of
deductibles, or capping the maximum permitted loss, or number of claims (subject to local regulatory and
legislative requirements).
The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event,
which can include excess of loss, stop loss, quota share, and catastrophe reinsurance as well as adverse
development covers (“ADC’s”). Where an individual exposure is deemed surplus to the Syndicate’s appetite
additional facultative reinsurance may also be purchased.
Where considered appropriate, and in limited circumstances, the Syndicate may adopt a pro-active
approach to early settling long tail latent disease claims with the contract holder, although each settlement
is assessed on a case-by-case basis to ensure the contract holder is not disadvantaged by such an approach.
The Claims, Reinsurance and Reserving Committee oversees the management of reserving risk. The use of
proprietary and standardised modelling techniques, internal and external benchmarking, and the review of
claims development are all instrumental in mitigating reserving risk.
The Syndicate managing agent’s actuaries perform a reserving analysis on a quarterly basis liaising closely
with, claims and reinsurance technicians. The aim of this exercise is to produce a probability-weighted
average of the expected future cash outflows arising from the settlement of incurred claims. These projections
include an analysis of claims development compared to the previous ‘best estimate’ projections. The output
of the reserving analysis is reviewed by external consulting actuaries. The Claims, Reinsurance and Reserving
Committee performs a comprehensive review of the projections, both gross and net of reinsurance. Following
this review the Claims, Reinsurance and Reserving Committee makes recommendations to the Audit
Committee and the managing agent’s Board of Directors of the claims provisions to be established.
The claims development table In note number 18 shows the actual claims incurred to previous estimates for
the last 10 years.
27
Notes (continued)
4. Risk and capital management (continued)
A. Insurance risk (continued)
ii. Concentration of insurance risk
The Syndicate’s exposure to insurance risk is well diversified. The following table provides an analysis of the
geographical breakdown of its gross and net claims reserves by class of business.
2024
Accident
and Health
Marine,
aviation
and
transport
Fire and
other
damage
to
property
Third party
liability
Other
Re-
insurance
Total
Gross
£’000
£’000
£’000
£’000
£’000
£’000
£’000
United States
2,903
5,917
5,321
70,922
2,385
316,381
403,829
United
Kingdom
553
9,636
2,279
68,784
5,483
145,134
231,869
EEA
-
-
-
-
-
184,155
184,155
Other Non-
EEA
72
557
810
9,659
605
49,779
61,482
Australia &
New Zealand
81
614
4,628
23,763
2,128
22,345
53,559
Canada
6
364
3,971
22,764
338
45,261
72,704
Total
3,615
17,088
17,009
195,892
10,939
763,055
1,007,598
2023
Accident
and
Health
Marine,
aviation
and
transport
Fire and
other
damage
to
property
Third party
liability
Other
Re-
insurance
Total
Gross
£’000
£’000
£’000
£’000
£’000
£’000
£’000
United States
4,761
5,639
20,406
93,350
6,581
438,202
568,939
United
Kingdom
1,648
9,573
4,572
87,908
6,094
163,196
272,991
EEA
-
-
-
-
-
247,633
247,633
Other Non-
EEA
158
1,600
1,127
13,096
(451)
87,853
103,383
Australia &
New Zealand
22
663
5,247
41,234
4,459
26,345
77,970
Canada
5
804
2,854
23,255
353
63,377
90,648
Total
6,594
18,279
34,206
258,843
17,036
1,026,606
1,361,564
28
Notes (continued)
4. Risk and capital management (continued)
A. Insurance risk (continued)
ii. Concentration of insurance risk (continued)
2024
Accident
and
Health
Marine,
aviation
and
transport
Fire and
other
damage
to
property
Third party
liability
Other
Re-
insurance
Total
Net
£’000
£’000
£’000
£’000
£’000
£’000
£’000
United States
2,495
4,047
1,973
21,678
2,682
207,703
240,578
United
Kingdom
247
5,183
1,411
29,227
1,181
80,235
117,484
EEA
-
-
-
-
-
91,307
91,307
Other Non-
EEA
(11)
904
551
5,246
531
29,902
37,123
Australia &
New Zealand
42
447
1,647
10,480
1,497
11,007
25,120
Canada
5
300
1,948
13,404
167
23,822
39,646
Total
2,778
10,881
7,530
80,035
6,058
443,976
551,258
2023
Accident
and
Health
Marine,
aviation
and
transport
Fire and
other
damage
to
property
Third party
liability
Other
Re-
insurance
Total
Net
£’000
£’000
£’000
£’000
£’000
£’000
£’000
United States
4,708
513
16,109
27,743
(675)
306,398
354,796
United Kingdom
247
4,376
3,206
36,656
2,425
92,439
139,349
EEA
-
-
-
-
-
122,951
122,951
Other Non-EEA
130
1,604
417
6,497
(205)
48,763
57,206
Australia & New
Zealand
(7)
336
2,387
20,011
2,217
13,581
38,525
Canada
5
463
1,491
12,725
177
33,249
48,110
Total
5,083
7,292
23,610
103,632
3,939
617,381
760,937
iii. Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims
arising. This level of uncertainty varies between the classes of business and the nature of the risk being
underwritten and can arise from developments in case reserving for large losses and catastrophes, or from
changes in estimates of claims incurred but not reported (IBNR). A five per cent increase or decrease in the
ultimate cost of settling claims arising is considered to be reasonably possible at the reporting date.
29
Notes (continued)
4. Risk and capital management (continued)
iii. Sensitivity to insurance risk (continued)
A five percent increase or decrease in total net claims liabilities would have the following effect on profit or
loss and equity:
General insurance business sensitivities as at 31
December 2024
Sensitivity
5.0%
-5.0%
£’000
£’000
Claims outstanding – gross of reinsurance
50,072
(50,072)
Claims outstanding – net of reinsurance
27,419
(27,419)
General insurance business sensitivities as at 31
December 2023
Sensitivity
5.0%
-5.0%
£’000
£’000
Claims outstanding – gross of reinsurance
68,078
(68,078)
Claims outstanding – net of reinsurance
38,048
(38,048)
B. Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets
are sufficient to fund the obligations arising from its insurance contracts. The goal of the investment
management process is to optimise the risk-adjusted investment income and risk-adjusted total return by
investing in a diversified portfolio of securities, whilst ensuring that the assets and liabilities are managed on a
cash flow and duration basis.
a. Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual
obligation. The Syndicate is exposed to credit risk in respect of the following:
• debt securities;
• deposits with ceding undertakings
• reinsurers’ share of insurance liabilities;
• amounts due from intermediaries;
• amounts due from reinsurers in respect of settled claims;
• cash and cash equivalents; and
• other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
30
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
a. Credit risk (continued)
i. Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a single
counterparty, by reference to the credit rating of the counterparty. Financial assets are graded according to
current credit ratings issued by rating agencies such as Standard and Poor’s.
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single
counterparty and maintains an authorised list of acceptable cash counterparties.
ii. Exposure to credit risk
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the individual
business units as part of their credit control processes. The impact of reinsurer default is regularly assessed and
managed accordingly.
All intermediaries must meet minimum requirements established by the Syndicate. The credit ratings and
payment histories of intermediaries are monitored on a regular basis.
The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating information and by
internal investigations.
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The Syndicate does not hold any collateral as security or purchase any credit enhancements (such as
guarantees, credit derivatives and netting arrangements that do not qualify for offset).
The Syndicate has inherited the reinsurance programs of the reinsured Syndicates, so the risk is largely the
exposure to reinsurers on past reinsurance rather than new purchases of reinsurance. The Syndicate has an
intra-group reinsurance arrangement with Cavello Bay Reinsurance Limited (“CBRe”)for 50% of the net results
on the business originally written in the 2018 and 2019 underwriting years; as well as business written in the 2023
underwriting year which relates to the QBE LPT. This is collateralised at a minimum of 120% through a
combination of funds withheld and a letter of credit. During the year, the Syndicate also signed an ADC with
CBRe protecting its 2023 underwriting year.
The Syndicate holds deposits with ceding undertakings arising from the LPT with Hiscox and cash transferred
to Lloyd’s Europe following Lloyd’s Part VII transfer.
Any new purchase of reinsurance may only be carried out with the Claims, Reinsurance and Reserving
Committee’s prior approval of the related security.
The following table analyses the credit rating by investment grade of financial investments, reinsurers’ share
of technical provisions, debtors arising out of direct insurance and reinsurance operations, cash at bank and
in hand, and other debtors and accrued interest that are neither past due, nor impaired.
31
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
a. Credit risk (continued)
ii. Exposure to credit risk (continued)
2024
AAA
£’000
AA
£’000
A
£’000
BBB
£’000
Other
£’000
Not
rated
£’000
Total
£’000
Shares and other variable
yield securities and units in
unit trusts
-
-
-
-
-
245,773
245,773
Debt securities and other
fixed income securities
108,628
41,861
171,130
119,090
20,598
16,552
477,859
Loans and deposits with
credit institutions
-
-
-
-
-
1,598
1,598
Syndicate loans to central
fund
-
-
-
-
574
574
Other investments
18,651
4,547
3,603
2,682
2,809
9,647
41,939
Deposits with ceding
undertakings
-
-
68,102
-
-
-
68,102
Reinsurers’ share of claims
outstanding
-
23,977
411,615
15,965
10
1,497
453,064
Debtors arising out of direct
insurance operations
-
-
-
-
-
3,611
3,611
Cash at bank and in hand
-
-
-
-
-
19,593
19,593
Other debtors and accrued
interest
-
-
-
-
-
82,348
82,348
Total
127,279
70,385
654,450
137,737
23,417
381,193
1,394,461
2023
AAA
£’000
AA
£’000
A
£’000
BBB
£’000
Other
£’000
Not rated
£’000
Total
£’000
Shares and other variable yield
securities and units in unit trusts
-
-
-
-
-
369,604
369,604
Debt securities and other fixed
income securities
100,738
61,012
177,336
104,808
7,799
8,712
460,405
Loans and deposits with credit
institutions
-
-
2,644
-
-
-
2,644
Syndicate loans to central fund
-
-
-
-
1,340
1,340
Other investments*
38,885
6,976
4,681
4,705
3,504
9,071
67,822
Deposits with ceding
undertakings
-
-
141,551
-
-
-
141,551
Reinsurers’ share of claims
outstanding
-
34,526
148,817
13,816
429
403,039
600,627
Debtors arising out of direct
insurance operations
-
-
-
-
-
11,723
11,723
Cash at bank and in hand
-
729
9,251
-
-
-
9,980
Other debtors and accrued
interest
-
-
-
-
-
88,580
88,580
Total
139,623
103,243
484,280
123,329
11,732
892,069
1,754,276
*This line has been re-presented
32
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
a. Credit risk (continued)
iii. Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date. The Syndicate does not consider these debtors to be impaired.
These debtors have been individually assessed for impairment by considering information such as the
occurrence of significant changes in the counterparty’s financial position, patterns of historical payment
information and disputes with counterparties. An analysis of the carrying amounts of past due or impaired
debtors is presented in the table below.
An analysis of the carrying amounts of past due or impaired debtors is presented in the table below:
2024
Neither
past due
nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impair-
ment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and units in unit trusts
245,773
-
-
-
245,773
Debt securities and other fixed income
securities
477,859
-
-
-
477,859
Loans and deposits with credit institutions
1,598
-
-
-
1,598
Syndicate loans to central fund
574
-
-
-
574
Other investments
41,939
-
-
-
41,939
Deposits with ceding undertakings
68,102
-
-
-
68,102
Reinsurers’ share of claims outstanding
453,064
-
-
-
453,064
Debtors arising out of direct insurance
operations
3,611
-
-
-
3,611
Debtors arising out of reinsurance
operations
-
8,287
-
-
8,287
Other debtors, accrued interest, Unearned
Premium and Deferred Acquisition Costs
87,796
-
-
-
87,796
Cash at bank and in hand
19,593
-
-
-
19,593
Total
1,399,909
8,287
-
-
1,408,196
33
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
a. Credit risk (continued)
iii. Financial assets that are past due or impaired (continued)
2023
Neither
past due
nor
impaired
assets
Past due
but not
impaired
assets
Gross
value of
impaired
assets
Impair-
ment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and units in unit trusts
368,264
-
-
-
368,264
Debt securities and other fixed income
securities
461,746
-
-
-
461,746
Loans and deposits with credit institutions
2,644
-
-
-
2,644
Syndicate loans to central fund
1,340
-
-
-
1,340
Other investments*
67,822
-
-
-
67,822
Deposits with ceding undertakings
141,551
-
-
-
141,551
Reinsurers’ share of claims outstanding
600,627
-
-
-
600,627
Debtors arising out of direct insurance
operations
11,723
-
-
-
11,723
Debtors arising out of reinsurance
operations
-
20,778
-
-
20,778
Other debtors, accrued interest, Unearned
Premium and Deferred Acquisition Costs
97,424
-
-
-
97,424
Cash at bank and in hand
9,980
-
-
-
9,980
Total
1,763,121
20,778
0
0
1,783,899
*This line has been re-presented
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
2024
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1
year past
due
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of reinsurance operations
(2,853)
812
3,784
6,544
8,287
Total
(2,853)
812
3,784
6,544
8,287
2023
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1
year past
due
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of reinsurance operations
12,794
5,187
1,273
1,524
20,778
Total
12,794
5,187
1,273
1,524
20,778
34
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
b. Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its
insurance contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash
resources mainly from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i. Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Syndicate’s reputation. Cashflow forecasts are
regularly prepared and reviewed. The only source of additional funds currently available to the Syndicate is
a cash call though other options may be investigated in due course.
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance contracts, the contractual maturity
is the estimated date when the gross undiscounted contractually required cash flows will occur. For financial
assets and liabilities, it is the earliest date on which the gross undiscounted cash flows (including contractual
interest payments) could be paid assuming conditions are consistent with those at the reporting date.
2024
Undiscounted net cash flows
Carrying
amount
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
1,001,446
-
248,852
312,623
187,034
252,937
1,001,446
Derivative liabilities
-
-
-
-
-
-
-
Deposits received from
reinsurers
312,011
312,011
-
-
-
-
312,011
Creditors
57,185
-
57,185
-
-
-
57,185
Other liabilities
982
-
982
-
-
-
982
Total
1,371,625
312,011
307,019
312,623
187,034
252,937
1,371,625
35
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
b. Liquidity risk (continued)
i. Management of liquidity risk (continued)
2023
Undiscounted net cash flows
Carrying
amount
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
1,361,564
-
355,240
428,581
241,180
336,563
1,361,564
Derivative liabilities
-
-
-
-
-
-
-
Deposits received from
reinsurers
397,050
397,050
-
-
-
-
397,050
Creditors
47,277
-
47,277
-
-
-
47,277
Other liabilities
1,957
-
1,957
-
-
-
1,957
Total
1,807,848
397,050
404,474
428,581
241,180
336,563
1,807,848
c. Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior
year.
i. Management of market risks
EMAL’s Finance and Investment Committee meets quarterly to review the performance of the investments
held and the return achieved on the Syndicate’s cash deposits. Goldman Sachs Asset Management Limited
(“GSAM”) were appointed in August 2017 as an investment manager acting on behalf of the Syndicate. The
other key aspect of market risk is that the Syndicate could incur losses on foreign exchange movements as a
result of mismatches between the currencies in which assets and liabilities are denominated. This has been
mitigated by the currency matching of assets and liabilities as far as can be achieved allowing for regulatory
funding restrictions.
As at 31 December 2024, the Syndicate had no currency forward contracts.
ii. Interest rate risk
Interest rate risk is the risk that the value of future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
Interest rate risk arises primarily from the Syndicate’s financial investments, cash and overseas deposits. The
risk of changes in the fair value of these assets is managed by primarily investing in short-duration financial
investments and cash and cash equivalents. The EMAL Board monitors the duration and sensitivity to interest
rate movements of these assets on a regular basis.
36
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
c. Market risk (continued)
iii. Currency risk
The Syndicate writes business primarily in Sterling, Euros, US dollars, Canadian dollars and Australian dollars and
is therefore exposed to currency risk arising from fluctuations in the exchange rates of Sterling against these
currencies.
The foreign exchange policy is to maintain assets in the currency in which the cash flows from liabilities are to
be settled.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
2024
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
157,610
356,743
124,942
84,556
50,971
97
12,417
787,336
Reinsurers’ share of
technical provisions
149,628
159,578
90,960
33,945
21,125
1,104
456,340
Debtors
11,878
(3,322)
3,916
(260)
(313)
-
11,899
Other assets
39,036
68,968
33,639
2,677
1,904
-
146,224
Prepayments and
accrued income
2,544
1,987
919
562
385
-
6,397
Total assets
360,696
583,954
254,376
121,480
74,072
1,201
12,417
1,408,196
Technical provisions
295,223
418,145
177,125
72,276
43,066
1,763
1,007,598
Deposits received
from reinsurers
78,860
121,392
52,411
33,444
26,036
(132)
312,011
Creditors
23,807
29,263
3,738
442
(96)
31
57,185
Accruals and
deferred income
1,061
369
307
6
3
-
1,746
Total liabilities
398,951
569,169
233,581
106,168
69,009
1,662
-
1,378,540
Total capital and
reserves
(38,255)
14,785
20,795
15,312
5,063
(461)
12,417
29,656
37
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
c. Market risk (continued)
iii. Currency risk (continued)
2023
GBP
USD
EUR
CAD
AUD
JPY
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
236,173
423,456
222,207
95,396
66,135
-
-
1,043,367
Reinsurers’ share of
technical provisions
186,641
227,465
119,077
42,878
28,997
1,073
-
606,131
Debtors
40,034
72,265
(2,051)
4,125
1,795
1
-
116,169
Other assets
3,463
3,546
1,380
866
650
75
-
9,980
Prepayments and
accrued income
3,672
2,151
1,467
516
446
-
-
8,252
Total assets
469,983
728,883
342,080
143,781
98,023
1,149
-
1,783,899
Technical provisions
361,624
611,420
240,527
94,274
62,761
1,757
-
1,372,363
Deposits received
from reinsurers
99,087
142,700
88,748
37,171
29,076
268
-
397,050
Creditors
9,792
29,775
6,016
289
1,406
(1)
-
47,277
Accruals and
deferred income
1,372
2,099
(254)
6
8
-
-
3,231
Total liabilities
471,875
785,994
335,037
131,740
93,251
2,024
-
1,819,921
Total capital and
reserves
(1,892)
(57,111)
7,043
12,041
4,772
(875)
-
(36,022)
iv. Equity price risk
Equity price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), principally investment securities,
whether those changes are caused by factors specific to the individual financial instrument or its issuer, or
factors affecting all similar financial instruments traded in the market.
The Syndicate holds a limited portfolio of equities which are subject to equity price risk. This exposure benefits
the member through the enhanced longer-term returns on equities compared with debt securities.
Equity price risks are managed by setting and monitoring objectives and constraints on investments,
diversification plans and limits on investments.
v. Sensitivity analysis to market risks
An analysis of the Syndicate’s sensitivity to interest rate, currency and other price risk is presented in the table
below. The table shows the effect on profit or loss of reasonably possible changes in the relevant risk variable,
assuming that all other variables remain constant, if that change had occurred at the end of the reporting
period and had been applied to the risk exposures at that date.
38
Notes (continued)
4. Risk and capital management (continued)
B. Financial risk (continued)
c. Market risk (continued)
v. Sensitivity analysis to market risks (continued)
2024
2024
2023
2023
Impact on
results
before tax
Impact on
members’
balances
Impact on
results
before tax
Impact on
members’
balances
£’000
£’000
£’000
£’000
Interest rate risk
+ 50 basis points shift in yield curves
(7,871)
(7,871)
(8,474)
(8,474)
- 50 basis points shift in yield curves
7,871
7,871
8,474
8,474
Currency risk
10 percent increase in GBP/euro exchange rate
(2,080)
(2,080)
(704)
(704)
10 percent decrease in GBP/euro exchange rate
2,080
2,080
704
704
10 percent increase in GBP/US dollar exchange rate
(1,478)
(1,478)
5,711
5,711
10 percent decrease in GBP/US dollar exchange rate
1,478
1,478
(5,711)
(5,711)
Equity price risk
5 percent increase in equity prices
2,066
2,066
1,959
1,959
5 percent decrease in equity prices
(2,066)
(2,066)
(1,959)
(1,959)
The impact of the changes in the risk variables on Members’ balances is the same as the impact on results
before tax because the Syndicate recognises all changes in assets and liabilities in the Statement of profit or
loss.
A 10% increase/decrease in exchange rates, 5% increase/decrease in equity prices and a 50 basis point
increase/decrease in yield curves have been selected on the basis that these are considered to be
reasonably possible changes in these risk variables over the following year.
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain
unchanged. However, the occurrence of a change in a single market factor may lead to changes in other
market factors as a result of correlations.
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting
date and may vary at the time that any actual market movement occurs. As investment markets move past
pre-determined trigger points, action would be taken which would alter the Syndicate’s position.
C. Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate. The agency
seeks to manage this risk through the use of detailed procedure manuals and a structured programme of
compliance testing of processes and systems, including those of sub-contractors used. This includes cyber
security risk, which is the threat posed by the higher maturity of attack tools and methods and the increased
motivation of cyber attackers.
39
Notes (continued)
4. Risk and capital management (continued)
D. RITC risks
These are risks relating to our acquisitions, including our ability to evaluate opportunities, successfully price
acquisitions, address operational challenges and assimilate acquired portfolios into our internal control system
in order to maintain effective internal controls. The risk is mitigated through a thorough due diligence program
ahead of executing a reinsurance transaction.
E. Group risk
This is the risk that changes in group strategy or the fortunes of other group companies will lead to losses to
the Syndicate. This risk is reviewed quarterly as part of the regular review processes.
F. Regulatory risk
The managing agent is required to comply with the requirements of the Prudential Regulation Authority
(“PRA”), the Financial Conduct Authority (“FCA”) and Lloyd’s. Lloyd’s requirements include adherence to
oversight principles and 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 a regulatory change. The agency monitors regulatory developments and assesses their impact
on agency policy and procedures. In addition, the agency carries out a compliance monitoring programme.
G. Reputation risk
This is the risk that negative publicity regarding an institution’s business practices will lead to a loss of revenue
or litigation.
In the modern digital era, reputational risk and subsequent threat to our strong brand is becoming more
significant. Loss of confidence from customers or regulators could cause long-term harm to the business.
Reputation risk is included as a specific category in the Syndicate’s risk register and forms part of the regular
risk assessment process, facilitated by the Risk Management team.
H. Capital management
i. Capital Framework at Lloyd’s
Lloyd’s is a regulated undertaking and subject to supervision by the (PRA) under the Financial Services and
Markets Act 2000, and in accordance with the Solvency II Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to
ensure that Lloyd’s would comply with the Solvency II requirements, and beyond that to meet its own financial
strength, licence and ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at Syndicate
level as a starting point, the requirement to meet Solvency II and Lloyd’s capital requirements apply at overall
and member level only respectively, not at Syndicate level. Accordingly, the capital requirement in respect
of Syndicate 2008 is not disclosed in these financial statements.
40
Notes (continued)
H. Capital management (continued)
ii. Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital
Requirement (“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200
year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The
Syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one-
year time horizon (one-year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each
Syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
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 Syndicates on which it is participating but not other members’
shares. Accordingly, the capital requirements that Lloyd’s sets for each member operates on a similar basis.
Each member’s SCR shall thus be determined by the sum of the member’s share of the Syndicate SCR ‘to
ultimate’. Where a member participates on more than one Syndicate, a credit for diversification is provided
to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to
cover a 1 in 200 loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the
member’s capital requirement, known as the Economic Capital Assessment (“ECA”). The purpose of this uplift,
which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings
objectives. The capital uplift applied for 2024 was 35% (2023: 35%) of the member’s SCR ‘to ultimate’.
iii. Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that
member (Funds at Lloyd’s), assets held and managed within a Syndicate (Funds in Syndicate), or as the
member’s share of the members’ balances on each Syndicate on which it participates. Accordingly, all of
the assets less liabilities of the Syndicate, as represented in the members’ balances reported on the statement
of financial position on pages 16 and 17 are considered in the calculation of the members’ and Lloyd’s capital
requirements. In circumstances where the members’ balances are in deficit, they are added to the FAL
requirement and funded by the member.
41
Notes (continued)
5. Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
2024
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses
£’000
Re-
insurance
balance
£’000
Under-
writing
result
£’000
Direct insurance
Accident and health
547
1,413
12,938
(547)
(11,526)
2,278
Motor (third party
liability)
-
-
621
(1)
(219)
401
Motor (other classes)
27
-
446
(141)
(226)
79
Marine, aviation, and
transport
(32)
81
9,037
(2,584)
(6,713)
(179)
Fire and other
damage to property
633
1,170
5,670
(1,476)
(6,899)
(1,535)
Third party liability
(160)
(34)
13,251
(5,159)
(1,524)
6,534
Credit and suretyship
994
4,170
(3,339)
(366)
724
1,189
Total direct insurance
2,009
6,800
38,624
(10,274)
(26,383)
8,767
Reinsurance
acceptances
1,604
1,331
14,595
(8,987)
(5,536)
1,403
Total
3,613
8,131
53,219
(19,261)
(31,919)
10,170
2024
Gross
premiums
written
£’000
Gross
premiums
earned
£’000
Gross
claims
incurred
£’000
Gross
operating
expenses
£’000
Re-
insurance
balance
£’000
Under-
writing
result
£’000
Additional analysis
Fire and damage to
property of which is:
Specialities
-
-
-
-
(173)
(173)
Energy
-
-
-
-
-
-
Third party liability of
which is:
Energy
-
-
-
-
-
-
42
Notes (continued)
5. Analysis of underwriting result (continued)
2023
Gross
premiums
written
£’000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Re-
insurance
balance
£000
Under-
writing
result
£’000
Direct insurance
Accident and health
4,131
4,238
148
(195)
(5,678)
(1,487)
Motor (third party
liability)*
0
-
(112)
(11)
128
5
Motor (other classes)*
36
36
(238)
(82)
232
(52)
Marine, aviation, and
transport*
85,613
85,809
(109,641)
(1,418)
32,264
7,014
Fire and other
damage to property*
53,684
53,216
(92,354)
(1,147)
48,454
8,169
Third party liability*
9,216
7,436
(7,448)
(4,888)
(6,768)
(11,668)
Credit and suretyship*
6,824
52
(15,987)
(348)
10,310
(5,973)
Total direct insurance
159,504
150,787
(225,632)
(8,089)
78,942
(3,992)
Reinsurance
acceptances
287,932
300,445
(396,366)
20,491
18,798
(56,632)
Total
447,436
451,232
(621,998)
12,402
97,740
(60,624)
*This line has been re-presented
2023
Gross
premiums
written
£’000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Re-
insurance
balance
£000
Under-
writing
result
£’000
Additional analysis
Fire and damage to
property of which is:
Specialities
652
652
2,740
5
-
2,735
Energy
-
-
1,290
2
-
1,287
Third party liability of
which is:
Energy
-
-
-
-
-
-
No gains or losses were recognised in profit or loss during the year on buying reinsurance (2023: [nil]).
43
Notes (continued)
5. Analysis of underwriting result (continued)
The gross premiums written for direct insurance by underwriting location of risk is presented in the table
below:
2024
2023
£’000
£’000
United Kingdom
2,009
159,504
Total gross premiums written
2,009
159,504
6. Net operating expenses/(income)
2024
2023
£’000
£’000
Acquisition costs*
2,089
(10,269)
Change in deferred acquisition costs*
1,426
3,107
Administrative expenses*
15,155
7,854
Members’ standard personal expenses*
1,085
1,045
Reinsurance commissions and profit participation*
(494)
(1,851)
Net operating expenses/(income)
19,261
(114)
*This line has been re-presented
2024
2023
£’000
£’000
Total commission for direct insurance business
-
-
Administrative expenses include:
2024
2023
£’000
£’000
Auditors’ remuneration:
fees payable to the Syndicate’s auditor for the audit of
these financial statements*
782
771
fees payable to the Syndicate’s auditor and its
associates in respect of other services pursuant to
legislation*
215
322
Total
997
1,093
*This line has been re-presented
In 2024, a fixed fee of £1.7m (2023: £1.6m) was charged to the Syndicate by the managing agent. The fee
was based on 0.5% of the Syndicate’s ECA. The Syndicate then recharged 70% of this fee to the managing
agent as an estimate of the managing agent’s expenses incurred by the Syndicate. This amount is included
within “net operating expenses”. In 2024, the Syndicate transferred £5.3m (2023: £6.8m) of its expenses to the
technical account. These expenses are related to the unallocated loss adjustment expenses (“ULAE”) paid
during the year.
44
Notes (continued)
7. Key management personnel compensation
The directors of Enstar Managing Agency Limited received the following aggregate remuneration charged
to the Syndicate and included within net operating expenses:
2024
2023
£’000
£’000
Directors’ emoluments
1,015
1,055
Contribution to pension schemes
79
80
Total
1,094
1,135
The amounts charged to the Syndicate by its managing agent in respect of emoluments paid to the
Syndicate’s run-off manager in the financial year were:
2024
2023
£’000
£’000
Emoluments
217
237
Contribution to pension schemes
16
24
Total
233
261
8. Staff numbers and costs
During 2024, all staff continued to be employed on behalf of EMAL by Enstar (EU) Limited (“EEUL”). EEUL
charges EMAL a management fee that covers all salary, pension, accommodation, computer and other
costs as a single amount. The total amount of EEUL management fees recharged to EMAL and the Syndicate
for the year amounts to £24.3m (2023: £23.8m).
The average number of persons employed by the Service Company, but working for the Syndicate during
the year, analysed by category, was as follows:
Number of
employees
Number of
employees
2024
2023
Administration and finance*
86
80
Underwriting
1
1
Claims
36
38
Investments*
2
2
Total
125
121
*This line has been re-presented
45
Notes (continued)
8. Staff numbers and costs (continued)
The following amounts were recharged by the managing agency to the Syndicate in respect of payroll costs:
2024
2023
£’000
£’000
Wages and salaries
10,940
10,392
Other pension costs
1,181
1,159
Other short-term and long-term incentive costs
7,215
6,916
Total
19,336
18,467
9. Investment return
The investment return transferred to the technical account from the non-technical account comprises the
following:
2024
2023
£’000
£’000
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income*
14,985
16,722
Dividend income*
-
-
Interest on cash at bank*
1,930
1,912
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments*
19,742
1,284
Losses on the realisation of investments*
(2,785)
(7,355)
Unrealised gains on investments*
11,221
29,990
Unrealised losses on the investments*
(16,441)
(1,054)
Investment management expenses*
(413)
(175)
Total investment return
28,239
41,323
Transferred to the technical account from the non-technical account
28,239
41,323
*This line has been re-presented
10. Distribution and open years of account
A distribution to SGL1 of £31.5m will be proposed in relation to the closing year of account (2022) (2023: £25.5m
collection in relation to the closing year of account (2021)).
The table below shows the current reporting year result of the years of account remaining open after the
three year period:
2024
2023
£’000
£’000
2022
31,526
(4,516)
2023
(1,870)
(5,980)
2024
N/A
N/A
46
Notes (continued)
11. Financial investments
As at 31 December 2024 and 31 December 2023 all financial assets were measured at fair value through profit
and loss.
Carrying
value
Carrying
value
Cost
Cost
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units
in unit trusts*
245,773
368,264
253,233
345,106
Debt securities and other fixed income securities
477,859
461,746
487,880
470,392
Loans and deposits with credit institutions
1,598
2,644
1,598
2,644
Syndicate loans to central fund*
574
1,340
574
1,340
Other investments*
41,939
67,822
41,939
67,822
Total financial investments
767,743
901,816
785,224
887,304
*This line has been re-presented
2024
2023
£’000
£’000
Financial assets measured at fair value through profit or loss
767,743
901,816
Financial assets measured at fair value as available for sale
-
-
Financial assets measured at amortised cost
-
-
Total financial investments
767,743
901,816
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1 – financial assets that are measured by reference to published quotes in an active market. A
financial instrument is regarded as quoted in an active market if quoted prices are readily and
regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory
agency and those prices represent actual and regularly occurring market transactions on an arm’s
length basis.
• Level 2 – financial assets measured using a valuation technique based on assumptions that are
supported by prices from observable current market transactions. For example, assets for which pricing
is obtained via pricing services but where prices have not been determined in an active market,
financial assets with fair values based on broker quotes, investments in private equity funds with fair
values obtained via fund managers and assets that are valued using the Syndicate’s own models
whereby the significant inputs into the assumptions are market observable.
• Level 3 – financial assets measured using a valuation technique (model) based on assumptions that
are neither supported by prices from observable current market transactions in the same instrument
nor are they based on available market data.
Therefore, unobservable inputs reflect the Syndicate’s own assumptions about the assumptions that market
participants would use in pricing the asset or liability (including assumptions about risk). These inputs are
developed based on the best information available, which might include the Syndicate’s own data.
47
Notes (continued)
11. Financial investments (continued)
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the
reporting date by its level in the fair value hierarchy.
2024
Level 1
Level 2
Level 3
Assets held
at
amortised
cost
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities and units in unit trusts
77,313
24,827
143,633
-
245,773
Debt securities and other fixed
income securities
-
477,859
-
-
477,859
Loans and deposits with credit
institutions
-
1,598
-
-
1,598
Syndicate loans to central fund
-
574
-
-
574
Other investments
-
41,939
-
-
41,939
Total financial investments
77,313
546,797
143,633
-
767,743
2023
Level 1
Level 2
Level 3
Assets held
at
amortised
cost
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities and units in unit trusts*
37,948
258,986
71,330
-
368,264
Debt securities and other fixed
income securities
-
461,746
-
-
461,746
Loans and deposits with credit
institutions
-
2,644
-
-
2,644
Syndicate loans to central fund*
-
1,340
-
-
1,340
Other investments*
-
67,822
-
-
67,822
Total financial investments
37,948
792,538
71,330
-
901,816
*This line has been re-presented
Information on the methods and assumptions used to determine fair values for each major category of
financial instrument measured at fair value is provided below.
48
Notes (continued)
11. Financial investments (continued)
Equity instruments listed on a recognised exchange are valued using prices sourced from the primary
exchange on which they are listed. Units in unit trusts are valued using the latest unit price or share price
provided by the unit trust. Shares and other variable securities and units in unit trusts are generally categorised
as level 1 in the fair value hierarchy except where they are not actively traded, in which case they are
generally measured on prices of recent transactions in the same instrument. The Syndicate has no exposure
to hedge funds.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will
often determine prices by consolidating prices of recent trades for identical or similar securities obtained from
a panel of market makers into a composite price. The pricing service may make adjustments for the elapsed
time from a trade date to the valuation date to take into account available market information. Lacking
recently reported trades, pricing vendors will use modelling techniques to determine a security price.
Some government and supranational securities are listed on recognised exchanges and are generally
classified as level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are
generally based on composite prices of recent trades in the same instrument and are generally classified as
level 2 in the fair value hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or are
traded in an established over-the-counter market are also mainly valued using composite prices. Where
prices are based on multiple quotes and those quotes are based on actual recent transactions in the same
instrument the securities are classified as level 2, otherwise they are classified as level 3 in the fair value
hierarchy.
The fair values for all securities in the fixed maturity investments portfolio are independently provided by the
investment accounting service providers, investment managers and investment custodians, each of which
utilise internationally recognised independent pricing services. The unadjusted price provided by the
investment accounting service providers, investment managers or investment custodians is recorded and
validated through a process that includes, but is not limited to:
(i) comparison of prices against alternative pricing sources;
(ii) quantitative analysis (e.g. comparing the quarterly return for each managed portfolio to its target
benchmark);
(iii) evaluation of methodologies used by external parties to estimate fair value, including a review of the
inputs used for pricing;
(iv) comparing the price to our knowledge of the current investment market.
The Syndicate has on-going due diligence processes with respect to the other investments carried at fair
value and their managers. These processes are designed to assist in assessing the quality of information
provided by, or on behalf of, each fund and in determining whether such information continues to be reliable
or whether further review is warranted. Certain funds do not provide full transparency of their underlying
holdings; however, the Syndicate obtains the audited financial statements for funds annually, and regularly
reviews and discusses the fund performance with the fund managers to corroborate the reasonableness of
the reported net asset values.
At the reporting date all debt instruments were valued using valuation techniques based on observable
market data.
49
Notes (continued)
12. Debtors arising out of direct insurance operations
2024
2023
£’000
£’000
Amounts due within one year
3,611
11,723
Total
3,611
11,723
13. Debtors arising out of reinsurance operations
2024
2023
£’000
£’000
Amounts due within one year
8,287
20,778
Total
8,287
20,778
14. Other debtors
2024
2023
£’000
£’000
Other related party balances (non-syndicate)*
4,011
3,158
Other*
73,052
80,510
Total
77,063
83,668
*This line has been re-presented
A further breakdown of other debtors is provided in the table below:
2024
2023
£’000
£’000
Lloyd’s central accounting debtors
30,092
40,613
Loss funds
21,644
24,120
Investment receivables
17,503
-
US federal income tax
-
10,851
Other
3,813
4,926
Total
73,052
80,510
50
Notes (continued)
15. Deferred acquisition costs
The table below shows changes in deferred acquisition costs assets from the beginning of the period to the
end of the period:
2024
2024
2024
2023
2023
2023
Gross
Re-
insurance
Net
Gross
Re-
insurance
Net
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 1 January
3,340
(1,274)
2,066
6,651
(3,145)
3,506
Incurred deferred
acquisition costs
-
-
-
3,169
(779)
2,391
Amortised deferred
acquisition costs
(1,426)
494
(932)
(6,277)
2,624
(3,652)
Foreign exchange
movements
(39)
17
(22)
(203)
26
(179)
Other
-
-
-
-
-
Balance at 31 December
1,875
(763)
1,112
3,340
(1,274)
2,066
16. Tangible fixed assets
The Syndicate does not have any tangible fixed assets
51
Notes (continued)
17. Claims development
Claims development is shown in the tables below, both gross and net of reinsurance ceded, on an
underwriting year basis. Balances have been translated at exchange rates prevailing at 31 December 2024
in all cases.
The calendar year developments in the tables above include the impact of reserves newly acquired through
RITC and LPT transactions.
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Estimate of ultimate gross claims
At end of underwriting year 64,515 72,587 121,378 102,089 55,412 83,037 1,628,645 - 355,931 - 2,483,594
One year later 109,901 147,537 241,414 185,243 107,046 88,963 1,660,731 - 353,854 - 2,894,689
Two years later 120,047 166,367 265,607 205,674 116,808 64,256 1,706,596 - - - 2,645,355
Three years later 1,021,213 735,975 266,397 203,613 113,262 72,886 1,695,945 - - - 4,109,291
Four years later 1,198,785 761,280 269,852 281,483 133,056 57,942 - - - - 2,702,398
Five years later 1,204,279 770,611 386,593 285,075 112,602 - - - - - 2,759,160
Six years later 1,199,093 855,159 395,840 282,083 - - - - - - 2,732,175
Seven years later 1,209,789 859,105 388,942 - - - - - - - 2,457,836
Eight years later 1,252,031 863,644 - - - - - - - - 2,115,675
Nine years later 1,243,396 - - - - - - - - - 1,243,396
Less gross claims paid 1,158,265 783,919 354,806 235,502 96,405 45,330 1,568,132 - 142,165 - 4,384,524
Gross ultimate claims reserve 85,131 79,725 34,136 46,581 16,197 12,612 127,813 - 211,689 - 613,884
Provision in respect of prior years 387,562 - - - - - - - - - 387,562
Gross claims reserves 472,693 79,725 34,136 46,581 16,197 12,612 127,813 - 211,689 - 1,001,446
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Estimate of ultimate gross claims
at end of underwriting year 55,480 67,164 78,976 64,165 49,271 44,813 1,628,645 - 177,965 - 2,166,479
One year later 99,340 138,048 146,779 108,232 90,111 63,919 1,660,731 - 176,927 - 2,484,087
Two years later 106,411 152,616 158,104 116,756 96,156 57,681 1,706,596 - - - 2,394,320
Three years later 893,864 531,748 160,868 114,100 92,266 63,424 1,695,945 - - - 3,552,215
Four years later 862,684 558,952 161,839 172,247 111,188 59,005 - - - - 1,925,915
Five years later 899,250 569,227 232,358 228,162 106,812 - - - - - 2,035,809
Six years later 920,431 627,955 320,349 280,444 - - - - - - 2,149,179
Seven years later 945,153 631,801 353,864 - - - - - - - 1,930,818
Eight years later 983,691 728,997 - - - - - - - - 1,712,688
Nine years later 1,082,544 - - - - - - - - - 1,082,544
Less net claims paid 1,041,409 696,425 330,347 255,744 94,610 47,010 1,568,132 - 71,083 - 4,104,760
Net ultimate claims reserve 41,135 32,572 23,517 24,700 12,202 11,995 127,813 - 105,844 - 379,778
Provision in respect of prior years 168,604 - - - - - - - - - 168,604
Net claims reserves 209,739 32,572 23,517 24,700 12,202 11,995 127,813 - 105,844 - 548,382
Pure underwriting year - Gross
Pure underwriting year - Net
52
Notes (continued)
18. Technical provisions
2024
2024
2024
2023
2023
2023
Gross
Re-
insurance
Net
Gross
Re-
insurance
Net
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding:
Claims notified
1,001,897
(473,641)
528,256
941,338
(480,175)
461,163
Claims incurred but not
reported
359,667
(126,986)
232,681
244,921
(56,882)
188,039
Balance at 1 January
1,361,564
(600,627)
760,937
1,186,259
(537,057)
649,202
RITC take on reserves
-
-
-
234,962
(76,950)
158,012
Change in prior year
provisions
(52,936)
14,253
(38,683)
388,016
(164,341)
223,675
Claims paid during the
year
(295,724)
127,328
(168,396)
(417,270)
173,051
(244,219)
Effect of movements in
exchange rates
(11,458)
5,982
(5,476)
(30,403)
4,670
(25,733)
Balance at 31
December
1,001,446
(453,064)
548,382
1,361,564
(600,627)
760,937
Claims notified
759,740
(355,432)
404,308
1,001,897
(473,641)
528,256
Claims incurred but not
reported
241,706
(97,632)
144,074
359,667
(126,986)
232,681
Balance at 31
December
1,001,446
(453,064)
548,382
1,361,564
(600,627)
760,937
Unearned premiums
Balance at 1 January
10,799
(5,504)
5,295
15,147
(7,559)
7,588
Premiums written during
the year
3,613
(15,519)
(11,906)
447,436
(141,748)
305,688
Premiums earned during
the year
(8,131)
17,664
9,533
(451,232)
143,551
(307,681)
Effect of movements in
exchange rate
(129)
83
(46)
(552)
252
(300)
Balance at 31
December
6,152
(3,276)
2,876
10,799
(5,504)
5,295
The table above shows changes in the insurance contract liabilities and assets from the beginning of the
period to the end of the period.
53
Notes (continued)
19. Provision for other risks
The Syndicate is not reporting any other provision for other risks.
20. Discounted claims
The Syndicate does not have any discounted claim provisions.
21. Creditors arising out of insurance operations
Creditors arising out of insurance operations
2024
2023
£’000
£’000
Due within one year
2,890
-
Total financial liabilities at amortised cost
2,890
-
22. Creditors arising out of reinsurance operations
Creditors arising out of reinsurance operations
2024
2023
£’000
£’000
Due within one year
15,410
18,883
Total financial liabilities at amortised cost
15,410
18,883
23. Other creditors
2024
2023
£’000
£’000
Profit Commissions
20,976
18,885
Other related party balances (non-syndicates)
8,349
5,466
Other liabilities
9,560
4,043
Total financial liabilities at amortised cost
38,885
28,394
24. Cash and cash equivalents
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in
the management of its short-term commitments are included in cash and cash equivalents.
2024
2023
restated
£’000
£’000
Cash at bank and in hand
19,593
9,980
Deposits with credit institutions
1,598
2,644
Other cash and cash equivalents
21,658
16,233
Total cash and cash equivalents
42,849
28,857
Other cash and cash equivalents has been restated to include additional short-term deposits reported within
financial investments on the balance sheet.
54
Notes (continued)
24. Cash and cash equivalents (continued)
Included within cash and cash equivalents are the following amounts which are not available for use by the
Syndicate. The majority is due to sanctions in place against Russia, with immaterial amounts identified within
the Overseas Deposits held by the Syndicate.
2024
2023
£’000
£’000
Cash at bank and in hand
2,933
2,919
Total cash and cash equivalents not available for use by the
syndicate
2,933
2,919
25. Analysis of net debt
The Syndicate does not have any debt to report.
26. Related parties
The main component of operating expenses was the Enstar (EU) limited, management fees of £24.3m (2023:
£23.8m) as shown in note 6.
At 31 December 2024, Syndicate 2008 owed £7.5m to EMAL (2023: £4.1m). No amount of profit commission is
due to EMAL at 31 December 2024 (2023: £Nil).
B Dimmock, M Heap and S Hextall are directors of SGL No.1 Limited which provides 100% of the nominal stamp
capacity of the Syndicate. The Syndicate has stamp arranged for the 2025 underwriting year of £4.5m (2024
underwriting year: £nil).
In 2008, the Syndicate ceded to Fitzwilliam (SAC) Insurance Limited (“FW”) a 100% quota share in respect of
the reinsurance to close of Syndicates 588 and 861. In 2024, Syndicates 588 and 861 were RITC'd to Syndicate
2003 and the quota share was commuted. The amount owing to FW at 31 December 2024 is therefore £nil
(2023: £5.1m).
The Syndicate cedes 100% of all profits or losses in relation to the unexpired risks on Syndicate 2243 and a
portion of the business on Syndicate 1301 to StarStone Insurance SE (“SISE”). As at 31 December 2024, the
amount owed by SISE was £5.0m (2023: £5.2m).
The Syndicate also has an intra-group reinsurance arrangement with Cavello Bay Reinsurance Ltd (“Cavello
Bay”) for 50% of the net results on the 2018 and 2019 underwriting years. It is collateralised at 120% through a
combination of funds withheld and a letter of credit. As at 31 December 2024, the amount owed by Cavello
Bay was £308.6m and this amount was supported by funds withheld amounting to £308.0m plus letter of credit
amounting to £130.4m.
27. Off-balance sheet items
There are no off-balance sheet items to report.
55
Notes (continued)
28. Post balance sheet events
On 13 January 2025, Syndicate 2008 agreed a ground-up loss portfolio transfer (“LPT”) with Atrium Syndicate
609, managed by Atrium Underwriters Limited. The transaction involves Atrium Syndicate 609’s discontinued
portfolios, comprising Marine Treaty Reinsurance, Property Treaty Reinsurance and US Contractors General
Liability.
Under the terms of the LPT, Atrium Syndicate 609 will cede net loss reserves of approximately £157m, based
on Atrium’s carried reserves as at Q3 2024, to Syndicate 2008. The reinsurance relates to business underwritten
in the 2023 and prior years of account.
The transaction completed on 4 March 2025.
29. Contingencies and commitments
There are no contingencies and commitments to report.
30. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions.
2024
2024
2024
2023
2023
2023
Start of
period rate
End of
period rate
Average
rate
Start of
period rate
End of
period rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
31. Prior year restatement
The following restatements have been made as the result of a reclassification of short-term deposits with credit
institutions with maturities of three months or less that are used by the Syndicate in the management of its
short-term commitments are included in cash and cash equivalents.
(i) Statement of cash flows
2023
As reported
Restated
£’000
£’000
Cash Flow from investing activities
Other - removal of movement on cash equivalents
(109,497)
(107,683)
Cash and cash equivalents at the beginning of the year
35,694
53,326
Foreign exchange on cash and cash equivalents
(2,317)
(2,887)
Cash and cash equivalents at the end of the year
9,980
28,857
56
Notes (continued)
31. Prior year restatement (continued)
(ii) Cash and cash equivalents (note 24)
2023
As Reported
Restated
£’000
£’000
Cash at bank and in hand
9,980
9,980
Deposits with credit institutions
2,644
2,644
Other cash and cash equivalents
-
16,233
Total cash and cash equivalents
12,624
28,857
32. Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyds (“FAL”).
These funds are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet
participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is
determined by Lloyd’s based on Prudential Regulatory Authority requirements and resource criteria. The
determination of FAL has regard to a number of factors including the nature and amount of risk to be
underwritten by the member and the assessment of the reserving risk in respect of business that has been
underwritten. Since FAL is not under the management of the managing agent, no amount has been shown
in these financial statements by way of such capital resources. However, the managing agent is able to make
a call on the member’s FAL to meet liquidity requirements or to settle losses.
33. Ultimate parent company
The ultimate parent company and controlling entity of EMAL is Enstar Group Limited, incorporated in
Bermuda.
The annual U.S. Securities and Exchange Commission filing of Enstar Group Limited may be obtained from:
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
U.S.A.
www.sec.gov
