Important information about Syndicate Reports and Accounts

Access to this document is restricted to persons who have given the certification set forth below. If this

document has been forwarded to you and you have not been asked to give the certification, please be

aware that you are only permitted to access it if you are able to give the certification.

The Syndicate Reports and A

Syndicate Accounting Byelaw (No. 8 of 2005), are being provided for

informational purposes only. The Syndicate Reports and A

Syndicate Reports and Accounts is

any syndicate of

syndicate

that past performance of a syndicate in any syndicate year is not predictive of the related syndicate

performance in any subsequent syndicate year.

You acknowledge and agree to the foregoing as a condition of your accessing the Syndicate Reports and

Accounts. You also agree that you will not provide any person with a copy of any Syndicate Report and

Accounts without also providing them with a copy of this acknowledgment and agreement, by which they

will also be bound.

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Syndicate 2357

Annual Report and Financial Statements

31 December 2024

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Syndicate 2357

Annual Report and Financial Statements

31 December 2024

Contents

Directors and administration

3

4

8

9

Profit and loss account

13

14

Balance sheet

15

Statement of cash flows

17

Notes to the financial statements

18

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2024 Annual Report and Financial Statements

Directors and administration

Managing agent

Nephila Syndicate Management Limited

Executive directors

A G Beatty

J A H G Cartwright

S G Drysdale

Appointed 5 January 2024

A J Wilkinson

Appointed 8 February 2024

Non-executive directors

R J S Bucknall

W A Guffey

T A Riddell

J E Street

L Taylor

office

Walsingham House

35 Seething Lane

London

EC3N 4AH

11103467

Active underwriter

S G Drysdale

Bankers

Citibank N.A.

Investment managers

Amundi UK Limited

41 Lothbury

London

EC2R 7HF

Registered auditor

Deloitte LLP

1 New Street Square

London

EC4A 3HQ

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2024 Annual Report and Financial Statements

Introduction

The directors of Nephila Syndicate Management Limited

present their annual report, which

incorporates the strategic review, together with the audited financial statements for the year ended 31

December 2024.

Syndicate and Aggregate Accounts) Regulation 2008 and FRS 102 and FRS 103, being applicable Accounting

Standards in the United Kingdom, and in accordance with the provisions of Schedule 3 of the Large and

Medium-sized Companies and Groups (Accounts and Reports) Regulations relating to insurance companies.

Principal activity and review of the business

NSML is the managing agent for

whose principal activity is underwriting

.

The Syndicate writes predominately worldwide property reinsurance and MGA insurance business, primarily

in the United States. The Syndicate also writes climate reinsurance business with risks typically outside the

United States.

Results

The Syndicate reported a $159.0m profit for the 2024 financial year (2023: profit of $311.6m). The calendar

year combined ratio was 72.7% (2023: 25.5%).

The 2023 calendar year results benefitted from benign catastrophe experience particularly relating to US

windstorms. The 2024 calendar year results include the impact of Hurricanes Helene and Milton.

Gross premiums written by class of business for the calendar year were as follows:

2024

2023

Reinsurance

564,773

392,483

Marine, aviation, and transport

1,094

250

Fire and other damage to property

43,653

40,199

Total

609,520

432,932

The Syndicate's key performance indicators for the financial year were as follows:

2024

2023

Gross premiums written

609,520

432,932

Profit for the financial year

159,023

311,600

Loss ratio

59.5%

10.6%

Expense ratio

13.2%

14.9%

Combined ratio

72.7%

25.5%

The combined ratio is the ratio of net claims incurred and net operating expenses to net premiums earned.

Lower ratios represent better performance.

The

for the 2022 closed year of account and the forecast

result for the 2023 year of account are as follows:

2022

YOA

Closed

2023

YOA

Open

2024

YOA

Open

Capacity

1

524,284

475,000

541,250

285,194

195,642

*

Return on capacity (%)

54.4%

41.2%

*

*A formal forecast range for the 2024 year of account is not released at the time of publishing.

1

Capacity, a GBP measure, has been stated above at 2024 year end foreign exchange rates

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2024 Annual Report and Financial Statements

continued

Principal risks and uncertainties

The NSML Board has overall responsibility and accountability for the establishment and oversight of the

risk management framework.

The Board has responsibility for identifying and assessing all material

The

principal risks and uncertainties to which the Syndicate is exposed are set out below.

Insurance risk

Insurance risk includes the risk associated with inaccurate or inadequate pricing of insurance policies,

inappropriate or poorly controlled underwriting guidelines or authority limits (underwriting risk), higher

frequency or severity of claims experience (claims risk), or inadequate or insufficient loss reserving (reserving

risk).

The NSML Board manages insurance risk through the approved business plan, which sets out targets for

volumes, pricing, line sizes and exposure metrics by class of business. The Board has in place controls and

governance processes designed to monitor performance against the business plan through the year.

Credit risk

Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual

obligation.

The notable exposure for the Syndicate is reinsurance counterparty risk which is the risk of default

by one or more of the Syndicate

policy is that the Syndicate will

reinsure with approved reinsurers, either of high credit rating (rating of A- or better from an external credit

rating agency) or supported by collateralisation, where required. Where a reinsurer does not meet these

criteria, the Syndicate Management Committee is required to approve them individually before business can

be placed with them.

Market risk

The Syndicate is exposed to market risk through fluctuations in interest rates or exchange rates. Exposure to

foreign exchange movements arises where there are mismatches between assets and liabilities within the

currencies in which the Syndicate transacts

expenditure in the core currencies in which they are received or paid. Any surplus or deficit arising as a result

of this policy is subject to review by the Executive Committee and where required currency trades are

performed with the aim of eliminating currency mismatches.

rough its investment portfolio. NSML seeks to

minimise this risk by investing only in fixed interest securities or high-quality floating rate notes.

Liquidity risk

Liquidity risk is the risk that the Syndicate will not be able to meet its obligations as they fall due, owing to a

shortfall in cash.

To mitigate this risk, all funds are held in cash or in highly liquid money market funds or short

duration US treasury bills. Cash flow projections, under both normal and stressed conditions, are reviewed on

a regular basis to identify potential liquidity strains to allow timely remedial action to be taken.

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2024 Annual Report and Financial Statements

continued

Principal risks and uncertainties

continued

Operational risk

This is the risk that errors caused by people, processes, systems and external events lead to losses to the

Syndicate.

NSML seeks to manage this risk using an operational risk and control framework throughout the

Syndicate, detailed procedures manuals and a structured programme of testing of processes and systems by

Risk Management and Internal Audit.

Business continuity and disaster recovery and succession plans are in

place and are regularly updated and tested.

The Syndicate has articulated its climate risk appetite and there are clear tolerances in place to actively

manage exposures; these are monitored by and reported to the Executive Committee and the Board

regularly. The impact of climate risk is an important part of our underwriting risk assessment and pricing for our

underwriting portfolio. The Syndicate has considered the principles of the PRA 3/19 Supervisory Statement on

financial risks arising from climate change and implemented them into its processes where relevant.

The work

performed to date, excluding the direct impact on the underwriting portfolio, has not resulted in any material

non-underwriting impact

climate related risks have on the business.

The Syndicate will continue to monitor the climate risk landscape

throughout 2025 and respond to regulations where appropriate.

Regulatory risk is the risk that regulatory requirements are not identified and/or implemented or are

misinterpreted and/or not complied with resulting in regulatory penalties. NSML is required to comply with the

requirements of the Financial Conduct Autho

monitoring business

activity and regulatory developments and assesses any impact on NSML.

The Syndicate has no appetite for failing to treat customers fairly.

The Syndicate manages and monitors its

conduct risk through a suite of risk indicators and reporting metrics as part of its documented conduct risk

framework.

Group / Strategic risks

Group Risk is the risk of contagion that arises from being associated with key stakeholders and the impact that

activities and events that occur within other connected or third parties have on the business.

Strategic risk covers the risks faced by the Syndicate due to changes in underlying strategy of the business or

that of its key stakeholders (including strategic conflicts of interest). These risks are mitigated through robust

performance and operations by the

Board and its sub-committees.

Environment, Social & Governance: Climate change

The Syndicate is exposed to both climate related risk and opportunities.

The two major categories of risk being

physical risk and transition risk.

Physical risks are those relating to the physical impacts of climate change such

as increased frequency and severity of climate related events or longer-term shifts in climate patterns.

Transition risks are those relating to the transition to a lower carbon economy and include risks such as policy

and legal risk, technology risk and reputation risk.

The Syndicate underwrites a portfolio of natural catastrophe

and climate risks and is therefore more significantly impacted by physical risk, whilst also recognising and

giving due consideration to transition risk.

Transition risk exposures on the asset side of th

sheet from climate change are

notwithstanding, the securities in the investment portfolio are regularly reviewed for any potential climate risk

exposures.

effectively by validating and calibrating catastrophe risk models through an in-house data and research

team, making adjustments to catastrophe risk models t

climate change and risks that are not captured in vendor models.

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2024 Annual Report and Financial Statements

continued

Principal risks and uncertainties

continued

Environment, Social & Governance: Climate change - continued

The Syndicate has developed a policy for Environmental, Social and Governance (ESG) which outlines the

approach to the management of ESG impacts whilst considering relevant stakeholders, namely employees,

customers, and the communities where it operates and transacts business. The Syndicate continues to

enhance its processes for the evaluation of ESG factors in its underwriting approach and wider business

operations.

Future developments

The Syndicate will continue to transact the current classes of general direct insurance and reinsurance

business. If opportunities arise to write new classes of business, these will be investigated at the appropriate

time. The capacity for the 2025 year of account is $437.5m (£350.0m).

Post balance sheet events

Details of post balance sheet events are disclosed in note 18 of the financial statements.

Going concern

In assessing going concern for the Syndicate, the Directors reviewed the budgets and forecasts as well as the

available sources of capital and the uses of that capital and associated cash flow for the Syndicate. After

consideration of these factors, the Directors have concluded that there are no material uncertainties that

could cast significant doubt over the

ability to continue as a going concern for at least twelve

months from the date of signing the Syndicate annual accounts. Accordingly, they continue to adopt the

going concern basis of accounting when preparing the Syndicate annual accounts.

Directors

Details of the Directors of the Managing Agent that were serving at the year end and up to the date of signing

of the Syndicate annual accounts are provided on page 3.

Changes to directors were as follows:-

S G Drysdale

Appointed 5 January 2024

A J Wilkinson

Appointed 8 February 2024

Disclosure of information to the auditor

So far as each person who was a director of the Managing Agent at the date of approving the report is

aware, there is no relevant audit information, being information needed by the Syndicate auditor in

connection with the auditor's report, of which the auditor is unaware. Having made enquiries of fellow

directors of the Managing Agent and the Syndicate's auditor, each director has taken all the steps that he or

she ought to have taken as a director to become aware of any relevant audit information and to establish

that the Syndicate's auditor is aware of that information.

Auditor

The Managing Agent intends to reappoint Deloitte LLP as the Syndicate

Syndicate Annual General Meeting

As permitted under the Syndicate Meetings (Amendment No 1) Byelaw (No 18 of 2000) the Managing Agent

does not propose holding an annual meeting this year.

Approved by and signed on behalf of the Board:

A G Beatty

CEO

06 March 2025

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2024 Annual Report and Financial Statements

The managing agent is responsible for preparing the Syndicate annual accounts in accordance with

applicable law and regulations.

December each year in accordance with the United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law) including FRS 102 and FRS 103. The Financial

Reporting Standard applicable in the UK and Republic of Ireland. The Syndicate annual accounts are

required by law to give a true and fair view of the state of affairs of the Syndicate as at that date and of its

profit or loss for that year. In preparing the Syndicate annual financial statements, the managing agent is

required to:

select suitable accounting policies, which are applied consistently, subject to changes arising on the

adoption of new accounting standards in the year;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material

departures disclosed and explained in the financial statements; and

prepare the annual financial statements on the going concern basis unless it is inappropriate to presume

that the Syndicate will continue in business.

The managing agent is responsible for keeping adequate accounting records which disclose with reasonable

accuracy at any time the financial position of the Syndicate and enable it to comply with the Insurance

Syndicate and Aggregate Accounts) Regulations 2008. It is also responsible for

safeguarding the assets of the Syndicate and hence for taking reasonable steps for the prevention and

detection of fraud and other irregularities. Similarly, the managing agent is responsible for the preparation

and review of the iXBRL tagging that has been applied to the Syndicate Accounts in accordance with the

internal controls to result in tagging that is free from material non-compliance with the instructions issued by

The managing agent is responsible for the maintenance and integrity of the corporate and financial

information included on the business' website. Legislation in the United Kingdom governing the preparation

and dissemination of annual accounts may differ from legislation in other jurisdictions.

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2024 Annual Report and Financial Statements

to the member of Syndicate 2357

Report on the audit of the syndicate annual financial statements

Opinion

for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

have been prepared in accordance with the requirements of The Insurance Accounts Directive

Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1 issued by

We have audited the syndicate annual financial statements which comprise:

the profit and loss account;

the balance sheet;

the cash flow statement;

the statement of accounting policies and

the related notes 1 to 19.

The financial reporting framework that has been applied in their preparation is applicable law and United

Kingdom Accounting Standards, including

Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable

law and the Syndicate Accounts Instructions. Our responsibilities under those standards are further described

in the auditor's responsibilities for the audit of the syndicate annual financial statements section of our report.

We are independent of the syndicate in accordance with the ethical requirements that are relevant to our

ulfilled our other ethical responsibilities in accordance with these

requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

Conclusions relating to going concern

concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events

in operations for a period of at least twelve months from when the syndicate financial statements are

authorised for issue.

Our responsibilities and the responsibilities of the managing agent with respect to going concern are

described in the relevant sections of this report.

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2024 Annual Report and Financial Statements

continued

Other information

The other information comprises the information included in the annual report, other than the syndicate

information contained within the annual report. Our opinion on the syndicate annual financial statements

does not cover the other information and, except to the extent otherwise explicitly stated in our report, we

do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is

materially inconsistent with the syndicate annual financial statements or our knowledge obtained in the

course of the audit, or otherwise appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a

material misstatement themselves. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of managing agent

responsibilities statement, the managing agent is responsible

for the preparation of the syndicate annual financial statements and for being satisfied that they give a true

and fair view, and for such internal control as the managing agent determines is necessary to enable the

preparation of syndicate annual financial statements that are free from material misstatement, whether due

to fraud or error.

In preparing the syndicate annual financial statements, the managing agent is responsible for assessing the

to continue in operation and to use the going concern basis of accounting unless the managing agent

Our objectives are to obtain reasonable assurance about whether the syndicate annual financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report

that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these

syndicate annual financial statements.

A further description of our responsibilities for the audit of the syndicate annual financial statements is located

report.

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2024 Annual Report and Financial Statements

continued

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

We considered the nature of the syndicate and its control environment and

documentation of their policies and procedures relating to fraud and compliance with laws and regulations.

We also enquired of management, about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and

identified the key laws and regulations that:

had a direct effect on the determination of material amounts and disclosures in the financial

Syndicate Accounting Byelaw (no. 8 of 2005)

Syndicate Accounts Instructions; and

do not have a direct effect on the financial statements but compliance with which may be

requirements of Solvency II.

We discussed among the audit engagement team including relevant internal specialists such as actuarial, IT

and fraud specialists, regarding the opportunities and incentives that may exist within the organisation for

fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud in the following areas, and

our specific procedures performed to address them are described below:

Valuation of technical provisions as it includes assumptions and methodology requiring significant

management judgement and involves complex calculations, and therefore there is potential for

management bias. There is also a risk of overriding controls by making late adjustments to the

technical provisions. In response to these risks we involved our actuarial independent experts to

develop independent estimates of the technical provisions and we tested the late journal entries to

technical provisions.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to

the risk of management override. In addressing the risk of fraud through management override of controls,

we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements

made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale

of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess

compliance with provisions of relevant laws and regulations described as having a direct effect on

the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud;

enquiring of management, concerning actual and potential litigation and claims, and instances of

non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance, reviewing internal audit reports and

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2024 Annual Report and Financial Statements

continued

Report on other legal and regulatory requirements

Aggregate

Accounts) Regulations 2008

In our opinion, based on the work undertaken in the course of the audit:

statements are prepared is consistent with the financial statements; and

In the light of the knowledge and understanding of the syndicate and its environment obtained in the course

Matters on which we are required to report by exception

Aggregate Accounts) Regulations 2008 we

are required to report in respect of the following matters if, in our opinion:

the managing agent in respect of the syndicate has not kept adequate accounting records; or

the syndicate annual financial statements are not in agreement with the accounting records; or

we have not received all the information and explanations we require for our audit.

We have nothing to report in respect of these matters.

Use of our report

has been undertaken so that we might state to

y, for our audit

work, for this report, or for the opinions we have formed.

As required by the Syndicate Accounts Instructions Version 2.0, these financial statements will form part of the

des no assurance over whether the Electronic Format Annual Syndicate

Accounts have been prepared in compliance with Section 2 of the Syndicate Accounts Instructions Version

2. We have been engaged to provide assurance on whether the Electronic Format Annual Syndicate

Accounts has been prepared in compliance with Section 2 of the Syndicate Accounts Instructions Version 2

and will privately report to the directors of the managing agent and the

Adam Knight (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

06 March 2025

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2024 Annual Report and Financial Statements

Profit and loss account

For the year ended 31 December 2024

Technical account

general business

Notes

2024

2023

Gross premiums written

4

609,520

432,932

Outward reinsurance premiums

(108,080)

(110,642)

Premiums written, net of reinsurance

501,440

322,290

Change in provision for unearned premiums

gross amount

5

(40,148)

55,494

5

10,713

5,701

Change in provision for unearned premiums, net of reinsurance

(29,435)

61,195

Earned premiums, net of reinsurance

472,005

383,485

Claims paid

gross amount

(267,492)

(214,631)

99,599

122,295

Claims paid, net of reinsurance

(167,893)

(92,336)

Change in the provision for claims:

gross amount

5

(38,964)

141,701

5

(73,727)

(90,022)

Change in provision for claims paid, net of reinsurance

(112,691)

51,679

Claims incurred, net of reinsurance

(280,584)

(40,657)

Net operating expenses

6

(62,420)

(57,097)

Balance on the technical account

general business

129,001

285,731

The notes 1 to 19 form an integral part of these financial statements.

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2024 Annual Report and Financial Statements

Profit and loss account

continued

For the year ended 31 December 2024

Non-technical account

Notes

2024

2023

Balance on the technical account

general business

129,001

285,731

Investment income

36,833

26,913

Unrealised gains on investments

156

4,013

Investment expenses and charges

(609)

(421)

(Loss) / Profit on foreign exchange

(6,358)

(4,636)

Profit for the financial year

159,023

311,600

All of the amounts above are in respect of continuing operations.

There is no other comprehensive income in the accounting period. Accordingly, a separate statement of

comprehensive income has not been presented.

The notes 1 to 19 form an integral part of these financial statements.

Statement of changes in member

balances

For the year ended 31 December 2024

Notes

2024

2023

Balance at start of year

578,065

275,307

Total comprehensive income for the year

159,023

311,600

(206,366)

(8,842)

Losses collected in relation to distribution on closure of underwriting year

-

-

Balance at end of year

530,722

578,065

The notes 1 to 19 form an integral part of these financial statements.

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2024 Annual Report and Financial Statements

Balance sheet

continued

As at 31 December 2024

Liabilities

Notes

2024

2023

530,722

578,065

Provision for unearned premiums

5

133,561

93,652

Claims outstanding

5

657,519

618,180

Technical provisions

791,080

711,832

Creditors arising out of reinsurance operations

13

179,666

191,578

Other creditors

14

-

1,957

Creditors

amounts falling due within one year

179,666

193,535

Accruals and deferred income

1,314

2,334

Total liabilities

972,060

907,701

Total liabilities

1,502,782

1,485,766

The notes 1 to 19 form an integral part of these financial statements.

These financial statements were approved by the Board of Nephila Syndicate Management Limited on

6

th

March 2025 and signed on its behalf by:

J A H G Cartwright

Finance Director

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2024 Annual Report and Financial Statements

Notes to the financial statements

continued

2.

Accounting policies

Critical accounting judgements and key sources of estimation uncertainty

In the preparation of the financial statements, the directors of NSML have made judgements, estimates and

assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and

liabilities at the date of the accounts, and the reported amounts of income and expenses during the reporting

period. Actual results may differ from those estimates.

There are no critical judgements, apart from those involving estimations in the process of applying the

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance

sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and

liabilities within the next financial year, are discussed below.

i.

Provision for claims outstanding

The provision for claims comprises amounts set aside for reported claims and

IBNR

claims. The estimate of IBNR is subject to a greater degree of uncertainty than reported claims as it is based

on statistical techniques of estimation applied by actuaries as outlined below. Provision for claims outstanding

is disclosed in note 5.

ii.

Premium earning patterns (provision for unearned premium)

Premiums written are recognised as earned over the period of the policy on a time apportionment basis

having regard to the incidence of risk. A degree of estimation is required in determining the earning profile of

a policy where the incidence of risk is non-linear. Unearned premium is disclosed in note 5.

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

Premiums

Premiums written comprise premiums on contracts incepted during the financial year.

Premiums are shown

gross of brokerage payable and exclude taxes and duties levied on them. Estimates are made for pipeline

premium, representing amounts due to the syndicate not yet notified.

Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the

related direct inwards business.

Unearned premiums

Premiums written are recognised as earned over the period of the policy on a time apportionment basis

having regard to the incidence of risk. In some cases, a non-linear earnings pattern is considered appropriate

due to the timing in incidence of risk. Unearned premiums represent the proportion of premiums written in the

year that relate to the unexpired period of policies in force at the balance sheet date.

Unearned reinsurance premiums are deferred over the term of the underlying policies for risks-attaching

contracts and over the term of the reinsurance contract for losses-occurring contracts.

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2024 Annual Report and Financial Statements

Notes to the financial statements

continued

2.

Accounting policies -

continued

Claims

Claims incurred represent the cost of claims and settlement expenses paid during the financial year, together

with the movement in provisions for outstanding claims and claims incurred but not reported ('IBNR').

Reinsurance recoveries are accounted for in the same period as the incurred claims for the related business.

The provision for claims comprises amounts set aside for claims notified and IBNR. The amount included in

respect of IBNR is based on statistical techniques of estimation applied by actuaries, on a best estimate basis,

and reviewed annually by external consulting actuaries.

These techniques generally use projections, based

on past experience of the development of claims over time, to form a view of the likely ultimate claims to be

experienced.

For the most recent years, where a high degree of volatility arises from projections, estimates

may be based in part on output from rating and other models of the business accepted and assessments of

underwriting conditions.

projections for IBNR, net of estimated irrecoverable amounts, having regard to the reinsurance programme

in place for the class of business and the claims experience for the year.

The Syndicate uses a number of

statistical techniques to assist in making these estimates.

Accordingly, the two most critical assumptions as regards claims provisions are that the past is a reasonable

predictor of the likely level of claims development and that the rating and other models used for current

business are fair reflections of the likely level of ultimate claims to be incurred.

The directors consider that the provisions for gross claims and related reinsurance recoveries are fairly stated

on the basis of the information currently available to them.

However, ultimate liability will vary as a result of

subsequent information and events, and this may result in significant adjustments to the amounts provided.

Adjustments to the amounts of claims provisions established in prior years are reflected in the financial

statements for the period in which the adjustments are made.

The methods used, and the estimates made,

are reviewed regularly.

Sensitivities of claims incurred and claims development table are included in note 3 of the financial

statements.

Deferred acquisition costs

Acquisition costs comprise the direct expenses of concluding insurance contracts written during the financial

year. Acquisition costs are accrued over a period equivalent to that over which the underlying business is

underwritten and are charged to the accounting periods in which the related premiums are earned. Deferred

acquisition costs represent the proportion of acquisition costs incurred in respect of unearned premiums at

the balance sheet date.

Liability adequacy testing

At each reporting date, liability adequacy tests are performed to ensure the adequacy of the claims liabilities

net of deferred acquisition costs and unearned premium reserves.

If that assessment shows that the carrying

amount of insurance liabilities is inadequate in the light of estimated future cash flows, the entire deficiency

is immediately recognised in the profit and loss account.

A provision for unexpired risks is made where anticipated claims and related expenses arising after the end

of the financial year in respect of contracts concluded before that date, are expected to exceed the

unearned premiums under these contracts, after the deduction of any deferred acquisition costs. The

provision for unexpired risks is calculated separately by reference to classes of business which are managed

together, after taking into account relevant investment return.

At 31 December 2024 and 31 December 2023 the Syndicate did not have an unexpired risk provision.

21

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

2.

Accounting policies

continued

Reinsurance assets

The Syndicate cedes insurance and reinsurance risk in the normal course of business. Reinsurance assets

represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in

a manner consistent with the outstanding claims provision or settled claims associated with the reinsurer's

policies and are in accordance with the related reinsurance contract.

Reinsurance assets are reviewed for impairment at each reporting date, or more frequently, when an

indication of impairment arises during the reporting year. Impairment occurs when there is objective evidence

as a result of an event that occurred after initial recognition of the reinsurance asset that the Syndicate may

not receive all outstanding amounts due under the terms of the contract and the event has a reliably

measurable impact on the amounts that the Syndicate will receive from the reinsurer. The impairment loss is

recorded in the profit and loss account.

Gains or losses on buying reinsurance are recognised in the profit and loss account immediately at the date

of purchase and are not amortised. There were no such gains recognised in 2024 or 2023.

Ceded reinsurance arrangements do not relieve the Syndicate from its obligations to policyholders.

Insurance and reinsurance receivables

Insurance and reinsurance receivables are recognised when due and measured on initial recognition at the

fair value of the consideration received or receivable. Subsequent to initial recognition, insurance and

reinsurance receivables are measured at amortised cost, using the effective interest rate method. The

carrying value of insurance and reinsurance receivables is reviewed for impairment whenever events or

circumstances indicate that the carrying amount may not be recoverable, with the impairment loss recorded

in the profit and loss account.

Insurance and reinsurance receivables are not recognised when the derecognition criteria for financial assets

have been met.

Insurance payables

Insurance payables are recognised when due and measured on initial recognition at the fair value of the

consideration received less directly attributable transaction costs. Subsequent to initial recognition, they are

measured at amortised cost using the effective interest rate method. Insurance payables are derecognised

when the obligation under the liability is settled, cancelled or expired.

Investment return

All investment return is recognised in the non-technical account.

Investment return comprises all investment income, realised investment gains and losses and movements in

unrealised gains and losses, net of investment expenses, charges and interest.

Realised gains or losses represent the difference between the net sales proceeds and purchase price.

Unrealised gains and losses represent the difference between the valuation of investments held at the

balance sheet date and their purchase price.

The movement in unrealised gains and losses therefore

includes the reversal of previously recognised unrealised gains and losses on investments disposed of in the

current year.

22

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

2.

Accounting policies

continued

Investments

All financial assets are designated as fair value through the profit or loss account upon initial recognition

because they are managed and their performance is evaluated on a fair value basis. These financial assets

are initially recognised at fair value with any transaction costs being expensed through the profit and loss

account.

For quoted investments where there is an active market, the fair value is the quoted bid price at the balance

sheet date. For quoted investments where there is no active market, the fair value is determined by reference

to prices for similar assets in active markets. For investments where there is no active market and no similar

assets in active markets, a fair value is derived from inputs that are not based on observable market data.

Realised and unrealised gains and losses arising from changes in the fair value of financial assets at fair value

through profit and loss are included in the profit and loss account in the period in which they arise.

Cash and cash equivalents

Cash and cash equivalents represent cash balances, money market deposits with banks and other short-term

highly liquid investments purchased within three months of maturity.

Financial liabilities

The Syndicate's financial liabilities include trade and other payables, borrowings and insurance payables,

where applicable. All financial liabilities are recognised initially at fair value and, in the case of loans and

borrowings, net of directly attributable transaction costs.

A financial liability is derecognised when the obligation under the liability is discharged or expires.

Foreign currencies

Foreign currency transactions are converted to the presentational and functional currency of the Syndicate

(US dollar) using the exchange rates prevailing at the date of the transactions. Assets and liabilities

denominated in foreign currency are revalued to functional currency at year end exchange rates and the

resultant differences are recognised as gains and losses in the non-technical account.

The currency exchange rates that have been used for principal foreign currency transactions are available

in note 19.

Tax

Under Schedule 19 of the Finance Act 1993, managing agents are not required to deduct basic rate income

tax from trading income. In addition, all UK basic rate income tax deducted from syndicate investment

income is recoverable by managing agents and consequently the distribution made to the member is gross

of tax. Capital appreciation falls within trading income and is also distributed gross of tax.

No provision has been made for any other overseas tax payable by members on underwriting results or

investment earnings.

Profit commission

NSML does not charge the Syndicate a profit commission.

23

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3.

Risk Management

Governance framework

The NSML Board is responsible for managing the risks of the Syndicate and has a comprehensive governance

structure and risk management framework in place.

The risk management framework enables risks to be

identified, assessed, managed and reported.

The Board also has a suite of comprehensive risk appetite

statements

of its business and that the model is used to improve both the understanding of risk and the quality of the

decision making at all levels across the business.

-making and routine management and is

incorporated within the strategic and operational planning processes. As part of the risk management

framework, NSML has comprehensive policies and procedures in place which outline controls and business

conduct standards for day to day operations.

Employees are expected to manage risk as defined through

their roles. This ensures that an assessment of risk remains central to decision-making.

The Governance, Risk and Compliance Function maintains the risk and governance frameworks and this

understanding or management of risk.

Risk assessments are conducted on new projects, processes, systems and commercial activities to ensure that

assessments are identified, analysed and reported to the Board or appropriate committee.

Capital management objectives, policies and approach

The Society of Lloyd's (Lloyd's) is a regulated undertaking and subject to the supervision of the Prudential

Regulatory Authority (PRA) under the Financial Services and Markets Act 2000.

Within the supervisory framework, Lloyd's applies capital requirements at member level and centrally to ensure

that Lloyd's complies with Solvency II capital requirements, and beyond that to meet its own financial strength,

licence and ratings objectives.

Although 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 2357 is not

disclosed in these financial statements.

24

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3.

Risk Management

continued

Capital management objectives, policies and approach - continued

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 of the Syndicate on which it is participating but not on other members

shares. Accordingly, the capital requirement that Lloyd's sets for each member operates on a similar basis.

Each member's SCR shall thus be determined by the sum of the member's share of the Syndicate SCR 'to

ultimate'. Where a member participates on more than one Syndicate, a credit for diversification is provided

to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to

cover a 1 in 200 year loss 'to ultimate' for that member. Over and above this, Lloyd's applies a capital uplift to

the member's capital requirement, known as the Economic Capital Assessment (

ECA

). The purpose of this

uplift, which is a Lloyd's not 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'.

Provision of capital by members

Each member may provide capital to meet its ECA either by assets held in trust by Lloyd's specifically for that

member (funds at Lloyd's), held within and managed within a Syndicate (funds in Syndicate) or as the

Syndicate on which it participates.

Insurance risk

The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit

payments or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity

of claims, actual benefits paid and subsequent development of long-term claims. Therefore, the objective of

the Syndicate is to ensure that sufficient reserves are available to cover these liabilities.

The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and

geographical areas. The variability of risks is also improved by careful selection and implementation of

underwriting strategy guidelines, as well as the use of reinsurance arrangements.

The Syndicate purchases reinsurance as part of its risk mitigation programme. From time to time, the Syndicate

purchases index-based reinsurance. The Syndicate also has proportional reinsurance arrangements in place.

Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims

provision and are in accordance with the reinsurance contracts.

The Reserve Committee oversees the management of reserving risk.

The use of standardised and internal

modelling techniques, as well as benchmarking and the review of claims development are key in mitigating

reserving risk.

The purpose of these underwriting, reinsurance and reserving strategies is to limit exposure to catastrophes or

large losses based on the Syndicate's risk appetite as decided by the Board.

The Syndicate uses both its own and commercially available risk management software to assess catastrophe

exposure.

However, there is always a risk that the assumptions and techniques used in these models are unreliable or

that claims arising from an unmodelled event are greater than those arising from a modelled event.

25

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Key assumptions

The principal assumption underlying the liability estimates is that the future claims development will follow a

similar pattern to past claims development experience.

This includes assumptions in respect of average claim

costs, claim handling costs and claim numbers for each underwriting year.

Additional qualitative judgements are used to assess the extent to which past trends may not apply in the

future, for example: one-off occurrence, changes in market factors such as public attitude to claiming,

economic conditions, claim inflation factors, as well as internal factors such as portfolio mix, policy conditions

and claims handling procedures. Judgement is further used to assess the extent to which external factors such

as judicial decisions and government legislation affect the estimates.

Other key circumstances affecting the reliability of assumptions include variation in interest rates, delays in

settlement and changes in foreign currency rates.

Sensitivities

The claim liabilities are sensitive to the key assumptions that follow. It has not been possible to quantify the

sensitivity of certain assumptions such as legislative changes or uncertainty in the estimation process.

The following analysis is performed for reasonably possible movements in key assumptions with all other

The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to

demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual

basis.

It should be noted that movements in these assumptions are non-linear

and that the level of reinsurance

recoveries arising from changes in gross claims will not be proportional to the gross losses.

Gross of

reinsurance

Net of

reinsurance

Gross

of

reinsurance

Net of

reinsurance

2024

2024

2023

2023

Impact of a:

5%

increase

in

C

laims liability

32,876

25,301

30,909

19,648

5% decrease in Claims

liability

(32,876)

(

25,301

)

(30,909)

(19,648)

The method used for deriving sensitivity information and significant assumptions did not change from the

previous period.

Claims development table

The following tables show the Syndicate's cumulative incurred claims development, including both claims

notified and IBNR for each underwriting year, together with the cumulative payments to date on a gross and

net of reinsurance basis at the balance sheet date.

Claims development is expected when the underwriting year is at an early stage of development as the

premiums to which the claims relate are earned.

The Syndicate has elected to translate estimated claims and claims payments at a consistent rate of

exchange as determined at the balance sheet date.

The uncertainty associated with the ultimate claims experience of an underwriting year is greatest when the

underwriting year is at an early stage of development and when the risk margin for future experience

potentially being more adverse than has been assumed is at its highest. As claims develop, and the ultimate

cost of the claims becomes more certain, the relative level of margin should decrease. Due, however, to the

uncertainty inherent in the claims estimation process, initial reserves may not always be in a surplus.

26

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Claims development table gross of reinsurance

Underwriting year

2016

2017

2018

2019

2020

2021

2022

2023

2024

Estimate of gross claims incurred:

At end of first

year

49,792

339,881

516,622

318,374

374,400

496,206

260,072

136,218

330,341

One year later

55,664

420,967

574,218

419,924

539,855

572,025

275,681

179,904

Two years later

52,812

456,973

589,203

430,045

579,447

534,108

246,190

Three years later

52,850

474,363

584,597

412,490

575,621

529,184

Four years later

52,839

474,854

578,355

405,748

555,039

Five years later

52,485

490,950

556,168

394,290

Six years later

52,411

489,508

559,443

Seven years later

52,429

487,923

Eight years later

52,437

Gross incurred

claims

52,437

487,923

559,443

394,290

555,039

529,184

246,190

179,904

330,341

Less cumulative

gross claims paid

(52,411)

(454,770)

(542,328)

(371,776)

(480,335)

(460,914)

(198,230)

(75,168)

(41,300)

Liability for gross

outstanding

claims

26

33,153

17,115

22,514

74,704

68,270

47,960

104,736

289,041

Total gross claims

outstanding

657,519

27

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Claims development table net of reinsurance

Underwriting year

2016

2017

2018

2019

2020

2021

2022

2023

2024

Estimate of net claims incurred:

At end of first

year

46,775

269,911

344,293

229,379

262,709

190,601

173,199

66,462

314,677

One year later

48,577

308,104

364,367

282,252

363,963

211,621

179,658

86,886

Two years later

47,628

326,604

368,708

285,035

373,963

201,317

161,330

Three years later

47,646

331,719

368,121

268,174

370,799

196,942

Four years later

47,640

331,965

350,337

265,761

353,174

Five years later

47,534

338,924

341,357

257,193

Six years later

47,454

338,302

340,132

Seven years later

47,472

336,717

Eight years later

47,480

Net incurred

claims

47,480

336,717

340,132

257,193

353,174

196,942

161,330

86,886

314,677

Less cumulative

net claims paid

(47,454)

(303,567)

(324,818)

(238,816)

(307,453)

(146,124)

(128,889)

(50,081)

(41,300)

Liability for net

outstanding

claims

26

33,150

15,314

18,377

45,721

50,818

32,441

36,805

273,377

Total net claims

outstanding

506,029

28

of

42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Financial risk

Credit risk

Credit risk is the risk of loss if a counterparty fails to meet its contractual obligations resulting in a financial loss

to the Syndicate. The Syndicate is exposed to credit risk primarily through its investment and insurance

activities.

The following policies and procedures are in place to mitigate the exposure to credit risk:

Investment guidelines are established setting out the quality of investments to be included within the

Syndicate

s portfolio. The policy is monitored by the Executive Committee.

Reinsurance is placed with counterparties that either have a credit rating

-

better from an external

credit rating agency or, where reinsurance is placed with unrated reinsurers, exposure is required to be

100% collateralised through the depositing of funds held in trust to the Syndicate. Concentration of risk is

avoided by following policy guidelines in respect of counterparties' limits. If the counterparty is

downgraded or does not have the required credit rating, then collateral is sought to mitigate any risk

where required. This is monitored by the Syndicate Management Committee, which may approve

exceptions in certain circumstances.

The tables below show the maximum exposure to credit risk (including an analysis of financial assets exposed

to credit risk) for the components of the balance sheet. The maximum exposure is shown gross, before the

effect of mitigation through collateral agreements.

As at December 2024

Neither past due or

impaired

Past due

Impaired

Total

2024

2024

2024

2024

Syndicate loans to central fund

6,250

-

-

6,250

Debt securities and fixed income securities

575,182

-

-

575,182

151,490

-

-

151,490

Debtors arising out of direct insurance operations

481

481

Debtors arising out of reinsurance operations

400,859

-

-

400,859

Other debtors

577

-

-

577

Cash and cash equivalents

308,442

-

-

308,442

Total assets

1

1,443,281

-

-

1,443,281

As at December 2023

Neither past due

or impaired

Past due

Impaired

Total

2023

2023

2023

2023

Syndicate loans to central fund

7,897

-

-

7,897

Debt securities and fixed income securities

522,364

-

-

522,364

225,217

-

-

225,217

Debtors arising out of direct insurance operations

-

-

-

-

Debtors arising out of reinsurance operations

378,704

-

-

378,704

Other debtors

-

-

-

-

Cash and cash equivalents

307,245

-

-

307,245

Total assets

1,441,427

-

-

1,441,427

29

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Financial risk

continued

Credit risk

continued

The tables below provide information regarding the credit risk exposure of the Syndicate by classifying assets

according to independent credit ratings of the counterparties. AAA is the highest possible rating. Assets that

fall outside the range of AAA to BBB have not been rated.

Debtors, other than amounts due from reinsurers, have been excluded from the tables as these are not rated.

As at 31 December 2024

AAA

AA

A

BBB

Less than

BBB

Other

Not

Rated

Total

2024

2024

2024

2024

2024

2024

2024

2024

Shares and other variable yield

securities and units in unit trusts

259,103

-

-

-

-

-

-

259,103

Debt securities and other fixed

income securities

573,870

544

457

311

-

-

-

575,182

Syndicate loans to central fund

-

6,250

-

-

-

-

-

6,250

outstanding

-

127,707

23,783

-

-

-

-

151,490

Debtors arising out of direct

insurance operations

-

-

-

-

-

-

481

481

Debtors arising out of

reinsurance

operations

-

46,308

11,442

-

-

343,109

-

400,859

Cash at bank and in hand

-

-

49,339

-

-

-

49,339

Other debtors and accrued

interest

-

-

-

-

-

-

577

577

Total assets

832,973

180,809

85,021

311

-

343,109

1,058

1,443,281

As at 31 December 2023

AAA

AA

A

BBB

Less than

BBB

Other

Not

Rated

Total

2023

2023

2023

2023

2023

2023

2023

2023

Shares and other variable yield

securities and units in unit trusts

214,876

-

-

-

-

-

-

214,876

Debt securities and other fixed

income securities

520,871

597

528

368

-

-

-

522,364

Syndicate loans to central fund

-

7,897

-

-

-

-

-

7,897

outstanding

-

167,048

53,253

4,916

-

-

-

225,217

Debtors arising out of direct

insurance operations

-

-

-

-

-

-

-

-

Debtors arising out of reinsurance

operations

-

53,043

13,273

1,327

-

311,061

-

378,704

Cash at

bank and in hand

-

-

92,369

-

-

-

-

92,369

Other debtors and accrued

interest

-

-

-

-

-

-

-

-

Total assets

735,747

228,585

159,423

6,611

-

311,061

-

1,441,427

30

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Maximum credit exposures

It is the Syndicate's policy to maintain accurate and consistent risk ratings across its credit portfolio. This

enables management to focus on the applicable risks and the comparison of credit exposures across all lines

of business.

Liquidity risk

Liquidity risk is the risk that cash may not be available, or that assets cannot be liquidated at a reasonable

price, to pay obligations when they fall due.

The Syndicate is exposed to daily calls on its available cash

resources mainly from claims arising through insurance and reinsurance contracts.

In respect of business

underwritten in certain international regions there is a requirement to collateralise exposure through regulated

trust funds in respect of gross insurance liabilities. This puts an additional burden on the Syndicate

The Syndicate tries to reduce this risk by reviewing its expected cash obligations on a quarterly basis and

keeping adequate cash on deposit to meet those obligations.

The tables below summarise the maturity profile of the Syndicate's financial liabilities based on remaining

undiscounted contractual obligations, including interest payable and outstanding claim liabilities based on

the estimated timing of claim payments resulting from recognised insurance and reinsurance liabilities.

Repayments which are subject to notice are treated as if notice were to be given immediately.

Within 1

year

1

-

3

years

3

-

5 years

Over 5

years

Total

As at 31 December 2024

Claims outstanding

(354,037)

(190,113)

(91,431)

(21,938)

(657,519)

Reinsurance creditors

(179,666)

-

-

-

(179,666)

Other Creditors

-

-

-

-

-

Total

(533,703)

(190,113)

(91,431)

(21,938)

(837,185)

Within 1

year

1

-

3

years

3

-

5 years

Over 5

years

Total

As at 31 December 2023

Claims outstanding

(276,241)

(243,742)

(52,628)

(45,569)

(618,180)

Reinsurance creditors

(191,578)

-

-

-

(191,578)

Other Creditors

(1,957)

-

-

-

(1,957)

Total

(469,776)

(243,742)

(52,628)

(45,569)

(811,715)

Market risk

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because

of changes in foreign exchange rates.

The Syndicate transacts insurance business in Pound Sterling, Euro, US Dollar, Australian Dollar, Canadian Dollar,

Japanese Yen and New Zealand Dollar.

Assets are held in each of these currencies to generally match the

corresponding liabilities.

The Syndicate is exposed to movements in foreign exchange where there is a mismatch between assets and

operations.

When a mismatch occurs the Syndicate looks to limit this mismatch exposure, wherever possible.

31

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Market risk

continued

Currency risk - continued

The following tables summarise the exposure of the financial assets and liabilities to foreign currency

exchange risk at the reporting date.

As at 31 December 2024

GBP

USD

EUR

CAD

AUD

JPY

NZD

Total

202

4

202

4

202

4

202

4

202

4

202

4

202

4

202

4

Financial

investments

6,250

833,151

-

927

207

-

-

840,535

of technical

provisions

-

196,53

4

-

-

-

-

-

196,53

4

(Re)insurance

Debtors

(

176

)

396,53

2

4,757

(

1,866

)

342

1,212

539

401,340

Cash

in bank and

in hand

267

690

12,983

13,21

7

151

16,0

30

6,001

49,339

Other assets

(

13

)

14,87

4

-

-

-

36

137

15,03

4

Total assets

6,328

1,441,78

1

17,740

12,27

8

700

17,27

8

6,677

1,502,78

2

Technical

provisions

(

9,148

)

(

752,78

0

)

(

18,827

)

1,176

(

542

)

(

9,641

)

(

1,318

)

(

791,08

0

)

Reinsurance

Creditors

-

(

179,666

)

-

-

-

-

-

(

179,666

)

Other liabilities

-

(

1,31

4

)

-

-

-

-

-

(

1,31

4

)

Total liabilities

(9,148)

(

933,76

0

)

(

18,827

)

1,176

(

542

)

(

9,641

)

(

1,318

)

(

972,0

6

0

)

Total capital and

reserves

(

2,820

)

508,02

1

(

1,087

)

13,45

4

158

7,63

7

5,359

530,722

32

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Market risk

continued

Currency risk - continued

As at 31 December 2023

GBP

USD

EUR

CAD

AUD

JPY

NZD

Total

2023

2023

2023

2023

2023

2023

2023

2023

Financial

investments

7,897

735,412

-

1,567

261

-

-

745,137

of technical

provisions

-

259,54

8

-

-

-

-

-

259,54

8

(Re)insurance

Debtors

(323)

372,540

5,07

0

(1,729)

1

1,577

1,568

378,704

Cash in bank

and in hand

7,540

4

21,548

15,388

548

43,963

3,378

92,369

Other assets

9,784

100

124

10,008

Total assets

15,114

1,377,28

8

26,618

15,226

810

45,640

5,070

1,485,766

Technical

provisions

(7,917)

(652,24

5

)

(29,168)

(1,734)

(1,019)

(18,128)

(1,621)

(711,832)

Reinsurance

Creditors

-

(191,578)

-

-

-

-

-

(191,578)

Other liabilities

(35)

(3,62

5

)

-

-

-

(631)

-

(4,29

1

)

Total liabilities

(7,952)

(847,44

8

)

(29,168)

(1,734)

(1,019)

(18,7

59

)

(1,621)

(907,701)

Total capital and

reserves

7,16

2

529,84

0

(2,550)

13,492

(209)

26,88

1

3,449

578,065

33

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

3. Risk management

continued

Market risk

continued

Currency risk - continued

Sensitivity to changes in foreign exchange rates

The tables below give an indication of the impact on profit of a percentage change in the relative strength

of US Dollar against the value of the Syndicate

on the information as at 31st December 2024.

2024

(2,270)

(4,822

)

(2,270)

(4,822

)

(4,540)

(9,645)

(4,540)

(9,645)

A weakening of US Dollar against the above currencies at 31 December 2024 would have had an equal but

opposite effect to the amounts shown above, on the basis that all other variables remain constant.

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. Floating rate instruments expose the Syndicate to cash flow interest risk,

whereas fixed rate instruments expose the Syndicate to fair value interest risk.

The Syndicate has no significant concentration of interest rate risk. Insurance liabilities are not discounted and

therefore are not exposed to interest rate risk.

2024

397

359

397

359

(397)

(359)

(397)

(359)

34

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

4.

Segmental information

Segmental information is presented in respect of reportable segments. These are based on the

management and internal reporting structures. All business is concluded in the UK. An analysis of the

underwriting result before investment return is set out below.

For the year ended 31 December 2024:

Gross

premiums

written

Gross

premiums

earned

Gross

claims

incurred

Gross

operating

expenses

Re

insurance

balance

s

earned

Total

1,094

834

(375)

(301)

(241)

(83)

43,653

33,341

13,354

(9,690)

(9,779)

27,226

44,747

34,175

12,979

(9,991)

(10,020)

27,143

564,773

535,197

(319,435)

(54,081)

(59,823)

101,858

609,520

569,372

(306,456)

(64,072)

(69,843)

129,001

For the year ended 31 December 2023:

Gross

premiums

written

Gross

premiums

earned

Gross

claims

incurred

Gross

operating

expenses

Reinsurance

balances

earned

Total

Marine, aviation and transport

250

52

(23)

(25)

22

26

Fire and other damage to property

40,199

84,917

563

(25,430)

(13,621)

46,429

Total direct insurance

40,449

84,969

540

(25,455)

(13,599)

46,455

Reinsurance acceptances

392,483

403,457

(73,470)

(40,389)

(50,322)

239,276

Total

432,932

488,426

(72,

)

(65,844)

(63,921)

285,731

The gross premiums written received from two customers (2023: one customer) were individually greater than

10 per cent of the total gross premiums written.

The reinsurance balance is the aggregate total of all those items included in the technical account of the

profit and loss account which relate to reinsurance.

35

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

5.

Technical provisions

The gross liabilities for claims reported, loss adjustment expenses and claims incurred but not reported are net

of expected recoveries from salvage and subrogation. The amounts for salvage and subrogation at the end

of the current and prior year are not material.

Total technical provisions

2024

2023

technical provisions

213,126

162,518

444,393

455,662

133,561

93,652

Total gross technical provisions

791,080

711,832

technical provisions

21,913

38,584

129,577

186,633

45,044

34,331

Total reinsurers' share of technical provisions

196,534

259,548

191,213

123,934

314,816

269,029

88,517

59,321

technical provisions

594,546

452,284

36

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

5. Technical provisions

continued

Movement in technical provisions

Provision for

unearned

premiums

Claims

outstanding

Total

Gross

148,322

755,050

903,372

824

4,831

5,655

(55,494)

(141,701)

(197,195)

93,652

618,180

711,832

(239)

375

136

40,148

38,964

79,112

133,561

657,519

791,080

28,629

315,239

343,868

1

-

1

5,701

(90,022)

(84,321)

34,331

225,217

259,548

-

-

-

10,713

(73,727)

(63,014)

45,044

151,490

196,534

Net

88,517

506,029

594,546

59,321

392,963

452,284

37

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

6.

Net operating expenses

2024

2023

(55,744)

(41,402)

4,467

(9,848)

1,652

8,747

(2,801)

(3,956)

(9,994)

(10,638)

(62,420)

(57,097)

personal expenses comprise member subscriptions, new central fund contributions and

managing agent fees.

Total commissions for direct insurance business for the year amounted to:

2024

2023

(13,513)

(12,171)

Administrative expenses include:

2024

2023

(316)

(280)

(69)

(66)

(106)

(97)

(491)

(443)

Non-audit fees relate to work to issue a Statement of Actuarial Opinion on the technical provisions of the

Syndicate.

Fees payable to Deloitte LLP for the audit of the annual accounts of Nephila Syndicate Management Limited

are $30.8k (2023: $30.8k). Fees payable for audit-related assurance services provided to the managing agent

are $7k (2023: $7k). There were no other fees payable for the provision of other non-audit services.

7.

Emoluments of directors of Nephila Syndicate Management Limited.

The aggregate emoluments of the Directors and staff of the Managing Agent are met by Nephila

Management Services Ltd and are disclosed within the financial statements of that company.

The Syndicate

S G Drysdale, received emoluments in respect of the role of active

underwriter for the Syndicate through Nephila Syndicate Services Limited. The syndicate was charged $113k

in 2024 in respect of fees relating to the active underwriter (2023: $111k).

No other compensation was payable to key management personnel.

38

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

8.

Financial investments

Cost

Cost

Carrying value

Carrying value

2024

2023

2024

2023

259,103

214,876

259,103

214,876

6,479

7,971

6,250

7,897

572,170

519,200

575,182

522,364

837,752

742,047

840,535

745,137

All investment return arises from investments designated as fair value through profit and loss.

There was no material change in fair value for financial instruments held at fair value attributable to own

credit risk in the current or comparative period.

Financial investments are classified using the fair value hierarchy in accordance with the FRS 102.

The levels within the fair value hierarchy are defined as follows:

Level 1

the unadjusted quoted price in an active market for identical assets or liabilities that the entity

can access at the measurement date;

Level 2

inputs other than quoted prices included within level 1 that are observable (i.e. developed using

market data) for the asset or liability, either directly or indirectly;

Level 3

inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

Level 1

Level 2

Level 3

Total

2024

Shares and other variable yield securities and units in unit trusts

259,103

-

-

259,103

-

-

6,250

6,250

571,735

3,447

-

575,182

830,838

3,447

6,250

840,535

2023

Shares and other variable yield securities and units in unit trusts

214,876

-

-

214,876

-

-

7,897

7,897

517,912

4,452

-

522,364

732,788

4,452

7,897

745,137

39

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

9.

Debtors arising out of direct insurance and reinsurance operations

2024

2023

481

-

400,859

378,704

401,340

378,704

10.

Other debtors

2024

2023

577

-

577

-

11.

Cash and cash equivalents

2024

2023

49,339

92,369

259,103

214,876

308,442

307,245

40

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

12.

Deferred acquisition costs

2024

2023

Gross

Reinsurance

Net

Gross

Reinsurance

Net

10,008

(309)

9,699

19,796

(1,560)

18,236

4,467

252

4,719

(9,848)

1,251

(8,597)

(18)

-

(18)

60

-

60

14,457

(57)

14,400

10,008

(309)

9,699

13.

Creditors arising out of reinsurance operations

2024

2023

179,666

191,578

179,666

191,578

14.

Other creditors

2024

2023

-

1,957

-

1,957

All amounts are expected to be payable within one year.

15.

Related parties

NSML is the Managing Agent of Syndicate 2357. The total fees charged for provision of services and support

to Syndicate 2357 in 2024 were managing agent fees of $6.3m (2023: $6.5m).

managing agent is Walsingham House, 35 Seething Lane, London EC3N 4AH.

The immediate parent undertaking of Nephila Syndicate Management Limited is Nephila Syndicate

Management Holdings Ltd (NSH), a company incorporated and registered in the United Kingdom. The

ultimate parent and controlling party is Markel Group Inc., a company incorporated and registered in the

United States of America. Group financial statements for Markel Group Inc. are available from 4521

Highwoods Parkway, Glen Allen, Virginia 23060-6148, USA.

Holdings Ltd, a company incorporated and registered in Bermuda. Syndicate 2357 benefits from collateralised

reinsurance provided by Demeter Re Ltd, a class III Bermuda reinsurer.

Nephila Syndicate Holdings Ltd,

Poseidon Re Ltd and Demeter Re Ltd are managed by Nephila Capital Limited, a company incorporated in

Bermuda.

Syndicate 2357 purchased quota share reinsurance costing $14.7m (2023: $96.2m) from Demeter Re for its

reinsurance business. The amount outstanding from Demeter Re at 31 December 2024 was $9.3m. At 31

December 2023, Syndicate 2357 owed Demeter Re $7.1m.

41

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42

2024 Annual Report and Financial Statements

Notes to the financial statements

continued

16.

Funds

FAL

. The funds are intended primarily to cover circumstances where Syndicate assets prove

inter alia, of a number of factors including the nature and amount of underwriting risk assumed by the

member and the assessment of the reserving risk in respect of business that has already been underwritten.

FAL is not under the management of the managing agent, so no amounts have been shown in these financial

meet liquidity

requirements and to settle losses should this be required.

The FAL requirement is provided by a combination of the member as well as by Poseidon Re.

17.

Off balance sheet items

The Syndicate has not been party to any arrangement which is not reflected on the balance sheet, where

material risks and benefits arise for the Syndicate.

18.

Post balance sheet events

Effective 31 December 2024 the 2022 year of account closed by way of reinsurance to close into the 2023

year of account. During 2025, $285.2m will be distributed to the member being the net surplus on the 2022

closing year of account.

19.

Foreign exchange rates

The following currency exchange rates have been used for principal foreign currency transactions:

2024

2023

Start of period

rate

End of period

rate

Average

rate

Start of period

rate

End of period

rate

Average

rate

Sterling

0.787

0.800

0.781

0.833

0.787

0.806

Euro

0.906

0.968

0.922

0.942

0.906

0.927

US dollar

1.000

1.000

1.000

1.000

1.000

1.000

Canadian dollar

1.323

1.440

1.367

1.358

1.323

1.355

Australian dollar

1.472

1.616

1.516

1.475

1.472

1.508

Japanese Yen

141.535

157.520

151.195

132.258

141.535

141.105

New Zealand dollar

1.583

1.792

1.648

1.583

1.583

1.637

42

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2024 Annual Report and Financial Statements