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Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
2
Tokio Marine Combined Syndicate 0510
Report and Accounts
For the year ended 31 December 2024
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
3
Contents
Directors and advisers
4
Report of the Directors of the managing agent
5
Syndicate 510 annual accounts for the year ended 31 December 2024
14
15
Profit and loss and other comprehensive income
Technical account
general business for the year ended 31 December 2024
18
Profit and loss and other comprehensive income
Non-technical account
general business for the year ended 31 December 2024
19
Balance sheet: assets
as at 31 December 2024
20
Balance sheet: liabilities
as at 31 December 2024
21
for the year ended 31 December 2024
22
Statement of cash flows
for the year ended 31 December 2024
23
Notes to the annual accounts and significant accounting policies
24
Syndicate 510 underwriting year accounts for the 2022 year of account
Report of the Directors of the managing agent
51
52
members of Syndicate 510
2022 closed year of account
53
Profit and loss: technical account
general business
for the 36 months ended 31 December 2024
56
Profit and loss: non-technical account
for the 36 months ended 31 December 2024
57
Balance sheet for the 2022 closed year of account
as at 31 December 2024
58
Notes to the underwriting year accounts and significant accounting policies
59
Seven-year summary (unaudited)
69
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
4
Directors and advisers
Managing agent
(Syndicate 510), Tokio Marine Kiln Syndicate 1880 (Syndicate 1880), Tokio Marine Kiln Catastrophe Syndicate 557
(Syndicate 557) and Tokio Marine Kiln Life Syndicate 308 (Syndicate 308). TMKS is a wholly-
owned subsidiary of
Tokio Marine Kiln Group Limited (TMKGL). TMKGL and its subsidiaries are referred to as Tokio Marine Kiln (TMK)
.
TMKGL
ultimate parent is Tokio Marine Holdings, Inc., Japan (Tokio Marine).
TMKS is authorised by the Prudential Regulation Authority (PRA)
and regulated by the Financial Conduct Authority
(FCA)
.
Directors
S Batori
C Fuhrmann
V M Gordon-Walker
N I Hutton-Penman
B T Irick
A McNamara
C J G Moulder
R Patel
A M W Shaw
V Syal
D A Torrance (Chair)
M H Trussell
C J B Williams (resigned 31 March 2024)
Company secretary
Investment managers
A Gordon
BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
Active underwriter
London EC2N 2DL
M A Mortlock
New England Asset Management Limited
Registered office
The Oval-Block 3, Shelbourne Road, Ballsbridge,
20 Fenchurch Street
D04 T8F2, Dublin 4, Ireland
London EC3M 3BY
Alcentra NY, LLC
Registered numbers
200 Park Avenue, 7th Floor
TMKS company number
00729671
New York, NY 10166
FCA reference number
204909
United States of America
1041K
Delphi Capital Management, Inc.
Bankers
590 Madison Avenue, 30
th
floor
Barclays Bank plc
New York, NY 1022
Citibank, N.A.
United States of America
Royal Bank of Canada
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London SE1 2RT
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
5
Report of the Directors of the managing agent
The Directors of the managing agent (the Board) present their report and audited accounts for the year ended 31
December 2024 under UK Generally Accepted Accounting Practice (GAAP). This report covers Syndicate 510 (the
Syndicate), managed by TMKS. The managing agent
which is in Japan.
The annual report for the managed syndicate is prepared using the annual basis of accounting as required by Statutory
Instrument No. 1950 of 2008, the Insurance Accounts Directive
Syndicate and Aggregate Accounts) Regulations
2008.
Separate underwriting year accounts for the 2022 year of account are also included in this report.
Principal activity
The principal activity of the Syndicate remains the transaction of general insurance and reinsurance business on a
was written on a split stamp basis with Syndicate
1880, split 80% to the Syndicate and 20% to Syndicate 1880. Business attaching to the 2020 and prior years of account
did not form part of the split stamp arrangement.
Results
The result for the 2024 calendar year was a profit of £155.5 million
performance indicators during the year were as follows:
2024
£m
2023
£m
Gross written premium
1,817.3
1,792.8
Net earned premium
1,295.2
1,142.2
Profit for the financial year
155.5
229.7
Investment return
68.4
74.2
Claims ratio
(1)
54.0%
47.3%
Combined ratio
(2)
93.2%
86.5%
(1)
Claims ratio - Total of net incurred claims as a percentage of net earned premium
(2)
Combined ratio - Total of net incurred claims, net acquisition costs and operating expenses as a percentage of net earned premium
Review of the business
plication to merge Syndicate 1880 into
the
2025 year of account.
increased to
£2.23 billion (2024 year of account: £1.77 billion). It is anticipated that the last trading year of account of Syndicate 1880
(the 2024 year of account) will reinsure-to-close into the
2025 year of account at 36 months.
Performance
Gross written premium for the year of £1,817.3 million (2023: £1,792.8 million) generated a profit of £155.5 million
(2023: £229.7 million) and a combined ratio of 93.2% (2023: 86.5%). At constant rates of exchange, gross written
premium increased by 4.3% compared to prior year, primarily driven by growth in the Aviation, Liability and Portfolio
Solutions divisions.
The net claims ratio of 54.0% is adverse to prior year (47.3%). Reserve deteriorations on prior year losses (defined as
movements on closed years of account and on
contributed 7.8% (2023:
3.7%) to the net claims ratio and included an increase in provisions held for potential exposures arising from the Russian
invasion of Ukraine within the Aviation and Marine & Energy divisions.
Catastrophe losses contributed 6.2% (2023: 4.6%) to the net claims ratio and included Hurricanes Helene and Milton.
Together, these events resulted in higher losses to the Syndicate compared to the catastrophes reported in 2023.
The Syndicate reported an attritional claims ratio of 40.0% (2023: 39.0%). Although higher than prior year, attritional
claims experience remains benign, particularly across the Property & Motor division.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
6
Gross written premium
Underwriting result
(1)
Performance by division
2024
£m
2023
£m
2024
£m
2023
£m
Property & Motor
916.7
953.9
127.0
107.2
Liability
265.5
251.7
17.4
20.9
Aviation
182.8
159.9
(60.3)
(33.8)
Portfolio Solutions
139.1
127.4
12.7
7.3
Cyber & Enterprise Risk
119.7
118.2
13.2
6.3
Marine & Energy
107.1
100.1
(8.1)
25.0
Special Risks
87.9
80.1
(35.7)
16.3
Reinsurance
(1.5)
1.5
21.5
5.5
1,817.3
1,792.8
87.7
154.7
(1)
Underwriting result
Profit/(loss) before investment return and foreign exchange gains/(losses)
Property & Motor
The Property account specialises in insurance for large and mid-sized corporate properties worldwide. The Motor portfolio
consists of fire, theft, collision and motor truck cargo cover and physical damage risks mainly focussed in the US.
The division generated gross written premium of £916.7 million (2023: £953.9 million) and an underwriting profit of
£127.0 million (2023: £107.2 million). The reduction in gross written premium reflects increased market competition,
with several accounts non-renewed as underwriters maintain rate discipline.
The underwriting profit reflects positive attritional claims experience across almost all classes, most notably Property Open
Market. The division also benefitted from favourable reserve releases on prior year catastrophe losses, primarily relating
to Hurricanes Otis, Ian and Idalia. Catastrophe losses in 2024 included weather related losses from Hurricanes Helene,
Milton and Beryl and contributed 10.4% to
Liability
The Liability division provides coverage for a range of global businesses in case their processes, activities or products
cause unintended damage or injury to third parties.
The division produced gross written premium of £265.5 million (2023: £251.7 million) and an underwriting profit of £17.4
million (2023: £20.9 million). At constant rates of exchange, gross written premium grew by £19.2 million, primarily
attributed to the Delegated and Professional Indemnity classes.
The underwriting profit of £17.4 million reflects benign attritional claims experience across the open years of account of
both the International Open Market and Delegated classes of business.
Aviation
In addition to hull and aviation liability cover (including war), the team provides coverage to component manufacturers,
service operations and third-party liability insurance for airports. The division contains a balanced portfolio of risk across
a broad selection of aviation classes, with no over-dependence on any one area of the account.
The division reported gross written premium of £182.8 million (2023: £159.9 million) and an underwriting loss of £60.3
million (2023: loss of £33.8 million). At constant rates of exchange, the division reported premium growth of £26.0 million
driven by the deployment of larger line sizes on high-value accounts within the Hull War class, as well as new business
opportunities within the General Aviation class.
The underwriting loss of £60.3 million includes an increase in provisions for potential exposures arising from the Russian
invasion of Ukraine, in addition to adverse developments on the prior years of account within the Aerospace and Excess
Liability accounts.
Portfolio Solutions
The Portfolio Solutions division includes Accident & Health, Crisis Management, Equine, Facilities, Aviation Reinsurance
and Innovation business and provides bespoke insurance and reinsurance solutions for a broad spectrum of risks.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
7
The division reported gross written premium of £139.1 million (2023: £127.4 million) and an underwriting profit of £12.7
million (2023: £7.3 million), with growth achieved through the Facilities and Accident & Health product lines.
The underwriting profit reflects benign attritional claims experience, particularly across Accident & Health and Facilities.
Cyber & Enterprise Risk
The Cyber & Enterprise Risk division provides first and third-party cover for cyber and intellectual property risks, as well
as errors and omissions coverage for technology companies.
The division reported gross written premium of £119.7 million (2023: £118.2 million) and an underwriting profit of £13.2
million (2023: £6.3 million). Growth was limited by increased market competition across the portfolio, resulting in rate
reductions across several large corporate accounts.
The underwriting profit of £13.2 million was driven by benign attritional loss experience across the open years of account,
coupled with prior year reserve releases within the Cyber Delegated and Intellectual Property classes.
Marine & Energy
The Marine & Energy division provides general cargo, marine excess of loss, fine art, and specie cover, as well as coverage
for offshore deep-water exploration, construction, and production exposures.
The division reported gross written premium of £107.1 million (2023: £100.1 million) and an underwriting loss of £8.1
million (2023: profit of £25.0 million). Premium growth was achieved within the Energy and Fine Art classes, the latter of
which remains a strategic growth class.
The underwriting loss of £8.1 million was driven by a combination of open year catastrophe losses and reserve
deteriorations on the closed years of account. Catastrophe losses that impacted the division included the Baltimore Bridge
Collapse and Hurricanes Milton and Helene. The closed years of account were impacted by an increase in provisions for
potential exposures arising from the Russian invasion of Ukraine within the Marine Excess of Loss class, in addition to
adverse developments across the Energy account.
Special Risks
The Special Risks division provides coverage for a range of bespoke risks including consequential loss, political risks,
contract frustration and trade credit.
The division reported gross written premium of £87.9 million (2023: £80.1 million) and an underwriting loss of £35.7
million (2023: profit of £16.3 million). At constant rates of exchange, gross written premium was £9.0 million ahead of
prior year driven by the Contract Frustration and Trade Credit classes of business.
The underwriting loss of £35.7 million reflects heightened claims activity across all years of account.
Reinsurance
The division was placed into run-off in September 2022 and produced a calendar year underwriting profit of £21.5 million
(2023: £5.5 million), driven by reserve improvements from weather-related losses, primarily related to Hurricane Ian.
2022 underwriting year of account
The Syndicate made a 2022 closing year profit of £71.5
agents fees) on allocated capacity of
£1,499.1 million (return on capacity 4.8
and investment income.
The 2022 underwriting year of account benefitted from benign attritional claims experience across the Property & Motor
and Liability divisions, coupled with strong investment return of £61.7 million following falling yields during 2024.
This was partially offset by potential exposures relating to the Russian invasion of Ukraine impacting the Aviation, Marine
& Energy and Special Risks divisions. The underwriting year of account result was also impacted by a series of weather-
related catastrophes including Hurricane Ian, Winter Storm Elliot and the US Tornadoes throughout 2022.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
8
2025 Outlook
Although market conditions are expected to soften heading into 2025, the Syndicate remains well-placed to take
advantage of new opportunities that meet risk appetite and generate sufficient underwriting returns.
The Syndicate remains focussed on its aim of building a market leading business that is profitable, well diversified, and
of growth in 2025 include the Speciality Reinsurance (after
recruitment of a dedicated underwriter), Marine & Energy and Cyber & Enterprise Risk divisions.
Reinsurance to close (RITC) of Syndicate 557
Effective 1 January 2025, the Syndicate accepted the transfer of the remaining assets and liabilities of the 2022 and prior
underwriting years of account
of an RITC agreement. Please also refer to note 24.
Capital management
: the Syndicate consists of specialist underwriters, providing a wide variety of
products tailored to their
-wide framework
for the management of risk across the whole of TMK. The Syndicate focusses on specialist lines of insurance and
reinsurance business where the occurrence of a loss is known relatively quickly, and so it is able to make more immediate
reliable estimates regarding the extent of the losses expected. The Syndicate is substantially exposed to catastrophe
related business and the underwriters have detailed knowledge of the risks underwritten.
It is
policy to confine risk exposure primarily to core areas of expertise: the underwriting of specialist
insurance and reinsurance risks. This approach results in prudent financial risk management, such as investment
management and reserving. This allows the Syndicate to protect capital and focus its risk appetite on underwriting.
Services and Markets Act 2000, and in accordance with Solvency II and the Insurance and Reinsurance Undertakings
(Prudential Requirements) (Risk Margin) Regulations 2023.
Ll
objectives.
syndicate level as a
startin
a syndicate level. Accordingly, the capital
requirement at syndicate level is not disclosed in these report and accounts.
uirements, 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 li
SCR at the same confidence level but reflecting uncertainty over a one-year time horizon (one-
to use in meeting Solvency II requirements. The SCRs of each syndicate
s total capital
requirement is theref
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
known as the Economic Capital Assessment (ECA). The purpose of this uplift, which is a requirement set by
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
9
Provision of capital by members
Each member may provide capital to meet its ECA either through assets
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
respective balance sheets, represent resources available to meet the members
-wide capital uplift applied for 2024 to derive the ECA is 35.0% (2023: 35.0%) of the members
Capital allocation
The Syndicate has an approved internal model which is used to calculate capital requirements, allocate capital to business
lines and risk categories and assess the value of different business and reinsurance strategies. The calculations are based
upon sophisticated mathematical models that reflect the key risks in the business, allowing for the probability of
occurrence, the potential impact should losses occur and the interactions between the different risk types.
The results of the modelling confirm that the majority of capital is required to support insurance risk.
Risk management and risk appetite
There is a comprehensive, enterprise-wide Risk Management Framework (RMF) in place for the management of risk across
the whole of TMK. A key element of this is the Risk Appetite Framework (RAF) which is approved by the Board each year
and lays out the agreed appetite for each area of risk the Syndicate is exposed to.
TMK is exposed to a variety of risks and the Board has developed a strategy for categorising, managing and reporting
these different risks. This high-level categorisation is called the TMK Risk Universe. The Risk Universe is defined
complete view of all pos
includes risks that could positively or negatively impact the business and underpins the RAF, which sets out the parameters
for risk taking.
The RAF ensures that risk taking is aligned to the business strategy by including a set of risk preferences. These are
strategic choices taken by the business to deliver the best result to its stakeholders. These preferences change over time
as the strategy develops, ensuring the Syndicate remains relevant to its clients, whilst adapting to market conditions.
Risk appetites are regularly monitored with risk metrics supported by qualitative and quantitative data collated by the
Risk Management team (RMT) from first-line teams and are reported quarterly as part of the Own Risk and Solvency
Assessment (ORSA) process to the Risk, Capital & Compliance Committee (RCCC).
Key risks facing TMK are included in the risk register and form part of the regular risk assessment process, facilitated by
the RMT. Risks are reported on a quarterly basis as part of the ORSA process to the RCCC.
The principal risks, known as Tier 1 risks, are Solvency, Liquidity, Earnings Volatility and Reputational. The Syndicate also
has exposure to the following Tier 2 risks: Insurance, Market, Counterparty Credit, Operational, Regulatory, Strategic and
Conduct. Additionally, the Syndicate faces Climate and Emerging risks.
Tier 1 risks:
Solvency risk
This is the risk of non-
Syndicate has enough capital to meet demands as they
fall due.
Solvency risk is driven by exposure to several other risks such as Insurance, Market, Credit and Operational. These risks
and their mitigants are described later in this section.
Liquidity risk
This is the risk of the Syndicate being unable to meet liabilities in a timely manner due to the lack of liquid resources.
To mitigate liquidity risk, the Treasury team reviews syndicate cash flow projections quarterly, and also stress tests them
against Realistic Disaster Scenarios. In the event of a catastrophe loss of a significant size, the Syndicate has the ability to
take advantage of outstanding claims advances from its major reinsurers. The Syndicate also has the ability to make cash
calls on its members in order to manage liquidity.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
10
Earnings volatility risk
This is the risk that there is excessive fluctuation in profits.
Exposure to this risk is calculated annually as part of
business plan submission and reviewed by the RMT
through the business plan review.
This risk is managed on an ongoing basis through checks which ensure the Syndicate underwrites business in accordance
with
business plan.
Reputational risk
adverse effects such as a loss
of revenue, brand damage or litigation.
In the modern digital era, reputational risk and the subsequent threat to
strong brand is becoming more significant.
Loss of confidence from customers, regulators or capital providers could cause long-term harm to the business.
In light of this, all staff are made aware of their responsibilities to clients and other stakeholders.
Tier 2 risks:
Insurance risk
This is the risk of loss arising from the inherent uncertainties as to the occurrence, amount and timing of insurance liabilities.
Due to the cyclical nature of insurance business, there is a risk that future earnings are lower or more volatile than expected
with fluctuations in capacity, competition and the frequency and severity of losses, as a result of both man-made and
natural disasters.
Insurance risk is sub-divided into several categories which include underwriting risk, reinsurance risk and reserving risk.
Underwriting risk
This is the risk arising from fluctuations in the frequency and severity of financial losses incurred as a result of the
acceptance of the insurance portfolio of business.
RAF and the business plan, which
sets out targets for volumes, pricing, line sizes and retention by class of business. Volume and price performance is
monitored against
quarterly. The RMT conduct an annual review of the business plan.
Catastrophe modelling software is used to model maximum probable losses from catastrophe-exposed business and as part
of the Realistic Disaster Scenario process. The Syndicate has adopted a cyber aggregate monitoring tool to manage the
growing exposures in this area.
ugh delegated authorities. A dedicated Delegated
Authority team provides operational and regulatory oversight of
coverholders and third-party
administrators, carrying out annual due diligence, an ongoing schedule of audits and management of regulatory
requirements.
As an underwriter of complex and specialist insurance business, ensuring compliance with licensing and other regulatory
requirements is a priority for the Board. This is overseen by the Product and Underwriting Governance Committee (PUGC).
The PUGC also oversees adherence to internal standards for delegated authority arrangements.
Reinsurance risk
This is the risk that reinsurance purchased to protect the gross account does not respond as intended due to, inter alia,
mismatch with gross losses; poorly worded contracts; reinsurer counterparty risk; or exhaustion of reinsurance limits. The
risk is heightened if there is a lack of reinsurance or retrocession availability in the market.
Reinsurance is used to protect capital against underwriting risk volatility, either as a result of large catastrophes or from
the severity of losses on individual policies.
To mitigate this risk, there is a process in place to monitor early warning of exposures outside of tolerance thresholds, with
post-placement reviews undertaken and reported to the Underwriting Committee.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
11
Reserving risk
This is the risk that reserves held on the balance sheet will be inadequate to meet the net amount payable when insurance
liabilities crystallise and is exacerbated due to the inherent uncertainty of knowing the ultimate timing and quantum of
liabilities incurred.
Claims provisions represent estimates, based on both the underwri
administration costs of claims incurred. A variety of estimation techniques are used, generally based upon statistical
analyses of historical loss development patterns, to assist in the establishment of appropriate claims reserves.
In addition, the estimates are subject to independent review by external actuaries, who sign an annual Statement of
Actuarial Opinion on the sufficiency of the reserves for the Syndicate.
policy is to reserve on a consistent
basis with a reasonable margin for prudence. Claims run-off tables are used to monitor the history of reserve adequacy,
and these show a trend of predominantly positive run-off since they were first prepared in 2001.
Market risk
This is the risk that arises from fluctuations in values of, or income from assets, interest rates or exchange rates.
Assets are held as a result of underwriting activities either in premium trust funds or as capital support. On-going
investment strategy, investment objectives and the management of risks arising from investments are agreed by the
Investment Committee in line with the Prudent Person Principle, as outlined in the Solvency II Directive.
The Syndicate monitors its cash-flow on a daily basis and reviews its cash-flow forecasts, foreign currency exposures and
asset-liability matching regularly.
Counterparty credit risk
This is the risk of loss if another party fails to meet its financial obligations, including failure to meet them in a timely
manner.
The Syndicate is exposed to three types of credit risk: reinsurer credit risk; broker/coverholder credit risk; and investment
credit risk. Credit exposure and aggregate exposure to reinsurers are managed by the Outwards Reinsurance team. The
team assesses all new reinsurers before business is placed with them, and monitors the credit ratings of all reinsurers
used. The performance of premium debtors, from brokers and coverholders, is monitored regularly. The Investment
Committee regularly tracks and reviews
investment portfolio, the management of which is outsourced to
investment managers who manage the portfolios within permitted counterparty limits.
Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate.
The Board seeks to manage this risk by the recruitment of high calibre staff and providing them with ongoing, high-quality
training. Operational risks are reviewed on a regular basis with departmental heads responsible for identifying, assessing
and controlling operational risks effectively, as well as attesting to the effectiveness of these controls on a regular basis.
This forms the Risk and Control Self-Assessment (RCSA) process which is supported by the RMT who independently assess
key risks and controls on a regular basis.
There is a strong risk reporting and risk governance system in place to ensure effective risk management of operational
risk. This is underpinned by the RMF and the RAF. The RCCC reviews the most material elements of the operational risk
profile quarterly, in line with the RMF. Attention is paid to how the risks from cyber security threats are managed by the
Information Security Group.
The Board is aware of its fiduciary responsibilities to capital providers across each of its four managed syndicates and is
careful to ensure equity between them. Potential conflicts of interest between capital providers are managed through the
Conflicts Committee, which reports to the Board.
Regulatory risk
This is the risk of loss owing to a breach of regulatory requirements or failure to respond to regulatory change.
The Board
market by overseas regulators, particularly in respect of US and Canadian regulated business. The Compliance function
is responsible for monitoring compliance with regulation and monitoring of regulatory change. The Compliance framework
outlines the broad regulatory and compliance structure that applies to all staff.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
12
The nature of
business exposes the managing agent to controls and sanctions which regulate international
trade. Processes and controls are in place to screen and monitor transactions against relevant requirements to ensure
compliance with them.
Strategic risk
This is
the risk of making poor business decisions in the context of the internal and external market environment in which the
Syndicate operates.
Strategic risk is managed via the Board which is ultimately responsible for setting and monitoring
strategic direction. Below the Board, various sub-committees discuss and challenge business strategy.
Conduct risk
the customer value chain.
-term relationships with customers, whether they be
held directly or indirectly via a third party. This culture of partnership is fundamental to the Syndicate
s dealings with its
customers, and comes regardless of the complexity of the risk, the sophistication of the buyer, or the length of the supply
chain to the end customer.
The conduct objective is central to delivering good outcomes for customers, aligning with the FCA Consumer Duty's cross-
cutting rules and four customer outcomes: products and services, price and value, consumer understanding, and
consumer support, which apply to all in scope UK business.
The management of conduct risk applies to all business, regardless of product lines and customer types, across both open
market and delegated underwriting and is achieved through the application of the Conduct Risk Framework. The
framework is applied in a proportionate, risk-based way which takes account of the different inherent conduct risk across
products, distribution and customer types. Conduct risk and the treatment of customers is monitored by the PUGC.
Other risks:
Climate risk
Climate risks are recognised by the Board as manifesting through a range of physical, transitional, reputational, strategic
and litigation risks as a result of climate change.
The Board considers climate risk to be a transverse risk, with each risk category affected by varied risks from climate
change. For example, physical risks of climate change such as increased severity of weather-related perils will have effects
across insurance risk, market risk and operational risk. Likewise, the global transition to low carbon will have effects
across the business.
The Board recognises the severity of the risks posed by climate change, and the need for a robust risk management
response. The risks are identified, managed and reported both internally and externally.
Sustainability Strategy.
The RMT has performed scenario analysis to better understand the range and materiality of climate risks affecting TMK,
in collaboration with the business. This includes physical, transitional, reputational and litigation risks.
Emerging risk
The Board defines an emerging risk as relating to a new or evolving area that is perceived to be potentially significant in
terms of its impact on society and the insurance industry. These risks are characterised by significant uncertainty, with
limited relevant historical information.
The Board is committed to the continual research and identification of emerging risks and actively monitors research
undertaken independently, and via market working groups. Emerging risk analysis is included in the ORSA process with
annual and where relevant, quarterly updates. Through the effective management of emerging risks, the Board is able to
identify external trends and threats, and improve risk selection and knowledge of future risk exposures. Emerging risks
may present both threats and opportunities to the business and, as the Syndicate has done in the past, it will readily
capitalise on identified opportunities in this area.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
13
Directors
The Directors of the managing agent who served during the year ended 31 December 2024, as well as any subsequent
changes, are listed unde
and advisers
Post balance sheet events
These are discussed in note 24 of the annual accounts.
Disclosure of information to the auditors
As far as each person who was a Director of the managing agent at the date of approving this report is aware, there is
no relevant audit information, which is information needed by the auditors in connection with their report, of which the
auditors are unaware. Having made enquiries of fellow Directors of the managing agent and the S
each Director has taken all the steps that they are obliged to take as a Director in order to make themselves aware of
any relevant audit information and to establish that the auditors are aware of that information.
Reappointment of auditors
The Board approved the reappointment of PricewaterhouseCoopers LLP as auditors for the current year and on an ongoing
basis for the managed syndicates, managing agent and other TMK Group entities.
Syndicate annual general meeting
In accordance with the Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000) the managing agent does not
propose holding a syndicate annual meeting this year; objections to this proposal or the intention to reappoint the auditors
for a further 12 months can be made by the Syndicate
members in writing to the Company Secretary within 21 days of
this notice.
Approved by the Board of Directors
A M W Shaw
Chief Executive Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
14
The managing agent is responsible for preparing the Syndicate annual report and annual accounts in accordance with
applicable law and regulations.
requires the managing agent to prepare syndicate annual accounts for each syndicate at 31 December each year, in
accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). The annual accounts are required by law to give a true and fair view of the state of affairs of the Syndicate
as at that date and of its profit or loss for that year.
In preparing the S
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable United Kingdom accounting standards have been followed, subject to any material
departures disclosed and explained in the annual accounts; and
prepare the annual accounts on the going concern basis for each syndicate unless it is intended for the Syndicate to
cease operations, or it has no realistic alternative but to do so.
The managing agent is responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of each syndicate and enable it to ensure that the Syndicate annual accounts comply with the
2008 Regulations. It is also responsible for safeguarding the assets of each syndicate and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The managing agent is responsible for the maintenance and integrity of the corporate and financial information included
on its website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The managing agent is responsible for the preparation and review of the iXBRL tagging that has been applied to the
maintaining systems, processes and internal controls to result in tagging that is free from material non-compliance with
The Directors of the managing agent confirm that they have complied with the above requirements in preparing the
Syndicate
annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
15
Independent auditors’ report to the members of Syndicate 510
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 510’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 version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the Lloyd’s
Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Report and Accounts
(the “Annual Report”), which
comprise: the Balance sheet: assets and the Balance sheet: liabilities as at 31 December 2024; Profit and loss and other
comprehensive income: technical account – general business, Profit or loss and other comprehensive income: non-
technical account – general business, 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 4, 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.
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.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
16
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 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.
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.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
17
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 the posting of
inappropriate journals and management bias in accounting estimates. Audit procedures performed by the engagement
team included:
•
Discussions with management, internal audit and the risk and compliance functions, including consideration of known
or suspected instances of non-compliance with laws and regulation and fraud;
•
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to valuation of the IBNR component of claims outstanding, reinsurance to close and pipeline premium
income;
•
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
impacting revenue, journals posted by senior management and/or those posted late in the year end close process;
and
•
Reviewing relevant meeting minutes including those of the Conflicts Committee, Risk, Capital & Compliance Committee
and Audit Committee and correspondence with regulatory authorities, including Lloyd’s of London and the Prudential
Regulation Authority.
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 members as a body 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 version 2.0.
Matthew Nichols (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 March 2025
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
18
Profit and loss and other comprehensive income
Technical account - general business for the year ended 31 December 2024
Note
2024
£
2023*
£
Gross premiums written
3
Outward reinsurance premiums
(494,089 )
(542,618 )
Premiums written, net of reinsurance
Change in the gross provision for unearned premiums
8
(34,223 )
(132,961 )
8
Net change in provisions for unearned premiums
(28,003 )
(107,956 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
7
Claims paid:
-
Gross amount
8
(740,601 )
(746,575 )
-
8
Net claims paid
(515,823 )
(519,581 )
Change in the provision for claims:
-
Gross amount
8
(224,432 )
(85,650 )
-
8
Net change in provisions for claims
(183,324 )
(20,119 )
Claims incurred, net of reinsurance
(699,147 )
(539,700 )
Net operating expenses
4,5,6
(508,357 )
(447,736 )
Balance on the technical account for general business
*Please refer to the Restatement of comparative information section in note 1.1.
All operations are continuing.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
19
Profit and loss and other comprehensive income
Non-technical account
general business for the year ended 31 December 2024
Note
2024
£
2023*
£
Balance on the technical account - general business
Investment income
7
Realised gains on investments
7
Unrealised gains on investments
7
Investment expenses and charges
7
(724 )
(552 )
Total investment return
Allocated investment return transferred to the general business
technical account
(68,445 )
(74,220 )
Loss on foreign exchange
(7,130 )
(7,263 )
Other income
Profit for the financial year
Total comprehensive income for the year
*Please refer to the Restatement of comparative information section in note 1.1.
There is no other comprehensive income. Accordingly, a separate statement of other comprehensive income has not been
provided.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
20
Balance sheet: assets
as at 31 December 2024
Note
2024
£
2023
£
Financial investments
21
Deposits with ceding undertakings
Investments
Provision for unearned premiums
8
Claims outstanding
8,9
Debtors arising out of direct insurance operations
10
Debtors arising out of reinsurance operations
11
Other debtors
12
Debtors
Cash at bank and in hand
13
Other (Overseas deposits)
Other assets
Deferred acquisition costs
15
Prepayments and accrued income
Total assets
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
21
Balance sheet: liabilities
as at 31 December 2024
Note
2024
£
2023*
£
Members' balances
Total capital and reserves
Provision for unearned premiums
8
Claims outstanding
8,9
Technical provisions
Deposits received from reinsurers
Creditors arising out of direct insurance operations
16
Creditors arising out of reinsurance operations
17
Other creditors including taxation and social security
18
Creditors
Accruals and deferred income
Reinsurers
share of deferred acquisition costs
15
Total liabilities
Total liabilities, capital and reserves
*Please refer to the Restatement of comparative information section in note 1.1.
The annual accounts, which comprise the Profit and loss and other comprehensive income: technical account
general
business, Profit and loss and other comprehensive income: non-technical account
general business, Balance sheet:
assets, Balance sheet: liabilities, Statement of changes in
balances, Statement of cash flows and Notes to the
annual accounts and significant accounting policies, were approved by the Board of Tokio Marine Kiln Syndicates Limited
on 5 March 2025 and were signed on its behalf by:
R Patel
Deputy Chief Executive Officer & Chief Financial Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
22
Statement of changes in
balances
for the year ended 31 December 2024
2024
£
2023
£
(28,081 )
Total comprehensive income for the year
personal reserve funds
(2,048 )
(88,133 )
Losses collected from
Members agent fees
(3,289 )
(3,045 )
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.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
23
Statement of cash flows
For the year ended 31 December 2024
2024
£
202
3
Restated*
£
Cash flows from operating activities:
Profit for the financial year
Increase in gross technical provisions
Increase
technical provisions
(47,657 )
(49,983 )
Decrease/(increase) in debtors
(17,284 )
Decrease in creditors
(85,017 )
(32,519 )
Decrease in deposits received from reinsurers
(1,085 )
(513 )
Movement in other assets/liabilities
(4,941 )
(19,859 )
Investment return
(68,445 )
(74,220 )
Foreign exchange
Other
(1,349 )
Net cash flows from operating activities
Cash flows from investing activities:
Purchase of equity and debt instruments
(851,214 )
(494,688 )
Sale of equity and debt instruments
Sale of derivatives
Investment income received
Net cash flows from investing activities
(166,806 )
(69,377 )
Cash flows from financing activities:
Distribution of profit
(2,047 )
(88,134 )
Collection of losses
Other
(3,289 )
(3,045 )
Net cash flows from financing activities
(3,339 )
(91,179 )
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange on cash and cash equivalents
(1,231 )
(367 )
Cash and cash equivalents at the end of the year
*Please refer to the Restatement of comparative information section in note 1.1.
.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
24
Notes to the annual accounts and significant accounting policies
1.
Accounting policies
1.1 Statement of compliance
Syndicate and Aggregate Accounts) Regulations 2008 and Accounting Standards in the United Kingdom, including
, and
Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1
. The
general business result is determined on an annual basis of accounting.
These annual accounts are prepared under the historical cost convention, as modified by the recognition of certain financial
assets and liabilities measured at fair value.
The preparation of annual accounts requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Syndicate accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the annual accounts, are disclosed in
note 2.
These annual accounts are presented in pounds sterling, which is the functional currency of the Syndicate. All amounts have
been rounded to the nearest thousand pounds, unless otherwise stated.
Restatement of comparative information
During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative information has been restated to ensure consistency with
current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions. The changes comprise:
a) Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The
principal change is the reclassification of profit commission
ccount
Other creditors including taxation and social security
as shown
below. The comparative balances in note 18 have also been reclassified to align with the current period presentation.
Balance sheet: liabilities
2023
£
Reclass
£
2023
(restated)
£
Creditors arising out of direct insurance operations
101,708
-
101,708
Creditors arising out of reinsurance operations
348,656
-
348,656
Other creditors including taxation and social security
4,859
23,377
28,236
Creditors
455,223
23,377
478,600
55,849
-
55,849
Other accruals and deferred income
23,377
(23,377)
-
Accruals and deferred income
79,226
(23,377)
55,849
b) Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated
or disaggregated within the financial statements and related notes. This includes the presentation of realised and
unrealised gains and losses on investments, which are now shown on a disaggregated basis in the
rofit and loss and
other comprehensive income: non-technical account
personal expenses, which are now shown on an agg
rofit and loss
and comprehensive income: technical account
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
25
c) Correction of error
During the review of financial statement presentation, it was identified that certain short-term, highly liquid cash
equivalents as defined under paragraph 7.2 of FRS 102 had been omitted from the opening and closing cash equivalents
in the Statement of cash flows. The restated Statement of cash flows is shown below:
Statement of cash flows
2023
£
Restatement
£
2023
(restated)
£
Cash flows from operating activities:
Profit for the financial year
229,746
-
229,746
Decrease in creditors*
(36,507)
3,988
(32,519)
Movement in other assets/liabilities*
(16,384)
(3,475)
(19,859)
Other operating cash flows*
1,670
(513)
1,157
Net cash inflow from operating activities
178,525
-
178,525
Purchase of equity and debt instruments
(536,708)
42,020
(494,688)
Sale of equity and debt instruments
397,598
(16,573)
381,025
Other investing cash flows
44,286
-
44,286
Net cash flows from investing activities
(94,824)
25,447
(69,377)
Net cash flows from financing activities
(91,179)
-
(91,179)
Net (decrease)/increase in cash and cash equivalents
(7,478)
25,447
17,969
Cash and cash equivalents at beginning of year
21,861
80,407
102,268
Foreign exchange on cash and cash equivalents
(367)
-
(367)
Cash and cash equivalents at the end of the year
14,016
105,854
119,870
*These adjustments relate to reclassification and aggregation changes as noted in (a) and (b) above.
The reclassification and aggregation changes in (a) and (b) above have been applied retrospectively and had no impact
on previously reported profit, total comprehensive income, total assets, total liabilities, or total capital and reserves. The
restatement in (c) above increased the overall cash and cash equivalents reported in the Statement of cash flows by
£105,854,000 but did not impact the overall asset position recognised in the Balance sheet: assets account.
1.2 New standards and amendments
The Syndicate has applied FRS 102 and FRS 103 as issued in September 2024, which reflects the amendments made
since the previous editions were issued in 2022
.
FRS 102 is subject to a periodic review at least every five years. In December 2022, the Financial Reporting Council
published its periodic review of amendments to FRS 102 (FRED 82). The proposed effective date for these amendments
is accounting periods beginning on or after 1 January 2026, with early application permitted (provided all amendments
are applied at the same time).
The proposed amendments within FRED 82 are focussed on updating accounting requirements to reflect changes in
International Financial Reporting Standards (IFRS), particularly with respect to the following:
The proposed basis for revenue accounting will align to IFRS 15 Revenue from Contracts with Customers, and a
five-step model for revenue recognition, with appropriate simplifications.
The proposed basis for lease accounting will align to IFRS 16 Leases, and an on-balance-sheet model, with
appropriate simplifications.
The Syndicate has not applied any amendments from FRED 82 for the year ended 31 December 2024 and will assess the
impact of the publication in future accounting periods.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
26
1.3 Funds at
Every member is required to hold capital at
which is held in trust and is known as Funds at
(FAL). These
funds are intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating
underwriting liabilities.
The level of FAL that
requires a member to maintain is determined by
based on PRA requirements and
resource criteria. FAL has regard to a number of factors, including the nature and amount of risk to be underwritten by
the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not
under the management of the managing agent, no amount has been shown in these annual accounts by way of such
capital resources. However, the managing agent is able to make a call on the
FAL to meet liquidity requirements
or to settle losses.
1.4 Going concern
The Directors consider it appropriate to adopt the going concern basis of accounting in preparing the annual accounts.
The following are key factors that the Directors have considered in adopting the going concern basis of accounting:
complies with Solvency II requirements, and beyond to meet its own financial strength, licence and ratings
objectives.
A- Very Strong), Fitch (AA- Very
Strong), AM Best (A Excellent) and Kroll Bond (AA- Stable).
Cash flow forecasting and monitoring: Cash flow forecasts for the next 12 months are prepared on a regular basis
Syndicate business forecast: The Syndicate business forecast for the 2025 year of account was approved by
Reinsurance purchasing: The Syndicate has purchased reinsurance to manage insurance risk and reinsurer credit
ratings are assessed at placement, and where credit ratings are not sufficient, collateral is requested to mitigate
liquidity risk.
1.5
Summary of accounting policies
The significant accounting policies adopted in the preparation of the annual accounts are set out below. They have been
applied consistently to all periods presented in these annual accounts.
a. Product classification
Insurance contracts are defined as those containing significant insurance risk at the inception of the contract, or those
where at the inception of the contract there is a scenario with commercial substance where the level of insurance risk
may be significant. The significance of insurance risk is dependent on both the probability of an insured event and the
magnitude of its potential effect.
b. Premiums written
Inwards premiums written comprise premiums on contracts incepting during the financial year as well as adjustments
made in the year to premiums on contracts incepting in prior accounting periods. Premiums in respect of insurance
contracts underwritten under facilities such as binding authorities, lineslips or consortia arrangements are estimated based
on information provided by the broker, past underwriting experience and prevailing market conditions. The estimates are
updated on a regular basis. It is assumed that the majority of risks incept evenly across the period of the facility; however
bespoke writing patterns are used for a small number of facilities. Therefore, only the proportion of risks incepted at the
year-end date are reported as written. Premiums are shown gross of brokerage payable and exclude taxes and duties
levied on them. Estimates are made for pipeline premiums on a risk-by-risk basis, representing the difference between
written and signed (premium processed for future settlement) premium, which is held on the balance sheet as an asset.
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct
or inwards business being reinsured.
c. Earned premiums
Inwards and outwards earned premium represents the amount of written premium deemed to have been exposed to loss
according to defined earnings patterns. The earning patterns are based primarily on time apportionment, with an
adjustment for the risk profile of certain classes of business, particularly those exposed to seasonal weather-related
events. The provision for unearned premium comprises the proportion of gross premiums written which is estimated to
be earned after the balance sheet date.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
27
Reinstatement premiums arise on both inwards and outwards policies when a loss has been incurred on a policy and there
is a clause which requires the reinstatement of the policy with the payment of a further premium by the policyholder.
They are recognised as written and earned in full at the date of the event giving rise to the reinstatement premium.
Outwards reinstatement premiums payable in the event of a claim being made are charged to the same year of account
as that to which the recovery is credited.
d. Claims paid and incurred
Paid claims represent all claims paid during the year and include claims handling expenses.
Claims incurred comprise paid claims and changes in the provisions for outstanding claims, including provisions for claims
incurred but not reported (IBNR) and related expenses, together with any adjustments to claims from previous years.
e. Claims provisions and related recoveries
Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or not,
including related direct and indirect claims handling costs and adjustments to claims outstanding from previous years.
Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet date,
including outstanding claims estimated on a case-by-case basis and also the cost of claims IBNR. The estimated cost of
claims includes expenses to be incurred in settling claims. All reasonable steps are taken to ensure that appropriate
information regarding claims exposures is obtained. However, given the uncertainty in establishing claims provisions, it
is likely that the final outcome will prove to be different from the original liability established. All claims provisions are
reported on an undiscounted basis.
Reinsurance recoveries are accounted for in the same period as the incurred claims for the related business. The
laims incurred, net of estimated
irrecoverable amounts.
f. Provision for unexpired risks
Provision is made for any deficiencies arising when unearned premiums, net of associated acquisition costs, are insufficient
to meet expected claims and expenses after taking into account future investment return on the investments supporting
the unearned premiums provision. The expected claims are calculated having regard only to events that have occurred
prior to the balance sheet date. The need for an unexpired ris
Unexpired risks surpluses and deficits are offset where business classes are managed together and a provision is made if
an aggregate deficit arises. The unexpired risks provision is included within other technical provisions.
All reasonable steps are taken to ensure that the appropriate information regarding claims exposures is obtained. The
calculation is based upon statistical analyses of historical experience, which assumes that the development pattern of
premiums and claims will be similar to past experience. Allowance is made, however, for changes or uncertainties which
may create distortions in the underlying statistics or which might cause the cost of unsettled claims to increase or reduce
when compared with the cost of previously settled claims. Therefore, given the uncertainty in establishing a provision for
unexpired risks, it is likely that the final outcome will prove to be different from the original liability established.
g. Net operating expenses and personal expenses
Net operating expenses comprise the cost of acquiring business including commission, profit commission and reinsurance
commission income as well as the staff costs and other expenses attributable to underwriting operations.
profit commission,
subscriptions.
Net operating expenses and personal expenses are recognised on the accruals basis and represent the expenses incurred
on underwriting operations.
h. Finance costs
Finance costs comprise interest paid and bank charges together with facility fees on letters of credit and are recorded in
the period in which they are incurred.
i. Acquisition costs
Acquisition costs, comprising commission and other costs related to the acquisition of new insurance contracts are deferred
to the extent that they are attributable to premiums unearned at the balance sheet date. Where inwards business is ceded
to an outwards proportional reinsurance treaty, an estimate of the relevant proportion of the inwards acquisition costs is
calculated and deferred in line with the outwards unearned premium at the balance sheet date.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
28
Deferred acquisition costs, representing the proportion of commission and other acquisition costs that relate to unearned
premium on policies in force at the year-end, are charged over the period in which related premiums are earned. Deferred
acquisition costs are reviewed by category of business at the end of each reporting period and are written off where they
are no longer considered to be recoverable.
j. Foreign currencies
Functional and presentation currency
Items included in the annual accounts are measured using the currency of the primary economic environment in which
the Syndicate operates (the functional currency). The annual accounts are presented in pounds sterling which is also the
functional currency of the Syndicate.
Transactions and balances
Foreign currency transactions are recorded in the functional currency using the exchange rates prevailing at the dates of
the transactions or an appropriate average rate of exchange. At each period end, foreign currency monetary items are
translated using the closing rate. For this purpose, all assets and liabilities arising from insurance contracts (including
unearned premiums, deferred acquisition costs and unexpired risks provisions) are monetary items.
Foreign exchange gains and losses resulting from the settlement of transactions and from the measurement at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the non-technical
account.
Exchange rates used are as follows:
2024
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
The distributable result on closing a year of account, usually at 36 months, is calculated using the exchange rates
prevailing at the date of closure.
k. Financial investments
The Syndicate has chosen to adopt Sections 11 and 12 of FRS 102
ther Financial
Instruments Issues
Financial instruments are initially recorded at cost, which equates to fair value, and subsequently carried at fair value
through profit or loss.
Financial instruments that are designated as fair value through profit or loss are classified using a fair value hierarchy
that reflects the significance of the inputs used in these measurements.
Level 1: the fair value of financial instruments is derived using unadjusted quoted prices in an active market for
identical assets or liabilities at the measurement date. These instruments include government bonds and securities
using quoted prices in an active market.
Level 2: the fair value of financial instruments is derived using 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. These
instruments include regularly traded government agency bonds, supranational bonds, corporate bonds, money
market and open-ended funds.
Level 3: financial instruments are derived from inputs that are not observable. Unobservable inputs are used to
measure fair value to the extent that relevant observable inputs are not available and may include internal data or
models. Assumptions from market participants may be used to formulate the valuation of certain assets and
liabilities.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
29
All regular purchases of financial investments are recognised on the trade date, being the date the Syndicate commits to
purchase the asset. All regular sales of financial investments are recognised at the earlier of the trade date and maturity
date.
A financial asset is derecognised when the contractual right to receive cash flows expires or where they have been
transferred, and the Syndicate has also substantially transferred all risks and rewards of ownership. A financial liability is
derecognised once the obligation under the liability is discharged, cancelled or expires.
l. Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at their fair value. Changes in the fair value are recognised immediately in the profit and loss
account. Fair values are obtained from quoted market prices in active markets, including recent market transactions. All
derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The best evidence of the fair value of a derivative at initial recognition is the transaction price (i.e. the fair value of the
consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets.
m. Debtors and creditors arising out of direct and reinsurance operations
Debtors and creditors arising out of direct and reinsurance operations are initially recognised at transaction price and are
subsequently carried at the recoverable amount. The carrying value is reviewed for impairment whenever events or
circumstances indicate that the carrying amount is greater than the recoverable amount, with the impairment adjustment
recorded in the profit and loss account. Debtors arising out of direct insurance and reinsurance operations are stated net
of specific provisions against doubtful debts which are made on the basis of reviews conducted by management.
n. Other debtors and creditors
Any other debtors and creditors are recognised initially at transaction price and subsequently carried at the recoverable
amount. The carrying value of other debtors is reviewed for impairment whenever events or circumstances indicate that
the carrying amount is greater than the recoverable amount, with the impairment adjustment recorded in the profit and
loss account. All other debtors and creditors are due within one year, unless otherwise stated.
o. Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, deposits held at call with banks and other short-term highly
liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of
changes in value.
Bank overdrafts, when applicable, are shown within borrowings in current liabilities. These are measured at cost less any
allowance for impairment.
p. Overseas deposits
Overseas deposits are lodged as a condition of conducting underwriting business in certain countries. These are initially
recorded at cost, which equates to fair value, and subsequently carried at fair value through profit or loss.
q. Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in unrealised
gains and losses, net of investment management expenses, including interest. Realised gains and losses on investments
carried at fair value through profit or loss are calculated as the difference between sale proceeds and the fair value at the
previous balance sheet date, or purchase price if acquired during the year. Unrealised gains and losses on investments
represent the difference between the fair value at the balance sheet date and the fair value at the previous balance sheet
date, or purchase price if acquired during the year.
Investment return on general business is initially recorded in the profit and loss non-technical account. A transfer is made
from the non-technical account to the technical account. Investment return has been wholly allocated to the profit and
loss technical account as all investments relate to the technical account.
r. Investment yield
expressed as a percentage. Aggregate investment return is the total amount of net appreciation/losses, investment
income and accrued interest received during the year, after deducting investment management costs but before deducting
tax. Average funds available is the average value of all investments (including accrued interest), deposits and surplus
cash at the beginning of the year and at each quarter-end revalued at market prices.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
30
s. Taxation
Under Schedule 19 of the Finance Act 1993 the Syndicate does not pay UK taxation, its profits being allocated and
assessed to tax on its members in direct proportion to their capacity.
The Syndicate pays various overseas direct and premium based taxes, the majority of which are allocable to its members
in direct proportion to their capacity and which can be claimed by the members either as double tax relief or as an expense
against tax liabilities.
t. Pension costs
TMK operates a defined contribution scheme. A defined contribution plan is a pension plan under which a fixed contribution
is paid into a separate entity. Once the contributions have been paid TMK has no further payment obligations. Pension
contributions relating to syndicate staff are charged to the Syndicate and included within net operating expenses.
u. Profit commission
Profit commission is charged by the managing agent at a rate of 12.5% of profit subject to the operation of a two-year
deficit clause. The S
ction of a 5% divisional profit share, again
subject to the operation of a divisional two-year deficit clause. Final settlement to the managing agent is made when the
year of account closes; normally at 36 months. Divisional profit share does not become payable until after the appropriate
year of account closes; normally at 36 months. Profit commission and divisional profit share are both estimated on an
ultimate basis for each year of account and accrued by the Syndicate on a straight-line basis to the extent it is probable
(more likely than not) that the Syndicate will be required to transfer economic benefits in settlement.
v. Provisions
A provision is recognised when the Syndicate has a present legal or constructive obligation, as a result of a past event,
that is expected to result in an outflow of resources. A provision is recognised when a reliable estimate of the amount of
the obligation can be made.
w. Current and non-current disclosure
For each asset and liability line item that combines amounts expected to be recovered or settled (a) no more than 12
months after the year-end date and (b) more than 12 months after the year-end date, the relevant note discloses the
amount expected to be recovered or settled after more than 12 months.
x. Contingencies
Contingent liabilities arise as a result of past events when either it is not probable that there will be an outflow of resources
or that the amount cannot be reliably measured at the reporting date or when the existence will be confirmed by the
occurrence or non-occurrence of uncertain future events not wholly within the S
are disclosed in the annual accounts unless the probability of an outflow of resources is remote.
y. Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the
assets and settle the liability simultaneously.
z. Other income and charges
Other income and other charges include investment return on withheld premium.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
31
2.
Use of critical accounting estimates and judgements in applying accounting policies
The preparation of the annual accounts requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the S
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the annual
accounts are those listed below.
Incurred but
not reported
claims (IBNR)
The estimation of claims IBNR is generally subject to a greater degree of uncertainty than the
estimation of the cost of settling claims already notified to the S
yndicate, where more information
about the claim event is generally available. In calculating
the estimated cost of unpaid claims the
S
yndicate uses a variety of estimation techniques, generally based upon statistical analyses of
historical experience, which assumes that the development pattern of the current claims will be
consistent with past exp
erience. Allowance is made, however, for changes or uncertainties which may
create distortions in the underlying statistics or which might cause the cost of unsettled claims to
increase or reduce when compared with the cost of previously settled claims including:
changes in processes which might accelerate or slow down the development and/or recording of
paid or incurred claims compared with the statistics from previous periods;
changes in the legal environment;
the effects of inflation;
changes in the mix of business;
the impact of large losses; and
movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified but not
paid claims. In estimating the cost of these, regard is given to the claim
circumstance as reported,
any information available from loss adjusters and information on the cost of settling claims with similar
characteristics in previous periods.
Large claims affecting each relevant business class are generally assessed separately,
either measured
on a case-by-
case basis or projected separately, in order to allow for the possible distorting effect of
the development and incidence of these large claims.
Where possible, multiple techniques are adopted in order to estimate the require
d level of provisions.
This assists in giving greater understanding of the trends inherent in the data being projected. The
projections given by the various methodologies also assist in setting the range of possible outcomes.
The most appropriate estimatio
n technique is selected taking into account the characteristics of the
business class and the extent of the development of each accident year. The amount of salvage and
subrogation recoveries is separately identified and, where material, reported as an asset.
The Directors consider that the provisions for gross claims and related reinsurance recoveries are fairly
stated on the basis of the information currently available to them. However, the ultimate liability will
vary as a result of subsequent informati
on 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 report and accounts
for the period in which the adjustments are made. The
methods used, and the estimates made, are reviewed regularly.
Provisions are calculated gross of any reinsurance recoveries. A separate estimate is made of the
amounts that will be recoverable from reinsurers based upon the gross provisions and having due
regard to collectability. An estimate of the future cost of indirect claims handling is calculated as a
percentage of the claims reserves held at the balance sheet date.
Property & Motor, Special Risks, Cyber & Enterprise Risk, Portfolio Solutions
and
Reinsurance business
occurrence of the claim and the claim being reported, with the exception of the liability risks written
in the Cyber & Enterprise Risk and Property & Motor divisions
. For short tail risks, the costs of claims
notified to the Syndicate at the year-end date are estimated on a case-by-
case basis to reflect the
individual circumstances of each claim. The ultimate expected cost of claims is p
rojected from this
data by reference to statistics which show how estimates of claims incurred in previous periods have
developed over time to reflect changes in the underlying estimates of the cost of notified claims and
late notifications. For liability
risks, claims may not become apparent for many years after the event
giving rise to the claim has happened, and there will typically be greater variation between initial
estimates and final outcomes compared with other classes.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
32
Marine & Energy, Liability and Aviation business
These business areas have a mix of hull and cargo risks that are short tail in nature, and liability risks
which are longer tail. The methodology uses a predetermined formula whereby greater weight is given
to actual claims experien
ce as time passes. The initial estimate of the loss ratio based on the
experience of previous years adjusted for factors such as premium rate changes and claims inflation,
and on the anticipated market experience, is an important assumption in this estimat
ion technique.
The assessment of claims inflation and anticipated market experience is particularly sensitive to the
level of court awards and to the development of legal precedent on matters of contract and tort. This
class of business is also potentially
subject to the emergence of new types of latent claims but no
specific allowance is included for this as at the year-end date.
COVID-19
The Directors are aware of the heightened estimation uncertainty in reserving for estimated losses
arising from COVID-
19 due to the unique nature of the loss. Management have a robust reserving
approach which supports the held reserves at the year-end date.
Russian invasion of Ukraine
The Syndicate has loss exposure to the Russian invasion of Ukraine, stemming from its Aviation
,
Special Risks and Marine & Energy divisions
. There remains significant uncertainty as to how these
losses will develop,
approach supports the held reserves at the year-end date.
Written
premium &
Pipeline
premium
Written premium is reported according to management estimation of when premium will be written.
An estimate of premiums written during the year that have not yet been notified by the financial year-
end (pipeline premium) is made on a risk-by-
risk basis. The pipeline premium is booked as written
and an assessment is made of the related u
nearned premium provision and an estimate of claims
incurred but not reported in respect of the earned element. Pipeline premium of £594,303,000
was
recognised as an asset on the balance sheet at 31 December 2024 (2023: £598,346,000).
For delegated authority business,
the underwriters estimate how much business will attach to a facility
trading conditions of the market. This estimate is updated on a regula
r basis. It is assumed that risks
attaching to the master facility incept evenly across the period of the facility and therefore only the
proportion of risks which have incepted to the master facility by the year-
end date are reported within
written premium in these report and accounts.
Earned
premium
Earned premium is estimated based on assumptions of how each risk is earned according to its method
of placement and class of business. Each risk falling within a class of business is earned according to
the
estimated pattern applying to that class of business, which takes into account the class
characteristics including exposure to seasonal weather-
related events. This approach is applied
consistently year-on-year.
The earning of premiums is based primarily
on time apportionment, with an adjustment for the risk
profile of certain classes of business particularly those exposed to seasonal weather-related events.
Provision
for
unexpired
risks
All reasonable steps are taken to ensure that the appropriate info
rmation regarding claims exposures
is obtained. The calculation is based upon statistical analyses of historical experience, which assumes
that the development pattern of premium and claims will be similar to past experience. However,
given the uncertainty
in establishing a provision for unexpired risks, it is likely that the final outcome
will prove to be different from the original liability established.
Reinsurance
recoverable
Reinsurance is deemed to be fully recoverable unless there is reason to doub
t its recoverability. In
these circumstances specific provisions are made based on the expected proportional recovery and
the credit risk profile of the counterparties.
Financial
investments
Financial investments are carried in the balance sheet at fair value. Market valuations of funds are
obtained from fund administrators. The fair value of Level 3 financial instruments, which
are those
where no active market exists or where quoted prices are not otherwise available,
is determined by
using valuation techniques. To the extent that valuations are
based on models or inputs that are
unobservable in the market, the determination of fair value requires more judgement and accordingly,
those instruments will require a greater degree of judgement to be exercised during valuation.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
33
3.
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2024
Direct insurance
Accident and health
32,696
35,369
(13,892)
(17,899)
(1,422)
2,156
Motor (other classes)
37,102
42,842
(21,246)
(19,587)
88
2,097
Marine, aviation, and transport
239,579
216,970
(255,470)
(104,365)
52,935
(89,930)
Fire and other damage to property
912,969
907,891
(351,862)
(309,902)
(125,436)
120,691
Third party liability
358,628
346,759
(186,259)
(147,011)
(4,207)
9,282
Credit and suretyship
90,419
85,987
(85,253)
(50,373)
(65)
(49,704)
Miscellaneous
(66)
156
74
(1,818)
(9
)
(1,597
)
Total direct insurance
1,671,327
1,635,974
(913,908)
(650,955
)
(78,116
)
(7,005
)
Reinsurance acceptances
145,973
147,103
(51,125)
(14,110
)
12,841
94,709
Total
1,817,300
1,783,077
(965,033)
(665,065)
(65,275
)
87,704
2023*
Direct insurance
Accident and health
37,214
37,694
(18,887)
(19,092)
(2,286)
(2,571)
Motor (other classes)
29,932
39,763
(18,508)
(17,589)
(26)
3,640
Marine, aviation, and transport
183,340
170,044
(148,348)
(74,293)
13,373
(39,224)
Fire and other damage to property
938,447
866,141
(380,488)
(279,455)
(107,073)
99,125
Third party liability
344,863
299,774
(168,425)
(122,666)
(9,306)
(623)
Credit and suretyship
90,367
90,561
(42,662)
(48,377)
114
(364)
Miscellaneous
499
270
(185)
(1,728)
-
(1,643)
Total direct insurance
1,624,662
1,504,247
(777,503)
(563,200)
(105,204)
58,340
Reinsurance acceptances
168,107
155,561
(54,722)
(16,690)
12,270
96,419
Total
1,792,769
1,659,808
(832,225)
(579,890)
(92,934)
154,759
*Please refer to the Restatement of comparative information section in note 1.1.
All business was concluded in the UK. The geographical analysis of gross premium written is below:
2024
2023*
United Kingdom
284,755
205,817
US
804,527
792,786
Rest of the world
728,018
794,166
Total gross premiums written
1,817,300
1,792,769
*Please refer to the Restatement of comparative information section in note 1.1.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
34
An additional analysis of two of the segments above has been set out below:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2024
Fire and damage to property of which is:
-
Specialities
1,413
1,406
(545)
(480)
(194)
187
-
Energy
5,598
5,567
(2,157)
(1,900)
(769)
740
Third party liability of which is:
-
Energy
28,624
27,677
(14,866)
(11,734)
(336)
741
2023
Fire and damage to property of which is:
-
Specialities
1,453
1,341
(589)
(433)
(166)
153
-
Energy
5,754
5,311
(2,333)
(1,713)
(657)
608
Third party liability of which is:
-
Energy
27,525
23,926
(13,443)
(9,791)
(743)
(50)
4.
Net operating expenses
2024
2023*
Acquisition costs
519,816
472,428
Change in deferred acquisition costs
(18,570)
(30,686)
Administrative expenses
111,802
98,137
52,017
40,011
Reinsurance commissions and profit participations
(156,708)
(132,154)
Net operating expenses
508,357
447,736
*Please refer to the Restatement of comparative information section in note 1.1.
Total commission for direct insurance business for the year amounted to:
2024
2023
Total commission for direct insurance business
488,512
442,521
A
remuneration
2024
2023
s for the audit of these financial
statements
478
455
F
s and its associates in respect of other
services pursuant to legislation
219
195
All other services
250
244
Total
947
894
The charge incurred for other services pursuant to legislation relates to the audit and
returns and these financial statements. The charge in 2024 also includes fees relating to the iXBRL tagging of these
financial statements. The charge for all other services relates to the provision of a statement of actuarial opinion on the
reserves.
Audit fees are billed combined for the TMK Group and the Syndicate and are paid by a fellow subsidiary of TMKGL. A
recharge of audit fees is made to the Syndicate.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
35
5.
Staff numbers and costs
The Syndicate and its managing agent have no employees. Staff are employed by Tokio Marine Insurance Services Limited
(TMKIS). The following amounts were recharged to the Syndicate in respect of salary costs and are included within
administrative expenses:
2024
2023*
Wages and salaries
56,197
46,262
Social security costs
4,358
3,965
Other pension costs
3,583
3,244
Total
64,138
53,471
*Please refer to the Restatement of comparative information section in note 1.1.
6.
Key management personnel compensation
The Directors of TMKS received the following aggregate remuneration in relation to their work on the Syndicate:
2024
2023
moluments
3,360
2,528
Of the above amount, £686,000 (2023: £685,000) was charged to the Syndicate as an expense, with the remainder borne
by other group entities.
The active underwriter received the following remuneration charged as a syndicate expense:
2024
2023
Emoluments
326
365
7.
Investment return
2024
2023*
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
52,289
41,340
Interest on cash at bank
297
161
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments
4,994
3,305
Losses on the realisation of investments
(797)
(61)
Unrealised gains on investments
20,825
30,685
Unrealised losses on the investments
(8,439)
(658)
Investment management expenses
(724)
(552)
Total investment return
68,445
74,220
Transferred to the technical account from the non-technical account
68,445
74,220
*Please refer to the Restatement of comparative information section in note 1.1.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
36
8.
Technical provisions
The reconciliation of the opening and closing provision for claims outstanding is as follows:
Gross
Reinsurance
Net
2024
Claims outstanding
Balance at 1 January
2,163,618
(732,409)
1,431,209
Claims paid during the year
(740,601)
224,778
(515,823)
Expected cost of current year claims
798,569
(200,137)
598,432
Change in estimates of prior year provisions
166,464
(65,749)
100,715
Foreign exchange adjustments
(250)
(159)
(409)
Balance at 31 December
2,387,800
(773,676)
1,614,124
2023*
Balance at 1 January
2,169,761
(698,478)
1,471,283
Claims paid during the year
(746,575)
226,994
(519,581)
Expected cost of current year claims
689,705
(191,501)
498,204
Change in estimates of prior year provisions
142,520
(101,024)
41,496
Foreign exchange adjustments
(91,793)
31,600
(60,193)
Balance at 31 December
2,163,618
(732,409)
1,431,209
*Please refer to the Restatement of comparative information section in note 1.1.
The reconciliation of the opening and closing provision for unearned premiums is as follows:
Gross
Reinsurance
Net
2024
Unearned premiums
Balance at 1 January
879,855
(212,533)
667,322
Premiums written in the year
1,817,300
(494,089)
1,323,211
Premiums earned during the year
(1,783,077)
487,869
(1,295,208)
Foreign exchange adjustments
(1,062)
(170)
(1,232)
Balance at 31 December
913,016
(218,923)
694,093
2023*
Balance at 1 January
782,257
(196,481)
585,776
Premiums written in the year
1,792,769
(542,618)
1,250,151
Premiums earned during the year
(1,659,808)
517,613
(1,142,195)
Foreign exchange adjustments
(35,363)
8,953
(26,410)
Balance at 31 December
879,855
(212,533)
667,322
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
37
9.
Claims development
Within the calendar year technical result, a deficit of £100,715,000 (2023: deficit of £41,496,000) relates to the
reassessment of net claims incurred for previous accident years.
The following tables show the development of gross and net claims incurred including IBNR and the claims handling
provision over the last ten years. The claims development tables are prepared on an underwriting year of account basis,
and therefore reflect the pattern of earned premium and risk exposure over a number of years. All figures are shown
converted at current year-end rates.
Gross:
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Pure underwriting year
at end of underwriting
year
279,580
356,445
638,522
456,351
344,714
440,885
387,460
484,238
327,686
396,577
one year later
628,582
798,099
1,045,581
841,224
945,574
880,771
824,064
840,015
690,688
-
two years later
642,632
838,850
1,090,379
925,830
898,477
885,450
902,431
860,088
-
-
three years later
647,367
819,590
1,085,260
912,760
819,276
891,474
1,004,369
-
-
-
four years later
627,255
793,235
1,070,668
868,124
819,215
933,944
-
-
-
-
five years later
612,338
789,629
1,058,473
901,592
827,269
-
-
-
-
-
six years later
610,697
799,385
1,062,578
936,683
-
-
-
-
-
-
seven years later
610,610
806,931
1,064,029
-
-
-
-
-
-
-
eight years later
621,166
816,376
-
-
-
-
-
-
-
-
nine years later
620,242
-
-
-
-
-
-
-
-
-
Estimate of gross
claims reserve
620,242
816,376
1,064,029
936,683
827,269
933,944
1,004,369
860,088
690,688
396,577
Less: gross claims paid
594,949
758,715
975,798
776,795
699,230
725,177
546,709
517,482
203,125
32,594
Gross claims reserve
25,293
57,661
88,231
159,888
128,039
208,767
457,660
342,606
487,563
363,983
Net:
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Pure underwriting year
at end of underwriting
year
243,681
285,915
418,731
317,983
248,996
269,943
237,840
298,115
243,161
287,378
one year later
537,240
649,025
751,386
600,214
647,330
553,555
534,234
546,260
528,396
-
two years later
550,722
679,499
774,543
654,968
625,452
535,343
564,699
573,684
-
-
three years later
557,752
669,737
771,620
646,539
580,146
529,584
639,991
-
-
-
four years later
541,034
645,202
762,081
610,310
567,591
553,557
-
-
-
-
five years later
527,329
654,203
752,983
623,208
564,624
-
-
-
-
-
six years later
535,277
660,932
756,667
635,710
-
-
-
-
-
-
seven years later
533,837
662,259
758,137
-
-
-
-
-
-
-
eight years later
541,449
663,918
-
-
-
-
-
-
-
-
nine years later
539,625
-
-
-
-
-
-
-
-
-
Estimate of net claims
reserve
539,625
663,918
758,137
635,710
564,624
553,557
639,991
573,684
528,396
287,378
Less: net claims paid
522,749
629,051
698,954
538,088
484,932
433,469
375,231
335,315
148,084
21,798
Net claims reserve
16,876
34,867
59,183
97,622
79,692
120,088
264,760
238,369
380,312
265,580
Gross
Reinsurance
Net
Estimated balance to pay
2,319,691
(762,342)
1,557,349
2014 and prior years of account
68,109
(11,334)
56,775
Outstanding claims reserve
2,387,800
(773,676)
1,614,124
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
38
10.
Debtors arising out of direct insurance operations
2024
2023
Due within one year
699,898
704,694
Due after one year
22,844
19,386
Total
722,742
724,080
11.
Debtors arising out of reinsurance operations
2024
2023*
Due within one year
202,314
271,590
Due after one year
95,485
93,465
Total
297,799
365,055
*Please refer to the Restatement of comparative information section in note 1.1.
12.
Other
debtors
The following balances are included within other debtors:
2024
2023*
Inter-syndicate balances
1,850
3,010
Amounts owed by group undertakings
19
19
Other
20,002
8,118
Consisting of:
-
Taxation
13,738
1,645
-
Amounts due from service company
5,951
6,465
-
Other
313
8
Total
21,871
11,147
*Please refer to the Restatement of comparative information section in note 1.1.
13. Cash and cash equivalents
2024
2023
Cash at bank and in hand
41,651
14,016
Short term deposits with credit institutions
176,039
105,854
Total cash and cash equivalents
217,690
119,870
Included within cash and cash equivalents are the following amounts which are not available for use by the Syndicate:
2024
2023
Short term deposits with credit institutions
35,592
34,802
14. Analysis of net debt
At 1 January
2024
Cash flows
Fair value
and
exchange
movements
At 31
December
2024
Cash and cash equivalents
119,870
98,977
(1,157)
217,690
Derivative financial liabilities
(340)
-
(74)
(414)
Total
119,530
98,977
(1,231)
217,276
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
39
15.
Deferred acquisition costs
The reconciliation of the opening and closing deferred acquisition costs is as follows:
Gross
Reinsurance
Net
2024
Balance at 1 January
230,842
(55,849)
174,993
Incurred deferred acquisition costs
519,816
(160,040)
359,776
Amortised deferred acquisition costs
(501,246)
156,708
(344,538)
Foreign exchange movements
(535)
(132)
(667)
Balance at 31 December
248,877
(59,313)
189,564
2023
Balance at 1 January
209,024
(52,933)
156,091
Incurred deferred acquisition costs
472,428
(137,442)
334,986
Amortised deferred acquisition costs
(441,742)
132,154
(309,588)
Foreign exchange movements
(8,868)
2,372
(6,496)
Balance at 31 December
230,842
(55,849)
174,993
16.
Creditors arising out of direct insurance operations
2024
2023
Due within one year
96,487
97,223
Due after one year
6,189
4,485
Total
102,676
101,708
17.
Creditors arising out of reinsurance operations
2024
2023
Due within one year
226,887
344,634
Due after one year
6,172
4,022
Total
233,059
348,656
18.
Other
creditors
including taxation and social security
The following balances are included within other creditors including taxation and social security:
2024
2023*
Profit commissions payable
52,010
23,377
Amounts owed to group undertakings
5,424
2,522
Derivative liabilities
414
340
Other liabilities
-
1,997
Total
57,848
28,236
Amounts due after one year
35,046
17,450
*Please refer to the Restatement of comparative information section in note 1.1.
19.
Off-balance sheet items
The Syndicate has not been party to an arrangement, which is not reflected in its balance sheet, where material risks
and benefits arise for the Syndicate.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
40
20.
Related parties
From/to
related
parties
Service
companies
TMKS/
TMKIS
TMUL
2024
Profit and loss
Gross premiums written
49,785
115,233
-
-
Outward reinsurance premiums
(144,317)
-
-
-
Claims paid: gross amount
(24,993)
(56,152)
-
-
Claims paid: r
91,207
-
-
-
Members
standard personal expenses (managing agen
fee)
-
-
(13,325)
-
Net operating expenses (profit commission)
1
-
-
(34,559)
-
Net operating expenses (expenses)
-
-
(88,898)
(53)
Balance sheet
claims outstanding
2
111,301
-
-
-
Technical provisions: claims outstanding
2
(26,329)
(74,623)
-
-
2023
Profit and loss
Gross premiums written
61,805
112,457
-
-
Outward reinsurance premiums
(275,308)
-
-
-
Claims paid: gross amount
(35,448)
(68,587)
-
-
Claims paid: r
99,185
-
-
-
Members
standard personal expenses (managing agen
fee)
-
-
(12,407)
-
Net operating expenses (profit commission)
1
-
-
(19,196)
-
Net operating expenses (expenses)
-
-
(81,710)
(39)
Balance sheet
claims outstanding
2
141,015
-
-
-
Technical provisions: claims outstanding
2
(31,358)
(79,346)
-
-
1
Including divisional profit share
2
Notified claims
From/to related parties
The Syndicate accepted inwards reinsurance business from, and placed outwards reinsurance business with, other TMK
Group entities, including Syndicate 1880, that are deemed to be related parties of TMKS by virtue of the shareholding in
TMKGL, the parent of TMKS, by Tokio Marine Holdings, Inc.
Syndicate 557 is considered to be a related party as TMKS is the managing agent of both syndicates. All transactions
between these entities were conducted at
length and on normal commercial terms.
Service companies
The Syndicate received business through Tokio Marine Kiln Singapore Pte Limited (100% owned) whose investment is
held ultimately by the managing agent.
The Syndicate also received business through Tokio Marine Highland Insurance Services, Inc. (formerly WNC Insurance
Services, Inc), whose parent WNC Holding Company, LP is 100% owned within the TMK Group.
TMKS
Profit commission is estimated on an ultimate basis for each year of account and accrued by the Syndicate on a straight-
line basis to the extent it is probable (more likely than not) that the Syndicate will be required to transfer economic
benefits, final settlement to the managing agent is paid when the year of account is closed after three years.
Managing agen
fees were paid by the Syndicate to TMKS.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
41
TMKIS
Expenses were paid to TMKIS (a fellow subsidiary of TMKGL) for expenses paid on behalf of the Syndicate.
Tokio Marine Underwriting Limited (TMUL)
Tokio Marine & Nichido Fire Insurance Co., Ltd. wholly owns TMUL. TMUL participates as a member on the Syndicate as
shown in the table below.
2021
2022
2023
2024
2025
Percentages of capacity per year of account %
56
56
57
57
67
21. Financial Investments
Carrying Value
Cost
2024
2023
2024
2023
Shares and other variable yield securities and units in unit trusts
168,124
90,508
166,286
87,169
Debt securities and other fixed income securities
1,318,993
1,092,650
1,300,010
1,057,694
Deposits with credit institutions
1,052
1,947
1,052
1,947
Syndicate loan to central fund
17,919
22,186
17,919
22,186
Total financial investments
1,506,088
1,207,291
1,485,267
1,168,996
The table below presents an analysis of financial investments by their measurement classification:
2024
2023
Financial assets measured at fair value through profit or loss
1,506,088
1,207,291
Total financial investments
1,506,088
1,207,291
The table below analysis the derivative assets and liabilities by type:
2024
2023
Notional
amount
Fair value
Notional
amount
Fair value
Foreign exchange forward contracts
62,395
(414)
73,055
(340)
Total
62,395
(414)
73,055
(340)
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
42
22.
Risk management
Details of the S
Risk Management Framework are given in the Report of the Directors of the managing agent.
a. Insurance risk
Claims sensitivity analysis
The following table shows the impact of a ±5.0% sensitivity on claims outstanding and represents the impact on both
the profit and loss for the year and member
balances.
2024
+5.0%
-5.0%
Claims outstanding
gross of reinsurance
119,390
(119,390)
Claims outstanding
net of reinsurance
80,706
(80,706)
2023
Claims outstanding
gross of reinsurance
108,181
(108,181)
Claims outstanding
net of reinsurance
71,560
(71,560)
b. Financial risk
The Syndicate is exposed to a range of financial risks through its financial assets and financial liabilities. In particular, the
key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from insurance
policies and investment contracts as they fall due. The most important components of this financial risk are credit risk,
liquidity risk and market risk (including interest rate risk and currency risk).
These risks arise from open positions in interest rate and currency products, all of which are exposed to general and
specific market movements. The risks that the Syndicate primarily faces due to the nature of its investment and liabilities
are interest rate risk and currency risk.
Credit risk
For details of the management of the S
credit risks please refer to the Report of the Directors of the managing
agent. The following table provides information regarding credit risk exposures of the Syndicate by classifying assets
according to the Standard &
credit rating of the counterparties. Where a security has no credit rating, the rating of
the issuer is used. During the year there were no material breaches in exposure limits.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
43
AAA
AA
A
BBB
Other
Not rated
Total
2024
Shares and other variable yield securities and
units in unit trusts
70,516
-
-
-
-
97,607
168,123
Debt securities and other fixed income securities
210,197
456,782
443,815
176,380
-
31,820
1,318,994
Loans and deposits with credit institutions
-
-
1,052
-
-
-
1,052
Syndicate loans to central fund
-
-
17,919
-
-
-
17,919
Deposits with ceded undertakings
-
-
4,470
-
-
-
4,470
outstanding
17,844
311,694
383,855
-
11,419
48,864
773,676
Debtors arising out of direct insurance operations
-
79,122
-
-
643,620
722,742
Debtors arising out of reinsurance operations
549
126,132
36,452
-
2,506
132,160
297,799
Cash at bank and in hand
-
-
41,651
-
-
-
41,651
Other (Overseas deposits)
91,630
26,665
23,606
29,503
7,757
1,139
180,300
Other debtors and accrued interest
-
-
-
-
-
489,671
489,671
Total
390,736
1,000,395
952,820
205,883
21,682
1,444,881
4,016,397
2023*
Shares and other variable yield securities and
units in unit trusts
15,833
-
-
-
-
74,675
90,508
Debt securities and other fixed income securities
317,545
340,498
328,260
90,908
-
15,439
1,092,650
Loans and deposits with credit institutions
-
-
1,947
-
-
-
1,947
Syndicate loans to central fund
-
-
22,186
-
-
-
22,186
Deposits with ceded undertakings
-
-
3,121
-
-
-
3,121
31,758
210,880
421,095
-
218
68,458
732,409
Debtors arising out of direct insurance operations
-
80,730
-
-
-
643,350
724,080
Debtors arising out of reinsurance operations
11,225
138,651
42,635
-
-
172,544
365,055
Cash at bank and in hand
-
-
14,016
-
-
-
14,016
Other (Overseas deposits)
104,846
27,138
19,533
26,253
10,627
638
189,035
Other debtors and accrued interest
-
-
-
-
454,52
2
454,52
2
Total
481,207
797,897
852,793
117,161
10,845
1
,429,626
3,689,52
9
*Please refer to the Restatement of comparative information section in note 1.1.
0.2% (2023: 0.2%) is collected under
Outstanding Claims Advances (OCAs) which is a form of cash deposit allowing crystallisation of an outstanding reinsurance
recovery. The majority of the collateral values relating to the granting of OCAs are for US Situs losses. Surplus reinsurance
treaties allow the Syndicate to call upon OCAs at its discretion.
In respect of the
share of claims, there are collateralised agreements with reinsurers including ILS
arrangements, which comprise letters of credit and trust accounts totalling US $166,875,000 (2023: US $223,342,000).
The largest potential reinsurer credit exposure to the Syndicate at 31 December 2024 was £172,599,193 with Tokio
Marine & Nichido Fire Insurance Co.,
A+*1 Stable
s (S&P) rated security (2023: £195,595,000
with Tokio Marine & Nichido Fire Insurance Co., Ltd.). The Outwards Reinsurance team review the level of this exposure
and take appropriate action where necessary, including obtaining a letter of credit from reinsurers, related parties
included.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
44
An aged analysis of financial assets past due is shown below:
Neither past
due nor
impaired assets
Past due but
not impaired
assets
Total
2024
Shares and other variable yield securities and units in unit trusts
168,123
-
168,123
Debt securities and other fixed income securities
1,318,994
-
1,318,994
Loans and deposits with credit institutions
1,052
-
1,052
Syndicate loans to central fund
17,919
-
17,919
Deposits with ceded undertakings
4,470
-
4,470
773,676
-
773,676
Debtors arising out of direct insurance operations
602,048
120,694
722,742
Debtors arising out of reinsurance operations
276,671
21,128
297,799
Cash at bank and in hand
41,651
-
41,651
Other (Overseas deposits)
180,300
-
180,300
Other debtors and accrued interest
489,671
-
489,671
Total
3,874,575
141,822
4,016,397
2023*
Shares and other variable yield securities and units in unit trusts
90,508
-
90,508
Debt securities and other fixed income securities
1,092,650
-
1,092,650
Loans and deposits with credit institutions
1,947
-
1,947
Syndicate loans to central fund
22,186
-
22,186
Deposits with ceded undertakings
3,121
-
3,121
732,409
-
732,409
Debtors arising out of direct insurance operations
605,132
118,948
724,080
Debtors arising out of reinsurance operations
341,794
23,261
365,055
Cash at bank and in hand
14,016
-
14,016
Other (Overseas deposits)
189,035
-
189,035
Other debtors and accrued interest
454,522
-
454,522
Total
3,547,320
142,209
3,689,529
*Please refer to the Restatement of comparative information section in note 1.1.
For assets to be classified as past-due the contractual payments are in arrears by more than 30 days. An impairment
adjustment is recorded in the profit and loss: non-technical account for assets impaired. The Syndicate operates mainly
on a
past-due nor impaired
and when evidence is available, sufficient collateral will be obtained for
-
due and
assets. An impairment assessment will also be performed if applicable.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
45
Analysis of the amounts past due but not impaired is shown below:
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
2024
Debtors arising out of direct insurance operations
13,281
15,835
37,830
53,748
120,694
Debtors arising out of reinsurance operations
10,795
1,662
4,935
3,736
21,128
Total
24,076
17,497
42,765
57,484
141,822
2023
Debtors arising out of direct insurance operations
15,085
12,762
49,757
41,344
118,948
Debtors arising out of reinsurance operations
9,093
6,396
5,126
2,646
23,261
Total
24,178
19,158
54,883
43,990
142,209
Liquidity risk
For details of the management of the S
the Report of the Directors of the managing
agent.
The Syndicate writes a significant proportion of US Situs and Canadian business which requires the deposit of appropriate
monies into specific trust funds. Some of these trust funds are regulated, requiring quarterly assessment of the adequacy
of funding. Surplus funds or additional funding requirements are settled each quarter between the regulated and non-
regulated trust funds. In exceptional circumstances, and with approval from
inter-fund settlement can take place
outside the quarterly process.
As at 31 December 2024, the balances held in the regulated US Situs and Canadian trust funds were US $588,979,000
(2023: US $636,294,000) and Canadian $637,104,000 (2023: Canadian $676,974,000) respectively.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
46
The following table analyses the financial liabilities and claims outstanding into their relevant maturity groups based on
the remaining period at the year-end date to their contractual maturities or expected settlement dates. The projected
settlement of claims outstanding is modelled using actuarial techniques. These estimates assume that future claims
settlement patterns will be broadly similar to those experienced in the past.
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2024
Claims outstanding
-
825,714
776,429
342,721
442,936
2,387,800
Derivative liabilities
-
414
-
-
-
414
Deposits received from reinsurers
-
35
-
-
-
35
Creditors
-
345,762
47,407
-
-
393,169
Other credit balances
-
972,329
-
-
-
972,329
Total
-
2,144,254
823,836
342,721
442,936
3,753,747
2023*
Claims outstanding
-
777,634
719,027
303,667
363,290
2,163,618
Derivative liabilities
-
340
-
-
-
340
Deposits received from reinsurers
-
1,120
-
-
-
1,120
Creditors
-
452,303
25,957
-
-
478,260
Other credit balances
-
935,704
-
-
-
935,704
Total
-
2,167,101
744,984
303,667
363,290
3,579,042
*Please refer to the Restatement of comparative information section in note 1.1.
Foreign currency market risk
For further details of the management of the S
the Report of the Directors of the
managing agent.
The Syndicate maintains bank accounts, investment portfolios and claims reserves in pounds sterling, US dollars, and
Canadian dollars (the
closing currencies). Additionally, bank accounts and investment portfolios are maintained in
Euros. Transactions arising in other currencies are translated to the
closing currencies as they occur. Certain other
currencies are held for regulatory purposes. The majority of the S
financial assets are denominated in the same
currencies as its insurance liabilities and thus the developing profit or loss that remains embedded within the Syndicate
gives rise to the main currency exposure. The profit or loss is distributed, or settled, in accordance with
rules using
a combination of pounds sterling and US dollars after deduction of the member level charges.
Investment strategy is recommended and agreed by the Investment Committee. The Syndicate currency exposure and
future cash flows are monitored and shortfalls addressed by foreign currency transactions, hedges or cash calls on
members.
A substantial proportion of the S
business is written in currencies other than pounds sterling, in particular US
dollars. The S
business is therefore exposed to changes in exchange rates and there is no assurance that foreign
currency risk mitigation initiatives undertaken by the Syndicate will be successful in preventing any losses due to such
changes.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
47
reporting date:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Other
Total
2024
Investments
21,729
1,067,345
59,159
362,325
-
-
1,510,558
Reinsurers' share of technical
provisions
222,981
636,247
-
133,371
-
-
992,599
Debtors
140,705
818,309
627
82,653
-
118
1,042,412
Other assets
5,217
7,361
35,850
75,001
64,749
33,773
221,951
Prepayments and accrued income
49,744
155,509
-
43,624
-
-
248,877
Total assets
440,376
2,684,771
95,636
696,974
64,749
33,891
4,016,397
Technical provisions
(676,236)
(2,113,809)
-
(510,771)
-
-
(3,300,816)
Deposits received from reinsurers
-
(35)
-
-
-
-
(35)
Creditors
(100,291)
(242,516)
(1,427)
(49,375)
26
-
(393,583)
Accruals and deferred income
(9,038)
(42,435)
-
(7,840)
-
-
(59,313)
Total liabilities
(785,565)
(2,398,795)
(1,427)
(567,986)
26
-
(3,753,747)
Total Capital and reserves
345,189
(285,976)
(94,209)
(128,988)
(64,775)
(33,891)
(262,650)
2023
Investments
32,556
728,641
45,548
403,667
-
-
1,210,412
Reinsurers' share of technical
provisions
143,152
661,715
-
140,075
-
-
944,942
Debtors
129,389
888,509
1,019
81,303
-
62
1,100,282
Other assets
664
11,870
12,300
82,832
53,529
41,856
203,051
Prepayments and accrued income
46,031
138,534
-
46,277
-
-
230,842
Total assets
351,792
2,429,269
58,867
754,154
53,529
41,918
3,689,529
Technical provisions
(513,054)
(2,018,017)
-
(512,402)
-
-
(3,043,473)
Deposits received from reinsurers
(149)
(809)
-
(162)
-
-
(1,120)
Creditors
(66,441)
(349,047)
(1,809)
(61,180)
-
(123)
(478,600)
Accruals and deferred income
(9,107)
(38,224)
-
(8,518)
-
-
(55,849)
Total liabilities
(588,751)
(2,406,097)
(1,809)
(582,262)
-
(123)
(3,579,042)
Total Capital and reserves
236,959
(23,172)
(57,058)
(171,892)
(53,529)
(41,795)
(110,487)
The Syndicate uses forward currency contracts to manage its exposure to foreign currency risks as a result of protecting
the net asset position in the Canadian dollar and non-closing currencies. The use of financial derivatives is governed by
the S
policies approved by the Investment Committee, which provides written principles on the use of financial
derivatives. More information is available in the
value
in part (c) of this note.
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
48
Exchange rate sensitivity analysis
The analysis below is performed for possible movements in key variables, with all other variables held constant, showing
the impact on the result and net assets. The correlation of variables will have a significant effect in determining the
ultimate impact. However, to isolate and demonstrate the effect due to changes in variables, each variable has been
changed on an individual basis.
The following table gives an indication of the impact on the result and net assets or liabilities of a ten percent change in
the relative strength of the pound sterling against the value of the US dollar and Canadian dollar, excluding the effect of
hedges.
2024
Impact on
results
before tax
2024
Impact on
balances
2023
Impact on
results before
tax
2023
Impact on
balances
Currency risk
10 percent increase in GBP/USD exchange rate
(31,775)
(31,775)
(2,575)
(2,575)
10 percent increase in GBP/CAD exchange rate
(14,332)
(14,332)
(19,099)
(19,099)
10 percent decrease in GBP/USD exchange rate
31,775
31,775
2,575
2,575
10 percent decrease in GBP/CAD exchange rate
14,332
14,332
19,099
19,099
Interest rate market risk
For further details of the management of the S
Directors of the
managing agent.
The Syndicate holds investments in its balance sheet and the performance of its investment portfolio may have an effect
on the result. The income derived by the Syndicate from its investments, and the capital value of its investments, may
fall as well as rise. Therefore, changes in interest rates, credit ratings and other economic variables could substantially
affect the S
profitability. The use of financial derivatives is governed by the S
policies approved by
the Investment Committee, which provides written principles on the use of financial derivatives.
Interest rate sensitivity analysis
The analysis below is performed for possible movements in key variables with all other variables held constant, showing
the impact on the result. The correlation of variables will have a significant effect in determining the ultimate impact.
However, to isolate and demonstrate the effect due to changes in variables, each variable has been changed on an
individual basis. It should be noted that movements in these variables are linear.
The table below shows the estimated impact on the result and
of a 50-basis point movement in
interest rates on the market value of the S
investments.
2024
Impact on
results
before tax
2024
Impact on
balances
2023
Impact on
results before
tax
2023
Impact on
balances
Interest rate risk
+ 50 basis points shift in yield curves
(19,354)
(19,354)
(15,373)
(15,373)
- 50 basis points shift in yield curves
19,354
19,354
15,373
15,373
Tokio Marine Combined Syndicate 510
Report and accounts for the year ended 31 December 2024
49
Capital management
Disclosures on capital management can be found in the Report of the Directors of the managing agent.
c. Fair value estimation
Financial instruments that are fair valued through profit and loss are classified using a fair value hierarchy that reflects
the significance of the inputs used in these measurements.
Level 1 financial instruments comprise government bonds and securities which have been valued at fair value using
quoted prices in an active market.
Level 2 financial instruments are less regularly traded government agency bonds, supranational bonds, corporate
bonds, money market and open-ended funds. These fair values have been derived from market observable inputs.
The fair value for level 3 financial instruments is derived from inputs that are not observable. Level 3 securities
include securitised instruments, the fair value of which are based on broker quotes and a pricing vendor model.
of £17,919,000 (2023: £22,186,000) as a proxy for fair
value.
T
balance sheet at the reporting date
by its level in the fair value hierarchy:
Level 1
Level 2
Level 3
Total
2024
Shares and other variable yield securities and
units in unit trusts
-
168,123
-
168,123
Debt securities and other fixed income securities
158,216
1,160,778
-
1,318,994
Loans and deposits with other credit institutions
1,052
-
-
1,052
Syndicate loans to central fund
-
-
17,919
17,919
Total assets
159,268
1,328,901
17,919
1,506,088
Derivative liabilities
(414)
-
-
(414)
Total
158,854
1,328,901
17,919
1,505,674
2023*
Shares and other variable yield securities and
units in unit trusts
-
90,508
-
90,508
Debt securities and other fixed income securities
158,621
934,029
-
1,092,650
Loans and deposits with other credit institutions
1,947
-
-
1,947
Syndicate loans to central fund
-
-
22,186
22,186
Total assets
160,568
1,024,537
22,186
1,207,291
Derivative liabilities
(340)
-
-
(340)
Total
160,228
1,024,537
22,186
1,206,951
*Please refer to the Restatement of comparative information section in note 1.1.
23.
Post balance sheet events
On 10 February 2025, the Board of TMKS approved the closure of the 2022 and prior underwriting years of account of
Syndicate 557, via a RITC agreement, into the
2023 year of account.
There are no other post balance sheet events to report.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
50
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
51
Report of the Directors of the managing agent
The managing agent presents its report at 31 December 2024 for the 2022 closed year of account. This report is prepared
run-off accounts prepared on an underwriting year basis of accounting as required by Statutory Instrument No. 1950 of
2022 underwriting year of account
The Syndicate made a 2022 closing year profit of £71.5 milli
£1,499.1 million (return on capacity 4.8
and investment income.
The 2022 underwriting year of account benefitted from benign attritional claims experience across the Property & Motor
and Liability divisions, coupled with strong investment return of £61.7 million following falling yields during 2024.
This was partially offset by potential exposures relating to the Russian invasion of Ukraine impacting the Aviation, Marine
& Energy and Special Risks divisions. The underwriting year of account result was also impacted by a series of weather-
related catastrophes including Hurricane Ian, Winter Storm Elliot and the US Tornadoes throughout 2022.
Post balance sheet events
There are no post balance sheet events to report.
Disclosure of information to the auditors
As far as each person who was a Director of the managing agent at the date of approving this report is aware, there is
no relevant audit information, which is information needed by the auditors in connection with their report, of which the
auditors are unaware. Having made enquiries of fellow Directors of the managing agent and the S
each Director has taken all the steps that they are obliged to take as a Director in order to make themselves aware of
any relevant audit information and to establish that the auditors are aware of that information.
Reappointment of auditors
The Board approved the reappointment of PricewaterhouseCoopers LLP as auditors on an ongoing basis for the managed
syndicates, managing agent and other TMK Group entities.
Approved by the Board of Directors
A M W Shaw
Chief Executive Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
52
require the managing agent to prepare syndicate underwriting year accounts at 31 December in respect of any
underwriting year which is being closed by reinsurance to close (RITC) which give a true and fair view of the result of the
underwriting year at closure. Detailed requirements in respect of the underwriting ye
Syndicate Accounting Byelaw (No. 8 of 2005).
In preparing the Syndicate underwriting year accounts, the managing agent is required to:
select suitable accounting policies which are applied consistently and where there are items which affect more
than one year of account, ensure a treatment which is equitable between the members of the syndicate affected.
In particular, the amount charged by way of premium in respect of the RITC shall, where the reinsuring members
and reinsured members are members of the same syndicate for different years of account, be equitable between
them, having regard to the nature and amount of the liabilities reinsured;
take into account all income and charges relating to a closed year of account without regard to the date of receipt
or payment;
make judgements and estimates that are reasonable and prudent; and
state whether applicable UK accounting standards have been followed, subject to any material departures
disclosed and explained in the underwriting year accounts.
The managing agent is responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of each syndicate and enable it to ensure that each syndicate underwriting year accounts
comply with the 2008 Regulations. It is also responsible for safeguarding the assets of each syndicate and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The managing agent is responsible for the maintenance and integrity of the corporate and financial information included
on its website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The managing agent is responsible for the preparation and review of the iXBRL tagging that has been applied to the
maintaining systems, processes and internal controls to result in tagging that is free from material non-compliance with
The Directors of the managing agent confirm that they have complied with the above requirements in preparing the
Syndicate underwriting year accounts.
Tokio Marine Combined Syndicate 510 Underwriting Year Accounts for the 2022 Year of Account
5
3
Independent auditors’ report to the members of Syndicate 510 - 2022
closed year of account
Report on the audit of the syndicate underwriting year
financial statements
Opinion
In our opinion, 510’s syndicate underwriting year financial statements for the 2022 year of account for the 36 months
ended 31 December 2024 (the “underwriting year financial statements”):
●
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its result
for the
2022 closed year of account;
●
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 Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005).
We have audited the underwriting year financial statements included within the Underwriting Year Accounts for the 2022
Year of Account, which comprise: the Balance sheet for the 2022 closed year of account as at 31 December 2024; the
Profit and loss: technical account - general business and the Profit and loss: non-technical account for the 36 months
ended 31 December 2024; and the notes to the underwriting year financial statements 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)”), including ISA (UK)
800, and The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and other
applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of
the underwriting year financial statements
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 underwriting year financial statements 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.
Emphasis of matter – Basis of preparation
Without modifying our opinion, we draw attention to note 1 of the underwriting year financial statements, which describes
the basis of preparation. In particular, as these underwriting year financial statements relate to a closed underwriting
year of account, matters relating to going concern are not relevant to these underwriting year financial statements. The
underwriting year financial statements are prepared in accordance with a special purpose framework for the specific
purpose as described in the
Use of this report
paragraph below. As a result, the underwriting year financial statements
may not be suitable for another purpose.
Reporting on other information
The other information comprises all of the information in the Underwriting Year Accounts other than the underwriting year
financial statements and our auditors’ report thereon. The Managing Agent is responsible for the other information. Our
opinion on the underwriting year financial statements 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 underwriting year financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the underwriting year
financial statements 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 underwriting year financial statements or a material misstatement of the other
Tokio Marine Combined Syndicate 510 Underwriting Year Accounts for the 2022 Year of Account
5
4
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.
Responsibilities for the underwriting year financial statements and the
audit
Responsibilities of the Managing Agent for the underwriting year financial statements
As explained more fully in the Statement of managing agent’s responsibilities, the Managing Agent is responsible for the
preparation of the underwriting year financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view of the result for the 2022
closed year of account. The Managing Agent is also
responsible for such internal control as they determine is necessary to enable the preparation of underwriting year financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibilities for the audit of the underwriting year financial statements
Our objectives are to obtain reasonable assurance about whether the underwriting year financial statements 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 underwriting year financial statements.
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 underwriting year financial statements. We also
considered those laws and regulations that have a direct impact on the underwriting year financial statements such as
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the underwriting year financial statements
(including the risk of override of controls), and determined that the principal risks were related to the posting of
inappropriate journals and management bias in accounting estimates. Audit procedures performed by the engagement
team included:
●
Discussions with management, internal audit and the risk and compliance functions, including consideration of
known or suspected instances of non-compliance with laws and regulation and fraud;
●
Challenging assumptions and judgements made by management in their significant accounting estimates, in
particular in relation to valuation of the IBNR component of claims outstanding and pipeline premium income;
●
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
impacting revenue, journals posted by senior management and/or those posted late in the year end close
process; and
●
Reviewing relevant meeting minutes including those of the Conflicts Committee, Risk, Capital & Compliance
Committee and Audit Committee and correspondence with regulatory authorities, including Lloyd’s of London and
the Prudential Regulation Authority.
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
underwriting year financial statements. 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 underwriting year financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Tokio Marine Combined Syndicate 510 Underwriting Year Accounts for the 2022 Year of Account
5
5
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s members as a body in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and Part
C of the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005) 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 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005), 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
●
the underwriting year financial statements are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Matthew Nichols (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 March 2025
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
56
Profit and loss: technical account - general business
for the 36 months ended 31 December 2024
Note
2022
Syndicate allocated capacity
1,499,100
Earned premiums, net of reinsurance
Gross premiums written
3
1,623,430
Outward reinsurance premiums
(520,558)
Earned premiums, net of reinsurance
1,102,872
Reinsurance to close premium receivable, net of reinsurance
4
850,019
Allocated investment return transferred from the non-technical account
61,250
Total technical income
2,014,141
Claims incurred, net of reinsurance
Claims paid:
-
Gross amount
(866,105)
-
278,630
-
Reinsurance to close premium payable, net of reinsurance
4
(911,425)
Claims incurred, net of reinsurance
(1,498,900)
expenses
(32,169)
Net operating expenses
5,6
(406,004)
Total technical charges
(1,937,073)
Balance on the technical account for general business
77,068
The notes to the underwriting year accounts and significant accounting policies form part of these underwriting year
accounts.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
57
Profit and loss: non-technical account
for the 36 months ended 31 December 2024
Note
2022
Balance on the technical account for general business
77,068
Investment income
8
45,349
Unrealised gains on investments
17,691
Investment expenses and charges
8
(1,790)
Allocated investment return transferred to the general business technical account
(61,250)
Other income
6,639
Non-technical foreign exchange loss
(12,247)
71,460
(3,104)
Amounts due to members
68,356
There is no other comprehensive income. Accordingly, a separate statement of other comprehensive income has not been
provided.
The notes to the underwriting year accounts and significant accounting policies form part of these underwriting year
accounts.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
58
Balance sheet for the 2022 closed year of account
as at 31 December 2024
Note
2022
Assets
Investments
Other financial investments
9
598,647
Deposits with ceding undertakings
4,470
Debtors
Debtors arising out of direct insurance operations
59,929
Debtors arising out of reinsurance operations
189,716
Other debtors
101,303
Reinsurance recoveries anticipated on gross reinsurance to close premium payable to close
the account
4
549,166
Other assets
Cash at bank and in hand
41,174
Overseas deposits
102,351
Total assets
1,646,756
Liabilities
Amounts due to members
68,356
Reinsurance to close premium payable to close the account - gross amount
4
1,460,591
Deposits received from reinsurers
35
Creditors
Creditors arising out of direct insurance operations
51,617
Creditors arising out of reinsurance operations
51,267
Other creditors
14,890
Total liabilities
1,646,756
The underwriting year accounts, which comprise the Profit and loss: technical account - general business, Profit and loss:
non-technical account, Balance sheet for the 2022 closed year of account and Notes to the underwriting year accounts
and significant accounting policies, were approved by the Board of Tokio Marine Kiln Syndicates Limited on
5 March 2025 and were signed on its behalf by:
R Patel
Deputy Chief Executive Officer & Chief Financial Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
The notes to the underwriting year accounts and significant accounting policies form part of these underwriting year
accounts.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
59
Notes to the underwriting year accounts and significant accounting
policies
1.
Accounting policies
1.1 Statement of compliance
These
Syndicate and Aggregate Accounts) Regulations 2008, Part
and Accounting Standards in the
ndicate Accounts Instructions Version 2.0 as modified by the
These underwriting year accounts are prepared under the historical cost convention, as modified by the recognition of
certain financial assets and liabilities measured at fair value.
The preparation of underwriting year accounts requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Syndicate accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the underwriting
year accounts, are disclosed in note 2.
Members participate on a syndicate by reference to a year of account and each syndicate year of account is a separate
annual venture. These accounts relate to the 2022 year of account which has been closed by RITC at 31 December 2024.
Consequently, the balance sheet represents the assets and liabilities of the 2022 year of account at the date of closure.
The underwriting account reflects the transactions of that year of account during the three-year period until closure. These
underwriting year accounts cover the three years from the date of inception of the 2022 year of account to the date of
closure. Accordingly, this is the only reporting period and so corresponding amounts are not shown.
These underwriting year accounts are presented in pounds sterling, which is the functional currency of the Syndicate. All
amounts have been rounded to the nearest hundred thousand pounds, unless otherwise stated.
1.2 New standards and amendments
The Syndicate has applied FRS 102 and FRS 103 as issued in September 2024, which reflects the amendments made
since the previous editions were issued in 2022.
FRS 102 is subject to a periodic review at least every five years. In December 2022, the Financial Reporting Council
published its periodic review of amendments to FRS 102 (FRED 82). The proposed effective date for these amendments
is accounting periods beginning on or after 1 January 2026. These underwriting year accounts relate to a closed
underwriting year of account, and as such, matters relating to future accounting periods are not relevant.
funds are intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating
ng liabilities.
resource criteria. FAL has regard to a number of factors, including the nature and amount of risk to be underwritten by
the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not
under the management of the managing agent, no amount has been shown in these underwriting year accounts by way
of such capital resources. H
requirements or to settle losses.
1.4 Going concern
These underwriting year accounts relate to a closed underwriting year of account, matters relating to going concern are
not relevant. The underwriting year accounts are prepared for and only for the S
and Part C of the Ll
1.5 Summary of accounting policies
The significant accounting policies adopted in the preparation of the underwriting year accounts are set out below. They
have been applied consistently to all periods presented in these underwriting year accounts.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
60
a. Product classification
Insurance contracts are defined as those containing significant insurance risk at the inception of the contract, or those
where at the inception of the contract there is a scenario with commercial substance where the level of insurance risk
may be significant. The significance of insurance risk is dependent on both the probability of an insured event and the
magnitude of its potential effect.
b. Premiums written
Inwards premiums written comprise premiums on contracts incepting during the financial year as well as adjustments
made in the year to premiums on contracts incepting in prior accounting periods. Premiums in respect of insurance
contracts underwritten under facilities such as binding authorities, lineslips or consortia arrangements are estimated based
on information provided by the broker, past underwriting experience and prevailing market conditions. The estimates are
updated on a regular basis. It is assumed that the majority of risks incept evenly across the period of the facility; however
bespoke writing patterns are used for a small number of facilities. Therefore, only the proportion of risks incepted at the
year-end date are reported as written. Premiums are shown gross of brokerage payable and exclude taxes and duties
levied on them. Estimates are made for pipeline premiums on a risk-by-risk basis, representing the difference between
the written and signed premium, which is held on the balance sheet as an asset.
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct
or inwards business being reinsured.
Gross premiums are allocated to years of account on the basis of the inception date of the policy. Premiums written under
binding authorities, lineslips or consortium arrangements are allocated to the year of account into which the arrangement
incepts. Additional and return premiums follow the year of account of the original premium. Estimates are made for
pipeline premiums, representing premiums written but not reported to the Syndicate by the reporting date.
c. Earned premiums
Inwards and outwards earned premium represents the amount of written premium deemed to have been exposed to loss
according to defined earnings patterns. The earning patterns are based primarily on time apportionment, with an
adjustment for the risk profile of certain classes of business, particularly those exposed to seasonal weather-related
events. The provision for unearned premium comprises the proportion of gross premiums written which is estimated to
be earned after the balance sheet date.
Reinstatement premiums arise on both inwards and outwards policies when a loss has been incurred on a policy and there
is a clause which requires the reinstatement of the policy with the payment of a further premium by the policyholder.
They are recognised as written and earned in full at the date of the event giving rise to the reinstatement premium.
Outwards reinstatement premiums payable in the event of a claim being made are charged to the same year of account
as that to which the recovery is credited.
d. Claims paid and incurred
Paid claims represent all claims paid during the year and include claims handling expenses.
Claims incurred comprise paid claims and changes in the provisions for outstanding claims, including provisions for claims
incurred but not reported (IBNR) and related expenses, together with any adjustments to claims from previous years.
e. Claims provisions and related recoveries
Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or not,
including related direct and indirect claims handling costs and adjustments to claims outstanding from previous years.
Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet date,
including outstanding claims estimated on a case-by-case basis and also the cost of claims IBNR. The estimated cost of
claims includes expenses to be incurred in settling claims. All reasonable steps are taken to ensure that appropriate
information regarding claims exposures is obtained. However, given the uncertainty in establishing claims provisions, it
is likely that the final outcome will prove to be different from the original liability established. All claims provisions are
reported on an undiscounted basis.
Reinsurance recoveries are accounted for in the same period as the incurred claims for the related business. The
ovisions for claims is based on estimated amounts for gross claims incurred, net of estimated
irrecoverable amounts.
The net RITC premium is determined on the basis of estimated cost of claims incurred but not settled at the balance sheet
date and expenses to be incurred in settling claims, net of estimated collectible reinsurance recoveries and future premium
relating to the closed year of account and all priors of account reinsured therein.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
61
f. Provision for unexpired risks
Provision is made for any deficiencies arising when unearned premiums, net of associated acquisition costs, are insufficient
to meet expected claims and expenses after taking into account future investment return on the investments supporting
the unearned premiums provision. The expected claims are calculated having regard only to events that have occurred
Unexpired risks surpluses and deficits are offset where business classes are managed together and a provision is made if
an aggregate deficit arises. The unexpired risks provision is included within other technical provisions.
All reasonable steps are taken to ensure that the appropriate information regarding claims exposures is obtained. The
calculation is based upon statistical analyses of historical experience, which assumes that the development pattern of
premiums and claims will be similar to past experience. Allowance is made, however, for changes or uncertainties which
may create distortions in the underlying statistics or which might cause the cost of unsettled claims to increase or reduce
when compared with the cost of previously settled claims. Therefore, given the uncertainty in establishing a provision for
unexpired risks, it is likely that the final outcome will prove to be different from the original liability established.
g. Net operating expenses and personal expenses
Net operating expenses comprise the cost of acquiring business including commission, profit commission and reinsurance
commission income as well as the staff costs and other expenses attributable to underwriting operations.
profit commission,
subscriptions.
Net operating expenses and personal expenses are recognised on the accruals basis and represent the expenses incurred
on underwriting operations.
Commission and brokerage are charged to the year of account to which the relevant policy is allocated.
h. Finance costs
Finance costs comprise interest paid and bank charges together with facility fees on letters of credit and are recorded in
the period in which they are incurred.
i. Acquisition costs
Acquisition costs, comprising commission and other costs related to the acquisition of new (re)insurance contracts are
deferred to the extent that they are attributable to premiums unearned at the balance sheet date. Where inwards business
is ceded to an outwards proportional reinsurance treaty, an estimate of the relevant proportion of the inwards acquisition
costs is calculated and deferred in line with the outwards unearned premium at the balance sheet date.
Deferred acquisition costs, representing the proportion of commission and other acquisition costs that relate to unearned
premium on policies in force at the year-end, are charged over the period in which related premiums are earned. Deferred
acquisition costs are reviewed by category of business at the end of each reporting period and are written off where they
are no longer considered to be recoverable.
j. Foreign currencies
Functional and presentation currency
Items included in the underwriting year accounts are measured using the currency of the primary economic environment
in which the Syndicate operates (the functional currency). The underwriting year accounts are presented in pounds sterling
which is also the functional currency of the Syndicate.
Transactions and balances
Foreign currency transactions are recorded in the functional currency using the exchange rates prevailing at the dates of
the transactions or an appropriate average rate of exchange. At each period end foreign currency monetary items are
translated using the closing rate. For this purpose, all assets and liabilities arising from insurance contracts (including
unearned premiums, deferred acquisition costs and unexpired risks provisions) are monetary items.
Foreign exchange gains and losses resulting from the settlement of transactions and from the measurement at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the non-technical
account.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
62
Exchange rates used are as follows:
2022 calendar
year average
2023 calendar
year average
2024 calendar
year average
Date of RITC
US dollar
1.24
1.24
1.28
1.25
Canadian dollar
1.61
1.68
1.75
1.80
The distributable result on closing a year of account, usually at 36 months, is calculated using the exchange rates
prevailing at the date of closure.
k. Financial investments
The Syndicate has chosen to adopt Sections 11 and 12 of FRS 102
ther Financial
Instruments Issues
Financial instruments are initially recorded at cost, which equates to fair value, and subsequently carried at fair value
through profit or loss.
Financial instruments that are designated as fair value through profit or loss are classified using a fair value hierarchy
that reflects the significance of the inputs used in these measurements.
Level 1: the fair value of financial instruments is derived using unadjusted quoted prices in an active market for
identical assets or liabilities at the measurement date. These instruments include government bonds and securities
using quoted prices in an active market.
Level 2: the fair value of financial instruments is derived using 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. These
instruments include regularly traded government agency bonds, supranational bonds, corporate bonds, money
market and open-ended funds.
Level 3: financial instruments are derived from inputs that are not observable. Unobservable inputs are used to
measure fair value to the extent that relevant observable inputs are not available and may include internal data or
models. Assumptions from market participants may be used to formulate the valuation of certain assets and
liabilities.
All regular purchases of financial investments are recognised on the trade date, being the date the Syndicate commits to
purchase the asset. All regular sales of financial investments are recognised at the earlier of the trade date and maturity
date.
A financial asset is derecognised when the contractual right to receive cash flows expires or where they have been
transferred and the Syndicate has also substantially transferred all risks and rewards of ownership. A financial liability is
derecognised once the obligation under the liability is discharged, cancelled or expires.
l. Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at their fair value. Changes in the fair value are recognised immediately in the profit and loss
account. Fair values are obtained from quoted market prices in active markets, including recent market transactions. All
derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The best evidence of the fair value of a derivative at initial recognition is the transaction price (i.e. the fair value of the
consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets.
m. Debtors and creditors arising out of direct and reinsurance operations
Debtors and creditors arising out of direct and reinsurance operations are initially recognised at transaction price and are
subsequently carried at the recoverable amount. The carrying value is reviewed for impairment whenever events or
circumstances indicate that the carrying amount is greater than the recoverable amount, with the impairment adjustment
recorded in the profit and loss account. Debtors arising out of direct insurance and reinsurance operations are stated net
of specific provisions against doubtful debts which are made on the basis of reviews conducted by management.
Tokio Marine Combined Syndicate 510
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63
n. Other debtors and creditors
Any other debtors and creditors are recognised initially at transaction price and subsequently carried at the recoverable
amount. The carrying value of other debtors is reviewed for impairment whenever events or circumstances indicate that
the carrying amount is greater than the recoverable amount, with the impairment adjustment recorded in the profit and
loss account. All other debtors and creditors are due within one year, unless otherwise stated.
o. Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, deposits held at call with banks and other short-term highly
liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of
changes in value.
Bank overdrafts, when applicable, are shown within borrowings in current liabilities. These are measured at cost less any
allowance for impairment.
p. Overseas deposits
Overseas deposits are lodged as a condition of conducting underwriting business in certain countries. These are initially
recorded at cost, which equates to fair value, and subsequently carried at fair value through profit or loss.
q. Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in unrealised
gains and losses, net of investment management expenses, including interest. Realised gains and losses on investments
carried at fair value through profit or loss are calculated as the difference between sale proceeds and the fair value at the
previous balance sheet date, or purchase price if acquired during the year. Unrealised gains and losses on investments
represent the difference between the fair value at the balance sheet date and the fair value at the previous balance sheet
date, or purchase price if acquired during the year.
Investment return on general business is initially recorded in the non-technical account. A transfer is made from the non-
technical account to the general business technical account. Investment return has been wholly allocated to the technical
account as all investments relate to the technical account.
Investment return that is not specific to a year of account is allocated based on the proportion of the assets generating
that return held by each year of account.
r. Investment yield
The calendar year investment yield is calculated as the rat
expressed as a percentage. Aggregate investment return is the total amount of net appreciation/losses, investment
income and accrued interest received during the year, after deducting investment management costs but before deducting
tax. Average funds available is the average value of all investments (including accrued interest), deposits and surplus
cash at the beginning of the year and at each quarter-end revalued at market prices.
s. Taxation
Under Schedule 19 of the Finance Act 1993 the Syndicate does not pay UK taxation, its profits being allocated and
assessed to tax on its members in direct proportion to their capacity.
The Syndicate pays various overseas direct and premium based taxes, the majority of which are allocable to its members
in direct proportion to their capacity and which can be claimed by members either as double tax relief or as an expense
against tax liabilities.
t. Pension costs
TMK operates a defined contribution scheme. A defined contribution plan is a pension plan under which a fixed contribution
is paid into a separate entity. Once the contributions have been paid TMK has no further payment obligations. Pension
contributions relating to syndicate staff are charged to the Syndicate and included within net operating expenses.
u. Profit commission
Profit commission is charged by the managing agent at a rate of 12.5% of profit subject to the operation of a two-year
deficit clause. The S
subject to the operation of a divisional two-year deficit clause. Final settlement to the managing agent is made when the
year of account closes; normally at 36 months. Divisional profit share does not become payable until after the appropriate
year of account closes; normally at 36 months.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
64
v. Provisions
A provision is recognised when the Syndicate has a present legal or constructive obligation, as a result of a past event,
that is expected to result in an outflow of resources. A provision is recognised when a reliable estimate of the amount of
the obligation can be made.
w. Current and non-current disclosure
For each asset and liability line item that combines amounts expected to be recovered or settled (a) no more than 12
months after the year-end date and (b) more than 12 months after the year-end date, the relevant note discloses the
amount expected to be recovered or settled after more than 12 months.
x. Contingencies
Contingent liabilities arise as a result of past events when either it is not probable that there will be an outflow of resources
or that the amount cannot be reliably measured at the reporting date or when the existence will be confirmed by the
occurrence or non-occurrence of uncertain future events not wholly within the S
are disclosed in the underwriting year accounts unless the probability of an outflow of resources is remote.
y. Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the
assets and settle the liability simultaneously.
z. Other income and charges
Other income and other charges include investment return on withheld premium.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
65
2.
Use of critical accounting estimates and judgements in applying accounting policies
The preparation of the underwriting year accounts requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Syndicate
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the underwriting
accounts are those listed below.
Incurred but
not reported
claims (IBNR)
The estimation of claims IBNR is generally subject to a grea
ter degree of uncertainty than the
estimation of the cost of settling claims already notified to the Syndicate
, where more information
about the claim event is generally available. In calculating the estimated cost of unpaid claims t
he
Syndicate uses a var
iety of estimation techniques, generally based upon statistical analyses of
historical experience, which assumes that the development pattern of the current claims will be
consistent with past experience. Allowance is made, however, for changes or uncertai
nties which may
create distortions in the underlying statistics or which might cause the cost of unsettled claims to
increase or reduce when compared with the cost of previously settled claims including:
changes in processes which might accelerate or slow
down the development and/or recording of
paid or incurred claims compared with the statistics from previous periods;
changes in the legal environment;
the effects of inflation;
changes in the mix of business;
the impact of large losses; and
movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified but not
paid claims. In estimating the cost of these, regard is given to the claim circumstance as reported,
any information available from los
s adjusters and information on the cost of settling claims with similar
characteristics in previous periods.
Large claims affecting each relevant business class are generally assessed separately, either measured
on a case-by-case basis or projected separa
tely, in order to allow for the possible distorting effect of
the development and incidence of these large claims.
Where possible, multiple techniques are adopted in order to estimate the required level of provisions.
This assists in giving greater understanding of the trends inherent in the data being projected. The
projections given by the various methodologies also
assist in setting the range of possible outcomes.
The most appropriate estimation technique is selected taking into account the characteristics of the
business class and the extent of the development of each accident year. The amount of salvage and
subrogation recoveries is separately identified and, where material, reported as an asset.
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 the
m. However, the ultimate liability will
vary as a result of subsequent information and events and this may result in significant adjustments
to the amounts provided. Adjustments to the amounts of claims provisions established in prior years
are reflected in the report and accounts
for the period in which the adjustments are made. The
methods used, and the estimates made, are reviewed regularly.
Provisions are calculated gross of any reinsurance recoveries. A separate estimate is made of the
amounts that w
ill be recoverable from reinsurers based upon the gross provisions and having due
regard to collectability. An estimate of the future cost of indirect claims handling is calculated as a
percentage of the claims reserves held at the balance sheet date.
Property & Motor, Special Risks, Cyber & Enterprise Risk, Portfolio Solutions
and
Reinsurance business
occurrence of the claim and the claim being reported,
with the exception of the liability risks written
in the Cyber & Enterprise Risk and Property divisions
. For short tail risks, the costs of claims notified
to the Syndicate at the year-end date are estimated on a case by case basis to reflect the individu
al
circumstances of each claim. The ultimate expected cost of claims is projected from this data by
reference to statistics which show how estimates of claims incurred in previous periods have developed
over time to reflect changes in the underlying estima
tes of the cost of notified claims and late
notifications. For liability risks, claims may not become apparent for many years after the event giving
rise to the claim has happened, and there will typically be greater variation between initial estimates
and final outcomes compared with other classes.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
66
Marine & Energy, Liability and Aviation business
These business areas have a mix of hull and cargo risks that are short tail in nature, and liability risks
which are longer tail. The methodology uses a predetermined formula whereby greater weight is given
to actual claims experience as time passes. The i
nitial estimate of the loss ratio based on the
experience of previous years adjusted for factors such as premium rate changes and claims inflation,
and on the anticipated market experience, is an important assumption in this estimation technique.
The asses
sment of claims inflation and anticipated market experience is particularly sensitive to the
level of court awards and to the development of legal precedent on matters of contract and tort. This
class of business is also potentially subject to the emergenc
e of new types of latent claims but no
specific allowance is included for this as at the year-end date.
COVID-19
The Directors are aware of the heightened estimation uncertainty in reserving for estimated losses
arising from COVID-19 due to the unique nat
ure of the loss. Management have a robust reserving
approach which supports the held reserves at the year-end date.
Russian invasion of Ukraine
The Syndicate has loss exposure to the Russian invasion of Ukraine, stemming from its Aviation
,
Special Risks and Marine & Energy divisions
. There remains significant uncertainty as to how these
losses
approach supports the held reserves at the year-end date.
Provision
fo
r
unexpired
risks
All reasonable steps are taken to ensure that the appropriate information regarding claims exposures
is obtained. The calculation is based upon statistical analyses of historical experience, which assumes
that the development pattern of
premium and claims will be similar to past experience. However,
given the uncertainty in establishing a provision for unexpired risks, it is likely that the final outcome
will prove to be different from the original liability established.
Reinsurance
recoverable
Reinsurance is deemed to be fully recoverable unless there is reason to doubt its recoverability. In
these circumstances specific provisions are made based on the expected proportional recovery and
the credit risk profile of the counterparties.
Financial
investments
Financial investments are carried in the balance sheet at fair value. Market valuations of funds are
obtained from fund administrators. The fair value of Level 3 financial instruments, which
are those
where no active market exists or where quoted prices are not otherwise available,
is determined by
using valuation techniques. To the extent that valuations are
based on models or inputs that are
unobservable in the market, the determination of fair value requires more judgement and ac
cordingly,
those instruments will require a greater degree of judgement to be exercised during valuation.
3.
Segmental analysis
An analysis of the underwriting result before investment return and profit or loss on exchange is set out below:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Result
2022
Fire and other damage to property
795,054
795,054
(418,241)
(234,333)
(41,524)
100,956
Third party liability
355,079
355,079
(229,230)
(168,227)
(19,054)
(61,432)
Reinsurance acceptances
216,381
216,381
(150,733)
(21,170)
(6,060)
38,418
Marine, Aviation and Transport
174,465
174,465
(215,570)
(95,445)
99,782
(36,768)
Motor (other)
45,253
45,253
(22,624)
(27,084)
(5,522)
(9,977)
Accident & Health
37,086
37,086
(16,617)
(23,726)
(7,913)
(11,170)
Other
112
112
63
(2,139)
(2,245)
(4,209)
1,623,430
1,623,430 (1,052,952)
(572,124)
17,464
15,818
All business was concluded in the UK.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
67
4.
Reinsurance to close premium
Reported
IBNR
Total
Reinsurance to close premium receivable, net of
reinsurance
Gross reinsurance to close premium receivable
602,374
671,369
1,273,743
Reinsurance recoveries anticipated
(186,967)
(236,757)
(423,724)
415,407
434,612
850,019
Reinsurance to close premium payable, net of
reinsurance
Gross reinsurance to close premium payable
676,108
784,483
1,460,591
Reinsurance recoveries anticipated
(264,133)
(285,033)
(549,166)
411,975
499,450
911,425
The RITC is effected to the 2023 year of account of Syndicate 510.
5.
Net operating expenses
Acquisition costs
brokerage and commission
436,267
Acquisition costs - other
13,083
Administrative expenses
90,605
Reinsurance commissions and profit participations
(133,951)
406,004
Fees payable to the S
s for the audit of the Syndicate accounts
434
Other services pursuant to legislation
186
All other services
241
861
The charge incurred for other services pursuant to legislation relates to the audit and review of the S
returns. The charge incurred for all other services relates to the provision of statement of actuarial opinion on the reserves.
Audit fees are billed combined for the TMK Group and the Syndicate and are paid by a fellow subsidiary of TMKGL. A
recharge of audit fees is made to the Syndicate.
Tokio Marine Combined Syndicate 510
Underwriting Year Accounts for the 2022 Year of Account
68
6.
Staff costs
The Syndicate and its managing agent have no employees. Staff were employed by TMKIS (a fellow subsidiary of TMKGL).
The following amounts were recharged to the 2022 year of account in respect of salary costs and are included within
administrative expenses:
Wages and salaries
43,401
Social security costs and pension costs
7,734
51,135
7.
Analysis of technical result
2021 & prior
2022
Total
Technical account balance excluding investment return
and operating expenses
(74,337)
528,328
453,991
Brokerage and commission on gross premium
(15,593)
(420,674)
(436,267)
(89,930)
107,654
17,724
8.
Investment return
2022
Investment income
Income from investments
41,547
Realised gains on investments
3,802
45,349
Investment expenses and charges
Investment management expenses, including interest
(775)
Realised losses on investments
(1,015)
(1,790)
Investment return for the 2022 year of account is recognised in the 2022, 2023 and 2024 calendar years.
9.
Other financial investments
Fair value
Purchase price
Other financial investments
-Shares and other variable yield securities
104,886
103,935
-Debt securities and other fixed income securities
492,913
485,819
-Deposits with credit institutions
848
848
598,647
590,602
10.
Off-balance sheet items
The Syndicate has not been party to an arrangement, which is not reflected in its balance sheet, where material risks and
benefits arise for the Syndicate.
11.
Post balance sheet events
There are no post balance sheet events to report.
