Syndicate Accounts

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Classification: Unclassified

Lloyd’s Syndicate

Syndicate CVS 1919

Annual Report and Accounts for the year ended

31 December 2024

Contents

Directors and Administration....................................................................................................4

Managing Agent’s report..........................................................................................................5

Statement of Managing Agent’s responsibilities....................................................................12

Independent auditor’s report to the members of Syndicate CVS 1919..................................13

Statement of profit or loss and other comprehensive income:...............................................17

Balance sheet – Assets.........................................................................................................19

Balance sheet (cont’d) – Liabilities........................................................................................20

Statement of changes in members’ balances........................................................................21

Statement of cash flows.........................................................................................................22

Notes to the financial statements – (forming part of the financial statements).....................23

Appendix: Disclosure notes and accounting reference (Not forming part of the financial statements)............................................................................................................................54

Directors and Administration

MANAGING AGENT

Starr Managing Agents Limited

Directors

J Ribeiro (Non-executive Director)

J Herbert(Non-Executive Director)

D Stewart(Director of Underwriting)

G J L Broughton (UK & European Finance Director)

A Missen (Chief Operations Officer)

S Scott(President, UK & EME)

R Shaak(Non-executive Director)

A P Hulse(Independent Non-executive Chairman)

N C T Pawson (Non-executive Director, resigned on 8th April 2024)

S J Helson (Independent Non-executive Director)

A Gac(Independent Non-executive Director, appointed 1st June 2024)

A Bahia(Governance, Risk & Compliance Director, appointed 8th April 2024)

Company secretary

A Bahia

Managing agent’s registered office

4th Floor

30 Fenchurch Avenue

London

EC3M 5AD

Managing agent’s registered number

6265337

SYNDICATE

Active underwriter

A Raven (resigned 1st January 2024)

E Ilott (appointed 1st January 2024)

Bankers

Citibank NA

Royal Bank of Canada

Barclays Plc

Statutory auditor

BDO LLP, London

Managing Agent’s report

The directors of Starr Managing Agents Limited (“SMAL”) present their managing agent’s report, incorporating the strategic report, for the year ended 31 December 2024.

This annual report is prepared using the annual basis of accounting as required by the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008 Regulations”).

Separate underwriting year accounts for the closed 2022 account have not been produced as the Syndicate member has agreed in writing that no underwriting year accounts shall be prepared in respect of the Syndicate.

Principal activity and review of the business

The principal activity of Syndicate 1919 during the period was the transaction of general insurance and reinsurance business. Note 5 provides the analysis of gross written premium by geographic area in which the risks are written.

The Syndicate business is underwritten under a limited number of binding authority arrangements granted to Starr Underwriting Agents Limited (“SUAL”) in London, an established and experienced underwriting agency. SUAL is a Financial Conduct Authority (“FCA”) regulated insurance intermediary and an approved Society of Lloyd’s (“Lloyd’s”) Coverholder. Lloyd’s consortium business for the 2014 and post years of account is written via SMAL. Delegated authority is also given to a number of Starr offices in overseas territories to access local markets not otherwise available to Lloyd’s. SUAL and SMAL share a single management team. SUAL and SMAL are both 100% owned by Starr Global Financial Inc. (Nevada) a Group company.

The Syndicate currently has a portfolio of seven main divisions, namely:

Marine – direct and facultative business including hull, cargo and liability.

Aviation – direct and facultative business including airlines, products, and general aviation.

Technical risks – direct and facultative technical risks including onshore and offshore energy, process industries, power, chemical and other heavy industries, property and construction.

Accident and Health – direct and facultative business.

Political Risk – direct and facultative business including credit risk and contract frustration.

Casualty – direct and facultative business including construction, energy, export products and environmental and crisis management.

Financial Lines – direct and facultative business.

Results

The result for the calendar year 2024 is a profit of $15.1m (2023: profit of $51.9m). Profits will be distributed by reference to the results of individual underwriting years. The member’s funds total surplus is $125.2m (2023: surplus $109.1m). In addition, the Syndicate has the right to call upon Funds at Lloyd’s which are not shown on the Syndicate balance sheet.

Results in the 2024 calendar year have been mixed across the various underwriting divisions of Syndicate 1919. Market conditions have softened since 2023, with a small rate decrease seen at a total Syndicate level for the year, with longer tailed classes of business seeing larger rate reductions than other lines. The macroeconomic conditions have been less challenging this year with inflation returning to more normal levels.

Favourable claims experience on the Technical Risks division is the material driver for the underwriting profit generated during the year.

The Syndicate evaluates its performance using key performance indicators that allow the measurement of volumes of business being written and the underlying profitability of the business. The Syndicate’s key performance indicators during the period were as follows:

2024

2023

$000

Gross written premiums

478,034

527,869

Net written premium

112,325

128,277

Net claims incurred

90,985

76,017

Profit for the period

15,138

51,864

Combined ratio*

94.5%

79.7%

*The combined ratio is calculated as net claims incurred plus net operating expenses, divided by net earned premiums.

Principal risks and uncertainties

The SMAL Board sets risk appetite annually as part of the Syndicate business planning and Syndicate Capital Requirement process. SMAL’s Risk and Compliance Committee meets quarterly to review and update the risk register and to monitor performance against risk appetite using a series of key risk indicators reported through the Own Risk and Solvency Assessment process. The principal risks and uncertainties facing the Syndicate are as follows and are discussed in more detail in note 4.

Insurance risk

Insurance risk includes the risk that a policy will be written for too low a premium or provide inappropriate cover (underwriting risk), that the frequency or severity of insured events will be higher than expected (claims risk), or that estimates of claims subsequently prove to be insufficient (reserving risk). The SMAL Board manages insurance risk by agreeing its appetite for these risks annually through the business plan, which sets out targets for volumes, pricing, line sizes and retention by class of business. The SMAL Board then monitors performance against the business plan throughout the year. SMAL sets upper limits on and monitors maximum probable losses from catastrophe-exposed business. Reserve adequacy is monitored through quarterly reviews by the Syndicate actuary and the Reserving Committee.

The Syndicate has a defined event risk tolerance, which determines the maximum gross and net loss that the Syndicate limits its exposure to, from major catastrophe event scenarios. At 31st December 2024 the maximum final net loss was $32.6m ($125m gross, reinsurers’ share of $92.5m with reinstatement premium of $182k) for the Syndicate (2023: final net loss $22m, $270m gross, reinsurers’ share of $248m). The Syndicate also adopts risk tolerance maximum net limits for a number of non-elemental scenarios including an aviation terror event and a major complex loss.

The risk tolerance policy recognises that there may be circumstances in which the net event limit could be exceeded. Such circumstances include non-renewal or delay in renewal of reinsurance protection, reinsurance security failure, or regulatory and legal requirements. A detailed analysis of catastrophe exposures is carried out periodically and measured against the event risk tolerance. The following assumptions and procedures are used in the process:

•The data used reflects the information supplied to the Syndicate by insureds and ceding companies. This may prove to be inaccurate or could develop during the policy period. To mitigate this risk, our data governance structure provides assurance that an effective data management framework is in place evidencing the accuracy, completeness and timeliness of data used within the Syndicate.

•The exposures are modelled using a mixture of physical models for natural catastrophe risks and underwriter input for man-made catastrophe risks to arrive at damage factors. These factors are then applied to the assumed aggregate exposure to produce gross loss estimates.

The damage factors may prove to be inadequate. To mitigate this risk, independent model validation ensures that the inputs used to derive our overall catastrophe risk are thoroughly assessed and appropriate.

•The reinsurance programme as purchased is applied – a provision for reinsurer counterparty failure is analysed but may prove to be inadequate. To mitigate this risk, independent model validation ensures that the inputs used to derive our reinsurance credit risk are thoroughly assessed and appropriate.

•Reinstatement premiums both payable and receivable are included. Catastrophe data is captured at a variety of levels to ensure all aspects of our catastrophe losses are well understood, including reinstatement premiums.

There is no guarantee that the assumptions and techniques deployed in calculating these event loss estimates are entirely accurate; furthermore, there could also be a loss which exceeds these figures. The likelihood of such a catastrophe is considered to be remote but the most severe scenarios modelled are simulated and these simulations could prove to be unreliable.

Credit risk

The Syndicate has credit risk exposure to its reinsurers, brokers, coverholders, banks and investments. The largest component of credit risk is the default by one or more of the Syndicate’s reinsurers. SMAL has a Reinsurance Security Committee that reviews and agrees the security of the proposed reinsurers. The Committee assesses the acceptability of reinsurers and sets maximum usage limits based on each reinsurer’s security rating. A listing of all acceptable security is maintained by the Reinsurance Security Committee. Any reinsurer that does not appear on the list of approved reinsurers, or of an approved reinsurer in excess of its applicable limit, requires prior authorisation from the Reinsurance Security Committee. The Reinsurance Security Committee reviews and agrees the form and structure of the reinsurance programme to be purchased by the Syndicate and monitors progress on placement and exhaustion of cover. Aged debt in respect of premiums and reinsurance recoveries is actively managed and closely monitored by the SMAL Executive Committee. The associated credit rating of the reinsurer is provided within note 4.

Liquidity risk

This is the risk that the Syndicate will not be able to meet its liabilities as they fall due, owing to a shortfall in cash. To mitigate this risk the cash positions are monitored on a daily basis and investments are held in highly liquid instruments.

Market risk

The key aspect of market risk is that the Syndicate may incur losses on foreign exchange movements as a result of mismatches between the currencies in which assets and liabilities are denominated. The majority of assets and liabilities are denominated in the functional currency, US Dollars. However SMAL monitors net exposure to any other material currencies to determine whether further action is required.

Due to the nature of our investment portfolio we are not significantly exposed to realised market valuation differences on bonds as these are not traded on a regular basis. The factor which impacts our investments most is interest rates. Interest rates have a direct impact on investment return and the valuation of bonds is directly linked to interest rates and their anticipated movements.

Operational risk

This is the risk of losses arising from failures in people, process, systems or from external events. SMAL seeks to manage this risk through the use of an internal control assessment programme, a risk event management process, the setting and reporting against Board approved operational risk appetites, the use of operational risk stress and scenario testing, a formal operational resilience and third party risk framework and through the use of a scalable change governance process to ensure material business changes are subject to higher levels of control.

Operational risk is reporting through to the Executive Committee, Risk Committee, Audit Committee and, by exception, to the Board.

Regulatory risk

SMAL is required to comply with the requirements of the Prudential Regulation Authority (“PRA”), the Financial Conduct Authority (“FCA”) and Lloyd’s. Lloyd’s requirements include those imposed on the Lloyd’s market by overseas regulators, particularly in respect of US Situs business. Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to respond to regulatory change. SMAL has a compliance team which monitors regulatory developments, assesses the impact on agency policy and carries out a compliance monitoring programme which is reported to the SMAL Audit Committee and Board throughout the year.

ESG and Climate Change risk

In 2024 SMAL continued implementing its ESG strategy having completed an assessment of its current business model. SMAL now operates the following:

•An ESG Working Group that is responsible for escalating matters to the Risk Committee and Board;

•A Diversity and Inclusion working Group that is responsible for recommending employee and wellbeing initiatives;

•ESG and carbon emission limits within its investment guidelines;

•A proprietary US wild fire model in its catastrophe risk analysis;

•A recruitment process that explores different options to broaden the pool of talent and diversity within the Starr Team;

•Policies that are developed and maintained to ensure that supply chains operate within the standards required by Starr; and

•A tool that assists the business in understanding our client’s ESG journey.

Further work on ESG initiatives will continue through 2025 as SMAL’s approach to action on ESG and climate change develop further. This work will inform SMAL’s approach to the Syndicate’s ESG framework to ensure it is aligned to our strategy and risk appetites.

Starr has put in place a policy to assist in managing the financial risks associated with the effects of climate change and to ensure that Starr has adequate oversight and control of this area and how climate change relates to other risk groups.

The financial risks emanating from climate change impact risk groups such as Strategy, Insurance, Credit and Market risk areas. Financial risks from climate change arises through two primary channels, being physical and transition factors. In addition, liability arising from third parties who have suffered loss or damage from physical or transition risk factors may also impact the financial risks from climate change.

The objective of the climate change risk policy is to ensure that:

i.There is an understanding of the implications of climate change across the organisation and the global insurance industry;

ii.The financial risks from climate change are understood, quantified, assessed and monitored;

iii.Financial resources (including capital) adequately reflect the potential impact of climate change;

iv.The reputational consequences to Starr with stakeholders, whether policyholders, regulators, reinsurers or staff, are managed appropriately.

The Board is responsible for setting the climate change policy and ensuring that there are adequate processes in place to monitor and manage the financial risks therefrom within the parameters defined by our risk appetite. Stress and scenario tests relating to financial risks from climate change are developed by the business and are overseen and challenged by the Risk Function where appropriate. Climate change is also considered within the annual ORSA process including stress and scenario tests.

During 2024 the Starr UK operations were estimated to have indirectly consumed 339,560 KWH (2023: 213,455) of energy or an average of 946 KWH per employee (2023: 657 KWH per employee), based on 359 employees (2023: 325 employees). This estimate has been made using data supplied by commercial landlords. We consider the methodology used to be proportionate and repeatable, to ensure comparability period on period. Starr does not currently have targets or commitments in respect of climate change or energy use.

Directors’ Section 172 Statement

The Directors accept the responsibility for promoting the success of the Syndicate as if s172(1)(a-f) of the Companies Act 2006 were applicable and have acted accordingly in the decisions taken during the year ended 31 December 2024.

The Director’s priorities in stakeholder engagement are demonstrated through the decisions made by the Directors as well as the Board’s oversight of executive management. The Syndicate’s stakeholders are considered to be the Starr International Group of insurance companies of which the Syndicate’s sole member is a part (the “Group”), its policyholders and intermediaries, employees, regulators, and other stakeholder groups affected by SMAL’s overall standards of business conduct.

•Overall Group Strategy: The Board remains cognisant of the evolving competitor and insurance landscape in which the Syndicate operates, making decisions for the Syndicate within the Group strategy to sustain the long-term profitability of its insurance carriers, while maximising capital efficiency. This is demonstrated in a well-maintained control environment ensuring that the Syndicate can take advantage of opportunities now and in the long term. The Syndicate’s purpose and business model, in relation to the Group strategy, were reviewed by the Directors this year with no significant changes. The Board approves an annual business plan and the annual ORSA which contains a range of themes analysing the future including but not limited to business and underwriting performance, solvency and risk profile. The Board also receives yearly class by class presentations to ensure that class activities align with the overall strategy set by the Board.

•Policyholders: The Board is committed to fostering the Syndicate’s business relationships with policyholders and intermediaries and the quality of insurance products and services provided to them. Through its risk oversight, the Board ensures the liquidity and ability of the syndicate to pay its obligations to its policyholders, as well as monitoring that the Syndicate is properly managing its operational risk and compliance risk. The Board monitors compliance with the requirements on conduct and consumer duty as well as anti-bribery and corruption. The Board also monitors data privacy initiatives and compliance with regulations to protect consumer data under the General Data Protection Regulation. Finally, the Board also regularly oversees the claims handling practices of the Syndicate, through its Claims Committee which regularly reports to the Reserving Committee and presentations.

•Employees: All employees are employed by SUAL. The Board recognises that employees are key to the success of the business. The Board has regard to employee interests through the Remuneration and Nominations Committee and accountability under the Senior Managers and Certification Regime. SUAL’s Remuneration Policy sets out the remuneration structure to ensure a proper balance between variable and fixed remuneration to attract, motivate and retain qualified Staff members, whilst not incentivising risk-taking behaviour that is outside our risk appetites. This is further reinforced though the performance review process where Starr has implemented a strict conduct goal, if conduct falls below expectations there is a direct impact on compensation. Starr continues its focus on training and development with comprehensive training and personal development plans, alongside structured team days and collaborative knowledge sharing exercises. Starr values two-way communication updating staff on strategy and performance through regular Town Hall meetings and listening to their concerns and feedback through the Employee Consultation Forum, Diversity & Inclusion Forum and an annual survey on Culture and Diversity & Inclusion, as well as through other mechanisms. The Board is committed to ensuring diversity throughout the employee population and senior management support initiatives to promote diversity & inclusion throughout Recruitment, Talent Management and Succession Planning activities. Starr also continues to adapt its Employment Packages to reflect current working conditions, with greater

management focus on staff wellbeing and providing resources and assistance to those staff in need of help particularly through the recruitment and training of a team of Mental Health First Aiders.

SMAL also has a robust compliance programme, which aims to ensure that a culture of compliance and ethical behaviour permeates through all business operations and processes. To meet this objective, required practices and obligations are clearly communicated to all employees through a number of policies and procedures such as Anti-Fraud, Anti-Bribery & Corruption, Sanctions and Whistleblowing in order to support senior management in their compliance objectives as well as targeted Compliance training resources.

•Impact of operations on the community and the environment: As noted above, SUAL is focused on managing the challenges of climate change through its ESG Working Group both from a business perspective and the impact on its operations. Research into the impacts of climate change on policyholders and the risks that are insured has been fed into the catastrophe underwriting models and the assessments of the impacts on exposures. In respects of operations, Starr continues to consult with its employees to change practices to ensure positive effects on the climate. Likewise, Starr supports local community programmes promoting positive outcomes for the local communities within which Starr operates.

•Regulators: SMAL is committed to working with its regulators in a cooperative, responsive and transparent manner. SMAL seeks to ensure a strong regulatory compliance culture and the Directors receive regular compliance reports and updates from management. During the year, the PRA conducted routine meetings with several members of the Board and executive management. Regular management information is provided to assist the regulators with the supervision of the Group.

•High standards of business conduct and further stakeholder groups: Starr’s intention is to ensure that the business is conducted in an ethical and responsible way. A healthy corporate culture is the cornerstone of high standards of business conduct and governance. The Board’s commitment to culture, is evidenced through regular review of business conduct and an open level of communication between executive management and the Board. Starr’s commitment to high standards of business conduct is also enshrined in its Code of Conduct. Starr’s culture also pervades its business dealings with stakeholders outside of the organisation, such as suppliers and the community, as exemplified by its work with suppliers in relation to the Modern Slavery Act, as further disclosed on the Starr website and its commitment to Consumer Duty requirements.

Future Developments

SMAL plans to continue writing a broadly similar book of business in 2025 and beyond. It will look to use the current market conditions by working responsibly with clients, many of whom are long term, for an appropriate return on risk, enhanced terms and conditions and adjusted net retentions. Syndicate 1919 will continue to develop in areas where business opportunities for profitable growth present themselves. In addition, SMAL is continuously investigating new lines of business where opportunities may present themselves, to achieve improved returns. The Syndicate Business Forecast for the 2025 underwriting year has approved Capacity of £400m (2024: £415m).

The Directors are confident that the Syndicate is a going concern.

Medium to long-term developments

SMAL intends to maintain the position of its managed Syndicate within the Lloyd’s market. It will do this in a number of ways:

•By maintaining existing product lines where rates and competition permit in addition to seeking improved terms and increased participations;

•Leveraging available capital, operational and service resources within and across the Starr Group as required to take advantage of opportunities; and

•Benefitting from Lloyd’s global network of licences to operate in territories where Starr Group is not licenced or to satisfy client needs.

Directors

Details of the directors of the managing agent who served during the year to 31 December 2024 and as at the signing date of this report are provided on page 4.

Disclosure of information to the auditors

Each of the persons who is a director of the managing agent at the date of approval of this report confirms that:

•So far as the director is aware there is no relevant audit information of which the Syndicate’s auditors are unaware; and

•They have taken all the steps they ought to have taken as directors in order to make themselves aware of relevant audit information and to establish that the Syndicate’s auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Schedule 1, paragraph 11 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.

The Directors also confirm their agreement with the disclosures within the managing agent’s report.

Auditors

The auditors, BDO LLP, have indicated their willingness to continue in office and the directors of SMAL intend to reappoint them as the Syndicate auditors.

By order of the Board

Graham Broughton

Finance Director, London

05 March 2025

Statement of Managing Agent’s responsibilities

Starr Managing Agents Limited is responsible for preparing the Syndicate annual accounts in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the managing agent to prepare Syndicate annual accounts at 31 December each year which give a true and fair view of the state of affairs of the Syndicate as at that date and of its profit or loss for that year.

In preparing the Syndicate annual accounts, the managing agent is required to:

1.Select suitable accounting policies which are applied consistently;

2.Make judgements and estimates that are reasonable and prudent;

3.State whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the annual accounts; and

4.Prepare the annual accounts on the basis that the Syndicate will continue to write future business unless it is inappropriate to presume that the Syndicate will do so.

The managing agent is responsible for keeping adequate accounting records that are sufficient to show and explain the Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the Syndicate and enable it to ensure that the Syndicate annual accounts comply with the 2008 Regulations. It is also responsible for safeguarding the assets of the Syndicate and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

The managing agent is responsible for the maintenance and integrity of the corporate and financial information included on the business’ website. Legislation in the United Kingdom governing the preparation and dissemination of annual accounts may differ from legislation in other jurisdictions.

The Syndicate financial statements on pages 17 to 53 were approved by the Board of Starr Managing Agents Limited on 05 March 2025 and were signed on its behalf by:

………………………………………

Graham Broughton

Finance Director, London

05 March 2025

Independent auditor’s report to the members of Syndicate CVS 1919

Opinion on the financial statements

In our opinion, the financial statements:

•give a true and fair view of the state of the Syndicate’s affairs as at 31 December 2024 and of its profit for the year then ended;

•have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (the “LR 2008”) and the requirements within sections 1 and 5 of the Lloyd’s Syndicate Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s (the “Lloyd’s Syndicate Accounts Instructions”).

We have audited the financial statements of Syndicate 1919 (the ‘Syndicate’) for the year ended 31 December 2024 which comprise the Statement of Profit or Loss and Other Comprehensive Income, Balance Sheet, Statement of Changes in Members’ Balances, Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and Financial Reporting Standard 103 Insurance Contracts (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

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

(UK)), the LR 2008, the Lloyd’s Syndicate Accounts Instructions and other applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the 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 are independent of the Syndicate in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Managing Agent’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Syndicate’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the relevant sections of this report.

Other 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 the Lloyd’s Syndicate Accounts Instructions.

Other information

The Managing Agent is responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the LR 2008

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

•the information given in the Managing Agent’s report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•the Managing Agent’s report has been prepared in accordance with the LR 2008.

In the light of the knowledge and understanding of the Syndicate and its environment obtained in the course of the audit, we have not identified material misstatements in the Managing Agent’s report.

We have nothing to report in respect of the following matters in relation to which the LR 2008 requires us to report to you, if in our opinion:

•adequate accounting records have not been kept on behalf of the Syndicate;

•the financial statements are not in agreement with the accounting records;

•certain disclosures of Managing Agent emoluments and other benefits specified by law are not made;

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

Responsibilities of the Managing Agent

As explained more fully in the Managing Agent’s responsibilities statement, the Managing Agent is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Managing Agent determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, 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 the Managing Agent either intends to liquidate the Syndicate or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

•Our understanding of the Syndicate and the industry in which it operates;

•Discussion with management and those charged with governance; and

•Obtaining an understanding of the Syndicate’s policies and procedures regarding compliance with laws and regulations;

we considered the significant laws and regulations to be the applicable accounting framework, the LR 2008, and the Lloyd’s Syndicate Accounts Instructions.

The Syndicate is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the requirements of the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”).

Our procedures in respect of the above included:

•Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;

•Review of correspondence with regulatory authorities for any instances of non-compliance with laws and regulations;

•Review of financial statement disclosures and agreeing to supporting documentation; and

•Review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

•Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

•Obtaining an understanding of the Syndicate’s policies and procedures relating to:

oDetecting and responding to the risks of fraud; and

oInternal controls established to mitigate risks related to fraud.

•Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;

•Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

•Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

•Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be the valuation of IBNR, revenue recognition and management override of controls.

Our procedures in respect of the above included:

•Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;

•Involvement of forensic specialists in our fraud risk assessment; and

•Assessing significant estimates made by management for bias through review of the methods and assumptions applied by management in valuing IBNR, performing independent projection of IBNR, and verifying whether claims occurrence throughout the life of insurance policies matches the earning pattern applied by management.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Syndicate’s members, as a body, in accordance with the LR 2008. Our audit work has been undertaken so that we might state to the Syndicate’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Syndicate and the Syndicate’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Thomas Reed (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

05 March 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Statement of profit or loss and other comprehensive income:

Technical account – General business

For the year ended 31 December 2024

Note

2024

$000

2023

$000

Gross premiums written

478,034

527,869

Outwards reinsurance premiums

(365,709)

(399,592)

Premiums written, net of reinsurance

112,325

128,277

Changes in unearned premium

Change in the gross provision for unearned premiums

28,778

(21,214)

Change in the provision for unearned premiums reinsurers’ share

(17,850)

10,183

Net change in provisions for unearned premiums

10,928

(11,031)

Earned premiums, net of reinsurance

123,253

117,246

Allocated investment return transferred from the non-technical account

18,174

18,488

Other technical income, net of reinsurance

Claims paid

Gross amount

(311,442)

(245,182)

Reinsurers’ share

258,038

204,792

Net claims paid

(53,404)

(40,390)

Change in the provision for claims

Gross amount

(47,833)

2,836

Reinsurers’ share

10,252

(38,463)

Net change in provisions for claims

(37,581)

(35,627)

Claims incurred, net of reinsurance

(90,985)

(76,017)

Net operating expenses

(25,510)

(17,396)

Other technical charges, net of reinsurance

Balance on the technical account – general business

24,932

42,321

Statement of profit or loss and other comprehensive income: (cont.)

Non-technical account – General business

For the year ended 31 December 2024

All operations are continuing.

The accompanying notes from page 23 to 53 form an integral part of these financial statements.

Note

2024$000

2023$000

Balance on the technical account – general business

24,932

42,321

Investment income

16,287

14,001

Realised gains/(losses) on investments

2,358

(2,732)

Unrealised gains/(losses) on investments

2,969

9,495

Investment expenses and charges

(339)

(372)

Total investment return

21,275

20,392

Allocated investment return transferred to the general business technical account

(18,174)

(18,488)

Gain/(loss) on foreign exchange

(12,895)

7,639

Other income

Other expenses

Profit/(loss) for the financial year

15,138

51,864

Total comprehensive income/(loss) for the year

15,138

51,864

Balance sheet – Assets

As at 31 December 2024

Note

2024$000

2023$000

Financial investments

509,419

529,620

Deposits with ceding undertakings

3,531

3,878

Investments

512,950

533,498

Provision for unearned premiums

221,905

241,829

Claims outstanding

826,320

830,732

Reinsurers’ share of technical provisions

1,048,225

1,072,561

Debtors arising out of direct insurance operations

202,925

184,713

Debtors arising out of reinsurance operations

62,130

65,289

Other debtors

23,589

12,517

Debtors

288,644

262,519

Cash at bank and in hand

3,679

4,623

Other

Other assets

3,679

4,623

Deferred acquisition costs

22,916

24,164

Other prepayments and accrued income

246

Prepayments and accrued income

22,916

24,410

Total assets

1,876,414

1,897,611

Balance sheet (cont’d) – Liabilities

As at 31 December 2024

Note

2024$000

2023$000

Members’ balances

125,166

109,142

Total capital and reserves

125,166

109,142

Provision for unearned premiums

303,148

335,374

Claims outstanding

1,048,690

1,016,525

Other technical provisions

Technical provisions

1,351,838

1,351,899

Provisions for other risks

Deposits received from reinsurers

Creditors arising out of direct insurance operations

1,572

Creditors arising out of reinsurance operations

348,490

387,786

Other creditors including taxation and social security

4,027

4,241

Amounts owed to credit institutions

Creditors

354,089

392,027

Accruals and deferred income

45,321

44,543

Total liabilities

1,751,248

1,788,469

Total liabilities, capital and reserves

1,876,414

1,897,611

The Syndicate financial statements on pages 17 to 53 were approved by the Board of Starr Managing Agents Limited on 05 March 2025 and were signed on its behalf by;

Graham BroughtonUK & European Finance Director

05 March 2025

Statement of changes in members’ balances

For the year ended 31 December 2024

2024$000

2023$000

Members’ balances brought forward at 1 January

109,142

56,129

Total comprehensive income for the year

15,138

51,864

Payments of profit to members’ personal reserve funds

(41,818)

Losses collected in relation to distribution on closure of underwriting year

37,399

Cash calls on open underwriting years

Members agent fees

Net movement on funds in syndicate

41,818

(37,399)

Other

886

1,149

Members’ balances carried forward at 31 December

125,166

109,142

Statement of cash flows

For the year ended 31 December 2024

Note

2024$000

2023$000

Cash flows from operating activities

Profit/(loss) for the financial year

15,138

51,864

Adjustments:

Depreciation and other movements in tangible fixed assets

(Gain)/loss on disposal of tangible fixed assets

Increase/(decrease) in gross technical provisions

20,991

17,545

(Increase)/decrease in reinsurers’ share of gross

technical provisions

6,324

29,388

(Increase)/decrease in debtors

17,196

(28,519)

Increase/(decrease) in creditors

(78,317)

(2,498)

Increase/(decrease) in deposits received from reinsurers

Movement in other assets/liabilities

16,063

520

Investment return

(21,275)

(9,495)

Foreign exchange

6,213

(23,505)

Other

Net cash flows from operating activities

(17,667)

35,300

Cash flows from investing activities

Purchase of tangible fixed assets

Sales of tangible fixed assets

Purchase of equity and debt instruments

(355,203)

(237,378)

Sale of equity and debt instruments

360,954

182,578

Purchase of derivatives

Sale of derivatives

Investment income received

18,306

10,897

Other

(7,241)

Net cash flows from investing activities

16,816

(43,903)

Cash flows from financing activities

Distribution of profit

(41,818)

Open year profit release

Collection of losses

37,399

Capital contributions/open year cash calls made

41,818

(37,399)

Funds In Syndicate released to members

Other

Net cash flows from financing activities

Net increase/(decrease) in cash and cash equivalents

(851)

(8,603)

Cash and cash equivalents at the beginning of the year

4,623

317

Foreign exchange on cash and cash equivalents

(93)

12,909

Cash and cash equivalents at the end of the year

3,679

4,623

Notes to the financial statements – (forming part of the financial statements)

1.Basis of preparation

Syndicate 1919 is a Lloyd’s Syndicate managed by Starr Managing Agents Limited, incorporated in the United Kingdom. SMAL’s registered office is 4th Floor, 30 Fenchurch Avenue, London, EC3M 5AD with a registered number 6265337. The financial statements cover those of the individual entity and are for the year ended 31 December 2024. A description of the nature of the entity’s operational and principal activities is provided within the Managing Agent’s report.

Statement of compliance

The financial statements are prepared on the annual basis of accounting in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, and applicable Accounting Standards in the United Kingdom, including Financial Reporting Standard 102: ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (FRS 102) and Financial Reporting Standard 103: ‘Insurance Contracts’ (FRS 103), and in accordance with the provisions of Schedule 3 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations relating to insurance companies, and the Lloyd’s Syndicate Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1 issued by Lloyd’s.

The financial statements are prepared under the historical cost convention except for certain financial instruments which are measured at fair value.

The financial statements for the year ended 31 December 2024 were approved for issue by

the Board of Directors on 05 March 2025.

Financial Reporting Standard 102 requires each entity to identify its functional currency and a presentational currency. The functional currency is identified as the currency of the primary economic environment in which the entity operates.

The functional currency of the Syndicate is the US Dollar as the majority of the underwriting business, cash flows and expenses are in US Dollars. For this reason we have adopted US Dollar as the presentation currency for these financial statements. The financial statements are rounded to the nearest $000.

The Director’s continue to adopt the going concern basis in preparing the annual accounts.

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 changes are

•Balance Sheet – Assets

-The reclassification of overseas deposits, previously shown as a separate balance sheet item, to form part of Financial investments.

-The reclassification of deposits with ceding undertakings, previously shown as Other Assets, to form part of investments.

-Reinsurers’ share of deferred acquisition costs are not to be presented as a separate line on the balance sheet and are therefore included in the deferred acquisition costs in Balance Sheet – Assets.

•Cash flow

-The reclassification of the total investment return, now shown as part of the net cash flows from operating activities, previously split between unrealised and realised gains and losses.

•Note 4 - Risk and capital management

-The change of the claims sensitivities table from showing 10% on the average claims cost and number of claims to 5% on claims outstanding.

-The reclassification of overseas deposits, previously shown as a separate line item, to form part of other investments.

-The inclusion of Accruals and other liabilities in the currency risk table and in the Maturity profiles within Other credit balances.

-The inclusion of Debtors arising out of direct insurance operations in the Financial risk – credit risk section.

•Note 5 – Analysis of underwriting result

-Operating expenses are presented gross with Reinsurers’ share of expenses now included in the Reinsurance balance.

•Note 11 – Financial investment

-The reclassification of overseas deposits, previously shown as a separate line item, to form part of other investments.

The comparative balances in the affected notes have also been represented to align with the current period presentation.

b)Aggregation changes

To align with Lloyd’s reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated or disaggregated within the financial statements and related notes. This includes

•Statement of profit or loss:

-The presentation of realised and unrealised gains and losses on investments, as well as the investment expenses and charges, which are now shown on a disaggregated basis.

•Balance Sheet – Liabilities

-The presentation of Creditors arising out of direct insurance operations, which are now shown on a disaggregated basis between direct and reinsurance.

•Cash Flow

-The presentation of the movement in the technical provisions, which are now shown on a disaggregated basis between gross and reinsurers’ share.

•Note 4 - Risk and capital management

-The presentation Syndicate loans to central fund, previously shown within Shares and other variable yield securities and unit trust and now shown on a disaggregated basis.

-The presentation of the aging of debt figures, previously shown in one table with full development, now split between two tables with one dedicated to Past due but not impaired assets.

-The presentation of Loans and deposits with credit institutions , previously shown within Other Investments and now shown on a disaggregated basis.

•Note 5 - Analysis of underwriting result

-Additional disclosure for Lloyd’s reporting purposes of certain segments and is included to facilitate the classification of the main segments into the Lloyd’s aggregate classes of business.

•Note 6 – Net operating expenses

-The presentation of the total commission for direct insurance business, now shows in a separate table.

•Note 9 – Investment return

-The presentation of dividend income, previously shown as part of the investment income and now shown on a disaggregated basis.

-The disaggregation of investment gains and losses in the Other income from investments section.

•Note 11 – Financial investment

-The presentation of Syndicate loans to central fund, previously shown within Shares and other variable yield securities and unit trust and now shown on a disaggregated basis.

-The presentation of Loans and deposits with credit institutions , previously shown within Other Investments and now shown on a disaggregated basis.

•Note 13 – Debtors arising out of reinsurance operations

-Additional disclosure for Lloyd’s reporting purposes of the debtors arising out of reinsurance operations between due within one year and after one year.

•Note 14 – Other debtors

-Additional disclosure for Lloyd’s reporting purposes of the contents within Other debtors.

•Note 15 – Deferred acquisition costs

-The presentation of the DAC, previously shown within Technical provisions, and now shown on a disaggregated basis.

•Note 17 – Claims development

-The claims split table has been aggregated into the main triangle view as well as the provision in respect of prior years in order to calculate the Gross claims reserve.

•Note 18 – Technical provisions

-The presentation of the Claims outstanding and Unearned Premiums, previously shown in one aggregated table, are now shown in separate tables.

-The presentation of the Movement in provision in Unearned Premiums has been now split between premiums written during the year and premiums earned during the year.

•Note 21 – Creditors arising out of direct insurance operations

-Additional disclosure for Lloyd’s reporting purposes of the creditors arising out of direct operations between due within one year and after one year.

•Note 22 – Creditors arising out of reinsurance insurance operations

-Additional disclosure for Lloyd’s reporting purposes of the creditors arising out of direct operations between due within one year and after one year.

•Note 23 – Other creditors

-Additional disclosure for Lloyd’s reporting purposes of the contents within Other creditors.

The reclassification and aggregation changes have been applied retrospectively and had no impact on previously reported profit or (loss), total comprehensive income/(loss), total assets, total liabilities, or total capital and reserves.

2.Use of judgements and estimates

In the application of the Syndicate’s accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognised in the period in which the estimate is revised if the change affects only that period, or in the period of the revision and future periods if the change affects both current and future periods.

Critical judgements in applying the Syndicate’s accounting policies

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Syndicates accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Reinsurance assets

Reinsurance assets include balances due from reinsurance companies for paid and unpaid losses. Reinsurance assets are measured in accordance with the accounting policy stated in note 3. Reinsurance assets are subject to impairment testing and the carrying amount is reduced to its recoverable amount. The asset is impaired if objective evidence is available to suggest that it is probable that the Syndicate will not be able to collect the amounts due from reinsurers.

Provision for unearned premiums and deferred acquisition costs

The directors use their judgement in selecting appropriate earnings patterns for the business underwritten and associated acquisition costs. Two main patterns are used being (1) a straight-line pattern over the life of the policy for open market risks and (2) an extended pattern for delegated authority premium to take into account the expected pattern for written business attached to the master contract. Both of these patterns are calculated with reference to the inception and expiry dates of the policies concerned. At the balance sheet date the carrying amount for the unearned premium reserve (net of reinsurance) was $81.2m (2023: $93.5m) and deferred acquisition costs were $22.9m (2023: $24.2m).

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within future financial years, are discussed below.

•Valuation of liabilities of non-life insurance contracts

Estimates are made for both the expected ultimate cost of claims reported and IBNR at the reporting date. The estimate of IBNR is generally subject to a greater degree of uncertainty than that for reported claims. In calculating the estimated liability, the Syndicate uses a variety of estimation techniques based upon statistical analyses of historical experience which generally assume past trends can be used to project future developments, assessments of current underwriting conditions relative to past experience and expectations of future inflation in claims costs. The gross carrying amount for non-life insurance contract liabilities, the summation of claims outstanding (including IBNR) and unearned premium reserve (“UPR”), at the balance sheet date is $1,351.8m (2023: $1,351.9m).

•Valuation of financial instruments

The directors use their judgement in selecting an appropriate valuation technique. Where possible, financial instruments are marked at prices quoted in active markets. In certain instances, such price information is not available for all instruments and the Syndicate uses valuation techniques to measure such instruments. These techniques use “market observable inputs” where available, derived from similar assets in similar and active markets, from recent transaction prices for comparable items or from other observable market data. For positions where observable reference data are not available for some or all parameters the Syndicate estimates the non-market observable inputs used in its valuation models. More details on this are given in note 4.

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, yield curves, credit spreads, liquidity statistics and other factors. The use of different valuation techniques could lead to different estimates of fair value.

•Gross written premium

A proportion of revenue recognised in a year is estimated premium income (“EPI”). The extent of coverage under certain contracts at the year-end is unknown and hence the premium income in respect of these requires estimation. The main area of estimation relates to third party coverholder arrangements. EPI is estimated based on information supplied by coverholders, review of the performance of previous years’ contracts and takes into account whether the contract is a renewal or new to Starr.

3.Significant accounting policies

Premiums written

Premiums written comprise premiums on contracts incepted during the financial year as well as adjustments made in the year to premiums written in prior accounting periods. Premiums are shown gross of brokerage payable and exclude taxes and duties levied on them. Estimates are made for pipeline premiums, representing amounts due to the Syndicate not yet notified.

Unearned premiums

Unearned premiums represent the proportion of premiums written that relate to unexpired periods of policies in force at the balance sheet date, calculated on a combination of time apportionment and risk profile of the policy.

Reinsurance premium ceded

Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct or inwards business being reinsured.

Claims provisions and related recoveries

Gross claims incurred comprise the estimated cost of all claims occurring during the year, whether reported or not, including related direct and indirect claims handling costs and adjustments to claims outstanding from previous years.

The provision for claims outstanding is assessed and is based on the estimated ultimate cost of all claims notified but not settled by the balance sheet date. The provision also includes the estimated cost of claims incurred but not reported (“IBNR”) at the balance sheet date based on statistical methods. Market standard statistical methods including Bornhuetter-Ferguson and Chain Ladder techniques are used to assist in making these estimates.

These methods generally involve analysing historic experience of the development of claims over time, and use this to project a view of the likely ultimate claims to be experienced for current and prior underwriting years, having regard to variations in the business accepted and the underlying terms and conditions. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part on output from rating and other models of the business accepted and assessments of underwriting conditions, including an uplift for the anticipated impact of heightened inflation.

The reinsurers’ share of provisions for claims is based on the amounts of outstanding claims and projections for IBNR, having regard to the reinsurance programme in place for the class of business and the claims experience for the year.

The two most critical assumptions as regards claims provisions are that the historic claim experience can generally be considered areasonable predictor of the likely level of claims development, including inflation, and that the rating and other models used for current business are fair reflections of the likely level of ultimate claims to be incurred.

IBNR is estimated using the above techniques on two bases. The held IBNR is estimated as part of the quarterly reserving exercises, approved by the Board, and forms the basis of the reserves in the balance

sheet along with the outstanding claims. This is reliant to some extent on the business plan loss ratio, and for some classes the provision has a degree of caution embedded in the selections. The aim of the best estimate exercise is to independently estimate outcomes which are neither optimistic or prudent; a reserve margin is then applied in excess of the best estimate to reach the held claims provision figure.

The directors consider that the provisions for gross claims and related reinsurance recoveries are fairly stated on the basis of the information currently available to them. However, the ultimate liability will vary as a result of subsequent information and events and this may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made. The methods used, and the estimates made, are reviewed regularly.

Unexpired risks provision

A provision for unexpired risks is made where claims and related expenses arising after the end of the financial period in respect of contracts concluded before that date, are expected to exceed the unearned premiums and premiums receivable under these contracts, after the deduction of any acquisition costs deferred. The provision for unexpired risks is calculated by reference to classes of business which are managed together, after taking into account relevant investment return.

Acquisition costs

Acquisition costs, comprising commission and other costs related to the acquisition of new insurance contracts are deferred to the extent that they are attributable to premiums unearned at the balance sheet date. Deferred acquisition costs are amortised systematically over the life of the contracts.

Reinsurance commission receivable from quota share and facultative reinsurers, are deferred to the extent that they represent the reinsurers’ share of acquisition costs. Overrider commissions receivable from reinsurers are recognised on inception of the related insurance contracts.

Foreign currencies

Monetary items are retranslated at the closing rate with exchange differences reported through the non-technical account. Non-monetary items (for example, deferred acquisition costs) are translated into the functional currency using period closing rates of exchange prevailing at the time of the transaction as a proxy for transactional rates.

The results and financial position of the Syndicate are retranslated from underlying currencies into the functional currency as follows:

-assets and liabilities are translated at the closing rate at the balance sheet date; and

-income and expenses are translated at the average rate of exchange during each quarter of the year.

Financial investments

The Syndicate has adopted Sections 11 and 12 of FRS 102 in respect of financial instruments.

The Syndicate classifies its financial assets held for investment purposes (investments) into ‘shares and other variable-yield securities’, ‘debt securities and other fixed-income securities’, ‘participation in investment pools’, ‘loans secured by mortgages’, ‘loans and deposits with credit institutions’, ‘derivative assets’, syndicate loans to central fund’ and ‘other investments’ – all at fair value through profit or loss. Management determines the classification of its investments at initial recognition and re-evaluates this at every reporting date.

The Syndicate determines the classification of its financial assets at initial recognition, with investments recognised initially at cost. The classification depends on the purpose for which the investments are acquired or originated. Subsequent to initial recognition financial assets are classified as fair value

through profit or loss as the Syndicate’s documented investment strategy is to manage financial investments acquired on a fair value basis.

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand and short-term deposits with an original maturity date of three months or less. For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts of which there are none at 31 December 2024 or 2023.

Fair value of financial assets

The Syndicate uses the following hierarchy for determining the fair value of financial instruments by valuation technique:

-Level 1: The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

-Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

-Level 3: Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

The fair value is based upon quotes from pricing services where available. These pricing services derive prices based on an average of quotes provided by brokers. Where multiple quotes are not available, the fair value is based upon evaluated pricing services, which typically use proprietary cash flow models and incorporate observable market inputs, such as credit spreads, benchmark quotes and other trade data. If such services do not provide coverage of the asset, then fair value is determined manually using indicative broker quotes, which are corroborated by recent market transactions in similar or identical assets. Where there is an active market for financial investments and their fair value is the unadjusted quoted market price, these are classified as Level 1. Level 1 also includes bond funds, where fair value is based upon quoted prices. Where the market is inactive or the price is adjusted, but significant market observable inputs have been used by the pricing sources, then these are considered to be Level 2. This is typically the case for government agency debt, corporate debt, mortgage and asset-backed securities and catastrophe bonds. Certain assets, such as the Lloyd’s Syndicate loans (discussed further in note 11) for which prices or other market inputs are unobservable, are classified as Level 3.

Deposits with ceding undertakings

To facilitate the settlement of Part VII claims, the Syndicate pays advanced funds into segregated Part VII settlement bank accounts, managed by the Managing Agent on behalf of Lloyd’s Brussels. The amount to be held within the settlement float is calculated by Lloyd’s Brussels every six months with excess funds being then released. As amounts held in the settlement accounts are held in cash, fair value is considered to be the same as cost. Consistent with other reinsurance assets, the asset are considered impaired if objective evidence is available to suggest that it is probable that the Syndicate will not be able to collect the amounts due from Lloyds Brussels. At 31 December 2024 amounts held within the settlement accounts equalled $3.5m (2023: $3.9m).

Loans and deposits with credit institutions

As a condition of underwriting, certain countries require a level of capital to be held in restricted accounts. These are known as ‘overseas deposits’ and are lodged centrally with Lloyd’s. The split between levels is determined by Lloyd’s who provide a working schedule detailing the underlying assets.

Derecognition of financial assets

A financial asset or, when applicable, a part of a financial asset is derecognised when:

a)the rights to the cash flows from the asset have expired; or

b)the Syndicate retains the right to receive cash flows from the asset and has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass through’ arrangement and either (a) the Syndicate has transferred substantially all the risks and rewards of the asset; or (b) the Syndicate has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Syndicate has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards nor transferred control of the asset, the asset is recognised to the extent of the Syndicate’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Syndicate could be required to repay. In that case, the Syndicate also recognises an associated liability.

Investment return

Investment return comprises all investment income, realised investment gains and losses and movements in unrealised gains and losses, net of investment expenses, charges and interest.

Realised gains and losses on investments are calculated as the difference between sale proceeds and purchase price. Unrealised gains and losses on investments represent the difference between the fair valuation at the balance sheet date and their valuation at the previous balance sheet date, or purchase price, if acquired during the year, together with the reversal of unrealised gains and losses recognised in earlier accounting periods in respect of investment disposals in the current period.

Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical account to the general business technical account for the investment return generated on investments supporting technical balances. Investment return generated on Funds in Syndicate capital balances is retained in the non-technical account.

The tables provided in note 11 give further analysis on the syndicate’s investments detailing credit rating, ageing and fair value hierarchy.

Taxation

Under Schedule 19 of the Finance Act 1993, managing agents are not required to deduct basic rate income tax from trading income. In addition, all UK basic rate income tax deducted from Syndicate investment income is recoverable by managing agents and consequently the distribution made to members or their member agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.

No provision has been made for any United States Federal Income Tax payable on underwriting results or investment earnings. Any payments on account made by the Syndicate during the year are included in the balance sheet under the heading ‘other debtors’. No provision has been made for any other overseas tax payable by members on underwriting results.

Insurance debtors

Insurance receivables are recognised when due and measured on initial recognition at the fair value of the consideration received or receivable. Subsequent to initial recognition, insurance receivables are measured and reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable, with the impairment loss recorded in the income statement. Insurance receivables are derecognised when the derecognition criteria for financial assets have been met.

Insurance creditors

Insurance payables are recognised when due and measured on initial recognition at the fair value of the consideration received less directly attributable transaction costs. Subsequent to initial recognition, insurance payables are derecognised when the obligation under the liability is settled, cancelled or expired.

Profit commission

No profit commission arrangements are in place with the managing agent for the closing 2022 year of account and all subsequent years of account.

4.Risk and capital management

Governance framework

The primary objective of the Syndicate’s risk and financial management framework is to protect the Syndicate’s members from events that hinder the sustainable achievement of financial performance objectives, including failing to exploit opportunities. SMAL recognises the critical importance of having efficient and effective risk management systems in place.

SMAL has established a risk management function for the Syndicate with clear terms of reference from the Board, its committees and the associated executive management committees. This is supplemented with a clear organisational structure with documented delegated authorities and responsibilities from the Board of directors to executive management committees and senior managers. The Syndicate has adopted a suite of risk management policies, which among other things, set out the risk appetite framework for the Syndicate and the wider risk management requirements, including internal control and business conduct standards. Each policy has executive ownership and ongoing monitoring of compliance. Any concerns or issues are reported through to Executive Committee, Risk Committee and Board, by exception.

The Board of directors approves the risk management policies and meets regularly to approve any commercial, regulatory and organisational requirements of such policies. These policies define the identification of risk and its interpretation to ensure the appropriate quality and diversification of assets, align underwriting and reinsurance strategy to the Syndicate goals, and specify reporting requirements. Significant emphasis is placed on assessment and documentation of risks and controls, including the articulation of risk appetite.

Capital framework at Lloyd’s

The Society of Lloyd’s is a regulated undertaking and subject to the supervision of the Prudential Regulation Authority under the Financial Services and Markets Act 2000. Effective 1 January 2016, Lloyd’s has been subject to the Solvency II capital regime. Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that Lloyd’s complies with Solvency II capital requirements, and beyond that to meet its own financial strength, licence and ratings objectives. Although Lloyd’s capital setting processes use a capital requirement set at Syndicate level as a starting point, the requirement to meet Solvency II and Lloyd’s capital requirements applies at overall and member level only respectively, not at Syndicate level. Accordingly, the capital requirement in respect of the Syndicate is not disclosed in these financial statements.

Lloyd’s capital setting process

In order to meet Lloyd’s requirements, each Syndicate is required to calculate its Solvency Capital Requirement (“SCR”) for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each Syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group. A Syndicate may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its own share of underwriting liabilities on the Syndicate on which it is participating but no other members’ shares. Accordingly, the capital requirement that Lloyd’s sets for each member operates on a similar basis. Each member’s SCR is determined by the sum of the member’s share of the Syndicate SCR ‘to ultimate’. Where a member participates on more than one Syndicate, a credit for diversification is provided to reflect the spread of risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200 year loss ‘to ultimate’ for that member. Over and above this, Lloyd’s applies a capital uplift to the

member’s capital requirement, known as the Economic Capital Assessment (“ECA”). The purpose of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings objectives. The capital uplift applied for 2024 and 2023 was 35% of the member’s SCR ‘to ultimate’.

Provision of capital by members

Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that member (Funds at Lloyd’s), held within and managed within a Syndicate (Funds in Syndicate) or as the member’s share of the members’ balances on each Syndicate on which it participates. Accordingly all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported on the statement of financial position, represent resources available to meet members’ and Lloyd’s capital requirements. Further detail on the Syndicate’s capital are set out in note 31.

Insurance risk

The principal risk the Syndicate faces under insurance contracts is that the actual claims and benefit payments or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long tail claims.

Therefore, the objective of the Syndicate is to ensure that sufficient reserves are available to cover these liabilities. The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and geographical areas. The variability of risks is also improved by careful selection and implementation of underwriting strategy guidelines, as well as the use of reinsurance arrangements.

The Syndicate purchases reinsurance as part of its risk mitigation programme. Reinsurance ceded is placed on both a proportional and non–proportional basis. The majority of proportional reinsurance is quota–share reinsurance which is taken out to increase capacity and reduce the overall exposure to certain classes of business. Non–proportional reinsurance is made up of facultative and excess–of–loss reinsurance designed to mitigate the Syndicate’s net exposure to specific risks and catastrophe losses. Retention limits for the excess–of–loss reinsurance vary by product line and territory.

Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision and are in accordance with the reinsurance contracts. Although the Syndicate has reinsurance arrangements, it is not relieved of its direct obligations to its policyholders and thus a credit exposure exists with respect to ceded insurance, to the extent that any reinsurer is unable to meet its obligations assumed under such reinsurance agreements. The Syndicate’s placement of reinsurance is diversified such that it is neither dependent on a single reinsurer nor are the operations substantially dependent upon any single reinsurance contract.

The Syndicate principally issues the following types of general insurance contracts: accident and health, property fire and peril, third-party liability, marine, aviation and transport. Risks usually cover twelve months duration.

The most significant risks arise from man-made disasters, climate changes, natural disasters and terrorist activities. For longer tail claims that take some years to settle, there is also inflation risk.

Strict claim review policies to assess all new and ongoing claims, regular detailed review of claims handling procedures and frequent investigation of possible fraudulent claims are all policies and procedures put in place to reduce the risk exposure of the Syndicate. The Syndicate further enforces a policy of actively managing and promptly pursuing claims, in order to reduce its exposure to unpredictable future developments that can negatively impact the business. Inflation risk is mitigated by taking expected inflation into account when estimating insurance contract liabilities.

The Syndicate has also limited its exposure by imposing maximum claim amounts on certain contracts as well as the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g., hurricanes, earthquakes, wildfires and flood damage).

The purpose of these underwriting and reinsurance strategies is to limit exposure to the impact of catastrophic events on the Syndicate’s risk appetite as determined by management. The overall aim is currently to restrict exposure to the syndicate to less than the equivalent of 7.5% of approved ECA as a result of net modelled natural catastrophe risk arising from a single catastrophic event. Counterparty exposure is readily monitored to prevent over concentration in the event of such a catastrophe. The Board may decide to increase or decrease the maximum tolerances based on market conditions and other factors.

The Syndicate uses both its own and commercially available proprietary risk management software to assess catastrophe exposure. However, there is always a risk that the assumptions and techniques used in these models are unreliable or that claims arising from an un-modelled event are greater than expected. As a further guide to the level of catastrophe exposure written by the Syndicate, the following table shows hypothetical claims arising for various realistic disaster scenarios (RDS) based on the Syndicate’s expected risk exposures estimated for the 2025 Syndicate Business Forecast.

RDS event

Estimated gross claims

Estimated net claims

$000

Aviation Terror Event

150,000

40,000

Cyber - Major Data Security Breach

80,000

32,000

Third Party Liability Event

75,000

27,000

Directors and Officers Liability Event

75,000

27,000

Chile Earthquake Event

250,000

15,000

The table above sets out the concentration of outstanding claims liabilities by type of contract.

Key assumptions

The principal assumption underlying the liability estimates is that the future claims development will follow a similar pattern to past claims development experience. This includes assumptions in respect of average claim costs, claim handling costs, claim inflation factors and claim numbers for each underwriting year. Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future, for example: one–off occurrences; changes in market factors such as public attitude to claiming; economic conditions; as well as internal factors such as portfolio mix, policy conditions and claims handling procedures. Judgement is further used to assess the extent to which external factors such as judicial decisions and government legislation affect the estimates. Other key circumstances affecting the reliability of assumptions include variation in interest rates, delays in settlement and changes in foreign currency rates.

Sensitivities

The claim liabilities are sensitive to the key assumptions that follow. It has not been possible to quantify the sensitivity of certain assumptions such as legislative changes or uncertainty in the estimation process. The following analysis is performed for reasonably possible movements in key assumptions with all other assumptions held constant, showing the impact on gross and net liabilities, profit and members’ balances. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, assumptions have been changed on an individual basis.

General insurance business sensitivities as at 31 December 2024

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

52,435

(52,435)

Claims outstanding – net of reinsurance

11,119

(11,119)

General insurance business sensitivities as at 31 December 2023

Sensitivity

+5.0%$000

-5.0%$000

Claims outstanding – gross of reinsurance

50,826

(50,826)

Claims outstanding – net of reinsurance

9,290

(9,290)

Financial risk - credit risk

Credit risk is the risk that the Syndicate becomes exposed to losses if a specific counterparty fails to perform its contractual obligations in a timely manner, causing the Syndicate loss and/or impacting the Syndicate’s ability to meet its claims as they fall due. Credit risk can also arise from underlying causes that have an impact upon the creditworthiness of all counterparties of a particular description or geographical location. Part of the Syndicate’s credit risk is mitigated by the collateral received from a third party, as detailed below. The Syndicate is exposed to credit risk in its investment portfolio and with its premium and reinsurance receivables. The tables below show the breakdown as at 31 December 2024 and 2023 of the exposure of the bond portfolio, liquidity funds and insurance and reinsurance receivables by credit quality.

The reinsurance recoveries from SIRL, a Group company, have been collateralised through a combination of the ring fencing of a bond portfolio and the funds withheld account relating to the Loss Portfolio Transfer (LPT) enacted in December 2022. The current recoverable is $229.5m (2023: $274.7m) which is fully collateralised. The table below provides information regarding the credit risk exposure of the Syndicate at 31 December 2024 by classifying assets that are neither past due nor impaired, according to Standard & Poor’s credit ratings of the counterparties. AAA is the highest possible rating. Assets that fall outside the range of AAA to BBB are classified as speculative grade and have not been rated.

Year 2024

AAA$000

AA$000

A$000

BBB$000

Other$000

Not rated$000

Total$000

Shares and other variable yield securities and units in unit trusts

66,291

Debt securities and other fixed income securities

112,454

63,527

132,544

39,307

510

348,342

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

5,149

Other investments

40,525

10,296

9,192

6,511

3,308

19,795

89,627

Deposits with ceding undertakings

3,531

Reinsurers’ share of claims outstanding

1,939

800,885

4,448

19,048

826,320

Debtors arising out of direct insurance operations

165,536

Debtors arising out of reinsurance operations

225

42,155

890

43,302

Cash at bank and in hand

3,679

Other debtors and accrued interest

23,589

Total

156,520

75,987

1,059,895

50,298

3,818

228,858

1,575,376

Year 2023

AAA$000

AA$000

A$000

BBB$000

Other$000

Not rated$000

Total$000

Shares and other variable yield securities and units in unit trusts

61,616

Debt securities and other fixed income securities

132,085

84,942

115,662

24,532

357,221

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

6,702

Other investments

52,483

7,592

9,646

6,308

5,953

22,030

104,012

Deposits with ceding undertakings

3,878

Reinsurers’ share of claims outstanding

119,507

693,283

4,896

13,046

830,732

Debtors arising out of direct insurance operations

151,214

Debtors arising out of reinsurance operations

9,056

36,495

543

46,121

Cash at bank and in hand

4,623

Other debtors and accrued interest

12,763

Total

188,446

221,097

928,096

35,763

5,953

199,596

1,578,951

Ageing of debt

It is important that the Syndicate can pay its obligations as they fall due. Levels of cash are therefore managed on a daily basis and buffers of liquid assets are held in excess of the immediate requirements. This is to reduce the risk of being forced sellers of any of the Syndicate’s assets. The Syndicate funds its insurance liabilities with a portfolio of cash and debt securities exposed to market risk. Assets which are past due but not impaired have been in arrears for less than 3 months from the reporting date. The tables below indicate the ageing past due of cash flows arising from assets at both 31 December 2024 and 31 December 2023.

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2024

$000

Shares and other variable yield securities and units in unit trusts

66,291

Debt securities and other fixed income securities

348,342

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

5,149

Other investments

89,627

Deposits with ceding undertakings

3,531

Reinsurers' share of claims outstanding

826,320

Debtors arising out of direct insurance operations

165,536

37,389

202,925

Debtors arising out of reinsurance operations

43,302

18,828

62,130

Other debtors and accrued interest

23,589

Cash at bank and in hand

3,679

Total

1,575,376

56,217

1,631,593

Neither past due nor impaired assets

Past due but not impaired assets

Gross value of impaired assets

Impairment allowance

Total

2023

$000

Shares and other variable yield securities and units in unit trusts

61,616

Debt securities and other fixed income securities

357,221

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

6,702

Other investments

104,012

Deposits with ceding undertakings

3,878

Reinsurers' share of claims outstanding

830,732

Debtors arising out of direct insurance operations

151,214

33,499

184,713

Debtors arising out of reinsurance operations

46,121

19,168

65,289

Other debtors and accrued interest

12,763

Cash at bank and in hand

4,623

Total

1,578,951

52,667

1,631,618

No class of financial asset has any associated impairment allowance in the current, or prior, period.

The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet date:

Past due 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

$000

Shares and other variable yield securities and units in unit trusts

Debt securities and other fixed income securities

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

Other investments

Deposits with ceding undertakings

Reinsurers' share of claims outstanding

Debtors arising out of direct insurance operations

19,972

6,784

4,909

5,724

37,389

Debtors arising out of reinsurance operations

16,928

(464)

1,822

542

18,828

Other debtors and accrued interest

Cash at bank and in hand

Total

36,900

6,320

6,731

6,266

56,217

Maximum credit exposure

It is the Syndicate’s policy to maintain accurate and consistent risk ratings across its credit portfolio. This enables management to focus on the applicable risks and the comparison of credit exposures across all lines of business, geographic regions and products. The rating system is supported by a variety of financial analytics combined with processed market information to provide the main inputs for the measurement of counterparty risk. All internal risk ratings are tailored to the various categories and are derived in accordance with the Syndicate’s rating policy. The attributable risk ratings are assessed and updated regularly.

During the year, no credit exposure limits were exceeded. The Syndicate actively manages its product mix to ensure that there is no significant concentration of credit risk.

All debt securities and other fixed income securities shown above are listed.

Financial risk - liquidity risk

Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting its obligations as they fall due. In respect of catastrophic events there is also a liquidity risk associated with the timing differences between gross cash out-flows and expected reinsurance recoveries. The following policies and procedures are in place to mitigate the Syndicate’s exposure to liquidity risk:

a)A liquidity risk policy exists that sets out the assessment and determination of what

constitutes liquidity risk. Compliance with the policy is monitored and exposures and breaches are reported to the risk committee. The policy is regularly reviewed for pertinence and for changes in the risk environment.

b)Guidelines on asset allocation, portfolio limit structures and maturity profiles of assets are set, in order to ensure that sufficient funding is available to meet insurance and investment contract obligations.

c)Contingency funding plans are set up which specify minimum proportions of funds to meet emergency calls as well as specifying events that would trigger such plans. The Syndicate’s catastrophe excess-of-loss reinsurance contracts contain clauses permitting the immediate draw down of funds to meet claim payments should claim events exceed a certain size.

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

2023

$000

Shares and other variable yield securities and units in unit trusts

Debt securities and other fixed income securities

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

Other investments

Deposits with ceding undertakings

Reinsurers' share of claims outstanding

Debtors arising out of direct insurance operations

21,953

5,335

4,893

1,318

33,499

Debtors arising out of reinsurance operations

10,746

5,785

2,563

19,168

Other debtors and accrued interest

Cash at bank and in hand

Total

32,699

11,120

7,456

1,392

52,667

Maturity profiles

The table below summarises the maturity profile of the Syndicate’s financial liabilities based on undiscounted contractual obligations, including interest payable, and outstanding claim liabilities based on the estimated timing of claim payments resulting from recognised insurance liabilities. Repayments which are subject to notice are treated as if notice were to be given immediately.

000

Undiscounted net cash flows

Year 2024

No maturity stated$000

0-1 yrs$000

1-3 yrs$000

3-5 yrs$000

>5 yrs$000

Total$000

Claims outstanding

367,266

386,087

173,678

121,659

1,048,690

Derivative liabilities

Deposits received from reinsurers

Creditors

241,545

112,544

354,089

Other credit balances

45,321

Total

654,132

498,631

173,678

121,659

1,448,100

000

Undiscounted net cash flows

Year 2023

No maturity stated$000

0-1 yrs$000

1-3 yrs$000

3-5 yrs$000

>5 yrs$000

Total$000

Claims outstanding

334,559

374,330

180,181

127,455

1,016,525

Derivative liabilities

Deposits received from reinsurers

Creditors

266,793

125,234

392,027

Other credit balances

44,543

Total

645,895

499,564

180,181

127,455

1,453,095

There are no derivative based liabilities.

Financial risk - market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk:

i. Currency risk;

ii. Interest rate risk; and

iii. Equity price risk.

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

a) A market risk policy exists that sets out the assessment and determination of what constitutes market risk for the Syndicate. Compliance with the policy is monitored and exposures and breaches are reported to the Risk Committee. The policy is reviewed regularly for pertinence and for changes in the risk environment.

b)Strict control over derivative instruments (e.g. equity derivatives are only permitted to be held to facilitate portfolio management or to reduce investment risk).

c)For assets backing outstanding claims provisions, market risk is managed by matching the duration and profile of assets to the technical provisions they are backing. This helps manage market risk to the extent that changes in the values of assets are matched by a corresponding movement in the values of the technical provisions.

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Syndicate’s functional currency is US Dollars and its exposure to foreign exchange risk arises primarily with respect to transactions in Sterling, Euro and Canadian Dollars. The Syndicate monitors the matching of the foreign currency denominated liabilities with assets denominated in the same currency.

Asset liability matching by currency risk

Underwriting assets are initially held in the settlement currencies of Sterling, Euros, US Dollars and Canadian Dollars, which represent the majority of the Syndicate’s liabilities by currency, thus reducing the underwriting asset liability matching currency risk. The tables below present the Syndicate’s assets and liabilities by currency. The amounts are stated in the US Dollar equivalent of the local currency, in order that the amounts can be reconciled to the Syndicate’s statement of financial position. Where possible, the foreign exchange policy is to maintain assets in the currency in which the cash flows from liabilities are to be settled, aside from Euros. This minimises the currency risk inherent in these contracts so far as this is allowed by regulatory requirements. Profits or losses are converted to be reflected in the net assets of the functional currency, US Dollars.

Sterling

US dollar

Euro

Canadian dollar

Total

2024

$000

Investments

88,557

287,061

2,212

135,120

512,950

Reinsurers' share of technical provisions

176,801

723,656

44,039

103,729

1,048,225

Debtors

60,544

191,941

2,794

9,776

265,055

Other assets

17,794

28,676

1,791

1,923

50,184

Prepayments and accrued income

Total assets

343,696

1,231,334

50,836

250,548

1,876,414

Technical provisions

(236,270)

(935,696)

(57,158)

(122,714)

(1,351,838)

Provisions for other risks

Deposits received from reinsurers

Creditors

(22,365)

(348,870)

18,127

(981)

(354,089)

Accruals and deferred income

(9,232)

(20,857)

(8,064)

(7,168)

(45,321)

Total liabilities

(267,867)

(1,305,423)

(47,095)

(130,863)

(1,751,248)

Total capital and reserves

75,829

(74,089)

3,741

119,685

125,166

Sterling

US dollar

Euro

Canadian dollar

Total

2023

$000

Investments

89,168

302,384

2,580

139,366

533,498

Reinsurers' share of technical provisions

201,630

674,974

65,850

130,107

1,072,561

Debtors

59,001

172,538

933

17,530

250,002

Other assets

7,490

28,777

2,310

2,727

41,304

Prepayments and accrued income

246

Total assets

357,289

1,178,919

71,673

289,730

1,897,611

Technical provisions

(242,183)

(881,989)

(76,792)

(150,935)

(1,351,899)

Provisions for other risks

Deposits received from reinsurers

Creditors

(36,042)

(360,391)

16,967

(12,561)

(392,027)

Accruals and deferred income

(10,345)

(17,444)

(7,400)

(9,354)

(44,543)

Total liabilities

(288,570)

(1,259,824)

(67,225)

(172,850)

(1,788,469)

Total capital and reserves

68,719

(80,905)

4,448

116,880

109,142

Policyholders’ assets are held in the settlement currencies of Sterling, US Dollar, Canadian Dollar and Euro which represent the majority of the Syndicate’s liabilities by currency. This limits the underlying foreign exchange risk.

Foreign exchange exposure also arises when business is written in non-settlement currencies. These transactions are converted into US Dollar at the prevailing spot rate once the premiums are received. Consequently there is exposure to currency movements between the risk being written and the premiums being converted. Payments in non-settlement currencies are converted back into the underlying currency at the time a claim is to be settled; therefore the Syndicate is exposed to exchange rate risk between the claim being made and the settlement being paid. In addition there is the currency risk arising from the claims in a settlement currency being different from the net premiums earned in that currency.

10% strengthening of currency against USD

10% weakening of currency against USD

2024

$000

Currency

GBP

7,583

(7,583)

EUR

374

(374)

CAD

11,969

(11,969)

10% strengthening of currency against USD

10% weakening of currency against USD

2023

$000

Currency

GBP

6,872

(6,872)

EUR

445

(445)

CAD

11,688

(11,688)

Interest rate risk

Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Floating rate instruments expose the Syndicate to cash flow interest risk, whereas fixed rate instruments expose the Syndicate to fair value interest risk. The Syndicate has no significant concentration of interest rate risk. Insurance liabilities are not discounted and therefore not exposed to interest rate risk.

The analysis on this page is performed for reasonably possible movements in interest rates with all other variables held constant, showing the impact on profit and member balance of the effects of changes in interest rates on:

i) Fixed rate financial assets and liabilities; and

ii) Variable rate financial assets and liabilities.

The first of these measures the impact on profit or loss for the year (for items recorded at fair value through profit or loss) and on member’s balance that would arise from a reasonably possible change in interest rates at the reporting date on financial instruments at the period end. The second of these measures the change in interest income or expense over the period of the year attributable to a reasonably possible change in interest rates, based on floating rate assets and liabilities held at the reporting date. The correlation of variables will have a significant effect in determining the ultimate impact on interest rate risk, but to demonstrate the impact due to changes in variables, the variables were altered on an individual basis. It should be noted that movements in these variables are non-linear.

2024Impact on results before tax$000

2024Impact on

members’

balances$000

2023Impact on results before tax$000

2023Impact on

members’

balances$000

Interest rate risk

+ 50 basis points shift in yield curves

(2,109)

(2,218)

- 50 basis points shift in yield curves

2,133

2,240

The sensitivity is calculated using portfolio characteristics, moderated duration and price sensitivity assumptions and applied to the portfolio value. The method used for deriving sensitivity information and significant variables did not change from the previous period.

A 10% increase (or decrease) in exchange rates, 5% increase (or decrease) in equity prices and a 50 basis point increase (or decrease) in yield curves have been selected on the basis that these are considered to be reasonably possible changes in these risk variables over the following year.

The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain unchanged. However, the occurrence of a change in a single market factor may lead to changes in other market factors as a result of correlations.

The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting date and may vary at the time that any actual market movement occurs. As investment markets move past pre-determined trigger points, action would be taken which would alter the Syndicate’s position.

5.Analysis of underwriting result

An analysis of the underwriting result before investment return and currency translation adjustment is set out below:

2024

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Direct insurance

Accident and health

36,538

35,731

(25,131)

(38,444)

25,583

(2,261)

Motor (third party liability)

Motor (other classes)

Marine, aviation, and transport

52,360

54,179

(76,469)

(11,258)

27,283

(6,265)

Fire and other damage to property

202,181

205,272

(127,306)

6,810

(77,930)

6,846

Third party liability

81,420

103,485

(70,364)

(53,979)

22,264

1,406

Credit and suretyship

Legal expenses

Assistance

Miscellaneous

14,715

10,664

(12,257)

(5,620)

7,470

257

Life

Total direct insurance

387,214

409,331

(311,527)

(102,491)

4,670

(17)

Reinsurance acceptances

90,820

97,481

(47,748)

(14,987)

(27,971)

6,775

Total

478,034

506,812

(359,275)

(117,478)

(23,301)

6,758

The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into the Lloyd’s aggregate classes of business:

2024

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Additional analysis

Fire and damage to property of which is:

Specialities

Energy

Third party liability of which is:

Energy

(38)

1,705

(14)

(49)

1,642

2023

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Direct insurance

Accident and health

39,736

33,521

(15,878)

(45,331)

28,531

843

Motor (third party liability)

Motor (other classes)

Marine, aviation, and transport

52,738

51,647

(21,150)

(4,479)

(19,626)

6,392

Fire and other damage to property

206,208

198,638

(106,344)

11,660

(98,024)

5,929

Third party liability

107,573

110,241

(70,773)

(60,753)

18,503

(2,782)

Credit and suretyship

Legal expenses

Assistance

Miscellaneous

12,033

7,213

(2,831)

(1,586)

(1,886)

910

Life

Total direct insurance

418,288

401,260

(216,976)

(100,489)

(72,502)

11,292

Reinsurance acceptances

109,581

105,395

(25,370)

(9,859)

(57,626)

12,541

Total

527,869

506,655

(242,346)

(110,348)

(130,128)

23,833

The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the above segments into the Lloyd’s aggregate classes of business:

2023

Gross premiums written$000

Gross premiums earned$000

Gross claims incurred$000

Gross operating expenses$000

Reinsurance balance$000

Underwriting result$000

Additional analysis

Fire and damage to property of which is:

Specialities

Energy

Third party liability of which is:

Energy

3,253

3,232

(102)

173

3,303

The net assets of the Syndicate are managed as a whole and are not allocated to separate business segments.

The analysis of gross written premiums for direct insurance by geographical areas in which the risks are written is as follows:

2024$000

2023$000

United Kingdom

189,857

248,157

European Union Member States

13,334

12,103

101,334

90,518

Rest of the world

82,689

67,510

Total gross premiums written

387,214

418,288

Gross commission and acquisition costs incurred during the year ended 31 December 2024 total $96.2m (2023: $97.7m).

6.Net operating expenses

2024$000

2023$000

Acquisition costs

96,197

97,740

Change in deferred acquisition costs

902

(1,546)

Administrative expenses

10,553

8,667

Foreign exchange

Members’ standard personal expenses

7,674

7,759

Reinsurance commissions and profit participation

(89,816)

(95,224)

Net operating expenses

25,510

17,396

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

2024$000

2023$000

Total commission for direct insurance business

15,799

14,786

Administration expenses refer to costs incurred directly by the Syndicate. The most material of these are Lloyd’s overseas operating expenses $7.2m (2023: $5.8m). Administrative expenses are stated net of claims handling expenses allocated to claims paid. Indirect administration expenses are borne by SUAL out of the commission charged to the syndicate for the servicing of business.

Administrative expenses include:

2024$000

2023$000

Auditors’ remuneration:

fees payable to the Syndicate’s auditor for the audit of these financial statements

313

291

fees payable to the Syndicate’s auditor and its associates in respect of other services pursuant to legislation

Impairment losses on debtors:

arising out of direct insurance operations

arising out of reinsurance operations

Impairment losses on financial instruments:

arising from instrument measured at amortised cost

arising from instruments measured as available for sale

7.Key management personnel compensation

Neither the Directors’ emoluments nor the active underwriter’s emoluments have been charged to the Syndicate for the 2024 year (2023: nil) but are retained by SUAL.

8.Staff numbers and costs

No staff are employed directly by Starr Managing Agents Limited (‘’SMAL’’), all staff being employed by SUAL and therefore no staff costs have been disclosed for 2024 (2023: nil).

9.Investment return

2024$000

2023$000

Interest and similar income

From financial assets designated at fair value through profit or loss

Interest and similar income

12,458

10,183

Dividend income

From financial assets classified as Available for Sale

Interest and similar income

Dividend income

From financial assets at amortised cost

Interest and similar income

Dividend income

Interest on cash at bank

3,830

3,817

Other income from investments

From financial assets designated at fair value through profit or loss

Gains on the realisation of investments

3,553

776

Losses on the realisation of investments

(1,195)

(3,508)

Unrealised gains on investments

13,113

18,530

Unrealised losses on the investments

(10,144)

(9,035)

Other relevant gains/(losses)

From financial assets at amortised cost

Gains on the realisation of investments

Losses on the realisation of investments

Unrealised gains on investments

Unrealised losses on the investments

Other relevant gains/(losses)

Financial liabilities at amortised cost

Interest expense

Other relevant gains

Other relevant losses

Investment management expenses

(339)

(372)

Total investment return

21,276

20,391

Transferred to the technical account from the non-technical account

18,174

18,488

Investment return on Funds in Syndicate

3,102

1,903

Impairment losses on debtors recognised in administrative expenses

The above investment return represents values held within the technical and non-technical account. The non-technical account retains those returns that are derived from the ring-fenced Funds in Syndicate (‘FIS’).

The overall investment income (excluding unrealised gains, losses and investment expense) is $18.6m (2023: $11.3m) representing an average yield of 3.5% (2023: 2.1%) on average funds of $532.1m (2023: $501.6m). “Average funds” represent the average of bank balances, overseas deposits and investments held at the end of each month during the calendar year.

10.Distribution and open years of account

There are no years of account remaining open after the three-year period. The 2022 year of account (incorporating the RITC’d 2021 and prior calendar year result) is a profit of $20.6m and will be distributed to members in 2025. The 2021 year of account (incorporating the RITC’d 2020 and prior calendar year result) was a profit of $41.8m and was distributed to members in 2024.

11.Financial investments

Carrying value

Cost

2024$000

2023$000

2024$000

2023$000

Shares and other variable yield securities and units in unit trusts

66,291

61,616

66,291

61,616

Debt securities and other fixed income securities

348,342

357,221

340,566

354,470

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

5,149

6,702

5,149

6,702

Other investments

89,627

104,012

89,582

103,923

Total financial investments

509,419

529,620

501,598

526,782

The amount ascribable to listed investments is $504.3m (2023: $522.9m).

The table below presents an analysis of financial investments by their measurement classification:

2024$000

2023$000

Financial assets measured at fair value through profit or loss

509,419

529,620

Financial assets measured at fair value as available for sale

Financial assets measured at amortised cost

Total financial investments

509,419

529,620

The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting date by its level in the fair value hierarchy:

2024

Level 1$000

Level 2$000

Level 3$000

Assets held at amortised cost

Total$000

Shares and other variable yield securities and units in unit trusts

66,291

Debt securities and other fixed income securities

58,395

289,947

348,342

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

5,149

Other investments

18,716

70,911

89,627

Total financial investments

143,412

360,858

5,149

509,419

Derivative liabilities

Total

143,412

360,858

5,149

509,419

2023

Level 1$000

Level 2$000

Level 3$000

Assets held at amortised cost

Total$000

Shares and other variable yield securities and units in unit trusts

61,616

Debt securities and other fixed income securities

357,221

Participation in investment pools

Loans secured by mortgages

Loans and deposits with credit institutions

Derivative assets

Syndicate loans to central fund

6,702

Other investments

18,520

85,492

104,012

Total financial investments

80,136

442,782

6,702

529,620

Derivative liabilities

Total

80,136

442,782

6,702

529,620

Syndicate Loans

Since 2019 Lloyd’s has mandated that three tranches of syndicate loans be made to the central fund in order to strengthen Lloyd’s central resources and facilitate the injection of capital to Lloyd’s Insurance Company SA (“Lloyd’s Brussels”). Management has considered potential methods of valuing the syndicate loans, including a model developed by Lloyd’s on behalf of market participants. Having reviewed the outputs from such models that point to an immaterial difference between suggested fair values and transaction cost, management has concluded it is appropriate to continue to recognise these loans at cost, as a proxy for fair value. This conclusion will be reviewed annually, taking into account changes in market credit and liquidity spreads, evidence of the performance of the loan in practice and the issuance or redemption of any loan tranches. Lloyd’s have repaid tranche 1 of the loan on 2nd April 2024.

Other investments

The amount disclosed under this heading relates to asset backed securities.

12.Debtors arising out of direct insurance operations

2024$000

2023$000

Due within one year

191,781

171,394

Due after one year

11,144

13,319

Total

202,925

184,713

13.Debtors arising out of reinsurance operations

2024$000

2023$000

Due within one year

62,130

65,289

Due after one year

Total

62,130

65,289

The balances on this table include receivables from both third parties and related parties, refer to note 26 for further details.

14.Other debtors

2024$000

2023$000

Inter syndicate balances

Other related party balances (non-syndicate)

329

Amounts due from members

23,564

12,016

Other

172

Total

23,589

12,517

15.Deferred acquisition costs

The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end of the period:

2024

2023

Gross$000

Reinsurance$000

Net$000

Gross$000

Reinsurance$000

Net$000

Balance at 1 January

69,594

(45,430)

24,164

64,746

(42,478)

22,268

Incurred deferred acquisition costs

96,197

(89,816)

6,381

97,740

(95,224)

2,516

Amortised deferred acquisition costs

(99,251)

91,968

(7,283)

(93,922)

92,952

(970)

Foreign exchange movements

(923)

577

(346)

1,030

(680)

350

Other

Balance at 31 December

65,617

(42,701)

22,916

69,594

(45,430)

24,164

16.Tangible fixed assets

The Syndicate has no tangible fixed assets.

17.Claims development

The tables below analyse the development of the estimates of earned ultimate cumulative claims for the Syndicate after the end of the underwriting year, illustrating how amounts estimated have changed from the first estimates made. Tables have been constructed on an underwriting year basis. Non US Dollar balances have been converted using period end 2024 exchange rates to aid comparability.

At the end of each first year, only part of the premium written will have been earned and it is expected that ultimate claims will increase during the period over which the premium is earned.

Gross:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

$000

Estimate of gross claims

at end of underwriting year

102,893

117,051

93,498

152,095

92,747

109,828

105,939

115,042

153,379

129,256

one year later

241,682

257,296

222,695

322,644

213,038

226,479

278,076

226,498

274,927

two years later

247,995

274,623

245,426

319,496

204,462

217,017

253,422

235,209

three years later

251,591

284,557

245,654

322,971

216,625

217,262

302,672

four years later

269,527

297,239

264,210

363,317

205,309

231,118

five years later

285,968

336,476

272,942

342,870

203,481

six years later

305,333

353,081

283,289

354,605

seven years later

321,469

366,411

290,741

eight years later

322,368

370,716

nine years later

328,428

Estimate of gross claims reserve

328,428

370,716

290,741

354,605

203,481

231,118

302,672

235,209

274,927

129,256

2,721,153

Provision in respect of prior years

67,263

Less gross claims paid

(289,698)

(315,989)

(241,881)

(293,643)

(142,570)

(152,086)

(145,791)

(95,381)

(49,045)

(13,642)

(1,739,726)

Gross claims reserve

38,730

54,727

48,860

60,962

60,911

79,032

156,881

139,828

225,882

115,614

1,048,690

Net:

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Pure underwriting year

$000

Estimate of net claims

at end of underwriting year

36,424

34,546

28,911

36,165

25,993

28,916

26,657

26,613

35,991

28,086

one year later

82,069

75,990

69,151

81,801

59,669

61,784

62,392

59,813

78,298

two years later

87,604

81,757

77,485

85,758

59,215

33,111

65,019

65,797

three years later

89,190

83,024

78,676

88,060

35,175

34,196

78,120

four years later

97,947

86,677

85,444

69,706

34,966

35,408

five years later

102,694

101,949

70,127

69,364

36,507

six years later

112,678

84,169

71,840

69,958

seven years later

99,155

83,463

71,192

eight years later

97,799

83,309

nine years later

97,513

Estimate of net claims reserves

97,513

83,309

71,192

69,958

36,507

35,408

78,120

65,797

78,298

28,086

644,188

Provision in respect of prior years

11,925

Less net claims paid

(96,235)

(80,376)

(67,104)

(63,834)

(31,301)

(27,223)

(31,744)

(22,824)

(11,072)

(2,030)

(433,743)

Net claims reserve

1,278

2,933

4,088

6,124

5,206

8,185

46,376

42,973

67,226

26,056

222,370

The total gross claims reserves including prior years is $1,049m and the net total is $222m. During 2024, gross ultimate claims in respect of prior underwriting years (2022 and prior) increased by $99.5m. This was primarily due to poor experience and reserve strengthening in Syndicate 1919’s Casualty Division in respect of the US business. On a net basis ultimate claims have increased by $21.3m. On 2020 and prior this gross experience in Casualty is net nil, due to the loss portfolio transfer on the 2020 & prior years of account. However, as there was IBNR strengthening on the 2021 and post underwriting years, these years have seen a net impact.

The level of uncertainty varies significantly from class to class but can arise from inadequate case reserves for known large losses and catastrophes, or from inadequate provision for IBNR. The impact on profit of a 1% variation in the total net earned claims reserves would be $2.2m (2023: $1.9m).

Whilst the current macroeconomic environment continues to create some uncertainty this is somewhat reduced from previous years as the high inflation levels seen in the last few years have returned to more normal levels. However market conditions have softened since 2023 putting increasing pressure on loss ratios. The latest rate information, inflation, and recession have all been considered as part of the reserve valuation in 2024. While there is uncertainty in the wider insurance market arising from the Russia and Ukraine conflict, the Syndicate’s claims team have already made provisions reflecting the expected exposure to Syndicate 1919. The impact of climate change is also an area of uncertainty for the insurance market, the potential impacts that may arise are being monitored, but no explicit provision is currently deemed necessary.

18.Technical provisions

The table below shows changes in the insurance contract liabilities and assets from the beginning of the period to the end of the period.

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Claims outstanding

Balance at 1 January

1,016,525

(830,732)

185,793

1,002,044

(853,121)

148,923

Claims paid during the year

(311,442)

258,038

(53,404)

(245,182)

204,792

(40,390)

Expected cost of current year claims

338,437

(247,713)

90,724

289,214

(213,746)

75,467

Change in estimates of prior year provisions

20,838

(20,577)

261

(46,868)

47,417

550

Discount unwind

Foreign exchange movements

(15,668)

14,664

(1,004)

17,317

(16,074)

1,243

Other

Balance at 31 December

1,048,690

(826,320)

222,370

1,016,525

(830,732)

185,793

2024

2023

Gross provisions$000

Reinsurance

Assets$000

Net$000

Gross provisions$000

Reinsurance

Assets$000

Net$000

Unearned premiums

Balance at 1 January

335,374

(241,829)

93,545

310,271

(229,115)

81,156

Premiums written during the year

478,034

(365,709)

112,325

527,869

(399,592)

128,277

Premiums earned during the year

(506,812)

383,559

(123,253)

(506,655)

389,409

(117,246)

Foreign exchange movements

(3,448)

2,074

(1,374)

3,889

(2,531)

1,358

Other

Balance at 31 December

303,148

(221,905)

81,243

335,374

(241,829)

93,545

Refer to note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the accounts, to potential movements in the assumptions applied within the technical provisions.

19.Provisions for other risks

The Syndicate has no provisions for other risks.

20.Discounted claims

The Syndicate has no discounted claims.

21.Creditors arising out of direct insurance operations

2024$000

2023$000

Due within one year

1,572

Due after one year

Total

1,572

22.Creditors arising out of reinsurance operations

2024$000

2023$000

Due within one year

235,946

262,552

Due after one year

112,544

125,234

Total

348,490

387,786

The balances on this table include payables from both third parties and related parties, refer to note 26 for further details.

23.Other creditors

2024$000

2023$000

Inter syndicate balances

Profit commissions payable

Other related party balances (non-syndicates)

4,027

4,241

Derivative liabilities

Other liabilities

Total

4,027

4,241

Amounts owed to Group companies include $3.1m (2023: $1.9m) of investment income earned from FIS, owed to the Corporate Member, Starr Syndicate Limited (“SSL”). The remaining balance represents funds received on behalf of Group companies on common reinsurance programmes.

24.Cash and cash equivalents

2024$000

2023$000

Cash at bank and in hand

3,679

4,623

Short term debt instruments presented within other financial investments

Deposits with credit institutions

Bank overdrafts

Total cash and cash equivalents

3,679

4,623

Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the management of its short-term commitments are included in cash and cash equivalents.

There are no amounts included within cash and cash equivalents which are not available for use by the Syndicate.

25.Analysis of net debt

The Syndicate has no net debt.

26.Related parties

Starr Managing Agents Limited

Syndicate 1919 is managed by SMAL. SMAL is owned 100% by Starr Global Financial Inc. (Nevada). The Syndicate paid a managing agent’s fee of $3.2m in the year to SMAL (2023: $3.0m).

Starr Syndicate Limited

The corporate member of Syndicate 1919 is Starr Syndicate Limited (“SSL”). SSL’s immediate parent is Starr Indemnity & Liability Company (Texas) which is owned 100% by Starr Global Financial Inc. (Nevada). The ultimate controlling party of Syndicate 1919 is Starr International Inc. (Switzerland).

Starr Underwriting Agents Limited

SUAL underwrites on behalf of Syndicate 1919. SUAL is owned 100% by Starr Global Financial Inc. (Nevada). The Syndicate paid SUAL commissions of $19.5m (2023: $18.7m) for services provided during the year.

Starr Underwriting Agents Dubai

Starr Underwriting Agents Dubai (“SUAD”) underwrites on behalf of Syndicate 1919. SUAD is owned 100% by Starr Underwriting Agents Limited.

Other Starr Companies

Other companies within the Starr Companies Group have been authorised as Lloyd’s coverholders and granted binding authorities to produce business on behalf of the Syndicate for which they receive commission, and in some cases, a profit commission. All contracts are prepared using standard market wordings and are on a commercial arm’s length basis.

Certain directors of SMAL and SUAL hold directorships in some of these companies. These are disclosed to the Boards in the conflicts registers.

The Syndicate purchases intra Group reinsurance protection in three areas:

i)Global catastrophe cover from SIRL protecting all catastrophe exposed lines of business;

ii)Quota share reinsurance from SIRL and Starr Indemnity & Liability Company, who participate on the Syndicate’s reinsurance panel, alongside third-party reinsurers; and

iii)The LPT agreement with SIRL on the 2020 and prior years of account, on certain classes and certain discontinued classes of business, that is discussed in more detail on page 34.

At 31 December 2024, the Syndicate owed Group reinsurers $171.4m (2023: $221.2m) in respect of reinsurance premium and was owed in return $9.9m (2023: $13.8m) in reinsurance recoveries. These receivables and payables are included in the Statement of Financial Position as Debtors arising out of reinsurance operations and Creditors arising out of reinsurance operations, respectively. All remaining balances are with third parties.

There are common directorships between these entities that are disclosed in the conflicts registers. All contracts are prepared using standard market wordings and are on a commercial arm’s length basis.

With effect from 1 January 2011, SUAL has acted as coverholder to the UK branch of SIRL and from 24 June 2015 SUAL also acted as a coverholder to Starr International (Europe) Limited (“SIEL”); SUAL is remunerated on a commission basis. SMAL has considered this and sees no material risk to the Syndicate in the arrangement. A protocol has been signed between all four parties (SIRL, SIEL, SUAL and SMAL) defining the allocation of risks to the three carriers.

Since 1 January 2014, SMAL has been writing Lloyd’s consortium business for which SMAL receives a consortium management fee and binding authority commission. Prior to this period the Syndicate participated in a number of consortia managed by SUAL for which SUAL received a consortium management fee and binding authority commission.

These disclosure requirements are in addition to the requirement to disclose key management personnel compensation. This disclosure is given in note 7.

27.Off-balance sheet items

The Syndicate has no off-balance sheet items.

28.Post balance sheet events

The Syndicate has no disclosable post balance sheet events.

29.Contingencies and commitments

The Syndicate has no contingencies or commitments other than in the ordinary course of insurance business.

30.Foreign exchange rates

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

2024

2023

Start of period rate

End of period

rate

Average

rate

Start of period rate

End of period rate

Average

rate

Sterling

0.79

0.80

0.78

0.83

0.79

0.81

Euro

0.91

0.97

0.92

0.94

0.91

0.93

US dollar

1.00

Canadian dollar

1.32

1.44

1.37

1.36

1.32

1.35

Australian dollar

1.47

1.62

1.52

1.48

1.47

1.51

Japanese Yen

141.54

157.52

151.20

132.26

141.54

141.10

31.Funds at Lloyd’s

Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (‘FAL’). These funds are intended primarily to cover circumstances where Syndicate assets prove insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority requirements and resource criteria. The determination of FAL has regard to a number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not under the management of the Managing Agent, no amount has been shown in these Financial Statements by way of such capital resources. However, the Managing Agent is able to make a call on the Member’s FAL to meet liquidity requirements or to settle losses.

Appendix: Disclosure notes and accounting reference

Disclosure notes

Accounting reference

Table

Collect at Interim

Managing Agent’s report

LR Sch1 8(1)(b)LR Sch1 9(1)LR Sch1 9(2)(b), LR Sch1 10LR Sch1 8(2)(b)LR Sch1 8(1)(a)LR Sch1 11

N/A

Yes

Statement of Managing Agent’s responsibilities

N/A

Auditor’s report

LR Sch1 12(1)

N/A

Yes (review report)

Statement of profit or loss – technical account

LR Sch1 1(2)(b)

Sch3 P&L format

FRS 102.3.17

FRS 102.5.7E

Statement

Yes

Statement of profit or loss – Non-technical account

LR Sch1 1(2)(b)

Sch3 P&L format

FRS 102.3.17

FRS 102.5.7E

FRS 103.2.32

Statement

Yes

Statement of OCI

FRS 102.3.17

FRS 102.3.19

Statement

Yes

Balance sheet

LR Sch1 1(2)(a)

Sch3 BS Format

Statement

Yes

Statement of changes in members’ balances

Best practice

Statement

Yes

Statement of cash flows

FRS 102.7.1

Statement

Yes

Note 1 – Basis of preparation

FRS 102.3.24(a), LR 5(3)(b), FRS 102.3.3, FRS 102.8.5(a), FRS 102.3.23 (d),(e)

None

Yes

Note 2 – Use of judgements and estimates

FRS 102.8.6,7, IG2.10

None

Note 3 – Significant accounting policies

FRS 102.8.5(b)

None

Yes

General insurance business sensitivities

Exposure to credit risk by rating

Financial assets that are past due or impaired

Movement in impairment allowance

Aged analysis of past due but not impaired assets

Analysis of liabilities by duration

Analysis of balance sheet by currency

Note 4 – Risk and capital management

FRS 102.34.21

FRS 102.34.23

FRS 102.34.24

FRS 102.34.25

FRS 102.34.26(a)

FRS 102.34.24

FRS 102.34.28

FRS 102.34.24

FRS 102.34.29

FRS 102.34.31

MB Y4856

Sensitivities to market risks

Disclosure notes

Accounting reference

Table

Collect at Interim

Analysis of result by segment

Note 5 – Analysis of underwriting result

Sch3 85

Sch3 87 (1)

FRS 102.1.5

FRS 103 4.5

Geographical split of premiums by origination

Net operating expenses by type

Yes

Direct commission

Note 6 – Net operating expenses

FRS 103.4.6

Sch 3 88

LR Sch 2

Auditors remuneration

Directors emoluments

Active underwriter emoluments

Note 7 – Key management personnel compensation

LR Sch1 5

FRS 102.33.6

Run off manager emoluments

Staff numbers by type

Note 8 – Staff numbers and costs

LR Sch1 4

S.411(1)

S.411(5)

Staff costs by type

Note 9 – Investment return

Sch 3 P&L format

FRS 102.11.48 (a)

FRS 102.11.48 (b)

FRS 102.11.48 (c)

Investment return

Yes

Note 10 – Distribution and open years

Required by Lloyd‘s

Distribution on open years

Investment by asset type

Yes

Investments by measurement classification

Derivatives by type

Funds in syndicate table

Yes

Asset by FV hierarchy classification

Note 11 – Financial investments

Sch3 BS

Sch3 73

Sch3 72

FRS 102.11.41

FRS 102.11.27

FRS 102.34.22

FRS 102.11.43

Sch3 73(2)(c)

FIS - required by Lloyds

Level 3 movement analysis

Note 12 – Debtors arising out of direct insurance operations

FRS 102.4.4A

Split by one year, > one year

Note 13 – Debtors arising out of reinsurance operations

FRS 102.4.4A

Split by one year, > one year

Note 14 – Other debtors

Required by Lloyds

Analysis of other debtors

Note 15 – DAC

FRS 103.4.5(d)

Movement analysis

Note 16 – Tangible fixed assets

FRS 102.17.31(e)

Movement in fixed asset

Development triangle – Gross

Note 17 – Claims development

FRS 103.4.8(b)(iii)

Development triangle – Net

Claims movement analysis

UPR movement analysis

Note 18 – Technical provisions

FRS 103.4.5(d)

Long term business provision movement analysis

Note 19 – Provisions for other risks

FRS 102.21.14

Provisions movement analysis

Discount rates and mean terms

Note 20 – Discounted claims

FRS 103.4.5(b)

Discounted claims values