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QBE Casualty Syndicate 386
Annual Report
QBE CASUALTY SYNDICATE 386
1
Contents Page
Managing Agency – Corporate information 2
Strategic Report 3
Report of the Directors of the Managing Agent 15
Independent Auditors’ Report to the Members of QBE Casualty Syndicate 386 17
Profit and loss account – technical account – general business 20
Profit and loss account – non-technical accounting 21
Statement of changes in members’ balances 22
Balance sheet 23
Statement of cash flows 25
Notes to the annual accounts 26
2022 UNDERWRITING YEAR ACCOUNTS
Underwriting year – report of the Directors of the managing agent 56
Independent Auditors’ Report to the Members of QBE Casualty Syndicate 386 – 2022 closed year of account 59
Profit and loss account – 2022 underwriting year technical account – general business 62
Profit and loss account – 2022 underwriting year non-technical account 63
Balance sheet – 2022 Underwriting year 64
Notes to the underwriting year accounts 65
Seven year summary 72
QBE CASUALTY SYNDICATE 386
2
MANAGING AGENCY – CORPORATE INFORMATION
Directors
C A Brown*
C G L M Fresneau
J R Harris
C T Killourhy
S Maddock*
Sir N K Skeoch*
R C Stone
N J D Terry
T C Wade* Appointed on 1 March 2024
Former Directors who served during the year and prior to date of signing
M G McCaig* Resigned on 30 June 2024
* Non-Executive Director
Company secretary
A J Smith
Registered office
30 Fenchurch Street
London
EC3M 3BD
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London
SE1 2RT
QBE CASUALTY SYNDICATE 386
3
STRATEGIC REPORT
The Directors of QBE Underwriting Limited (‘the Company’ or ‘QUL’), the Managing Agent for QBE Casualty Syndicate
December 2024.
Principal activities
The Syndicate is a specialist non-US liability syndicate (other than for incidental US exposures of non-US domiciled
parents), operating within the Lloyd’s insurance market. The Syndicate is led by Cecile Fresneau, Managing Director of
QBE’s European Operations Insurance business.
The Syndicate forms an integral part of QBE European Operations Division (‘QBE EO’) of QBE Insurance Group Limited
(‘QBE Group’). Together with other underwriting entities within QBE EO, the Syndicate continued to provide an
integrated casualty offering during 2024, leveraging off QBE EO’s extensive distribution capability and economies of
scale in the cost of reinsurance protection.
Business written by the Syndicate comprises: employers’ liability, professional indemnity, and general liability (the latter
encompassing, inter alia, products liability and third-party liability).
For Lloyd’s planning and performance monitoring reporting, classes of business are defined as: UK & Ireland Liability,
International Casualty and Professional Indemnity.
UK and Ireland Liability
This account totals approximately 52% of overall Gross Written Premium (‘GWP’). The team offers a comprehensive
product capability to its clients, underwriting traditional lines including employers’ liability, public and products liability,
and products guarantee and recall.
International Casualty
The account totals approximately 34% of overall GWP. The team underwrites a broad-based public and products’ liability
account as well as umbrella and excess of loss for risks including large industrial, mineral extraction, utility and transport.
Professional Indemnity
This account totals approximately 14% of overall GWP and encompasses risks in the construction business, technology
business and other professions, including a significant book of solicitors’ business.
Claims
The Syndicate’s claims team operates within a combined QBE EO claims service, leveraging operational and cost
efficiencies.
Business review and future developments
The results of the Syndicate for the year are set out in the Profit and Loss Account on page 21 and Key Performance
Indicators on page 4.
On 31 October 2024, the Syndicate entered a 100% retrospective reinsurance arrangement. This cover protects run-off of
certain prior year claims reserves within the Syndicate. The effective date of the arrangement is 1 July 2024.
QBE EO’s vision, consistent with the wider QBE Group, is to be ‘the most consistent and innovative risk partner’ and is
guided by our purpose ‘QBE – enabling a more resilient future’, which appropriately reflects the ambitions of the QBE
Group and the world in which we live. Our Vision and Purpose provide a strong sense of direction for the future. To
achieve this, we are committed to 6 strategic priorities: portfolio optimisation, sustainable growth, bringing the enterprise
together, modernising our business, people and customer. These 6 priorities ensure that we deliver on our vision and
maintain consistency across QBE EO.
With regards to Environmental, Social and Governance (‘ESG’), QBE Group has adopted the approach of an orderly and
inclusive transition to a net-zero economy. Our current focus is to continue building our capability to reduce insurance-
associated greenhouse gas emissions. This continual measurement and ongoing client conversations will inform our
underwriting considerations over time.
QBE CASUALTY SYNDICATE 386
4
STRATEGIC REPORT (continued)
Business review and future developments (continued)
In an increasingly competitive marketplace for talent, QBE EO have continued to focus on establishing QBE EO as the
employer of choice, and embedding the new global employee value proposition, ‘Why QBE’.
This year QBE EO won Commercial Lines Insurer of the Year at the Insurance Times Awards 2024. QBE EO also picked
up the Silver for the Diversity and Inclusion Excellence Award for our commitment to ensuring everyone at QBE felt like
they belong.
Key performance indicators and future developments
As an insurance entity, key Performance Indicators (‘KPI’) include Gross Written Premium, Net Earned Premium and
Investment income. Key ratios monitored by the Board include the Combined Operating Ratio, comprising the Claims
Ratio and Commission and Expense Ratio. The Ratios are net claims, expenses and commissions incurred for the year,
expressed as a percentage of the Net Earned Premium.
The table below details the Syndicate’s annually accounted result for the year ended 31 December 2024 relative to the
previous year:
2024
2023
Gross written premium
£’000
371,246
415,200
Net earned premium
£’000
220,548
261,600
Claims incurred, net of reinsurance
£’000
(125,627)
(133,200)
Acquisition costs and expenses
£’000
(101,307)
(128,100)
Investment return
£’000
46,513
65,100
Profit for the year
£’000
44,761
75,100
Claims ratio
%
57.0%
50.9%
Commission and expense ratio
%
45.9%
49.0%
Combined operating ratio
%
102.9%
99.9%
Other net operating expenses include standard personal expenses.
The Active Underwriter comments
The syndicate generated a total profit for the year of £44.8m (2023 £75.1m). The results includes an underwriting loss of
£6.4m, equivalent to a combined operating ratio of 102.9% (2023 99.9%). During the current period, the Syndicate entered
into a transaction to reinsure certain prior year claims liabilities. The transaction had a positive impact on the reported
profit for the financial year.
Overall GWP of £371.2m (2023 £415.2m) represents a circa 10.6% decrease on the previous year (at a constant rate of
exchange) reflecting the non-renewal of poor performing business in the International Markets book. There have been
softer market conditions, particularly through the second half of the year, with rate achieved below plan.
The net claims ratio of 57.0% is adverse against prior year (2023 50.9%) due to prior year deterioration mainly in the
Professional Indemnity and International Liability portfolios. This has been offset by the benefit of the reinsurance
arrangement which covers reserves from 2022 and prior within the International Liability portfolio.
Acquisition cost and expenses have decreased due to the reduced business written and reduced profit commission expense
during the year. The overall commission and expense ratio for both years have been distorted by the reduced net earned
premium due to the retrospective reinsurance arrangements entered into in both 2024 and 2023. Excluding this impact,
the commission and expense ratios has decreased from 32.7% in 2023 to 28.1% in 2024.
The investment income of £46.5m or 5.1% return (2023 £65.1m or 5.9% return), was supported by increases in market
yields on fixed income holdings. Fixed income represents circa 93.8% of the Syndicate’s overall portfolio. Further details
regarding the investment performance are included on page 5.
EY has again been engaged to provide independent projections to support the Statement of Actuarial Opinion (‘SAO’).
Outlook
Through 2025, we expect many of the global themes of geopolitical tension and economic uncertainty to persist. Early
trading in 2025 has shown challenging market conditions with new entrants and increased appetites among our peers
driving pressure on rate and terms & conditions. We have a targeted underwriting strategy to deliver consistent
profitability and sustainable growth with a focus on adaptability and innovation as we negotiate transitioning market
conditions and global challenges from economic variables. Our underwriting teams will maintain focus on profitability,
prioritising retention of good business and developing a pipeline of new business. Our ambition is to be a trusted risk
partner, delivering high quality service to our clients and brokers and developing innovative solutions to meet customer
needs.
QBE CASUALTY SYNDICATE 386
5
STRATEGIC REPORT (continued)
Outlook (continued)
All our 1/1 outwards reinsurance placements have been successfully completed in line with our strategy. We continue to
trade with high quality reinsurance providers and optimise our reinsurance structure to reflect portfolio growth and risk
appetite.
We will continue to enhance our employee experience and aim to be the employer of choice in our chosen markets. In
addition to our focus on wellbeing and inclusion of diversity, we will support our colleagues to engage with development
to supports both their career plans aligned with our organisational needs. As we modernise our business, we will continue
to develop the skills needed to drive change: future focus, agility and innovation, alongside technical skills and leadership
capability.
Investment policy
Management of the investment portfolios for the Syndicate is delegated to QBE Group Services Pty Limited, the
investment manager, a wholly owned subsidiary of the QBE Group. The performance of the investment manager is
monitored against an absolute return mandate, using other reference benchmarks or peer group performance as KPIs.
QBE EO management, along with input from the investment manager, is responsible for developing and monitoring the
Syndicate’s investment policy and strategy, subject to QUL’s Board approval. The Board also monitors the Syndicate’s
investment manager performance and their compliance with the investment guidelines. The investment guidelines are
designed to ensure that liquidity, credit and market risk are appropriately managed.
Syndicate investments are primarily held in core fixed income bonds with modest exposure to growth assets through
investment funds in developed market equities, high yield debt, and infrastructure assets. The majority of the core fixed
income portfolios have an average credit rating equivalent to, or better than, Standard & Poor’s “A”. The Syndicate has
not incurred any credit defaults or write downs in any of its fixed interest portfolios.
Responsibility for the oversight and monitoring of the asset and liability strategy falls within the remit of the Board.
Duration of the Syndicate’s core fixed income portfolios are managed broadly in line with that of net outstanding claim
liabilities.
The Syndicate operates a Foreign Exchange policy to minimise foreign exchange risk by holding assets in foreign
currencies in order to match net outstanding claim liabilities and policy-holders interest. Any remaining foreign currency
exposure is hedged using foreign exchange forward rate derivatives in order to minimise residual foreign exchange risk.
Investment performance
The total investment returns achieved for each financial year are set out below. These include income earned on funds
which are not managed by the investment manager, such as certain regulatory overseas deposits managed directly by
Lloyd’s. The investment return is calculated as an absolute return on the underlying portfolio of assets held during the
year, which was 5.1% (2023 5.9%).
2024
2024
2023
2023
Portfolio currency
Average funds
Average return
Average funds
Average return
£’000
%
£’000
%
Australian dollar
138,538
4.1
141,900
4.1
Canadian dollar
364,558
5.1
359,400
5.2
Euro
174,716
5.1
164,500
7.6
UK pound sterling
375,394
2.3
363,300
5.7
US dollar
77,830
5.6
77,700
7.4
South African rand
13,256
9.4
12,500
8.5
The benchmark target for investment portfolios is an absolute return yield, agreed for each currency on an annual basis
by the Board of QUL. Combined asset class actuals for each currency agreed for each financial year are shown above.
QBE CASUALTY SYNDICATE 386
6
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company
The Syndicate and the Company face a number of principal risks and uncertainties specific to the Syndicate’s role as an
insurance undertaking.
The Syndicate’s activities expose the business to a number of key risks which have the potential to affect the Company’s
ability to achieve its business objectives. The Board is responsible for ensuring that an appropriate structure for managing
these risks is maintained. The Board acknowledges that it is not realistic or desirable to eliminate risk entirely, and
therefore seeks to ensure that the appropriate controls are in place to effectively manage risks in line with the agreed
tolerance.
QBE EO’s established Enterprise Risk Management (‘ERM’) Framework, together with QBE Group’s Risk Management
Strategy, describes the approach to managing risk effectively, which in turn supports strategy and fundamental principles.
QBE EO’s Risk Appetite Statements (‘RAS’) set out the nature and level of risk that the Board are willing to take in
pursuit of the organisation’s objectives. The RAS are used to support risk-based decision making by clearly defining QBE
EO’s appetite (what we should do) and tolerance (what we can do) across the risk categories defined below.
A summary of the main risk categories faced by the Syndicate which is managed by the Company, and risk mitigation
techniques to identify, assess, evaluate and mitigate these risks are outlined as follows:
Strategic risk
The Company defines strategic risk as the current and prospective impact on earnings and/or capital arising from strategic
business decisions and responsiveness to external change.
The Company manages strategic risk as follows:
• Through oversight, monitoring and reporting of strategic risks including performance, capital, reputational,
Environmental, Social and Governance (‘ESG’) and emerging risks;
• Considering strategic options in light of the impact on return volatility and capital requirements; and
• Planning and monitoring capital levels on an ongoing basis, with reference to economic requirements.
The Company has a programme of stress and scenario testing to review the potential impacts of a range of different
strategic threats on its capital position and exposure to market, liquidity and operational risks.
Insurance risk
The Company defines insurance risk as the risk of fluctuations in the timing, frequency and severity of insured events and
claims settlements, relative to expectations.
Our exposure to insurance risk arises from:
• Underwriting/pricing;
• Insurance concentrations; and
• Reserving.
The Company manages insurance risk as follows:
• Analysing historical pricing and claims experience;
• Setting a tolerance to concentration risk;
• Monitoring and reviewing underwriting performance and authority limits;
•
Monitoring usage and availability of pricing models, including independent reviews;
• Purchase of appropriate reinsurance programme to reduce Syndicate’s exposure to individual losses or an
accumulation of losses;
• Setting thresholds and monitoring of reserve probability of adequacy (‘PoA’); and
• Conducting both an in-house and external actuarial review of our claims provisions, independent of our underwriting
teams.
QBE CASUALTY SYNDICATE 386
7
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company (continued)
Credit risk
The Company defines credit risk as the risk of financial loss from obligors’ failure to meet their financial obligations,
including both inability or unwillingness to pay, as well as loss due to credit quality deterioration. Credit risks are
monitored and managed in relation to obligations to the Company in respect of reinsurance counterparties, insurance
activities, issuers and transactional counterparties.
The Company manages credit risk as follows:
• Regular counterparty monitoring through dedicated systems and procedures to manage and control exposure to
counterparties;
• Regular exposure monitoring against applicable counterparty limits via the approved RAS and supporting Key Risk
Indicators (‘KRI’), which are reported on a quarterly basis;
• Through management and monitoring of credit related risks, including reinsurance credit risk and other recoveries,
insurance credit risk and investment and treasury credit risk.
• Regular performance of stress and scenario analyses and the application of models that estimate remote losses due
to economic events. This may include holding collateral in respect of specific exposures;
• The monitoring on an on-going basis of external issuer default and financial strength ratings and QBE Group ratings
and updating as appropriate; and
• Regular review of receivables, the collectability of those debts, and the adequacy of associated impairments.
Market risk
The Company defines market risk as the risk of adverse impacts on earnings resulting from changes in market factors .
Market factors include, but are not limited to, interest rates, credit spreads, foreign exchange rates and equity prices.
The Company manages market risk as follows:
• Management and monitoring of market factors and risks including investment market movements related to equity
prices, interest rates, credit spreads and foreign exchange rate movements, as noted above;
• Assessing and reporting of various market risk exposures using the Board-approved market RAS, that are reported
on a quarterly basis;
• Application of stress and scenario analyses and the application of credit models that are able to estimate remote
losses due to economic events;
• Actively managing investment assets;
• Maintaining a diversified portfolio;
• Hedging residual non-functional currency net asset exposures;
• Use of derivatives for efficient portfolio management; and
• Monitoring compliance with legal and regulatory requirements, including the Prudent Person Principle.
Liquidity risk
The Company defines liquidity risk as the risk of insufficient liquid assets to meet liabilities as they fall due to
policyholders and creditors, or only being able to access liquidity at excessive cost.
The Company manages liquidity risk as follows:
• Monitoring liquidity risks against the Board-approved RAS and supporting KRIs to ensure minimum coverage of
stressed financial outflows for liabilities, which are reported on a regular basis;
• Performing stress and scenario testing analyses and the application of models that estimate remote losses due to
various events;
• Setting minimum levels of liquid, short-term money market securities;
• Matching assets and liabilities in our major currency positions;
• Regular monitoring of the ratio of liquid assets to liabilities;
• The production of cash-flow forecasts, supplemented by Early Warning Indicators, such as the short-term liquidity
ratio, to proactively identify any changes to the liquidity position or potential funding needs; and
• Recourse to a Board-approved Liquidity Contingency Plan, permitting access to sources of further liquid assets in
the event of extreme liquidity stress.
QBE CASUALTY SYNDICATE 386
8
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company (continued)
Operational risk
The Company defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people
and systems or from external events, with the following sub-risk categories: internal fraud, external fraud, employment
practices and workplace safety, improper business practices, damage to physical assets, business disruption and system
failures and execution, delivery, and process management.
The Company manages operational risk using the following:
• Actively monitoring our key processes and systems;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Maintaining effective segregation of duties, access controls, governance and reconciliation procedures;
• Performance of functional Risk and Control Self-Assessments (‘RCSA’) providing periodic assessment of risks as
well as assurance over control design and performance;
• Operational Risk Dashboard monitoring including Operational Risk Appetites, key management focus areas and
other risk Management Information; Operational KRIs are also being monitored; and
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate.
Compliance risk
The Company defines compliance risk as the risk of legal or regulatory penalties, financial loss or non-financial loss or
customer detriment resulting from a non-compliance with laws, regulations or standards, and includes Conduct Risk.
The Company manages compliance risk using the following:
• Identifying and monitoring of compliance obligations/risks;
• Embedding of compliance requirements into processes, systems and procedures including through RCSAs;
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Monitoring of internal / external fraud, improper business practices and non-compliance with external requirements;
• Compliance Risk Dashboard monitoring including Compliance Risk Appetite, key management focus areas and
other risk Management Information. Compliance KRIs are also being monitored;
• Closely monitoring rapid changes in the international sanctions regulatory environment, undertaking appropriate
screening and due diligence and communicating requirements to the business as required; and
• Maintaining effective segregation of duties, access controls, governance, and reconciliation procedures.
Group risk
The Company defines group risk as the risk to a division or legal entity arising specifically from being part of a wider
group, including financial impact and loss of support from the parent company.
The Company manages group risk as follows:
• Challenge and oversight from independent Non-Executive Directors (‘NED’) on the Board;
• Contractual arrangements are in place and actively monitored against for material services provided by other QBE
Group divisions and companies;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Ensure functional RCSAs include Group risks;
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate;
• Board’s Group risk appetite monitoring including intra-Group loans, intra-QBE EO loans, Intra-Group collateral
monitoring, Group Outsourced Services Service Level Agreement (‘SLA’) monitoring;
• Group Risk Dashboard monitoring including Group Risk Appetites and other Group risk related Management
Information, including risk metrics regarding QBE’s capital vehicle, QBE Capital, (Global) Limited as well as Group
issues and incidents impacting EO; and
• Involvement of QBE EO executive management individuals within material QBE Group initiatives that could impact
the Company.
QBE CASUALTY SYNDICATE 386
9
STRATEGIC REPORT (continued)
Solvency II and capital adequacy
The Syndicate, managed by the Company, applies QBE EO’s internal capital model, as approved by the Prudential
Regulation Authority (‘PRA’) and Lloyd’s. The internal model is an integrated framework to support the Company’s
objectives by managing risk and capital across the Syndicate’s business. The internal model has broad scope including
capital modelling; risk identification, mitigation, assessment and monitoring, and is used in the day-to-day operations of
the Company.
The internal model is used to help assess our risk and calculate the appropriate level of risk-based capital to allocate to
risks to which we are exposed. The assessment of risk-based capital enables us to make decisions that involve quantitative
risk reward trade-offs. The allocation of risk-based capital helps ensure that the level of risk we take is commensurate
with the required returns and is within the approved risk appetite and tolerance.
The Syndicate, managed by the Company, comply with Lloyd’s capital setting processes which are described in note 2 in
the accounts.
Corporate governance
The Syndicate is managed by the Company, a subsidiary of QBE European Operations plc, which is the holding company
for QBE EO of QBE Group. The Corporate Governance framework is managed at QBE EO level.
During 2024, the Company’s Corporate Governance structure and system of governance continued to evolve, reflecting
the Board’s ongoing commitment to ensuring that it remains efficient, relevant and supportive of the strategic aims of the
Company. The structure continues to comply with all relevant regulatory and legal requirements.
The role of the board is to provide leadership, to oversee the design and implementation of QBE EO’s strategy and to set
a framework of prudent and effective controls which enable risk to be assessed and managed within it. The Board Charter
includes an agreed set of matters reserved for the Board’s consideration. The Board ensures that the necessary financial,
people resources policies and practices are in place for the Company to meet its objectives and measure the performance
of management in delivering on QBE EO’s strategic aims.
The Board establishes and instils QBE EO’s purpose, values and culture and ensures these are aligned with those set by
QBE Group and ensures that its obligations to its shareholder and other stakeholders of QBE EO are understood and met,
generate value for shareholders and contribute to wider society.
During the year, the Board Committees’ Terms of Reference and Board Charter for the Company were reviewed by the
relevant Committees and Boards, with minor enhancements made to reflect ongoing corporate governance and general
housekeeping updates.
The main QBE EO Boards and Board Committees met regularly during the year and there was strong attendance from all
members.
The Board of the Company comprises 5 Executive Directors and 4 NEDs.
The Board of QBE Underwriting Limited
The Board Charter of the Company states that the role of the Board is to provide leadership; to oversee the design and
implementation of QBE EO’s strategy and to set a framework of prudent and effective controls which enable risk to be
assessed and managed within it. The Board Charter includes an agreed set of matters reserved for the Board’s
consideration. The Board ensures that the necessary financial and people resources are in place for the Company to meet
its objectives and reviews the performance of management in delivering on QBE EO’s strategic aims. The Board sets and
instils QBE EO’s values and culture in line with those set by QBE Group and ensure that its obligations to its shareholder
and other stakeholders of QBE EO are understood and met.
The role of the Chair of the Board is distinct from that of the Chief Executive Officer (‘CEO’), and each role is clearly
established and held by different individuals. The Chair is responsible for chairing and overseeing the performance of the
Board, leading the development of the Company’s culture by the Board of Directors as well as leading the development
of, and monitoring the effective implementation of policies and procedures for the induction, training and professional
development of all members of the Board. The Chair promotes open debate and facilitates constructive discussion within
the board by ensuring that Directors receive meeting papers at least four working days prior to the scheduled Board
meetings.
QBE CASUALTY SYNDICATE 386
10
STRATEGIC REPORT (continued)
The Board of QBE Underwriting Limited (continued)
The CEO has responsibility for the day-to-day management and operations of the Company, supported by the International
Executive Management Board (‘International EMB’), which the CEO chairs. The CEO is responsible for leading,
directing and being accountable for the performance of the Company and reporting to the Board of Directors in respect of
these matters.
This separation of roles ensures that the balance of responsibilities, accountabilities and decision making are effectively
maintained. Directors have equal voting rights when making decisions and the Chair has a casting vote when required.
All Directors have access to the advice and services of the Company Secretary and are able to seek professional advice at
the Company’s expense.
Mr Tim Wade was appointed as an independent NED from 1 March 2024, and became chair of the Audit Committee from
1 July 2024, replacing Mr McCaig. Mr McCaig resigned his position as an independent NED, Senior Independent Director
and Chair of the Audit Committee effective 30 June 2024. Ms Catherine Brown replaced Mr McCaig as the Senior
Independent Director, effective 1 July 2024.
The Board considers that the experience and areas of focus which each Board member brings to the Company results in a
strong and balanced leadership team. The independent NEDs have no material business or relationships with the Company
that might influence their independence or judgement and bring a range of financial services and wider industry experience
to the Board. As such, the size and composition of the Board is considered to be appropriate.
QBE Group have a continuing professional development programme which requires each NED to undertake ten hours of
continuous professional development each year covering areas such as Regulation, Insurance and Customer. A NED skills
matrix is maintained by Company Secretarial, together with NED training records.
In conjunction with QBE Group and supported by the Nomination Committee, succession planning is undertaken in
accordance with the talent and culture objective within the strategic priorities of both QBE EO and QBE Group whilst
ensuring the Board has the right balance of skills, background, knowledge, experience and diversity to be effective.
The duties of the Board are executed, to some degree, through Board Committees that are each chaired by a NED. The
Board and other regulated companies in QBE EO have jointly constituted these Board Committees which comprise
appropriately skilled members and are supported by attendees as necessary. QBE EO’s key Committees comprise: Audit
Committee; People and Remuneration Committee (‘PARC’); Nomination Committee; and Risk and Capital Committee
(‘RCC’).
In addition, the International EMB has also been constituted to act as a Management Committee of the Company and
other UK regulated companies in QBE EO. The International EMB is Chaired by the CEO (and its management groups
are each chaired by an EMB member). The Board delegates authority for day-to-day management of the Company to the
CEO, who is supported by the EMB. Membership of the International EMB includes the Chief Financial Officer
International (‘CFO’), Chief Risk Officer International (‘CRO’), leaders of the Insurance and Reinsurance business areas
which includes the Active Underwriter, Chief Underwriting Officer, Chief People Officer, Chief Operations Officer, Chief
Information Officer, Head of Executive Governance & Strategy, Claims Director and (with effect from April 2024) the
CEO Asia. The International EMB’s responsibilities include formulating and implementing approved strategies and plans,
and management of the day-to-day effective running of the Company. During the year, the International EMB met
formally ten times and additional regular informal discussion forums took place during the year.
Section 172 Companies Act 2006 statement
The Directors are fully aware of their duty under section 172 of the Companies Act 2006 to act in the way which they
consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a
whole and, in doing so, to have regard amongst other matters to the duties contained therein.
The Directors have acted in accordance with such responsibilities during the year. The Board has identified that its key
stakeholders are its employees, shareholders, customers, suppliers, regulators, brokers, and other intermediaries, together
with communities and the environment.
Being a part of QBE Group, the Company adheres to QBE’s purpose and DNA values. QBE’s purpose is to enable a more
resilient future. QBE is committed to the highest standards of corporate governance as reflected in its DNA. The QBE
DNA interlinks seven cultural elements (listed below) that are fundamental to QBE and how QBE needs to operate in the
future to succeed, recognising its customers, employees, shareholders, and the community. QBE believes that a culture,
which rewards transparency, integrity and performance will promote its long-term substantiality and the ongoing success
of its business.
QBE CASUALTY SYNDICATE 386
11
STRATEGIC REPORT (continued)
Section 172 Companies Act 2006 statement (continued)
The QBE DNA is as follows:
• customer-focused – we proactively listen with empathy to guide how we meet customer needs and have an impact
(#Outside In)
• technical experts – we build and share our expertise, striving for excellence and knowing when to ask for guidance
(#Know your stuff)
• fast-paced – we move with pace, adapting with our purpose and future in mind (#Ramp It Up)
• inclusive – we treat each other with respect and fairness, and value diverse perspectives (#Value All Views)
• courageous – we act with integrity and challenge the status quo, feeling safe to speak up and experiment with new
ideas (#Do the Right Thing)
• accountable – we take ownership and follow through to deliver, managing risks and learning from mistakes (#Own
It Now)
• a team – we support each other and collaborate widely to achieve common goals, knowing we are stronger together
(#Together)
How the Board engages
QBE employees
• A comprehensive communications and engagement plan ensures regular employee and leader updates on strategic
priorities and business performance by the Group and Divisional CEO’s;
• Each International EMB member (of which five are QBE EO board members) host Town Halls on a quarterly basis.
Further engagement opportunities are available through informal connection opportunities and email
communications;
• The CEO and NEDs visit and engage with regional and overseas offices, and have deep dives and other update
sessions with management and staff across the business;
• The Chief People Officer Report includes an overview on progress against the People and Culture strategic priorities;
• The International EMB proactively encourage and act on employee feedback through regular pulse surveys,
Together@QBE forums and employee networks to help identify opportunities to improve our ways of working,
benefits, policies and overall culture;
•
The CEO chairs a bi-annual Inclusion Forum with the Chief People Officer, the EMB, Inclusion team, employee
network chairs (MIX, Circle, Pride, Workability, Open Mind and Sustainability), and executive sponsors to track
progress against our Inclusion and Diversity strategy and plans;
• Recurring EMB Discussion Forums with opportunities for executive network sponsors to present; and
• There is a strong focus on culture and whistleblowing reports, and updates from internal and external auditors around
controls.
Our shareholder
• There is regular interaction with the shareholder, QBE Group, on a frequent basis. The QBE Group Board receives
on an annual basis a presentation on the financial plans for the forthcoming year;
• There is regular interaction with Members’ Agents, including quarterly forecast letters and at least twice-yearly
meetings to review year-end results, latest market conditions and draft Syndicate Business Forecast; and
• There is a global NED conference held on a bi-annual basis. Chairs of Board Committees around the globe meet
frequently to discuss key matters.
Our customers
• The Board reviews strategy and monitors performance during the year with the aim of meeting customers’ needs
more effectively/efficiently;
• The Board receives competitor updates to understand QBE’s competitive performance and its strengths and
weaknesses as regards to meeting customer needs;
• Benchmarks performance in relation to customers using research and survey results;
• Customer is one of our priorities for 2025 with an aim of being our customers’ favourite insurer; and
• QBE EO has applied the Consumer duty in line with the Financial Conduct Authority (‘FCA’) policy statement
PS22/9 “A new consumer duty” to all in scope new and existing products and services open to sale or renewal,
effective 31 July 2023 and has also applied the consumer duty to in scope products and services held in closed books
from 31 July 2024.
QBE CASUALTY SYNDICATE 386
12
STRATEGIC REPORT (continued)
Section 172 Companies Act 2006 statement (continued)
How the Board engages (continued)
Our brokers and other intermediaries
• The Board receives updates regarding partner relationships, development and engagement;
• Consideration of key strategic partnerships and technology; and
• Understand our approach with partners.
Our regulators including the PRA, National Bank of Belgium, FCA, Financial Services and Markets Authority
(Belgium) and Lloyd’s of London
• There is transparent and regular communication with our regulators and Lloyd’s which is facilitated through our
Compliance Department; and
• Various teams in the business and Board members including NEDs have ongoing engagement with our regulators
on a frequent basis, including discussion on specific matters requested. All material regulator engagements are
reported to the respective EO Boards.
Our suppliers
• The Board receives updates as necessary from management on suppliers (e.g. claim service providers and IT and
operational suppliers) and reviews and approves applicable policies and procedures. Key areas of focus for regulators
include the fair treatment of customers, fair pricing and product value, controls for the management of outsourcing
and third-party risk, and employee conduct standards and awareness of the regulatory environment they operate in
as well as financial risks arising from climate change; and
• The Board receives updates as necessary from management on suppliers (e.g. IT and operational suppliers) and
reviews and approves applicable policies and procedures.
Our communities and the environment
• The Board receives updates on the QBE Group wide approach to sustainability and was jointly led by the Chief Risk
Officer and Chief Underwriting Officer who were responsible for identifying and managing the financial risks arising
from climate change up to 1 January 2024. From 1 January 2024, the Head of Executive Governance & Strategy was
appointed as the Chair of the ESG Management Group;
• The Board receives regular updates on the work underway across QBE EO to better identify, measure, monitor,
manage, and report on our exposure to the risks arising from climate change;
• The Board supports the following initiatives:
o As part of the sustainability initiatives across the QBE Group, the 2024 Sustainability Report is published on
the QBE Group website and provides detailed explanation of this (Group-wide) framework and includes case
studies and examples, highlighting the active steps that QBE Group is taking to embed sustainability into its
business practices;
o
Tax transparency through the annual publication of the QBE Group Tax Transparency Report and the
production of a Tax strategy document outlining its UK tax strategy; and
o Efforts to integrate human rights considerations across the business, as outlined in the QBE Group Human
Rights Policy and in our Modern Slavery and Human Trafficking Statements.
• Premiums4Good is the collaboration between QBE, our customers, partners and shareholders through which we
invest a portion of everyday premiums into investments that have additional social or environmental benefits at no
extra cost to the customer. Premiums4Good now has US$2.3 billion invested in 135 securities across our key impact
areas;
• The Board endorses a culture of “giving back to the community” time and skills (e.g. through employee volunteer
days and pro bono support); and
• The QBE Foundation EO, which supports involvement in the community by promoting employee volunteering,
employee matching, and through grant donations to registered charities aligned to the Foundation’s focus areas.
For all of the above interactions, the Board seeks to ensure that all stakeholder interests are considered.
QBE CASUALTY SYNDICATE 386
13
STRATEGIC REPORT (continued)
Climate-related Financial Disclosures (‘CFD’)
The Company, as part of the QBE Group, recognises the material risk that climate change poses to its business, including
the Syndicate and is committed to embedding climate change considerations within its decision making. Our approach to
managing the Financial Risks from Climate Change (‘FRCC’) has been guided by our Board-approved Roadmap to meet
the requirements of the PRA’s Supervisory Statement ‘SS3/19’.
QBE EO is guided by the QBE Group’s Risk Management Strategy to ensure we achieve our strategic priorities while
also establishing effective governance and fundamental principles for the management of risk across all levels of the
organisation. The FRCC are a component of ESG risk, which is classified as a strategic risk sub-class.
In line with SS3/19, exposures to physical, transition and liability risks are monitored and reported to the RCG, RCC and
the Board on a quarterly basis using the EO Climate Risk Dashboard (‘CRD’). The CRD includes the following
assessments:
x Physical risks: modelling of natural climate perils, for example assessing how EO’s Insurance Concentrations
risk appetites statements would be impacted by future climate stress scenarios. When considering physical risks,
Representative Concentration Pathway 8.5 (‘RCP 8.5’) is adopted, which is considered a ‘worst-case scenario’
and is based on a substantial global temperature increase;
x Underwriting transition risks: modelling transition scenario impacts on sensitive industry sectors and assessing
how they could impact EO’s GWP derived from products written for customers in these sectors;
x Investments transition risks: assessments of specific EO investment portfolios’ exposure to transition risks;
x Liability risks: climate-related litigation trends are monitored, and scenario assessments are conducted –
supported by the litigation monitoring work performed by the Legal team; and
x Climate-related risks as they pertain to own operations and Claims trends.
During 2024, The Company has continued to enhance and refresh its approach to meeting the requirements of SS3/19.
Further developments to our approach to managing the FRCC, and broader ESG risks, have included:
x Further training on climate risk for the EO Board and International EMB;
x Updated scenario assessments of physical risks to estimate changes in exposure materiality and to inform
underwriting strategy updates for EO insurance products;
x Reassessing hypothetical climate litigation scenarios to ensure that frequency and severity estimates are updated
and appropriate, including in relation to internal model validation;
x Engaged with priority commercial customers to further understand their transition risks; and
x Our Accumulation Management team provides technical catastrophe pricing for a large proportion of our
commercial property policies which is refreshed frequently to reflect current catastrophe accumulations,
reinsurance costs and required return on allocated capital.
In 2025, QBE Group published the 2024 Sustainability Report, which included details of the Sustainability Strategy to
better support the ambition and purpose of enabling a more resilient future. Climate change is a key consideration and is
relevant to the three areas of focus identified:
x Focus area 1: Foster an orderly and inclusive transition to a net-zero economy.
x Focus area 2: Enable a sustainable and resilient workforce.
x Focus area 3: Partner for growth through innovative, sustainable, and impactful solutions.
Progress against each of these focus areas is reported to the QBE Group at the level of the EO division on a regular basis.
The Company does not enter into any direct energy consumption contracts. All disclosure relating to the Company’s
Streamlined Energy and Carbon Reporting (‘SECR’) requirements can be found in the accounts of its parent, QBE
European Operations plc.
QBE EO remains committed in this area over the short to medium term to strengthening our data and scenario analysis
and adapting our modelling; pricing; capital management; financial reporting and disclosure, in partnership with QBE
Group and external stakeholders.
QBE CASUALTY SYNDICATE 386
14
STRATEGIC REPORT (continued)
Business continuity management
An established business continuity management framework is in place to ensure the Company is able to respond
effectively to incidents that threaten business continuity and is designed to ensure that the impact of any major disruption
is minimised. The business continuity management framework is complimented by an operational resilience framework.
The business continuity management framework includes a set of crisis and specialist team plans, department-level
business continuity plans and technology recovery plans. It is supported by a range of activities, including staff awareness
and testing.
For all of the above interactions, the EO Board seeks to ensure that all stakeholder interests are considered.
This Strategic report was approved by the Board of Directors on 4 March 2025 and signed on its behalf by:
R C Stone
Director
QBE Underwriting Limited
London
QBE CASUALTY SYNDICATE 386
15
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
The Directors of QUL, the Managing Agent for the Syndicate, present their report and the audited annual accounts of the
Syndicate for the year ended 31 December 2024.
This annual report is prepared using the annual basis of accounting as required by regulation 5 of the Insurance Accounts
Directive (‘Lloyd’s Syndicate and Aggregate Accounts’) Regulations 2008 (‘the 2008 Regulations’).
Directors and officers
Details of the Directors and officers of the Managing Agent for the Syndicate are set out on page 2.
Strategic report
The Strategic report, which includes details of the Syndicate’s principal activities, business review, position and future
developments, performance and KPI’s, governance structure, risk management framework and climate change, is set out
on pages 3 to 14.
Internal audit
An internal audit department provides assurance to the Audit Committee as to the effectiveness of internal systems and
controls, makes recommendations for improvement and monitors progress towards completion via management action
plans. Internal audit also provides feedback on the risk management process.
Going concern
The Directors of the Managing Agent have reasonable expectations, having made appropriate enquiries, that the Syndicate
has adequate resources to continue in operational existence for the foreseeable future. The Directors of the Managing
Agent 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 12 months from the
date on which the accounts are authorised for issue. For this reason, they continue to adopt the going concern basis in
preparing the accounts.
Relationship with Managing Agent
QUL has adopted a code of conduct which outlines a set of general business ethics that apply to all employees when
conducting any activity on behalf of the Syndicate. The code of conduct requires employees to carry on business in an
open and honest manner with customers, shareholders, employees, regulatory bodies, outside suppliers, intermediaries,
and the community at large. The code also deals with a number of other requirements including whistleblowing,
confidentiality, disclosure of information, conflicts of interest and treating customers fairly. Other policies are in place to
cover areas such as health and safety, harassment, equal opportunities and financial crime.
Statement of Managing Agent’s responsibilities
The Directors of the Managing Agent are responsible for preparing the Strategic report, report of the Directors of the
Managing Agent and the annual accounts in accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (‘IAD’) requires the
Managing Agent to prepare annual accounts for each financial year. Under that law the Directors are required to prepare
the Syndicate annual accounts in accordance with UK generally accepted accounting practice (‘UK accounting standards
and applicable law’). The IAD requires that the Directors must not approve the annual accounts unless they are satisfied
that they give a true and fair view of the state of affairs of the Syndicate and of the profit and loss of the Syndicate for
that period.
In preparing these Syndicate annual accounts, the Managing Agent is required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• State whether applicable UK accounting standards have been followed, subject to any material departures
disclosed and explained in the annual accounts; and
• Prepare the annual accounts on the basis that the Syndicate will continue to write business unless it is
inappropriate to presume that the Syndicate will do so.
• Prepare and review that the iXBRL tagging that has been applied to the Syndicate Accounts in accordance with
the instructions issued by Lloyd’s, including designing, implementing and maintaining systems, processes and
internal controls, results in tagging that is free from material non-compliance with the instructions issued by
Lloyd’s, whether due to fraud or error.
QBE CASUALTY SYNDICATE 386
16
REPORT OF THE DIRECTORS OF THE MANAGING AGENT (continued)
Statement of Managing Agent’s responsibilities (continued)
The Directors of the Managing Agent are responsible for keeping proper accounting records that are sufficient to show
and explain the Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the
Syndicate and enable them to ensure that the Syndicate annual accounts comply with the IAD. They are also responsible
for safeguarding the assets of the Syndicate and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors of the Managing Agent are responsible for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of annual accounts may differ from
legislation in other jurisdictions.
Statement of disclosure of information to auditors
Each person who is a Director of the Managing Agent at the date of this report confirms that:
• So far as the Director is aware, there is no information relevant to the audit of the Syndicate’s annual accounts
for the year ended 31 December 2024 of which the auditors are unaware; and
• The Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or
herself aware of, and to establish that the Syndicate’s auditors are aware of, any relevant audit information.
Independent auditors
The Directors of the Managing Agent intend to reappoint PricewaterhouseCoopers LLP as the Syndicate’s auditors.
On behalf of the Board of the Managing Agent,
R C Stone
Director
QBE Underwriting Limited
London
4 March 2025
QBE CASUALTY SYNDICATE 386
17
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 386’s syndicate annual accounts:
x give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit and cash
flows for the year then ended;
x have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland”, and applicable law); and
x have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate Accounts
Instructions version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the
Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Annual Report, which comprise: the Balance sheet as
at 31 December 2024; the Profit and loss account – Technical account – Gener
al business, the Profit and loss account –
Non-technical account, the Statement of cash flows, and the Statement of changes in members’ balances for the year then
ended; and the notes to the syndicate annual accounts.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions
and other applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for
the audit of the syndicate annual accounts section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of
public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note, we have provided no non-audit services to the syndicate in the period under audit.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going concern for
a period of at least twelve months from when the syndicate annual accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern basis
of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual accounts and
our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the syndicate
annual accounts does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
18
QBE CASUALTY SYNDICATE 386
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386 (CONTINUED)
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the syndicate annual accounts or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
With respect to the Report of the Directors of the Managing Agent the “Managing Agent’s Report”), we also considered
whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Managing Agent’s
Report for the year ended 31 December 2024 is consistent with the syndicate annual accounts and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of Managing Agent’s responsibilities, the Managing Agent is responsible for
the preparation of the syndicate annual accounts in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The Managing Agent is also responsible for such internal control as they determine is
necessary to enable the preparation of syndicate annual accounts that are free from material misstatement, whether due to
fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis
of accounting unless it is intended for the syndicate to cease operations, or it has no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation
Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered
the extent to which non-compliance might have a material effect on the syndicate annual accounts. We also considered
those laws and regulations that have a direct impact on the syndicate annual accounts such as The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Instructions. We evaluated management’s incentives and opportunities for fraudulent manipulation of the syndicate
annual accounts (including the risk of override of controls), and determined that the principal risks were related to
the risk of fraud in revenue recognition and management override of controls, including the potential for
management bias in significant accounting estimates, particularly in relation to the claims incurred but not reported
portion of outstanding claims reserves (gross and reinsurers’ share), and the estimated portion of gross premiums
written. Audit procedures performed by the engagement team included:
QBE CASUALTY SYNDICATE 386
19
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386 (CONTINUED)
● inspecting relevant meeting minutes, including those of the Board and Audit Committee of the Managing Agent,
and correspondence with regulatory authorities, including Lloyd’s of London, the Prudential Regulatory Authority
and the Financial Conduct Authority;
● discussions with the Board, management, the compliance function and internal audit function of the Managing
Agent, including consideration of known or suspected instances of fraud and non-compliance with laws and
regulations;
● testing and challenging where appropriate the assumptions and judgements made by management in their
significant accounting estimates, particularly in relation to the claims incurred but not reported portion of
outstanding claims reserves (gross and reinsurer’s share), and the estimated portion of gross premiums written;
● testing journal entries identified in accordance with our risk assessment; and
● designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s members as a body in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for
no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required
to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
● certain disclosures of Managing Agent remuneration specified by law are not made; or
● the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been
applied. This auditors’ repor
t provides no assurance over whether the
iXBRL tagging has been applied in accordance with
section 2 of the Lloyd’s Syndicate Instructions 2.0.
Matthew Nichols (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
4 March 2025
QBE CASUALTY SYNDICATE 386
20
PROFIT AND LOSS ACCOUNT - TECHNICAL ACCOUNT - GENERAL BUSINESS
for the year ended 31 December 2024
2024 | 2023 | ||||
Note | £’000 | £’000 | £’000 | £’000 | |
| Earned premiums, net of reinsurance | |||||
Gross premiums written | 3 | ||||
Outward reinsurance premiums | ( | ( | |||
Premiums written, net of reinsurance | |||||
| Changes in unearned premium | |||||
| Change in the gross provision for unearned premiums | 12 | ||||
| Change in the provision for unearned premiums, reinsurers’ share | 12 | ( | |||
Net change in provisions for unearned premiums | |||||
| Earned premium, net of reinsurance | |||||
Allocated investment return transferred from the non-technical account | 7 | ||||
| Claims incurred, net of reinsurance | |||||
| Claims paid | |||||
Gross amount | 12 | ( | ( | ||
| Reinsurers’ share | 12 | ||||
Net claims paid | ( | ( | |||
Change in the provision for claims | |||||
Gross amount | 12 | ( | ( | ||
| Reinsurers’ share | 12 | ||||
| Net change in provision for claims | |||||
| Claims incurred, net of reinsurance | ( | ( | |||
| Net operating expenses | 4 | ( | ( | ||
| Balance on the technical account - general business |
The notes set out of pages 26 to 55 form an integral part of these annual accounts
QBE CASUALTY SYNDICATE 386
21
PROFIT AND LOSS ACCOUNT - NON-TECHNICAL ACCOUNT
for the year ended 31 December 2024
Restated* | |||
2024 | 2023 | ||
Note | £’000 | £’000 | |
| Balance on the technical account - general business | |||
Investment income | 7 | ||
Investment expenses and charges | 7 | ( | ( |
Realised gains / (losses) on investments | 7 | ( | |
Unrealised gains on investments | 7 | ||
| Investment return | |||
| Allocated investment return transferred to the general business technical account | ( | ( | |
Gain on foreign exchange | |||
Profit for the financial year | |||
| Total comprehensive income for the year |
* The comparative figures for the realised and unrealised gains and losses on investments have been restated to present
them on a disaggregated basis to align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance.
Please see note 1(m) for further information.
The results above are derived from continuing operations.
There are no recognised gains or losses for the current and preceding year other than those included in the profit and loss
account above and therefore no statement of recognised gains and losses has been presented.
The notes set out of pages 26 to 55 form an integral part of these annual accounts
QBE CASUALTY SYNDICATE 386
22
STATEMENT OF CHANGES IN MEMBERS’ BALANCES
for the year ended 31 December 2024
2024 | 2023 | |
| £’000 | £’000 | |
| Members’ balances brought forward at 1 January | ||
Total comprehensive income for the year | ||
| Members’ agents fees | ||
| Other - Non-standard personal (expense) / income | ( | |
| Losses collected in relation to distribution on closure of underwriting year | ||
| Payments of profit to members’ personal reserve funds | ( | |
| Members’ balances carried forward at 31 December |
The notes set out of pages 26 to 55 form an integral part of these annual accounts
QBE CASUALTY SYNDICATE 386
23
BALANCE SHEET
As at 31 December 2024
Restated* | |||
| Assets | 2024 | 2023 | |
Note | £’000 | £’000 | |
| Investments | |||
Financial investments | 8 | ||
Deposits with ceding undertakings | |||
| Reinsurers’ share of technical provisions | |||
Provision for unearned premiums | 12 | ||
Claims outstanding | 12 | ||
| Debtors | |||
Debtors arising out of direct insurance operations | 14(i) | ||
Debtors arising out of reinsurance operations | 14(ii) | ||
Other debtors | 14(iii) | ||
| Other assets | |||
Cash at bank and in hand | |||
Other | 16 | ||
| Prepayments and accrued income | |||
Accrued interest and rent | |||
Deferred acquisition costs | 17 | ||
Other prepayments and accrued income | |||
| Total assets |
* The comparative figures have been restated to account for the reclassification of money market funds and as
investments, as well as reclassification between Debtors arising out of reinsurance operations and Debtors arising out
of direct insurance operations. In addition, overseas deposits, previously shown as a separate balance sheet item, has
been reclassified as “Other” within other assets. Please see note 1(m) for further information.
The notes on pages 26 to 55 form an integral part of these accounts.
QBE CASUALTY SYNDICATE 386
24
BALANCE SHEET (continued)
As at 31 December 2024
| Liabilities | 2024 | 2023 | |
Note | £’000 | £’000 | |
Capital and reserves | |||
| Members’ balances | |||
Technical provisions | |||
Provision for unearned premiums | 12 | ||
Claims outstanding | 12 | ||
Creditors | |||
| Creditors arising out of direct insurance operations | 22(i) | ||
Creditors arising out of reinsurance operations | 22(ii) | ||
| Other creditors including taxation and social security | 23 | ||
| Accruals and deferred income | |||
Total liabilities | |||
| Total liabilities, Capital and reserves |
These annual accounts on pages 20 to 55 were approved by the Board of QBE Underwriting Limited on 4 March 2025
and signed on its behalf by:
R C Stone
Director
The notes set out on pages 26 to 55 form an integral part of these annual accounts
QBE CASUALTY SYNDICATE 386
25
STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
2024 | 2023 | ||
| £’000 | £’000 | ||
Cash flows from operating activities | |||
Profit for the financial year | |||
| Increase in gross technical provisions | |||
| Increase in reinsurers’ share of technical provisions | ( | ( | |
Decrease in debtors | |||
(Decrease) / Increase in creditors | ( | ||
Investment return | ( | ( | |
Other (incl. foreign exchange) | |||
| Net cash flows (used in) / generated from operating activities | ( | ||
| Cash flows from investing activities | |||
| Purchase of equity and debt instruments | ( | ( | |
Sale of equity and debt instruments | |||
Purchase of derivatives | ( | ( | |
Sale of derivatives | ( | ||
Investment income received | |||
Other (incl. deposits with ceded undertakings) | |||
| Net cash flows generated from / (used in) investing activities | ( | ||
Cash flows from financing activities | |||
(Profit distribution) / open year cash calls made | ( | ||
Other | |||
| Net cash flows (used in) / generated from financing activities | ( | ||
| Movement in cash, portfolio investments and financing | |||
Cash and cash equivalents at the beginning of the year | |||
| Net increase / (decrease) in cash and cash equivalents | ( | ||
Foreign exchange on cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the end of the year | 15 |
The notes set out on pages 26 to 55 form an integral part of these annual accounts
QBE CASUALTY SYNDICATE 386
26
NOTES TO THE ANNUAL ACCOUNTS
for the year ended 31 December 2024
1. Accounting policies
The principal accounting policies adopted in the preparation of these annual accounts are set out below. These policies
have been consistently applied to all the years presented unless otherwise stated. The comparative period is the 12 months
ended 31 December 2023 .
(a) Basis of preparation
These annual accounts have been prepared in accordance with regulation 5 of the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, and in compliance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and
the Republic of Ireland” (“FRS 102”), Financial Reporting Standard 103 “Insurance Contracts” (“FRS 103”), 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 accounts incorporate all transactions committed to by the 2024 year of account and prior years of account.
The Directors of the Managing Agent have prepared the annual accounts on the basis that the Syndicate will continue to
write future business. The ability of the Syndicate to meet its obligations as they fall due is underpinned by the support
provided by the Lloyd’s solvency process and its chain of security for any members who are unable to meet their
underwriting liabilities. Members Funds at Lloyd’s are further explained in note 2.
All amounts have been rounded to the nearest thousand, unless otherwise indicated. Comparative balances previously
rounded to the nearest million, have been re-presented in thousands without recalibrating the amounts to the nearest
thousand. In certain movement disclosures, this has resulted in a gap between comparative closing balances and current
year opening balances, which are deemed not material. Certain comparative balances in the primary statements and
disclosure notes have been restated based on the disclosure requirements from Lloyd’s. These restatements have not
resulted in any impact to the opening members’ balances. Details of the restatements are set out in note 1(m).
(b) Basis of accounting for insurance
The result is determined on an annual basis whereby the incurred cost of claims, commission and related expenses are
charged against the earned portion of premiums, net of reinsurance as described below:
(i) Premiums written
Premium comprises amounts charged to policyholders, excluding taxes collected on behalf of third parties. The
earned portion of premium received and receivable, including unclosed business, is recognised as revenue.
Premium on unclosed business is brought to account based upon the pattern of booking of renewals and new
business. Unclosed business is insurance written close to the year end for which the date of attachment of risk is
prior to the year end, and where an estimate is made due to insufficient information being available.
(ii) Unearned premiums
Unearned premiums represent the proportion of premiums written in the year that relates to the unexpired terms
of policies in force at the balance sheet date, calculated on the basis of established earnings patterns using either
the daily pro-rata method or the 24ths method, adjusted where appropriate to reflect different risk patterns, and
may include straight line earnings patterns where appropriate.
(iii) Outwards reinsurance premiums written
Outwards reinsurance premiums written relate to business ceded during the year, including an estimate of any
adjustment premiums payable, together with any differences between estimates in the prior years and that
actually ceded. Outwards premiums are recognised as earned over the period of the policy having regard to the
incidence of risk. Policies that respond with reference to the attachment point are earned in line with the related
inwards written premiums.
(iv) Claims incurred
Claims incurred comprise claims and related expenses paid in the year and changes in provisions for outstanding
claims, including provisions for claims incurred but not reported and related expenses, together with any other
adjustments to claims from previous years.
(v) Claims outstanding
Provisions are made for the estimated cost of claims incurred but not settled at the balance sheet date, including
the cost of claims incurred but not yet reported to the Syndicate.
QBE CASUALTY SYNDICATE 386
27
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(b) Basis of accounting for insurance (continued)
(v) Claims outstanding (continued)
Outstanding claims are estimated by reviewing individual claims and making allowance for claims incurred but
not reported using past experience and trends adjusted for foreseeable events.
Case estimates are set by experienced claims technicians, applying their skill and specialist knowledge to the
circumstances of individual claims. The ultimate cost of outstanding claims, including claims incurred but not
reported, is estimated by the Syndicate actuaries who apply recognised actuarial techniques considered
appropriate for each portfolio, such as the Chain Ladder and Bornhuetter-Ferguson methods. These methods
consider, amongst other things, statistical analysis of the development of the value and frequency of past claims
and the results of analyses undertaken at the point of underwriting. Techniques considered appropriate for
specific portfolios include contract by contract analysis, segmentation by subclass, and stochastic analysis.
Classes of business are analysed at a level of detail appropriate to their materiality. Allowance is made for
changes or uncertainties which may create distortions in the underlying statistics, or which might cause the cost
of unsettled claims to increase or decrease when compared with the cost of previously settled claims, for example,
one-off occurrences and changes in mix of business, policy conditions or the legal environment.
The Syndicate actuaries produce an estimate of reserves, which is reviewed by an independent actuarial firm,
and is assessed by QBE EO management with input from the Syndicate underwriting and claims experts.
As provisions for claims outstanding are based on information, which is currently available, the eventual outcome
may vary from the original assessment depending on the nature of information received or developments in
future periods. For certain classes of business including liability and other long-tail classes written by the
Syndicate, claims may not be apparent for many years after the event giving rise to the claim has happened.
These classes will typically display greater variation between initial estimates and final outcomes.
Differences between the estimated cost and subsequent re-estimation or settlement of claims are reflected in the
technical account for the year in which these claims are re-estimated or settled.
Provisions are calculated gross of any reinsurance recoveries. In accordance with accounting regulations,
discounting of outstanding claims is permitted in certain circumstances. For the Syndicate this includes
discounting of outstanding reserves in respect of liabilities relating to periodical payment orders.
(vi) Reinsurance recoveries
An estimate is made of the amounts that will be recoverable from reinsurers based upon the gross claims
provisions and having due regard to collectability. Reinsurance recoveries are estimated by reviewing individual
claims including allowance for claims incurred but not reported and assessing the reinsurance recovery which is
expected based on the outwards reinsurance protections. Reinsurance recoveries estimates are set by experienced
outwards reinsurance technicians, applying their skill and specialist knowledge to the circumstances of individual
claims and the outwards reinsurance protections.
(vii) Unexpired risks provision
Provisions are made for any deficiencies arising when unearned premiums, net of associated acquisition costs,
are insufficient to meet expected claims and expenses after taking into account future investment return on the
investments supporting the unearned premiums provision and unexpired risks provision. The expected claims
are calculated having regard to events that have occurred prior to the balance sheet date.
All business classes are managed together therefore unexpired risk surpluses and deficits can be offset.
At the reporting date, deferred acquisition costs represent the capitalised costs that relate to the unearned
premium. Acquisition costs are deferred in recognition of their future benefit and are measured at cost
.
(viii) Acquisition costs
Acquisition costs (which include commission costs) are the costs associated with obtaining and recording
insurance contracts. Acquisition costs are capitalised when they relate to the acquisition of new business or
renewal of existing business and are referred to as deferred acquisition costs. These costs are amortised on the
same basis as the earning pattern of the premium, over the period of the insurance contract to which they relate.
QBE CASUALTY SYNDICATE 386
28
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(c) Foreign currency
The functional currency of the Syndicate is UK pound sterling (£). The Syndicate presents its accounts in thousands of
Transactions denominated in foreign currencies are translated into sterling at the rates of exchange prevailing at the time
of the transactions. Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of
exchange prevailing at the balance sheet date with the exception of non-monetary assets and liabilities, which are
maintained at historic rates. Open foreign exchange derivatives are marked to market at year end date. All assets and
liabilities arising from insurance contracts are treated as monetary items.
Exchange gains or losses are recognised in the profit and loss non-technical account.
(d) Investments
(i) Other financial investments
Other financial investments comprise shares and other variable yield securities, units in unit trusts, debt
securities, other fixed income securities, loans and deposits with credit institutions. These are managed on a fair
value basis in accordance with the Syndicate’s investment strategy. The Syndicate has elected to measure other
financial investments at fair value through the profit and loss non-technical account. All fair value gains and
losses on other financial investments are reallocated to the technical account as all investments held by the
Syndicate support its insurance operations.
Listed investments are stated at fair value using quoted prices in active markets for the same instruments where
available. In the absence of an active market, current or recent prices for similar instruments may be used to
estimate fair value, or other valuation techniques for which all significant inputs are based on observable market
data.
Units in unit trusts, including unit trusts which invest in property, are stated at fair value using current unit prices
as advised by the responsible entity, trustee or equivalent of the investment management scheme.
Other unlisted investments are carried at the Directors’ estimate of the current fair value, where prices are sourced
from the investment manager who may use a combination of observable and comparable market prices where
available and carried book value where none exist.
Loans to the Central Fund at Lloyd’s are included within Shares and other variable yield securities and units in
unit trusts. The loans are valued based on amounts collected by Lloyd’s on a percentage of the Syndicate gross
written premium forecast. There is no contractual obligation for Lloyd’s to settle the loans and there is no market
in which these loans are tradeable. The loans are valued at fair value.
Other financial investments are derecognised when the right to receive future cash flows from the assets has
expired, or when the Syndicate has transferred substantially all the risks and rewards of ownership.
(ii) Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently stated at fair value through the profit and loss non-technical account, using valuation techniques
for which all significant inputs are based on observable market data.
(e) Cash at bank and in hand
Cash at bank and in hand comprises cash at bank and deposits which are used by the Syndicate in the management of its
short-term commitments and operational cash requirements.
(f) Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and other short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.
QBE CASUALTY SYNDICATE 386
29
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(g) Overseas deposits
Overseas deposits, classified as “Other” in Other Assets, comprise funds held in overseas deposits which are subject to
Lloyd’s trust fund arrangements. These are managed on a fair value basis in accordance with Lloyd’s investment strategy.
The Syndicate has elected to measure overseas deposits at fair value through the profit and loss non-technical account.
Overseas deposits are stated at fair value using quoted prices in active markets for the same instruments where available.
In the absence of an active market, current or recent prices for similar instruments may be used to estimate fair value, or
other valuation techniques for which all significant inputs are based on observable market data.
Overseas deposits are derecognised when the right to receive future cash flows from the assets has expired, or when the
Syndicate has transferred substantially all the risks and rewards of ownership.
(h) Debtors
Debtors comprise amounts receivable in the normal course of business. Debtors are initially recognised at transaction
price, and where applicable are subsequently measured at amortised cost using the effective interest rate method. The
recoverability of these assets is assessed at each balance date and appropriate provision made to ensure that the balances
properly reflect the amounts that will ultimately be received, considering counterparty credit risk and the contractual
terms of the contract.
(i) Creditors
Creditors comprise amounts due in the normal course of business. Creditors are initially recognised at transaction price,
and where applicable are subsequently measured at amortised cost using the effective interest rate method. Amounts owed
to group undertakings are unsecured, interest free and payable on demand, except where specific loan agreements exist
prescribing the term and other features of the loan.
(j) Investment income
Investment income is taken into account in the profit and loss non-technical account on an accruals basis, except for
dividends which are taken into account when quoted ex dividend. Investment income includes realised gains or losses on
the disposal of financial assets.
A transfer is made from the non-technical account to the technical account for the entire return on investments which
support the insurance technical provisions.
(k) Taxation
Under Schedule 19 of the Finance Act 1993, Managing Agents are not required to deduct basic rate income tax from
trading income. In addition, all UK basic rate income tax deducted from syndicate investment income is recoverable by
Managing Agents and consequently the distribution made to the member is gross of tax. Capital appreciation falls within
trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or investment
earnings. Any payments on account made by the Syndicate on behalf of the members’ during the year are included in the
balance sheet under the heading “members’ balance”.
No provision has been made for any overseas tax payable by members on underwriting results.
(l) Administrative expenses
Administrative expenses are considered on an accrual basis. These recharged expenses include the costs of staff, who are
employed by QBE Management Services (UK) Limited. QBE Management Services (UK) Limited operates both defined
benefit and defined contribution pension schemes, the expense of which is included in the recharges. The recharged
expenses also include the costs of various service and claims handling companies.
(m) Profit commission
Profit commission is charged by the Managing Agent at a rate of 20% of profit subject to the operation of a deficit clause.
Profit commission is recognised on the basis of the annual accounting result for each year of account. It is charged to the
Syndicate as incurred.
(n) 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 the
current year presentation and compliance with the Lloyd’s Syndicate Accounts instructions. The changes comprise:
QBE CASUALTY SYNDICATE 386
30
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(m) Restatement of comparative information (continued)
Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The
principal change is the reclassification of overseas deposits, previously shown as a separate balance sheet item, to form
part of other assets. The comparative balances in note 16 have also been represented to align with the current period
presentation.
Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated
or disaggregated within the accounts and related notes. This includes the presentation of realised and unrealised gains and
losses on investments, which are now shown on a disaggregated basis in the Non-technical account of the Statement of
profit or loss and other comprehensive income.
Classification correction
A correction to the classification of money market funds as investments (previously included in cash at bank and in hand),
in line with the requirements of FRS 102. The correction resulted in a decrease of £14,745k in cash at bank and in hand
and an increase in investments. A further correction to the classification of a reinsurance debtor as Debtors arising out of
reinsurance operations (previously Debtors arising out of direct insurance operations). The correction resulted in a
decrease in Debtors arising out of direct insurance operations of £12,805k and an increase in Debtors arising out of
reinsurance operations.
The restatements have been applied retrospectively and had no impact on previously reported profit, total comprehensive
income, total assets, total liabilities or total capital and reserves.
(n) Critical accounting estimates and judgements
The Syndicate makes estimates and judgments in respect of the reported amounts of certain assets, liabilities and income.
These estimates and judgments are determined by qualified and experienced employees with reference to historical data
and reasoned expectations of future events and are continually updated. Actual results may differ from these estimates.
Estimates which are sensitive to changes in future economic conditions could be impacted by significant changes in the
economic and regulatory environment, such as geopolitical unrest, supply chain disruptions, climate change and inflation.
The key uncertainty is the risk that inflation remains higher than expected over the coming years, and elevated for longer
than expected, or the impact on claims inflation is significantly higher which would lead to increased claims reserves.
Our estimates include an explicit allowance for the impact of increased levels of inflation. Management continues to
monitor the geopolitical environment in which the Syndicate operates, the unrest in the Middle East and any developments
that may impact its assessment of potential exposures.
The following are the critical estimates that the Syndicate has made in the process of applying the accounting policies
and that have the most significant effect on the amounts recognised in the accounts.
Outstanding claims provisions
The Syndicate’s net outstanding claims provision comprises:
• The gross estimate of expected future claims payments; and
• Amounts recoverable from reinsurers based on the gross estimate.
Gross estimate
The provision for expected future payments includes claims reported but not yet paid; claims incurred but not reported
(‘
IBNR’); claims incurred but not enough reported (‘IBNER’); and estimated claims handling costs, being the direct and
indirect expenses incurred in the settlement of claims.
The estimation of IBNR is generally subject to a greater degree of uncertainty than the estimation of the cost of settling
claims already notified to the Syndicate, where more information about the claims is generally available. Liability and
other long tail classes of business, where claims settlement may not happen for many years after the event giving rise to
the claim, typically display greater variability between initial estimates and final settlement due to delays in reporting
claims and uncertainty in respect of court awards and future claims inflation. Claims in respect of property and other short
tail classes are typically reported and settled sooner after the claim event, giving rise to more certainty. The estimation
techniques and assumptions used in determining the gross estimate are described below.
QBE CASUALTY SYNDICATE 386
31
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(n) Critical accounting estimates and judgements (continued)
Outstanding claims provisions (continued)
The Syndicate’s process for establishing the gross estimate involves extensive consultation with internal and external
actuaries, claim managers, underwriters and other senior management. This process includes quarterly in-house claims
review meetings attended by senior divisional and management and detailed review by external actuaries at least annually.
The determination of the amounts that the Syndicate will ultimately pay for claims arising under insurance and reinsurance
contracts involves a number of critical assumptions. Some of the uncertainties impacting these assumptions are as follows:
• Changes in patterns of claims incidence, reporting and payment;
• Volatility in the estimation of future costs for long tail insurance classes due to the longer period of time that
elapses before a definitive determination of the ultimate claims cost can be made;
• Incidence of catastrophic events close to the balance sheet date;
• Changes in the legal environment, including the interpretation of liability laws and the quantum of damages
including but not limited to Ogden rate changes; and;
• Social and economic trends, for example price and wage inflation and interest rates.
Gross estimates for each class of business are determined by reference to a variety of estimation techniques, generally
based on a statistical analysis of historical experience which assumes an underlying pattern of claims development and
payment. The final selected estimates are based on a judgmental consideration of the results of each method and
qualitative information, for example, the class of business, the maturity of the portfolio and the expected term to settlement
of the class. Projections are based on both historical experience and external benchmarks where relevant.
Estimates are calculated gross of any reinsurance recoveries. A separate estimate is made of the amounts recoverable
from reinsurers based on the gross estimate.
Assets arising from contracts with reinsurers
Assets arising from reinsurance recoveries under contracts with the Syndicate’s reinsurers are determined using the same
methods described above. The recoverability of these assets is assessed at each balance date and appropriate provisions
made to ensure that the balances properly reflect the amounts that will ultimately be received, considering counterparty
credit risk and the contractual terms of the reinsurance contract.
The Syndicate benefits from an aggregate reinsurance programme that provides cover for certain large and catastrophe
events. A key input into the calculation of recoveries on this contract is an estimate of the ultimate claims for the
contributing large and catastrophe events by accident year. Actuarial reserving primarily produces ultimate claims by
underwriting year, with some judgement required to assign IBNR to an accident year, particularly on more recent accident
years which are still immature in their development for certain large losses on long tail classes of business.
Premiums estimates
Premiums written and earned include signed premiums as well as unclosed premiums, being business which has an
attachment date prior to the end of the reporting period but which has not yet been processed into the systems utilised by
the Syndicate. This unclosed premium is initially based on the estimated premium income (
‘EPI’) of each contract, before
being written and earned based on established patterns which reflect expected timings and risk exposures. If premium
cannot be reliably estimated at that date, then the premium written is recognised as soon as it can be reliably determined.
The underwriters adjust their EPI estimates as the year of account matures. At the end of the calendar year, premiums are
adjusted to match the actual signed premium for the closing year of account and all closed years of account, as appropriate.
Estimation techniques are necessary to quantify the EPI on all syndicate business written and are commonly used within
the Lloyd’s insurance market. The process of determining the EPI is based on several factors, which can include:
• Historical trends of business written versus expectation;
•
Current and expected market conditions for the line of business; and
•
Coverholder business plan documents provided prior to binding.
Due to the nature of the Lloyd’s business and the settlement patterns of the underlying business it is also not uncommon
for some contracts to take a number of years to finalise and settle, and as such remain as a receivable on the balance sheet.
There are no critical judgments made in the preparation of these annual accounts.
QBE CASUALTY SYNDICATE 386
32
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
2. Capital management
Capital framework at Lloyd’s
The Society of Lloyd’s (‘Lloyd’s’) is a regulated undertaking and subject to supervision by the Prudential Regulatory
Authority (‘PRA’) under the Financial Services and Markets Act 2000, and in accordance with the Solvency II
Framework.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that
Lloyd’s would comply with the Solvency II requirements, and beyond that to meet its own financial strength, licence, and
ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level as a starting
point, the requirement to meet Solvency II and Lloyd’s capital requirements apply at an overall and member level only
respectively, not at syndicate level. Accordingly, the capital requirement in respect of Syndicate 386 is not disclosed in
these accounts.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirements (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 comprises one or more underwriting members of Lloyd’s. Each member is liable for its own share of
underwriting liabilities on the syndicates on which it is participating but not other members’ shares. Accordingly, the
capital requirements that Lloyd’s set for each member operate on a similar basis. Each member’s SCR shall thus be
determined by the sum of the member’s share of the syndicate’s SCR ‘to ultimate’.
Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the spread of
risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’
for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s capital requirement, known as the
Economic Capital Assessment (‘ECA’). The purpose of this uplift, which is a Lloyd’s and not a Solvency II requirement,
is to meet Lloyd’s financial strength, licence and rating objectives. The capital uplift applied for 2024 was maintained at
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’), assets held and managed within a syndicate (‘funds in syndicate’), or as the member’s share of the
members’ balances on each syndicate on which it participates. Accordingly, all of the assets less liabilities of the
Syndicate, as represented in the members’ balances reported on the balance sheet on page 23 and 24, represent resources
available to meet members’ and Lloyd’s capital requirements.
Funds at Lloyd’s
Funds at Lloyd’s (‘FAL’) are intended primarily to cover circumstances where syndicate assets prove insufficient to meet
participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is
determined by Lloyd’s based on PRA requirements and resource criteria. FAL has regard to a number of factors including
the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of
business that has been underwritten. Since FAL is not under the management of the Managing Agent, no amount has been
shown in these accounts 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 through a formal process controlled by Lloyd’s.
QBE CASUALTY SYNDICATE 386
33
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
3. Segmental information
An analysis of the underwriting result before investment return is presented in the table below:
2024
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Total
£’000
£’000
£’000
£’000
£’000
£’000
Direct insurance
Third party liability
297,588
314,832
(251,570)
(84,291)
18,664
(2,365)
Reinsurance acceptances
Third party liability
73,658
75,187
(53,753)
(19,052)
(6,403)
(4,021)
Total
371,246
390,019
(305,323)
(103,343)
12,261
(6,386)
2023
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Total
£’000
£’000
£’000
£’000
£’000
£’000
Direct insurance
Third party liability
327,400
338,500
(200,400)
(103,500)
(22,500)
12,100
Reinsurance acceptances
Third party liability
87,800
98,600
(78,700)
(24,600)
(7,100)
(11,800)
Total
415,200
437,100
(279,100)
(128,100)
(29,600)
300
A gain of £12,261k was recognised in profit or loss during the year on buying reinsurance (2023: Loss of £29,600k).
Operating expenses includes standard personal expenses and reinsurance related expenses.
Gross premium written by destination
2024
2023
£’000
£’000
United Kingdom
173,359
152,400
European Union Member States
1,566
2,800
United States
5,827
8,000
Rest of world *
190,494
252,000
Total gross premiums written
371,246
415,200
* Rest of world include Worldwide cover, Other America, Asia, Africa, Oceania and Middle East.
All premiums were concluded in the UK.
QBE CASUALTY SYNDICATE 386
34
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
4. Net operating expenses
2024
2023
£’000
£’000
Acquisition costs
81,192
89,500
Change in deferred acquisition costs
362
4,200
Administrative expenses
8,496
13,800
Members’s standard personal expenses
13,293
21,000
Reinsurance commission revenue
(2,036)
(400)
Net operating expenses
101,307
128,100
Total commissions for direct insurance business for the year amounted to:
2024
2023
£’000
£’000
Total commissions for direct insurance business
41,010
46,300
Administrative expenses include:
2024
2023
£’000
£’000
Auditors’ remuneration:
Fees payable to the Syndicate’s auditors for the auditing of these accounts
527
300
Fees payable to the Syndicate’s auditors for other services pursuant to
regulatory requirements
53
200
5. Employees
The Syndicate and managing agent did not directly incur staff costs during the year (2023: £nil). Staff are jointly employed
by QBE Management Services (UK) Limited and QBE Europe SA/NV, as well as QBE Management (Ireland) Limited,
to provide services to the Company during the year and up to the date of signing. QBE Management Services (UK)
Limited recharged the Syndicate for the services, provided by these staff, via QBE Partner Services (Europe) LLP up to
August 2023 and then directly for the remainder of the prior and current year. QBE Management Services (UK) Limited,
QBE Europe SA/NV, QBE Management (Ireland) Limited and QBE Partner Services (Europe) LLP (up to August 2023)
are fellow group undertakings.
6. Directors’ emoluments and key management compensation
The Directors of QUL and the Active Underwriter received the following aggregate remuneration charged to the
Syndicate and included within net operating expenses:
2024
2023
£’000
£’000
Directors of the Managing Agent
200
210
Active Underwriter
52
53
Further information in respect of the Directors of QUL is provided in that company’s annual report.
QBE CASUALTY SYNDICATE 386
35
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
7. Investment return
2024
Restated *
2023
£’000
£’000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
25,220
23,600
From financial assets at amortised cost
Interest on cash at bank
5,456
3,800
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
12,182
-
Losses on the realisation of investments
-
(4,000)
Unrealised gains on investments
5,395
42,800
Investment management expenses
(1,740)
(1,100)
Total investment return
46,513
65,100
Transferred to the technical account from the non-technical account
(46,513)
(65,100)
* The comparative figures for the investment return have been restated to align with Lloyd's reporting requirements
whilst maintaining FRS 102 compliance. Interest and similar income (previously included in Income from
investments) have been presented on a disaggregated basis, whilst net losses on the realisation of investments are
presented on an aggregated basis (previously separately disclosed as gains on realisation of investments and losses on
realisation of investments), as set out in note 1(m).
The investment return was wholly allocated to the technical account as all investments held support the underwriting
activities of the Syndicate.
8. Financial investments
2024
Restated *
2023
Cost
Fair value
Cost
Fair value
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in unit trusts
93,466
103,502
44,200
67,900
Debt securities and other fixed income securities
848,039
829,347
975,200
965,100
Derivative assets
-
3,420
-
5,600
Total financial investments
941,505
936,269
1,019,400
1,038,600
The amount ascribable to listed investments is £900,253k (2023: £984,600k).
The table below presents an analysis of financial investments by their measurement classification:
2024
Restated *
2023
£’000
£’000
Financial assets measured at fair value through profit and loss
936,269
1,038,600
Total financial investments
936,269
1,038,600
* The comparative figures have been restated to account for the reclassification of money market funds as investments,
as set out in note 1(m).
QBE CASUALTY SYNDICATE 386
36
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
9. Derivative financial instruments
The below table analyses the derivative assets and liabilities by type:
2024
2023
Notional
amount
Fair value
Notional
amount
Fair value
£’000
£’000
£’000
£’000
Foreign exchange forward contracts
376,102
3,420
252,400
5,600
Total
376,102
3,420
252,400
5,600
Foreign exchange forward contracts
The Syndicate uses forward foreign exchange derivatives in order to hedge its exposure to foreign currencies. These are
valued using the underlying foreign exchange rates at the year end. Contractual amounts for foreign currency exchange
derivatives outstanding at the balance sheet date include foreign exchange contracts to buy the net contract equivalent of
£376,102k (2023: buy £252,400k).
The forward foreign exchange derivatives outstanding at year end all expire by 25 September 2025 (2023: 2 October
2024).
During the year a gain of £16,612k (2023: gain of £12,100k) relating to such contracts was recognised in the profit and
loss non-technical account.
Equity derivatives
The Syndicate enters into equity derivatives from time to time in order to facilitate efficient portfolio management and
the management of market risk. The Syndicate did not hold any equity derivatives during the year (2023: £nil).
10. Valuation hierarchy
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting date by
its level in the fair value hierarchy.
2024
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and variable yield securities and units in
unit trusts
37,155
30,164
36,183
103,502
Debt securities and other fixed income securities
176,896
652,451
-
829,347
Derivative assets
-
3,420
-
3,420
Other assets – Overseas deposits
96,383
69,851
-
166,234
Total
310,434
755,886
36,183
1,102,503
2023 Restated *
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and variable yield securities and units in
unit trusts
14,700
14,700
38,500
67,900
Debt securities and other fixed income securities
172,800
792,300
-
965,100
Derivative assets
-
5,600
-
5,600
Other assets – Overseas deposits
107,200
82,900
-
190,100
Total
294,700
895,500
38,500
1,228,700
* The comparative figures have been restated to account for the reclassification of money market funds as investments,
as set out in note 1(m).
QBE CASUALTY SYNDICATE 386
37
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
10. Valuation hierarchy (continued)
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value hierarchy based
on the inputs used in the valuation techniques as follows:
Level 1 Financial assets measured by reference to published quotes in active markets. A financial instrument is
regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm’s length basis.
Level 2 Financial assets measured using a valuation technique based on assumptions that are supported by prices from
observable current market transactions. For example, assets for which pricing is obtained via pricing services
but where prices have not been determined for an active market, financial assets with fair values based on
broker quotes, investments in private equity funds with their fair values obtained via fund managers and assets
that are valued using the Syndicate’s own models whereby the significant inputs into the assumptions are
market observable.
Level 3 Financial assets measured using a valuation technique (model) based on assumptions that are neither supported
by prices from observable current market transaction sin the same instrument nor are they based on available
market data. Therefore, unobservable inputs reflect the Syndicate’s own assumptions about the assumptions
that market participants would use in pricing the asset or liability (including assumptions about risk). These
inputs are developed based on the best information available, which might include the Syndicate’s own data.
2024
2023
Movements in level 3 investments
£’000
£’000
At 1 January
38,474
41,000
Purchases
815
300
Redemptions
(5,666)
(2,200)
Unrealised gains / (losses)
2,560
(600)
At 31 December
36,183
38,500
The Syndicate’s approach to measuring the fair value of investments is described below:
(i) Shares and other variable yield securities and units in unit trusts
These assets mainly comprise listed equities traded in active markets valued by reference to quoted prices.
(ii) Debt securities and other fixed income securities
These assets are valued based no quoted prices sourced from external data providers. The fair value categorisation of
these assets is based on the observability of the inputs.
(iii) Derivative assets
For derivative assets traded in an active market, the fair value is determined by reference to quoted market prices.
(iv) Other assets – overseas deposits
Overseas deposits managed as part of the investment portfolio is categorised as Level 1 in the fair value hierarchy. Term
are valued at par.
11. Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets are
sufficient to fund the obligations arising from its insurance contracts.
The activities of the Syndicate expose it to financial risks such as market risk (including currency risk, interest rate risk
and equity price risk), credit risk and liquidity risk. The Syndicate’s risk management framework recognises the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Syndicate.
The key objectives of the Syndicate’s asset and liability management strategy are to ensure sufficient liquidity is
maintained at all times to meet the Syndicate’s obligations, including its settlement of insurance liabilities and, within
these parameters, to optimise investment returns for the Syndicate.
QBE CASUALTY SYNDICATE 386
38
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market factors. Market risk comprises three types of risk: currency risk (due to
fluctuations in foreign exchange rates), interest rate risk (due to fluctuations in market interest rates) and price
risk (due to fluctuations in market prices).
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
a) Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
b) Sensitivity analyses
The sensitivity analyses in the sections below are performed for reasonably possible movements in indices
on financial instruments with all other variables held constant, showing the impact on the result before tax
due to changes in fair value of financial assets and liabilities (whose fair values are recorded in the profit and
loss account) and members’ balances.
The sensitivity analyses demonstrate 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 analyses are based on the Syndicate’s financial position at the reporting
date and may vary at the time that any actual market movement occurs. As investment markets move past
pre-determined trigger points, action would be taken which would alter the Syndicate’s position.
c) Currency risk
The Syndicate writes business primarily in Sterling (‘GBP’), US dollar (‘USD’), Euro, Canadian dollar
(‘CAD’) and Australian dollar (‘AUD’) and is therefore exposed to foreign currency risk in respect of its
foreign currency exposures arising from fluctuations in these exchange rates. The Syndicate manages its
exposure to foreign currencies based on the balance sheet by currency which also includes insurance assets
and liabilities. Forward foreign exchange derivatives are used to protect the currency positions.
The risk management process covering forward foreign exchange derivatives involves close senior
management scrutiny, including regular board and other management reporting. All forward foreign
exchange derivatives are subject to delegated authority levels provided to management, and levels of
exposure are reviewed on an ongoing basis.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
QBE CASUALTY SYNDICATE 386
39
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
c) Currency risk (continued)
2024
GBP
USD
Euro
CAD
AUD
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
346,324
84,448
183,976
312,551
21,536
-
948,835
Reinsurer’s share of
technical provisions
120,062
87,389
28,608
21,026
155,048
5,829
417,962
Debtors
120,643
(8,636)
(6,985)
15,898
21,901
1,489
144,310
Other assets
5,334
8,970
2,721
33,301
116,439
14,480
181,245
Prepayments and accrued
income
32,327
3,745
3,573
6,149
4,290
464
50,548
Total assets
624,690
175,916
211,893
388,925
319,214
22,262
1,742,900
Technical provisions
(750,612)
(170,639)
(200,216)
(183,328)
(216,021)
(22,869)
(1,543,685)
Creditors
100,943
(92,249)
69,729
(177,121)
22,781
(622)
(76,539)
Accruals and deferred
income
(1,677)
-
-
405
-
-
(1,272)
Total liabilities
(651,346)
(262,888)
(130,487)
(360,044)
(193,240)
(23,491)
(1,621,496)
Total capital and reserves
(26,656)
(86,972)
81,406
28,881
125,974
(1,229)
121,404
2023
GBP
USD
Euro
CAD
AUD
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
451,700
83,000
167,000
335,000
6,000
-
1,042,700
Reinsurer’s share of
technical provisions
154,000
124,000
23,000
15,000
29,000
600
345,600
Debtors
91,500
14,000
7,100
20,000
26,000
600
159,200
Other assets
10,300
9,000
2,500
40,000
135,000
12,000
208,800
Prepayments and accrued
income
31,000
4,000
3,000
8,000
8,000
300
54,300
Total assets
738,500
234,000
202,600
418,000
204,000
13,500
1,810,600
Technical provisions
(711,200)
(148,100)
(242,000)
(198,300)
(244,000)
(17,700)
(1,561,300)
Creditors
129,400
(111,300)
43,300
(170,500)
10,000
(15,200)
(114,300)
Accruals and deferred
income
(1,800)
-
-
100
-
-
(1,700)
Total liabilities
(583,600)
(259,400)
(198,700)
(368,700)
(234,000)
(32,900)
(1,677,300)
Total capital and reserves
154,900
(25,400)
3,900
49,300
(30,000)
(19,400)
133,300
QBE CASUALTY SYNDICATE 386
40
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
c) Currency risk (continued)
The table below shows the impact on profit and loss and members’ balance as a result of movements in
foreign exchange rates. The basis for this sensitivity analysis is the residual foreign currency exposures at the
balance sheet date. A 10% increase (or decrease) in exchange rates has been selected on the basis that this is
considered to be a reasonably possible change in the risk variable over the following year.
2024
2023
Movement in
Impact on
results before
tax
Impact on
members’
balances
Impact on
results before
tax
Impact on
members’
balances
variable %
£’000
£’000
£’000
£’000
US dollar
+10
(2,028)
(2,028)
2,102
2,102
–10
2,028
2,028
(2,102)
(2,102)
CAD
+10
(394)
(394)
(77)
(77)
–10
394
394
77
77
AUD
+10
(242)
(242)
(514)
(514)
–10
242
242
514
514
Euro
+10
356
356
(650)
(650)
–10
(356)
(356)
650
650
d) Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk through its investment portfolio, borrowings and cash and cash
equivalents. Assets with floating interest rates expose the Syndicate to cash flow interest rate risk. Fixed
interest rate assets expose the Syndicate to fair value interest rate risk. The Syndicate’s strategy is to invest
in high quality, liquid fixed interest securities and cash and to actively manage duration. The investment
portfolios are actively managed to achieve a balance between cash flow interest rate risk and fair value interest
rate risk bearing in mind the need to meet the liquidity requirements of the business.
The investment committee monitors the duration of these assets on a regular basis, targeting an investment
portfolio duration that, in the event of changes in interest rates, always maintains internal capital
requirements.
The Syndicate’s sensitivity to movements in interest rates in relation to the value of fixed interest securities
is shown in the table below. A 50-basis point increase (or decrease) in yield curves has been selected based
on Lloyd’s requirement to be a reasonably possible change in the risk variable over the following year.
2024
2023
Movement in
Impact on
results before
tax
Impact on
members’
balances
Impact on
results before
tax
Impact on
members’
balances
variable
£’000
£’000
£’000
£’000
Interest rate movement
– fixed interest
+50 basis points
(13,817)
(13,817)
(13,300)
(13,300)
securities
-50 basis points
13,817
13,817
13,300
13,300
QBE CASUALTY SYNDICATE 386
41
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
d) Interest rate risk (continued)
The Syndicate’s exposure to interest rate risk for each significant class of interest-bearing financial assets
and liabilities is as follows:
2024
Floating
Fixed interest rate maturing in
Total
interest
rate
1 year or
less
1 to 2
years
2 to 3
years
3 years
over
£’000
£’000
£’000
£’000
£’000
£’000
Interest bearing assets
135,512
294,777
116,296
62,975
401,032
1,010,592
2023
Floating
Fixed interest rate maturing in
Total
interest
rate
1 year or
less
1 to 2
years
2 to 3
years
3 years
over
£’000
£’000
£’000
£’000
£’000
£’000
Interest bearing assets
115,500
471,600
130,700
152,400
303,700
1,173,900
e) Equity price risk
Equity price risk is the risk that the fair value of an equity instrument will fluctuate because of changes in
market prices (other than those arising from interest rate or currency risk), principally investment securities,
whether those changes are caused by factors specific to the individual equity instrument or its issuer, or
factors affecting all similar equity instruments traded on the market.
The Syndicate holds a limited portfolio of equities which are subject to equity price risk. This exposure
benefits members through the enhanced longer-term returns on equities compared with debt securities.
Equity price risks are managed by setting and monitoring objectives and constraints on investments,
diversification plans and limits on investments. The management ensures that the Syndicate’s internal capital
requirements are met at all times, as well as those mandated by the Syndicate’s external regulators.
The potential impact of movements in the market value of equities on the profit and loss account and balance
sheet is shown in the sensitivity analysis below. A 5% increase (or decrease) in equity prices has been selected
based on Lloyd’s requirement as this is considered to be a reasonably possible change in the risk variable
over the following year.
The impact has been shown on the basis that equity funds are fully exposed to market price fluctuations.
Equity portfolios are from time to time hedged in order to manage this exposure. Exchange traded futures
contracts used from time to time to provide the hedges are not perfectly correlated to the composition of the
underlying equity fund.
2024
2023
Movement in
Impact on
results before
tax
Impact on
members’
balances
Impact on
results before
tax
Impact on
members’
balances
Variable %
£’000
£’000
£’000
£’000
Euro STOXX
+5
1,810
1,810
730
730
-5
(1,810)
(1,810)
(730)
(730)
QBE CASUALTY SYNDICATE 386
42
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk
Credit risk is the risk that one party to a financial instrument will cause financial loss to the other party by failing
to discharge an obligation.
The Syndicate is exposed to credit risk in respect of the following:
x Debt securities and derivative financial instruments;
x Reinsurers’ share of claims outstanding;
x Amounts due from intermediaries;
x Amounts due from reinsurers in respect of settled claims;
x Cash and cash equivalents; and
x Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
a) Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a
single counterparty, by reference to the credit rating of the counterparty. Financial assets are graded according
to current credit ratings issued by rating agencies such as Standard and Poor’s. The Syndicate has a policy of
investing mainly in government issued and government backed debts. The Syndicate does not currently invest
new monies in speculative grade assets (i.e. those rated below BBB). The Syndicate does not expect any
investment counterparties to fail to meet their obligations given their strong credit ratings. The Syndicate
only uses derivatives in highly liquid markets.
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single counterparty
and maintains an authorised list of acceptable cash counterparties.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the individual
business units as part of their credit control processes.
All intermediaries must meet minimum requirements established by the Syndicate. The credit ratings and
payment histories of intermediaries are monitored on a regular basis.
Credit risk exposures are calculated regularly and compared with authorised credit limits before further
transactions are undertaken with counterparties. The credit ratings and payment histories of intermediaries
are monitored on a regular basis.
b) Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure.
The Syndicate holds letters of credit as security to mitigate credit risk exposure to reinsurers. At the balance
sheet date, the Syndicate held £2,299k (2023: £5,700k) in the form of letters of credit and £214,380k (2023:
£122,100k) as investment assets pledged.
The following table analyses the credit rating by investment grade of financial investments, debt securities
and derivative financial instruments, reinsurers’ share of claims outstanding, amounts due from reinsurers in
respect of settled claims, cash and cash equivalents, and other debtors and accrued interest.
QBE CASUALTY SYNDICATE 386
43
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk (continued)
b) Exposure to credit risk (continued)
2024
AAA
AA
A
BBB
Other
Not
rated
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities
14,817
-
13,155
-
-
75,530
103,502
Debt securities
152,235
288,026
252,407
93,178
43,501
-
829,347
Derivative assets
-
-
-
-
-
3,420
3,420
Overseas deposits
92,451
22,037
17,969
13,437
13,733
6,607
166,234
Deposits with ceding undertakings
-
-
-
-
-
12,566
12,566
Reinsurers’ share of claims
outstanding
-
282,704
108,139
-
-
7,695
398,538
Debtors arising out of direct
insurance operations
-
-
-
-
-
57,942
57,942
Debtors arising out of reinsurance
operations
-
-
-
-
-
73,358
73,358
Cash at bank and in hand
-
8,993
5,952
66
-
-
15,011
Provision for unearned premium
-
-
-
-
-
19,424
19,424
Other debtors and prepayments
-
-
-
-
-
63,558
63,558
259,503
601,760
397,622
106,681
57,234
320,100
1,742,900
2023
AAA
AA
A
BBB
Other
Not
rated
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities
-
-
6,200
1,700
-
60,000
67,900
Debt securities
218,400
287,900
325,900
99,400
33,500
-
965,100
Derivative assets
-
-
-
-
-
5,600
5,600
Overseas deposits
117,300
61,000
-
11,800
-
-
190,100
Deposits with ceding undertakings
-
-
-
-
-
4,100
4,100
Reinsurers’ share of claims
outstanding
-
178,600
132,900
-
-
12,000
323,500
Debtors arising out of direct
insurance operations
-
-
-
-
-
111,100
111,100
Debtors arising out of reinsurance
operations
-
-
-
-
-
31,200
31,200
Cash at bank and in hand
-
6,600
12,000
100
-
-
18,700
Provision for unearned premium
-
-
-
-
-
22,100
22,100
Other debtors and prepayments
-
-
-
-
-
71,200
71,200
335,700
534,100
477,000
113,000
33,500
317,300
1,810,600
The reinsurers’ share of claims outstanding, and debtors is also exposed to credit risk, where 98.8% (2023:
97.4%) of the balance is with reinsurers with an S&P rating of “A-” or greater.
83.4% (2023: 86.6%) of total fixed interest and cash investments are with counterparties having a Standard
& Poor’s rating of A or better.
QBE CASUALTY SYNDICATE 386
44
NOTES TO THE ANUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk (continued)
The reinsurers’ share of claims outstanding, and debtors is also exposed to credit risk, where 98.8% (2023:
97.4%) of the balance is with reinsurers with an S&P rating of “A-” or greater.
c) Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date. These debtors have been individually assessed for impairment by considering
information such as the occurrence of significant changes in the counterparty’s financial position, patterns of
historical payment information and disputes with counterparties.
The following table provides information regarding the carrying value of the Syndicate’s financial assets,
excluding amounts in respect of insurance contracts. The total value per the table below represents the total
value of the Syndicates exposure to credit risk.
2024
Neither past
due nor
impaired
Past due
but not
impaired
Gross value
of impaired
assets
Impairment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities
103,502
-
-
-
103,502
Debt securities
829,347
-
-
-
829,347
Derivative assets
3,420
-
-
-
3,420
Overseas deposits
166,234
-
-
-
166,234
Deposits with ceding
undertakings
12,566
-
-
-
12,566
Reinsurers’ share of claims
outstanding
398,538
-
-
-
398,538
Debtors arising out of direct
insurance operations
50,889
7,053
-
-
57,942
Debtors arising out of reinsurance
operations
26,337
47,021
-
-
73,358
Cash at bank and in hand
15,011
-
-
-
15,011
Provision for unearned premium
19,424
-
-
-
19,424
Other debtors and prepayments
63,558
-
-
-
63,558
Total credit risk
1,688,826
54,074
-
-
1,742,900
2023
Neither past
due nor
impaired
Past due
but not
impaired
Gross value
of impaired
assets
Impairment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities
67,900
-
-
-
67,900
Debt securities
965,100
-
-
-
965,100
Derivative assets
5,600
-
-
-
5,600
Overseas deposits
190,100
-
-
-
190,100
Deposits with ceding undertakings
4,100
-
-
-
4,100
Reinsurers’ share of claims
outstanding
323,500
-
-
-
323,500
Debtors arising out of direct
insurance operations
108,100
3,000
-
-
111,100
Debtors arising out of reinsurance
operations
1,400
29,800
-
-
31,200
Cash at bank and in hand
18,700
-
-
-
18,700
Provision for unearned premium
22,100
-
-
-
22,100
Other debtors and prepayments
71,200
-
-
-
71,200
Total credit risk
1,777,800
32,800
-
-
1,810,600
QBE CASUALTY SYNDICATE 386
45
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk (continued)
c) Financial assets that are past due or impaired (continued)
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance
sheet date:
Past due but not impaired by
2024
Up to 3
Months
3 to 6
Months
6 Months to
1 year
Greater
than 1 year
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of direct
insurance operations
4,215
1,860
395
583
7,053
Debtors arising out of reinsurance
operations
24,902
7,219
95
14,805
47,021
29,117
9,079
490
15,388
54,074
Past due but not impaired by
2023 Restated *
Up to 3
Months
3 to 6
Months
6 Months to
1 year
Greater
than 1 year
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of direct
insurance operations
800
800
700
700
3,000
Debtors arising out of reinsurance
operations
20,800
1,800
5,400
1,800
29,800
21,600
2,600
6,100
2,500
32,800
* The comparative figures have been restated to account for the reclassification between Debtors arising
out of reinsurance operations and Debtors arising out of direct insurance operations, as set out in note
1(m).
QBE CASUALTY SYNDICATE 386
46
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(iii) Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from insurance
contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash resources mainly
from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
a) Financial assets that are past due or impaired
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
x Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance
contracts over the short, medium and long term;
x The Syndicate purchases assets with durations not greater than its estimated insurance contract
outflows;
x Assets purchased by the Syndicate are required to satisfy specified marketability requirements;
x The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts;
x The Syndicate holds significant committed borrowing facilities from a range of highly rated banks
to enable cash to be raised in a relatively short timespan; and
x The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid
financial resources are in place to meet obligations as they fall due in the event of reasonable
foreseeable abnormal circumstances.
In addition to the treasury cash held for working capital requirements, a minimum percentage of the
Syndicate’s total financial assets is held in liquid, short term money market securities to ensure there are
sufficient liquid funds available to meet current obligations.
b) Maturity analysis of Syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the
Syndicate’s insurance contracts and financial instruments. For insurance and reinsurance contracts, the
contractual maturity is the estimated date when the gross undiscounted contractually required cash flows will
occur. For financial liabilities, it is the earliest date on which the gross undiscounted cash flows (including
the contractual interest payments) could be paid assuming conditions are consistent with those at the reporting
date.
Undiscounted net cash flows
2024
No
maturity
stated
Up to 1
year
1 to 3
years
3 to 5
years
Greater
than 5
years
Total
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
-
306,748
479,404
296,636
287,388
1,370,176
Creditors
-
76,539
-
-
-
76,539
Total
-
383,287
479,404
296,636
287,388
1,446,715
QBE CASUALTY SYNDICATE 386
47
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(iii) Liquidity risk
b) Maturity analysis of Syndicate liabilities (continued)
Undiscounted net cash flows
2023
No
maturity
stated
Up to 1
year
1 to 3
years
3 to 5
years
Greater
than 5
years
Total
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
-
328,300
443,900
289,000
302,800
1,364,000
Creditors
-
114,300
-
-
-
114,300
Total
-
442,600
443,900
289,000
302,800
1,478,300
At 31 December 2024, the average duration of cash and fixed interest securities was 2.8 years (2023: 2.30 years).
The Syndicate has no significant concentration of liquidity risk.
12. Technical provisions
The tables below show the changes in the insurance contract liabilities and assets from the beginning of the period to the
end of the period.
2024
Gross
Reinsurance
Net
Provision for Unearned Premiums
£’000
£’000
£’000
At 1 January
201,333
(22,052)
179,281
Premiums written during the year
371,246
(166,413)
204,833
Premiums earned during the year
(390,019)
169,471
(220,548)
Effects of foreign exchange
(4,593)
(430)
(5,023)
At 31 December
177,967
(19,424)
158,543
Claims Outstanding
At 1 January
1,360,041
(323,475)
1,036,566
Claims paid during the year
(265,091)
92,607
(172,484)
Expected cost of current year claims
236,387
(45,322)
191,065
Change in estimates of prior year provisions
69,329
(134,768)
(65,439)
Discount unwind
(393)
394
1
Effects of foreign exchange and other movements
(34,555)
12,026
(22,529)
At 31 December
1,365,718
(398,538)
967,180
Total
1,543,685
(417,962)
1,125,723
QBE CASUALTY SYNDICATE 386
48
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
12. Technical provisions (continued)
The Syndicate applies discounting of outstanding reserves in respect of liabilities relating to periodical payment orders
on third party liability business. See note 13 for further information on the impact of discounting on the outstanding
reserves.
The unwind of discount has been included within the Statement of profit or loss – technical account – within Net change
in provisions for claims.
During the current period, the Syndicate entered into a transaction to reinsure certain prior year claims liabilities. The
transaction had a positive impact on the reported profit for the financial year.
2023
Gross
Reinsurance
Net
Provision for Unearned Premiums
£’000
£’000
£’000
At 1 January
229,200
(16,400)
212,800
Premiums written during the year
415,200
(181,700)
233,500
Premiums earned during the year
(437,100)
175,500
(261,600)
Effects of foreign exchange
(6,000)
500
(5,500)
At 31 December
201,300
(22,100)
179,200
Claims Outstanding
At 1 January
1,355,600
(272,700)
1,082,900
Claims paid during the year
(239,500)
83,700
(155,800)
Expected cost of current year claims
263,700
(69,000)
194,700
Change in estimates of prior year provisions
15,600
(76,800)
(61,200)
Discount unwind
(200)
(100)
(300)
Effects of foreign exchange
(35,200)
11,400
(23,800)
At 31 December
1,360,000
(323,500)
1,036,500
Total
1,561,300
(345,600)
1,215,700
Refer to note 20 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.
13. Discounted claims
Discounting may be applied to claims provisions where there are individual claims with structured settlements that have
annuity-like characteristics, or for books of business with mean term payments greater than four years from the accounting
date.
QBE CASUALTY SYNDICATE 386
49
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
13. Discounted claims (continued)
The claims that have been discounted are as follows:
Average discounted rates
Average mean term of
liabilities
2024
2023
2024
2023
%
%
Years
Years
Class of business
Third party liability
4.7
3.7
9.5
9.5
The claims provision before and after discounting is as follows:
Undiscounted claims
Effect of discounting
After discounting
2024
2023
2024
2023
2024
2023
£’000
£’000
£’000
£’000
£’000
£’000
Gross claims provisions
10,332
10,900
(4,459)
(4,100)
5,873
6,800
Reinsurers’ share of total claims
(6,226)
(6,100)
3,216
2,800
(3,010)
(3,300)
4,106
4,800
(1,243)
(1,300)
2,863
3,500
14. Debtors
(i) Debtors arising out of direct insurance operations
Restated *
2024
2023
£’000
£’000
Due from intermediaries
Due within one year
57,942
111,100
(ii) Debtors arising out of reinsurance operations
Restated *
2024
2023
£’000
£’000
Due within one year
73,358
31,200
(iii) Other debtors
2024
2023
£’000
£’000
Other debtors
825
2,000
Other related party balances (non-Syndicate)
12,185
14,900
13,010
16,900
* The comparative figures have been restated to account for the reclassification between Debtors arising out of
reinsurance operations and Debtors arising out of direct insurance operations, as set out in note 1(m).
QBE CASUALTY SYNDICATE 386
50
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
15. Cash and cash equivalents
Restated *
2024
2023
£’000
£’000
Cash at bank and in hand
15,011
18,700
Short term debt instruments presented within other financial investments
30,163
14,700
45,174
33,400
* The comparative figures have been restated to account for the reclassification of money market funds as investments,
as set out in note 1(m).
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 at bank and in hand.
16. Other Assets
2024
2023
£’000
£’000
Overseas deposits
166,234
190,100
Use of overseas deposit funds is restricted under the terms of the trust agreements where the deposits are lodged.
17. Deferred acquisition costs
The tables below show the changes in deferred acquisition costs assets from the beginning of the period to the end of the
period:
2024
Gross
Reinsurance
Net
£’000
£’000
£’000
At 1 January
42,700
-
42,700
Incurred deferred acquisition costs
81,192
-
81,192
Amortised deferred acquisition costs
(81,543)
-
(81,543)
Foreign exchange rate movement
(913)
-
(913)
At 31 December
41,436
-
41,436
2023
Gross
Reinsurance
Net
£’000
£’000
£’000
At 1 January
48,200
-
48,200
Incurred deferred acquisition costs
89,500
-
89,500
Amortised deferred acquisition costs
(93,700)
-
(93,700)
Foreign exchange rate movement
(1,300)
-
(1,300)
At 31 December
42,700
-
42,700
QBE CASUALTY SYNDICATE 386
51
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
18. Outstanding claims – claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred, including
claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated have changed from
the first estimates made.
The Syndicate has applied a consistent approach to prior years in establishing the technical provisions for claims
outstanding and reinsurers share thereof. Included within net claims incurred is adverse prior year development relating
to certain financial lines classes; reduced by positive developments across a number of other classes.
Gross basis
2014
and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At end of year
80,659
122,682
112,891
106,703
111,013
94,067
116,231
121,015
116,420
111,749
1,093,430
One year later
187,058
206,869
215,987
223,546
198,609
208,525
226,025
221,544
225,360
-
1,913,523
Two years later
186,950
216,062
257,882
234,730
181,387
223,814
235,569
226,547
-
-
1,762,941
Three years later
186,545
234,284
255,730
227,617
186,616
223,964
237,123
-
-
-
1,551,879
Four years later
205,233
238,207
264,900
248,207
204,899
225,586
-
-
-
-
1,387,032
Five years later
197,559
235,794
295,102
266,440
214,153
-
-
-
-
-
1,209,048
Six years later
186,838
247,600
289,301
268,627
-
-
-
-
-
-
992,366
Seven years later
191,474
253,765
306,575
-
-
-
-
-
-
-
751,814
Eight years later
191,410
263,849
-
-
-
-
-
-
-
-
455,259
Nine years later
192,923
-
-
-
-
-
-
-
-
-
192,923
Current estimate
of gross
cumulative claims
cost
192,923
263,849
306,575
268,627
214,153
225,586
237,123
226,547
225,360
111,749
Cumulative gross
claims payments
to date
(162,439)
(212,443)
(220,624)
(171,528)
(113,234)
(80,983)
(56,245)
(22,194)
(3,139)
(125)
Gross
outstanding
claims
136,180
30,484
51,406
85,951
97,099
100,919
144,603
180,878
204,353
222,221
111,624
1,365,718
Net basis
2014
and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At end of year
79,131
106,133
96,374
96,814
106,013
87,332
108,729
111,815
106,409
103,631
1,002,381
One year later
173,064
181,454
167,984
187,284
190,345
185,278
209,807
202,023
204,418
-
1,701,657
Two years later
169,321
181,131
205,811
199,249
173,780
195,308
217,897
183,363
-
-
1,525,860
Three years later
167,020
190,504
206,802
198,278
179,790
200,099
191,235
-
-
-
1,333,728
Four years later
163,890
198,423
213,187
210,963
198,177
172,003
-
-
-
-
1,156,643
Five years later
164,013
190,968
240,079
204,919
191,288
-
-
-
-
-
991,267
Six years later
153,196
206,212
217,940
192,453
-
-
-
-
-
-
769,801
Seven years later
157,486
192,337
219,087
-
-
-
-
-
-
-
568,910
Eight years later
151,758
187,717
-
-
-
-
-
-
-
-
339,475
Nine years later
150,156
-
-
-
-
-
-
-
-
-
150,156
Current estimate
of net
cumulative
claims cost
150,156
187,717
219,087
192,453
191,288
172,003
191,235
183,363
204,418
103,631
Cumulative net
claims payments
to date
(137,648)
(168,160)
(175,795)
(146,884)
(111,036)
(77,434)
(51,016)
(20,266)
(2,826)
(123)
Net outstanding
claims
63,017
12,508
19,557
43,292
45,569
80,252
94,569
140,219
163,097
201,592
103,508
967,180
The claims development tables express the development on an underwriting year basis. At the end of the opening year,
the underwriting year has not yet fully earned. One year after the opening year, the underwriting year has substantially
earned, and the development of that underwriting year becomes evident. The development is only developments in
actuarial assumptions.
QBE CASUALTY SYNDICATE 386
52
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
18. Outstanding claims – claims development (continued)
The Syndicate writes business in currencies other than Pound Sterling. The translation of outstanding claims denominated
in foreign currencies gives rise to foreign exchange movements which have no direct bearing on the development of the
underlying claims. To eliminate this distortion, claims liabilities have been retranslated to the Pound Sterling at constant
rate of exchange.
All estimates of cumulative claims cost and cumulative claims payments for the nine most recent reporting years reported
in functional currencies other than Pound Sterling have been retranslated to Pound Sterling using the exchange rate at the
end of the reporting year.
19. Concentration of insurance risk
The Syndicate’s exposure to concentrations of insurance risk is mitigated by a portfolio diversified across countries and
classes of business. Product diversification is achieved through a strategy of developing strong underwriting skills in a
wide variety of classes of business. A combination of core and speciality products under the control of employees skilled
in underwriting such products allows the Syndicate to lead underwrite in many of the markets in which they operate.
The segmental and geographical analysis at note 3 demonstrates the diversity of the Syndicate’s operations.
20. Impact of changes of key variables on the outstanding claims provision
Net claims outstanding could be lower or higher than the ultimate cost of settling the claims arising. This level of
uncertainty would vary between the classes of business and the underlying nature of the risk being underwritten and can
arise from developments in reserving for large losses, catastrophes or from changes in the level of attritional losses.
A five percent increase or decrease in the ultimate cost of settling gross claims arising is considered to be reasonably
possible at the reporting date. Net outstanding claims in respect of liabilities relating to long term personal injury lines of
business could be lower or higher as a result of movements in the Ogden rate, a half a percent increase or decrease in the
Ogden rate movement is considered to be reasonably possible. Net outstanding claims could be lower or higher as a result
of movements in exchange rates, a ten percent increase or decrease in the exchange rate movement of currency reserves
is considered to be reasonably possible.
The approximate impact on the result of the Syndicate of changes in these variables used in the calculation of the
outstanding claims provision is summarised in the table below. Each change has been calculated in isolation from the
other changes and each change shows the impact on profit assuming that there is no change to any of the other variables.
2024
2023
General business sensitivities
Sensitivity
Sensitivity
Sensitivity
Gross
Net
Gross
Net
%
£’000
£’000
£’000
£’000
Impact on Claims outstanding
+5
68,286
48,359
68,000
51,800
-5
(68,286)
(48,359)
(68,000)
(51,800)
Change in Ogden rate on certain long term
personal injury claims
+0.5
(1,746)
(962)
(3,700)
(2,800)
-0.5
1,746
962
4,200
3,200
Sterling to US Dollar exchange rate
+10
10,235
4,894
13,600
(400)
-10
(10,235)
(4,894)
(13,600)
400
Sterling to AUD exchange rate
+10
13,499
11,791
20,100
18,500
-10
(13,499)
(11,791)
(20,100)
(18,500)
Sterling to Euro exchange rate
+10
12,672
11,944
22,200
21,500
-10
(12,672)
(11,944)
(22,200)
(21,500)
Sterling to CAD exchange rate
+10
10,608
10,255
16,200
15,800
-10
(10,608)
(10,255)
(16,200)
(15,800)
The Syndicate’s current year exposure to the sensitivity on foreign exchange movements compared to the prior year has
increased as a result of the weakening of the pound Sterling against major currencies.
QBE CASUALTY SYNDICATE 386
53
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
21. Expected maturity profile of net outstanding claims
1 year or less
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
Over 5 years
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
2024
199,324
194,552
160,084
125,447
90,000
197,773
967,180
2023
221,100
192,700
157,800
130,300
97,900
236,700
1,036,500
22. Creditors
(i) Creditors arising out of direct insurance operations
2024
2023
£’000
£’000
Due to intermediaries
Due within one year
14,439
6,400
(ii) Creditors arising out of reinsurance operations
2024
2023
£’000
£’000
Due within one year
22,751
28,600
23. Other creditors including taxation and social security
2024
2023
£’000
£’000
Due within one year
Profit commission payable
30,328
32,900
Other related party balances (non-syndicates)
4,574
4,600
Other liabilities
4,447
41,800
39,349
79,300
* Other liabilities include Taxation and social security of £4,418k (2023: £26,300k) and Unsettled investment trade
creditors of £29k (2023: £15,500k)
24. Financial assets and liabilities
The assets and liabilities of the Syndicate, excluding deferred acquisition costs, unearned premiums, gross and net
technical provisions and members’ balances, are financial assets and liabilities. The Directors consider the carrying value
of the financial assets and liabilities to be equal to their fair value.
25. Related parties
The Managing Agent, QUL, and the corporate member QBE Corporate Limited (‘QCORP’), are wholly owned
subsidiaries of the ultimate parent company QBE Insurance Group Limited.
The Syndicate is managed at the QBE EO level, which is headed by QBE European Operations plc. The immediate parent
company of QUL and QCORP is QBE Holdings (‘EO’) Limited (‘QHEO’), QHEO is a wholly owned subsidiary of QBE
European Operations plc. QBE European Operations plc, QUL, QCORP, and QHEO are incorporated in the United
Kingdom.
All transactions between the Syndicate and companies within the QBE Group are conducted on normal market terms.
The consolidated annual report for QBE Insurance Group Limited is available from its registered office at 388 George
Street, Sydney, New South Wales 200, Australia.
QBE CASUALTY SYNDICATE 386
54
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
26. Related parties (continued)
Directors’ interests
All of the Executive Directors listed on page 2 hold, or held in the year, Executive Directorships of companies within
QBE EO. In addition, C A Brown, T C W Ingram, S Maddock and M G McCaig are, or were in the year, Non-Executive
Directors of related companies within QBE EO.
T C W Ingram indirectly has a non-material, non-voting economic interest as an underwriting line of £nil (2023: £264.5k
for the 2023 underwriting year) in Syndicate 386 for the underwriting year 2024.
Inter syndicate transactions
In certain instances, the Syndicate has underwritten reinsurances of QBE’s other managed syndicate. During the current
and prior financial year, there were no instances of reinsurances underwritten between QBE’s syndicates.
Inwards reinsurance contracts with related QBE companies
In certain instances, the Syndicate has underwritten inwards reinsurance business from Companies within the QBE
Insurance Group. During the year, there were no inwards premiums (2023: £nil), excluding the quota share arrangement
with QBE Europe SA/NV as detailed further below, written with related QBE companies. All such contracts were written
on normal market terms. At the year end, balances due to related QBE companies in respect of inwards reinsurance
premium were £27k (2023: £47k). At the year end there was £307k (2023: £2,800k) share of technical provisions.
Share of technical provisions
2024
2023
£’000
£’000
QBE Insurance Corporation
(74)
(200)
QBE Insurance (Australia) Limited
(233)
(2,100)
During 2019, the Syndicate entered into a quota share reinsurance arrangement with QBE Europe SA/NV in order to gain
EEA exposure. QBE Europe SA/NV writes in-scope risks and quota shares the appropriate protocol proportion back to
the Syndicate by way of a reinsurance quota share. During the year, inwards premiums totalled £25,874k (2023:
£25,883k). At the year end, balances due from QBE Europe SA/NV in respect of inwards reinsurance premium were
£42,225k (2023: £12,805k). At the year end, there was a £34,846k share of technical provisions (2023: £39,600k). The
comparative figures have been restated to disclose inwards reinsurance premiums and balances due in respect of inwards
reinsurance premiums that were previously disclosed as £nil.
Outwards reinsurance contracts with related QBE companies
The Syndicate has purchased reinsurance with companies within the QBE Group during the year. Outward premiums
totalling £23,293k (2023: £52,100K) were booked with QBE Capital (Global) Ltd (‘QCAP Global’). All such contracts
are written on normal market terms. At the year end, balances due from QCAP Global in respect of the reinsurers’ share
of technical provisions were £108,845k (2023: £129,600k).
Profit commission
Profit commission is payable to the Managing Agent as per note 1(l). During the year £11,418k was charged (2023:
£18,800k). At the year-end £30,328k was outstanding (2023: £32,900k). This is shown within other creditors.
Managing agent
Total fees payable to QUL in respect of services provided to the Syndicate in the year amounted £1,875k (2023: £1,600k).
£375k is outstanding at the year-end (2023: nil).
QBE CASUALTY SYNDICATE 386
55
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
26. Related parties (continued)
Administrative expenses
Total expenses recharged from QBE Partner Services (Europe) LLP in respect of services provided to the Syndicate
amounted to £nil (2023: £29,200k). The balance outstanding at year end to QBE Partner Services (Europe) LLP is £nil
(2023: £nil). Total expenses recharged from QBE Management Services (UK) Ltd (‘MSUK’) in respect of services
provided to the Syndicate amounted to £49,039k (2023: £15,800k). The balance outstanding at year end to MSUK is
£4,595k (2023: £4,500k). There are no other transactions or arrangements to be disclosed.
Service companies
Certain QBE EO owned service companies provided insurance business to the Syndicate and charged fees equal to the
costs they incurred in placing the business with the Syndicate. These charges are centrally administered within QBE EO
and are included within recharges made to the Syndicate by QBE Partner Services (Europe) LLP and MSUK. The risks
placed with the Syndicate are under normal market conditions and are in the interests of all the Names on the Syndicate.
The above disclosure requirements are in addition to the requirement to disclose key management personnel
compensation. This disclosure is given in note 6.
27. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2024 | 2023 | |||||
Start of year rate | Year-end rate | Average rate | Start of year rate | Year-end rate | Average rate | |
Sterling | ||||||
Euro | ||||||
US dollar | ||||||
Canadian dollar | ||||||
South African Rand | ||||||
Australian dollar |
28. 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 accounts 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 settle losses.
29. Subsequent events
There were no other material post balance sheet events.
QBE CASUALTY SYNDICATE 386
56
ANNUAL REPORT 56 31 DECEMBER 2024
2022 UNDERWRITING YEAR ACCOUNTS
UNDERWRITING YEAR - REPORT OF THE DIRECTORS OF THE MANAGING
AGENT
The Managing Agent presents its report as at 31 December 2024 for the 2022 closed year of account.
The report is prepared in accordance with the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005). It accompanies the
underwriting year accounts prepared on an underwriting year basis of accounting as required by the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (the 2008 Regulations).
The reinsurance to close for the 2022 underwriting year was approved by the Board of Directors on 4 March 2025.
Principal activities
The Syndicate is a specialist non-US liability syndicate (other than incidental exposures of non-US domiciled parents),
operating within the Lloyd’s insurance market and headed by Active Underwriter, Cecile Fresneau, Managing Director
of QBE's UK insurance business.
The Syndicate forms an integral part of the QBE European Operations division (QBE EO) in QBE Insurance Group
Limited (‘QBE Group’). Together with other underwriting entities within QBE EO, the Syndicate continued to provide
an integrated casualty offering, leveraging QBE EO’s extensive distribution capability and economies of scale in the cost
of reinsurance protection.
Business written by the Syndicate comprises: employers’ liability, professional indemnity and general liability (the latter
encompassing, inter alia, products liability and third-party liability).
For Lloyd’s planning and performance monitoring reporting, classes of business are defined as: International Casualty,
Professional Indemnity and UK & Ireland Liability.
The Syndicate has a continued emphasis on its customer value proposition, with a focus on customer requirements to
deliver their business ambitions.
QBE CASUALTY SYNDICATE 386
57
ANNUAL REPORT 57 31 DECEMBER 2024
UNDERWRITING YEAR – REPORT OF THE DIRECTORS OF THE MANAGING
AGENT (continued)
2022 closed year of account
The 2022 & prior underwriting years have produced a total profit of £91,214k or 24.9% of capacity including standard
personal expenses and prior to members’ agents’ fees, or £90,556k, 24.7% after.
2022 pure year gross written premium is at £438,394k, representing 119.7% stamp utilisation (net of acquisition costs).
The resultant 2022 pure year underwriting profit of £68,319k is split as follows:
£’000
International Casualty
25,460
UK and Ireland Liability
41,219
Professional Indemnity
1,640
68,319k
The 2022 and prior years experienced higher loss experience on UK Professional Indemnity and have required reserve
strengthening on the UK Professional Indemnity and International Liability accounts. This has been mitigated by
investment return generated in the period.
2023 and 2024 open years of account
Projected gross written premium of £381,620k for the 2023 pure year, representing 88.9% of stamp utilisation (net of
acquisition costs). Currently the 2023 pure year is forecast to produce a mid-point forecast profit of 14.8% of capacity.
Whilst early in development, the 2024 pure year is projected to write £364,488k of Gross written premiums, representing
85.2% stamp utilisation (net of acquisition costs). A mid-point profit of 19.2% of capacity is currently forecast.
Directors
Details of the Directors of the Managing Agent that served during the year and up to the date of signing of the Syndicate
annual accounts are shown on page 2.
QBE CASUALTY SYNDICATE 386
58
ANNUAL REPORT 58 31 DECEMBER 2024
UNDERWRITING YEAR – REPORT OF THE DIRECTORS OF THE MANAGING
AGENT (continued)
Statement of Managing Agent’s responsibilities
The Directors of the Managing Agent are responsible for preparing the Managing Agent’s report and the Syndicate
underwriting year accounts in accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 require the Managing
Agent to prepare syndicate underwriting year accounts at 31 December in respect of any underwriting year which is being
closed by reinsurance to close which give a true and fair view of the result of the underwriting year at closure. Detailed
requirements in respect of the underwriting year accounts are set out in the Lloyd’s Syndicate Accounting Byelaw (No.
8 of 2005).
In preparing the Syndicate underwriting year accounts, the Managing Agent is required to:
• Select suitable accounting policies which are applied consistently and where there are items which affect more
than one year of account, ensure a treatment which is equitable as between the members of the Syndicate affected.
In particular, the amount charged by way of premium in respect of the reinsurance to close shall, where the
reinsuring members’ and reinsured members’ are members of the same syndicate for different years of account,
be equitable as between them, having regard to the nature and amount of the liabilities reinsured;
• Take into account all income and charges relating to a closed year of account without regard to the date of receipt
or payment;
• Make judgements and estimates that are reasonable and prudent; and
• State whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the underwriting year accounts.
The Managing Agent is responsible for keeping proper accounting records that disclose with reasonable accuracy at any
time the financial position of the Syndicate and enable it to ensure that the Syndicate’s underwriting year accounts comply
with the Regulations. It is also responsible for safeguarding the assets of the Syndicate and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure of information to auditors
Each person who is a Director of the Managing Agent at the date of this report confirms that:
• So far as the Director is aware, there is no information relevant to the audit of the Syndicate’s underwriting year
accounts for the 2022 closed year of account of which the auditors are unaware; and
• The Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or
herself aware of, and to establish that the Syndicate’s auditors are aware of, any relevant audit information.
On behalf of the Board of the Managing Agent
R C Stone
Director
QBE Underwriting Limited
London
4 March 2025
QBE CASUALTY SYNDICATE 386
59
ANNUAL REPORT 59 31 DECEMBER 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386 – 2022 CLOSED YEAR OF ACCOUNT
Report on the audit of the syndicate underwriting year
financial statements
Opinion
In our opinion, 386’s syndicate underwriting year financial statements for the 2022 year of account for the 36 months
ended 31 December 2024 (the “underwriting year financial statements”):
● give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit for the 2022
closed year of account;
● have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”, and applicable law); and
● have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005).
We have audited the underwriting year financial statements included within the 2022 Underwriting year accounts (the
“Underwriting Year Accounts”), which comprise: the Balance sheet as at 31 December 2024; the Profit and loss account-
2022 underwriting year technical account - general business, and the Profit and loss account - 2022 underwriting year
non-technical account, for the 36 months then ended; and the notes to the underwriting year financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), including ISA
(UK) 800, and The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and
other applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the
audit of the underwriting year financial statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the underwriting year financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to other
entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Emphasis of matter – Basis of preparation
Without modifying our opinion, we draw attention to note 1 of the underwriting year financial statements, which describes
the basis of preparation. In particular, as these underwriting year financial statements relate to a closed underwriting year
of account, matters relating to going concern are not relevant to these underwriting year financial statements. The
underwriting year financial statements are prepared in accordance with a special purpose framework for the specific
purpose as described in the Use of this report paragraph below. As a result, the underwriting year financial statements
may not be suitable for another purpose.
Reporting on other information
The other information comprises all of the information in the Underwriting Year Accounts other than the underwriting
year financial statements and our auditors’ report thereon. The Managing Agent is responsible for the other information.
Our opinion on the underwriting year financial statements does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the underwriting year financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the underwriting year
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether
there is a material misstatement of the underwriting year financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report based on these responsibilities.
QBE CASUALTY SYNDICATE 386
60
ANNUAL REPORT 60 31 DECEMBER 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386 – 2022 CLOSED YEAR OF ACCOUNT (continued)
Responsibilities for the underwriting year financial statements and the audit
Responsibilities of the Managing Agent for the underwriting year financial statements
As explained more fully in the Statement of Managing Agent’s responsibilities, the Managing Agent is responsible for
the preparation of the underwriting year financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view of the result for the 2022 closed year of account. The Managing Agent is also
responsible for such internal control as they determine is necessary to enable the preparation of underwriting year financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibilities for the audit of the underwriting year financial statements
Our objectives are to obtain reasonable assurance about whether the underwriting year financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these underwriting year financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation
Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered
the extent to which non-compliance might have a material effect on the underwriting year financial statements. We also
considered those laws and regulations that have a direct impact on the underwriting year financial statements such as The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 . We evaluated
management’s incentives and opportunities for fraudulent manipulation of the underwriting year financial statements
(including the risk of override of controls), and determined that the principal risks were related to the risk of fraud in
revenue recognition and management override of controls, including the potential for management bias in significant
accounting estimates, particularly in relation to the claims incurred but not reported portion of outstanding claims reserves
(gross and reinsurers’ share), the estimated portion of Gross premiums written and the risk of unfair or inequitable
treatment of members on different years of account. Audit procedures performed by the engagement team included:
● inspecting relevant meeting minutes, including those of the Board and Audit Committee of the Managing Agent,
and correspondence with regulatory authorities, including Lloyd’s of London, the Prudential Regulatory Authority
and the Financial Conduct Authority;
● discussions with the Board, management, the compliance function and internal audit function of the Managing
Agent, including consideration of known or suspected instances of fraud and non-compliance with laws and
regulations;
● testing and challenging where appropriate the assumptions and judgements made by management in their significant
accounting estimates, particularly in relation to the claims incurred but not reported portion of outstanding claims
reserves (gross and reinsurer’s share), and the estimated portion of gross premiums written;
● testing journal entries identified in accordance with our risk assessment;
● designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and
● assessing the appropriateness of closing the 2022 year of account and testing and challenging, where appropriate,
the equity for the reinsurance to close premium charged.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
underwriting year financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than
the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the underwriting year financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
QBE CASUALTY SYNDICATE 386
61
ANNUAL REPORT 61 31 DECEMBER 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF QBE CASUALTY
SYNDICATE 386 – 2022 CLOSED YEAR OF ACCOUNT (continued)
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s members as a body in accordance
with part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and Part
C of the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005) and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Accounting Byelaw (No. 8 of 2005), we are required to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
● the underwriting year financial statements are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Matthew Nichols
(Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
4 March 2025
QBE CASUALTY SYNDICATE 386
62
ANNUAL REPORT 62 31 DECEMBER 2024
PROFIT AND LOSS ACCOUNT -
2022 UNDERWRITING YEAR TECHNICAL ACCOUNT - GENERAL BUSINESS
for the 36 months ended 31 December 2024
Note
£’000
£’000
Syndicate allotted capacity
366,153
Earned premium, net of reinsurance
Gross premiums written
2
438,394
Outward reinsurance premiums
(172,406)
Earned premium, net of reinsurance
265,988
Reinsurance to close premium received, net
3
713,406
Allocated investment gain transferred from the non-technical
account
53,614
Claims incurred, net of reinsurance
Claims paid
Gross amount
(262,563)
Reinsurers’ share
92,620
Net claims paid
(169,943)
Reinsurance to close premium payable, net of reinsurance
4
(652,400)
Claims incurred, net of reinsurance
(822,343)
Net operating expenses
5
(135,246)
Balance on the technical account - general business
75,419
The underwriting year has closed: all items therefore relate to discontinued operations.
The notes set out on pages 65 to 71 form an integral part of these underwriting year accounts
QBE CASUALTY SYNDICATE 386
63
ANNUAL REPORT 63 31 DECEMBER 2024
PROFIT AND LOSS ACCOUNT -
2022 UNDERWRITING YEAR NON - TECHNICAL ACCOUNT
for the 36 months ended 31 December 2024
Note
£’000
Balance on the technical account - general business
75,419
Investment income
6(a)
66,166
Unrealised gains on investments
457,991
Investment expenses and charges
6(b)
(26,408)
Unrealised losses on investments
(444,135)
Investment gain
53,614
Allocated investment gain transferred to the technical account - general business
(53,614)
Non – technical account income
15,795
Profit before members’ agents’ fees
91,214
Members’ agents’ fees
(658)
Profit for the underwriting year
11
90,556
There are no recognised gains or losses in the accounting period other than those included within the technical and non-
technical accounts.
The underwriting year has closed: all items therefore relate to discontinued operations.
The notes set out on pages 65 to 71 form an integral part of these underwriting year accounts
QBE CASUALTY SYNDICATE 386
64
ANNUAL REPORT 64 31 DECEMBER 2024
BALANCE SHEET -
2022 UNDERWRITING YEAR
for the closed year of account as at 31 December 2024
Note
£’000
Assets
Investments
8
601,523
Deposits with ceding undertakings
12,565
Debtors
9
23,273
Reinsurance recoveries anticipated on gross reinsurance to close premium payable
4
370,223
Other assets
Cash at bank and in hand
2,006
Other
10
133,426
Prepayments and other accrued income
1,711
Total assets
1,144,727
Liabilities
Members’ balance
11
93,436
Reinsurance to close premium payable – gross amount
4
1,022,623
Creditors
12
27,795
Accruals and deferred income
873
Total liabilities
1,144,727
These underwriting year accounts on 62 to 71 were approved by the Board of QBE Underwriting Limited on 4 March
2025 and signed on its behalf by:
R C Stone
Director
The notes set out on pages 65 to 71 form an integral part of these underwriting year accounts
QBE CASUALTY SYNDICATE 386
65
ANNUAL REPORT 65 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS
Forming part of the underwriting year accounts
1. Accounting policies
(a) Basis of preparation
These accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Accounting Byelaw (No. 8 of 2005) and applicable
Accounting Standards in the United Kingdom, comprising Financial Reporting Standard 102 “The Financial Reporting
Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS102”) as modified by the Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Accounting Byelaw (No. 8 of 2005).
Members participate on a syndicate by reference to a year of account and each syndicate year of account is a separate
annual venture. These accounts relate to the 2022 year of account which has been closed by reinsurance to close as at 31
December 2024. Consequently, the balance sheet represents the assets and liabilities of the 2022 year of account at the
date of closure. The underwriting account reflects the transactions for that year of account during the three-year period
until closure. These accounts cover the three years from the date of inception of the 2022 year of account to the date of
closure. Accordingly, this is the only reporting period and so corresponding amounts are not shown.
(b) Insurance
The underwriting accounts for each year of account are normally kept open for three years before the result on that year
is determined. At the end of the three-year period, outstanding liabilities can normally be determined with sufficient
accuracy to permit the year of account to be closed by payment of a reinsurance to close premium to the successor year
of account.
(i) Premiums written
Gross premiums are allocated to years of account on the basis of the inception date of the policy. Premiums in
respect of insurance contracts underwritten under a binding authority, line slip or consortium arrangement are
allocated to the year of account corresponding to the calendar year of inception of the arrangement. Premiums
are shown gross of brokerage payable and exclude taxes and duties levied on them.
(ii) Reinsurance premium ceded
Initial reinsurance premiums paid to purchase policies which give excess of loss protection are charged to the
year of account in which the protection commences. Premiums for other reinsurances are charged to the same
year of account as the risks being protected.
(iii) Claims paid and related recoveries
Gross claims paid include internal and external claims settlement expenses and, together with reinsurance
recoveries less amounts provided for in respect of doubtful reinsurers, are attributed to the same year of account
as the original premium for the underlying policy. Reinstatement premiums payable in the event of a claim being
made are charged to the same year of account as that to which the recovery is credited.
(iv) Reinsurance to close premium payable, net of reinsurance
The net reinsurance to close premium payable represents the reinsurance premium payable by the closing year
of account, in order to reinsure the net technical liabilities of the closing year of account. The reinsurance to
close is treated as the extinguishment of the related net insurance liabilities for the closed underwriting year. The
net reinsurance to close premium is determined on the basis of estimated outstanding liabilities and related claims
settlement costs (including claims incurred but not reported), net of estimated collectible reinsurance recoveries,
relating to the closed year of account and all previous years of account reinsured therein.
The estimate of claims outstanding is assessed on an individual case basis and is based on the estimated ultimate
cost of all claims notified but not settled by the balance sheet date. It also includes the estimated cost of claims
incurred but not reported (IBNR) at the balance sheet date based on statistical methods.
QBE CASUALTY SYNDICATE 386
66
ANNUAL REPORT 66 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
1. Accounting policies (continued)
(b) Insurance (continued)
(iv) Reinsurance to close premium payable, net of reinsurance (continued)
These methods generally involve projecting from past experience of the development of claims over time to form a view
of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations in the business
accepted and the underlying terms and conditions. For the most recent years, where a high degree of volatility arises from
projections, estimates may be based in part on output from rating and other models of the business accepted and
assessments of underwriting conditions.
The reinsurers’ share is based on the amounts of outstanding claims and projections for IBNR, net of estimated
irrecoverable amounts, having regard to the reinsurance programme in place for the class of business, the claims
experience for the year and the current security rating of the reinsurance companies involved. A number of statistical
methods are used to assist in making these estimates.
A critical assumption as regards claims estimates is that the past is a reasonable predictor of the likely level of claims
development.
(c) Foreign currency
The functional currency of the Syndicate is UK pound sterling (£). The Syndicate presents its accounts in thousands of
pounds sterling.
Transactions denominated in foreign currencies are translated into sterling at the rates of exchange prevailing at the time
of the transactions. Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of
exchange prevailing at the balance sheet date with the exception of non-monetary assets and liabilities, which are
maintained at historic rates. Open foreign exchange derivatives are marked to market at year end date. All assets and
liabilities arising from insurance contracts are treated as monetary items.
Exchange gains or losses are recognised in the profit and loss non-technical account.
(d) Cash at bank and in hand
Cash comprises cash at bank and money market accounts for use by the Syndicate in the management of its short-term
commitments.
(e) Investments
(i) Other financial investments
Other financial investments comprise shares and other variable yield securities, units in unit trusts, debt
securities, other fixed income securities, loans and deposits with credit institutions. These are managed on a fair
value basis in accordance with the Syndicate’s investment strategy. The Syndicate has elected to measure other
financial investments at fair value through the profit and loss non-technical account.
Listed investments are stated at fair value using quoted prices in active markets for the same instruments where
available. In the absence of an active market, current or recent prices for similar instruments may be used to
estimate fair value, or other valuation techniques for which all significant inputs are based on observable market
data.
Units in unit trusts, including unit trusts which invest in property, are stated at fair value using current unit prices
as advised by the responsible entity, trustee or equivalent of the investment management scheme.
Other unlisted investments are carried at the Directors’ estimate of the current fair value, where prices are sourced
from the investment manager who may use a combination of observable and comparable market prices where
available and carried book value where none exist.
Other financial investments are derecognised when the right to receive future cash flows from the assets has
expired, or when the Syndicate has transferred substantially all the risks and rewards of ownership.
QBE CASUALTY SYNDICATE 386
67
ANNUAL REPORT 67 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
1. Accounting policies (continued)
(e) Investments
(ii) Derivative financial instruments (continued)
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently stated at fair value using valuation techniques for which all significant inputs are based on
observable market data.
(f) Overseas deposits
Overseas deposits, classified in Other Assets, comprise funds held in overseas deposits which are subject to Lloyd’s trust
fund arrangements. These are managed on a fair value basis in accordance with Lloyd’s investment strategy. The
Syndicate has elected to measure overseas deposits at fair value through the profit and loss non-technical account.
Overseas deposits are stated at fair value using quoted prices in active markets for the same instruments where available.
In the absence of an active market, current or recent prices for similar instruments may be used to estimate fair value, or
other valuation techniques for which all significant inputs are based on observable market data.
Overseas deposits are derecognised when the right to receive future cash flows from the assets has expired, or when the
Syndicate has transferred substantially all the risks and rewards of ownership.
(g) Investment income
Investment income comprises all investment income, realised investment gains and losses and movements in unrealised
gains and losses, net of investment expenses, charges and interest. The returns on the overseas deposit funds are allocated
to the year of account as notified by Lloyd’s. The returns on other assets arising in a calendar year are apportioned to
years of account open during the calendar year in proportion to the average funds available for investment on each year
of account.
Realised gains and losses on investments carried at fair value through profit and loss are calculated as the difference
between sale proceeds and purchase price or where forming consideration for reinsurance to close (RITC) receivable the
fair value at the date of transfer. Movements in unrealised gains and losses on investments represent the difference
between the fair value at the balance sheet date and their purchase price or their fair value at transfer as consideration for
RITC receivable, together with the reversal of unrealised gains and losses recognised in the accounting period in respect
of investment disposals.
Investment income on general business is initially recorded in the non-technical account. A transfer is made from the non-
technical account to the general business technical account. Investment income has been wholly allocated to the technical
account as all investments relate to the technical account.
(h) Administrative expenses
Administrative expenses are taken into account on an accruals basis. These recharged expenses include the costs of staff,
who are employed by QBE Management Services (UK) Limited. QBE Management Services (UK) Limited operates both
defined benefit and defined contribution pension schemes, the expense of which is included in the recharges. The
recharged expenses also include the costs of various service and claims handling companies.
Syndicate operating expenses are allocated to the year of account for which they are incurred. Commission and brokerage
are charged to the year of account to which the relevant policy is allocated.
(i) Taxation
Under Schedule 19 of the Finance Act 1993 Managing Agents are not required to deduct basic rate income tax from
trading income. In addition, all UK basic rate income tax deducted from syndicate investment income is recoverable by
Managing Agents and consequently the distribution made to members or their members’ agents is gross of tax. 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 on behalf of the members during the year are included in the
balance sheet under the heading “other debtors”.
No provision has been made for any overseas tax payable by members on underwriting results.
QBE CASUALTY SYNDICATE 386
68
ANNUAL REPORT 68 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
1. Accounting policies (continued)
(j) Profit commission
Profit commission is charged by the Managing Agent at a rate of 20% of profit for the closed year of account, subject to
the operation of a deficit clause. Where profit commission is charged, it is included within standard personal expenses
within the profit and loss - technical account.
2. Segmental Information
An analysis of the underwriting result for the 2022 underwriting year, before investment return, is set out below:
Gross
premium
written
and
earned
Gross claims
incurred
(note a)
Gross
operating
expenses
Reinsurance
balance
(note b)
Total
£’000
£’000
£’000
£’000
£’000
Third party liability
338,972
(174,117)
(94,148)
(20,950)
49,757
Reinsurance acceptances
99,422
(47,050)
(21,435)
(3,657)
27,280
Reinsurance to close
713,406
(1,063,982)
6,023
315,008
(29,545)
Total
1,151,800
(1,285,149)
(109,560)
290,401
47,492
a) Gross claims incurred comprises gross claims paid and reinsurance to close the 2022 premium payable.
b) The reinsurance balance comprises reinsurance premiums ceded less reinsurance recoveries on claims paid and
reinsurance recoveries anticipated on reinsurance to close the 2022 payable.
c) All premiums are concluded in the UK.
d) Operating expenses excludes standard personal expenses and includes reinsurance related expenses.
e) Gross premium written equals gross premium earned.
f) The underwriting year accounts include credits of £6,039k gross premium written, and £6,115k gross operating
expenses relating to 2022 and prior underwriting years.
3. Reinsurance to close premium received, net
£’000
Gross reinsurance to close premium received
1,005,729
Reinsurance recoveries anticipated
(292,323)
Reinsurance to close premium receivable, net of reinsurance
713,406
4. Reinsurance to close premium payable, net of reinsurance
Reported
IBNR
Future
premiums
Total
£’000
£’000
£’000
£’000
Gross reinsurance to close premium payable
(684,563)
(347,311)
9,251
(1,022,623)
Reinsurance recoveries anticipated
258,485
111,309
429
370,223
Reinsurance to close premium payable, net of reinsurance
(426,078)
(236,002)
9,680
(652,400)
QBE CASUALTY SYNDICATE 386
69
ANNUAL REPORT 69 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
5. Net operating expenses
£’000
Acquisition costs – brokerage
(61,529)
Acquisition costs – other
(28,840)
Administrative expenses
(20,102)
Members’ standard personal expenses
(25,686)
Reinsurers commissions and profit participations
911
(135,246)
Administrative expenses include:
£’000
Auditors’ remuneration
Fees payable to the Syndicate auditors for the audit of the 2022 accounts
442
Other services pursuant to regulatory requirements
184
6. Investment income, expenses and charges
(a) Investment income
£’000
Income from investments
32,947
Gains on the realisation of investments
33,219
66,166
(b) Investment expenses and charges
£’000
Losses on the realisation of investments
(24,995)
Investment management expenses
(1,413)
(26,408)
7. Analysis of result by year of account
2021 and
prior years
of account
2022 pure
year of
account
Total
£’000
£’000
£’000
Balance excluding investment return and operating expenses
(41,608)
198,659
157,051
Brokerage and commission on gross premium
2,255
(63,785)
(61,530)
(39,353)
134,874
95,521
Allocated investment return transferred from the non-technical account
53,614
Net operating expenses excluding brokerage and commission
(48,031)
Standard personal expenses
(25,685)
Members’ agents’ fees
(658)
Non – technical account income
15,795
90,556
QBE CASUALTY SYNDICATE 386
70
ANNUAL REPORT 70 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
8. Investments
Cost
Market value
£’000
£’000
Shares and other variable yield securities and units in unit trusts
79,733
45,059
Debt securities and other fixed income securities
571,579
558,747
Derivative assets
-
(2,283)
651,312
601,523
9. Debtors
£’000
Due within one year
Arising out of direct insurance operations:
Due from intermediaries
(35,948)
Inter-year loan
11,867
Arising out of reinsurance operations
38,759
Other
8,595
23,273
10. Other
These are lodged as a condition of conducting underwriting business in certain countries.
£’000
Overseas deposits
133,426
133,426
11. Members’ balance
£’000
Non-standard personal expenses
2,880
Profit for the closed year of account
90,556
Members’ balance
93,436
Amounts are stated after the deduction of members’ agents’ fees
12. Creditors
£’000
Due within one year
Arising out of direct insurance operations:
Due to intermediaries
4,550
Arising out of reinsurance operations
(7,562)
Other
(24,783)
(27,795)
13. Financial assets and liabilities
The assets and liabilities of the closing year of the Syndicate are financial assets and liabilities. The Directors consider
the carrying value of the financial assets and liabilities to be equal to their fair value.
QBE CASUALTY SYNDICATE 386
71
ANNUAL REPORT 71 31 DECEMBER 2024
NOTES TO THE UNDERWRITING YEAR ACCOUNTS (continued)
Forming part of the underwriting year accounts
14. Related parties
The Managing Agent of the Syndicate, QUL, and a corporate Name that provides capital to the Syndicate, are wholly
owned subsidiaries of QBE Insurance Group Limited (Group).
All transactions between the Syndicate and companies within the Group are conducted on normal market terms.
Directors’ interests
All of the Executive Directors listed on page 2 hold, or held in the year, Executive Directorships of companies within
QBE European operations. In addition, C A Brown, S Maddock, M G McCaig and Sir N K Skeoch are, or were during
the underwriting year, Non-Executive Directors of related companies within QBE EO. T C W Ingram resigned as Non-
Executive Director on 29 March 2023.
T C W Ingram indirectly had a non-material, non-voting economic interest as an underwriting line of £8,500k in Syndicate
386 for the underwriting year 2022.
Inter-syndicate transactions
In certain instances, the Syndicate has underwritten reinsurances of QBE’s other managed syndicate. In respect of the
2022 year of account, there were no instances of reinsurances underwritten between QBE’s syndicates.
Outwards reinsurance contracts with related QBE companies
The Syndicate has booked outwards reinsurance business with companies within the Group during the period, premiums
ceded in respect of the 2022 year of account were £2,976k.
Profit commission
Profit commission is payable to the Managing Agent as per note 1(j). During the period there was a charge amounting to
£3,797k in respect of the 2022 year of account. At the end of the period, the outstanding balance was £20,796k.
Managing Agent
Total fees payable to QBE Underwriting Limited in respect of services provided to the Syndicate in respect of the 2022
year of account amounted to £2,198k. No balance is outstanding at the year end.
Administrative expenses
Total expenses recharged from QBE Underwriting Limited, QBE Management Services (UK) Limited and QBE Partner
Services (Europe) LLP in respect of services provided to the Syndicate in the 2022 year of account amounted to £10,663k.
At the end of the period, there was no balance outstanding.
There are no other transactions or arrangements to be disclosed.
QBE CASUALTY SYNDICATE 386
72
ANNUAL REPORT 72 31 DECEMBER 2024
SEVEN YEAR SUMMARY
The results for the last seven years on an annual accounting basis are as follows:
2018
2019
2020
2021
2022
2023
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Gross premium written
350,624
346,423
373,101
412,345
456,782
415,222
371,246
Net earned premiums
314,323
336,005
326,473
356,824
425,997
261,557
220,548
Net claims
(173,086)
(243,816)
(187,404)
(213,394)
(260,679)
(133,244)
(125,627)
Acquisition costs
(79,637)
(75,711)
(83,271)
(86,019)
(100,806)
(93,331)
(79,518)
61,600
16,478
55,798
57,411
64,512
34,982
15,403
Profit/(loss) on exchange
(2,103)
305
(174)
1,351
58
9,673
4,634
Other net operating expenses
(36,443)
(29,840)
(20,766)
(22,829)
(21,914)
(34,859)
(21,789)
Investment return
8,087
38,309
3,565
(3,097)
(53,290)
65,123
46,513
Profit / (loss) for the financial year
31,141
25,252
38,423
32,836
(10,634)
74,919
44,761
The results for the last seven underwriting years to close are as follows:
2018
2019
2020
2021
2022
2023
2024
Syndicate allocated capacity
£352,200k
£316,600k
£316,600k
£316,600k
£316,500k
£332,900k
£366,153
Capacity utilised
96.89%
109.8%
101.1%
117.2%
117.6%
133.3%
119.7%
Number of underwriting members
1,254
1,230
1,234
1,210
1,186
1,159
1,134
Aggregate net premiums
£304,900k
£326,900k
£293,800k
£347,100k
£347,300k
£281,300k
£265,988
Net capacity utilised
86.57%
103.2%
92.8%
109.6%
109.7%
84.5%
72.6%
Result for an illustrative share of £10,000
2018
2019
2020
2021
2022
2023
2024
£
£
£
£
£
£
£
Gross premiums
9,689
10,978
10,111
11,722
11,764
13,335
11,973
Net premiums
8,657
10,324
9,280
10,964
10,972
8,449
7,264
Reinsurance to close from earlier
account
19,368
19,698
20,972
20,418
23,541
21,899
19,484
Net claims
(6,255)
(6,083)
(6,536)
(4,110)
(6,417)
(4,699)
(4,641)
Reinsurance to close
(18,056)
(20,482)
(20,836)
(22,827)
(24,708)
(22,189)
(17,818)
Result on exchange
0
0
0
0
0
0
-
Syndicate operating expenses
(2,552)
(3,102)
(2,933)
(3,000)
(3,200)
(3,466)
(2,992)
Balance on technical account
1,162
355
(53)
1,445
188
(6)
1,297
Investment income and gains less
losses, less expenses and charges
85
923
84
(176)
(1,011)
2,236
1,896
1,247
1,278
31
1,269
(823)
2,230
3,193
Illustrative personal expenses for a
traditional Name
Managing agent’s fee
(60)
(60)
(60)
(60)
(60)
(60)
(60)
Contribution to Lloyd’s Central Fund
(33)
(39)
(37)
(39)
(40)
(39)
(39)
Profit commissions
(222)
(227)
-
(225)
-
(421)
(568)
Lloyd’s subscription
(43)
(44)
(38)
(40)
(8)
(27)
(34)
Other
-
-
-
(4)
-
-
-
(358)
(370)
(
135)
(368)
(108)
(547)
(701)
Profit/(loss) after illustrative profit
commission and personal expenses
889
908
(104)
901
(931)
1,683
2,492
Note:
1 The seven-year summary has been prepared from the audited accounts of the Syndicate.
2 These figures exclude members’ agents’ fees.
