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Lloyd’s Syndicate 1414
Annual Report and Accounts for the year ended
Managing Agent - Corporate Information
1
Strategic report of the Managing Agent
2
Managing Agent’s report
8
Statement of Managing Agent’s responsibilities
9
Independent auditor’s report to the member of Syndicate 1414
10
Statement of profit or loss and other comprehensive income
13
Balance sheet
15
Statement of changes in members’ balances
17
Statement of cash flows
18
Notes to the financial statements
19
Contents
Managing Agent
Directors
Robert P Sewell
Non-executive Chairman
Mark L Pepper
Ian D Thompson
Helen R Jones-Bak
Pascal Keutgens
Non-executive
Andrew Moss
Non-executive
Samantha J Hoe-Richardson
Non-executive
Susan J Sutherland
Non-executive
Company Secretary
Elizabeth H Guyatt
Registered Office
20 Fenchurch Street
London
England
EC3M 3BY
Active Underwriter
Mark L Pepper
Investment Managers
Conning Asset Management Limited
Independent Auditor
Deloitte LLP
Statutory Auditor
1 New Street Square
London
EC4A 3HQ
Managing Agent - Corporate Information
www.ascotgroup.com
1
Ascot | Syndicate 1414
The Directors of the managing agent, Ascot Underwriting Limited (AUL), present their strategic report for the year
ended 31 December 2024.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS
The principal activity of Syndicate 1414 (“the Syndicate”) remains the transaction of general insurance and
reinsurance business in the United Kingdom.
For the 2024 year of account Ascot Corporate Name Limited (ACNL) is the sole corporate member, a company
incorporated in England and Wales, and ultimately owned by Canada Pension Plan Investment Board. The final
allocated premium income capacity for each of the last four underwriting years and the prospective year is shown
below:
Syndicate Capacity
Year
£m
2021
900
2022
950
2023
1,250
2024
1,250
2025
1,250
The managing agent of Syndicate 1414 is AUL. AUL is a wholly owned subsidiary of Ascot Underwriting Group
Limited (AUGL), which is also the parent of ACNL.
AUL owned one subsidiary during the year, Ascot Insurance Services Limited (AIS) a service company for Syndicate
1414 providing services between the Syndicate and businesses who are acting as coverholders for the Syndicate.
Syndicate 1414 utilises Lloyd’s Brussels (Lloyd’s Insurance Company SA) to underwrite European Union (EU) and
European Economic Area (EEA) business following the UK’s exit from the EU.
KEY PERFORMANCE INDICATORS
As at 1 January 2024, the Syndicate’s presentational currency changed from Sterling to United States dollar.
Therefore, the 2023 comparative numbers within these financial statements have been restated to United States
dollar (note 3 Part I).
The key performance indicator for the Syndicate is considered to be profitability. The directors measure profitability
of the syndicate by reference to the combined ratio. The combined ratio for the last two years is set out in the table
below:
Year ended
31 December 2024
Year ended
31 December 2023 (restated)
Net loss ratio
1
57.9%
51.9%
Net expense ratio
2
33.7%
34.7%
Combined ratio
3
91.6%
86.6%
Gross written premium increased from $1,791.5m in 2023 (restated) to $1,942.1m in 2024, an increase of 8%. This is
being driven by a combination of rate increases, new business opportunities and notable reinstatement premiums,
arising from catastrophe events during the financial year. Excluding reinstatement premiums of $77.3m (2023
(restated): $25.9m) premium growth was 6%. These increases are fuelled by continued organic growth in existing
books of business, through considered cycle management, in response to a prolonged period of hardening market
rates from which the market is beginning to emerge.
Net written premium increased from $1,330.9m in 2023 (restated) to $1,462.7m in 2024, an increase of 10%, with a
premium retention ratio of 75% for 2024 versus 74% for 2023. Excluding net reinstatement premiums of $38.8m
(2023 (restated): $25.3m) premium growth was 9%. This is being driven by the above mentioned increases in gross
premiums written, whilst the exposure of the Syndicate continues to be protected with the use of an extensive
reinsurance programme. Despite a continued hardening reinsurance market environment, the Syndicate has
managed its costs effectively, with outwards reinsurance premiums including reinstatement premiums written
increasing by 4% compared to the increase in gross written premium of 8%.
Strategic report of the Managing Agent
www.ascotgroup.com
2
Ascot | Syndicate 1414
1
Net loss ratio is defined as claims incurred, net of reinsurance as a percentage of earned premiums, net of reinsurance
2
Net expense ratio is defined as operating expenses as a percentage of earned premiums, net of reinsurance
3
Combined ratio is defined as total costs (including claims and expenses) as a percentage of earned premiums, net of reinsurance
We are pleased to report that the Ascot syndicate has again produced an excellent underwriting profit for the 2024
year. This achievement comes despite a relatively heavy catastrophe year, with some industry estimates stating that
global catastrophe losses have exceeded $140bn for 2024. The most significant events affecting Ascot were
Hurricane Milton, Hurricane Helene, and the Baltimore Bridge marine loss (see net loss ratio section below). This
demonstrates Ascot’s focus on underwriting discipline and reducing volatility within its portfolio continues to drive
a profitable result.
Net loss ratio
Note
Year ended
31 December 2024
Year ended
31 December 2023
(restated)
Variance
Current accident year
57.5%
50.0%
7.5%
Prior accident years
6
0.4%
1.9%
(1.5)%
Net loss ratio
57.9%
51.9%
6.0%
The current accident year net loss ratio deteriorated 7.5% due to higher catastrophe activity compared to the prior
year which was relatively benign. The largest man made catastrophe to impact the Syndicate in terms of scale
being the Dali Baltimore Bridge Collision, gross loss of $197.8m and net $24.0m. 2024 continued to be a year of high
volume natural catastrophe events, with a significant number of worldwide wind storm, flood, cyclone and
convective storm events. Examples of such events that impacted the Syndicate and their relative scale are;
Hurricane Helene, gross loss of $67.7mand net of $67.2m; Hurricane Milton, gross loss of $53.7m and net $26.6m; and
Brazil Floods, gross loss of $22.6m and net $13.1m. Catastrophe events made up 14.1% of the current accident year
ratio (2023 (restated): 5.4%).
The prior accident year deterioration is driven by experience on events such as the Russia-Ukraine war and Italian
Storms. This is offset by favourable non-event experience and change in actuarial assumptions, which is
predominantly benefiting the Marine & Energy and Property sectors.
Net expense ratio
Year ended
31 December 2024
Year ended
31 December 2023
(restated)
Variance
Acquisition cost ratio
27.7%
28.7%
(1.0)%
Administrative expenses ratio
6.1%
6.0%
0.1%
Net expense ratio
33.7%
34.7%
(1.0)%
The net expense ratio has improved year on year, with Ascot’s acquisition cost ratio of 27.7% an improvement on the
prior year of 28.7%. This is largely due to changes in business mix which is resulting in an underlying decrease in the
acquisition cost ratio.
2024 reflects a marginal increase of 0.1% in the administrative expense ratio. Aministrative expenses (including other
Lloyd's direct expenses) have increased from $77.5m to $86.0m, an increase of 11.0%. This is driven by increased staff
costs caused by headcount increases across the business, as well as continued enhancements to our IT and data
solutions.
RESULTS AND PERFORMANCE
The result for the 2024 financial year, as set out on pages 13 and 14, is a profit of $185.1m (2023 (restated): profit of
$252.6m) and a combined ratio of 91.6% (2023 (restated): 86.6%). Syndicate profits have been supplemented by an
overall investment return of $53.1m (2023 (restated): $89.1m).
Profits will continue to be distributed by reference to the results of individual underwriting years. Under Lloyd’s
Accounting rules, the trading result of a year of account will not normally be declared until the end of three years
from commencement. The 2022 year of account was closed at 31 December 2024 with a profit of $245.6m or 20.6%
of stamp capacity of £950.0m (2023 (restated): 2021 year of account closed at 31 December 2023 with a profit:
$124.3m or 10.8% of stamp capacity of £900.0m).
Strategic report of the Managing Agent continued
www.ascotgroup.com
3
Ascot | Syndicate 1414
FUTURE OUTLOOK
The Syndicate has grown appropriately into the hardening market, adding over $1bn of top line income since 2019.
Ascot is renowned for it’s rigorous cycle management and timing the market appropriately. We have planned for
negative rate movement in 2025, and in some classes, there may be perceived adequacy if one only considers rate
movement over time as a stand-alone measure. Many believe that property is extremely well priced and are
complacent about giving back rate. However, if you were to overlay increased global loss frequency and severity, is
the adequacy really as good as one perceives? The answer to that is most certainly no. We will be very mindful of
taking multiple views when assessing the business we write to ensure good profit potential exists at both a risk and
portfolio level.
We have an excellent team of leading underwriters who are well experienced in cycle management and have seen
a softening cycle before. We will cut back where appropriate, but generally, 2025 should be a reasonable
underwriting environment as long as rate reductions are not too extreme.
As ever, our excellent result could not have been achieved without the dedication of the team at Ascot, many of
whom have worked in the business for many years. As the market softens, our cautious reserving and strong
portfolios should come to the fore even more. This is when our underwriters must demonstrate their superior
underwriting and they are well equipped for what the market may present to us in 2025.
PRINCIPAL RISKS AND UNCERTAINTIES
The following are considered to be the principal risks for the Syndicate along with a brief overview of how these risks
are managed. Risks are managed through the Risk Management Framework.
The Board of Directors is ultimately responsible for Risk Management. All aspects of the Risk Management
Framework have been approved by the Board of Directors. Responsibility for the oversight of risk lies on a day to day
basis with the Chief Risk Officer who reports into the Risk Committee, and ultimately into the Board. There are
several sub-committees that are responsible for the identification and management of certain risks (for example,
the Underwriting Management Committee (“UMC”) is responsible for many of the risks which are classified as
Insurance Risk).
The Risk Committee members are represented on all governance committees. This allows key issues requiring the
high level thinking and consideration of the Risk Committee from a strategic perspective to be reported by
members and discussed. The Risk Committee thus forms a quasi-independent body that can monitor the workings
of the other committees and ensure consistency in the approach to risk across Ascot. In the event that the Risk
Committee cannot be quorate, any decisions and oversight will be undertaken by the Board of Directors.
The comments below represent only an overview of the key risks and some of the controls to mitigate these risks.
Insurance risk
– this includes Underwriting and Reserving risk. It is the risk arising from uncertainty in the
likelihood, magnitude and timing of insured losses, the risk of inadequate pricing and the risk of insufficient claims
provisions. Insurance risk includes the risk of increased or prolonged claims inflation. This risk is effectively the
business of the Syndicate. Management of insurance risk includes a comprehensive underwriting peer review
process,
management
information
that
includes
aggregation
management
and
profitability
measures,
independent external reserve reviews and the strict control of terms and conditions of contractual wordings to
manage liabilities.
Credit risk
– this is the risk of loss arising from the inability of reinsurers or intermediaries to meet their financial
obligations to Ascot. The largest risk is the non-performance of the Syndicate’s reinsurers. This is managed by
monitoring the concentration to and security rating of each of our reinsurance partners.
Market risk
– this represents the potential loss of value or earnings arising from changes in the market price of
assets as a result of external market and economic factors. The risk is managed through conservative asset
allocation and concentration limits. Liquidity risk and Currency risk are part of market risk but discussed separately
below.
Operational risk
– the risk is that the Syndicate’s operations are adversely impacted from inadequate or failed
internal processes, people or systems or from external events. Key risks considered here include Operational
Resilience, Culture, Outsourcing, Legal and Regulatory risk and Information Security risk. To counter the impact, the
Company maintains various contingency plans (e.g. server backups) to mitigate the impact of these risks.
Liquidity risk
– the risk is that sufficient cash may not be available to settle obligations when due at a reasonable
cost. The primary liquidity risk of the Syndicate is the obligation to pay claims to policyholders following catastrophe
events. The projected settlements of these liabilities are modelled on a regular basis using actuarial techniques and
the currency and duration profile of the Syndicate’s assets are aligned accordingly.
Strategic report of the Managing Agent continued
www.ascotgroup.com
4
Ascot | Syndicate 1414
Currency risk
– the risk is that the fair value or future cash flows of a financial instrument will fluctuate owing to
changes in foreign exchange rates. The Syndicate maintains four separate currency funds: Sterling, Euros, United
States dollars and Canadian dollars. The Syndicate seeks to mitigate the risk by matching the estimated foreign
currency denominated liabilities with assets denominated in the same currency, subject to regulatory funding
requirements.
Group risk
– the risk that the activities of companies within Ascot Group (Ascot Group Limited (AGL) and it’s
subsidiaries) have an adverse impact on each other. The key risks considered are sharing of resources (including
financial, labour and infrastructure) and brand damage from negative publicity. These are mitigated through clear
governance structures and communication between entities across the group as well as a coordinated marketing
and communications strategy.
Climate risk
- the risk that climate change associated risks, including physical, transitional and liability aspects are
not fully considered in the context of wider business operations. The Syndicate’s approach to mitigating potential
financial risk from climate change is set out within the Sustainability framework that monitors and reports on
climate associated risks with key outputs flowing up to the Board for review and action.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
Whilst there is no disclosure requirement for the Syndicate to include the below, the directors of the Board would
like to share the following statement as it represents the actions being taken by Ascot, within the UK (being AUGL
and its subsidiaries). In addition to the ESG disclosures below, the Board's responsibilities in respect of Lloyd's ESG
requirements are re-confirmed annually through the Oversight Principles Attestation, and the Board continues to
monitor requirements from Lloyd's as they develop.
The Board recognises the importance of building on our existing responsible business practices with continuing to
embed environmental, social and governance factors.
Environment
– Ascot recognises the need to address the impact of climate change on global communities. Ascot's
carbon reduction plan, which is published on the Company website, states that Ascot Underwriting Limited is
committed to achieving Net Zero Greenhouse Gas emissions by 2050 and has continued its progress to track its
scope 1 and 2 emissions, along with a subset of scope 3 emissions. The emissions disclosed below cover emissions
across Scope 1 and Scope 2 as well as Scope 3 transport emissions related to Ascot's transport mileage claims
(business travel in rental cars or employee-owned vehicles where the Company is responsible for purchasing the
fuel). In line with our commitment to improving the transparency of our contribution to climate change, the
following tables summarise the results of the Streamlined Energy and Carbon Report (SECR), which has been
calculated in line with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard:
2023-2024 greenhouse gas emission figures
4
(tonnes CO2 equivalent)
Greenhouse Gas (GHG) Emissions
2024
2023
GHG Emissions from
UK Operations
(tCO2e)
% Contribution to
Total Emissions
(location/ market
based)
GHG Emissions from
UK Operations
(tCO2e)
% Contribution to
Total Emissions
(location/ market
based)
Scope 1 – Direct
25
26% location based/
98% market based
25
27% location based/
89% market based
Scope 2: Electricity
(Location-based; Indirect)
71
74%
62
69%
Scope 2: Electricity
(Market-based; Indirect)
-
-
-
-
Scope 3
(Transport Fuel Reimbursed)
1
1% location based/ 2%
market based
3
3% location based/
11% market based
Total
(Including Scope 2 location-based)
97
-%
90
-%
Total
(including Scope 2 market-based)
26
-%
28
-%
Strategic report of the Managing Agent continued
www.ascotgroup.com
5
Ascot | Syndicate 1414
4
The emission data disclosed within this report has been supplied by ERM Limited and is on a calender year basis.
UK Energy Consumption and Intensity
Source of Energy Consumption
2024
2023
Energy
Consumption (kWh)
% Contribution to
Total Energy
Consumption
Energy
Consumption (kWh)
% Contribution to
Total Energy
Consumption
Natural Gas
131,109
27.5%
121,647
28.0%
Electricity
342,061
71.8%
300,830
69.5%
Vehicle Fleet
3,032
0.7%
10,664
2.5%
Total
476,202
100.0%
433,141
100.0%
The emissions intensities for Ascot’s UK operations for 2024 are 0.049 and 0.013 tCO2e per £m revenue for location
based and market based respectively (2023: 0.064 and 0.013 respectively). The emissions intensities against the
number of employees (FTE) are 0.273 and 0.072 tCO2e per UK employee for location based and market based
respectively (2023: 0.282 and 0.093 respectively). The emissions intensities against meters square space (m
2
) are
0.035 and 0.009 for location based and market based respectively (2023: 0.035 and 0.011 respectively).
Ascot has seen an increase in energy consumption compared to the previous year. This has been driven by an
increase in the consumption of electricity (offset somewhat by a reduction in natural gas consumption) driven
primarily by an increase in staff headcount which Ascot believes has resulted in more people working in person in
the office.
A range of energy efficiency measures have been recently implemented, in part or full, which will continue to deliver
savings into 2025. These include:
•
Energy STRAVA:
This is a gamification programme between occupiers of 20 Fenchurch Street to encourage
energy saving. Ascot has been one of the best performing occupiers in the property for the competition.
•
Data sharing:
Ascot has access to its building’s energy data through the Atrius system, allowing daily
monitoring of energy use.
•
Tenant Energy Saving Workshops:
Ascot participated in a tenant energy saving workshop with its building
managers to engage in energy saving measures.
•
Occupier Green Meetings:
Ascot regularly attends meetings with its building managers to be updated on
initiatives within the property, which include awards, accreditations, energy usage summaries and waste
information.
•
REGO certified energy:
Ascot procures all its energy from renewable energy sources.
•
Project Go Dark:
Ascot participates in a building innovation to reduce night light pollution at 20 Fenchurch
Street.
•
General Energy Management Improvements:
Ascot takes care to ensure that all computers, monitors,
personal chargers, and other electrical appliances on site are switched off when not being used.
•
Heating/cooling times changed:
Air conditioning and heating times are managed throughout the week,
with air conditioning being switched off from 6pm Monday – Thursday and 5pm on Fridays.
•
LED Lighting Upgrade:
All lights in the Ascot office have been switched to LEDs.
Social
- Ascot endeavours not only to be a good corporate citizen and trusted insurer, but also a respected employer
that prioritises the importance of staff well-being and success. Ascot is an equal opportunities employer and the
Board continues to place emphasis on ensuring diversity in its broadest sense within the Company.
Ascot’s commitment to maintaining an inclusive culture and recognising and celebrating our diverse workforce is
critical to creating an environment where everyone’s contributions are appreciated and valued. This is enhanced by
the contribution of Ascot's Diversity & Inclusion Council. This employee led group’s purpose is to champion cultural
celebration and inclusion in the workplace, whilst spearheading corporate initiatives and events that support and
celebrate the many diverse cultures at Ascot.
The AUL Charity Committee meets regularly to assess ongoing charitable partnerships and other ways in which we
are able to support the local community. This has included the participation of Ascot employees through a
Company wide vote to nominate the chosen charity of the year 'Holding on letting go'. Donations have been made
to charities by service company Ascot Underwriting Holdings Limited (AUHL) throughout the year to local causes
such as the East End Community Foundation and The Ben Kinsella Trust, as well as larger national charities such as
The British Heart Foundation, World Wildlife Fund and Epilepsy Society. Ascot staff have provided 56 volunteering
days to local communities by supporting local charities and organisations such as Mudchute Farm, Migrateful and
the Lloyd's Community Programme. Ascot remains partnered with the Sponsors for Educational Opportunity
charity, supporting students from underserved and underrepresented backgrounds for career success via
internships.
Strategic report of the Managing Agent continued
www.ascotgroup.com
6
Ascot | Syndicate 1414
Governance
- Ascot is committed to fostering and promoting responsible corporate governance and transparency.
The Board comprises an independent Chair, three independent Non-Executive Directors, a Non-Executive Director
representative of the principal shareholder, the Chief Executive Officer, the Chief Financial Officer and the Chief
Underwriting Officer. The Company's Non-Executive Directors bring a wide range of experience and skills to the
Board. All new directors receive a tailored induction which is dependent on their current skill set, experience and
knowledge. This is designed to ensure that the collective Board has the correct tools to address and balance
stakeholders' interests with the Company's business needs. Directors continue to keep their knowledge and
familiarity with the business up to date by engaging with senior management, attending appropriate briefing
sessions and participating in a Board training plan.
The Board delegates certain tasks to committees and individuals although the Board itself retains ultimate
responsibility for the affairs and management of the Company. The Board's terms of reference contains a list of
matters reserved to the Board which must not be delegated to a sub-committee or individual. The Board's terms of
reference is reviewed at least annually and reapproved by the Board each year. The Board Diversity Policy, sets out
the Board's approach to diversity, is reviewed annually and can be found on the Company website. Oversight and
discussion of ESG related items takes place across various committees in the governance framework with notable
developments escalated to the Syndicate Executive, the Board's subcommittees and ultimately, the Board.
The strategic report was approved at a meeting of the Board of Directors and signed on its behalf by:
Ian D Thompson
Chief Executive Officer
Ascot Underwriting Limited
25 February 2025
Strategic report of the Managing Agent continued
www.ascotgroup.com
7
Ascot | Syndicate 1414
The directors of the managing agency, Ascot Underwriting Limited, present their report and audited annual
financial statements for the year ended 31 December 2024.
This annual report is prepared using the annual basis of accounting as required by the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (“the 2008 Lloyd’s Regulations”).
As a result of the 2008 Lloyd’s Regulations, Managing Agents are required to prepare annual financial statements
which comply with the provisions of the Companies Act 2006, subject to certain modifications as specified in the
regulations, for each syndicate that they manage.
Results and performance
This has been discussed in the strategic report.
Future outlook
This has been discussed in the strategic report.
Environmental, social and governance matters
This has been discussed in the strategic report.
Directors
The directors and officers of Ascot Underwriting Limited who held office during the year and up to the date of
signing are listed below:
Robert P Sewell
Non-executive Chairman
Sir Richard B Dearlove
Non-executive Chairman
Resigned 11 July 2024
Ian D Thompson
Chief Executive Officer
Appointed 30 September 2024
Jonathan M Zaffino
Chief Executive Officer
Resigned 30 September 2024
Helen R Jones-Bak
Pascal Keutgens
Non-executive
Andrew Moss
Non-executive
Mark L Pepper
Samantha J Hoe-Richardson
Non-executive
Susan J Sutherland
Non-executive
Company Secretary
Elizabeth H Guyatt
Active Underwriter
Mark L Pepper was active underwriter of Syndicate 1414 throughout 2024. Mr Pepper began his career in insurance
in 1987 and joined Ascot at its inception in 2001 to lead the Treaty team. He was promoted to the role of Chief
Underwriting Officer in 2009 and is a member of the Board.
Risk management
This has been discussed in the strategic report within
Principal risks and uncertainties.
Managing Agent’s report
www.ascotgroup.com
8
Ascot | Syndicate 1414
The directors of the Managing Agent are responsible for preparing the strategic report and the managing agent's
report and the annual financial statements 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 financial statements for each financial year. Under that law the directors have
prepared the Syndicate annual financial statements in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting
Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102) and Financial
Reporting Standard 103 Insurance Contracts (FRS 103).
The IAD requires that the directors must not approve the annual financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Syndicate and of the profit or loss of the Syndicate for that
period. In preparing these Syndicate annual financial statements, the Managing Agent is required to:
•
select suitable accounting policies and then apply them consistently, with the exception of changes arising
on the adoption of new accounting standards in the year;
•
make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable United Kingdom Accounting Standards, including FRS 102 & 103 have been
followed, subject to any material departures disclosed and explained in the syndicate annual financial
statements; and
•
prepare the annual financial statements on the basis that the Syndicate will continue to write business
unless it is inappropriate to presume that the Syndicate will do so.
The directors of the Managing Agent confirm that they have complied with the above requirements in preparing
the Syndicate annual financial statements. 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 annual
financial statements 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 Ascot website, on
which these financial statements may be published. Legislation in the UK concerning the preparation and
dissemination of annual financial statements may differ from legislation in other jurisdictions.
The directors of the Managing Agent are responsible for the preparation and review of the iXBRL tagging that has
been applied to the Syndicate Accounts in accordance with the instructions issued by Lloyd’s, including designing,
implementing and maintaining systems, processes and internal controls to result in tagging that is free from
material non-compliance with the instructions issued by Lloyd’s, whether due to fraud or error.
Charitable Donations
Service company AUHL made donations for charitable purposes of $299,626 during the year (2023 (restated):
$299,052), on behalf of the UK group. 80% of these donations, amounting $239,701 (2023 (restated): nil ) were
recharged to the Syndicate. No donations were made for political purposes (2023 (restated): nil).
Disclosure of information to auditors
Each of the persons who are directors of the Managing Agent at the time this report is approved confirms that:
•
as far as each of them is aware, there is no information relevant to the audit of the Syndicate’s annual
financial statements for the year ended 31 December 2024 of which the auditors are unaware; and
•
the directors have taken all steps that they ought to have taken in their duty as directors in order to make
themselves aware of any relevant audit information and to establish that the Syndicate’s auditors are aware
of that information.
Independent auditors
Deloitte LLP have expressed their willingness to continue in office as auditors.
Approved by order of the board
Helen R Jones-Bak
Chief Financial Officer
Ascot Underwriting Limited
25 February 2025
Statement of Managing Agent’s responsibilities
www.ascotgroup.com
9
Ascot | Syndicate 1414
Report on the audit of the syndicate annual financial statements
Opinion
In our opinion the syndicate annual financial statements of Syndicate 1414 (the ‘syndicate’):
•
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit/ for the
year then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,
including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”; and
•
have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and section 1 of the Syndicate Accounts Instructions
Version 2.0.
We have audited the syndicate annual financial statements which comprise:
•
statement of profit or loss and other comprehensive income;
•
statement of changes in members’ balances;
•
balance sheet;
•
statement of cash flows; and
•
the related notes 1 to 28.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law
and the Syndicate Accounts Instructions. Our responsibilities under those standards are further described in the
auditor's responsibilities for the audit of the syndicate annual financial statements section of our report.
We are independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the managing agent’s use of the going concern basis
of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue in
operations for a period of at least twelve months from when the syndicate financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are described in
the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the syndicate annual
financial statements and our auditor’s report thereon. The managing agent is responsible for the other information
contained within the annual report. Our opinion on the syndicate annual financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the syndicate annual financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Independent auditor’s report to the member of Syndicate 1414
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10
Ascot | Syndicate 1414
Responsibilities of managing agent
As explained more fully in the managing agent’s responsibilities statement, the managing agent is responsible for
the preparation of the syndicate annual financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the managing agent determines is necessary to enable the preparation of
syndicate annual financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the syndicate annual financial statements, the managing agent is responsible for assessing the
syndicate’s ability to continue in operation, disclosing, as applicable, matters related to the syndicate’s ability to
continue in operation and to use the going concern basis of accounting unless the managing agent intends to
cease the syndicate’s operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the syndicate annual financial statements
Our objectives are to obtain reasonable assurance about whether the syndicate annual financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these syndicate annual financial
statements.
A further description of our responsibilities for the audit of the syndicate annual financial statements is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the syndicate and its control environment, and reviewed the syndicate’s
documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We
also enquired of management and internal audit about their own identification and assessment of the risks of
irregularities.
We obtained an understanding of the legal and regulatory frameworks that the syndicate operates in, and
identified the key laws and regulations that:
•
had a direct effect on the determination of material amounts and disclosures in the financial statements.
These included the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations
2008 and the Lloyd’s Syndicate Accounting Byelaw (no. 8 of 2005); and
•
do not have a direct effect on the financial statements but compliance with which may be fundamental to
the syndicate’s ability to operate or to avoid a material penalty. These included in the requirements of
Solvency UK.
We discussed among the audit engagement team including relevant internal specialists such as actuarial and IT
specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and
where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and
regulations in the following areas, and our procedures performed to address them are described below:
•
Estimation of pipeline premiums requires significant management judgement and therefore there is
potential for management bias through manipulation of core assumptions. In response our testing
included, on a sample basis, performed substantive procedures on new binders during the year, compared
management’s estimates on prior year policies against actual premiums received as well as to historical
experience on similar policies.
•
Valuation of technical provisions includes assumptions requiring significant management judgement and
involves complex calculations, and therefore there is potential for management bias. In response to these
risks we involved our actuarial specialists to develop independent estimates of significant classes of
technical provisions and performed review of assumptions relating to technical provisions.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the
risk of management override. In addressing the risk of fraud through management override of controls, we tested
the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making
accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Independent auditor’s report to the member of Syndicate 1414
continued
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11
Ascot | Syndicate 1414
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Technical account – General business
For the year ended 31 December 2024
Gross premiums written
5
Outwards reinsurance premiums
(479,416 )
(460,578 )
Premiums written, net of reinsurance
Changes in unearned premium
19
Change in the gross provision for unearned premiums
(59,535 )
(43,092 )
Change in the provision for unearned premiums reinsurers’ share
Net change in provisions for unearned premiums
(40,810 )
(35,687 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical account
10
Claims paid
19
Gross amount
(622,168 )
(636,529 )
Reinsurers’ share
Net claims paid
(508,517 )
(428,817 )
Change in the provision for claims
19
Gross amount
(527,590 )
(195,084 )
Reinsurers’ share
(48,208 )
Net change in provisions for claims
(314,206 )
(243,292 )
Claims incurred, net of reinsurance
(822,723 )
(672,109 )
Net operating expenses
7
(479,451 )
(449,236 )
Balance on the technical account – general business
Note
2024
$000
2023
(restated)
$000
5
Statement of profit or loss and other comprehensive income
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13
Ascot | Syndicate 1414
5
See note 3(I) for further details on the change in presentational currency
Non-technical account – General business
For the year ended 31 December 2024
Note
2024
$000
2023
(restated)
$000
6
Balance on the technical account – general business
Investment income
10
Realised gains/(losses) on investments
10
(5,253 )
Unrealised gains/(losses) on investments
10
(1,388 )
Investment expenses and charges
10
(1,631 )
(1,102 )
Total investment return
Allocated investment return transferred to the general business technical
account
(53,093 )
(89,059 )
Gain/(loss) on foreign exchange
(10,331 )
Profit for the financial year
Other comprehensive income:
Other
7
(5,246 )
(19,655 )
Total comprehensive income for the year
All items shown above derive from continuing operations. No operations were acquired or discontinued during the
period.
The accompanying notes from page 19 to 48 form an integral part of these financial statements.
Statement of profit or loss and other comprehensive income
continued
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14
Ascot | Syndicate 1414
6
See note 3(I) for further details on the change in presentational currency
7
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate result
of the closing year of account.
Assets
As at 31 December 2024
Note
2024
$000
2023
(restated)
$000
8
Financial investments
12
Deposits with ceding undertakings
Investments
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
19
Debtors arising out of direct insurance operations
13
Debtors arising out of reinsurance operations
14
Other debtors
15
Debtors
Cash at bank and in hand
23
Other
17
Other assets
Accrued interest and rent
Deferred acquisition costs
16
Other prepayments and accrued income
Prepayments and accrued income
Total assets
Balance sheet
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15
Ascot | Syndicate 1414
8
See note 3(I) for further details on the change in presentational currency
Liabilities
As at 31 December 2024
Note
2024
$000
2023
(restated)
$000
9
Capital and reserves
Members’ balances
Total capital and reserves
Provision for unearned premiums
Claims outstanding
Technical provisions
19
Creditors arising out of direct insurance operations
20
Creditors arising out of reinsurance operations
21
Other creditors including taxation and social security
22
Creditors
Accruals and deferred income
Total liabilities
Total liabilities, capital and reserves
The accompanying notes from page 19 to 48 form an integral part of these financial statements.
The Syndicate financial statements on pages 13 to 48 were approved by the board of Ascot Underwriting Limited on
25 February 2025 and were signed on its behalf by:
Ian D Thompson
Helen R Jones-Bak
Chief Executive Officer
Chief Financial Officer
Balance sheet continued
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Ascot | Syndicate 1414
9
See note 3(I) for further details on the change in presentational currency
For the year ended 31 December 2024
2024
$000
2023
(restated)
$000
10
Members’ balances brought forward at 1 January
Total comprehensive income for the year
Payments of profit to members’ personal reserve funds
(124,299 )
(34,568 )
Other
11
Members’ balances carried forward at 31 December
Statement of changes in members’ balances
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17
Ascot | Syndicate 1414
10
See note 3(I) for further details on the change in presentational currency
11
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate
result of the closing year of account.
For the year ended 31 December 2024
Note
2024
$000
2023
(restated)
$000
12
Cash flows from operating activities
Profit/(loss) for the financial year
Adjustments:
Increase/(decrease) in gross technical provisions
Increase/(decrease) in reinsurers’ share of gross
technical provisions
(225,907 )
Increase/(decrease) in debtors
(52,264 )
(26,479 )
Increase/(decrease) in creditors
(79,367 )
Movement in other assets/liabilities
(31,300 )
Investment return
(53,093 )
(89,059 )
Other
13
(5,246 )
(19,655 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(1,162,492 )
(596,835 )
Sale of equity and debt instruments
Investment income received
Other
Net cash flows from investing activities
(474,432 )
(160,342 )
Cash flows from financing activities
Distribution of profit
(124,299 )
(34,568 )
Other
7
Net cash flows from financing activities
(119,053 )
(14,913 )
Net increase/(decrease) in cash and cash equivalents
(130,762 )
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(12,763 )
Cash and cash equivalents at the end of the year
23
Statement of cash flows
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Ascot | Syndicate 1414
12
See note 3(I) for further details on the change in presentational currency
13
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate
result of the closing year of account.
1.
Basis of preparation
Ascot Underwriting Limited is the managing agent for Syndicate 1414 at The Corporation of Lloyd’s. The company is
a private company limited by shares and is incorporated in England. The address of its registered office is 20
Fenchurch Street, London, England, EC3M 3BY.
The financial statements have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, applicable Accounting Standards in the United Kingdom
and the Republic of Ireland, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard 103
(FRS103) in relation to insurance contracts 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 Syndicate annual financial statements have been prepared under regulation 5 of the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008(IAD) and reflect the provisions of The Large
and Medium-sized Companies and Groups(Accounts and Reports) Regulations 2008 (‘SI2008/410’) as modified by
the IAD.
These annual financial statements are prepared on the basis that the Syndicate will continue to write future
business, under the historical cost convention, as modified by certain financial assets and liabilities measured at fair
value through profit or loss.
In March 2024 amendments were made to FRS 102 as a result of the Periodic Review 2024. The amendments are
due to be applied for accounting periods beginning on or after 1 January 2026 however early application is
permitted, provided that all the amendments are applied at the same time. The Syndicate has adopted the new
amendments effective 1 January 2024. The cumulative impact of the early adoption of amendments to FRS 102 from
the Periodic Review 2024 was considered for an adjustment to the brought-forward retained earnings, applying the
modified retrospective approach; no adjustment has been recorded as the impact was immaterial to these financial
statements.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Restatement of comparative information in respect of Lloyd’s rationalisation
During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative information has been restated to ensure consistency
with current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions. The changes
comprise:
a.
Reclassification changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. The
principal change is the reclassification of overseas deposits, previously shown as a separate balance sheet item, to
form part of other assets. The comparative balances in the affected notes 4 and 17 have also been represented to
align with the current period presentation.
b.
Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been
aggregated or disaggregated within the financial statements and related notes. This includes 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.
The reclassification and aggregation changes have been applied retrospectively and had no impact on previously
reported profit, total comprehensive income,
total assets, total liabilities, or total capital and reserves.
Change of presentational currency and restatement of comparative information
With effect from 1 January 2024, the Syndicate’s presentational currency changed from Sterling to United States
dollar, which is deemed a more appropriate presentational currency given the Syndicate earnings are denominated
in United States dollars, and the majority of financing and distribution cash flows are denominated in United States
dollars.
The comparatives figures for 2023 have, therefore, been restated to United States dollar.
Going concern
In arriving at a determination of going concern, the directors consider a number of risks, taking into account
economic, regulatory and environmental considerations as referenced in the Strategic Report:
i.
Insurance risk – this includes Underwriting and Reserving risk.
ii.
Credit risk – this is the risk of loss arising from the inability of reinsurers or intermediaries to meet their
financial obligations to the Syndicate.
Notes to the financial statements
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19
Ascot | Syndicate 1414
iii.
Market risk – this represents the potential loss of value or earnings arising from changes in the market price
of assets as a result of external market and economic factors.
iv.
Operational risk – the risk is that the Syndicate’s operations are adversely impacted from inadequate or
failed internal processes, people or systems or from external events.
v.
Liquidity risk – the risk is that sufficient cash may not be available to settle obligations when due at a
reasonable cost.
vi.
Currency risk – the risk is that the fair value or future cash flows of a financial instrument will fluctuate owing
to changes in foreign exchange rates.
vii.
Group risk – the risk that the activities of companies within Ascot Group have an adverse impact on each
other.
viii.
Climate risk – the risk of climate change on the Syndicate’s underwriting and investment portfolios.
The directors have concluded that the Syndicate continues to be a going concern after taking into account these
risks, as it can evidence that there is no impact on the ability of the Syndicate to remain profitable for the
foreseeable future, being not less than one year from the signing of the accounts.
2.
Use of judgements and estimates
In preparing these financial statements, the directors of the Managing Agent have made judgements, estimates
and assumptions that affect the application of the Syndicate’s accounting policies and the reported amounts of
assets, liabilities, income and expenses. These are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
No critical judgements have been made in applying the Syndicate’s accounting policies.
The Syndicate makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
i.
The ultimate liability arising from claims made under insurance contracts
The estimation of the ultimate liability arising from claims made under insurance contracts is the Syndicate’s most
critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of
the liability that the Syndicate will ultimately pay for such claims. The most significant assumptions made relate to
the level of future claims, the level of future claims settlements and the legal interpretation of insurance policies.
Whilst the directors consider that the gross provision for claims and the related reinsurance recoveries are fairly
stated on the basis of the information currently available to them, the ultimate liability will vary as a result of
subsequent information and events and may result in significant adjustments to the amount provided.
Adjustments to the amounts of provision are reflected in the Financial Statements for the period in which the
adjustments are made. The methods used, and the estimates made, are reviewed regularly.
In setting the provision for insurance liabilities, a best estimate is determined on an undiscounted basis and an
allowance for risk and uncertainty is added. The method and considerations made in setting the claims provisions
are discussed in more detail in note 3 (part F) and sensitivities run disclosed in note 4 (part A iii) of these Financial
Statements.
ii.
Pipeline premium
The Syndicate makes an estimate of premiums written during the year that have not yet been notified by the
financial year (‘pipeline premiums’) end based on current year business volumes. The pipeline premium is booked
as written and an assessment is made of the related unearned premium provision (note 5) and an estimate of
claims incurred but not reported in respect of the earned element (note 18).
Sensitivities have been run on the pipeline premium balance, a 5% reduction in pipeline premium would result in a
decrease of $13,223k (2023 (restated): $12,537k) in the reported 2024 gross written premium and a 5% increase in
pipeline premiums would result in an increase of $13,223k (2023 (restated): $12,537k).
Notes to the financial statements continued
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Ascot | Syndicate 1414
3.
Significant accounting policies
The Syndicate annual financial statements have been prepared in accordance with applicable accounting
standards in the United Kingdom. A summary of the more important accounting policies is set out below, together
with an explanation of where changes have been made to previous policies on the adoption of new accounting
standards in the year.
A.
Premiums written
Under the annual basis of accounting, gross premiums reflect direct and inwards reinsurance business written
during the period, gross of commission payable to intermediaries, and exclude any taxes or duties based on
premiums. Premiums written include estimates for ‘pipeline’ premiums representing amounts due to the Syndicate
not yet notified.
Estimated premium income in respect of facility contracts, for example binding authorities and lines slips, are
deemed to be written in a manner that reflects the expected profile of the underlying business which has been
written. Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the
related direct or inwards business being reinsured. The earned proportion of premiums is recognised as income.
Premiums are earned from the date of attachment of risk over the indemnity period based on the pattern of the
risks underwritten.
B.
Unearned premiums
The provision for unearned premiums comprises the proportion of gross premiums written which is estimated to be
earned in the following or subsequent financial periods, computed separately for each insurance contract using the
daily pro rata method, adjusted if necessary to reflect any variation in the incidence of risk during the period
covered by the contract.
C.
Acquisition costs
Costs incurred in acquiring general insurance contracts are deferred. Acquisition costs include direct costs such as
brokerage and commission, and indirect costs such as administrative expenses connected with the processing of
proposals and the issuing of policies. The deferred acquisition cost asset represents the proportion of acquisition
costs which corresponds to the proportion of gross premiums written that is unearned at the balance sheet date.
D.
Reinsurance
The Syndicate assumes and cedes reinsurance in the normal course of business. Premiums and claims on
reinsurance assumed are recognised in the technical account along the same basis as direct business, taking into
account the product classification. Reinsurance premiums ceded and reinsurance recoveries on claims incurred are
included in the respective expense and income accounts. Premiums ceded and claims reimbursed are presented
on a gross basis in the technical account and statement of financial position as appropriate.
Reinsurance outwards premiums are accounted for in the accounting period that they incept.
E.
Claims incurred
Claims incurred comprise claims and claims handling expenses (both internal and external) paid in the year and the
movement in provision for outstanding claims and settlement expenses, including provisions for claims incurred
but not reported and related expenses, together with any other adjustments to claims from previous years. Where
applicable, deductions are made for salvage and other recoveries. Outwards reinsurance recoveries are accounted
for in the same accounting period as the claims for the related direct or inwards reinsurance business being
reinsured.
F.
Claims provisions and related reinsurance recoveries
The provision for claims outstanding is based on information available at the balance sheet date. Subsequent
information and events may result in the ultimate liability being less or greater than the amount provided. Any
differences between provisions and subsequent settlements are dealt with in the general business technical
account of later periods.
The Directors consider that the provision for gross claims and related reinsurance recoveries are fairly stated on the
basis of information currently available to them.
Notes to the financial statements continued
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Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet
date, including an allowance for the cost of claims incurred by the balance sheet date but not reported until after
the year end (IBNR). The estimated cost of claims includes expenses to be incurred in settling claims and a
deduction for the expected value of salvage and subrogation and other recoveries. The Syndicate takes all
reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the
uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the
original liability established.
The estimation of claims incurred but not reported (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 claim event is generally available. Claims IBNR may often not be apparent to the insured until many years after
the event giving rise to the claims has happened. Classes of business where the IBNR proportion of the total reserve
is high will typically display greater variations between initial estimates and final outcomes because of the greater
degree of difficulty of estimating these reserves. Classes of business where claims are typically reported relatively
quickly after the claim event tend to display lower levels of volatility.
In calculating the estimated cost of unpaid claims the Syndicate uses a variety of estimation techniques, generally
based upon statistical analyses of historical experience, which assumes that the development pattern of the current
claims will be consistent with past experience. Allowance is made, however, for changes or uncertainties which may
create distortions in the underlying statistics or which might cause the cost of unsettled claims to increase or
reduce when compared with the cost of previously settled claims including:
•
changes in Syndicate processes which might accelerate or slow down the development and/or recording of
paid or incurred claims compare with the statistics from previous periods;
•
changes in the legal environment;
•
the effects of any change in the inflationary environment;
•
changes in the mix of business;
•
the impact of large losses; and
•
movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified but not paid claims. In
estimating the cost of these the Syndicate has regard to the claim circumstance as reported, any information
available from loss adjusters and information on the cost of settling claims with similar characteristics in previous
periods.
Large claims impacting each relevant business class are generally assessed separately, being measured on a case
by case basis or projected separately in order to allow for the possible distortive effect of the development and
incidence of these large claims.
Where possible the Managing Agent adopts multiple techniques to estimate the required level of provisions. This
assists in giving greater understanding of the trends inherent in the data being projected. The projections given by
the various methodologies also assist in setting the range of possible outcomes. The most appropriate estimation
technique is selected taking into account the characteristics of the business class and the extent of the
development of each accident year.
The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and projections
for IBNR, net of estimated irrecoverable amounts.
Reinsurance assets are assessed for impairment at each balance sheet date. Impairment losses are recognised in
profit or loss in the period in which the impairment loss is recognised.
G.
Unexpired risks provision
Provision has been 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.
Unexpired risk surpluses and deficits are offset where business classes are managed together and a provision is
made if an aggregate deficit arises.
H.
Foreign currencies
Transactions in foreign currencies are translated to the functional currency using the exchange rates at the date of
the transactions. The Syndicate’s monetary assets and liabilities denominated in foreign currencies are translated
into the functional currency at the rates of exchange at the balance sheet date. Non
-
monetary assets and liabilities
Notes to the financial statements continued
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Ascot | Syndicate 1414
denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the
exchange rate at the date that the fair value was determined. Non
-
monetary items denominated in foreign
currencies that are measured at historical cost are translated to the functional currency using the exchange rate at
the date of the transaction. For the purposes of foreign currency translation, unearned premiums and deferred
acquisition costs are treated as if they are monetary items.
Differences arising on translation of foreign currency amounts relating to the insurance operations of the Syndicate
are included in the non
-
technical account. The Syndicate’s functional currency is the United States dollar. With
effect from 1 January 2024, the Syndicate’s presentational currency changed from Sterling to United States dollar,
which is deemed a more appropriate presentational currency given the Syndicate earnings are denominated in
United States dollars, and the majority of financing and distribution cash flows are denominated in United States
dollars.
The comparatives figures for 2023 have, therefore, been restated to United States dollar which means there are no
longer foreign exchange gains and losses in other comprehensive income.
I.
Restated comparatives
As at 1 January 2024, the Syndicate’s presentational currency changed from Pound Sterling to United States dollar.
Therefore, the 2023 comparative numbers within these financial statements have been restated to United States
dollar.
The table below shows the effect of these changes. Balances originally stated in Sterling in the 2023 Report and
Accounts are shown, followed by their equivalent United States dollar restated value.
Effect of restatement on Member's Balance Sheet and Income Statement
As originally
stated in 2023
Restated for
change in
presentation
currency 2023
£'000
$'000
Members’ balances brought forward at 1 January
65,845
79,546
Total comprehensive income for the year
180,170
232,959
Payments of profit to members’ personal reserve funds
(28,615)
(34,568)
Other
14
16,270
19,655
Members’ balances carried forward at 31 December
233,670
297,592
J.
Financial instruments
The Syndicate has chosen to adopt the Sections 11 (Basic Financial Instruments) and 12 (Other Financial Instruments
Issues) of FRS 102 in respect of financial instruments.
Basic financial assets, including cash, bank balances and deposits with cedants, are initially recognised at
transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at
the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost less any provision for impairments. The unwinding of the
associated discount is subsequently recognised in the Statement of Comprehensive Income.
Financial Investments are initially measured at fair value, which is normally the transaction price. Such assets are
subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except investments
whose fair values cannot be measured reliably are measured at cost less impairment. Unrealised gains and losses
are tracked separately through the statement of comprehensive income based on advice from Lloyd’s.
Overseas deposits are stated at market value based on quarterly statements from Lloyd’s.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are
settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or
(c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the
asset to an unrelated third party without imposing additional restrictions.
Notes to the financial statements continued
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Ascot | Syndicate 1414
14
Other is the unearned element of the profit distribution on the closing year of account at 36 months. Profit distributed is equal to the ultimate
result of the closing year of account.
K.
Investment return
Investment return comprises investment income and movements in unrealised gains and losses on financial
instruments at fair value through profit or loss, realised gains and losses less investment management expenses,
interest expense, and impairment losses.
Realised gains and losses on investments carried at fair value through profit and loss are calculated as the
difference between net sales proceeds and purchase price. 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 the last balance sheet date, together with the reversal of unrealised gains and losses recognised in
earlier accounting periods in respect of investment disposals in the current period.
Dividends are recorded on the date on which the shares are quoted ex-dividend and include the imputed tax
credits. Interest and expenses are accounted for on an accruals basis.
Investment return is initially recorded in the non-technical account. A transfer is made from the non-technical
account to the technical account to reflect the investment return on funds supporting underwriting business.
L.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Cash Flows comprise cash at banks and in hand and short term
deposits with an original maturity date of three months or less.
M.
Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income tax from
trading income. In addition, all UK basic rate income tax (currently 25%) deducted from Syndicate investment
income is recoverable by managing agents and consequently the distribution made to members or their members’
agents is gross of tax. Capital appreciation falls within trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income Tax payable on underwriting results or
investment earnings. Any payments on account made by the Syndicate during the year have been included in the
balance sheet under the heading ‘other creditors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
N.
Pension costs
Ascot Underwriting Holdings Limited (AUHL) operates a defined contribution scheme. Pension contributions
relating to Managing agent staff who act on behalf of the Syndicate are charged to the Syndicate as incurred and
are included within net operating expenses.
O.
Profit commission Expense
Profit commission is charged by the managing agent Ascot Underwriting Limited (AUL) for its services as a
consortium manager for the 2023 and onwards years of account and is accrued as an expense in line with the
contractual terms. Profit commission to the managing agent in respect of managed consortia does not become
payable until after the appropriate consortium agreement concludes, normally at 24 months since inception.
P.
Deposits with ceding undertakings
Deposits with ceding undertakings are funds held by Lloyd’s Europe on behalf of the Syndicate to settle Part VII
claims. These funds are held at amortised cost in the balance sheet.
Q.
Reinsurance to Close (RITC) and Portfolio Transfer Policy
RITC is a reinsurance which closes a year of account by transferring the responsibility for discharging all the
liabilities that attach to that year of account (and any year of account closed into that year) plus the right to any
income due to the closing year of account into an open year of account of the same or a different syndicate in
return for a premium.
Syndicate 1414 has not entered into any external RITC during the year and reinsures the closing year into the oldest
open year of account. The reserves of the closing year of account constitute the premium for a reinsurance to close.
A year of account is normally closed by RITC at the end of 36 months.
Notes to the financial statements continued
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Ascot | Syndicate 1414
The profit distribution to the corporate member on the closing year of account at 36 months, is equal to the
ultimate result on the closing year of account.
Portfolio Transfer is the bulk transfer of contracts or risks to another entity. The Syndicate has not participated in any
portfolio transfers to third parties during the year.
R.
Operating expenses
Where expenses are incurred by the Service Company AUHL for the administration of the Syndicate, these expenses
are recharged to the Syndicate via a service fee based on an agreed share defined by the type of expense as stated
in the Group Resource Agreement.
S.
Reinsurers’ commission and profit participation
Reinsurers’ commissions and profit participations, which include reinsurance profit commission and overriding
commission, are treated as a contribution to acquisitions costs within net operating expenses.
T.
Debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract holders.
These are classified as debt instruments as they are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. Insurance debtors are measured at amortised cost less any
provision for impairments. Insurance creditors are stated at amortised cost. The Syndicate does not have any
debtors directly with policyholders, all transactions occur via an intermediary.
Reinsurance debtors and creditors include amounts due to and from reinsurers. These are classified as debt
instruments as they are non-derivative financial assets with fixed or determinable payments that are not quoted on
an active market. Reinsurance debtors are measured at amortised cost less any provision for impairments.
Reinsurance creditors are stated at amortised cost. Reinsurance debtor principally relates to claims recoveries
where the underlying claim has been settled and the recovery is due. Reinsurance creditors are primarily premiums
payable for reinsurance contracts and are recognised as an expense when due.
Other debtors principally consist of amounts due from members and sundry debtors and are carried at amortised
cost less any impairment losses.
Other creditors principally consist of amounts due to related syndicates and other related entities, profit
commissions payable and other sundry payables. These are stated at amortised cost determined using the effective
interest rate method.
U.
Classification of insurance and reinsurance contracts
Insurance and reinsurance contracts are classified as insurance contracts where they transfer significant insurance
risk. If a contract does not transfer significant insurance risk it is classified as a financial instrument. All of the
Syndicates written contracts and purchased reinsurance contracts transfer significant insurance risk and therefore
are recognised as insurance contracts.
Notes to the financial statements continued
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Ascot | Syndicate 1414
4.
Risk and capital management
Introduction and overview
Syndicate 1414 is managed by AUL and considers the business plan proposed and the risk and control environment
as managed by AUL.
This note presents information about the nature and extent of insurance and financial risks to which the Syndicate
is exposed, the Managing Agent’s objectives, policies and processes for measuring and managing insurance and
financial risks, and for managing the Syndicate’s capital.
Risk management framework
The Ascot risk management programme is made up of three key elements which all contribute to managing the
risks faced:
i.
Risk governance – the control and management of risk and capital management
ii.
Risk appetite – the measurement of risk taken
iii.
Risk register – details of the risks, controls, responsibilities and reporting
The ultimate governance and approval of the risk management and capital management for Syndicate 1414 is with
the AUL Board of Directors. Details of the governance of risk management are described more fully below but the
key committee in the management of the risk framework is the Risk Committee, which reports to the AUL Board
and whose terms of reference include the responsibility for both risk management and capital modelling.
Our approach is that every member of staff contributes to the overall risk management of the company; this is
stressed to new joiners during their induction program. The business is controlled by the diligence of staff in their
day to day activities, with the overlay of monitoring reports and committees contributing to the management of
risk. The risk management function is responsible for sitting above these business processes and ensuring that
there are no gaps between the level of control expected by the Board (as defined in the risk appetite) and the actual
controls in place. We have created a positive risk management culture at Ascot, whereby all staff members
understand their roles and the importance to the success of the business in carrying out those roles. Furthermore,
this culture allows individuals to raise issues or areas where they believe improvements could be made with more
senior members of staff and thus all areas of the business are constantly looking at ways to self-improve and better
align actual practices with risk appetite.
The following risk areas focus on those that have an impact on or a potential impact on the financial assets and
liabilities of the Syndicate and the methods of assessing the sensitivity and financial impacts of these risks are
discussed further below. Areas such as operational and group risk are not discussed further under this section.
A.
Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual claims experience being
different from that expected when an insurance product was designed and priced. The actual performance of
insurance contracts is subject to the inherent uncertainty in the occurrence, timing and amount of the final
insurance liabilities.
The insurance risk the Syndicate is exposed can be separated into underwriting risk, claims management risk,
catastrophes & aggregation & reinsurance risk, and reserving risk.
a.
Underwriting risk
Underwriting risk is the risk that the insurance premium will not be sufficient to cover future insurance losses and
associated expenses. This includes the risks that the premium is set too low, provides inappropriate levels of cover,
or that the actual frequency or severity of claims events will be significantly higher than was expected during the
underwriting process.
b.
Claims management
The risk arising from the uncertainties associated with the quantum and timing of claims that will be paid out on
policies underwritten.
c.
Catastrophes & aggregation & reinsurance risk
The risk arising from concentration of exposures by industry, geography, line of business, a single insured or single
insured event, and, in particular:
•
Risk arising from concentration of exposures exposed to catastrophe perils;
•
Clash risk, or risks arising from exposures in which multiple insureds suffer losses from the same occurrence,
or the same cause of loss, such as a wild-fire, a train crash, or a batch of component parts.
Notes to the financial statements continued
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Ascot | Syndicate 1414
d.
Reserve risk
Reserve risk is the risk that the reserves established in respect of insurance claims incurred are insufficient to settle
the claims and associated expenses in full.
A key driver of uncertainty, which cuts across all areas of insurance risk, is the impact of inflation. When not
adequately allowed for in pricing, claim management and reserving, it has the potential to adversely impact the
underwriting result when claims are ultimately settled. Inflation is a risk that has been in focus over recent years,
given the heightened economic inflationary environment seen across most markets globally. While the longer-term
impact is yet to be seen, the risks from rising social inflation remain.
i.
Management of insurance risk
Ascot has a number of policies in place for identifying the various elements of insurance risk and mitigating the
potential downside from these risks. These include:
•
The classes and characteristics of insurance business that Ascot is prepared to accept;
•
The underwriting (including catastrophe underwriting) criteria that Ascot applies, including how these can
influence its rating and pricing decisions;
•
Ascot’s approach to limiting significant aggregations of insurance risk, including aggregation from
concentration of catastrophe perils, for example, by setting aggregate limits and/or loss assessment that
can be underwritten firm-wide, in each region, in each country, by line of business, or for one insured for
Ascot’s in-force portfolio;
•
Ascot’s approach to monitor overall aggregate risk profile at the firm-wide level, by region, by country, by
profit centre, and by entity on a regular basis; and its procedures of reporting material changes in current or
prospective aggregate risk to the Exposure Management committee and Board;
•
Ascot is cognisant of the risk the inflation uncertainty has on potential future performance and therefore,
allowance for inflation in pricing has been a key focus for all underwriting teams. From a claims
management perspective, all claims continue to be reviewed at least quarterly, ensuring case estimates are
regularly updated to reflect current settlement costs as underlying valuations are impacted by inflation.
A Claims Inflation Forum has been established for the Syndicate, with a view to managing inflation risk
between claims and actuarial function, with wider input from underwriting and risk functions.
•
Ascot’s approach to managing its expense levels, including acquisition costs, recurring costs, and one-off
costs, taking account of the margins available in both the prices for products and in the technical provisions
in the balance sheet;
•
Ascot’s approach to assessing the effectiveness of its risk transfer arrangements and managing the residual
or transformed risks. For example, how it intends to handle disputes over contract wordings, and potential
pay-out delays;
•
A summary of the data and information to be collected and reported on underwriting, claims, and risk
control (including internal accounting records), management reporting requirements, and external data for
risk assessment purposes;
•
The risk measurement and analysis techniques to be used for setting underwriting premiums, technical
provisions in the balance sheet, and assessing capital requirements; and
•
Ascot’s approach to stress testing and scenario analysis of its exposures.
Ascot will identify, assess/measure, control, mitigate and monitor insurance risk in line with the strategy and risk
appetite set by the Board (and its relevant sub-committees).
During the business planning process, the Ascot Board of Directors agrees the Annual Business Plan or Syndicate
Business Forecast (SBF) submission to Lloyd’s. This plan will consider the performance of the portfolio, the external
environment, proposed line sizes and reinsurance structure, the rating environment, and other factors.
On an ongoing basis, there are:
•
Processes for identifying the underwriting risks associated with a particular policyholder or a group of
policyholders. For example, processes for collecting information on the claims histories of insureds,
including whether they have made any potentially false or inaccurate claims, to identify possible adverse
selection or moral hazard problems;
•
Processes for establishing underwriting and distribution procedures that must be followed by all classes of
business and all types of distribution channels; these procedures should include details in respect of the
information that must be gathered in order to assess the level of insurance risk that a particular contract
brings to Ascot;
•
Processes for identifying aggregations of risk that may give rise to a large catastrophic loss. Specific
information can include, for example, risk address, locations value, construction, year built, occupancy, and
Notes to the financial statements continued
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Ascot | Syndicate 1414
number of stories. Policy information and reinsurance information must be gathered in order to assess the
level of additional aggregate exposure and enable the calculation of marginal contribution to modelled loss
assessment risk that a particular account or contract brings to Ascot.
•
Process for reviewing current rating and inflationary environment relative to the forecast assumptions of
rate and inflation included within the business plan. To the extent that the actual rate or inflation deviates
from the business plan forecast, this is recognised relative to expected performance within the reserving
process.
In addition, there are committees and groups that are charged with responsibilities to identify and manage
underwriting, catastrophe, reserving and emerging risks:
•
The Ascot Exposure Management Committee (EMC) is responsible for identifying catastrophe and liability
risks, and developing methods for monitoring overall and class exposures to those risks and recommending
appropriate limits in line with Board approved strategy and risk appetites.
•
Ascot Underwriting Management Committee (UMC) is responsible for identifying new types of risk that may
alter the claims pattern for the Syndicate in the future.
•
Ascot Claims Committee is responsible for discussing and setting gross and net of reinsurance reserves for
claim events, where there is an aggregation of loss across multiple classes and/or cedants. The committee
also discusses significant individual losses and is responsible for ensuring appropriate case reserves are held.
•
Ascot Reserve Committee is responsible for setting the ultimate reserves on a gross and net of reinsurance
basis for all classes of business and all years of account. In particular, the reserve committee signs off on the
general Incurred But Not Reported (IBNR) provision held in addition to all incurred losses and specific IBNR
set by the claims committee.
•
Ascot Risk Committee is a Board level committee responsible for the oversight of Ascot’s risk framework,
including risk appetites set annually, the risk register and emerging risks. Insurance risk is the most material
risk under this framework; the committee has oversight of how underlying risks are monitored, managed
and mitigated and acts as an escalation point to other Ascot committees.
The claims development table in note number 18 shows the actual claims incurred to previous estimates for the last
10 years.
ii.
Concentration of insurance risk
The Syndicate’s exposure to insurance risk is well diversified. The following table provides an analysis of the
geographical breakdown of its gross written premiums, by location of the underlying risk, by class of business.
Accident and
Health
Marine,
aviation, and
transport
Fire and other
damage to
property
Third party
liability
Credit and
suretyship
Miscellaneous
Reinsurance
Total
2024
$000
$000
$000
$000
$000
$000
$000
$000
All other Europe
62
5,883
40,354
113,589
4,559
117
10,143
174,707
Australia
—
(209)
3,554
4,068
179
—
251
7,843
Canada
—
746
12,486
10,300
46
—
1,321
24,899
Rest of World
2,533
55,993
63,198
3,317
17,175
144
11,151
153,511
UK
—
919
2,850
2,680
711
—
6,335
13,495
USA
4,372
12,646
208,434
65,554
964
17
247,669
539,656
Worldwide
14,850
304,737
169,243
225,691
13,352
136
300,028
1,028,037
Total gross
premiums written
21,817
380,715
500,119
425,199
36,986
414
576,898
1,942,148
Accident and
Health
Marine,
aviation, and
transport
Fire and other
damage to
property
Third party
liability
Credit and
suretyship
Miscellaneous
Reinsurance
Total
2023 (restated)
$000
$000
$000
$000
$000
$000
$000
$000
All other Europe
(7)
5,583
30,502
86,583
3,115
282
8,105
134,163
Australia
5
292
4,236
3,946
(70)
—
152
8,561
Canada
—
939
13,457
6,792
44
—
1,225
22,457
Rest of World
4
55,065
55,034
1,192
13,907
230
11,055
136,487
UK
(28)
674
(264)
14,360
75
26
4,760
19,603
USA
3,752
13,326
197,791
63,505
1,152
6
225,064
504,596
Worldwide
13,682
293,290
143,967
230,469
16,122
1,964
266,135
965,629
Total gross
premiums written
17,408
369,169
444,723
406,847
34,345
2,508
516,496
1,791,496
Notes to the financial statements continued
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Ascot | Syndicate 1414
iii.
Sensitivity to insurance risk
The liabilities established could be significantly lower or higher than the ultimate cost of settling the claims arising.
This level of uncertainty varies between the classes of business and the nature of the risk being underwritten and
can arise from developments in case reserving for large losses and catastrophes, or from changes in estimates of
claims IBNR.
The following table presents the profit and loss impact on the the sensitivity of the value of insurance liabilities
disclosed in the accounts to potential movements in the assumptions applied within the technical provisions. Given
the nature of the business underwritten by the Syndicate, the approach to calculating the technical provisions for
each class can vary and as a result the sensitivity performed is to apply a beneficial and adverse risk margin to the
total insurance liability. The amount disclosed in the table represents the profit or loss impact of an increase or
decrease in the insurance liability as a result of applying the sensitivity. The amount disclosed for the impact on
claims outstanding – net of reinsurance represents the impact on both the profit and loss for the year and member
balance.
Claims outstanding – gross of reinsurance
(94,131)
94,131
Claims outstanding – net of reinsurance
(71,096)
71,096
General insurance business sensitivities as at
31 December 2024
Sensitivity
‘
+5.0%
$000
‘
-5.0%
$000
General insurance business sensitivities as at
31 December 2023 (restated)
Sensitivity
‘
+5.0%
$000
‘
-5.0%
$000
Claims outstanding – gross of reinsurance
(87,420)
87,420
Claims outstanding – net of reinsurance
(64,762)
64,762
B.
Financial risk
The focus of financial risk management for the Syndicate is ensuring that the proceeds from its financial assets are
sufficient to fund the obligations arising from its insurance contracts. The goal of the investment management
process is to optimise the risk-adjusted investment income and risk-adjusted total return by investing in a
diversified portfolio of securities, whilst ensuring that the assets and liabilities are managed on a cash flow and
duration matching basis.
a.
Credit risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The Syndicate is exposed to credit risk in respect of the following:
•
Debt securities
•
Reinsurers’ share of claims outstanding;
•
Amounts due from intermediaries;
•
Amounts due from reinsurers in respect of settled claims;
•
Cash and cash equivalents; and
•
Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing credit
risk have not changed significantly from the prior year.
i.
Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a single
counterparty, by reference to the credit rating of the counterparty. The Syndicate’s investment guidelines are
designed to mitigate credit risk by implementing rules that control portfolio diversification and credit quality.
Minimum credit ratings, and maximum concentration limits for issuers, asset type and credit rating category are
monitored regularly and compared against authorised limits. The Syndicate has a policy of investing mainly in
investment grade fixed income securities from a diverse range of issuers including Government, government
backed, and corporate issuers. The Syndicate does not currently invest new monies in speculative grade assets (i.e.,
those rated below BBB-).
Notes to the financial statements continued
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29
Ascot | Syndicate 1414
Concentration limits of Cash and Cash equivalents are monitored at Ascot Group Limited level. The Syndicate
provides regular reports that allows consolidation of all short term holdings. Where possible, the Syndicate utilises
approved money market mutual funds and/or deposit account sweep facilities to help reduce exposure to
individual banks. There are numerous requirements that must be satisfied before the use of any individual Money
Market Fund. The requirements also limit the maximum balance the Syndicate can hold in each.
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.
The Syndicate assesses the creditworthiness of all reinsurers by reviewing public rating information and by internal
investigations. The impact of reinsurer default is regularly assessed and managed accordingly.
ii.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure. The
Syndicate does not hold any collateral as security or purchase any credit enhancements (such as guarantees, credit
derivatives and netting arrangements that do not qualify for offset).
The following table analyses the credit rating by investment grade of financial investments and debt securities,
reinsurers’ share of claims outstanding, amount due from intermediaries, amounts due from reinsurers in respect of
settled claims, cash and cash equivalents, and other debtors and accrued interest.
Within the unrated reinsurers’ share of outstanding claims of $131,182k (2023 (restated): $173,732k), $130,461k relates
to collateralised reinsurers (2023 (restated): $173,638k). Within the unrated debtors arising out of reinsurance
operations of $483,724k (2023 (restated): $431,503k), $1,959k (2023 (restated): $2,758k) relates to amounts due from
reinsurance contracts ceded. Of this, $1,850k (2023 (restated): $2,642k) relates to collateralised reinsurers.
AAA
AA
A
BBB
Other
Not rated
Total
2024
$000
$000
$000
$000
$000
$000
$000
Shares and other variable yield securities and
units in unit trusts
91,950
—
—
—
—
—
91,950
Debt securities and other fixed income
securities
577,422
302,549
747,481
247,627
—
—
1,875,079
Syndicate loans to central fund
—
—
10,722
—
—
—
10,722
Deposits with ceding undertakings
—
—
256
—
—
—
256
Reinsurers' share of claims outstanding
198
283,139
314,278
—
—
131,182
728,797
Debtors arising out of direct insurance
operations
—
—
—
—
—
54,074
54,074
Debtors arising out of reinsurance operations
—
9,079
27,041
—
—
483,724
519,844
Cash at bank and in hand
—
—
10,080
—
—
—
10,080
Other debtors and accrued interest
15
40,948
8,325
8,659
6,755
4,802
442,310
511,799
Total
710,518
603,092
1,118,517
254,382
4,802
1,111,290
3,802,601
AAA
AA
A
BBB
Other
Not rated
Total
2023 (restated)
$000
$000
$000
$000
$000
$000
$000
Shares and other variable yield securities and
units in unit trusts
812
108,620
71,637
—
—
2,994
184,063
Debt securities and other fixed income
securities
502,825
201,766
555,008
118,812
—
—
1,378,411
Syndicate loans to central fund
—
—
13,084
—
—
—
13,084
Deposits with ceding undertakings
—
—
559
—
—
—
559
Reinsurers' share of claims outstanding
207
103,199
243,701
—
—
173,732
520,839
Debtors arising out of direct insurance
operations
—
—
—
—
—
63,213
63,213
Debtors arising out of reinsurance operations
—
14,759
52,363
—
—
431,503
498,625
Cash at bank and in hand
—
788
14,419
—
—
—
15,207
Other debtors and accrued interest
48,903
6,402
6,996
5,711
4,109
394,904
467,025
Total
552,747
435,534
957,767
124,523
4,109
1,066,346
3,141,026
Notes to the financial statements continued
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30
Ascot | Syndicate 1414
15
Other debtors and accrued interest comprise: Reinsurers’ share of provision for unearned premiums; Other debtors; Overseas deposits and
Prepayments and accrued income.
iii.
Financial assets that are past due or impaired
The Syndicate has debtors arising from direct insurance and reinsurance operations that are past due but not
impaired at the reporting date.
These debtors have been individually assessed for impairment by considering information such as the occurrence of
significant changes in the counterparty’s financial position, patterns of historical payment information and disputes
with counterparties.
An analysis of the carrying amounts of past due is presented in the table below;
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Total
2024
$000
$000
$000
Shares and other variable yield securities and units in unit trusts
91,950
—
91,950
Debt securities and other fixed income securities
1,875,079
—
1,875,079
Syndicate loans to central fund
10,722
—
10,722
Deposits with ceding undertakings
256
—
256
Reinsurers' share of claims outstanding
728,797
—
728,797
Debtors arising out of direct insurance operations
48,583
5,491
54,074
Debtors arising out of reinsurance operations
471,813
48,031
519,844
Cash at bank and in hand
10,080
—
10,080
Other debtors and accrued interest
16
511,799
—
511,799
Total
3,749,079
53,522
3,802,601
Neither past
due nor
impaired
assets
Past due but
not impaired
assets
Total
2023 (restated)
$000
$000
$000
Shares and other variable yield securities and units in unit trusts
184,063
—
184,063
Debt securities and other fixed income securities
1,378,411
—
1,378,411
Syndicate loans to central fund
13,084
—
13,084
Deposits with ceding undertakings
559
—
559
Reinsurers' share of claims outstanding
520,839
—
520,839
Debtors arising out of direct insurance operations
56,132
7,081
63,213
Debtors arising out of reinsurance operations
452,027
46,598
498,625
Cash at bank and in hand
15,207
—
15,207
Other debtors and accrued interest
467,025
—
467,025
Total
3,087,347
53,679
3,141,026
Notes to the financial statements continued
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Ascot | Syndicate 1414
16
Other debtors and accrued interest comprise: Reinsurers’ share of provision for unearned premiums; Other debtors; Overseas deposits and
Prepayments and accrued income. Management do not intend to impair aged debtors and are continuing to monitor support for future
recoverability.
The table below sets out the age analysis of financial assets that are past due but not impaired at the balance sheet
date:
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
2024
$000
$000
$000
$000
$000
Debtors arising out of direct insurance operations
3,266
370
806
1,049
5,491
Debtors arising out of reinsurance operations
28,564
3,235
7,054
9,178
48,031
Total
31,830
3,605
7,860
10,227
53,522
Past due but not impaired
0-3
months
past due
3-6
months
past due
6-12
months
past due
Greater
than 1 year
past due
Total
2023 (restated)
$000
$000
$000
$000
$000
Debtors arising out of direct insurance operations
5,131
826
542
582
7,081
Debtors arising out of reinsurance operations
33,765
5,437
3,567
3,829
46,598
Total
38,896
6,263
4,109
4,411
53,679
b.
Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from its insurance
contracts, regulatory funding requirements and other financial liabilities. The Syndicate is exposed to daily calls on
its available cash resources mainly from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
i.
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will have access to a
sufficient level of liquid assets to meet its liabilities when they fall due, under both normal and stressed conditions.
Forecasts are prepared and revised on a regular basis to predict cashflows over the short, medium and long term.
Syndicate Investment guidelines are structured with liquidity in mind with the primary investment objective being
the preservation of capital and provision of appropriate liquidity to meet operating needs. The Syndicate purchases
and holds high quality marketable securities with a currency and duration profile that matches the liabilities they
support. This approach reduces the risk that the Syndicate is either unable to sell securities to fund liability cash
flows or they are only realisable at materially below market value.
Notes to the financial statements continued
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32
Ascot | Syndicate 1414
ii.
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 contractual interest
payments) could be paid assuming conditions are consistent with those at the reporting date.
Undiscounted net cash flows
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2024
$000
$000
$000
$000
$000
Claims outstanding
784,824
899,206
408,899
338,625
2,431,554
Creditors
217,011
—
—
—
217,011
Other credit balances
17
795,689
—
—
—
795,689
Total
1,797,524
899,206
408,899
338,625
3,444,254
Undiscounted net cash flows
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2023 (restated)
$000
$000
$000
$000
$000
Claims outstanding
643,768
674,094
322,558
289,855
1,930,275
Creditors
174,755
—
—
—
174,755
Other credit balances
738,404
—
—
—
738,404
Total
1,556,927
674,094
322,558
289,855
2,843,434
c.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract will
fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency
risk and price risk. The Syndicate is not directly exposed to price risk as it does not invest in instruments such as
equities and commodities that are impacted by this risk.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior year.
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.
i.
Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of interest-bearing securities 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. Securities with floating interest rates expose the Syndicate to cash flow interest rate risk. Fixed interest
rate securities expose the Syndicate to fair value risk.
The Syndicate’s investment strategy is structured to control against these risks by primarily investing in high quality,
liquid investments and to actively manage the portfolios duration profile. The Investment Committee monitors the
duration of these assets on a regular basis, targeting an investment portfolio duration that is aligned to the liabilities
they are held to support, and to meet the liquidity requirements of the business.
Notes to the financial statements continued
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33
Ascot | Syndicate 1414
17
Other credit balances comprise: Provision for unearned premiums and accruals and deferred income.
ii.
Currency risk
Currency Risk is the risk that movements in foreign exchange rates impact the valuation of assets and liabilities and
associated cash flows.
The Syndicate primarily writes business and holds assets and liabilities in Sterling, US dollar, Euro, Canadian dollar
and Australian dollar and is therefore exposed to currency risk arising from fluctuations in these exchange rates.
The Syndicate’s Foreign exchange policy controls it’s exposure to currency risk. Where practical to do so the
Syndicate maintain assets in the same currency as the liabilities and associated liability cash flows that they are held
to support. The Investment Committee monitors the Syndicate’s asset and liability currency position on a regular
basis.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Other
Total
2024
$000
$000
$000
$000
$000
$000
$000
Investments
259,162
1,396,173
182,745
139,927
—
—
1,978,007
Reinsurers' share of technical provisions
40,952
759,662
70,368
15,870
—
—
886,852
Debtors
109,239
463,436
47,334
19,267
—
—
639,276
Other assets
17,354
7,399
3,824
26,055
32,409
10,272
97,313
Prepayments and accrued income
44,604
127,444
17,066
11,685
289
65
201,153
Total assets
471,311
2,754,114
321,337
212,804
32,698
10,337
3,802,601
Technical provisions
(460,443) (2,299,559)
(277,136)
(158,816)
—
—
(3,195,954)
Creditors
18
(8,024)
(196,784)
(9,359)
(2,827)
—
(17)
(217,011)
Accruals and deferred income
(832)
(27,811)
(2,572)
(74)
—
—
(31,289)
Total liabilities
(469,299) (2,524,154)
(289,067)
(161,717)
—
(17)
(3,444,254)
Total capital and reserves
2,012
229,960
32,270
51,087
32,698
10,320
358,347
Sterling
US dollar
Euro
Canadian
dollar
Australian
dollar
Other
Total
2023 (restated)
$000
$000
$000
$000
$000
$000
$000
Investments
162,439
1,110,517
145,413
157,748
—
—
1,576,117
Reinsurers' share of technical provisions
39,382
539,257
65,093
17,214
—
—
660,946
Debtors
114,990
416,138
36,249
33,454
—
—
600,831
Other assets
29,347
8,454
5,150
29,330
31,706
11,811
115,798
Prepayments and accrued income
37,544
112,270
23,985
13,535
—
—
187,334
Total assets
383,702
2,186,636
275,890
251,281
31,706
11,811
3,141,026
Technical provisions
(369,071)
(1,875,290)
(240,418)
(160,103)
—
— (2,644,882)
Creditors
(16,198)
(149,657)
(6,662)
(2,221)
—
(17)
(174,755)
Accruals and deferred income
(1,081)
(19,743)
(2,813)
(160)
—
—
(23,797)
Total liabilities
(386,350) (2,044,690)
(249,893)
(162,484)
—
(17)
(2,843,434)
Total capital and reserves
(2,648)
141,946
25,997
88,797
31,706
11,794
297,592
Notes to the financial statements continued
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34
Ascot | Syndicate 1414
18
Creditors includes amounts due to related companies and creditors arising out of insurance & reinsurance operations.
iii.
Sensitivity analysis to market risks
The analysis below is performed to provide an indication of the Syndicate’s sensitivity to reasonable approximations
of possible movements in interest rates and foreign exchange rates. All other variables are held constant for the
purpose of this analysis however, the occurrence of a change in a single market factor may lead to changes in other
market factors as a result of correlations.
2024
$000
2023 (restated)
$000
Impact on
results before
tax
Impact on
members’
balances
Impact on
results before
tax
Impact on
members’
balances
Interest rate risk
+ 50 basis points shift in yield curves
(27,940)
(27,940)
(18,327)
(18,327)
- 50 basis points shift in yield curves
28,393
28,393
18,530
18,530
Currency risk
10 percent increase in USD/EUR exchange rate
3,356
3,227
2,545
2,600
10 percent decrease in USD/EUR exchange rate
(3,356)
(3,227)
(2,545)
(2,600)
10 percent increase in USD/GBP exchange rate
205
201
(258)
(265)
10 percent decrease in USD/GBP exchange rate
(205)
(201)
258
(265)
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analysis is based on the Syndicate’s financial position at the reporting date
and may vary at the time that any actual market movement occurs. As investment markets move past pre-
determined trigger points, action would be taken which would alter the Syndicate’s position.
C.
Climate Risk
Climate risk is associated with climate change and takes into account physical, transitional and liability risk. In order
to effectively manage climate risk, the Risk Committee and Board maintain the following duties:
•
To assess and monitor the Company’s exposure in managing financial risks and opportunities from climate
change.
•
To promote the discussion, understanding and inclusion of climate-related risks and opportunities across all
areas of the business.
•
To ensure that all regulatory requirements, as they pertain to climate change, are adhered to.
Our business practices allow us to take a collaborative and cross-functional approach towards the continued
development of our climate risk framework, supported through the cross-collaborative approach of the
Sustainability, Exposure Management, Enterprise Risk Management, Legal and Actuarial teams. This encompasses
developing out a programme of work for climate change scenario analysis that considers physical, transitional and
liability risks.
Work continues within the Exposure Management team to assess our portfolio, modelled by country and peril to
estimate losses from a range of climate-related hazards. This work is overseen by Ascot’s Exposure Management
Committee.
The sustainability team is also taking a leading role is understanding where Ascot can support the transition to a
low carbon economy, including areas such as:
•
GHG emissions inventory management and identification of key focus areas of emissions reductions that
can support AUL’s target for net zero by 2050.
•
Building out enhanced business practices aligned to Ascot's Sustainable Underwriting Policy, Sustainable
Procurement Policy, and its Responsible Investment Policy.
Notes to the financial statements continued
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35
Ascot | Syndicate 1414
D.
Capital management
i.
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 overall and member
level only respectively, not at syndicate level. Accordingly, the capital requirement in respect of Syndicate 1414 is not
disclosed in these financial statements.
ii.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, the Syndicate is required to calculate its Solvency Capital Requirement (SCR)
for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200 year loss, reflecting
uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its
SCR at the same confidence level but reflecting uncertainty over a one year time horizon (one year SCR) for Lloyd’s
to use in meeting Solvency II requirements. The SCR of the Syndicate are subject to review by Lloyd’s and approval
by the Lloyd’s Capital and Planning Group.
A syndicate may be comprised of one or more underwriting members of Lloyd’s. ACNL is the sole corporate
member of the Syndicate and is liable for all underwriting liabilities of the Syndicate . Accordingly, the capital
requirements that Lloyd’s sets for ACNL operates on a similar basis.
ACNL’s SCR shall thus be determined by the Syndicate SCR ‘to ultimate’. Over and above this, Lloyd’s applies a
capital uplift to the member’s capital requirement, known as the Economic Capital Assessment (ECA). The purpose
of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and
ratings objectives. The capital uplift applied for 2024 was 35% (2023: 35%) of the member’s SCR ‘to ultimate’.
iii.
Provision of capital by members
ACNL may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for ACNL known as
Funds at Lloyd’s (FAL), assets held and managed within the syndicate known as Funds in Syndicate (FIS), or as the
members’ balances on the syndicate.
Accordingly, all of the assets less liabilities of the Syndicate, as represented in the members’ balances reported on
the balance sheet on page 15, represent resources available to meet members’ and Lloyd’s capital requirements.
E.
Operational risk
The Syndicate is exposed to the risk of direct or indirect loss resulting from internal processes, people or systems, or
(non-insurance) external events. This includes cyber security risk as well as major IT, systems or service failures. Our
Operational Resilience and Business Continuity frameworks serve to manage these key risks, with further
mitigation provided through the broader Risk Management Framework which includes the Risk Register, control
affirmation process, key metrics and appetites.
F.
Group risk
The UK Group (being AUGL and its subsidiaries) is forecast to continue being profitable for the foreseeable future,
and the continued existence of a loan facility between the UK holding company AUGL and Ascot Bermuda Limited
(ABL) provides the Syndicate with continued access to liquidity should the need arise. Every member is required to
hold capital at Lloyd’s which is held in trust and known as FAL. ACNL has met its FAL requirements by the way of
assets deposited by ABL. The Board of AUL monitors the financial strength of ABL on an annual basis, to ensure its
continued good standing of credit rating and solvency regulatory compliance.
Notes to the financial statements continued
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36
Ascot | Syndicate 1414
5.
Analysis of underwriting result
An analysis of the underwriting result before investment return is presented in the table below:
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2024
$000
$000
$000
$000
$000
$000
Direct insurance
Accident and health
21,817
20,506
(3,504)
(7,940)
(3,870)
5,192
Motor (other classes)
—
—
70
3
(12)
61
Marine, aviation, and transport
380,715
376,259
(246,097)
(115,637)
23,941
38,466
Fire and other damage to property
500,119
474,479
(169,547)
(142,719)
(91,773)
70,440
Third party liability
425,199
401,288
(194,534)
(130,960)
(48,238)
27,556
Credit and suretyship
36,986
33,994
(11,063)
(13,180)
(6,925)
2,826
Miscellaneous
414
383
245
(48)
(2)
578
Total direct insurance
1,365,250
1,306,909
(624,430)
(410,481)
(126,879)
145,119
Reinsurance acceptances
Casualty
178,015
176,071
(144,616)
(44,675)
(3,464)
(16,684)
Property
297,418
297,661
(167,997)
(62,797)
(44,701)
22,166
Marine
76,465
76,032
(159,169)
(8,485)
112,316
20,694
Energy
22,223
23,189
(50,699)
(3,027)
(21,987)
(52,524)
Aviation
2,777
2,751
(2,847)
(376)
1,449
977
Total reinsurance acceptances
576,898
575,704
(525,328)
(119,360)
43,613
(25,371)
Total
1,942,148
1,882,613
(1,149,758)
(529,841)
(83,266)
119,748
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of
the above segments into the Lloyd’s aggregate classes of business:
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2024
$000
$000
$000
$000
$000
$000
Additional analysis
Fire and damage to property of
which is:
Specialities
6,068
5,868
102
(1,639)
(3,142)
1,189
Energy
23,667
22,013
(5,150)
(7,299)
269
9,833
Third party liability of which is:
Energy
605
622
169
16
(61)
746
Notes to the financial statements continued
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37
Ascot | Syndicate 1414
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2023 (restated)
$000
$000
$000
$000
$000
$000
Direct insurance
Accident and health
17,408
15,864
(8,233)
(6,941)
118
808
Motor (other classes)
—
—
663
10
(914)
(241)
Marine, aviation, and transport
369,169
360,444
(195,691)
(103,675)
(12,353)
48,725
Fire and other damage to property
444,723
416,439
(172,401)
(119,605)
(61,847)
62,586
Third party liability
406,847
385,347
(185,159)
(121,199)
(42,265)
36,724
Credit and suretyship
34,345
34,502
(23,561)
(12,598)
4,194
2,537
Miscellaneous
2,508
1,590
(312)
(76)
(242)
960
Total direct insurance
1,275,000
1,214,186
(584,694)
(364,084)
(113,309)
152,099
Reinsurance acceptances
Casualty
173,585
189,374
(116,427)
(52,774)
(9,600)
10,573
Property
278,378
279,809
(104,975)
(57,723)
(84,444)
32,667
Marine
45,994
46,519
(16,247)
(7,243)
(65,687)
(42,658)
Energy
16,481
16,535
(9,116)
(2,578)
14,891
19,732
Aviation
2,058
1,981
(154)
(344)
(10)
1,473
Total reinsurance acceptances
516,496
534,218
(246,919)
(120,662)
(144,850)
21,787
Total
1,791,496
1,748,404
(831,613)
(484,746)
(258,159)
173,886
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of
the above segments into the Lloyd’s aggregate classes of business:
Gross
premiums
written
Gross
premiums
earned
Gross claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2023 (restated)
$000
$000
$000
$000
$000
$000
Additional analysis
Fire and damage to property of
which is:
Specialities
—
—
—
—
—
—
Energy
699
1,529
114
(112)
884
2,415
Third party liability of which is:
Energy
—
—
—
—
—
—
No gains or losses were recognised in profit or loss during the year on buying reinsurance, for example, with respect
to adverse development protection (2023 (restated): nil).
The gross premiums written for direct insurance by underwriting location is presented in the table below:
2024
$000
2023 (restated)
$000
United Kingdom
1,249,216
1,146,844
USA
68,791
74,174
Rest of the world
47,243
53,982
Total gross premiums written
1,365,250
1,275,000
6.
Claims
There has been no material change to the method of reserving during the year under review.
Unfavourable movements of $5,715k (2023 (restated): $25,031k) in the past year’s provision for claims outstanding,
net of expected reinsurance recoveries, are included in claims incurred, net of reinsurance.
Notes to the financial statements continued
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Ascot | Syndicate 1414
7.
Net operating expenses
2024
$000
2023 (restated)
$000
Acquisition costs
452,680
421,028
Change in deferred acquisition costs
(8,861)
(13,776)
Administrative expenses
72,061
64,138
Members’ standard personal expenses
13,961
13,356
Reinsurance commissions and profit participation
(50,390)
(35,510)
Net operating expenses
479,451
449,236
Total commissions for direct insurance business for the year amounted to:
2024
$000
2023 (restated)
$000
Total commission for direct insurance business
357,194
328,653
Administrative expenses include:
2024
$000
2023 (restated)
$000
Auditors’ remuneration:
fees payable to the Syndicate’s auditor for the audit of these financial
statements
365
380
fees payable to the Syndicate’s auditor and its associates in respect of other
services pursuant to legislation
132
116
Under the current agency agreement, there is no provision for a profit commission.
Included in administrative expenses above are the Syndicate’s share of administrative expenses recharged by AUHL
and other Ascot Group service companies whom initially incurred and paid these amounts.
8.
Emoluments of the directors of Ascot Underwriting Limited
The directors of AUL, including the active underwriter, received the following aggregate remuneration, of which
$720k (2023 (restated): $801k) was charged to the Syndicate:
2024
$000
2023 (restated)
$000
Directors’ emoluments
1,633
1,577
Benefits are accruing in respect of qualifying services for 2 directors. The active underwriter, and the highest paid
director received the following remuneration which was charged to the Syndicate:
2024
$000
2023 (restated)
$000
Remuneration of active underwriter
248
227
Remuneration of highest paid director
419
344
Notes to the financial statements continued
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Ascot | Syndicate 1414
9.
Staff numbers and costs
The syndicate and managing agent have no employees. Staff are employed by AUHL. The average number of
persons employed by the service company, but working for the Syndicate during the year, analysed by category,
was as follows:
Number of employees
2024
2023 (restated)
Operations, Administration and IT
93
88
Compliance
36
33
Risk management
29
26
Finance
23
22
Actuarial
20
16
Executive management
3
5
Corporate
5
4
Administration and finance
209
194
Underwriting
124
119
Claims
15
14
Investments
2
1
Total
350
328
The following amounts were recharged by AUHL to the Syndicate in respect of payroll costs:
2024
$000
2023 (restated)
$000
Wages and salaries
39,243
37,098
Social security costs
4,422
3,939
Other pension costs
2,879
2,530
Total
46,544
43,567
10.
Investment return
2024
$000
2023 (restated)
$000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
53,148
32,032
Interest on cash at bank
8,217
8,127
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
5,996
3,108
Losses on the realisation of investments
(11,249)
(719)
Unrealised gains on investments
18,922
50,008
Unrealised losses on the investments
(20,310)
(2,395)
Investment management expenses
(1,631)
(1,102)
Total investment return
53,093
89,059
Transferred to the technical account from the non-technical account
53,093
89,059
The investment return was wholly allocated to the technical account (2023 (restated): the investment return was
wholly allocated to the technical account).
Notes to the financial statements continued
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Ascot | Syndicate 1414
11.
Distribution and open years of account
A distribution to the member of $245.6m will be proposed in relation to the closing year of account 2022 (2023
(restated): $124.3m distribution in relation to the closing year of account [2021]).
Syndicates are required to keep each year of account open for a minimum of three years before it may be closed by
reinsurance to close. There are no years of account remaining open after the three-year period.
12.
Financial investments
Other financial investments of the Syndicate, amounting to $1,977.8m (2023 (restated): $1,575.6m), are held under
the terms of Lloyd's Premium Trust Deeds. Under the terms of the deeds these assets are held as security for
obligations to policyholders and amounts may only be released under certain limited circumstances. Other
investments comprise asset-backed securities.
Carrying value
Cost
2024
$000
2023
(restated)
$000
2024
$000
2023
(restated)
$000
Shares and other variable yield securities and units in unit trusts
91,950
184,063
91,950
184,063
Debt securities and other fixed income securities
1,875,079
1,378,411
1,887,815
1,412,351
Syndicate loans to central fund
10,722
13,084
11,115
14,008
Total financial investments
1,977,751
1,575,558
1,990,880
1,610,422
The amount ascribable to listed investments is $1,875.1m (2023 (restated): $1,378.4m).
The table below presents an analysis of financial investments by their measurement classification.
2024
$000
2023 (restated)
$000
Financial assets measured at fair value through profit or loss
1,977,751
1,575,558
Total financial investments
1,977,751
1,575,558
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value hierarchy
based on the inputs used in the valuation techniques as follows:
•
Level 1
– financial assets that are measured by reference to published quotes in an active market. A financial
instrument is regarded as quoted in an active market if quoted prices are readily and regularly available
from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices
represent actual and regularly occurring market transactions on an arm’s length basis.
•
Level 2
– financial assets measured using a valuation technique based on assumptions that are supported
by prices from observable current market transactions. For example, assets for which pricing is obtained via
pricing services but where prices have not been determined in an active market, financial assets with fair
values based on broker quotes, investments in private equity funds with fair values obtained via fund
managers and assets that are valued using the Syndicate’s own models whereby the significant inputs into
the assumptions are market observable.
•
Level 3
– financial assets measured using a valuation technique (model) based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are
they based on available market data. Therefore, unobservable inputs reflect the Syndicate's own
assumptions about the assumptions that market participants would use in pricing the asset or liability
(including assumptions about risk). These inputs are developed based on the best information available,
which might include the Syndicate’s own data.
Notes to the financial statements continued
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Ascot | Syndicate 1414
The table below analyses financial instruments held at fair value in the Syndicate’s balance sheet at the reporting
date by its level in the fair value hierarchy.
2024
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Shares and other variable yield securities and units in unit trusts
91,950
—
—
91,950
Debt securities and other fixed income securities
68,301
1,806,778
—
1,875,079
Syndicate loans to central fund
—
—
10,722
10,722
Total financial investments
160,251 1,806,778
10,722
1,977,751
2023 (restated)
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Shares and other variable yield securities and units in unit trusts
184,063
—
—
184,063
Debt securities and other fixed income securities
95,844
1,282,567
—
1,378,411
Syndicate loans to central fund
—
—
13,084
13,084
Total financial investments
279,907 1,282,567
13,084
1,575,558
Information on the methods and assumptions used to determine fair values for each major category of financial
instrument measured at fair value is provided below.
Debt securities are generally valued using prices provided by external pricing vendors. Pricing vendors will often
determine prices by consolidating prices of recent trades for identical or similar securities obtained from a panel of
market makers into a composite price. The pricing service may make adjustments for the elapsed time from a trade
date to the valuation date to take into account available market information. Lacking recently reported trades,
pricing vendors will use modelling techniques to determine a security price.
Some government and supranational securities are listed on recognised exchanges and are generally classified as
level 1 in the fair value hierarchy. Those that are not listed on a recognised exchange are generally based on
composite prices of recent trades in the same instrument and are generally classified as level 2 in the fair value
hierarchy.
Corporate bonds, including asset backed securities, that are not listed on a recognised exchange or are traded in an
established over-the-counter market are also mainly valued using composite prices. Where prices are based on
multiple quotes and those quotes are based on actual recent transactions in the same instrument the securities are
classified as level 2, otherwise they are classified as level 3 in the fair value hierarchy.
Management performs an analysis of the prices to ensure that they are reasonable and produce a reasonable
estimate of fair value.
At the reporting date Level 1 and Level 2 financial assets and liabilities were valued using valuation techniques
based on observable market data. All of the investments categorised as Level 3 are fair valued based on the inputs
to the valuation technique used.
For the 2019 and 2020 Underwriting Years, Lloyd’s of London required syndicates to make loans to the Lloyds’s
central fund in order to facilitate the injection of capital into Lloyd’s Brussels. The amount of the loans by Syndicate
was in reference to total premium income, rather than in relation to the amount of business transacted by the
Syndicate through Lloyd's Brussels. At the balance sheet date, there remain only two of the originating three loans
following the settlement of the initial 2019 underwriting year loan in March 2024. The aggregate face value of the
remaining two loans is $11.1m (2023 (restated): $14.0m) [fair value of $10.7m (2023 (restated): $13.1m)]; each of the two
remaining loans is for a minimum term of five years and pays interest on an annual basis.
As the central fund loans are deemed to have discretionary features they are reported within other variable-yield
securities and classed as a level 3 asset. Per FRS 102, section 11, this arrangement constitutes a financing transaction
and this being so where the financial asset is not already deemed at present value, it is measured at the present
value of the future payments discounted at a market rate of interest for a similar debt instrument as determined at
initial recognition. As there are no similar loan instruments, the loans due in 2025 onwards are recorded at fair value
using a valuation model which is provided to Lloyd's of London and it's managing agencies, from an external
valuation firm, and updated every six months. The valuation model requires significant subjective inputs especially
in determining appropriate credit and illiquidity premiums and, since there is no market where the loans can be
traded, the values attributed to the loans remain extremely subjective and can vary substantially.
Notes to the financial statements continued
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Ascot | Syndicate 1414
13.
Debtors arising out of direct insurance operations
2024
$000
2023 (restated)
$000
Due within one year
54,074
63,213
Total
54,074
63,213
The debtors arising out of direct insurance operations are all due from insurance intermediaries.
14.
Debtors arising out of reinsurance operations
2024
$000
2023 (restated)
$000
Due within one year
475,032
474,321
Due after one year
44,812
24,304
Total
519,844
498,625
The debtors due after more than one year are a combination of reinstatement premiums due on gross outstanding
claims on the treaty class of business and reinsurance accruals on the syndicate quota share with ABL.
15.
Other debtors
2024
$000
2023 (restated)
$000
Other related party balances (non-syndicate)
7,220
—
Other
58,138
38,993
Total
65,358
38,993
Amounts due from related companies are repayable on demand and do not have any associated terms and
conditions.
Other debtors include loss funds of $43.7m (2023 (restated): $35.4m), Italian premium tax prepayment of $11.1m
(2023 (restated): $0.0m) and sundry debtors of $3.1m (2023 (restated): $3.5m).
16.
Deferred acquisition costs
The table below shows changes in deferred acquisition costs assets from the beginning of the period to the end of
the period.
2024
2023 (restated)
Gross
Reinsurance
Net
Gross
Reinsurance
Net
$000
$000
$000
$000
$000
$000
Balance at 1 January
168,891
(21,439)
147,452
152,831
(21,477)
131,354
Incurred deferred acquisition costs
16,821
(7,990)
8,831
13,804
146
13,950
Foreign exchange movements
(2,421)
185
(2,236)
2,256
(108)
2,148
Balance at 31 December
183,291
(29,244)
154,047
168,891
(21,439)
147,452
17.
Other assets
2024
$000
2023 (restated)
$000
Overseas deposits
87,233
100,591
Total
87,233
100,591
Notes to the financial statements continued
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Ascot | Syndicate 1414
18.
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.
As these tables are on an underwriting year basis, there is an apparent large increase from amounts reported for the
end of the underwriting year to one year later as a large proportion of premiums are earned in the year of account’s
second year of development.
Balances have been translated at exchange rates prevailing at 31 December 2024 in all cases.
Gross:
Pure underwriting
year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
$000
Estimate of gross
claims
at end of underwriting
year
162,852
158,836
620,804
389,634
157,579
226,120
414,455
527,257
394,246
630,434
one year later
322,285
392,392
847,401
597,804
318,464
477,683
804,170
875,269
822,658
—
two years later
353,113
407,334
840,192
624,334
365,015
526,897
828,009
962,554
—
—
three years later
343,069
393,707
851,704
634,698
421,568
567,216
837,089
—
—
—
four years later
351,297
398,562
867,044
626,288
427,111
557,202
—
—
—
—
five years later
359,909
404,470
878,462
632,707
433,519
—
—
—
—
—
six years later
361,768
408,949
883,485
638,480
—
—
—
—
—
—
seven years later
359,558
412,005
870,665
—
—
—
—
—
—
—
eight years later
363,266
413,641
—
—
—
—
—
—
—
—
nine years later
362,663
—
—
—
—
—
—
—
—
—
Estimate of gross
claims reserve
362,663
413,641
870,665
638,480
433,519
557,202
837,089
962,554
822,658
630,434 6,528,905
Provision in respect of
prior years
23,581
Less gross claims paid
(348,653)
(392,723)
(824,032)
(582,190)
(353,208)
(394,367)
(515,639)
(484,398)
(186,397)
(39,325)
(4,120,932)
Gross claims reserve
14,010
20,918
46,633
56,290
80,311
162,835
321,450
478,156
636,261
591,109
2,431,554
Net:
Pure underwriting
year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
$000
Estimate of net claims
at end of underwriting
year
131,819
125,879
240,408
139,887
106,169
169,559
251,261
339,966
334,598
414,857
one year later
252,749
290,394
355,973
297,795
209,431
311,672
542,471
605,304
638,750
—
two years later
267,507
301,341
358,850
342,786
230,825
327,488
567,737
685,217
—
—
three years later
261,022
295,919
364,671
348,216
253,271
348,654
571,856
—
—
—
four years later
265,746
298,867
372,173
350,663
257,812
347,794
—
—
—
—
five years later
273,271
301,633
377,091
359,115
264,655
—
—
—
—
—
six years later
274,029
305,147
384,787
364,688
—
—
—
—
—
—
seven years later
273,099
306,751
387,657
—
—
—
—
—
—
—
eight years later
274,973
307,876
—
—
—
—
—
—
—
—
nine years later
275,278
—
—
—
—
—
—
—
—
—
Estimate of gross
claims reserve
275,278
307,876
387,657
364,688
264,655
347,794
571,856
685,217
638,750
414,857 4,258,628
Provision in respect of
prior years
19,044
Less net claims paid
(261,858)
(295,792)
(345,330)
(315,335)
(203,817)
(235,258)
(347,630)
(355,364)
(175,593)
(38,938)
(2,574,915)
Net claims reserve
13,420
12,084
42,327
49,353
60,838
112,536
224,226
329,853
463,157
375,919
1,702,757
The inflationary impact on the Syndicate's reserving approach has been identified as part of insurance risk for 2024,
as referenced in note 4.
Inflation has been higher over the last three years than any period in the syndicate’s history. During 2022 we
estimated an inflation allowance by class of business based on calendar year payment projections combined with
inflation forecasts. This was held as an explicit monetary load on short-tailed classes of business. In addition, further
implicit allowances for inflation are included within the best estimate reserve position for longer tailed lines.
As at year-end 2024, the inflation load across the short-tailed classes for the 2022 & prior years of account continues
to be held in full as a monetary amount. That is, no reduction has been given for any inflationary impact which is
within the current case reserves, due to the uncertainty around any calculation of reserved inflation effects. On a net
Notes to the financial statements continued
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44
Ascot | Syndicate 1414
best estimate basis, the explicit load amounts to $14.12m, which is 0.68% of total net best estimate reserves. As at
year-end 2023 this represented 0.79% of net best estimate reserves at the time, with the reduction due to growth in
net best estimate reserves over the 2023 and 2024 calendar year.
In addition to this explicit load, the following implicit allowances are in place for longer tailed lines and 2023 & 2024
year of account (YOA):
•
For long-tailed classes of business, we continue to monitor three inflation scenarios (fast, medium, and slow
reversion of inflation rates) quarterly against impact of implicit inflation assumptions. As at 31 December
2024 there is sufficient implicit allowance for inflation within the long-tail classes.
•
For the 2023 and 2024 YOA, inflation is incorporated in the expected loss ratios as opposed to a monetary
load, this is another example of implicit allowance for inflation. The initial expected loss ratio in the 2023 and
2024 planning cycles incorporated an explicit estimate of premium and claims inflation.
•
Further, case reserves continue to be updated to reflect the current inflationary environment with no
offsetting reduction to any inflation loadings, implicit or explicit.
In aggregate, the explicit and implicit inflation loadings continue to be upheld, recognising the uncertainty of
inflation to the ultimate reserving position persists.
More broadly, a continued focus on inflation within pricing remains as well as feedback loops into planning and
reserving to manage the associated risks to pricing and reserving.
19.
Technical provisions
The table below shows changes in the insurance contract liabilities and assets from the beginning of the period to
the end of the period.
2024
2023 (restated)
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Claims outstanding
Balance at 1 January
1,930,275
(520,839)
1,409,436
1,715,877
(565,220)
1,150,657
Claims paid during the year
(622,168)
113,651
(508,517)
(636,529)
207,712
(428,817)
Expected cost of current
year claims
1,165,350
(348,342)
817,008
807,144
(160,066)
647,078
Change in estimates of
prior year provisions
(15,592)
21,307
5,715
24,469
562
25,031
Foreign exchange
movements
(26,311)
5,426
(20,885)
19,314
(3,827)
15,487
Balance at 31 December
2,431,554
(728,797)
1,702,757
1,930,275
(520,839)
1,409,436
2024
2023 (restated)
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
$000
$000
$000
$000
$000
$000
Unearned premiums
Balance at 1 January
714,607
(140,107)
574,500
663,167
(131,992)
531,175
Premiums written during
the year
1,942,148
(479,416)
1,462,732
1,791,496
(460,578)
1,330,918
Premiums earned during
the year
(1,882,613)
460,691
(1,421,922)
(1,748,404)
453,173
(1,295,231)
Foreign exchange
movements
(9,742)
777
(8,965)
8,348
(710)
7,638
Balance at 31 December
764,400
(158,055)
606,345
714,607
(140,107)
574,500
Refer to Note 4 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the accounts,
to potential movements in the assumptions applied within the technical provisions.
Notes to the financial statements continued
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Ascot | Syndicate 1414
20.
Creditors arising out of direct insurance operations
2024
$000
2023 (restated)
$000
Due within one year
8,712
9,036
Total
8,712
9,036
The creditors arising out of direct insurance operations are all due from insurance intermediaries.
21.
Creditors arising out of reinsurance operations
2024
$000
2023 (restated)
$000
Due within one year
199,438
158,020
Total
199,438
158,020
The creditors arising out of reinsurance operations are all due from reinsurance intermediaries.
22.
Other creditors
2024
$000
2023 (restated)
$000
Other related party balances (non syndicates)
6,477
7,699
Other liabilities
2,384
—
Total
8,861
7,699
Amounts due to related companies are repayable on demand and do not have any associated terms and
conditions.
Other liabilities includes premium taxes payable of $2,375k (2023 (restated): nil).
23.
Cash and cash equivalents
2024
$000
2023 (restated)
$000
Cash at bank and in hand
10,080
15,207
Short term debt instruments presented within other financial investments
91,950
184,064
Total cash and cash equivalents
102,030
199,271
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the
management of its short-term commitments are included in cash and cash equivalents.
Cash at bank and in hand above relates to the underwriting activities of Syndicate 1414 and are held under the
terms of Lloyd's Premium Trust Deeds in Premium Trust Funds (see note 12).
Short term debt instruments included above relates to the cash balances held within the investment portfolio as
well as money market funds. Included within cash and cash equivalents are the following amounts which are not
available for use by the Syndicate because this cash is held in regulated bank accounts in overseas jurisdictions.
2024
$000
2023 (restated)
$000
Cash at bank and in hand
1,405
1,601
Short term debt instruments presented within other financial investments
6,341
6,806
Total cash and cash equivalents not available for use by the syndicate
7,746
8,407
Notes to the financial statements continued
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Ascot | Syndicate 1414
24.
Analysis of net debt
At 1 January
2024
Cash
flows
Acquired
Fair value &
exchange
movements
Non-cash
changes
At 31
December
2024
$000
$000
$000
$000
$000
$000
Cash and cash equivalents
199,271
(130,762)
—
33,521
—
102,030
Total
199,271
(130,762)
—
33,521
—
102,030
Net debt consists of the borrowings of the Syndicate, less any cash and cash equivalents. The Syndicate has no
borrowings.
25.
Related parties
All related party transactions were undertaken at arm's length under standard commercial terms that would be
applied to any third party.
Ascot Insurance Services Limited (AIS), a service company for Syndicate 1414, charged a service fee of $19k to the
Syndicate for 2024 (2023 restated: $18k) the fee is equal to the actual expenses relating to the introduction of
business to Syndicate 1414, plus a mark-up of 5.0% (2023: 5.0%). At 31 December 2024, the insurance balance owed
by AIS to Syndicate 1414 was $15,294k (2023 restated: $11,943k), and the non-insurance balance due to AIS was $0k
(2023 restated: due from $1k).
Ethos Speciality Insurance Services LLC (ESI) was a coverholder of Syndicate 1414 and was remunerated through
coverholder fees payable by the Syndicate. On the 4th November 2024, ESI was sold to Bishop Street Underwriters
LLC and therefore left the wider Ascot Group (being Ascot Group Limited and its subsidiaries). The total coverholder
fee amount charged through 2024 up until the point of sale was $18,013k (2023 restated: $21,370k). At the date of the
sale the amount due to ESI was $7,513k (2023 restated: $13,210k). At the balance sheet date $3,320k remained as
payable to ESI.
Expenses totalling $70,399k (2023 restated: $63,452k) and $1,216k (2023 restated: $4,012k) were recharged from
AUHL and Ascot Group Limited (AGL) to the Syndicate respectively. At 31 December 2024 the amount due to AUHL
was $1,766k (2023 restated: US$1,511k) and due to AGL $0k (2023 restated: $0k).
Syndicate 1414 paid US Federal Income Taxes on behalf of ACNL during the year. At 31 December 2024 the amount
due from ACNL was $7,220k (2023 restated: $1,965k).
Further, expenses of $2,049k (2023 restated: $1,396k) were recharged from Ascot US Services Company (USC) to the
Syndicate. At 31 December 2024 the amount due to USC was $0k (2023 restated: $0k).
Ascot Underwriting Inc. (AUI) and Ascot Underwriting Bermuda Limited (AUB) charge a coverholder fee to
Syndicate 1414 for the underwriting services they provide; this fee is based on 10%-7% (2023: 10.0%) of gross written
premiums dependant on class of business for the 2024 underwriting year and amounted to $11,453k (2023 restated:
$13,475k) and $4,624k (2023 restated: $5,466k) respectively for all underwriting years combined at year-end. At 31
December 2024 the amount due to AUI was $581k (2023 restated: $1,059k) and the amount due to AUB was $133k
(2023 restated: $254k).
For the 2018 to 2020 underwriting years, the Syndicate has a 20.0% quota-share reinsurance agreement in place
with ABL. The amount ceded to ABL in 2024 was an income to the Syndicate of $2,388k (2023 restated: $6,683k), and
amount receivable at the balance sheet date was $2,388k (2023 restated: $6,683k). In addition, the Syndicate has a
specific quota share over excess of loss polices, ceding to ABL with the amount in 2024 being an income to the
Syndicate of $44,127k (2023 restated: $13,245k expense). The amount payable at the balance sheet date was $8,184k
(2023 restated: $8,736k). ABL paid expenses in the year of $6,959k (2023 restated: $5,021k) recharging these back to
the Syndicate with the amount payable at the balance sheet date being $0k (2023 restated: $0k). ABL is a related
party within the wider Ascot Group of companies, and has provided the cash and securities element of ACNL’s
Funds at Lloyd’s for 2024 to the value of $501,983k (2023 restated: $515,853k).
For its services as the consortium manager, AUL receives consortium fee and profit commission income from the
Syndicate for the 2023 and post years of account. The Syndicate recognises the consortium fee expense on a written
basis, amounting to $5,859k (2023 restated: $4,910k), and an earned basis amounting to $5,345k (2023 restated:
$2,247k). At 31 December 2024 the amount due to AUL was $3,996k (2023 restated: $2,911k). The Syndicate
recognised a profit commission expense and payable of $263k (2023 restated: $nil).
Canro Re Limited (“Canro Re”, a Bermuda domiciled special purpose insurer (“SPI”) was formed to provide
reinsurance capacity to subsidiaries of Ascot, namely ABL and Syndicate 1414, through reinsurance agreements
which will be collateralised and funded by Canro Re through the issuance of non-voting redeemable preference
shares to investors. As of 31 December 2024, the sole investor or the preference shares issues by Canro Re was CPP
Investment Board PMI-2 Inc., CPP Investment Board PMI-2 Inc. is a related party of the Syndicate. Upon issuance of
Notes to the financial statements continued
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Ascot | Syndicate 1414
the preference shares, the proceeds from the issuance are deposited into a collateral account to fund any potential
obligations under the reinsurance agreements entered into with ABL and Syndicate 1414.
For the year ended 31 December 2024, the Syndicate recorded $15,579k (2023 restated: $14,833k) of ceded premiums
written to Canro Re and $4,892k (2023 restated: $12,363k) of losses and loss adjustment expense recoveries from
Canro Re. As of 31 December 2024, the Syndicate had a reinsurance recoverable on unpaid losses of $21,219k (2023
restated: $23,423k) due from Canro Re and $11,914k (2023 restated: $10,862k) of reinsurance balances payable to
Canro Re.
These disclosure requirements are in addition to the requirement to disclose key management personnel
compensation. This disclosure is given in note 8.
26.
Post balance sheet events
The amounts that are proposed to be transferred to members are disclosed in note 11.
27.
Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions:
2024
2023 (restated)
Start of period
rate
End of period
rate
Average
rate
Start of period
rate
End of period
rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
28.
Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as FAL. These funds are
intended primarily to cover circumstances where Syndicate assets prove insufficient to meet participating
members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by
Lloyd’s based on Prudential Regulatory Authority requirements and resource criteria. The determination of FAL has
regard to a number of factors including the nature and amount of risk to be underwritten by the member and the
assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not under the
management of the Managing Agent, no amount has been shown in these Financial Statements by way of such
capital resources. However, the Managing Agent is able to make a call on the Member’s FAL to meet liquidity
requirements or to settle losses.
Notes to the financial statements continued
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Ascot | Syndicate 1414