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SIRIUS INTERNATIONAL
MANAGING AGENCY LIMITED
– LLOYD’S SYNDICATE 1945
Report and Accounts for the year ended
REPORT AND ACCOUNTS 2024
1
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Contents
Directors and Administration
...................................................................................................................................................
2
Report of the Directors of the Managing Agent
.......................................................................................................................
4
Statement of Managing Agent’s Responsibilities
..................................................................................................................
10
Independent Auditors’ Report to the Member of Syndicate 1945
........................................................................................
11
Income Statement: Technical Account – General Business
...................................................................................................
16
Income Statement: Non-Technical Account – and other comprehensive income
................................................................
17
Statement of Financial Position – Assets
................................................................................................................................
18
Statement of Financial Position – Member’s balance and Liabilities
....................................................................................
19
Statement of Changes in Member’s Balance
.........................................................................................................................
20
Statement of Cash Flows
........................................................................................................................................................
21
Notes to the Report and Accounts for the year ended 31 December 2024
...........................................................................
22
REPORT AND ACCOUNTS 2024
2
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Directors and Administration
MANAGING AGENT:
The ultimate parent company of SIMA is SiriusPoint Limited domiciled in Bermuda.
Directors of SIMA:
K Caddick (Chief Human Resources Officer)
P Gage (Independent Non-Executive and Chair of the Strategic Underwriting Committee) *
R Gibbs (President and CEO SiriusPoint International)
R Harman (Chief Executive Officer)
J Haynes (Independent Non-Executive, Chair of the Audit Committee, Chair of Risk and Capital Committee) *
M Hudson (Independent Non–Executive Director, Chairman of the Board and Chair of the Remuneration and Nominations Committee) *
J Laville (Chief Financial Officer and Chair of the Reserving Committee, appointed 1 November 2024)
*Non-Executive Directors
None of the directors have any participation in the Syndicate's premium income capacity.
Managing Agent's secretary
Christian Taylor
Managing Agent's registered office
Floor 4
20 Fenchurch Street
London EC3M 3BY
Managing Agent's registered number
08536887
SYNDICATE:
Active Underwriter
Robert Harman (1 April 2023 to 31 May 2024)
Steve Smyth (1 June 2024 to 15 November 2024)
Robert Harman (16 November 2024 to current)
REPORT AND ACCOUNTS 2024
3
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Directors and administration (continued)
Bankers
Citibank N.A.
RBC Dexia
Investment Managers
BlackRock Investment Management (UK) Limited
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
United Kingdom
SE1 2RT
REPORT AND ACCOUNTS 2024
4
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Report of the Directors of the Managing Agent
The directors of the Managing Agent present their managing agent’s report and the audited accounts of Syndicate 1945 (‘the Syndicate’) for
the year ended 31 December 2024. This annual report is prepared using the annual basis of accounting as required by Statutory Instrument
No 1950 of 2008, the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and applicable United
Kingdom Accounting Standards, including Financial Reporting Standard 102: the Financial Reporting Standard applicable in the United
Kingdom and Republic of Ireland (FRS102) and Financial Reporting Standard 103: Insurance Contracts (FRS103). The Syndicate continues to
adopt the going concern basis in preparing the annual accounts (‘Report and Accounts’).
Principal Activities
This report covers the business of Syndicate 1945, whose principal activity during the year continued to be the transaction of insurance and
reinsurance business in the United Kingdom and overseas, underwriting at Lloyd’s of London.
Business Review
In 2024, the Syndicate underwrote the following classes of business: Accident and Health, Marine, Energy, Casualty, and Credit. The growth
in the Syndicate was mainly driven by the introduction of a new class, Credit, and expanded various lines within the Marine class.
Syndicate 1945 delivered a total comprehensive income of £8.7m (2023: £19.3m) for the calendar year with a combined ratio of 97.2% (2023:
91.2%), excluding LPT. Throughout 2024, the Syndicate continued to execute its strategy of expanding classes, broadening the underwriting
footprint, and adding further diversification to the portfolio.
Throughout the year, the Syndicate ensured that growth was driven by price adequacy, resulting in premium income being lower than planned
at the whole account level. The portfolio was actively optimised by reducing premium in Accident & Health and Marine while increasing
premium in Energy.
At the whole account level, as expected, rate increases were modest, averaging 1.7%, which aligned with the plan. Rate changes varied across
different classes and sub-classes of business. Casualty rates exceeded expectations, with larger increases in the US portfolio and reductions
in International, both maintaining good price adequacy. Accident & Health saw lower rates than planned due to the Health portfolio but
achieved sound price adequacy. Energy witnessed marginally lower increases than anticipated, again with solid price adequacy. Due to their
recent inclusion in the Syndicate, Marine and Credit had limited renewal rate data but demonstrated better-than-expected price adequacy.
The following risk-adjusted rate changes were achieved for the 2024 underwriting year: Casualty 1.8% (0.9% above plan), Accident & Health
0.6% (0.7% below plan), Energy 2.2% (1.1% below plan).
Our ongoing strategy is to continue focusing on our core lines of business and optimising results through prudent underwriting. The Syndicate
will pursue growth opportunities in lines offering the best returns while reducing exposure in any underperforming segments if necessary.
Looking ahead to 2025, we anticipate pressure on market conditions in certain classes; however, with a continued emphasis on price
adequacy, we remain optimistic. We will stay responsive to market changes while providing reliable strength and expertise to our clients and
brokers. A disciplined approach to underwriting, balancing risk and reward, and focusing on profitability rather than merely top-line growth
will be maintained. The Syndicate’s stamp capacity for the 2025 year of account is £184.9m, reflecting the expected increase in premium
income for 2025, primarily driven by opportunities for the Syndicate.
Results
Total comprehensive income for the financial year 2024 is £8,697k (2023: £33,331k). The profit for the financial year, excluding currency
translation loss,
is £11,326k (2023: £33,813k). The total recognised result on open years is a loss of £256k (2023: profit of £30,499k). This is
calculated as the sum of the 2022 year of account at 36 months, the 2023 year of account at 24 months and the 2024 year of account at 12
months. The balance due to the Member’s of the Syndicate was £31,311k at 31 December 2024 (2023: £26,074k).
REPORT AND ACCOUNTS 2024
5
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Report of the Directors of the Managing Agent (continued)
Key Performance Indicators
The directors consider the information in the following tables to be the key performance indicators for the Syndicate.
Key performance indicators
2024
£000
2023
excluding
LPT
£000
2023
£000
Gross written premium
180,212
159,823
159,823
Net earned premium
145,905
118,603
19,003
Total comprehensive
income for the financial year
8,697
19,355
33,331
Net claims ratio
62.5%
59.2%
(238.9)%
Expense ratio
34.7%
32.0%
199.9%
Combined ratio
97.2%
91.2%
(39.0)%
The net claims ratio is net claims incurred as a percentage of the net premium earned. The expense ratio is the net operational expense as a
percentage of net premium earned. The combined ratio is the combination of the two.
Gross written premium by class of business
2024
£000
2023*
£000
Accident and health
4,338
3,453
Marine, aviation and transport
45,748
19,186
Fire and other damage to property
13
5
Third party liability
17,100
31,103
Credit and suretyship
1,230
-
Assistance
8,699
12,333
Reinsurance acceptances
103,084
93,743
Total
180,212
159,823
*The above table has been restated to align it with Lloyds’s illustrative accounts. The amounts previously disclosed as ‘Accident and health’,
'Casualty’, ‘Energy’, ‘Marine’ and ‘Discontinued' have been restated, however, total amount disclosed remains unchanged. Due to this
reclassification, a substantial portion of previously reported amounts has been reallocated to 'Reinsurance Acceptances'.
REPORT AND ACCOUNTS 2024
6
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Report of the Directors of the Managing Agent (continued)
Investment Policy
The Syndicate's policy is to invest only in assets and instruments whose risks can be properly identified, measured, monitored, managed, and
controlled, and which are appropriately considered in the assessment of overall solvency needs. The investment management objective is to
make conservative investments in highly rated, easily realisable securities, while ensuring that assets and liabilities are managed based on
cash flow and duration.
SIMA has an investment committee to recommend investment strategy and guidelines. During the year the Syndicate’s appointed investment
manager was actively managing the USD Credit for Reinsurance Trust Fund (CRTF) and USD Lloyd’s Dollar Trust Fund (LDTF). Other Syndicate
Trust Funds are currently too small to be actively managed but these are kept under management review. In the interim, these funds are
invested in high quality, highly liquid Money Market Funds, available for utilisation immediately as required.
Principal Risks and Uncertainties
SIMA sets the risk appetite for the Syndicate annually, which is approved by the Board as part of the Syndicate's business planning and
Solvency Capital Requirement (`SCR') process. The SIMA Risk and Capital Committee meets at least quarterly to oversee the risk management
framework and review the risk profile and performance against risk appetite. The principal risks and uncertainties facing the Syndicate are
as follows:
Insurance Risk
Insurance risk includes the risks that a policy will be written for too low a premium or provide inappropriate cover (underwriting risk),
that the frequency or severity of insured events will be higher than expected (claims risk), or that estimates of claims subsequently
prove to be insufficient (reserving risk). The Board manages insurance risk by agreeing its appetite for these risks annually through
the business plan, which sets out targets for volumes, pricing, line sizes and retention by class of business. The Strategic Underwriting
Committee then monitors performance against the business plan regularly through the year. Reserve adequacy is monitored through
quarterly review by the Reserving Committee. It is also reviewed annually by an independent firm of actuaries, as part of the
Statement of Actuarial Opinion (SAO) process.
Credit Risk
Credit risk is the risk of financial loss to the Syndicate if a counterparty fails to discharge a contractual obligation.
The key aspect of credit risk is the risk of default by one or more of the Syndicate's reinsurers. The Board's policy is that the Syndicate
will normally only reinsure with businesses rated in the A range (S & P or AM Best) or higher or otherwise may require collateral.
SIMA participates in the Sirius Group Reinsurance Security Committee which assesses and is required to approve all new reinsurers
before business is placed with them.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Syndicate’s liability as primary insurer. If a
reinsurer fails to pay a claim, the Syndicate remains liable for the payment to the policyholder. The creditworthiness of reinsurers is
considered on an annual basis periodically by reviewing their financial strength prior to finalisation of any contract. In addition,
management assesses the creditworthiness of all reinsurers and intermediaries by periodically reviewing credit grades provided by
rating agencies and other publicly available financial information. The recent payment history of reinsurers is also used to update the
reinsurance purchasing strategy. Where ratings are lower than the A range (S & P or AM Best) and in certain other circumstances,
deposits from reinsurers may be held as collateral. Concentration risk is reviewed through monitoring aggregations of credit risk by
reinsurer. The approval of reinsurers includes establishing limits on exposure to individual counterparties, so that the total credit risk
the Syndicate can be exposed to is limited and management monitor the counterparty exposure on an ongoing basis.
REPORT AND ACCOUNTS 2024
7
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Report of the Directors of the Managing Agent (continued)
Market Risk
Market risk is the risk arising from uncertainty of asset prices, interest rates, foreign exchange rates, and other factors related to all financial
markets and investment asset management.
The key aspect of market risk for the Syndicate is that it may incur losses on foreign exchange movements as a result of mismatches between
the currencies in which assets and liabilities are denominated. SIMA's policy is to maintain received income or incurred expenditure in the
currencies in which they were received or paid. Currency asset and liability matching is explicitly reported to the Investment Committee on
a quarterly basis. Any significant surplus or deficit in a currency would be subject to review by the Investment Committee, and depending
on the magnitude of the surplus or deficit, escalated to the Board.
Liquidity and Cash Flow Risk
This is the risk that the Syndicate will not be able to meet its liabilities as they fall due, owing to a shortfall in cash. To mitigate this risk, the
Investment Committee reviews cash flow projections regularly and the investment portfolio is held in readily realisable securities and cash.
In addition, the Syndicate has a credit facility with SINT as disclosed in Note 24. Where appropriate, the Investment Committee escalates
liquidity risk issues to the Board. The capital framework at Lloyd’s is documented in Note 4.
Operational Risk
This
is the risk that errors caused by people, processes, systems and external events lead to losses to the Syndicate. SIMA seeks to
manage this risk through the use of detailed procedure manuals and a structured programme of testing of processes and systems by
internal audit. Business continuity and disaster recovery plans are in place and are regularly updated and tested.
Regulatory Risk
Regulatory risk is the risk of loss owing to a breach of regulatory requirements or failure to respond to regulatory change. SIMA is required
to comply with the requirements of the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Lloyd's. Lloyd's
requirements include those imposed on the Lloyd's market by overseas regulators, particularly in respect of US Situs business and by the
National Bank of Belgium for Lloyd’s Insurance Company Business. SIMA monitors regulatory developments and assesses the impact on
agency policy.
Climate Change
When assessing climate change, the SIMA Board considers all aspects of the business of the Managing Agency and Syndicate, including an
assessment of the classes of business underwritten, investment portfolio and operational activities. In undertaking this assessment, a range
of factors have been considered; including weather-related natural catastrophes, transition risks and SIMA’s environmental responsibilities
(i.e. reducing its carbon footprint). As a result of the assessment, climate change is not deemed a material risk to the Syndicate albeit the
position will be kept under review.
The Board approved ESG Policy is in line with Lloyd’s requirements and ensures that sustainability is embedded across the Syndicate’s
underwriting and investments and that the risk management system responds to the financial risks of climate change. Within the ESG Policy
a series of key policy statements are set out in order to demonstrate that SIMA is committed to the Lloyd’s ambition of working towards
net-zero greenhouse gas emissions by 2050.
Climate change risk continues to be monitored within the governance structure of SIMA including by the Risk and Capital Committee and
Board.
REPORT AND ACCOUNTS 2024
8
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Report of the Directors of the Managing Agent (continued)
Future Developments
The Syndicate’s business plan for the 2025 underwriting year of account includes a new class of business, Aviation, along with the
continued build out of our Marine and Credit classes. We will also continue to optimise our other classes of general insurance and
reinsurance business.
The Syndicate’s 2025 Business Forecast was submitted to Lloyd’s with a planned gross written premium of £244.5m (Gross net written
premium: £201.7m). The stamp capacity for the 2025 year of account is £184.9m.
Other than the above-mentioned new classes of business, there are no changes expected to the Syndicate’s planned activities over the
next twelve months.
Directors Serving in the Year
The directors of the Managing Agent during the period from 1 January 2024 to the date of this report were as follows:
K Caddick (Chief Human Resources Officer)
P Gage (Independent Non-Executive and chair of the Strategic Underwriting Committee) *
R Gibbs (President and CEO SiriusPoint International)
R Harman (Chief Executive Officer)
J Haynes (Independent Non-Executive, Chair of the Audit Committee, Chair of Risk and Capital Committee) *
M Hudson (Independent Non–Executive Director, Chairman of the Board and Chair of the Remuneration and Nominations Committee) *
J Laville (Chief Financial Officer and Chair of Reserving Committee, appointed 1 November 2024)
Director who served during the period from 1 January 2024 to the date of resignation was as follows:
D Foster (Chief Financial Officer and Chair of Reserving Committee, resigned 1 November 2024)
*Non-Executive Directors
The directors of the Managing Agent are covered by the Sirius Group indemnity provision policy, which was in force during the financial year
and at the date of signing the Report and Accounts.
REPORT AND ACCOUNTS 2024
11
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Independent Auditors’ Report to the Member of Syndicate 1945
Report on the audit of the syndicate annual accounts
Opinion
In our opinion,1945’s syndicate annual accounts:
●
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit and
cash flows for the year then ended;
●
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland”, and applicable law); and
●
have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate
Accounts Instructions version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version
1.1 (“the Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Report and Accounts
(the “Annual Report”), which
comprise: the Statement of Financial Position – Assets and the Statement of Financial Position – Member’s balance
and Liabilities as at 31 December 2024; the Income Statement: Technical Account – General Business, the Income
Statement: Non-Technical Account – and other comprehensive income, the Statement of Cash Flows, and
the
Statement of Changes in Members’ Balance for the year then ended; and the notes to the syndicate annual accounts,
which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions
and other applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities
for the audit of the syndicate annual accounts
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit
of the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities
of public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 6, we have provided no non-audit services to the syndicate in the period under
audit.
REPORT AND ACCOUNTS 2024
12
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Independent Auditors’ Report to the Member of Syndicate 1945 (continued)
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going
concern for a period of at least twelve months from when the syndicate annual accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern
basis of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual accounts
and our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the
syndicate annual accounts does not cover the other information and, accordingly, we do not express an audit opinion
or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the syndicate annual accounts or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent
material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is
a material misstatement of the syndicate annual accounts or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the
Report of the Directors of the Managing Agent
(the “Managing Agent’s Report”), we also
considered whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Managing Agent’s
Report for the year ended 31 December 2024 is consistent with the syndicate annual accounts and has been prepared
in accordance with applicable legal requirements.
REPORT AND ACCOUNTS 2024
13
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Independent Auditors’ Report to the Member of Syndicate 1945 (continued)
Managing Agent’s Report (continued)
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit,
we did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of Managing Agent’s Responsibilities, the Managing Agent is responsible
for the preparation of the syndicate annual accounts in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The Managing Agent is also responsible for such internal control as they
determine is necessary to enable the preparation of syndicate annual accounts that are free from material
misstatement, whether due to fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s ability
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern
basis of accounting unless it is intended for the syndicate to cease operations, or it has no realistic alternative but to
do so.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance
with laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential
Regulation Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and
we considered the extent to which non-compliance might have a material effect on the syndicate annual accounts.
REPORT AND ACCOUNTS 2024
14
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Independent Auditors’ Report to the Member of Syndicate 1945 (continued)
Auditors’ responsibilities for the audit of the syndicate annual accounts (continued)
We also considered those laws and regulations that have a direct impact on the syndicate annual accounts such as
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s
Syndicate Instructions. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
syndicate annual accounts (including the risk of override of controls), and determined that the principal risks were
related to the posting of inappropriate journals and management bias in accounting estimates and judgemental areas,
including the valuation of the incurred but not reported element of claims outstanding and estimates within gross
written premium. Audit procedures performed by the engagement team included:
●
Discussions with the Board, management, internal audit and the compliance function, of the Managing Agent
including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
●
Testing and challenging assumptions made by management in their significant accounting estimates, in particular
in relation to the valuation of claims incurred but not reported and estimates within gross premiums written;
●
Identifying and testing journal entries, in particular any journal entries posted with unexpected account
combinations or unusual words;
●
Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and
●
Reviewing relevant meeting minutes and correspondence with regulatory authorities.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected
in the syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than
the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s member in accordance with
part 2 of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for no
other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
REPORT AND ACCOUNTS 2024
15
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Independent Auditors’ Report to the Member of Syndicate 1945 (continued)
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are
required to report to you if, in our opinion:
●
we have not obtained all the information and explanations we require for our audit; or
●
adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
●
certain disclosures of Managing Agent remuneration specified by law are not made; or
●
the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been
applied. This auditors’ report provides no assurance over whether the iXBRL tagging has been applied in accordance
with section 2 of the Lloyd’s Syndicate Instructions version 2.0.
John Hawley (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
4 March 2025
REPORT AND ACCOUNTS 2024
16
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Income Statement: Technical Account – General Business
For the year ended 31 December 2024
Note
2024
£000
2023
£000
Gross premiums written
5
Outwards reinsurance premiums
(18,001 )
(119,686 )
Premiums written, net of reinsurance
Change in unearned premiums
Change in the gross provision for unearned premiums
(16,118 )
(21,600 )
Change in the provision for unearned premiums reinsurers’ share
(188 )
Net change in provisions for unearned premiums
(16,306 )
(21,134 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non- technical account
9
Claims paid
Gross amount
(64,719 )
(52,234 )
Reinsurers’ share
Net claims paid
(29,080 )
(31,874 )
Change in the provision for claims
Gross amount
(33,299 )
(32,573 )
Reinsurers’ share
(28,806 )
Net change in provisions for claims
(62,105 )
Claims incurred, net of reinsurance
(91,185 )
Net operating expenses
6
(50,638 )
(37,899 )
Balance on the technical account for general business
REPORT AND ACCOUNTS 2024
17
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Income Statement: Non-Technical Account – and other comprehensive
income
For the year ended 31 December 2024
Note
2024
£000
2023
£000
Balance on the technical account for general business
Investment income
9
Realised (losses)/gains on investments*
9
(1,433 )
Unrealised (losses)/gains on investments**
9
(176 )
Investment expenses and charges
9
(26 )
(108 )
Total investment return
9
Allocated investment return transferred to the general business
(6,510 )
(7,249 )
technical account
Loss on foreign exchange
(15 )
(88 )
Other Income***
9
Profit for the financial year
Other comprehensive income:
Currency translation losses
(2,629 )
(482 )
Total comprehensive income for the year
The Income Statement has been re-presented to align it with the Lloyd’s illustrative accounts. The re-presentations include:
*’Realised (losses)/gains on investments’ of £98k previously disclosed within ‘Investment income’: in line with Lloyd’s reporting requirements
now reported separately.
**‘Unrealised (losses)/gains investments’ of £2,500k previously disclosed within ‘Unrealised losses on investment’ (£630k) and ‘Unrealised
gain on investments’ of £3,130k.
***Other income includes investment surplus on Funds in Syndicate, previously shown separately.
REPORT AND ACCOUNTS 2024
18
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Statement of Financial Position – Assets
As at 31 December 2024
Note
2024
£000
2023
£000
Financial investments
11
Deposits with ceding undertakings
Investments
Provision for unearned premiums
Claims outstanding
Reinsurers’ share of technical provisions
Debtors arising out of direct insurance operations
12
Debtors arising out of reinsurance operations
13
Other debtors
14
Debtors
Cash at bank and in hand
22
Other
Other assets
Deferred acquisition costs
15
Other prepayments and accrued income
Prepayments and accrued income
Total assets
REPORT AND ACCOUNTS 2024
19
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Statement of Financial Position – Member’s balance and Liabilities
As at 31 December 2024
Note
2024
£000
2023
£000
Member’s balance
Total capital and reserves
Provision for unearned premiums
Claims outstanding
Technical provisions
17
Deposits received from reinsurers
Creditors arising out of direct insurance operations
18
Creditors arising out of reinsurance operations
19
Other creditors
20
Creditors
Accruals and deferred income
21
Total liabilities
Total liabilities, capital and reserves
The notes on pages 22 to 59 form an integral part of these Report and Accounts.
The Syndicate Report and Accounts on pages 16 to 21 were approved by the Board of Sirius International Managing Agency Limited on 4
March 2025 and were signed on its behalf by
J Laville
Chief Financial Officer
4 March 2025
REPORT AND ACCOUNTS 2024
20
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Statement of Changes in Member’s Balance
For the year ended 31 December 2024
2024
£000
2023
£000
Member’s balance brought forward as at 1 January
(7,066 )
Total comprehensive income for the year*
(Distribution)/losses collected in relation to distribution on closure of underwriting year
**
(30,499 )
Net movement on Funds In Syndicate***
(2,869 )
Other****
(190 )
Member’s balance carried forward at 31 December
The Statement of Changes in Member’s Balance has been re-presented to align it with the Lloyd’s illustrative accounts. The restatements
include:
* ‘Total comprehensive income for the year’ includes ‘Profit for the year’, previously disclosed separately.
**(Distribution)/losses collected in relation to distribution on closure of underwriting year’, previously disclosed as ‘Collection from
Member’.
***‘Net movement on Funds In Syndicate’ of £2,869k, previously disclosed as ‘Withdrawal of Funds in Syndicate Trust Funds’.
****’Other’ includes foreign exchange movement, previously disclosed separately.
Members participate on syndicates by reference to years of account (YOA) and their ultimate result, assets and liabilities are assessed with
reference to policies incepting in that year of account in respect of their membership of a particular year.
REPORT AND ACCOUNTS 2024
21
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Statement of Cash Flows
For the year ended 31 December 2024
Note
2024
£000
2023
(restated*)
£000
Cash flows from operating activities
Profit for the financial year
Adjustments:
Increase in gross technical provisions
Decrease/(increase) in reinsurers’ share of technical provisions
(108,304 )
(Decrease) in debtors
(16,220 )
(15,701 )
(Decrease)/increase in creditors
(1,775 )
(Decrease)/increase in deposits received from reinsurers
(24,854 )
Movement in other assets/liabilities
(8,013 )
(5,103 )
Investment return
(7,259 )
(7,401 )
Foreign exchange
(7,621 )
Net cash flows from operating activities
Cash flows from investing activities
Purchase of equity and debt instruments
(111,317 )
(112,809 )
Sale of equity and debt instruments
Investment income received
Net cash flows from investing activities
Cash flows from financing activities
Distribution of profit
(30,499 )
Collections of loss
Funds In Syndicate released to members
(2,869 )
Other – profit retained in Funds in syndicate
Net cash flows from financing activities
(3,951 )
Net increase in cash and cash equivalent
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(1,177 )
(2,543 )
Cash and cash equivalents at the end of the year
22
*Details of the restatements have been provided in in note 30.
REPORT AND ACCOUNTS 2024
22
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
1.
Basis of preparation
The Syndicate underwrites insurance and reinsurance business in the London Market at the Society of Lloyd’s on behalf of its corporate
member, Sirius International Corporate Member Limited (‘SICM’). The address of the Syndicate’s managing agent is Floor 4, 20
Fenchurch Street, London, EC3M 3BY.
The
report and accounts have been prepared in accordance with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate
Accounts) Regulations 2008 and applicable Accounting Standards in the United Kingdom and the Republic of Ireland, including
Financial Reporting Standard 102 (“FRS 102”). FRS 102 requires the application of Financial Reporting Standard 103 (FRS 103) in
relation to insurance contracts. These Report and Accounts are prepared on a going concern basis, under the historical cost
convention, as modified by the recognition of certain financial assets and liabilities measured at fair value through profit or loss.
In
assessing going concern the directors have considered the Syndicate’s current and forecast solvency and liquidity position for the next
twelve months and beyond using scenario analysis and by considering the mitigating recovery actions that can be undertaken. It is the
intention for the Syndicate to participate on the 2025 year of account and its ability to meet the capital requirements set by Lloyd’s
associated with this participation, including the continued financial support from the parent company, SiriusPoint International Insurance
Corporation (publ) (SINT) has been considered. Please refer to Note 4 for further information of the capital framework at Lloyd’s.
The Report and Accounts are presented in Pound Sterling (GBP). The functional currency of the Syndicate is US Dollars (USD) which is
the major currency in which business is written and costs incurred. Amounts are presented rounded to the nearest thousands, except
where stated.
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 reclassification, aggregation and correction of
error and these restatements have been clearly labelled where applicable.
Going concern
The Syndicate has financial resources to meet its financial needs and manages its portfolio of insurance risk. The directors have
continued to review the business plans, liquidity and operational resilience of the Syndicate and are satisfied that the Syndicate is well
positioned to manage its business risks in the current
economic environment. The Syndicate 2025 year of account has opened and the
directors have concluded that the Syndicate has sufficient resources to, and a reasonable expectation that it will, open a 2026 year of
account. The Syndicate has sufficient capital for each year of account in its Funds at Lloyd’s (FAL) and there is additional capital
available in the corporate member. There is no intention to cease underwriting or cease the operations of the Syndicate.
Accordingly, the directors of the Managing Agent continue to adopt the going concern basis in preparing the annual Report and
Accounts.
2.
Use of judgements and estimates
In preparing these Report and Accounts, 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.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes to estimates
are acknowledged on a forward-looking basis. The material judgements and estimates made in preparing these Report and Accounts are
described below.
REPORT AND ACCOUNTS 2024
23
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
2.
Use of judgements and estimates (continued)
Claims provisions
The measurement of the provision for claims outstanding involves judgements and assumptions about the future that have the most
significant effect on the amounts recognised in the annual accounts.
The claims provisions comprise the estimated cost of settling all claims incurred but unpaid at the balance sheet date, whether reported or
not. This is a judgemental and complex area due to the subjectivity inherent in estimating the impact of claims events that have occurred but
for which the eventual outcome remains uncertain. In particular, judgement is applied when estimating the value of amounts that should be
provided for claims that have been incurred at the reporting date but have not yet been reported (IBNR) to the Syndicate.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the Syndicate Managing Agent’s in-house
actuaries. These techniques generally involve projecting from past experience the development of claims over time in view of the likely
ultimate claims to be experienced and for more recent underwriting years, having regard to variations in business accepted and the underlying
terms and conditions. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part
from considerations of market benchmarks (especially where the account is relatively new), output from internal pricing models and
assessments of underwriting conditions. On specific losses/events a more bespoke approach is undertaken, involving inputs from
Underwriting, Claims and Exposure Management. The provision for claims also includes amounts in respect of internal and external claims
handling costs.
Areas where there is a relatively higher level of uncertainty at Q4 2024:
Casualty lines of business
Casualty, included within ‘Third Party Liability’ and part of ‘Reinsurance acceptances’ classes of business, has been underwritten since
2018 (International Casualty from 2020) and the reserves have become more dominant as Casualty has become the largest class of
business, in terms of gross written premium, of the Syndicate. On a gross of reinsurance basis, Casualty loss reserves are £171m, or
68% of total Syndicate loss reserves. On a net of reinsurance basis, Casualty loss reserves are £104m or 66% of total Syndicate loss
reserves. As at prior year end the equivalent figures were £135m or 62% on a gross of reinsurance basis and £57m or 61% on a net of
reinsurance basis.
The key assumption underlying the Casualty reserves is the Initial Expected Loss Ratios (“IELRs”). The IELRs are calibrated by
considering planning and pricing loss ratios, premium rate change assumptions, claims inflation assumptions and external
benchmarks.
Loss Portfolio Transfer (LPT)
The Loss Portfolio Transfer (“LPT”), a reinsurance for 2021 & prior underwriting year, became effective at 30th June 2023. This
resulted in all 2021 & prior underwriting year business (excluding Space policies and a single Casualty policy) being reinsured to a limit
of 130% of the ceded reserves. There is an uncertainty relating to the possible exhaustion of the LPT, although we consider this a
remote possibility.
Margin
In arriving at the level of claims provisions a margin is applied over and above the actuarial best estimate, which reduces the
possibility of adverse claims development during run-off.
REPORT AND ACCOUNTS 2024
24
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
2.
Use of judgements and estimates (continued)
Claims provisions (continued)
Margin is calibrated based on the attritional reserve distribution from the Internal Model. The level of the margin is set to maintain
the booked reserves in line with the Syndicate’s Reserve Risk Appetite. Margin of £10.6m is held within the Syndicate loss reserves,
representing 4.2% of total Syndicate gross loss reserves and 6.7% of total Syndicate net loss reserves (net of LPT). As at prior year end,
margin of £8.1m was held, representing 3.7% of total gross Syndicate loss reserves and 8.7% of total Syndicate net loss reserves (net
of LPT).
Further information about the risk that the claims provisions could be materially different from the ultimate cost of claims settlement
is included in Note 4 and further information about the amounts of claims provisions is contained in Note 17.
Claims Inflation
In light of the elevated level of general inflation seen since late 2021, the Syndicate has considered whether this may lead to an
increase in claims inflation. This has the potential to increase claims costs beyond those envisaged at the time risks were priced.
The Syndicate has performed a full analysis of claims inflation drivers for each class and has assessed that additional IBNR should be
held in respect of the risk posed by excess claims inflation. As at year end on a net of reinsurance (including net of LPT) basis, a loading
of £0.9m is being held in respect of excess claims inflation within the Syndicate loss reserves. As at prior year end, a net of reinsurance
loading of £1.5m was held.
Pipeline premium
The Syndicate makes an estimate of premiums written during the year that have not yet been notified by the end of the financial year
(“pipeline premiums”), based on business written but not yet signed. For certain insurance contracts, written premium is initially
recognised based on estimates of ultimate premiums. These estimates are derived based on a combination of underwriting information
(e.g. contractual terms, coverholder/broker estimates on expected premium etc.) and statistical/projection methods. Where statistical
methods are used, the main assumption underlying these estimates is that past premium development can be used to project future
premium development. The estimates are judgemental and could result in misstatements of revenue recorded in the Report and
Accounts, and are therefore subject to a quarterly review and control process. The pipeline premium included in gross written premium
is £71,727k (2023: £58,307k).
3.
Significant accounting policies
The following principal accounting policies that have been applied consistently in the preparation of the Syndicate’s Report and Accounts, are
listed below.
Premiums written
Gross premiums written 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’ premium representing
amounts due to the Syndicate not yet notified and adjustments to estimates of premium written in previous periods.
REPORT AND ACCOUNTS 2024
25
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
3.
Significant accounting policies (continued)
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, calculated separately for each insurance contract. Premiums are earned from the date of attachment of risk
over the indemnity period based on the pattern of the risk underwritten. Outwards reinsurance premiums on quota share policies are
accounted for in the same accounting period as the premiums for the related direct or inwards business being reinsured. Excess of loss
reinsurance policies are accounted for over their term. The earned proportion of premiums is recognised as income and, for reinsurance
ceded, an expense.
Acquisition costs
Gross acquisition costs written reflect direct and inwards reinsurance business written during the period. Costs incurred in acquiring business
are recognised over the period of the contracts to which they relate on the same basis as the earning pattern of the premium. At the balance
sheet date, acquisition costs are deferred to the extent that they are attributable to unearned premiums. 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.
Reinsurance
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 earned according to the nature of the cover. ‘Losses occurring during’ policies are earned evenly over
the policy period. ‘Risks attaching’ policies are expensed on the same basis as the inwards business being protected.
Reinstatement premiums on both inwards and outwards business are accreted to the technical account on a pro-rata basis over the term of
the original policy to which they relate.
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. Where applicable, deductions are made for salvage and other recoveries.
Claims provisions
The measurement of the provision for claims outstanding involves judgements and assumptions about the future that have the most
significant effect on the amounts recognised in the annual accounts.
The claims provisions comprise the estimated cost of settling all claims incurred but unpaid at the balance sheet date, whether reported or
not. This is a judgemental and complex area due to the subjectivity inherent in estimating the impact of claims events that have occurred but
for which the eventual outcome remains uncertain. In particular, judgement is applied when estimating the value of amounts that should be
provided for claims that have been incurred at the reporting date but have not yet been reported (IBNR) to the Syndicate.
The amount included in respect of IBNR is based on statistical techniques of estimation applied by the Syndicate Managing Agent’s in-house
actuaries. These techniques generally involve projecting from past experience the development of claims over time in view of the likely
ultimate claims to be experienced and for more recent underwriting years, having regard to variations in business accepted and the underlying
terms and conditions. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part
from considerations of market benchmarks (especially where the account is relatively new), output from internal pricing models and
assessments of underwriting conditions.
REPORT AND ACCOUNTS 2024
26
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
3.
Significant accounting policies (continued)
Claims provisions (continued)
On specific losses/events a more bespoke approach is undertaken, involving inputs from Underwriting, Claims and Exposure Management.
The provision for claims also includes amounts in respect of internal and external claims handling costs.
Claims recoveries
The reinsurers share of incurred claims comprise recoveries on paid gross claims that have been processed and movement in the reinsurers
share of gross claims provision. Recoveries are calculated based on the reinsurance programmes in place and gross outstanding claims having
due regard to collectability. Where applicable, collectability is assessed using the current security rating of the reinsurance companies
involved. A number of statistical techniques are used to assist in estimating reinsurance recoveries on gross IBNR claims.
Unexpired risks provision
Provision is made for unexpired risks arising from general insurance contracts where the expected value of claims and expenses attributable
to the unexpired periods of policies in force at the balance sheet date exceeds the unearned premiums provision in relation to such policies
(after the deduction of any deferred acquisition costs). An actuarial review is performed by Lloyd’s reporting class of business and
underwriting year and a provision for unexpired risks is calculated taking into account the expected loss ratio on unexpired premium.
Foreign currencies
The Report and Accounts are presented in Pound Sterling (GBP), consistent with the presentational currency for reporting to Lloyd’s
following the introduction of FRS 102, with effect from 1 January 2015. The functional currency of the Syndicate is US Dollars (USD)
which is the major currency in which business is written and costs incurred. Amounts are presented rounded to the nearest thousands,
except where stated.
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 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 historic 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.
Transactions in functional currency are translated to the presentational currency using average exchange rates for the period. Assets and
liabilities are translated from functional currency to presentational currency at the rates of exchange at the balance sheet date.
Financial assets and liabilities
In applying FRS 102, the Syndicate has chosen to apply the recognition and measurement provisions of FRS 102 chapters 11 and 12.
Recognition
The Syndicate does not hold financial assets or financial liabilities for trading purposes. Financial instruments are recognised when the
Syndicate becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially
recognised at transaction price.
REPORT AND ACCOUNTS 2024
27
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
3.
Significant accounting policies (continued)
Financial assets and liabilities (continued)
Financial assets are derecognised if the Syndicate’s contractual rights to the cash flows from the financial assets expire or if the
Syndicate transfers the financial asset to another party without retaining control of substantially all risks and rewards of the asset. A
financial liability is derecognised when its contractual obligations are discharged, cancelled, or expire.
Regular purchases and sales of financial assets are recognised and derecognised, as applicable, on the trade date, i.e. the date that the
Syndicate commits itself to purchase or sell the asset.
Classification and measurement
Investments in debt and other fixed income securities are subsequently carried at fair value through profit or loss. Fair value changes are
recognised immediately in profit or loss. Net gains or net losses on financial assets measured at fair value through profit or loss includes
foreign exchange gains/losses arising on their translation to the functional currency, but excludes interest and dividend income.
Debtors including debtors arising out of direct insurance and reinsurance operations, cash at bank and in hand, and creditors including
creditors arising out of direct insurance and reinsurance operations are subsequently carried at amortised cost.
Identification and measurement of impairment
At each reporting date the Syndicate assesses whether there is objective evidence that financial assets not at fair value through profit or loss
are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition
of an asset, and that the loss event has an impact on the future cash flows on the asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes observable data that comes to the attention of the Syndicate about any
significant financial difficulty of the issuer, or significant changes in the technological, market, economic or legal environment in which the
issuer operates.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount,
and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Significant financial assets
are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit
risk characteristics.
An impairment loss recognised reduces directly the carrying amount of the impaired asset. All impairment losses are recognised in profit or
loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised.
For financial assets measured at amortised cost the reversal is recognised in profit or loss.
Off-setting
Financial assets and financial liabilities are set off and the net amount presented in the balance sheet when, and only when, the Syndicate
currently has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
REPORT AND ACCOUNTS 2024
28
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
3.
Significant accounting policies (continued)
Investment return
Financial investments comprise of US Government Bonds, US Corporate Bonds and funds held in money market funds. Investment income in
respect of financial investments consists of interest income. Investment return comprises of investment income and movements in realised
and unrealised gains and losses on financial instruments at fair value through profit or loss, less investment management expenses, interest
payable, realised losses and impairment losses.
For investments at fair value through profit or loss, realised gains and losses represent the difference between the net proceeds on disposal
and the purchase price.
Unrealised gains and losses on investments represent the difference between the fair value at the balance sheet date and their purchase
price. Movements in unrealised investment gains and losses comprise changes during the reporting period in the value of the investments
held.
Investment return is initially recorded in the non-technical account. The return is transferred in full to the general business technical account
to reflect the investment return on funds supporting underwriting business.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances at bank, Letter of Credit (LOC) collateralisation accounts and funds held in overnight
“sweep” accounts with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in fair
value, and are used by the Syndicate in the management of its short term commitments. Cash at bank and in hand per the balance sheet
comprises solely of cash at bank.
Other
‘Other’ within ‘other assets’ in the ‘statement of financial position – assets’ include overseas deposits, which are lodged as a condition of
conducting underwriting business in certain countries. The funds are required in order to protect policyholders and enable the Syndicate to
operate in these markets. The Syndicate has only restricted access to these funds and no influence over their investment. Overseas deposits
are stated at market value (per Lloyd’s valuation).
Deposits with Ceding Undertakings
Deposits with ceding undertakings are measured at cost less allowance for impairment. 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.
Deposits received from reinsurers
Deposits received from reinsurers includes other amounts received in advance from reinsurers against future claims under the Syndicate's
reinsurance arrangements. These funds are held at amortised cost in the balance sheet.
REPORT AND ACCOUNTS 2024
29
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
3.
Significant accounting policies (continued)
Taxation
Managing agents are not required to deduct corporation tax from trading income. 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 at
20%) 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
debtors’.
No provision has been made for any other overseas tax payable by members on underwriting results.
Pension costs
SIMA does not employ any staff directly and does not operate a pension scheme. No pension contributions are charged directly to the
Syndicate.
Profit commission
There is no provision in SIMA’s managing agency agreement for profit commission.
Related party transactions
A related party is a person or entity that is related to the Syndicate. The Syndicate discloses transactions with related parties including parties not
wholly owned within the Group.
REPORT AND ACCOUNTS 2024
30
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management
Introduction and overview
This note presents information about the nature and extent of insurance and financial risks to which the Syndicate is materially 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 Board of Directors of the Managing Agent has overall responsibility for the establishment and oversight of the Syndicate’s risk
management framework. The Board has established a Risk and Capital Committee to oversee the operation of the Syndicate’s risk
management framework and to review and monitor the management of the risks to which the Syndicate is exposed. Additionally, the
Board of SIMA has delegated oversight aspects of insurance risks to the Strategic Underwriting Committee and Reserving Committee,
which are responsible for monitoring insurance and reserving risk management policies. The Board has delegated the management of
aspects of financial risks to the Investment Committee, which is responsible for developing and monitoring financial risk management
policies.
The Risk and Capital Committee reports regularly to the Board of Directors on its activities. Similarly, the Strategic Underwriting, Reserving
and Investment Committees report regularly to the Board on their areas of responsibility.
The risk management policies are established to identify and analyse the risks faced by the Syndicate, to set appropriate risk limits and controls,
and to monitor risks and adherence to limits.
Insurance Risk
The predominant risk to which the Syndicate is exposed is insurance risk which can be split into underwriting risk and reserving risk:
Management of underwriting risk
A key component of the management of underwriting risk for the Syndicate is a disciplined underwriting strategy that is focused on writing
quality business and not writing for volume. Product pricing is designed to incorporate appropriate premiums for each type of assumed risk.
The underwriting strategy includes underwriting limits on the Syndicate’s total exposure to specific risks together with limits on geographical
and industry exposures. The aim is to ensure a well-diversified book is maintained with no over exposure in any one category. This is described
further under Concentration of insurance risk below.
Contracts can contain a number of features which help to manage the underwriting risk such as the use of deductibles, or capping the
maximum permitted loss, or number of claims (subject to local regulatory and legislative requirements).
The Syndicate makes use of reinsurance to mitigate the risk of incurring significant losses linked to one event. Where an individual exposure
is deemed surplus to the Syndicate’s appetite additional facultative reinsurance is also purchased.
REPORT AND ACCOUNTS 2024
31
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Concentration of underwriting risk
The Syndicate’s exposure to insurance risk is diversified. The following tables provide an analysis of the geographical breakdown and by class of
business, which the directors consider to be the major types of insurance exposures.
Premium by class of business and geographic analysis is shown below:
Year 2024
Accident &
Health
£000
Marine,
aviation and
transport
£000
Fire and other
damage to
the property
£000
Third party
liability
£000
Credit and
suretyship
£000
Assistance
£000
Reinsurance
acceptances
£000
Total
£000
UK
3,481
36,709
10
13,721
987
6,980
10,761
72,649
EU
-
-
-
-
-
-
10,660
10,660
US
347
3,661
1
1,369
98
696
56,371
62,543
Canada
80
844
-
315
23
161
2,406
3,829
Other
430
4,534
2
1,695
122
862
22,886
30,531
Total
4,338
45,748
13
17,100
1,230
8,699
103,084
180,212
Year 2023*
Accident &
Health
£000
Marine, aviation
and transport
£000
Fire and other
damage to property
£000
Third party
Liability
£000
Assistance
£000
Reinsurance
acceptances
£000
Total
£000
UK
1,441
8,006
2
12,979
5,146
35,689
63,263
EU
-
-
-
-
-
8,224
8,224
US
1,177
6,539
2
10,600
4,203
29,151
51,672
Canada
78
434
-
703
279
1,926
3,420
Other
757
4,207
1
6,821
2,705
18,753
33,244
Total
3,453
19,186
5
31,103
12,333
93,743
159,823
*The note has been restated to align it with Lloyds’s illustrative accounts. The amounts previously disclosed as 'Accident and Health’, 'Casualty’,
and ‘Discontinued' have been restated, however, total amount disclosed remains unchanged. Due to this reclassification, a proportion of
amounts has been reallocated to ‘Fire and other damage to property’, ‘Third Party Liability’ and ‘Assistance’ categories.
REPORT AND ACCOUNTS 2024
32
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Insurance Risk (continued)
Concentration of underwriting risk (continued)
Claims liabilities by class of business are shown below: -
2024
2023*
Gross
liabilities
£000
Reinsurance
of liabilities
£000
Net
liabilities
£000
Gross
liabilities
£000
Reinsurance
of liabilities
£000
Net
liabilities
£000
Accident and health
(213)
4
(209)
206
3
209
Marine, aviation and transport
37,136
(15,407)
21,729
27,510
(16,740)
10,770
Fire and other damage to property
655
(576)
79
3,237
(3,040)
197
Third party liability
33,002
(6,550)
26,452
21,265
(5,847)
15,418
Credit and suretyship
192
88
280
-
-
-
Assistance
5,375
(452)
4,923
6,908
(1,739)
5,169
Reinsurance acceptance
179,782
(70,659)
109,123
161,117
(94,809)
66,308
Total
255,929
(93,552)
162,377
220,243
(122,172)
98,071
*The note has been restated to align it with Lloyds’s illustrative accounts. The previously disclosed classes ' Casualty’, ‘Energy’, ‘Marine’ and
‘Discontinued' have been restated, however total amount disclosed remain unchanged.
The geographical concentration of the outstanding claims liabilities is noted below. This is based on the location of the risk exposure: -
2024
2023
Gross
liabilities
£000
Reinsurance
of liabilities
£000
Net claims
outstanding
liabilities
£000
Gross
liabilities
£000
Reinsurance
of liabilities
£000
Net claims
outstanding
liabilities
£000
UK
24,160
(9,773)
14,387
20,876
(13,683)
7,193
EU
3,956
(1,475)
2,481
3,126
(1,935)
1,191
US
132,273
(44,793)
87,480
104,749
(56,421)
48,328
Canada
11,946
(5,475)
6,471
19,582
(8,147)
11,435
Other
83,594
(32,036)
51,558
71,910
(41,986)
29,924
Total
255,929
(93,552)
162,377
220,243
(122,172)
98,071
REPORT AND ACCOUNTS 2024
33
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Insurance Risk (continued)
Management of reserving risk
The Reserving Committee oversees the management of reserving risk. The use of proprietary software and standardised modelling
techniques, internal and external benchmarking, and the review of claims development are all instrumental in mitigating reserving risk.
The Syndicate Managing Agent’s in house actuaries perform a reserving analysis on a quarterly basis, liaising closely with underwriters and
claims staff. The aim of this exercise is to produce a probability-weighted average of the expected future cash outflows arising from the
settlement of incurred claims. These projections include an analysis of claims development compared to the previous ‘best estimate’
projections. The selected reserving best estimate is reviewed annually by external consulting actuaries.
The Reserving Committee performs a comprehensive review of the projections, both gross and net of reinsurance. Following this review, the
Reserving Committee makes recommendations to the Managing Agent’s Board of Directors of the claims provisions to be established.
In arriving at the level of claims provisions a margin for uncertainty is applied over and above the actuarial best estimate which reduces the
possibility of adverse claims development during run-off.
Reserving risk key assumptions
The principal assumption underlying the liability estimates is that the future claims development will follow a similar pattern to past claims
development. This includes assumptions in respect of average claim costs, claim handling costs, claim inflation factors and claim numbers for
each underwriting year. Additional qualitative judgements are used to assess the extent to which past trends can be applied in the future.
The assumptions used to determine the sensitivity have not changed from the prior year on attritional losses and Cat losses.
Sensitivity to reserving 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 incurred but not reported (IBNR).
The provision for claims outstanding is the key insurance risk faced by the Syndicate. Consistent with last year, the directors consider that a
5.0% and a 7.5% variation in the value of claims outstanding is a realistic spread of the uncertainty.
The effect this would have on profit and
member’s balance and hence the Syndicate is illustrated in the tables below:
2024
Sensitivity
Sensitivity
+5.0%
£000
-5.0%
£000
+7.5 %
£000
-7.5 %
£000
Gross claims outstanding
12,585
(12,585)
18,877
(18,877)
Claims outstanding net of reinsurance
7,864
(7,864)
11,796
(11,796)
REPORT AND ACCOUNTS 2024
34
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Sensitivity to reserving risk (continued)
2023*
Sensitivity
Sensitivity
+5.0%
£000
-5.0%
£000
+7.5%
£000
-7.5%
£000
Gross claims outstanding
10,838
(10,838)
16,257
(16,257)
Claims outstanding net of reinsurance
4,687
(4,687)
7,030
(7,030)
*Sensitivity table above restated to include
+
5% and -5% sensitivities. In addition, the signage has been switched
for +
7.5% and -7.5% in relation to
both ‘Gross claims
outstanding’ and ‘Claims outstanding net of reinsurance’. These changes have been made to align the presentations with the
Lloyd’s reporting requirements.
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 investment management objective is to invest conservatively in easily realisable,
highly rated securities, whilst ensuring that the assets and liabilities are managed on a cash flow and duration basis.
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:
•
Reinsurers’ share of insurance liabilities
•
Amounts due from reinsurers in respect of settled claims
•
Debt securities
•
Amounts due from intermediaries
•
Cash and cash equivalents
•
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.
Management of credit risk
The key aspect of credit risk is the risk of default by one or more of the Syndicate’s reinsurers. Pallas Reinsurance Company Ltd is the
largest of the Syndicate’s reinsurers following the LPT transaction which was executed on 30 June 2023. At 31 December 2024 the
reinsurance reserves recoverable amounted to £75m. To mitigate the risk of default, the transaction was conducted on a funds withheld
basis plus collateral equal to 120% of the reinsured exposure, posted by Pallas Reinsurance Company Ltd into a trust account for the
benefit of Syndicate 1945.
REPORT AND ACCOUNTS 2024
35
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Management of credit risk (continued)
The Board's policy is that the Syndicate will normally only reinsure with businesses rated in the A range (S & P or AM Best) or higher or
otherwise may require collateral. SIMA participates in the Sirius Group Reinsurance Security Committee which assesses and is required
to approve all new reinsurers before business is placed with them.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Syndicate’s liability as primary insurer. If a reinsurer
fails to pay a claim, the Syndicate remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered
on an annual basis periodically by reviewing their financial strength prior to finalisation of any contract. In addition, management
assesses the creditworthiness of all reinsurers and intermediaries by periodically reviewing credit grades provided by rating agencies
and other publicly available financial information. The recent payment history of reinsurers is also used to update the reinsurance
purchasing strategy. Where ratings are lower than the A range (S & P or AM Best) and in certain other circumstances, deposits from
reinsurers may be held as collateral. Concentration risk is reviewed through monitoring aggregations of credit risk by reinsurer. The
approval of reinsurers includes establishing limits on exposure to individual counterparties, so that the total credit risk the Syndicate
can be exposed to is limited and management monitor the counterparty exposure on an ongoing basis.
Other elements of credit risk are managed by monitoring exposure to individual counterparties and participation in money market funds
and collective investment schemes.
Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the material credit risk exposure. The Syndicate does not
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 of financial assets.
Analysis by credit rating for financial assets
Year 2024
AAA
£000
AA
£000
A
£000
BBB
£000
Other
£000
Not rated
£000
Total
£000
Shares & other variable yield securities & Unit trusts
11,506
94,278
10,783
-
-
5,196
121,763
Debt securities and other fixed income securities
26,913
22,274
34,049
4,956
-
3,029
91,221
Deposits with credit institutions
-
-
-
-
-
-
-
Syndicate loans to the central fund
-
-
-
-
-
1,165
1,165
Deposits with ceding undertakings
-
-
2,969
-
-
-
2,969
Reinsurers’ share of claims outstanding
-
-
14,607
-
-
78,945
93,552
Debtors arising from reinsurance operations
-
-
3,450
-
-
2,316
5,766
Cash at bank and in hand
-
-
39,308
-
-
-
39,308
Other assets
2,979
697
618
453
701
546
5,994
Total
41,398
117,249
105,784
5,409
701
91,197
361,738
REPORT AND ACCOUNTS 2024
36
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Exposure to credit risk (continued)
Analysis by credit rating for financial assets
Year 2023
AAA
£000
AA
£000
A
£000
BBB
£000
Other
£000
Not rated
£000
Total
£000
Shares & other variable yield securities and Unit trusts
7,421
55,124
21,708
520
-
136
84,909
Debt securities and other fixed income securities
37,871
12,417
44,763
7,827
-
-
102,878
Deposits with credit institutions*
-
-
730
-
-
-
730
Syndicate loans to the central fund**
-
-
-
-
-
1,528
1,528
Deposits with ceding undertakings
-
-
3,445
-
-
-
3,445
Reinsurers’ share of claims outstanding
-
-
18,458
-
-
103,714
122,172
Debtors arising from reinsurance operations
-
-
2,434
-
-
1,132
3,566
Cash at bank and in hand
-
-
29,634
-
-
-
29,634
Other assets***
4,065
704
538
486
620
495
6,908
Total
49,357
68,245
121,710
8,833
620
107,005
355,770
The note has been re-presented to align it with the Lloyd’s illustrative accounts. Restatements include: *’Deposits with credit Institutions’ of
£730k was previously disclosed as ‘Other investments’. **‘Syndicate loans to central fund’ of £1,528k, previously disclosed within the
‘Shares & other variable yield securities & unit trusts’. ***’Other assets’ previously disclosed as ‘Overseas deposits’.
Concentration of credit risk
At the end of the year the largest concentration of credit risk to the Syndicate was Citibank N.A. £41.6m (2023: £32.9m) and to the United
States Government £18.6m (2023 £27.5m). Cash held at Citibank N.A. at the end of the year was classified as A rated, in line with the
treatment at 2023.
Financial assets that are past due or impaired
The Syndicate has some debtors arising from direct insurance and reinsurance operations that are past due but not impaired at the
reporting date. The Syndicate has no financial assets that are impaired at the reporting date.
In preparation of this analysis 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 or impaired debtors is presented in the following page.
REPORT AND ACCOUNTS 2024
37
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Exposure to credit risk (continued)
In preparation of this analysis 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 or impaired debtors is presented in the following page.
Year 2024
Neither past
due nor
impaired
£000
Past due
£000
Impaired
£000
Impairment
allowance
£000
Total
£000
Shares & other variable yield securities & unit trusts
121,762
-
-
-
121,762
Debt securities and other fixed income securities
91,221
-
-
-
91,221
Deposits with credit institutions
-
-
-
-
-
Syndicate loans to the central fund
1,165
-
-
-
1,165
Deposits with ceding undertakings
2,969
-
-
-
2,969
Reinsurers’ share of claims outstanding
93,552
-
-
-
93,552
Debtors arising from direct insurance operations
32,169
-
-
-
32,169
Debtors arising from reinsurance operations
5,766
1,696
-
-
7,462
Other debtors and accrued interest
87,226
-
-
-
87,226
Cash at bank and in hand
39,308
-
-
-
39,308
Total credit risk
475,138
1,696
-
-
476,834
REPORT AND ACCOUNTS 2024
38
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Financial assets that are past due or impaired(continued)
Year 2023
Neither past
due nor
impaired
£000
Past due
£000
Impaired
£000
Impairment
allowance
£000
Total
£000
Shares & other variable yield securities & unit trusts
84,909
-
-
-
84,909
Debt securities and other fixed income securities
102,878
-
-
-
102,878
Deposits with credit institutions*
730
-
-
-
730
Syndicate loans to the central fund**
1,528
-
-
-
1,528
Deposits with ceding undertakings
3,445
-
-
-
3,445
Reinsurers’ share of claims outstanding
122,172
-
-
-
122,172
Debtors arising from direct insurance operations
25,802
-
-
-
25,802
Debtors arising from reinsurance operations
3,565
1,115
-
-
4,680
Other debtors and accrued interest***
76,795
-
-
-
76,795
Cash at bank and in hand
29,634
-
-
-
29,634
Total credit risk
451,458
1,115
-
-
452,573
The note has been re-presented to align it with the Lloyd’s illustrative accounts. Restatements include: *’Deposits with credit Institutions’ of
£730k was previously disclosed as ‘Other investments’. **‘Syndicate loans to central fund’ of £1,528k, previously disclosed within the
‘Shares & other variable yield securities & unit trusts’. ***’Other debtors and accrued interest’ included £6,908k, previously disclosed as
‘Overseas deposits’ separately. However, it has been added to ‘Other debtors and accrued interest’ this year.
REPORT AND ACCOUNTS 2024
39
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Financial assets that are past due or impaired (continued)
Past due but not impaired
Year 2024
0 to 3
months past
due
£000
3 to 6
months past
due
£000
6 to 12
months past
due
£000
Over 1 year
past due
£000
Total
£000
Debtors arising out of reinsurance operations
-
95
558
1,043
1,696
Total
-
95
558
1,043
1,696
Reinsurance recovery amounts which are past due of £1,696k (2023: £1,115k) are considered to be fully recoverable. These amounts are not
in dispute.
Past due but not impaired
Year 2023
0 to 3
months past
due
£000
3 to 6
months past
due
£000
6 to 12
months past
due
£000
Over 1 year
past due
£000
Total
£000
Debtors arising out of reinsurance operations
-
124
935
56
1,115
Total
-
124
935
56
1,115
Liquidity risk
This is the risk that the Syndicate will not be able to meet its liabilities as they fall due, owing to a shortfall in cash. To mitigate this risk, the
Investment Committee reviews cash flow projections regularly and the investment portfolio is held in readily realisable securities and cash.
In addition, the Syndicate has a credit facility
with SINT as disclosed in Note 24. Where appropriate, the Investment Committee escalates
liquidity risk issues to the Board.
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.
REPORT AND ACCOUNTS 2024
40
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Management of liquidity risk
The Syndicate’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when they fall due,
under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
•
Forecasts are prepared and revised on a regular basis to predict cashflows over the short, medium and long term
•
The Syndicate purchases assets with durations in line with forecast cashflows
•
Assets purchased by the Syndicate are required to satisfy specified marketability requirements
•
The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts
•
The Syndicate holds a working capital borrowing facility from Sirius International Insurance Corporation (publ) (SINT) to enable cash
to be raised in a relatively short time-span
•
The Syndicate regularly reviews its contingency funding plans to ensure that adequate liquid financial resources are in place to meet
obligations as they fall due in the event of reasonably modelled stress-test scenarios
The maturity analysis presented in the table below shows the remaining contractual maturities for the Syndicate’s (re)insurance contracts
and other liabilities. For (re)insurance contracts, the contractual maturity is the estimated date when the gross undiscounted contractually
required cash flows will occur.
Year 2024
0-1 year
£000
1-3 years
£000
3-5 years
£000
More
than 5
years
£000
Total
£000
Outstanding claim liabilities
63,144
80,973
46,303
65,509
255,929
Deposits received from reinsurers
14,199
18,208
10,412
14,730
57,549
Creditors
16,868
-
-
-
16,868
Total
94,211
99,181
56,715
80,239
330,346
Year 2023
0-1 year
£000
1-3 years £000
3-5 years
£000
**More
than 5
years
£000
Total
£000
Outstanding claim liabilities
71,715
65,621
35,143
47,764
220,243
Deposits received from reinsurers
27,279
24,960
13,368
18,168
83,775
Creditors*
19,638
-
-
-
19,638
Total
118,632
90,581
48,511
65,932
323,656
The note has been re-presented to align it with the Lloyd’s illustrative accounts. The restatements include: *The amounts previously
disclosed as ‘Creditors arising out of direct reinsurance operations’ (£1,551k), ‘Creditors arising out of reinsurance operations’ (£17,850k)
and ‘Other creditors’ (£237k) have now grouped under ‘Creditors’. **‘More than 5 years’ restated from previously disclosed ‘5-10 years’
and ‘More than 10 years’. ‘Carrying amount’ removed from the table.
REPORT AND ACCOUNTS 2024
41
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Market risk
Market risk is the risk arising from uncertainty of asset prices, interest rates, foreign exchange rates, and other factors related to all financial
markets and investment asset management.
The key aspect of market risk for the Syndicate is that it may incur losses on foreign exchange movements as a result of mismatches between
the currencies in which assets and liabilities are denominated. SIMA's policy is to maintain received income or incurred expenditure in the
currencies in which they were received or paid. Currency asset and liability matching is explicitly reported to the Investment Committee on
a quarterly basis. Any significant surplus or deficit in a currency would be subject to review by the Investment Committee, and depending
on the magnitude of the surplus or deficit, escalated to the Board.
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.
Management of market risk
For each of the major components of market risk the Syndicate has policies and procedures in place which detail how each risk should be
managed and monitored. The management of each of these major components of major risk and the exposure of the Syndicate at the
reporting date to each major risk are addressed below.
Interest rate risk
Interest rate risk arises primarily from the Syndicate’s financial investments, cash and overseas deposits. The risk of changes in the fair value
of these assets is managed by primarily investing in short-duration financial investments and cash and cash equivalents. The Investment
Committee monitors the duration of these assets on a periodic basis.
Currency risk
The Syndicate writes business primarily in US Dollar, Australian Dollar, Sterling, Canadian Dollar and Euro, and is therefore exposed to
currency risk arising from fluctuations in the exchange rates of Sterling against these currencies.
The foreign exchange policy is to maintain assets in the currency in which the cash flows from liabilities are to be settled in order to hedge
the currency risk inherent in these contracts.
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
REPORT AND ACCOUNTS 2024
42
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Currency risk (continued)
Year 2024
UK £
£000
US $
£000
Euro
£000
CAD $
£000
AUD $
£000
JPY
£000
Total
£000
Investments
1,167
200,567
2
15,381
-
-
217,117
Reinsurers’ share of technical provisions
1,706
96,511
828
604
175
173
99,997
Debtors
7,001
72,481
3,696
2,751
4,350
(214)
90,065
Other assets
20,746
1,666
8,695
1,366
8,805
4,024
45,302
Prepayments & accrued income
3,202
17,845
1,320
657
1,199
131
24,354
Total assets
33,822
389,070
14,541
20,759
14,529
4,114
476,835
Technical provisions
(30,798)
(286,537)
(12,573)
(8,039)
(9,532)
(1,679)
(349,158)
Deposits received from reinsurers
-
(57,549)
-
-
-
-
(57,549)
Creditors
(1,058)
(13,700)
(718)
(1,396)
(34)
38
(16,868)
Accruals & deferred income
(428)
(21,364)
(88)
(27)
(11)
(31)
(21,949)
Total liabilities
(32,284)
(379,150)
(13,379)
(9,462)
(9,577)
(1,672)
(445,524)
Total capital & reserves
1,538
9,920
1,162
11,297
4,952
2,442
31,311
Year 2023
UK £
£000
US $
£000
EUR
£000
CAD $
£000
AUD $
£000
JPY*
£000
Total
£000
Investments
1,530
178,785
17
13,158
-
-
193,490
Reinsurers’
share
of
technical
provisions
2,287
124,419
1,477
213
194
211
128,801
Debtors
6,917
54,698
3,938
2,157
6,324
(90)
73,944
Other assets
11,258
997
6,965
1,335
12,287
3,700
36,542
Prepayments & accrued income
2,787
13,858
1,154
666
1,216
115
19,796
Total assets
24,779
372,757
13,551
17,529
20,021
3,936
452,573
Technical provisions
(27,247)
(238,299)
(11,051)
(5,895)
(11,617)
(2,702)
(296,811)
Deposits received from reinsurers
-
(83,775)
-
-
-
-
(83,775)
Creditors
(2,354)
(14,620)
(1,345)
(1,110)
(102)
(107)
(19,638)
Accruals & deferred income
(15,249)
(10,822)
(119)
(42)
(5)
(38)
(26,275)
Total liabilities
(44,850)
(347,516)
(12,515)
(7,047)
(11,724)
(2,847)
(426,499)
Total capital & reserves
(20,071)
25,241
1,036
10,482
8,297
1,089
26,074
*The note has been re-presented to align it to the requirements of the Lloyd’s illustrative accounts. Previously, the table disclosed assets
and liabilities as totals, these have now been split out further to give more detail as required. In addition, ‘JPY’ has been added, this was
previously disclosed as ‘Other’.
REPORT AND ACCOUNTS 2024
43
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Currency risk (continued)
The most significant net liability position arises in sterling, due to the need to fund operating expenses in sterling. This may be managed by a
sale of currencies that have a surplus or by utilisation of the Working Capital Facility mentioned in Note 24.
The currency translation differences are found in the statement of comprehensive income, a loss for 2024 of £2,629k (2023: loss of £482k).
Sensitivity analysis to market risks for financial instruments
An analysis of the Syndicate’s sensitivity to interest rate, currency and other price risk is presented in the table below. The table shows the
effect on profit or loss of reasonably possible changes in the relevant risk variable, assuming that all other variables remain constant, if that
change had occurred at the end of the reporting year and had been applied to the risk exposures at that date.
2024
Impact on net
assets
£000
2024
Impact on
members
balances
assets
£000
2023
Impact on net
assets
£000
2023
Impact on
members
balances
£000
Interest rate risk
+ 50 basis points shift in interest rates
(1,698)
(1,698)
(995)
(995)
-
50 basis points shift in interest rates
1,698
1,698
995
995
Currency risk
10 percent increase in USD/GBP exchange rate
(2,707)
(2,707)
(4,195)
(4,195)
10 percent decrease in USD/GBP exchange rate
2,707
2,707
4,195
4,195
10 percent increase in USD/Euro exchange rate
116
116
104
104
10 percent decrease in USD/Euro exchange rate
(116)
(116)
(104)
(104)
10 percent increase in USD/AUD exchange rate
495
495
830
830
10 percent decrease in USD /AUD exchange rate
(495)
(495)
(830)
(830)
The impact of the reasonably possible changes in the risk variables on Members’ balances would be the same, since the Syndicate recognises
all changes in recognised assets and liabilities in profit or loss.
A 10% increase (or decrease) in exchange rates, a 50 basis point increase in yield curves and a 50 basis point decrease in yield curves have been
selected on the basis that these are considered to be reasonably possible changes in these risk variables over the following year.
Should yields
increase or decrease by more or less than 50 basis points the impact on net assets would increase or decrease proportionally.
The sensitivity analysis demonstrates the effect of a change in a key variable while other assumptions remain unchanged. However, the
occurrence of a change in a single market factor may lead to changes in other market factors as a result of correlations.
The sensitivity 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.
REPORT AND ACCOUNTS 2024
44
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
4.
Risk and capital management (continued)
Capital management
Capital framework at Lloyd’s
The Society of Lloyd’s (Lloyd’s) is a regulated undertaking and subject to supervision by the Prudential Regulation 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, not at syndicate level. Accordingly, the
capital requirement in respect of Syndicate 1945 is not disclosed in these Report and Accounts.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirement (SCR) for the prospective
underwriting year. This amount must be sufficient to cover a 1 in 200-year loss, reflecting uncertainty in the ultimate run-off of underwriting
liabilities (SCR ‘to ultimate’). The syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one-year
time horizon (one-year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each syndicate are subject to review by Lloyd’s
and approval by the Lloyd’s Capital and Planning Group.
A syndicate may be comprised of one or more underwriting members of Lloyd’s. Each member is liable for its own share of underwriting
liabilities on the syndicates on which it is participating but not other members’ shares. Accordingly, the capital requirements that Lloyd’s sets
for each member operates on a similar basis. Each member’s SCR shall thus be determined by the sum of the member’s share of the syndicate
SCR ‘to ultimate’. Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the spread of
risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’ for that member.
Over and above this, Lloyd’s applies a capital uplift to the member’s capital requirement, known as the Economic Capital Assessment (ECA).
The purpose of this uplift, which is a Lloyd’s not a Solvency II requirement, is to meet Lloyd’s financial strength, licence and ratings objectives.
The capital uplift applied is 35% of the member’s SCR ‘to ultimate’.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that member (Funds at Lloyd’s), assets
held and managed within a syndicate (Funds in Syndicate), or as the member’s share of the members’ balances on each syndicate on which it
participates.
Accordingly, all of the assets less liabilities of the Syndicate, as represented in the member’s balances reported on the Statement of Financial
Position on page 19 represent resources available to meet or a deduction to a member’s and Lloyd’s capital requirements.
REPORT AND ACCOUNTS 2024
45
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
5.
Analysis of underwriting result
Year 2024
Gross
premiums
written
£000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
Gross
operating
expenses
£000
Reinsurance
balance
£000
Underwriting
result
£000
Direct insurance
Accident and health
4,338
4,389
(4,494)
(1,829)
62
(1,872)
Marine, aviation and transport
45,748
31,779
(16,612)
(9,648)
(11,555)
(6,036)
Fire and other damage to the property
13
13
2,339
(1)
(5,871)
(3,520)
Third party liability
17,100
21,186
(11,725)
(9,058)
(5,745)
(5,342)
Credit and suretyship
1,230
394
(157)
(185)
(94)
(42)
Assistance
8,699
9,942
(5,022)
(3,702)
(4,129)
(2,911)
Total direct
77,128
67,703
(35,671)
(24,423)
(27,332)
(19,723)
Reinsurance acceptances
103,084
96,391
(62,347)
(28,311)
18,072
23,805
Total
180,212
164,094
(98,018)
(52,734)
(9,260)
4,082
Year 2023
Gross
premiums
written
£000
Gross
premiums
earned
£000
Gross
claims
incurred
£000
*Gross
operating
expenses
£000
*Reinsurance
balance
£000
Underwriting
result
£000
Direct insurance
Accident and health
3,453
3,635
(1,627)
(1,612)
(3,474)
(3,078)
Marine, aviation and transport
19,186
15,439
(9,291)
(4,300)
2,099
3,947
Fire and other damage to the property
5
6
745
157
470
1,378
Third party liability
31,103
24,799
(14,465)
(9,829)
(1,842)
(1,337)
Assistance
12,333
11,097
(7,983)
(3,474)
7,890
7,530
Total direct
66,080
54,976
(32,621)
(19,058)
5,143
8,440
Reinsurance acceptances
93,743
83,248
(52,187)
(13,803)
802
18,060
Total
159,823
138,224
(84,808)
(32,861)
5,945
26,500
The note has been re-presented to align it with the Lloyd’s illustrative accounts. The restatements include: *'Reinsurance balance’ decreased
by £5,038k due to a reclassification of reinsurance acquisition costs previously disclosed as ‘Gross operating expenses’. The Underwriting result
remains unchanged.
The amounts previously disclosed as 'Accident and Health’, 'Casualty’, and ‘Discontinued' have been restated to align to the Lloyd’s updated
reporting requirements. Total amount disclosed remains unchanged. Due to this reclassification, a proportion of amounts has been reallocated
to ‘Fire and other damage to property’, ‘Third Party Liability’ and ‘Assistance’ categories.
REPORT AND ACCOUNTS 2024
46
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
5.
Analysis of underwriting result (continued)
The gross premiums written for direct insurance by underwriting location of risk is presented in the table below:
2024
£000
2023*
£000
United Kingdom
61,889
27,574
US
6,172
22,521
Canada
1,423
1,494
Rest of world**
7,644
14,491
Total gross premiums written
77,128
66,080
*The note has been re-presented to align it with the Lloyd’s illustrative accounts to only include direct insurance business, excluding
reinsurance acceptances included previously.
**‘Rest of the world’ previously disclosed as ‘Other countries’, restated to only include direct business.
6.
Net operating expenses
The Syndicate is charged a managing agency fee at a rate of 0.45% of stamp capacity (2023: 0.61%) by SIMA. This is included in the
administrative expenses in the table below. In addition, all necessary expenses incurred in the administration of the Syndicate were
charged to the Syndicate.
2024
£000
2023
£000
Acquisition costs*
44,869
38,973
Change in deferred acquisition costs
(4,344)
(6,140)
Administrative expenses
10,083
8,424
Members’ standard personal expenses
2,125
1,681
Reinsurance commissions and profit participation
(2,095)
(5,039)
Net operating expenses
50,638
37,899
The note has been re-presented to align it with the Lloyd’s illustrative accounts. The restatements include: *‘Acquisition costs’
previously disclosed as ‘Brokerage and commissions’ (£36,684k) and ‘Other acquisition cost’ (£2,289k).
Total commissions for direct insurance business for the year amounted to:
2024
£000
2023
£000
Total direct commissions
20,560
17,962
REPORT AND ACCOUNTS 2024
47
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
6.
Net operating expenses (continued)
During the year the Syndicate obtained the following services from the auditors:
2024
£000
2023
£000
Auditors’ remuneration:
Fees payable to the Syndicate’s auditors for the audit of these Report and
Accounts
360
299
Fees payable to the Syndicate’s auditors in respect of other audit related
assurance services
84
83
Fees payable to the Syndicate’s auditors in respect of other non-audit related
assurance services
14
-
Total
458
382
Fees payable to the Syndicate’s auditors in respect of other audit related assurance services include all audit services in relation to the audit
of Lloyd’s reporting at year end 2024 and half year 2024.
Included in the auditors’ remuneration for 2024 is £58k for 2023 audit services that was agreed upon after signing the 2023 Annual Report
and Accounts.
7.
Key management personnel compensation
Directors’ costs on behalf of the Syndicate are also borne by SINT and similarly costs in respect of work done on behalf of the Syndicate
are part of the management fee charged by SINT to the Syndicate but are not separately identifiable. The directors have estimated the
emoluments received that relate to their services to the Syndicate, which are included in the tables below.
2024
£000
2023
£000
Aggregate emoluments and other benefits*
1,033
1,186
Total
1,033
1,186
The Highest paid director and Active underwriter received the following remuneration for services provided to the Syndicate.
2024
£000
2023
£000
Aggregate emoluments and other benefits*
476
412
Total
476
412
The note has been re-presented to align it with the Lloyd’s illustrative accounts. The restatements include: *‘Aggregate emoluments and
other benefits’ include ‘Pension contributions’, previously disclosed separately.
REPORT AND ACCOUNTS 2024
48
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
8.
Staff numbers and costs
Staff costs on behalf of the Syndicate are borne by another group undertaking, SiriusPoint International Insurance Corporation (publ)
(SINT). Costs in respect of work done on behalf of the Syndicate are part of the management fee charged by SINT to the Syndicate but are
not separately identifiable.
9.
Investment return
The investment return transferred from the technical account to the non-technical account comprises the following:
2024
£000
2023
£000
Interest and Similar Income:
From financial instruments designated at fair value through profit or loss:
Interest and similar income*
3,320
1,384
Interest on cash at bank*
5,588
3,509
Other income from investments:
From financial instruments designated at fair value through profit or loss:
Gains on the realisation of investments**
1,534
1,681
Losses on the realisation of investments
(3,042)
(1,591)
Unrealised gains on investments***
281
3,165
Unrealised losses on investments
(396)
(639)
Investment management expenses****
(26)
(108)
Total investment return
7,259
7,401
Amount transferred to the technical account
6,510
7,249
Investment income on funds in syndicate
749
152
Total Investment return
7,259
7,401
The note has been re-presented to align it with the Lloyd’s illustrative accounts. Re-presentations include:
*’Interest and similar income’ and ‘Interest on cash at bank’, previously disclosed as ‘Interest’.
**’Gains on the realisation of investments’, previously disclosed as ‘Realised gains’.
***’Unrealised gains on investments’, previously disclosed as ‘Unrealised gains’.
****‘Investment management expenses’, previously disclosed as ‘Investment management expenses, including interest’.
REPORT AND ACCOUNTS 2024
49
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
10.
Distribution and open years of account
A collection from member of £256k will be proposed in relation to the closing year of account (2022) (2023: was a distribution of £30,499k in
relation to the closing year of account (2021).
There were no years of account remaining open after the three-year period.
11.
Financial investments
2024 carrying
value £000
2024 cost
£000
2023 carrying
value £000
2023 Cost
£000
Shares and other variable yield securities & unit trusts
121,762
121,762
84,909
84,909
Debt securities
91,221
89,714
102,878
100,953
Deposits with credit institutions
-
-
730
730
Syndicate loans to the central fund*
1,165
1,165
1,528
1,528
Total financial investments
214,148
212,641
190,045
188,120
The note has been re-presented to align it with the Lloyd’s illustrative accounts. Re-presentations include: *’Syndicate loans to the central
fund’ of £1,528k previously disclosed within the ‘Shares and other variable yield securities & unit trusts’. ‘Market value’ column removed from
the previously disclosed table.
The table below presents an analysis of financial investments by their measurement classification:
2024
£000
2023
£000
Financial assets measured at fair value through profit and loss
214,148
190,045
As the Syndicate is fully aligned, the Syndicate holds some of the capital supporting their underwriting in their Syndicate’s premium trust
funds. These funds are known as funds in syndicate (FIS). At 31 December the following amount was held as funds in syndicate:
2024
£000
2023
£000
Funds in Syndicate (FIS)
31,467
3,660
Total funds in Syndicate
31,467
3,660
REPORT AND ACCOUNTS 2024
50
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
11.
Financial investments (continued)
The Syndicate classifies its financial instruments held at fair value in its balance sheet using a fair value hierarchy, as follows:
•
Level 1 – The fair value is based on the unadjusted quoted prices in an active market, for identical assets or liabilities that the Syndicate
can access at the measurement date.
•
Level 2 –
Level 2 financial instruments are inputs other than quoted prices included within Level 1 that are observable for the asset
or liabilities, either directly or indirectly.
•
Level 3 – Level 3 financial instruments are financial assets and liabilities for which the values are based on prices or valuation
techniques that require inputs that are both unobservable, and significant, to the fair value measurement.
The table on the following page 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
18,780
102,982
-
121,762
Debt securities and other fixed income securities
12,861
78,360
-
91,221
Syndicate loan to central fund
-
-
1,165
1,165
Total
31,641
181,342
1,165
214,148
2023
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Shares and other variable yield securities and units in unit trusts*
15,410
69,500
-
84,910
Debt securities and other fixed income securities
23,870
79,008
-
102,878
Deposits with credit institutions
730
-
-
730
Syndicate loan to central fund*
-
-
1,528
1,528
Total
40,010
148,508
1,528
190,046
*The note has been re-presented to align it with the Lloyd’s illustrative accounts. ’Syndicate loans to the central fund’ of £1,528k previously
disclosed within the ‘Shares and other variable yield securities & unit trusts’.
Information on the methods and assumptions used to determine fair values for each major category of financial instrument measured at fair
value are provided below.
Units in unit trusts and other variable yield securities are held in money market funds. These shares and other variable yield securities
and units in unit trusts are generally categorised as level 1 in the fair value hierarchy except where they are not actively traded, in
which case they are generally measured on prices of recent transactions in the same instrument. The Syndicate has no exposure to
hedge funds.
Debt securities comprise of United States Government Treasury Notes and corporate bonds. These are actively traded and are valued
using quoted prices provided by external pricing vendor.
At the reporting date all debt instruments assets were valued using valuation techniques based on observable market data.
REPORT AND ACCOUNTS 2024
51
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
12.
Debtors arising out of direct insurance operations
2024
£000
2023
£000
Amounts due within one year*
32,169
25,802
Total due within one year
32,169
25,802
*The note has been stated to align it with the Lloyd’s illustrative accounts. ‘Amounts due within one year’ previously disclosed as ‘Amounts
due from intermediaries’.
13.
Debtors arising out of reinsurance operations
2024
£000
2023
£000
Due within one year*
53,406
43,791
Due after one year
2
-
Total due within one year
53,408
43,791
*The note has been restated to align it with the Lloyd’s illustrative accounts. ‘Due within one year’ previously disclosed as ‘Due from ceding
insurers and intermediaries’ (£39k) and ‘due from reinsures and intermediaries’ (£4.7k).
14.
Other Debtors
2024
£000
2023
£000
Related party balances (non- syndicate)
-
53
Other*
4,488
4,298
Total other debtors
4,488
4,351
*The note has been restated to align it with the Lloyd’s illustrative accounts. ‘Other’ previously included ‘claims floats’ (£4,163k), ‘taxes’ (£45k)
and ‘premium deposit’ (£90k), restated to ‘Other’, total amounts disclosed remain unchanged.
REPORT AND ACCOUNTS 2024
52
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
15.
Deferred acquisition costs
The table below shows changes in gross and net deferred acquisition cost assets during the year.
Gross
£000
2024 RI
£000
Net
£000
Gross
£000
2023 RI
£000
Net
£000
Balance at 1 January
19,755
(1,593)
18,162
14,429
(1,741)
12,688
Incurred costs deferred
44,869
(1,896)
42,973
38,973
(4,997)
33,976
Amortisation
(40,525)
2,095
(38,430)
(32,833)
5,039
(27,794)
Effect of movements in exchange rates
98
(7)
91
(814)
106
(708)
Balance at 31 December
24,197
(1,401)
22,796
19,755
(1,593)
18,162
The above table has been updated in line with Lloyd’s pro-forma to include RI and Net.
16.
Claims development tables
The claims development is shown in the tables below, both gross and net of reinsurance ceded, on an underwriting year basis. Balances have
been translated at exchange rates prevailing at 31 December 2024 in all cases.
Gross:
Pure underwriting year
2014 &
Prior
£000
2015
£000
2016
£000
2017
£000
2018
£000
2019
£000
2020
£000
2021
£000
2022
£000
2023
£000
2024
£000
Total
£000
Estimate of gross claims
At end of underwriting
year
74,993
32,279
52,416
73,660
34,996
25,727
48,011
34,147
38,180
47,098
49,355
510,862
One year later
132,510
70,999
101,611
101,667
87,121
68,963
82,891
65,960
80,344
92,314
-
884,380
Two years later
114,555
74,835
111,445
108,140
140,155
73,284
80,777
66,652
84,028
-
-
853,871
Three years later
107,188
72,932
108,210
106,144
133,260
67,505
74,408
70,698
-
-
-
740,345
Four years later
106,172
73,859
119,393
104,845
128,257
68,176
75,930
-
-
-
-
676,632
Five years later
106,323
73,384
120,149
104,319
128,828
65,195
-
-
-
-
-
598,198
Six years later
106,115
73,560
120,272
103,354
130,072
-
-
-
-
-
-
533,373
Seven years later
106,164
73,396
120,555
102,962
-
-
-
-
-
-
-
403,077
Eight years later
106,017
73,844
118,901
-
-
-
-
-
-
-
-
298,762
Nine years later
106,130
73,639
-
-
-
-
-
-
-
-
-
179,769
Ten years later
105,705
-
-
-
-
-
-
-
-
-
-
105,705
Estimate of gross claims
reserve
105,705
73,639
118,901
102,962
130,072
65,195
75,930
70,698
84,028
92,314
49,355
968,799
Less gross claims paid
(105,573)
(73,165)
(117,191)
(101,956)
(123,540)
(51,752)
(55,784)
(31,473)
(33,888)
(
15,026)
(3,521)
(712,869)
Gross claims reserve
132
474
1,710
1,006
6,532
13,443
20,146
39,225
50,140
77,288
45,834
255,930
REPORT AND ACCOUNTS 2024
53
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
16.
Claims development tables (continued)
Net:
Pure underwriting
year
2014 &
prior
£000
2015
£000
2016
£000
2017
£000
2018
£000
2019
£000
2020
£000
2021
£000
2022
£000
2023
£000
2024
£000
Total
£000
Estimate of net claims
At end of
underwriting year
74,993
30,835
49,147
63,359
33,339
24,257
45,881
32,013
36,165
38,558
47,620
476,167
One year later
132,510
64,956
90,538
92,816
81,774
66,527
76,261
62,619
71,266
82,059
-
821,326
Two years later
114,555
69,401
99,979
99,626
109,921
71,884
75,590
21,027
75,074
-
-
737,057
Three years later
107,188
67,016
96,880
97,886
104,164
64,686
42,924
20,821
-
-
-
601,565
Four years later
106,172
67,392
105,158
96,546
101,561
42,958
42,974
-
-
-
-
562,761
Five years later
106,323
66,951
105,670
96,044
87,937
42,834
-
-
-
-
-
505,759
Six years later
106,115
67,106
105,585
93,192
87,889
-
-
-
-
-
-
459,887
Seven years later
106,164
66,927
98,174
93,160
-
-
-
-
-
-
-
364,425
Eight years later
106,017
66,140
98,179
-
-
-
-
-
-
-
-
270,336
Nine years later
106,130
66,114
-
-
-
-
-
-
-
-
-
172,244
Ten years later
103,354
-
-
-
-
-
-
-
-
-
-
103,354
Estimate of net
claims reserves
103,354
66,114
98,179
93,160
87,889
42,834
42,974
20,821
75,074
82,059
47,620
760,078
Less net claims paid
(103,349)
(66,088)
(98,168)
(93,130)
(87,784)
(42,640)
(42,471)
(17,153)
(30,182)
(13,220)
(3,516)
(597,701)
Net claims reserve
5
26
11
30
105
194
503
3,668
44,892
68,839
44,104
162,377
REPORT AND ACCOUNTS 2024
54
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
17.
Technical Provisions
The table below shows changes in the insurance contract liabilities and assets:
2024
2023
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Gross
provisions
£000
Reinsurance
assets
£000
Net
£000
Incurred claims outstanding:
Claims notified
75,714
(46,947)
28,767
61,247
(6,972)
54,275
Claims incurred but not reported
144,529
(75,225)
69,304
136,679
(6,055)
130,624
Balance at 1 January
220,243
(122,172)
98,071
197,926
(13,027)
184,899
Claims paid in year
(11,821)
30,509
18,688
(52,234)
20,360
(31,874)
Expected cost of current year claims
109,839
(37,342)
72,497
97,046
(28,763)
68,283
Change
in
estimates
of
prior
year
provisions
(64,719)
35,639
(29,080)
(12,238)
(101,441)
(113,679)
Effect of movements in exchange rates
2,387
(186)
2,201
(10,257)
699
(9,558)
Balance at 31 December
255,929
(93,552)
162,377
220,243
(122,172)
98,071
Claims notified
66,638
(35,484)
31,154
75,714
(46,947)
28,767
Claims incurred but not reported
189,291
(58,068)
131,223
144,529
(75,225)
69,304
Balance at 31 December
255,929
(93,552)
162,377
220,243
(122,172)
98,071
Unearned premiums
Balance at 1 January
76,568
(6,630)
69,938
58,528
(6,547)
51,981
Premiums written during the year
180,212
(18,001)
162,211
159,823
(119,686)
40,137
Premiums earned during the year
(164,094)
18,189
(145,905)
(138,224)
119,221
(19,003)
Effect of movements in exchange rate
543
(3)
540
(3,559)
382
(3,177)
Balance at 31 December
93,229
(6,445)
86,784
76,568
(6,630)
69,938
REPORT AND ACCOUNTS 2024
55
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
18.
Creditors arising out of direct insurance operations
2024
£000
2023
£000
Due within one year *
1,508
1,551
Total
1,508
1,551
*The note has been restated to align it with the Lloyd’s illustrative accounts. Previously disclosed ‘Creditors arising out of direct
insurance’, restated to ‘Due within one year’, amount disclosed unchanged.
19.
Creditors arising out of reinsurance operations
2024
£000
2023
£000
Due within one year*
14,546
17,850
Total
14,546
17,850
*The note has been restated to align it with the Lloyd’s illustrative accounts. ‘Due within one year’ previously disclosed as
‘Creditors arising out of reinsurance operations’.
20. Other Creditors
2024
£000
2023
£000
Other related party balances (non-syndicate)*
760
97
Other liabilities*
54
140
Total
814
237
*The note has been restated to align it with the Lloyd’s illustrative accounts. ‘Other related party balances (non-syndicate)’ and
‘Other liabilities’, both previously disclosed as ‘Other creditors’.
Other related party include £8k (2023: £2k due from) due to Sirius International Managing Agency Limited.
21. Accruals and deferred income
2024
£000
2023
£000
Accrued expenses*
20,548
24,682
Deferred RI acquisition costs
1,401
1,593
Total
21,949
26,275
*Accrued expenses comprises of inter-company recharges payable to SINT.
REPORT AND ACCOUNTS 2024
56
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
22.
Cash and cash equivalents
2024
£000
2023
£000
Cash at bank and in hand
39,308
29,634
Deposits with credit institutions
106,848
72,406
Total cash and cash equivalents
146,156
102,040
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.
23.
Analysis of net debt
Year 2024
Balance
at 1
January
£000
Cash
flows
£000
Acquired
£000
Fair value
and
foreign
exchange
£000
Non-cash
changes
£000
Balance
at 31
December
£000
Cash and cash equivalents
102,040
45,293
-
(1,177)
-
146,156
Total
102,040
45,293
-
(1,177)
-
146,156
24.
Related parties
For the year to 31 December 2024 managing agent fees of £700k were paid to SIMA (2023: £700k). No service charges were paid to SIMA in
the year (2023 £nil).
SiriusPoint International Insurance Corporation (publ) (SINT), the parent company of both SIMA and Sirius International Corporate Member
Limited (SICM), provided management services to the Syndicate in 2024. The amount recharged in respect of this was £11,557k (2023:
£9,576k). A balance of £19,887k was outstanding at the end of the year (2023: £24,406k). In addition, expenses of £398k were paid by SINT
on behalf of the Syndicate and recovered (2023: £281k).
The £20m drawdown facility provided to the Syndicate by SINT remains in place, and permits drawdowns in any settlement currency. The
Syndicate has not drawdown on this facility during 2024 and it remains fully unutilised.
The sole capital provider for the Syndicate is Sirius International Corporate Member Limited, a wholly owned subsidiary of SINT.
REPORT AND ACCOUNTS 2024
57
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
24. related parties (continued)
SiriusPoint America, a wholly-owned subsidiary of SINT, cedes business to Syndicate 1945. During 2024, premium ceded amounted to £nil
with related brokerage and commissions of £15k and claims incurred of £29k (2023 premium £16k, brokerage and commissions £5k and
claims £315k). The underwriting balance is £nil payable (2023: £nil payable).
SiriusPoint International Insurance Corporation (publ) (SINT) reinsures Syndicate 1945. During 2024, premiums ceded under these reinsurance
contracts amounted to £1,442k with related ceding commission of £179k and claims recoverable were £1,274k (2023 premiums £2,040k,
ceding commission £508k and recoveries £nil). The outstanding underwriting balance is £511k payable. (2023: £2,247k payable).
All transactions with related parties were conducted on an arms length basis as if they were any other transactions conducted in the course
of the Syndicate’s business.
The ultimate parent company of SIMA is SiriusPoint Limited, whose registered office address is Point Building, 3 Waterloo Lane, Pembroke
HM 08, Bermuda.
25.
Off-balance sheet items
The Syndicate has not been party to any arrangement, which is not reflected in its statement of financial position, where material risks and
benefits arise for the Syndicate.
26.
Post Balance Sheet events
There are no material post balance sheet events.
27.
Contingencies and commitments
The syndicate has no material contingencies or commitments.
28.
Foreign exchange rates
2024
Start of
period
rate
2024
End of
period
rate
2024
Average
rate
2023
Start of
period
rate
2023
End of
period
rate
2023
Average
Rate
Sterling
Euro
US Dollar
Canadian Dollar
Australian Dollar
Japanese Yen
The table above shows the currency exchange rates have been used for principal foreign currency transactions:
REPORT AND ACCOUNTS 2024
58
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
29.
Funds at Lloyd’s
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s (‘FAL’). These funds are intended
primarily to cover circumstances where Syndicate assets prove insufficient to meet participating members’ underwriting liabilities. The level
of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority requirements and
resource criteria. The determination of FAL has regard to a number of factors including the nature and amount of risk to be underwritten by
the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not under the
management of the Managing Agent, no amount has been shown in these Report and Accounts by way of such capital resources. However,
the Managing Agent is able to make a call on the Member’s FAL to meet liquidity requirements or to settle losses.
REPORT AND ACCOUNTS 2024
59
Sirius International Managing Agency Limited – Lloyd’s Syndicate 1945
Notes to the Report and Accounts for the year ended 31 December 2024
(continued)
30.
Statement of Cash Flows: restatement 2023
2023
£000
(Decrease)/increase
£000
Restated 2023
£000
Cash flows from operating activities
Profit for the financial year
33,813
-
33,813
Adjustments:
Net unrealised foreign exchange gain/(losses)*
16,684
(16,684)
-
Net interest (payable)/receivable*
(7,401)
7,401
-
Interest received**
4,875
(4,875)
-
(Increase) in reinsurers’ share of technical provisions
(108,304)
-
(108,304)
Increase in prepayment and accrued income*
(5,332)
5,332
-
Increase in debtors*
(15,104)
(597)
(15,701)
Increase in gross technical provisions
27,954
-
27,954
Increase in creditors*
89,149
(82,269)
6,880
(Decrease)/increase in deposits received from reinsurers***
-
83,775
83,775
Increase in accrual and deferred income*
1,138
(1,138)
-
Movement in other assets/liabilities*
-
(5,103)
(5,103)
Investment return*
-
(7,401)
(7,401)
Foreign exchange*
-
16,684
16,684
Net cash flows from operating activities
37,472
(4,875)
32,597
Cash flows from investing activities
Purchase of equity and debt instruments*
-
(112,809)
(112,809)
Acquisitions of other financial instruments*
(112,809)
112,809
-
Sale of equity and debt instruments*
-
115,948
115,948
Proceeds from sale of other financial instruments*
115,948
(115,948)
-
Investment income received**
-
4,875
4,875
Net cash flows from investing activities
3,139
4,875
8,014
Cash flows from financing activities
Collections of loss*
-
2,869
2,869
Transfer from members in respect of underwriting participants*
2,869
(2,869)
-
Funds In Syndicate released to members*
-
(2,869)
(2,869)
Withdrawal of funds at Lloyd’s in Syndicate Trust Fund*
(2,869)
2,869
-
Net cash flows from financing activities
-
-
-
Net increase in cash and cash equivalent
40,611
-
40,611
Cash and cash equivalents at the beginning of the year
63,972
-
63,972
Foreign exchange on cash and cash equivalents
(2,543)
-
(2,543)
Cash and cash equivalents at the end of the year
102,040
-
102,040
*The Statement of Cash Flows have been re-presented to be aligned with Lloyds’s updated requirements.
** ’Investment income received’ of £4,875k has been reclassed due to a change in accounting policy. Previously disclosed as ‘Interest
received’ within ‘Cash flows from operation activities’. The reclassification had no impact on overall reported cash flow activities.
***’Increase in deposits received from reinsurers’ erroneously included in ‘Increase in creditors’ in the prior year, now disclosed separately.