Accounts disclaimer
Important information about Syndicate Reports and Accounts Access to this document is
restricted to persons who have given the certification set forth below. If this document has been
forwarded to you and you have not been asked to give the certification, please be aware that
you are only permitted to access it if you are able to give the certification. The syndicate reports
and accounts set forth in this section of the Lloyd’s website, which have been filed with Lloyd’s
in accordance with the Syndicate Accounting Byelaw (No. 8 of 2005), are being provided for
informational purposes only. The syndicate reports and accounts have not been prepared by
Lloyd’s, and Lloyd’s has no responsibility for their accuracy or content. Access to the syndicate
reports and accounts is not being provided for the purposes of soliciting membership in Lloyd’s
or membership on any syndicate of Lloyd’s, and no offer to join Lloyd’s or any syndicate is being
made hereby. Members of Lloyd’s are reminded that past performance of a syndicate in any
syndicate year is not predictive of the related syndicate’s performance in any subsequent
syndicate year. You acknowledge and agree to the foregoing as a condition of your accessing
the syndicate reports and accounts. You also agree that you will not provide any person with a
copy of any syndicate report and accounts without also providing them with a copy of this
acknowledgment and agreement, by which they will also be bound.
SYNDICATE 3623
ANNUAL REPORT AND ACCOUNTS
YEAR ENDED
31 DECEMBER 2024
CONTENTS
STRATEGIC REPORT OF THE MANAGING AGENT…………………………………………………………… 4
MANAGING AGENT’S REPORT………………………………………………………………………………………… 6
STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES……………………………………………… 12
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SYNDICATE 3623 ………………… 13
STATEMENT OF COMPREHENSIVE INCOME …………………………………………………………………… 16
BALANCE SHEET ……………………………………………………………………………………………………………… 17
STATEMENT OF CHANGES IN MEMBER'S BALANCES ……………………………………………………… 18
CASH FLOW STATEMENT ………………………………………………………………………………………………… 19
NOTES TO THE FINANCIAL STATEMENTS ……………………………………………………………………… 20
MANAGING AGENT'S CORPORATE INFORMATION …………………………………………………………… 47
SYNDICATE 3623
31 DECEMBER 2024
3
STRATEGIC REPORT OF THE MANAGING AGENT
Overview
Syndicate 3623 (the ‘syndicate’) began writing new risks again in 2024. In 2024, the syndicate wrote a
portfolio of North American surplus lines business across a number of classes - property, cyber and
specialty.
In 2022, the syndicate underwrote personal accident and sports insurance and market facilities at Lloyd’s
and reinsurance business ceded from Beazley’s US admitted insurance company, Beazley Insurance
Company, Inc. (‘BICI’). The syndicate retained 10% of the market facility risks it underwrote from 2018 to
2022, while reinsuring 90% to Syndicate 5623 through a quota share arrangement. The result for
Syndicate 3623 for the year ended 31 December 2024 is a profit of $65.9m (2023: $78.5m).
The capacities of the syndicates managed by Beazley Furlonge Limited ("BFL") are as follows:
Syndicate Number Capacities
2024 £m
2023 £m
623 887.2 818.6
2623 2,299.6 3,794.5
3622 37.0 33.8
3623 1,325.6 —
4321 — 33.1
5623 396.6 339.8
6107 57.8 43.3
Total 5,003.8 5,063.1
Year of account results
The 2022 year of account had a capacity of £41.2m and declares a profit on capacity of 98% mainly on the
back of strong performance of its personal accident and market facilities book. The 2023 year of account
did not write any risks. The 2024 year of account is currently forecasting a positive return on capacity,
although it is still in the early stages of development.
Rating environment
Rates on renewal business decreased by 0.6% in 2024. These rates were determined based on business
that was previously written through Syndicate 2623 and Syndicate 623 in 2023. The syndicate did not
write new business in 2023.
Combined ratio
The combined ratio is a measure of operating performance and represents the ratio of the syndicate's total
costs (excluding foreign exchange movements) to total net earned premium. A combined ratio under
100% indicates an underwriting profit. The calculation of the combined ratio for the syndicate includes all
claims and other costs of the syndicate but excludes foreign exchange gains or losses. The syndicate's
combined ratio for 2024 financial year was 91% (2023: 24%). The increase in combined ratio is a result of
the syndicate writing new business in 2024, relative to no new underwriting in 2023.
Claims
The claims ratio is a measure of the syndicate's claims experience and represents the ratio of its net
insurance claims to net earned premium. The syndicate had a negative claims ratio of 72% in 2023 due to
reserve releases on risks written prior to 2023. The claims ratio was 52% for the financial year 2024. The
syndicate has prior year reserves releases of $25.0m in 2024 (2023: $59.4m), primarily driven by claims
releases on the older years of account of the market facilities and personal accident books.
SYNDICATE 3623
31 DECEMBER 2024
4
STRATEGIC REPORT OF THE MANAGING AGENT CONTINUED
Net operating expenses
Net operating expenses, including business acquisition costs and administrative expenses were $224.6m
(2023: $50.1m). The expense ratio is a measure of net operating expenses to net earned premium. The
expense ratio in 2024 is 39% (2023: 49%).
The breakdown of these costs is shown below:
2024
2023
$m
$m
Brokerage costs
171.8 51.8
Other acquisition costs
2.1 1.9
Total acquisition costs
173.9 53.7
Administration and other expenses
50.7 (3.6)
Net operating expenses*
224.6 50.1
*The majority of administrative and other expenses in 2023 was attributed to the unwinding of deferred
overrider commission (ORC). As the syndicate did not engage in any underwriting activities in 2023, its
administrative expenses were limited. A further breakdown of net operating expenses can be found in note
4.
Brokerage costs as a percentage of net earned premiums are approximately 30% (2023: 51%). In 2023
the syndicate did not write new business and the relatively high brokerage rate was function of minimal
activity and older year of account activity that skews the brokerage percentage. 2024 saw the return of
more sensible brokerage rates, as the syndicate commenced underwriting once again. Brokerage costs are
deferred and expensed over the life of the associated premiums in accordance with accounting guidelines.
Other acquisition costs compromise costs that have been identified as being directly related to
underwriting activity (e.g. underwriters’ salaries and Lloyd’s box rental). These costs are also deferred in
line with premium earning patterns. Administrative expenses comprise primarily IT costs, facilities costs,
Lloyd’s central costs and other support costs.
Reinsurance
In 2024, the amount spent on outward reinsurance was $246.3m (2023: $0.5m). The increase is due to
the syndicate not underwriting business during 2023 and then commencing underwriting again in 2024.
Outlook
In 2024 the syndicate wrote a portfolio of North American surplus lines business across a number of
classes - property, cyber and specialty. Looking ahead to 2025, the syndicate has continued to write this
business, albeit at reduced volumes. 2025 YOA has a capacity of £305.2m versus £1,325.6m capacity for
2024 YOA. The business currently written in this syndicate will continue to transition from syndicate 3623
to another Beazley entity in the US.
…………………………
C C J Wong
Chief Financial Officer
5 March 2025
SYNDICATE 3623
31 DECEMBER 2024
5
MANAGING AGENT’S REPORT
The managing agent presents its report 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
and Financial Reporting Standard 103: Insurance Contracts in accordance with the provisions of Schedule
3 of the Large and Medium-size Companies and Groups (Accounts and Reports) Regulations relating to
insurance companies.
Principal activity
In 2024, the syndicate wrote a portfolio of North American surplus lines business across a number of
classes - property, cyber and specialty. In 2022, the syndicate underwrote personal accident and sports
insurance and market facilities at Lloyd’s and reinsurance business ceded from Beazley’s US admitted
insurance company,BICI. The syndicate retained 10% of the market facility risks it underwrote from 2018
to 2022, while reinsuring 90% to Syndicate 5623 through a quota share arrangement.
Business review
A review of the syndicate’s activities and future outlook is included in the strategic report.
Risk governance and reporting
BFL’s Board of Directors (the 'Board') has the responsibility for defining and monitoring the risk appetite
within which BFL and the syndicates operate (collectively, ‘Beazley’), with key individuals and committees
accountable for day-to-day management of risks and controls. Regular reporting by the risk management
team in board meetings and senior management committees ensures that risks are monitored and
managed as they arise. Beazley is actively "future proofing" its structure across its three platforms. One of
these platforms is its London Wholesale platform which the managing agent governs. This platform focus
will allow strengthening of the managing agent’s leadership and further enhance platform-specific and
entity governance, while continuing to strengthen its risk management structure. The managing agent
continues to evolve its structure to deliver on this governance framework.
Climate change/Responsible business
Led by Beazley plc’s Board and supported by the Boards of BFL, Beazley Insurance dac, and Beazley
Insurance Company Inc, Environmental, Social and Governance ('ESG') issues and climate related risks
have become regular agenda items throughout 2024. In March 2021 we launched our first Responsible
Business Strategy. This document, and the subsequent update which is published alongside the Beazley plc
annual report and accounts ('ARA'), sets out the goals and targets across a wider range of ESG issues,
including climate change.
In addition to the summary Responsible Business report, Beazley plc discloses its compliance with the Task
Force on Climate-Related Disclosures' ('TCFD') Recommendations and Recommended Disclosures at the
consolidated group level in the Beazley plc annual report and accounts produced annually. The 2024
Beazley plc ARA was published on the Group's website in March 2025.
Although not specifically listed in the risk categorises detailed further in this report, the Board of BFL
deems climate risk to be inherently embedded within all risks managed across the syndicate.
Risk management
Beazley prides itself on understanding the drivers of risk across the syndicate. The risk management
function supports and challenges management in effectively managing those risks. During the year,
Beazley continued to enhance, roll out and embed elements of the risk management framework. Beazley
has continued working with our colleagues across the first and second lines of defence to support the
syndicate strategy, including challenging the oversight of climate-related risks (covering physical,
transition and litigation) and journey in digitisation. The details of the performance of the risk management
framework are considered further in this report.
Risk management oversight and framework
The Board delegates direct oversight of the risk management function and framework to its Risk
Committee. The Board delegates executive oversight of the risk management function and framework to
the Beazley plc executive Committee, which fulfils this responsibility primarily through its risk and
regulatory Committee.
The risk management framework establishes the approach to identifying, measuring, mitigating,
monitoring, and reporting on principal risks. The risk management framework supports Beazley's strategy
and objectives.
SYNDICATE 3623
31 DECEMBER 2024
6
MANAGING AGENT’S REPORT CONTINUED
Beazley has adopted a ‘three lines of defence’ model, in which the risk management function is part of the
second line of defence. Ongoing communication and collaboration across the three lines of defence ensures
that Beazley identifies and manages risks effectively.
The Board approves the company’s risk appetite statements at least annually and receives updates on
monitoring against risk appetites throughout the year. This includes an assessment of principal risks.
A suite of reports from the risk management function support senior management and the Board in
discharging their oversight and decision-making responsibilities throughout the year. The risk management
function's reports include updates on risk appetite, risk profiles, stress and scenario testing (including
reverse stress testing) and analysis, emerging and heightened risks, and the Own Risk and Solvency
Assessment (ORSA) report for BFL.
The business operates a control environment which supports mitigating risks to stay within risk appetite.
The risk management function reviews and challenges the control environment through various risk
management activities (e.g. risk opinions, risk reviews etc). In addition, the risk management function
works with the capital modelling and exposure management teams, particularly in relation to validation of
the internal model, preparing parts of the ORSA, monitoring risk appetite and the business planning
process.
The risk management plan considers, among other inputs, the inherent and residual risk scores for the
risks in the risk registers. The risk management function also incorporates results from internal audits and
other assurance activities into its risk assessment process. The internal audit function considers the risk
management framework in its audit universe to derive a risk-based audit plan.
The approach to identifying, managing and mitigating emerging risks includes inputs from across the
business, analysis of lessons learned following incidents and industry thought leadership. The approach
considers the potential materiality and likelihood of impacts, which helps prioritise emerging risks which
the company monitors or undertakes focused work on. Key emerging risks in 2024 included geopolitical
and conflict escalation, artificial intelligence, systemic cyber attack, political and social unrest, supply chain
risk and climate change. The Board carries out a robust assessment of the emerging risks at least
annually.
Principal risks
Principal risks are under continuous review with ongoing risk assessments. Whilst our risk profile has
remained broadly stable in 2024, we continue to focus on operational and regulatory risks, to ensure that
our control environment keeps pace with business change and growth initiatives. The table below
summarises the principal risks the company faces, and the control environment, governance and oversight
that mitigate these risks. Our approach to managing the risks arising from climate change are set out
within the TCFD section of Beazley plc’s annual Report.
Legend for principal risks table below
Risk outlook
Increasing Stable Decreasing
SYNDICATE 3623
31 DECEMBER 2024
7
MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary description Mitigation and monitoring
Insurance
Risk of loss arising from uncertainties and
deviations of the occurrence, frequency, amount
and timing of insurance premium and claim
liabilities relative to the assumptions at the time of
underwriting. This includes risk from underwriting
such as market cycle, catastrophe, reinsurance and
reserves.
• Market cycle: potential systematic
mispricing of medium- or long-tailed
business that does not support revenue to
invest and cover future claims;
• Catastrophe: one or more large events
caused by nature (e.g. hurricane,
windstorm, earthquake and/or wildfire) or
mankind (e.g. coordinated cyber-attack,
global pandemic, losses linked to an
economic crisis, an act of terrorism or an
act of war and/or a political event)
impacting a number of policies, and
therefore giving rise to multiple losses;
• Reinsurance arrangements: reinsurance
may not be available or purchases do not
support the business underwritten (e.g.
mismatch); and
• Reserving: reserves may not be
sufficiently established to reflect the
ultimate paid losses.
Insurance risk is principally managed through pricing
tools, analysis of macro trends and claim frequency/
severity and ensures exposure is well diversified and
not overly concentrated in any one area, or line of
business.
Our strategic approach to exposure management and a
comprehensive internal and external reinsurance
programme helps to reduce volatility of profits in
addition to managing net exposure through the transfer
of risk.
Our prudent and comprehensive approach to reserving
ensures adequate provisions are made for the payment
of all valid claims. High calibre claims and underwriting
professionals deliver expert service and claims handling
to insureds, ensuring good customer outcomes.
Beazley carries out periodic analysis to identify
significant areas of concentration risk across its
business.
Beazley makes extensive use of modelling, including
catastrophe modelling, the use of our Solvency II model
and stress and scenario testing to ensure insurance risk
is within our risk appetite.
Insurance risk outlook continues to be stable as BFL
manages the market cycle across all the lines of
business.
Credit
The risk of loss resulting from default in obligations
due or changes in the credit standing of either
issuers of securities, counterparties or any debtors
which the company is exposed to. Exposure to
credit risk largely emanates from the use of
reinsurers, brokers, and coverholders and our
investments, of which reinsurance asset is the
largest exposure for the Syndicate.
Beazley maintains long-term partnerships with strategic
reinsurance partners to support it throughout the
insurance cycle and during potential catastrophic claim
events. Beazley uses a range of traditional and
alternative reinsurance mechanisms to diversify
reinsurance credit risk. All reinsurers must meet
stringent internal approval criteria, overseen by the
Reinsurance Security Committee. Credit risk from
brokers and coverholders remains low.
The credit risk outlook therefore remains stable, as
Beazley manages reinsurance, broker, coverholder and
investment credit risks, maintaining low levels of aged
and/or bad debt.
Market
The risk of loss resulting from fluctuations in the
level and in the volatility of market prices of assets,
liabilities and financial instruments. Investment
assets may be impacted by adverse movements in
financial markets, interest rates, exchange rates, or
external market forces.
Beazley operates a conservative investment strategy
with a view to limiting investment losses that would
impact the syndicate’s financial results. We employ
robust policies and tools to manage market risk,
ensuring alignment with regulatory requirements and
industry best practices. Interest rate and foreign
exchange risks are managed using natural hedges and
financial instruments, minimizing potential volatility.
The Investment Committee regularly reviews market
risk exposures to ensure that our risk management
capabilities remain agile and effective in responding to
evolving market dynamics.
Despite the global and political economic uncertainties,
we maintain a stable market risk outlook, driven by
clear political outcomes and steady growth in the United
States, where most of our asset exposures are
concentrated.
Group
The contagion risk that an action or inaction of one
part of the Beazley Group adversely affect an area
of the Syndicate. This also includes a deterioration
in culture which leads to inappropriate behaviour,
actions and/or decisions including dilution of culture
or negative impact on the brand.
Risk culture is grounded in principles of transparency,
accountability, and awareness. An effective risk culture
reflects a mature risk management function,
encourages prudent risk-taking, and fosters awareness
of existing and emerging risks. The Executive
Committee and the Board oversee Group risk, with
regular monitoring conducted by the Risk Management
function and overseen by the Risk Committee.
Our Group risk outlook remains stable, with the
Executive Committee continuously managing and
improving our risk culture through ongoing monitoring
and enhancements.
SYNDICATE 3623
31 DECEMBER 2024
8
MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary description Mitigation and monitoring
Liquidity
Investments and/or other assets are not available
or adequate in order to settle financial obligations
when they fall due.
By actively managing its liquidity needs, Beazley
maximizes flexibility in handling its financial assets and
investment strategy. This proactive approach ensures
that clients and creditors are financially protected.
Beazley regularly evaluates the liquidity position of the
syndicate, under the oversight of the Risk Committee.
Our liquidity risk outlook remains stable as we
consistently maintain more than adequate levels of
liquidity.
Regulatory and legal
Non-compliance with regulatory and legal
requirements, failing to operate in line with the
relevant regulatory framework in the territories
where the Syndicate operates. This may lead to
financial loss (fines, penalties), sanctions,
reputational damage, loss of confidence from
regulators, regulatory intervention, inability to
underwrite or pay claims.
Beazley maintains active ongoing dialogue with its
principal regulators. A suite of compliance controls are
in place to support the nature, scale and complexity of
the business which are overseen by the Risk and
Regulatory Committee. The company wants to have a
trusting and transparent relationship with regulators,
ensuring coordinated communication and the following
of robust processes, policies and procedures in the
business. In addition, key staff, particularly those who
hold defined roles with regulatory requirements, are
experienced and maintain regular dialogue with
regulators.
Beazley is implementing a horizon scanning service to
support in-house activity to identify relevant regulatory
and legal matters and emerging policy so the business
can consider their potential impacts on the business.
Considering the needs of our clients in everything our
business does is of utmost importance to Beazley. We
deliver good customer outcomes to our clients
throughout the product lifecycle. The Conduct Review
Group oversees this risk.
The company has a very low appetite for regulatory and
legal risk, therefore maintaining strong and open
relationships with our regulators is of paramount
importance. The outlook for this is increasing as
throughout 2024 and into 2025, we have seen
increased engagement with our regulators as the
regulatory environment becomes more complex and
Beazley grows.
SYNDICATE 3623
31 DECEMBER 2024
9
MANAGING AGENT’S REPORT CONTINUED
Principal risks and summary description Mitigation and monitoring
Operational
Failures of people, processes and systems or the
impact of an external event on operations (e.g., a
cyber-attack having a detrimental impact on
operations) including transformation and change
related risks.
Beazley attracts and nurtures talented colleagues who
champion diversity of thought, fostering a culture of
empowerment, collaboration, and innovation. This
commitment creates an environment of employee
wellbeing, where high-calibre, motivated, loyal, and
productive individuals are empowered to perform
their duties competently.
Beazley continues investing in technology and re-
engineering processes to support our operations,
overseen by the Operations Committee. Our business
continuity, disaster recovery, and incident response
plans ensure the stability of our processes and
systems, enabling our team to consistently deliver
optimal outcomes for our clients.
We expect technology and cyber resilience to continue
being key focus areas. We are dedicated to
collaborating with external agencies, and maintaining
robust controls over information security, data, and
operational resilience. We regularly review incident
response plans and continue to invest in cybersecurity
training for our employees.
While maintaining a low appetite for operational risk,
we observed an increased frequency of reported risk
incidents during 2024, coinciding with an increasingly
complex operating environment. The risk
management function continues to work with first line
teams to ensure that controls and processes in place
remain appropriate as the operating landscape
evolves.
Our risks and controls are formally monitored and
reported through a risk and control self-assessment
process and the use of quantifiable Key Risk
Indicators.
The outlook for this risk is under increased focus as
we continue to strengthen operationally and realise
the benefits of ongoing initiatives to modernise our
systems and processes.
Strategic
The risk of loss resulting from ineffective strategic
direction and implementation that leads to
inadequate profitability, insufficient capital,
financial loss and/or reputational damage for BFL.
Pervasive risks impacting multiple areas of Beazley
(e.g., reputation, and sustainability) occurring
through real or perceived action, or inaction, by a
regulatory body, market and/or third-party
provider.
A negative change to Beazley’s reputation would
have a detrimental impact to the syndicates
performance and public perception.
Beazley consistently addresses key strategic
opportunities and challenges, striving to be the
highest performing and most sustainable specialist
insurer. We ensure that we recognize, understand,
discuss, and develop action plans for significant
strategic priorities in a timely manner, while
maintaining operational effectiveness and brand
reputation.
Beazley creates an environment that attracts, retains
and develops high performing talent with diverse
perspectives, encouraging exploration, creation, and
innovation. By investing in understanding the
complexities of the risks our clients face and
deploying our expertise where it adds value, we
thrive. The Executive Committee and the Board
oversee these risks.
Our commitment is to create a sustainable business
for our people, partners, and planet through
responsible business goals. We embed sustainability
principles and ambitions, focusing on reducing our
carbon footprint (refer to the Group's TCFD report for
more details on climate-related risks and mitigations),
contributing to our social environment, and practicing
good governance. While we consider market
developments, we evaluate each on its individual
merits, weighing both potential opportunities and
risks.
As we consolidate and embed our achievements from
2024, our strategic risk outlook remains stable.
SYNDICATE 3623
31 DECEMBER 2024
10
MANAGING AGENT’S REPORT CONTINUED
Directors
A list of Directors of the managing agent who held office during the year and to the date of this report can
be found on page 47.
Disclosure of information to the auditor
The Directors of the managing agent who held office at the date of approval of this Managing Agent’s
Report confirm that, so far as they are each aware, there is no relevant audit information of which the
syndicate’s auditor is unaware; and each Director has taken all the steps that they ought to have taken as
a Director to make themselves aware of any relevant audit information and to establish that the
syndicate’s auditor is aware of that information.
Auditor
Pursuant to Section 14(2) of Schedule 1 of the Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, the auditor will be deemed to be reappointed and Ernst & Young
LLP will therefore continue in office.
On behalf of the board
…………………………
C C J Wong
Chief Financial Officer
5 March 2025
SYNDICATE 3623
31 DECEMBER 2024
11
STATEMENT OF MANAGING AGENT’S RESPONSIBILITIES
The Directors of the managing agent are responsible for preparing the syndicate financial statements in
accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires
the Directors of the managing agent to prepare their syndicate annual accounts for each financial year.
Under that law they have elected to prepare the annual accounts in accordance with UK Accounting
Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The
Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 the
Directors of the managing agent must not approve the annual accounts unless they are satisfied that they
give a true and fair view of the state of affairs of the syndicate and of the statement of comprehensive
income of the syndicate for that period. In preparing these financial statements, the Directors of the
managing agent are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the annual accounts;
• assess the syndicate’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either intend to cease trading, or have no
realistic alternative but to do so.
The Directors of the managing agent are responsible for keeping adequate accounting records that are
sufficient to show and explain the syndicate’s transactions and disclose with reasonable accuracy at any
time the financial position of the syndicate and enable them to ensure that the financial statements comply
with the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. They
are responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
company and to prevent and detect fraud and other irregularities.
The Directors of the managing agent are responsible for the maintenance and integrity of the syndicate
and financial information included on the syndicate’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors of the managing agent are required to comply with the requirements of Section 1 of the
Lloyd’s Syndicate Accounts Instructions version 2.1 as modified by the Frequently Asked Questions version
1.1 issued by Lloyd’s (the Syndicate Accounts Instructions).
The Directors of the managing agent are responsible for the preparation and review of the iXBRL tagging
that has been applied to the syndicate accounts in accordance with the instructions issued by Lloyd's,
including designing, implementing and maintaining systems, processes and internal controls to result in
tagging that is free from material non-compliance with the instructions issued by Lloyd's, whether due to
fraud or error.
On behalf of the Board
…………………………
C C J Wong
Chief Financial Officer
5 March 2025
SYNDICATE 3623
31 DECEMBER 2024
12
Opinion
We have audited the syndicate annual accounts of syndicate 3623 (‘the syndicate’) for the year ended 31
December 2024 which comprise the Statement of Comprehensive Income, the Statement of changes in
Members’ Balances, the Balance Sheet, the Cash Flow statement and the related notes 1 to 24 , including
a summary of significant accounting policies. The financial reporting framework that has been applied in
their preparation is applicable law including The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008, United Kingdom Accounting Standards including FRS 102 “The
Financial Reporting Standard applicable in the UK and Republic of Ireland” and FRS 103 “Insurance
Contracts” (United Kingdom Generally Accepted Accounting Practice), and Section 1 of the Lloyd’s
Syndicate Accounts Instructions version 2.1 as modified by the Frequently Asked Questions version 1.1
issued by Lloyd’s (the Syndicate Accounts Instructions).
• give a true and fair view of the syndicate’s affairs as at 31 December 2024 and of its profit for the
year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the requirements of The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Syndicate Accounts
Instructions.
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 Syndicate
Accounts Instructions, and other applicable law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the syndicate annual accounts section of our
report. We are independent of the syndicate in accordance with the ethical requirements that are relevant
to our audit of the syndicate annual accounts in the UK, including the FRC’s Ethical Standard as applied to
other entities of public interest, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the 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.
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 12 months from when the syndicate annual accounts are
authorised for issue.
Our responsibilities and the responsibilities of the managing agent with respect to going concern are
described in the relevant sections of this report. However, because not all future events or conditions can
be predicted, this statement is not a guarantee as to the syndicate’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report and accounts other than the
syndicate annual accounts and our auditor’s report thereon. The Directors of the managing agent are
responsible for the other information contained within the annual report and accounts.
Our opinion on the syndicate annual accounts does not cover the other information and, except to the
extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the syndicate annual accounts or our knowledge obtained in the course of
the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the syndicate annual accounts themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of the other information, we are required to report that
fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the managing agent’s report for the financial year in which the syndicate
annual accounts are prepared is consistent with the syndicate annual accounts; and
• the managing agent’s report has been prepared in accordance with applicable legal requirements.
SYNDICATE 3623
31 DECEMBER 2024
AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3623
13
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the syndicate and its environment obtained in the
course of the audit, we have not identified material misstatements in the managing agent’s report.
We have nothing to report in respect of the following matters where The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 requires us to report to you, if in our
opinion:
• the managing agent in respect of the syndicate has not kept adequate accounting records; or
• the syndicate annual accounts are not in agreement with the accounting records; or
• certain disclosures of the managing agents’ emoluments specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the managing agent
As explained more fully in the Statement of Managing Agent’s Responsibilities set out on page 12 the
managing agent is responsible for the preparation of the syndicate annual accounts and for being satisfied
that they give a true and fair view, and for such internal control as the managing agent determines is
necessary to enable the preparation of the 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 in operation, disclosing, as applicable, matters related to its ability to
continue in operation and using the going concern basis of accounting unless the managing agent either
intends to cease to operate the syndicate, or has no realistic alternative but to do so.
Auditor’s 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 auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these syndicate annual accounts.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed
below. However, the primary responsibility for the prevention and detection of fraud rests with both those
charged with governance of the managing agent and management.
Our approach was as follows:
• We obtained a general understanding of the legal and regulatory frameworks that are applicable to
the syndicate and determined that the most significant are direct laws and regulations related to
elements of Lloyd’s Byelaws and Regulations, and the financial reporting framework (UK GAAP),
and requirements referred to by Lloyd’s in the Syndicate Accounts instructions. Our considerations
of other laws and regulations that may have a material effect on the syndicate annual accounts
included permissions and supervisory requirements of Lloyd’s of London, the Prudential Regulation
Authority (‘PRA’) and the Financial Conduct Authority (‘FCA’).
• We obtained a general understanding of how the syndicate is complying with those frameworks by
making enquiries of management, internal audit, and those responsible for legal and compliance
matters of the syndicate. In assessing the effectiveness of the control environment, we also
reviewed significant correspondence between the syndicate, Lloyd’s of London and other UK
regulatory bodies; reviewed minutes of the Board and Risk Committee of the managing agent; and
gained an understanding of the managing agent’s approach to governance.
• For direct laws and regulations, we considered the extent of compliance with those laws and
regulations as part of our procedures on the related syndicate annual accounts’ items.
• For both direct and other laws and regulations, our procedures involved: making enquiries of the
Directors of the managing agent and senior management for their awareness of any non-
compliance of laws or regulations, enquiring about the policies that have been established to
prevent non-compliance with laws and regulations by officers and employees, enquiring about the
SYNDICATE 3623
31 DECEMBER 2024
AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3623
14
managing agent’s methods of enforcing and monitoring compliance with such policies, and
inspecting significant correspondence with Lloyd’s, the FCA and the PRA.
• The syndicate operates in the insurance industry which is a highly regulated environment. As such
the Senior Statutory Auditor considered the experience and expertise of the engagement team to
ensure that the team had the appropriate competence and capabilities, which included the use of
specialists where appropriate.
• We assessed the susceptibility of the syndicate’s annual accounts to material misstatement,
including how fraud might occur by considering the controls that the managing agent has
established to address risks identified by the managing agent, or that otherwise seek to prevent,
deter or detect fraud. We also considered areas of significant judgement, complex transactions,
performance targets, economic or external pressures and the impact these have on the control
environment. Where this risk was considered to be higher, we performed audit procedures to
address each identified fraud risk, including:
• Reviewing accounting estimates for evidence of management bias. Supported by our
Actuaries, we assessed if there were any indicators of management bias in the valuation of
insurance liabilities and the recognition of estimated premium income.
• Evaluating the business rationale for significant and/or unusual transactions.
• These procedures included testing manual journals and were designed to provide reasonable
assurance that the syndicate annual accounts were free from fraud or error
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matter
Our opinion on the syndicate annual accounts does not cover the iXBRL tagging included within these
syndicate annual accounts, and we do not express any form of assurance conclusion thereon.
Use of our report
This report is made solely to the syndicate’s members, as a body, in accordance with The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008. Our audit work has been
undertaken so that we might state to the syndicate’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the syndicate and the syndicate’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Niamh Byrne (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
5 March 2025
SYNDICATE 3623
31 DECEMBER 2024
AUDITOR’S REPORT TO THE MEMBER OF SYNDICATE 3623
15
2024 2023
Notes $'000 $'000
Gross premiums written
3 1,335,977 31,747
Outward reinsurance premiums (246,281 ) (539 )
Premiums written, net of reinsurance 1,089,696 31,208
Changes in unearned premium
Change in the gross provision for unearned premiums
16 (654,954 ) 179,381
Change in the provision for unearned premiums, reinsurers’
share
16 137,382 (108,682 )
Net change in the provision for unearned premiums (517,572 ) 70,699
Earned premiums, net of reinsurance 572,124 101,907
Allocated investment return transferred from the
non-technical account
7 16,861 708
Claims paid
Gross amounts
16
(105,879 ) (113,848 )
Reinsurers’ share
16
Net claims paid (50,174 ) (47,921 )
Change in the provision for claims
Gross amount 16 (224,206 ) 63,036
Reinsurers' share 16 (21,766 ) 10,793
Net change in provision for claims (245,972 ) 73,829
Claims incurred, net of reinsurance (296,146 ) 25,908
Net operating expenses 4
(224,636 ) (50,121 )
Balance on the technical account - general business 68,203 78,402
Investment income 7 15,457 6,470
Investment expenses and charges 7 (5,126 ) (8,886 )
Realised losses on investments 7
(188 ) (5,118 )
Unrealised gains on investments 7
Total investment income
Allocated investment return transferred to general
business technical account
(16,861 ) (708 )
Loss on foreign exchange (2,295 ) (145 )
Other income — 275
Total comprehensive income for the financial year
There were no other comprehensive gains or losses in the year.
The notes on pages 20 to 46 form part of these financial statements.
SYNDICATE 3623
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
16
2024 2023
Assets Notes $'000 $'000
Investments
Financial investments 9 694,443 211,566
Deposits from ceding undertakings 53 46
Reinsurers' share of technical provisions
Provision for unearned premiums 16 142,387 5,168
Claims outstanding 16 279,956 303,137
Debtors
Debtors arising out of direct insurance operations
10
Debtors arising out of reinsurance operations
11
Other debtors 12 61,110 227,190
Other assets
Cash at bank and in hand 13 128,838 46,467
Prepayments and accrued income
Deferred acquisition costs 14 167,468 3,399
Other prepayments and accrued income 47,842 1,597
Total assets 1,855,919 872,308
Capital and reserves
Members' balances 88,602 77,436
Liabilities
Technical provisions
Provision for unearned premiums 16 664,077 10,965
Claims outstanding 16 685,670 462,348
Creditors
Creditors arising out of direct insurance operations
17 446 1,935
Creditors arising out of reinsurance operations
18 160,154 75,690
Other creditors
19 235,182 242,588
Accruals and deferred income 21,788 1,346
Total liabilities 1,767,317 794,872
Total liabilities, capital and reserves 1,855,919 872,308
The notes on pages 20 to 46 form part of these financial statements.
The syndicate annual accounts on pages 16 to 46 were approved by the board of Beazley Furlonge Limited
on 5 March 2025 and were signed on its behalf by
……………………… ....……………………
P J Bantick (Director) C C J Wong (Chief Financial Officer)
SYNDICATE 3623
BALANCE SHEET
AS AT 31 DECEMBER 2024
17
2024
2023
$'000 $'000
Members’ balances brought forward at 1 January
Total comprehensive income for the financial year
Payments of profit to members' personal reserve funds
(54,742 ) —
Losses collected in relation to distribution on closure of underwriting
year
Members’ balances carried forward at 31 December
Members participate in syndicates by reference to years of account (‘YOA’) and their ultimate result, assets
and liabilities are assessed with reference to policies incepting in that YOA in respect of their membership
of a particular year.
The notes on pages 20 to 46 form part of these financial statements.
SYNDICATE 3623
STATEMENT OF CHANGES IN MEMBER’S BALANCES
31 DECEMBER 2024
18
2024
2023
*restated
Notes $'000 $'000
Cash flows from operating activities
Total comprehensive income
Adjustments for:
Increase/(decrease) in gross technical provisions
16
(Increase)/decrease in reinsurers' share of gross technical
provisions
16
(114,038 ) 95,806
(Increase)/decrease in debtors
(94,004 ) 98,052
Movement in other assets/liabilities
(189,879 ) 37,067
Increase /(decrease) in creditors
Investment return 7
(16,861 ) (708 )
Foreign exchange
Net cash flow from operating activities
Cash flows from investing activities
Purchase of equity and debt securities
(861,099 ) (107,635 )
Sale of equity and debt securities
Investment income received
Net cash from investing activities
(471,157 ) 57,221
Cash flows from financing activities
Distribution of profit
(54,742 ) —
Collection of losses
Net cash flow from financing activities
(54,742 ) 1,280
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the year
Foreign exchange on cash and cash equivalents
(554 ) 158
Cash and cash equivalents at the end of the year 13
*Certain balances have been restated due to a voluntary change in accounting policy. Refer to note 23.
The notes on pages 20 to 46 form part of these financial statements.
SYNDICATE 3623
CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2024
19
1. Accounting policies
Basis of preparation
Syndicate 3623 (the ‘syndicate’) comprises a group of members of the Society of Lloyd’s that underwrites
insurance business in the London Market. The managing agent of the syndicate is Beazley Furlonge Limited
(’BFL'), whose registered address and principal place of business is 22 Bishopsgate, London, EC2N 4BQ.
The ultimate controlling party of BFL is Beazley plc, a company incorporated in England and Wales.
These syndicate annual accounts have been prepared in accordance with the Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (the ‘Regulations’), the applicable
Accounting Standards in the United Kingdom and the Republic of Ireland, Financial Reporting Standard 102
(FRS 102) and the applicable Accounting Standard on insurance contracts Financial Reporting Standard
103 (FRS 103) and the Lloyd's syndicate accounts instructions version 2.1 as modified by the frequently
asked questions version 1.1 issued by Lloyd's.
The financial statements have been prepared on the historic cost basis, except for financial assets at fair
value through profit or loss which are measured at fair value. The principal accounting policies applied in
the preparation of these financial statements are set out below. The policies have been consistently applied
to all periods presented, unless otherwise stated. All amounts presented are stated in US dollars, being the
syndicate’s functional currency, and in thousands, unless noted otherwise. Previously, these financial
statements were presented in millions of US dollars. The change from presenting in millions to presenting
in thousands has been applied for the first time in these financial statements for the year ended 31
December 2024.
Going concern
The financial statements of the syndicate have been prepared on a going concern basis. The syndicate's
business activities, together with the factors likely to affect its future development, performance and
position, are set out in the Strategic report contained in the annual report. In addition, note 2 includes the
syndicate's risk management objectives and the entity’s objectives, policies and processes for managing its
capital. The syndicate has sufficient capital for each year of account in its Funds at Lloyd’s (FAL). There is
no intention to cease underwriting or cease the operations of the syndicate.
In assessing the syndicate's going concern position as at 31 December 2024, the managing agent has
considered a number of factors, including the current statement of financial position and the syndicate's
strategic and financial plan. The assessment concluded that, given the intention to partake in the 2025
YOA, the syndicate has sufficient capital and liquidity for the 12 months from the date that the financial
statements are authorised for issue.
Use of estimates and judgements
The preparation of financial statements requires the use of certain critical accounting estimates and
judgements that affect the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from those on which management’s estimates are based. Estimates and assumptions are
continually evaluated and are based on historical experience and other factors. For example, estimates
which are sensitive to economic, regulatory and geopolitical conditions could be impacted by significant
changes in the external environment such as the volatile macroeconomic environment, climate change,
international conflicts, and significant changes in legislation. Any revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
Specific to climate change, since responses to it are still developing, it is not possible to consider all
possible future outcomes when determining asset and liability valuations, and timing of future cash flows,
as these are not yet known. Nevertheless, the current management view is that reasonably possible
changes arising from climate risks would not have a material impact on asset and liability valuations at the
year-end date.
(a) Valuation of insurance contract liabilities
The most critical estimate included within the syndicate’s balance sheet is the estimate for insurance losses
incurred but not reported (‘IBNR’) which is included within total technical provisions and reinsurers’ share
of technical provisions in the balance sheet and note 16. This estimate is critical as it outlines the current
liability
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2024
20
20
1. Accounting policies continued
for future expenses expected to be incurred in relation to claims. If this estimation was to prove
inadequate then an exposure would arise in future years where a liability has not been provided for.
The best estimate of the most likely ultimate outcome is used when calculating notified claims. This
estimate is based upon the facts available at the time, in conjunction with the claims manager’s view of
likely future developments. The total estimate of gross IBNR as at 31 December 2024 included within
claims outstanding is $558,573k (2023: $353,922k).
(b) Valuation of unquoted and illiquid financial assets
Determination of fair value of unquoted and illiquid assets involves judgement in model valuations,
through the incorporation of both observable and unobservable market inputs. These inputs include
assumptions that lead to the existence of a range of plausible valuations. Further detail on the
methodologies and inputs used is described in note 9.
(c) Premium estimates
Premium written is initially based on the estimated premium income (‘EPI’) of each contract. Where
premium is sourced through binders, the binder EPI is pro-rated across the binder period. Judgement is
involved in determining the ultimate estimates in order to establish the appropriate premium value and,
ultimately, the cash to be received. EPI estimates are updated to reflect changes in an underwriters
expectation through consultation with brokers and third-party coverholders, changes in market conditions,
historic experience and to reflect actual cash received for a contract.
Due to the nature of Lloyd’s business and the settlement patterns of the underlying business it is also not
uncommon for some contracts to take a number of years to finalise and settle, and a receivable on the
balance sheet remains. The amount of estimated future premium that remains in insurance receivables
relating to years of account that are more than three years developed at 31 December 2024 is $652k
(2023: $2,700k).
Significant accounting policies
The financial statements have been prepared on an annual basis of accounting, whereby the incurred cost
of claims, commissions and related expenses are charged against the earned proportion of premiums, net
of reinsurance as follows:
(a) Premiums written
Gross premiums written comprise premiums on contracts incepted during the financial year together with
adjustments to premiums written in previous accounting periods and estimates for premiums from
contracts entered into during the course of the year. Gross written premiums are stated before the
deduction of brokerage, taxes and duties levied on premiums and other deductions.
(b) Unearned premiums
A provision for unearned premiums represents that part of the gross premiums written that is estimated
will be earned in the following or subsequent financial periods. It is calculated using the daily pro rata
method, under which the premium is apportioned over the period of risk.
(c) Claims provsions and related reinsurance recoveries
Claims represent the cost of claims and claims handling expenses paid during the financial year, together
with the movement in provisions for outstanding claims, IBNR and future claims handling provisions. The
provision for claims outstanding comprises amounts set aside for claims advised and IBNR.
The IBNR amount is based on estimates calculated using widely accepted actuarial techniques (e.g. chain
ladder) which are reviewed quarterly by the group actuary and annually by the independent syndicate
reporting actuary. The techniques generally use projections, based on past experience of the development
of claims over time, to form a view on the likely ultimate claims to be experienced. For more recent
underwriting, regard is given to the variations in the business portfolio accepted and the underlying terms
and conditions. Thus, the critical assumptions used when estimating claims provisions are that the past
experience is a reasonable predictor of likely future claims development and that the rating and other
models used to analyse current business are a fair reflection of the likely level of ultimate claims to be
incurred.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
21
1. Accounting policies continued
A provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance
sheet date, including the cost of claims incurred but not yet reported to the managing agent. The
managing agent takes all reasonable steps to ensure that it has appropriate information regarding its
claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final
outcome will prove to be different from the original liability established.
(d) Liability adequacy testing
At each reporting date, liability adequacy tests are performed to ensure the adequacy of the claims
liabilities net of deferred acquisition costs and unearned premium reserves. In performing these tests,
current best estimates of future contractual cash flows, claims handling and administration expenses as
well as investment income from the assets backing such liabilities are used.
Any deficiency is subsequently charged to the statement of comprehensive income and a liability for
unexpired risk provision is established.
(e) Acquisition costs
Acquisition costs comprise brokerage, premium levies, and staff related costs of the underwriters acquiring
the business. The proportion of acquisition costs in respect of unearned premiums is deferred at the
balance sheet date and recognised in later periods when the related premiums are earned.
(f) Foreign currencies
Foreign currency transactions are translated into the functional currency using average exchange rates
applicable to the period in which the transactions take place and where the syndicate considers these to be
a reasonable approximation of the transaction rate. Foreign exchange gains and losses resulting from the
settlement of such transactions and from translation at the period end of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement of comprehensive income.
(g) Investment return
Investment return comprises all investment income, realised investment gains and losses and movements
in unrealised gains and losses, net of investment expenses, charges and interest.
Realised gains and losses on investments carried at market value are calculated as the difference between
sale proceeds and the original cost of the investment. Movements in unrealised gains and losses on
investments represent the difference between the valuation at the balance sheet date, and the valuation at
the previous period end or purchase value during the period.
Investment return is initially recorded in the non-technical account. A transfer is made from the non-
technical account to the general business technical account to reflect the investment return on funds
supporting underwriting business.
(h) Ceded reinsurance
These are contracts entered into by the syndicate with reinsurers under which the syndicate is
compensated for losses on contracts issued by the syndicate and that meet the definition of an insurance
contract. Insurance contracts entered into by the syndicate under which the contract holder is another
insurer (‘inwards reinsurance’) are included with insurance contracts.
Any benefits to which the syndicate is entitled under its reinsurance contracts held are recognised as
reinsurance assets. These consist of balances due from reinsurers relating to claims and also includes the
provision for unearned premiums, reinsurers’ share. Balances due relating to the reinsurers share of claims
are based on calculated amounts of outstanding claims recoveries and projections for IBNR, net of
estimated irrecoverable amounts having regard to the reinsurance programme in place for the class of
business, the claims experience for the period and the current security rating of the reinsurer involved.
Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised as an
expense when due.
Reinsurance assets are assessed for impairment at each reporting date. If there is objective evidence of
impairment, then the carrying amount is reduced to its recoverable amount and the impairment loss is
recognised in statement of comprehensive income.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
22
1. Accounting policies continued
(i) Financial instruments
Recognition and derecognition
Financial instruments are recognised on the balance sheet at such time that the syndicate becomes a party
to the contractual provisions of the financial instrument. A financial asset is derecognised when:
• the contractual rights to receive cash flows from the financial assets expire;
• the financial assets have been transferred, together with substantially all the risks and rewards of
ownership; or
• despite having retained some, but not substantially all, risks and rewards of ownership, control of
the asset is transferred to another party and the other party has the practical ability to sell the
asset in its entirety to an unrelated third party.
Financial liabilities are derecognised if the syndicate’s obligations specified in the contract expire, are
discharged or cancelled.
Financial assets and liabilities measurement
On acquisition of a financial asset or liability, the syndicate will measure the asset or liability at transaction
price, except for those financial assets and liabilities at fair value through profit or loss (‘FVTPL’), which are
initially measured at fair value. The exception to this is when the arrangement constitutes a financing
transaction however, the syndicate does not make use of any such arrangements.
Except for derivative financial investments, all financial investments are designated as FVTPL upon initial
recognition because they are managed and their performance is evaluated on a fair value basis.
Information about these financial instruments is provided internally on a fair value basis to key
management. The investment strategy is to invest and evaluate their performance with reference to their
fair values.
Fair value measurement
Fair value is the price at which an orderly transaction to sell an asset or to transfer a liability would take
place between market participants at the measurement date. Fair value is a market-based measure and in
the absence of observable market prices in an active market, it is measured using the assumptions that
market participants would use when pricing the asset or liability.
The best evidence of the fair value of a financial instrument at initial recognition is the transaction price,
i.e., the fair value of the consideration given or received, unless the fair value of that instrument is
evidenced by comparison with other observable current market transactions in the same instrument (i.e.,
without modification or repackaging) or based on a valuation technique whose variables include only data
from observable markets.
When transaction price provides the best evidence of fair value at initial recognition, the financial
instrument is initially measured at the transaction price and any difference between this price and the
value initially obtained from a valuation model is subsequently recognised in statement of comprehensive
income depending on the individual facts and circumstances of the transaction but not later than when the
valuation is supported wholly by observable market data or the transaction is closed out.
Upon initial recognition, attributable transaction costs relating to financial instruments at fair value through
the income statement are recognised in statement of comprehensive income when incurred. Financial
assets at FVTPL are measured at fair value, and changes therein are recognised in the statement of
comprehensive income. Net changes in the fair value of financial assets at FVTPL exclude interest and
dividend income, as these items are accounted for separately.
(j) Insurance debtors and creditors
Insurance debtors and creditors include amounts due to and from agents, brokers and insurance contract
holders. These are classified as debt instruments as they are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. Insurance debtors are measured at
amortised cost less any provision for impairment. Insurance creditors are stated at amortised cost. The
syndicate does not have any debtors directly with policyholders, all transactions occur via an intermediary.
For information on reinsurance debtors and creditors, refer to Section (h) above.
(k) Other debtors
Other debtors principally consist of intercompany debtor balances and sundry debtors and are carried at
amortised cost less any impairment losses.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
23
1. Accounting policies continued
(l) Other creditors
Other creditors principally consist of amounts due to Syndicate 5623, and other related entities, and profit
commissions payable. These are stated at amortised cost determined using the effective interest rate
method.
(m) Impairment of financial assets
Assessment is made at each reporting date whether there is objective evidence that a financial asset or
group of financial assets measured at amortised cost is impaired. A financial asset or group of financial
assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as
a result of one or more events that have occurred after the initial recognition of the assets and that event
has an impact on the estimated cash flows of the financial asset or group of financial assets that can be
reliably estimated.
If there is objective evidence that impairment exists, the amount of the loss is measured as the difference
between the assets carrying amount and the value of the estimated future cash flows discounted at the
financial asset’s original effective interest rate. Where a loss is incurred this is recognised in the statement
of comprehensive income.
(n) Cash and cash equivalents
Cash and cash equivalents are comprised of cash at bank and in hand, in addition to deposits held at call
with banks and other short-term highly liquid investments with maturities of three months or less from the
acquisition date. Only cash at bank and in hand is presented separately on the face of the balance sheet,
while cash equivalents are included within the 'financial investments' line. Cash and cash equivalents are
shown in aggregate on the cash flow statement and at note 13. These are carried at amortised cost less
impairment losses
(o) Taxation
Under Schedule 19 of the Finance Act 1993 managing agents are not required to deduct basic rate income
tax from trading income. In addition, all UK basic rate income tax (currently 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 US 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.
(p) Pension costs
Pension contributions relating to staff who act on behalf of the syndicate are charged to the syndicate and
included within net operating expenses.
(q) Related party transactions
The syndicate has taken advantage of the exemption contained in FRS 102.1 and has therefore not
disclosed transactions with other wholly owned entities forming part of the Beazley Group.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
24
2 Risk management
The syndicate has identified the risks arising from its activities and has established policies and procedures
to manage these items in accordance with its risk appetite. The sections below outline the syndicate’s risk
appetite and explain how it defines and manages each category of risk. The risk management framework is
discussed in the managing agent's report.
2.1 Insurance risk
The syndicate’s insurance business assumes the risk of loss from persons or organisations that are directly
exposed to an underlying loss. Insurance risk arises from this risk transfer due to inherent uncertainties
about the occurrence, amount and timing of insurance liabilities. The four key components of insurance
risk are underwriting, reinsurance, claims management and reserving. Each element is considered below.
a) Underwriting risk
Underwriting risk comprises four elements that apply to all insurance products offered by the syndicate:
• cycle risk – the risk that business is written without full knowledge as to the (in)adequacy of rates,
terms and conditions;
• event risk – the risk that individual risk losses or catastrophes lead to claims that are higher than
anticipated in plans and pricing;
• pricing risk – the risk that the level of expected loss is understated in the pricing process; and
• expense risk – the risk that the allowance for expenses and inflation in pricing is inadequate.
The managing agent manage and model these four elements in the following three categories: attritional
claims, large claims and catastrophe events.
The syndicate’s underwriting strategy is to seek a diverse and balanced portfolio of risks in order to limit
the variability of outcomes. This is achieved by accepting a spread of business over time, segmented
between different products, geography and size.
The annual business plans for each underwriting team reflect the syndicate’s underwriting strategy, and
set out the classes of business, the territories and the industry sectors in which business is to be written.
These plans are approved by the Board of BFL and monitored by the underwriting committee.
The syndicate’s underwriters calculate premiums for risks written based on a range of criteria tailored
specifically to each individual risk. These factors include but are not limited to the financial exposure, loss
history, risk characteristics, limits, deductibles, terms and conditions and acquisition expenses. The
managing agent also
recognises that insurance events are, by their nature, random, and the actual number and size of events
during any one year may vary from those estimated using established statistical techniques.
To address this, the managing agent sets out the exposure that it is prepared to accept in certain
territories to a range of events such as natural catastrophes and specific scenarios which may result in
large industry losses. This is monitored through regular calculation of Realistic Disaster Scenarios. The
aggregate position is monitored at the time of underwriting a risk, and reports are regularly produced to
highlight the key aggregations to which the syndicate is exposed.
The managing agent uses a number of modelling tools to monitor its exposures against the agreed risk
appetite set and to simulate catastrophe losses in order to measure the effectiveness of its reinsurance
programmes.
Stress and scenario tests are also run using these models. The range of scenarios considered includes
natural catastrophe, cyber, marine, liability, political, terrorism and war events.
One of the largest types of event exposure relates to natural catastrophe events such as wind storm or
earthquake. With the increasing risk from climate change impacts the frequency and severity of natural
catastrophes, the managing agent continues to monitor its exposure. Where possible the syndicate
measures geographic accumulations and uses its knowledge of the business, historical loss behaviour and
commercial catastrophe modelling software to assess the expected range of losses at different return
periods. Upon application of the reinsurance coverage purchased, the key gross and net exposures are
calculated on the basis of extreme events at a range of return periods.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2024
25
25
2 Risk management continued
To manage underwriting exposures, the syndicate has developed limits of authority and business plans
which are binding upon all staff authorised to underwrite and are specific to underwriters, classes of
business and industry.
These authority limits are enforced through a comprehensive sign-off process for underwriting transactions
including dual sign-off for all line underwriters and peer review for all risks exceeding individual
underwriters authority limits. Exception reports are also run regularly to monitor compliance.
All underwriters also have a right to refuse renewal or change the terms and conditions of insurance
contracts upon renewal. Rate monitoring details, including limits, deductibles, exposures, terms and
conditions and risk characteristics are also captured and the results are combined to monitor the rating
environment for each class of business.
Binding Authority contracts
A proportion of the syndicate’s insurance risks are transacted by third parties under delegated underwriting
authorities. Each third party is thoroughly vetted by the managing agent's coverholder approval group
before it can bind risks, and is subject to rigorous monitoring to maintain underwriting quality and confirm
ongoing compliance with contractual guidelines.
b) Reinsurance risk
Reinsurance risk to the syndicate arises where reinsurance contracts put in place to reduce gross insurance
risk do not perform as anticipated, result in coverage disputes or prove inadequate in terms of the vertical
or horizontal limits purchased. Failure of a reinsurer to pay a valid claim is considered a credit risk which is
detailed separately below.
The syndicate’s reinsurance programmes complement the underwriting team business plans and seek to
protect syndicate capital from an adverse volume or volatility of claims on both a per risk and per event
basis. In some cases the syndicate deems it more economic to hold capital than purchase reinsurance.
These decisions are regularly reviewed as an integral part of the business planning and performance
monitoring process.
The Reinsurance Security Committee examines and approves all reinsurers to ensure that they possess
suitable security. The syndicate’s ceded reinsurance team ensures that these guidelines are followed,
undertakes the administration of reinsurance contracts, monitors and instigates our responses to any
erosion of the reinsurance programmes.
c) Claims management risk
Claims management risk may arise within the syndicate in the event of inaccurate or incomplete case
reserves and claims settlements, poor service quality or excessive claims handling costs. These risks may
damage the Beazley brand and undermine its ability to win and retain business or incur punitive damages.
These risks can occur at any stage of the claims life-cycle.
The syndicate’s claims teams are focused on delivering quality, reliability and speed of service to both
internal and external clients. Their aim is to adjust and process claims in a fair, efficient and timely
manner, in accordance with the policy’s terms and conditions, the regulatory environment, and the
business’s broader interests. Prompt and accurate case reserves are set for all known claims liabilities,
including provisions for expenses.
d) Reserving and ultimate reserves risk
Reserving and ultimate reserves risk occurs within the syndicate where established insurance liabilities are
insufficient through inaccurate forecasting, or where there is inadequate allowance for expenses and
reinsurance bad debts in provisions.
To manage reserving and ultimate reserves risk, our actuarial team uses a range of recognised techniques
to project gross premiums written, monitor claims development patterns and stress test ultimate insurance
liability balances. An external independent actuary also performs an annual review to produce a statement
of actuarial opinion for the syndicate.
The objective of the syndicate’s reserving policy is to produce accurate and reliable estimates that are
consistent over time and across classes of business. The estimates of gross premiums written and claims
prepared by the actuarial department are used through a formal quarterly peer review process to
independently test the integrity of the estimates produced by the underwriting teams for each class of
business. These meetings are attended by senior management, senior underwriters, actuarial, claims, and
finance representatives.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
26
2 Risk management continued
An increase or decrease in total claims liabilities would have the following impact on profit and members'
balances':
Sensitivity to insurance risk (claims reserves)
Impact on profit and members'
balances'
2024
$'000
2023
$'000
Claims outstanding - gross of reinsurance
685,670 462,348
Claims outstanding - net of reinsurance
405,714 159,211
5% increase in gross claims reserve
(34,284) (23,117)
5% decrease in gross claims reserve
34,284 23,117
5% increase in net claims reserve
(20,286) (7,961)
5% decrease in net claims reserve
20,286 7,961
The syndicate monitors its exposure to insurance risk by location. The geographical breakdown of written
premiums is disclosed in note 3.
2.2 Market risk
Market risk arises where the value of assets and liabilities changes as a result of movements in foreign
exchange rates, interest rates and market prices.
Foreign exchange risk
The functional and presentational currency of the syndicate is the US dollar. The effect of this on foreign
exchange risk is that the syndicate is exposed to fluctuations in exchange rates for non-dollar denominated
transactions and net assets.
The syndicate deals in four main settlement currencies: US dollars, sterling, Canadian dollars and euros.
Transactions in all currencies are converted to US dollars on initial recognition and revalued at the
reporting date. Remaining foreign exchange risk is still actively managed as described below.
The following table summarises the carrying value of total assets and total liabilities categorised by
currency:
31 December
2024
CAD $
$'000
EUR €
$'000
UK £
$'000
AUD $
$'000
Other
$'000
Subtotal
$'000
US $
$'000
Total
$'000
Investments 91,221 9 2,493 12,581 9,392 115,696 578,800 694,496
Reinsurers' share of
technical provisions 33,876 33,438 57,760 — — 125,074 297,269 422,343
Debtors 8,459 34,076 25,348 — — 67,883 327,049 394,932
Other assets 263 196 875 — — 1,334 127,504 128,838
Prepayments and
accrued income 12,079 695 937 — — 13,711 201,599 215,310
Total assets
145,898 68,414 87,413 12,581 9,392 323,698 1,532,221 1,855,919
Technical provisions (88,151) (20,454) (61,420) — — (170,025) (1,179,722) (1,349,747)
Creditors
(14,998) (37,122) (27,725) — — (79,845) (315,937) (395,782)
Accruals and
deferred income
(707) — (10,669) — — (11,376) (10,412) (21,788)
Total liabilities (103,856) (57,576) (99,814) — — (261,246) (1,506,071) (1,767,317)
Total Capital and
Reserves 42,042 10,838 (12,401) 12,581 9,392 62,452 26,150 88,602
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
27
2 Risk management continued
31 December
2023
CAD $
$'000
EUR €
$'000
UK £
$'000
AUD $
$'000
Other
$'000
Subtotal
$'000
US $
$'000
Total
$'000
Investments 24,012 31 2,707 8,688 4,850 40,288 171,324 211,612
Reinsurers' share of
technical provisions 20,002 24,507 51,256 — — 95,765 212,540 308,305
Debtors 6,434 40,236 32,055 — — 78,725 222,203 300,928
Other assets 57 — 2,210 — — 2,267 44,200 46,467
Prepayments and
accrued income — 518 404 — — 922 4,074 4,996
Total assets
50,505 65,292 88,632 8,688 4,850 217,967 654,341 872,308
Technical provisions (16,303) (30,148) (72,920) — — (119,371) (353,942) (473,313)
Creditors
(12,847) (42,443) (26,554) — — (81,844) (238,368) (320,212)
Accruals and deferred
income
— (34) (896) — — (930) (417) (1,347)
Total liabilities (29,150) (72,625)
(100,370)
— — (202,145) (592,727) (794,872)
Total Capital and
Reserves 21,355 (7,333) (11,738) 8,688 4,850 15,822 61,614 77,436
Sensitivity analysis - foreign exchange risk
In 2024, the managing agent managed the syndicate's foreign exchange risk by periodically assessing its
non-dollar exposures while targeting net assets to be predominately US dollar denominated. On a forward
looking basis an assessment is made of expected future exposure development and appropriate currency
trades put in place to reduce risk.
Fluctuations in the syndicate’s trading currencies against the US dollar would result in a change to profit
and net asset value. The table below gives an indication of the impact on profit and members' balances of
a percentage change in relative strength of US dollar against the value of sterling, Canadian dollar, euro
and Australian dollar, simultaneously.
Impact on profit and members'
balances
Change in exchange rate of Australian dollar, Canadian dollar, euro and
sterling, relative to US dollar
2024
$'000
2023
$'000
Dollar weakens 10% against other currencies
4,824 992
Dollar strengthens 10% against other currencies
(4,824) (992)
Interest rate risk
Some of the syndicate’s financial instruments, including financial investments and cash and cash
equivalents are exposed to movements in market interest rates.
The managing agent manages interest rate risk by primarily investing in short duration financial
investments and cash and cash equivalents. The Investment Committee monitors the duration of these
assets on a regular basis.
The following table shows the average duration at the reporting date of the financial instruments that are
exposed to movements in market interest rates. Duration is a commonly used measure of volatility and
this gives a better indication than maturity of the likely sensitivity of our portfolio to changes in interest
rates.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
28
2 Risk management continued
Duration <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Debt securities
and other fixed
income securities
180,521 218,642 136,577 24,252 15,481 — — 575,473
Participation in
investment pools
25,641 — — — — — — 25,641
Shares and other
variable yield
securities and unit
trusts*
— — — 27,306 — — — 27,306
Other investments 35,315 — — — — — — 35,315
Cash at bank and
in hand
128,838 — — — — — — 128,838
Syndicate loans to
central fund
2,470 — — — — — — 2,470
Total 372,785 218,642 136,577 51,558 15,481 — — 795,043
*Only high yield debt securities have been included here. Equity securities have been excluded.
Duration <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Debt securities
and other fixed
income securities
53,289 44,630 23,848 25,066 4,586 — — 151,419
Participation in
investment pools
30,782 — — — — — — 30,782
Other investments 17,972 8,683 4 — — — — 26,659
Cash at bank and
in hand
46,467 — — — — — — 46,467
Syndicate loans to
central fund
486 2,218 — — — — — 2,704
Total
148,996 55,531 23,852 25,066 4,586 — — 258,031
*Only high yield debt securities have been included here. Equity securities have been excluded.
Sensitivity analysis - interest rate risk
The syndicate holds financial assets and liabilities that are exposed to interest rate risk. Changes in
interest yields, with all other variables constant, would result in changes in the capital value of debt and
derivative financial instruments. This will affect reported profits and members balances as indicated in the
table on the following page.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
29
2 Risk management continued
Impact on profit for the year
Impact on members balances
Shift in yield (basis
points)
2024
$'000
2023
$'000
2024
$'000
2023
$'000
50 basis point increase (5,381) (1,590) (5,381) (1,590)
50 basis point decrease
5,381 1,590 5,381 1,590
Price risk
Financial assets that are recognised on the balance sheet at their fair value are susceptible to losses due to
adverse changes in prices. This is referred to as price risk.
Financial assets include fixed and floating debt securities, which are well diversified across high quality,
liquid securities. The price risk associated with these securities is predominantly interest, foreign exchange
and credit risk related. The Investment Committee has established comprehensive guidelines with
investment managers setting out maximum investment limits, diversification across industries and
concentrations in any one industry or company.
Listed investments are recognised on the balance sheet at quoted bid price. If the market for the
investment is not considered to be active, then the syndicate establishes fair value using valuation
techniques. This includes using recent arm’s length market transactions, reference to current fair value of
other investments that are substantially the same, discounted cash flow models and other valuation
techniques that are commonly used by market participants.
2.3 Credit risk
Credit risk arises from the failure of another party to perform its financial or contractual obligations to the
syndicate in a timely manner. The primary sources of credit risk for the syndicate are:
• reinsurers – whereby reinsurers may fail to pay valid claims against a reinsurance contract held by
the syndicate;
• brokers and coverholders – whereby counterparties fail to pass on premiums or claims collected or
paid on behalf of the syndicate;
• investments – whereby issuer default results in the syndicate losing all or part of the value of a
financial instrument and derivative financial instrument; and
• cash at bank and in hand.
The syndicate’s core business is to accept significant insurance risk and the appetite for other risks is low.
This protects the syndicate’s capital from erosion so that it can meet its insurance liabilities. The
managing agent limits the syndicate's exposure to a single counterparty or a group of counterparties and
analyses the geographical locations of exposures when assessing credit risk.
An approval system also exists for all new brokers, and broker performance is carefully monitored. Regular
exception reports highlight trading with non-approved brokers, and the syndicate’s credit control function
frequently assesses the ageing and collectability of debtor balances. Any large, aged items are prioritised
and where collection is outsourced, incentives are in place to support these priorities.
The Investment Committee has established comprehensive guidelines for the syndicate’s investment
managers regarding the type, duration and quality of investments acceptable to the syndicate. The
performance of investment managers is regularly reviewed to confirm adherence to these guidelines.
The managing agent has developed processes to formally examine all reinsurers before entering into new
business arrangements. New reinsurers are approved by the Reinsurance Security Committee, which also
reviews arrangements with all existing reinsurers at least annually. Vulnerable or slow-paying reinsurers
are examined more frequently.
The tables on the following page summarise the syndicate’s concentrations of credit risk.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
30
2 Risk management continued
31 December 2024
AAA
$'000
AA
$'000
A
$'000
BBB
$'000
Other
$'000
Not
rated
$'000
Total
$'000
Investments
Shares and other variable yield
securities and units in unit
trusts
— — — — 27,305 28,239 55,544
Debt securities and other fixed
income securities
68,900 229,390 194,849 82,334 — — 575,473
Participation in investment
pools
— — 25,641 — — — 25,641
Syndicate loans to central fund
— — 2,470 — — — 2,470
Other investments
— — 35,315 — — — 35,315
Deposits with ceding
undertakings
— — 53 — — — 53
Total investments
68,900 229,390 258,328 82,334 27,305 28,239 694,496
Cash at bank and in hand
492 — 128,346 — — — 128,838
Debtors arising out reinsurance
operations
— 406 5,908 — — 48,772 55,086
Reinsurers’ share of outstanding
claims
5,408 249,344 24,944 — — 260 279,956
Debtors arising out of direct
insurance operations
— — — — — 278,736 278,736
Other debtors and accrued
interest
653 2,176 1,847 781 — 103,495 108,952
Total
75,453 481,316 419,373 83,115 27,305 459,502
1,546,064
31 December 2023
AAA
$'000
AA
$'000
A
$'000
BBB
$'000
Other
$'000
Not
rated
$'000
Total
$'000
Investments
Debt securities and other fixed
income securities
72,389 — 76,952 2,078 — — 151,419
Participation in investment
pools
— 30,783 — — — — 30,783
Loans secured by mortgages
— — — — — — —
Syndicate loans to central fund
— — 2,704 — — — 2,704
Other investments
— — 26,660 — — — 26,660
Deposits with ceding
undertakings
— — 46 — — — 46
Total investments
72,389 30,783 106,362 2,078 — — 211,612
Cash at bank and in hand
156 — 46,311 — — — 46,467
Debtors arising out reinsurance
operations
8,988 3,414 10,186 — — (708) 21,880
Reinsurers’ share of outstanding
claims
15,997 272,060 15,057 — — 23 303,137
Debtors arising out of direct
insurance operations
— — — — — 51,858 51,858
Other debtors and accrued
interest
3,740 — 2,212 60 — 221,178 227,190
Total
101,270 306,257 180,128 2,138 — 272,351 862,144
The syndicate has insurance debtors and reinsurance assets that are past due but not impaired at the
reporting date. An aged analysis of these is presented on the following page.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
31
2 Risk management continued
31 December 2024
Neither past
due nor
impaired
$'000
Past due but
not impaired
$'000
Gross value of
impaired
assets
$'000
Impairment
allowance
$'000
Total
$'000
Investments
Shares and other variable yield
securities and units in unit trusts
55,544 — — — 55,544
Debt securities and other fixed
income securities
575,473 — — — 575,473
Participation in investment pools
25,641 — — — 25,641
Syndicate loans to central fund
2,470 — — — 2,470
Other investments
35,315 — — — 35,315
Deposits with ceding
undertakings
53 — — — 53
Total Investments
694,496 — — — 694,496
Cash at bank and in hand
128,838 — — — 128,838
Debtors arising out reinsurance
operations
52,038 3,048 — — 55,086
Reinsurers’ share of claims
outstanding
279,956 — — — 279,956
Debtors arising out of direct
insurance operations
227,219 51,517 — — 278,736
Other debtors and accrued
interest
108,952 — — — 108,952
Total
1,491,499 54,565 — — 1,546,064
31 December 2023
Neither past
due nor
impaired
$'000
Past due but
not impaired
$'000
Gross value of
impaired
assets
$'000
Impairment
allowance
$'000
Total
$'000
Investments
Debt securities and other fixed
income securities
151,419 — — — 151,419
Participation in investment pools
30,783 — — — 30,783
Syndicate loans to central fund
2,704 — — — 2,704
Other investments
26,660 — — — 26,660
Deposits with ceding undertakings
46 — — — 46
Total Investments
211,612 — — — 211,612
Cash at bank and in hand
46,467 — — — 46,467
Debtors arising out reinsurance
operations
17,947 3,933 — — 21,880
Reinsurers’ share of claims
outstanding
303,137 — — — 303,137
Debtors arising out of direct
insurance operations
50,007 1,851 — — 51,858
Other debtors and accrued
interest
227,190 — — — 227,190
Total
856,360 5,784 — — 862,144
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
32
2 Risk management continued
The table below sets out the age analysis of financial assets that are past due but not impaired at the
balance sheet date:
Past due but not
impaired assets
Up to 3
months past
due
3 – 6
months past
due
6 – 12
months past
due
Greater than
1 year past
due
Total
31 December 2024 $'000 $'000 $'000 $'000 $'000
Debtors arising out of
reinsurance operations
— 15 — 3,033 3,048
Debtors arising out of
direct insurance operations
47,064 2,063 1,233 1,157 51,517
Past due but not
impaired assets
Up to 3
months past
due
3 – 6
months past
due
6 – 12
months past
due
Greater than
1 year past
due
Total
31 December 2023 $'000 $'000 $'000 $'000 $'000
Debtors arising out of
reinsurance operations
— — — 3,933 3,933
Debtors arising out of
direct insurance operations
1,358 216 150 127 1,851
Based on all evidence available, debtors arising out of insurance operations and other debtors have not
been impaired and no impairment provision has been recognised in respect of these assets (2023: nil). No
other financial assets held at year end were impaired
2.4 Liquidity risk
Liquidity risk arises where cash may not be available to pay obligations when due at a reasonable cost. The
syndicate is exposed to daily calls on its available cash resources, principally from claims arising from its
insurance business. In the majority of the cases, these claims are settled from the premiums received.
The managing agent’s approach is to manage the syndicate's liquidity position so that it can reasonably
survive a significant individual or market loss event. This means that the syndicate maintains sufficient
liquid assets, or assets that can be translated into liquid assets at short notice and without any significant
capital loss, to meet expected cash flow requirements. These liquid funds are regularly monitored using
cash flow forecasting to ensure that surplus funds are invested to achieve a higher rate of return.
The maturity analysis presented in the table below shows the remaining contractual maturities for the
syndicate’s insurance contracts and financial instrument liabilities. For insurance and reinsurance contracts,
the contractual maturity is the estimated date when the gross undiscounted contractually required cash
flows will occur. For financial liabilities, it is the earliest date on which the gross undiscounted cash flows
(including contractual interest payments) could be paid assuming conditions are consistent with those at
the reporting date.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
33
2 Risk management continued
Maturity
Carrying
amount
No
maturity
stated
0 - 1 yrs 1 - 3 yrs 3 - 5 yrs >5 yrs Total
31 December
2024
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Claims
outstanding
685,670 — 167,296 277,504 132,931 107,939 685,670
Creditors
395,728 119,885 275,897 — — —
395,782
Other liabilities
21,788 — 21,788 — — —
21,788
Total 1,103,186 119,885 464,981 277,504 132,931 107,939 1,103,240
Maturity
Carrying
amount
No
maturity
stated
0 - 1 yrs 1 - 3 yrs 3 - 5 yrs >5 yrs Total
31 December
2023
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Claims
outstanding
462,348 — 138,776 173,126 86,579 63,867 462,348
Creditors
320,213 211,445 108,768 — — —
320,213
Other liabilities
1,346 — 1,346 — — —
1,346
Total 783,907 211,445 248,890 173,126 86,579 63,867 783,907
2.5 Capital management
Capital framework at Lloyd’s
The Society of Lloyd’s is a regulated undertaking and subject to the supervision of the Prudential
Regulation Authority under the Financial Services and Markets Act 2000.
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to
ensure that Lloyd’s complies with Solvency II, and beyond that to meet its own financial strength, license
and ratings objectives. Although, as described below, the Lloyd’s capital setting processes use a capital
requirement set at syndicate level as a starting point, the requirement to meet Solvency II and Lloyd’s
capital requirements apply at an overall and member level respectively, not at a syndicate level.
Accordingly the capital requirement in respect of Syndicate 3623 is not disclosed in these financial
statements.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital
Requirement (SCR) for the prospective underwriting year. This amount must be sufficient to cover a 1 in
200 year loss, reflecting uncertainty in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’).
the syndicate must also calculate its SCR at the same confidence level but reflecting uncertainty over a one
year time horizon (one year SCR) for Lloyd’s to use in meeting Solvency II requirements. The SCRs of each
syndicate are subject to review by Lloyd’s and approval by the Lloyd’s Capital and Planning Group.
A syndicate comprises one or more underwriting members of Lloyd’s. Each member is liable for its own
share of underwriting liabilities on the syndicate(s) on which it participates but not other members’ shares.
Accordingly, the capital requirement 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 year loss ‘to ultimate’
for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s capital requirement,
known as the Economic Capital Assessment (‘ECA’). The purpose of this uplift (which is a Lloyd’s
requirement, not a Solvency II requirement) is to meet Lloyd’s financial strength, license and ratings
objectives. The capital uplift applied for 2024 was 35% (2023: 35%) of the member’s SCR to ultimate.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
34
2 Risk management continued
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for
that member (funds at Lloyd’s), held within and managed within a syndicate (funds in syndicate) and/or as
the member’s share of the Solvency II members’ balances on each syndicate on which it participates.
3 Analysis of underwriting result
2024
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
$'000 $'000 $'000 $'000 $'000 $'000
Direct Insurance
Third party liability 1,006,060 483,898 (264,371) (158,830) (36,945) 23,752
Fire and other damage
to property
235,362 149,156 (50,691) (40,678) (29,209) 28,578
Marine, aviation and
transport (558) 614 (1,808) (346) 1,347 (193)
Credit and suretyship 27,707 12,819 (5,245) (10,274) (1,727) (4,427)
Total direct insurance
1,268,571 646,487 (322,115) (210,128) (66,534) 47,710
Reinsurance
acceptances 67,406 34,536 (7,970) (14,508) (8,426) 3,632
Total direct and
reinsurance accepted 1,335,977 681,023 (330,085) (224,636) (74,960) 51,342
2023
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Net
operating
expenses*
Reinsurance
balance
Underwriting
result
$'000 $'000 $'000 $'000 $'000 $'000
Direct Insurance
Third party liability 22,332 99,903 (50,253) (33,777) (4,427) 11,446
Fire and other damage
to property
1,755 52,955 (35,579) (8,222) (6,491) 2,663
Marine, aviation and
transport 7,259 19,254 1,823 (3,971) (12,272) 4,834
Credit and suretyship 2,207 5,880 (1,253) (1,763) (1,918) 946
Total direct insurance
33,553 177,992 (85,262) (47,733) (25,108) 19,889
Reinsurance
acceptances (1,806) 33,136 34,450 (2,388) (7,393) 57,805
Total direct and
reinsurance accepted 31,747 211,128 (50,812) (50,121) (32,501) 77,694
*Included in net operating expenses is income arising from overrider commissions from reinsurance
operations of $10,873K (2023: $5,456k).
All business was concluded in the UK. No gains or losses were recognised in profit or loss during the year
on buying reinsurance (2023: nil). The gross premiums written by destination of risk is presented in the
table below:
Concentration of insurance risk
2024
$'000
2023
$'000
United Kingdom
—
678
US 1,129,028 19,531
European Union member states — 2,137
Rest of world 139,544 10,790
Total
1,268,572 33,136
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
35
4 Net operating expenses
2024 2023
$'000 $'000
Acquisition costs
1
338,414 10,440
Change in deferred acquisition costs
(164,516) 43,261
Administrative expenses
61,611 1,876
Reinsurance commissions and profit participation
(10,873) (5,456)
Total 224,636 50,121
1
Acquisition costs include commissions for direct insurance business as shown below:
2024 2023
$'000 $'000
Total commission for direct business
314,752 7,342
Administrative expenses include:
2024 2023
$’000 $’000
Fees payable to the syndicate’s auditor for the audit of these annual
accounts
173 115
Fees payable to the syndicate’s auditor and its associates in respect of
other services pursuant to legislation
178 133
Fees payable to the syndicate's auditor in relation to other services pursuant to legislation primarily relate
to the review and audit of syndicate regulatory returns along with the statement of actuarial opinion.
5 Staff numbers and costs
The syndicate has no employees. All staff are employed by Beazley Management Limited ('BML'), a related
company to the managing agent, both of which operate within the Beazley Group. The average number of
persons employed by BML and working for the syndicate in some capacity are as follows.
Number of employees
2024 2023
Administration and finance 870 799
Underwriting 239 234
Claims 88 75
Investments 8 8
1,205 1,116
The following amounts were recharged to the syndicate in respect of staff costs:
2024 2023
$’000 $’000
Wages and salaries 5,293 —
Social security 1,929 —
Pension costs 1,590 —
Short-term incentive payments 5,096 —
13,908 —
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
36
6 Key management personnel compensation
The Directors of BFL received the following aggregate remuneration charged to 3623 and included within
net operating expenses:
2024
2023
$’000 $’000
Directors' emoluments
1,248 51
The active underwriter received the following aggregate remuneration charged to 3623:
2024 2023
$’000 $’000
Emoluments
523
20
7 Investment return
2024 2023
$’000 $’000
Interest and similar income
From financial instruments designated at fair value through profit or
loss
Interest and similar income
12,893 5,039
From financial instruments classified at amortised cost
Interest on cash at bank
2,564 1,431
Other income from investments
From financial instruments designated at fair value through profit or
loss
Gains on the realisation of investments
1,936 375
Losses on the realisation of investments
(2,124) (5,493)
Unrealised gains on investments
8,452 10,258
Unrealised losses on the investments
(1,734) (2,016)
Financial liabilities at amortised cost
Interest expense
— —
Investment management expenses*
(5,126) (8,886)
—
—
Total investment return
16,861 708
Transferred to the technical account from the non technical account 16,861 708
Impairment losses on debtors recognised in administrative expenses
—
—
* Included in Investment management expenses is investment return of $4,787k (2023: $8,548k) payable
to syndicate 5623 in relation to withheld cash balances due syndicate 5623, along with a balance of $186k
(2023: Nil) payable to syndicate 6107.
8 Distribution and open years of account
A distribution of $51,664k to members will be proposed in relation to the closing year of account 2022
(2023: distribution of $59,500k for year of account 2021).
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
37
9 Financial investments
Carrying value Cost
2024 2023 2024 2023
$’000 $’000 $’000 $’000
Shares and other variable yield securities
and units in unit trusts
55,544 — 53,126 —
Debt securities and other fixed income
securities
575,473 151,419 573,177 153,734
Participation in investment pools 25,641 30,783 25,409 31,395
Syndicate loans to central fund 2,470 2,704 2,425 2,745
Other investments 35,315 26,660 35,128 26,808
Total financial investments 694,443 211,566 689,265 214,682
The table below presents an analysis of financial investments by their measurement classification
2024 2023
$’000 $’000
Financial assets measured at fair value through profit or loss 694,443 211,566
Total financial investments 694,443 211,566
Valuation hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole. If the inputs used to measure the fair value of an
asset or a liability could be categorised in different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.
Level 1 – Valuations based on quoted prices in active markets for identical instruments. An active market
is a market in which transactions for the instrument occur with sufficient frequency and volume on an
ongoing basis such that quoted prices reflect prices at which an orderly transaction would take place
between market participants at the measurement date.
Level 2 – Valuations based on quoted prices in markets that are not active, or based on pricing models for
which significant inputs can be corroborated by observable market data, directly or indirectly (e.g. interest
rates, exchange rates). Level 2 inputs include:
• Quoted prices similar assets and liabilities in active markets;
• Quoted prices for identical or similar assets and liabilities in markets that are not active, the prices are
not current, or price quotations vary substantially either over time or among market makers, or in
which little information is released publicly;
• Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates
and yield curves observable at commonly quoted intervals, implied volatilities and credit spreads); and
• Market corroborated inputs. Included within level 2 are government bonds and treasury bills, equity
funds and corporate bonds which are not actively traded, hedge funds and senior secured loans.
Level 3 – Valuations based on inputs that are unobservable or for which there is limited market activity
against which to measure fair value. The availability of financial data can vary for different financial assets
and is affected by a wide variety of factors, including the type of financial instrument, whether it is new
and not yet established in the marketplace, and other characteristics specific to each transaction. To the
extent that valuation is based on models or inputs that are unobservable in the market, the determination
of fair value requires more judgement. Accordingly the degree of judgement exercised by management in
determining fair value is greatest for instruments classified in level 3. The syndicate uses prices and inputs
that are current as of the measurement date for valuation of these instruments.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2024
38
38
9 Financial investments continued
Valuation approach
The valuation approach for fair value assets and liabilities classified as Level 2 is as follows:
• For the level 2 debt securities, our fund administrator obtains the prices used in the valuation from
independent pricing vendors. The independent pricing vendors derive an evaluated price from
observable market inputs. These inputs are verified in their pricing assumptions such as weighted
average life, discount margins, default rates, and recovery and prepayments assumptions for mortgage
securities.
The valuation approach for fair value assets and liabilities classified as Level 3 is as follows:
• The syndicate loans are loans provided to the Central Fund at Lloyd’s. These instruments are not
tradeable and are valued using discounted cash flow models, designed to appropriately reflect the credit
and liquidity risk of the instruments.
The table below analyses financial instruments measured at fair value at 31 December 2024, based on the
level in the fair value hierarchy into which the financial instrument is categorised.
2024 Level 1 Level 2 Level 3
Assets
held at
amortised
cost
Total
Financial assets at fair value $’000 $’000 $’000
$’000
$’000
Shares and other variable yield
securities and units in unit
trusts
55,544 — — — 55,544
Debt securities and other fixed
income securities
351,823 223,650 — — 575,473
Participation in investment pools 25,641 — — — 25,641
Syndicate loans to central fund — — 2,470 — 2,470
Other investments 35,315 — — — 35,315
Total financial investments 468,323 223,650 2,470 — 694,443
Derivative financial liabilities — — — — —
Total 468,323 223,650 2,470 — 694,443
2023 Level 1 Level 2 Level 3
Assets
held at
amortised
cost
Total
Financial assets at fair value
$’000 $’000 $’000 $’000 $’000
Debt securities and other fixed
income securities
103,086 48,333 — — 151,419
Participation in investment pools
30,783 — — — 30,783
Syndicate loans to central fund
— — 2,704 — 2,704
Other investments
26,660 — — — 26,660
Total financial investments 160,529 48,333 2,704 — 211,566
Derivative financial liabilities — — —
—
—
Total
160,529 48,333 2,704 — 211,566
The managing agent determines whether transfers have occurred between levels in the fair value hierarchy
by assessing categorisation at the end of the reporting period.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
39
9 Financial investments continued
The following transfers between levels 1 & 2 for the period ended 31 December 2024 reflect the level of
trading activities including frequency and volume derived from market data obtained from an independent
external valuation tool.
Level 1 Level 2
31 December 2024 transfer from level 1 to 2
$'000 $'000
Debt securities and other fixed income securities
(45,789) 45,789
Level 1 Level 2
31 December 2024 transfer from level 2 to 1
$'000 $'000
Debt securities and other fixed income securities
26,499 (26,499)
10 Debtors arising out of direct insurance operations
2024 2023
$'000 $'000
Due within one year 278,736 51,840
Due after one year — 18
278,736 51,858
11 Debtors arising out of reinsurance operations
2024 2023
$'000 $'000
Due within one year 55,086 21,880
Due after one year — —
55,086 21,880
12 Other debtors
2024
2023
$'000 $'000
Amount due from syndicate 2623
48,757 217,178
Amount due from syndicate 623 4,384 297
Inter-Syndicate Balance
53,141 217,475
Other 7,969 9,715
Total other debtors
61,110 227,190
These balances are due within one year.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
40
13 Cash and cash equivalents
2024 2023
$'000
$'000
Cash at bank and in hand 128,838 46,467
Short term debt instruments presented within other financial
investments
25,641 30,782
Total cash and cash equivalents 154,479 77,249
14 Deferred acquisition costs
2024 2023
Gross Reinsurance Net Gross Reinsurance Net
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 3,399 (280) 3,119 46,559 (5,593) 40,966
Incurred deferred acquisition
costs
338,414 (11,050) 327,364 10,440 — 10,440
Amortised deferred
acquisition costs (173,897) 248 (173,649) (53,701) 5,314 (48,387)
Foreign exchange movements (448) 32 (416) 101 (1) 100
Balance at 31 December
167,468 (11,050) 156,418 3,399 (280) 3,119
15 Analysis of net debt
All amounts in $'000
At 1 January
2024 Cashflows Acquired
Fair value and
exchange
movements
Non-cash
changes
At 31 December
2024
Cash at bank and in
hand
46,467
82,243
— 128 —
128,838
Short term deposits 30,782
(4,459)
— (682) —
25,641
Cash and cash
equivalents
77,249 77,784 — (554) —
154,479
Derivative financial
liabilities
—
—
— — —
—
Total
77,249 77,784 — (554) —
154,479
All amounts in $'000
At 1 January
2023 Cashflows Acquired
Fair value and
exchange
movements
Non-cash
changes
At 31 December
2023
Cash at bank and in
hand
56,068
(9,608)
— 7 —
46,467
Short term deposits 28,343
2,288
— 151 —
30,782
Cash and cash
equivalents
84,411 (7,320) — 158 —
77,249
Derivative financial
liabilities
—
—
— — —
—
Total
84,411 (7,320) — 158 —
77,249
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
41
16 Technical provisions
2024 2023
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
Claims outstanding
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
462,348 (303,137) 159,211 522,951 (290,352) 232,599
Claims paid during the
year
(105,879) 55,705 (50,174) (113,848) 65,927 (47,921)
Expected cost of current
year claims
385,086 (63,968) 321,118 145,628 (111,083) 34,545
Change in estimates of
prior year provisions
(55,001) 30,029 (24,972) (94,816) 34,363 (60,453)
Effects of movements in
exchange rate
(884) 1,415 531 2,433 (1,992) 441
Balance at 31
December
685,670 (279,956) 405,714 462,348 (303,137) 159,211
2024 2023
Gross
provisions
Reinsurance
assets
Net
Gross
provisions
Reinsurance
assets
Net
Unearned
premiums
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
10,965 (5,168) 5,797 190,047 (113,759) 76,288
Premium written during
the year
1,335,977 (246,281) 1,089,696 31,747 (539) 31,208
Premiums earned during
the year
(681,023) 108,899 (572,124) (211,128) 109,221 (101,907)
Effect of movements in
exchange rate
(1,842) 163 (1,679) 299 (91) 208
Balance at 31
December
664,077 (142,387) 521,690 10,965 (5,168) 5,797
Refer to note 2 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the
accounts, to potential movements in the assumptions applied within the technical provisions.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
42
16 Technical provisions continued
The following tables illustrate the development of the estimates of ultimate cumulative claims incurred,
including claims notified and IBNR, for each successive underwriting year, illustrating how amounts
estimated have changed from the first estimates made.
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Gross amounts
$ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000
12 months
153,719 150,871 150,327 57,518 87,454 186,369 213,258 287,455 — 792,144
24 months
157,667 162,921 83,558 52,716 108,580 190,060 197,535 249,918 —
36 months
145,066 179,420 84,931 43,895 93,755 172,283 153,535 219,971
48 months
143,047 191,629 87,527 38,261 90,384 156,427 128,766
60 months
150,340 191,299 80,172 36,793 80,310 153,205
72 months
155,763 185,126 74,612 35,291 79,769
84 months
159,125 186,858 72,999 35,931
96 months
159,177 187,005 72,309
108 months
151,262 191,759
120 months
148,366
Total ultimate losses
148,366 191,759 72,309 35,931 79,769 153,205 128,766 219,971 — 792,144 1,822,220
Provision in respect of prior
years (2014 and earlier)
18,237
Less paid claims
(144,227) (173,164) (69,572) (33,930) (59,537) (91,515) (69,341) (89,534) — (11,122) (741,942)
Gross claims reserves
(unearned)
4,139 18,595 2,737 2,001 20,232 61,690 59,425 130,437 — 781,022
1,098,515
Less unearned portion of
ultimate losses
— — (412,845) (412,845)
Gross claims reserves
(earned)
4,139 18,595 2,737 2,001 20,232 61,690 59,425 130,437 — 368,177 685,670
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Net amounts
$ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000
12 months
124,274 132,619 135,153 49,130 48,311 87,985 82,256 82,333 — 673,765
24 months
127,656 141,570 75,751 45,486 61,279 91,139 80,645 70,271 —
36 months
116,249 147,052 78,119 37,370 45,719 84,133 54,390 55,848
48 months
117,678 156,493 78,575 29,681 44,528 77,848 37,966
60 months
125,191 152,482 71,140 28,084 40,612 77,478
72 months
125,869 146,676 64,821 26,886 41,848
84 months
126,813 148,588 63,606 26,829
96 months
132,051 144,726 61,784
108 months
119,904 155,640
120 months
117,473
Total ultimate losses
117,473 155,640 61,784 26,829 41,848 77,478 37,966 55,848 — 673,765 1,248,631
Provision in respect of
prior years (2013 and
earlier)
11,371
Less paid claims
(117,473) (142,624) (61,784) (25,675) (37,225) (49,970) (28,372) (27,267) — (9,425) (499,815)
Net claims reserves
(unearned)
— 13,016 — 1,154 4,623 27,508 9,594 28,581 — 664,340 760,187
Less unearned portion
of ultimate losses
— — (354,473) (354,473)
Net claims liabilities
— 13,016 — 1,154 4,623 27,508 9,594 28,581 — 309,867 405,714
17 Creditors arising out of direct insurance operations
2024 2023
$'000 $'000
Due within one year 446 1,935
Due after one year — —
446 1,935
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
43
18 Creditors arising out of reinsurance operations
2024 2023
$'000 $'000
Due within one year 160,154 75,690
Due after one year — —
160,154 75,690
19 Other creditors
2024 2023
$'000 $'000
Inter-syndicate balances
Due to syndicate 6107 19,695 —
Due to syndicate 5623 100,189 211,441
Total inter-syndicate balances
119,884 211,441
Other related party balances (non-syndicates) 113,382 30,767
Other liabilities 1,916 380
Total creditors 235,182 242,588
The above other creditors balances are payable within one year except for inter-syndicate balances with
6107 which will settle upon the closure of the associated YOA. These are payable after more than one
year.
20 Related party transactions
BFL as the managing agent of the syndicate is responsible for settling intercompany balances with other
managed syndicates and net amounts due to/from other related entities. In relation to the 2022 YOA and
prior years, the syndicate ceded a portion of its market facilities business to syndicate 5623 on a quota
share basis. In 2024 YOA only, the syndicate ceded portions of certain cyber policies to Syndicate 6107 on
a quota share basis. Amounts due to these syndicates are set out in note 19.
21 Subsequent events
There have been no balance sheet events which have occurred between the reporting date and the date
which the financial statements have been signed, for which an adjustment and or disclosure is required.
The 2022 YOA has closed with a profit of $28,970k (2021:$54,718k).
22 Funds at Lloyd's
Every member is required to hold capital at Lloyd’s which is held in trust and known as Funds at Lloyd’s
(‘FAL’). These funds are intended primarily to cover circumstances where Syndicate assets prove
insufficient to meet participating members’ underwriting liabilities. The level of FAL that Lloyd’s requires a
member to maintain is determined by Lloyd’s based on Prudential Regulatory Authority requirements and
resource criteria. The determination of FAL has regard to a number of factors including the nature and
amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of
business that has been underwritten. Since FAL is not under the management of the Managing Agent, no
amount has been shown in these Financial Statements by way of such capital resources. However, the
managing agent is able to make a call on the Member’s FAL to meet liquidity requirements or to settle
losses.
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
44
23 Changes in accounting policies - presentation
The 2023 syndicate accounts were prepared in line with the relevant accounting standards and regulatory
requirements and received an unqualified audit opinion from the Syndicate’s auditor. However, the
managing agent has voluntarily elected to enact certain changes in accounting policy relating to the
presentation of various items in the financial statements for this syndicate for the year ended 31 December
2024. The changes are intended to align the presentation of the syndicate’s accounts with the proforma
disclosures set out by Lloyd's during the year as part of their effort to rationalise and standardise reporting
across the Lloyd’s market. These changes have been applied on a retrospective basis and have no impact
on the measurement of assets or liabilities, reported profit or the combined ratio. Further details have
been included below. This has impacted certain comparative notes also.
Cash flow statement – presentation and classification
The managing agent has elected to change the presentation and classification of several lines within the
cash flow statement in order to align with the proforma disclosures set out by Lloyd’s. These changes can
be summarised on the following page:
• Several lines are now combined under a single heading (Movement in other assets/liabilities)
where previously these were presented separately.
• Purchases and sales of equities are now presented separately where historically these have been
combined.
• Foreign exchange amounts have been reclassified from investing to operating activities and
presented separately.
• Transfer from/to members in respect of underwriting operations is now presented as Collection of
losses.
Previously
disclosed Adjustment Restated
$'000 $'000 $'000
Increase/decrease in deposits with ceded undertakings
93 (93) —
(Increase)/decrease in debtors, prepayments and accrued income
98,089 (37) 98,052
Increase/(decrease) in net technical provisions
(143,880) 143,880 —
Increase/(decrease) in gross technical provisions
— (239,686) (239,686)
(Increase)/decrease in reinsurers' share of gross technical provisions
— 95,806 95,806
(Increase)/decrease in deferred acquisition costs
43,160 (43,160) —
Increase/(decrease) in creditors, accruals and deferred income
(140,938)
6,223 (134,715)
Movement in other assets/liabilities
— 37,067 37,067
Foreign exchange
— (158) (158)
Net cash flows from operating activities
(65,652) (158) (65,810)
Net purchase of investments
64,597 (64,597) —
Purchase of equity and debt securities
—
(107,635) (107,635)
Sale of equity and debt securities
— 172,390 172,390
Total impact on net cash flow from investing activities
— — —
Net cash flows from investment activities
57,063 158 57,221
Transfer from / (to) member in respect of underwriting
participations
1,280 (1,280) —
Collection of losses
1,280 1,280
Net cash flows from financing activities
1,280 — 1,280
Net increase/decrease in cash and cash equivalents
(7,309) — (7,309)
Cash and cash equivalents at the end of the year
77,249 — 77,249
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
45
24 Foreign exchange rates
The syndicate used the following exchange rates to translate foreign currency assets, liabilities, income
and expenses into US dollars, being the syndicate’s presentational currency:
| 2024 | 2023 | |||||
| Start of period | Average | End of period | Start of period | Average | End of period | |
| Sterling | | | | | | |
| Euro | | | | | | |
| US dollar | | | | | | |
Canadian dollar | | | | | | |
Australian dollar | | | | | | |
SYNDICATE 3623
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
YEAR ENDED 31 DECEMBER 2024
46
Beazley Furlonge Limited has been the managing agent of Syndicate 3623 throughout the period covered
by this report and the registered office is 22 Bishopsgate, London EC2N 4BQ.
Directors
R A Stuchbery*
A P Cox - Chief Executive Officer and Active Underwriter
G P Blunden (resigned 31/03/2024)
C C R Bannister* (resigned 31/03/2024)
A J Reizenstein*
N Wall*
L Santori*
R S Anarfi
R J Clark* - (appointed 23/05/2024)
P J Bantick - (appointed 07/06/2024)
C C J Wong - (appointed 17/09/2024)
S M Lake - (resigned 30/06/2024)
R E Quane - (resigned 04/10/2024)
* Non-executive director.
Company secretary
R Yeoman
Managing agent’s registered office
22 Bishopsgate
London
EC2N 4BQ
United Kingdom
Registered number
01893407
Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Banker
Deutsche Bank AG
Winchester House
London
1 Great Winchester Street
EC2N 2DB
SYNDICATE 3623
MANAGING AGENT'S CORPORATE INFORMATION
YEAR ENDED 31 DECEMBER 2024
47
47
