ANNUAL REPORT 0 31 DECEMBER 2024
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.
QBE SYNDICATE 2999
ANNUAL REPORT 1 31 DECEMBER 2024
Annual Report
QBE Syndicate 2999
ANNUAL REPORT 1 31 DECEMBER 2024
ANNUAL REPORT
for the year ended 31 December 2024
Contents Page
Managing Agency - corporate information 2
Strategic report 3
Report of the Directors of the Managing Agent 14
Independent Auditors Report 16
Profit and loss account - Technical account - General business 19
Profit and loss account - Non-technical account 20
Statement of changes in member's balance 21
Balance sheet 22
Statement of cash flows 24
Notes to the annual accounts 25
QBE SYNDICATE 2999
ANNUAL REPORT 2 31 DECEMBER 2024
MANAGING AGENCY – CORPORATE INFORMATION
Directors
C A Brown*
C G L M Fresneau
J R Harris
C T Killourhy
S Maddock*
Sir N K Skeoch*
R C Stone
N J D Terry
TC Wade* Appointed 1 March 2024
Former Directors who served during the year and prior to date of signing
M G McCaig* Resigned 30 June 2024
* Non-Executive Director
Company secretary
A J Smith
Registered office
30 Fenchurch Street
London
EC3M 3BD
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London
SE1 2RT
QBE SYNDICATE 2999
ANNUAL REPORT 3 31 DECEMBER 2024
STRATEGIC REPORT
The Directors of QBE Underwriting Limited (‘the Company’ or ‘QUL’), the Managing Agent for QBE Syndicate 2999
(the Syndicate), present their Strategic Report and audited annual accounts for the Syndicate for the year ended 31
December 2024.
Principal Activities
The Syndicate is headed by Christopher Killourhy, Managing Director, Global Reinsurance Division and Kevin Shallow,
Executive Director of International Markets as Joint Active Underwriters. Regulatory approval was received for the
appointment of Kevin Shallow on 6 March 2024, replacing Cécile Fresneau, Managing Director of QBE’s European
Operations Insurance Division, who had been interim joint active underwriter since December 2023.
The Syndicate forms an integral part of QBE European Operations Division (‘QBE EO’) of QBE Insurance Group Limited
(‘QBE Group’).
The four trading units for the Syndicate for 2024 are as follows:
Non-marine, Property and Casualty
This account totals approximately 30% of overall Gross Written Premium (‘GWP’) and encompasses risks in non-marine
general liability, professional and financial lines, motor, property direct and facultative and property binders.
Reinsurance
This account totals approximately 36% of overall GWP and encompasses reinsurance risks in property, aviation, casualty
treaty, personal accident and marine.
Marine and Energy
This account totals approximately 11% of overall GWP and encompasses risks in hull, energy, liability, specie, cargo,
war, ports and political risks.
Multi-line facility business
This account totals approximately 23% of overall GWP and encompasses all product lines in broker facilities.
Business review and future developments
The results of the Syndicate for the year are set out in the Profit and Loss Account on page 20 and Key Performance
Indicators on page 4.
The Syndicate continues to monitor the war in Ukraine and unrest in the Middle East and any resulting developments that
may impact its assessment of potential exposures. The exposure to these issues identified to date are not significant. In
January 2025, devastating wildfires broke out in Southern California. The Syndicate continues to evaluate the financial
impact on its insurance result for 2025.
On 31 October 2024, the Syndicate entered a 100% retrospective reinsurance arrangement. This cover protects run-off of
certain prior year claims reserves within the Syndicate. The effective date of the arrangement is 1 July 2024.
QBE EO’s vision, consistent with the wider QBE Group, is to be ‘the most consistent and innovative risk partner’ and is
guided by our purpose ‘QBE – enabling a more resilient future’, which appropriately reflects the ambitions of the QBE
Group and the world in which we live. Our Vision and Purpose provide a strong sense of direction for the future. To
achieve this, we are committed to 6 strategic priorities: portfolio optimisation, sustainable growth, bringing the enterprise
together, modernising our business, people and customer. These 6 priorities ensure that we deliver on our vision and
maintain consistency across QBE EO.
With regards to Environmental, Social and Governance (‘ESG’), QBE Group has adopted the approach of an orderly and
inclusive transition to a net-zero economy. Our current focus is to continue building our capability to reduce insurance-
associated greenhouse gas emissions. This continual measurement and ongoing client conversations will inform our
underwriting considerations over time.
In an increasingly competitive marketplace for talent, QBE EO have continued to focus on establishing QBE EO as the
employer of choice and embedding the new global employee value proposition, ‘Why QBE’.
This year QBE EO won Commercial Lines Insurer of the Year at the Insurance Times Awards 2024. QBE EO also picked
up the Silver for the Diversity and Inclusion Excellence Award for our commitment to ensuring everyone at QBE felt like
they belong.
QBE SYNDICATE 2999
ANNUAL REPORT 4 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Key Performance Indicators and future developments
As an insurance entity, Key Performance Indicators include Gross Written Premium, Net Earned Premium and Investment
income. Key ratios monitored by the Board include the Combined Operating Ratio, comprising the Claims Ratio and
Commission and Expense Ratio. The ratios are net claims, expenses and commissions incurred for the year, expressed as
a percentage of the Net Earned Premium.
The table below details the Syndicate’s annually accounted result for the year ended 31 December 2024 relative to the
previous year:
2024
2023
Gross written premium
£’000
2,536,209
2,224,900
Net earned premium
£’000
1,781,336
1,434,600
Claims incurred, net of reinsurance
£’000
(996,587)
(638,300)
Acquisition costs and expenses
£’000
(544,577)
(491,600)
Investment return
£’000
101,197
100,900
Profit for the year
£’000
346,693
437,000
Claims ratio
%
55.9%
44.5%
Commission and expense ratio
%
30.6%
34.3%
Combined operating ratio
%
86.5%
78.8%
The Active Underwriters’ comment as follows:
The 2024 financial year has produced a total profit for the year of £346.7m (2023 £437.0m) and a combined operating
ratio of 86.5% (2023 78.8%). During the period, the Syndicate entered into a transaction to reinsure certain prior year
claims liabilities. The transaction had a positive impact on the reported profit for the financial year.
Overall GWP of £2,536.2m (2023 £2,224.9m) is circa 14% up on the previous year (at a constant rate of exchange). This
is primarily due to growth of the Marsh Fast Track facility within QBE Portfolio Solutions and growth in Casualty Treaty
and Specialty Treaty where we have seen favourable market conditions, and as QBE Re execute on their global client
initiative, expanding with selected clients on a cross-class basis.
Loss experience in 2024 has been adverse to prior year, driven by catastrophe losses including Hurricanes Helene and
Milton, as well as large loss experience including the Baltimore Bridge collapse.
Acquisition costs and expenses have increased in line with the growth in premiums during the year. The overall
Commission and expense ratio for both years have been distorted by the reduced net earned premium due to the
reinsurance cost of the reserve transfers in both 2024 and 2023. Excluding the impact of the reserve transfers, the
commission and expense ratio has decreased slightly from 31.2% in 2023 to 29.4% in 2024.
The investment profit of £101.2m or 4.1% return (2023 £100.9m or 4.6% return), was impacted by increases in market
yields on fixed income holdings. Fixed income represents circa 95.2% of the Syndicate’s overall portfolio. Further details
regarding the investment performance are included on page 5.
EY has again been engaged to provide independent projections to support the Statement of Actuarial Opinion (SAO).
Outlook
Through 2025, we expect many of the global themes of geopolitical tension and economic uncertainty to persist. Early
trading in 2025 has shown challenging market conditions with new entrants and increased appetites among our peers
driving pressure on rate across many markets and lines of business. We have targeted underwriting strategies for each
division to deliver consistent profitability and sustainable growth with a focus on adaptability and innovation as we
negotiate transitioning market conditions and global challenges from climate risk and economic variables. Our
underwriting teams will maintain focus on profitability, prioritising retention of good business and developing a pipeline
of new business. Our ambition is to be a trusted risk partner, delivering high quality service to our clients and brokers
and developing innovative solutions to meet customer needs.
All our 1/1 outwards reinsurance placements have been successfully completed in line with our strategy. We continue to
trade with high quality reinsurance providers and optimise our reinsurance structure to reflect portfolio growth and risk
appetite.
QBE SYNDICATE 2999
ANNUAL REPORT 5 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Outlook (continued)
We will continue to enhance our employee experience and aim to be the employer of choice in our chosen markets. In
addition to our focus on wellbeing and inclusion of diversity, we will support our colleagues to engage with development
to support both their career plans aligned with our organisational needs. As we modernise our business, we will continue
to develop the skills needed to drive change: future focus, agility and innovation, alongside technical skills and leadership
capability.
Investment policy
Management of the investment portfolios for the Syndicate is delegated to QBE Group Services Pty Limited, the
investment manager, a wholly owned subsidiary of the QBE Group. The performance of the investment manager is
monitored against an absolute return mandate, using other reference benchmarks or peer group performance as Key
Performance Indicators.
QBE EO management, along with input from the investment manager, is responsible for developing and monitoring the
Syndicate’s investment policy and strategy, subject to QUL’s Board approval. The Board also monitors the Syndicate’s
investment manager’s performance and their compliance with the investment guidelines. The investment guidelines are
designed to ensure that liquidity, credit and market risk are appropriately managed.
Syndicate investments are primarily held in core fixed income bonds with modest exposure to growth assets through
investment funds in developed market equities, high yield debt, and infrastructure assets. The majority of the core fixed
income portfolios have an average credit rating equivalent to, or better than, Standard & Poor’s “A”. The Syndicate has
not incurred any credit defaults or write downs in any of its fixed interest portfolios.
Responsibility for the oversight and monitoring of the asset and liability strategy falls within the remit of the Board.
Duration of the Syndicate’s core fixed income portfolios are managed broadly in line with that of net outstanding claim
liabilities.
The Syndicate operates a Foreign Exchange policy to minimise foreign exchange risk by holding assets in foreign
currencies in order to match net outstanding claim liabilities and policy-holders interest. Any remaining foreign currency
exposure is hedged using foreign exchange forward rate derivatives in order to minimise residual foreign exchange risk.
Investment performance
The total investment returns achieved for each financial year are set out below. These include income earned on funds
which are not managed by the investment manager, such as certain regulatory overseas deposits managed directly by
Lloyd’s. The investment return is calculated as an absolute return on the underlying portfolio of assets held during the
year, which was 4.1% (2023 4.6%).
2024
2024
2023
2023
Average
Average
Average
Average
funds
return
funds
return
Portfolio currency
£’000
%
£’000
%
Australian dollar
179,065
4.1
126,100
4.1
Canadian dollar
968,095
5.1
869,700
5.2
Euro
131,364
1.6
4,100
(6.0)
Sterling
386,452
(0.1)
262,100
1.2
US dollar
985,206
3.9
861,000
4.8
The benchmark target for investment portfolios is an absolute return yield, agreed for each currency on an annual basis
by the Board of QUL. Combined asset class actuals for each currency agreed for each financial year are shown above.
Principal risks and uncertainties of the Syndicates and the Company
The Syndicates and the Company face a number of principal risks and uncertainties specific to the Syndicate’s role as an
insurance undertaking.
The Syndicate’s activities expose the business to a number of key risks which have the potential to affect the Company’s
ability to achieve its business objectives. The Board is responsible for ensuring that an appropriate structure for managing
these risks is maintained. The Board acknowledges that it is not realistic or desirable to eliminate risk entirely, and
therefore seeks to ensure that the appropriate controls are in place to effectively manage risks in line with the agreed
tolerance.
QBE SYNDICATE 2999
ANNUAL REPORT 6 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company (continued)
QBE EO’s established Enterprise Risk Management (‘ERM’) Framework, together with QBE Group’s Risk Management
Strategy, describes the approach to managing risk effectively, which in turn supports strategy and fundamental principles.
QBE EO’s Risk Appetite Statements (‘RAS’) set out the nature and level of risk that the Board are willing to take in
pursuit of the organisation’s objectives. The RAS are used to support risk-based decision making by clearly defining QBE
EO’s appetite (what we should do) and tolerance (what we can do) across the risk categories defined below.
A summary of the main risk categories faced by the Syndicate managed by the Company, and risk mitigation techniques
to identify, assess, evaluate, and mitigate these risks are outlined as follows:
Strategic risk
The Company defines strategic risk as the current and prospective impact on earnings and/or capital arising from strategic
business decisions and responsiveness to external change.
The Company manages strategic risk as follows:
• Through oversight, monitoring and reporting of strategic risks including performance, capital, reputational, ESG and
emerging risks;
• Considering strategic options in light of the impact on return volatility and capital requirements; and
• Planning and monitoring capital levels on an ongoing basis, with reference to economic requirements.
During periods of uncertainty like the war in Ukraine and tensions in the Middle East, the Company continues to monitor
its potential exposure in these regions. The Company also has a programme of stress and scenario testing to review the
potential impacts of a range of different strategic threats on its capital position and exposure to market, liquidity and
operational risks.
Insurance risk
The Company defines insurance risk as the risk of fluctuations in the timing, frequency and severity of insured events and
claims settlements, relative to expectations. Our exposure to insurance risk arises from:
• Underwriting/pricing;
• Insurance concentrations; and
• Reserving.
The Company manages insurance risk as follows:
• Analysing historical pricing and claims experience;
• Setting a tolerance to concentration risk;
• Monitoring and reviewing underwriting performance and authority limits;
• Monitoring usage and availability of pricing models, including independent reviews;
• Purchase of appropriate reinsurance programme to reduce the Syndicate’s exposure to individual losses or an
accumulation of losses;
• Setting thresholds and monitoring of reserve probability of adequacy (‘PoA’); and
• Conducting both an in-house and external actuarial review of our claims provisions, independent of our underwriting
teams.
Credit risk
The Company defines credit risk as the risk of financial loss from obligors’ failure to meet their financial obligations,
including both inability or unwillingness to pay, as well as loss due to credit quality deterioration. Credit risks are
monitored and managed in relation to obligations to the Company in respect of reinsurance counterparties, insurance
activities, issuers and transactional counterparties.
The Company manages credit risk as follows:
• Regular counterparty monitoring through dedicated systems and procedures to manage and control exposure to
counterparties;
• Regular exposure monitoring against applicable counterparty limits via the approved RAS and supporting Key Risk
Indicators (‘KRI’), which are reported on a quarterly basis;
QBE SYNDICATE 2999
ANNUAL REPORT 7 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company (continued)
Credit risk (continued)
• Through management and monitoring of credit related risks, including reinsurance credit risk and other recoveries,
insurance credit risk and investment and treasury credit risk;
• Regular performance of stress and scenario analyses and the application of models that estimate remote losses due
to economic events. This may include holding collateral in respect of specific exposures;
• The monitoring on an on-going basis of external issuer default and financial strength ratings and QBE Group ratings
and updating as appropriate; and
• Regular review of receivables, the collectability of those debts, and the adequacy of associated impairments.
Market risk
The Company defines market risk as the risk of adverse impacts on earnings resulting from changes in market factors.
Market factors include, but are not limited to, interest rates, credit spreads, foreign exchange rates and equity prices.
The Company manages market risk as follows:
• Management and monitoring of market factors and risks including investment market movements related to equity
prices, interest rates, credit spreads and foreign exchange rate movements, as noted above;
• Assessing and reporting of various market risk exposures using the Board-approved market RAS, that are reported
on a quarterly basis;
• Application of stress and scenario analyses and the application of credit models that are able to estimate remote
losses due to economic events;
• Actively managing investment assets;
• Maintaining a diversified portfolio;
• Hedging residual non-functional currency net asset exposures;
• Use of derivatives for efficient portfolio management; and
• Monitoring compliance with legal and regulatory requirements, including the Prudent Person Principle.
Liquidity risk
The Company defines liquidity risk as the risk of insufficient liquid assets to meet liabilities as they fall due to
policyholders and creditors, or only being able to access liquidity at excessive cost.
The Company manages liquidity risk as follows:
• Monitoring liquidity risks against the Board-approved RAS and supporting KRIs to ensure minimum coverage of
stressed financial outflows for liabilities, which are reported on a regular basis;
• Performing stress and scenario testing analyses and the application of models that estimate remote losses due to
various events;
• Setting minimum levels of liquid, short-term money market securities;
• Matching assets and liabilities in our major currency positions;
•
Regular monitoring of the ratio of liquid assets to liabilities;
• The production of cash-flow forecasts, supplemented by Early Warning Indicators, such as the short-term liquidity
ratio, to proactively identify any changes to the liquidity position or potential funding needs; and
• Recourse to a Board-approved Liquidity Contingency Plan, permitting access to sources of further liquid assets in
the event of extreme liquidity stress.
Operational risk
The Company defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people
and systems or from external events, with the following sub-risk categories: internal fraud, external fraud, employment
practices and workplace safety, improper business practices, damage to physical assets, business disruption and system
failures and execution, delivery, and process management.
The Company manages operational risk using the following:
• Actively monitoring our key processes and systems;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Maintaining effective segregation of duties, access controls, governance and reconciliation procedures;
• Performance of functional Risk and Control Self-Assessments (‘RCSA’) providing periodic assessment of risks as
well as assurance over control design and performance;
QBE SYNDICATE 2999
ANNUAL REPORT 8 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Principal risks and uncertainties of the Syndicates and the Company (continued)
Operational risk (continued)
• Operational Risk Dashboard monitoring including Operational Risk Appetites, key management focus areas and
other risk Management Information; Operational KRIs are also being monitored; and
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate.
Compliance risk
The Company defines compliance risk as the risk of legal or regulatory penalties, financial loss or non-financial loss or
customer detriment resulting from a non-compliance with laws, regulations or standards, and includes Conduct Risk.
The Company manages compliance risk using the following:
• Identifying and monitoring of compliance obligations/risks;
• Embedding of compliance requirements into processes, systems and procedures including through RCSAs;
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Monitoring of internal / external fraud, improper business practices and non-compliance with external requirements;
• Compliance Risk Dashboard monitoring including Compliance Risk Appetite, key management focus areas and
other risk Management Information. Compliance KRIs are also being monitored;
• Closely monitoring rapid changes in the international sanctions regulatory environment, undertaking appropriate
screening and due diligence and communicating requirements to the business as required; and
• Maintaining effective segregation of duties, access controls, governance, and reconciliation procedures.
Group risk
The Company defines group risk as the risk to a division or legal entity arising specifically from being part of a wider
group, including financial impact and loss of support from the parent company.
The Company manages group risk as follows:
• Challenge and oversight from independent Non-Executive Directors (‘NED’) on the Company Board;
• Contractual arrangements are in place and actively monitored against for material services provided by other QBE
Group divisions and companies;
• Conducting scenario reviews to identify and quantify potential exposures for mitigation;
• Ensure functional RCSAs include Group risks;
• Identification and management of Issues and Incidents with defined remediation plans in place, as appropriate;
• Board’s Group risk appetite monitoring including intra-Group loans, intra-QBE EO loans, Intra-Group collateral
monitoring, Group Outsourced Services Service Level Agreement (‘SLA’) monitoring;
• Group Risk Dashboard monitoring including Group Risk Appetites and other Group risk related Management
Information, including risk metrics regarding QBE’s capital vehicle, QBE Capital (Global) Limited, as well as Group
issues and incidents impacting EO; and
• Involvement of QBE EO executive management individuals within material QBE Group initiatives that could impact
the Company.
Solvency II and capital adequacy
The Syndicate, managed by the Company, applies QBE EO’s internal capital model, as approved by the Prudential
Regulation Authority (‘PRA’) and Lloyd’s. The internal model is an integrated framework to support the Company’s
objectives by managing risk and capital across the Syndicate’s business. The internal model has broad scope including
capital modelling; risk identification, mitigation, assessment and monitoring, and is used in the day-to-day operations of
the Company.
The internal model is used to help assess our risk and calculate the appropriate level of risk-based capital to allocate to
risks to which we are exposed. The assessment of risk-based capital enables us to make decisions that involve quantitative
risk reward trade-offs. The allocation of risk-based capital helps ensure that the level of risk we take is commensurate
with the required returns and is within the approved risk appetite and tolerance.
The Syndicate, managed by the Company, comply with Lloyd’s capital setting processes which are described in note 2 in
the accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 9 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Corporate governance
The Syndicate is managed by the Company, a subsidiary of QBE European Operations plc, which is the holding company
for QBE EO of QBE Group. The Corporate Governance framework is managed at QBE EO level.
During 2024, the Company’s Corporate Governance structure and system of governance continued to evolve, reflecting
the Board’s ongoing commitment to ensuring that it remains efficient, relevant and supportive of the strategic aims of the
Company. The structure continues to comply with all relevant regulatory and legal requirements.
The role of the board is to provide leadership, to oversee the design and implementation of QBE EO’s strategy and to set
a framework of prudent and effective controls which enable risk to be assessed and managed within it. The Board Charter
includes an agreed set of matters reserved for the Board’s consideration. The Board ensures that the necessary financial,
people resources, policies and practices are in place for the Company to meet its objectives and measure the performance
of management in delivering on QBE EO’s strategic aims.
The Board establishes and instils QBE EO’s purpose, values and culture and ensures these are aligned with those set by
QBE Group and ensures that its obligations to its shareholder and other stakeholders of QBE EO are understood and met,
generate value for shareholders and contribute to wider society.
During the year, the Board Committees’ Terms of Reference and Board Charter for the Company were reviewed by the
relevant Committees and Boards, with minor enhancements made to reflect ongoing corporate governance and general
housekeeping updates.
The main QBE EO Boards and Board Committees met regularly during the year and there was strong attendance from all
members.
The Board of the Company comprises 5 Executive Directors and 4 NEDs.
The Board of QBE Underwriting Limited
The Board Charter of the Company states that the role of the Board is to provide leadership; to oversee the design and
implementation of QBE EO’s strategy and to set a framework of prudent and effective controls which enable risk to be
assessed and managed within it. The Board Charter includes an agreed set of matters reserved for the Board’s
consideration. The Board ensures that the necessary financial and people resources are in place for the Company to meet
its objectives and reviews the performance of management in delivering on QBE EO’s strategic aims. The Board sets and
instils QBE EO’s values and culture in line with those set by QBE Group and ensure that its obligations to its shareholder
and other stakeholders of QBE EO are understood and met.
The role of the Chair of the Board is distinct from that of the Chief Executive Officer (‘CEO’), and each role is clearly
established and held by different individuals. The Chair is responsible for chairing and overseeing the performance of the
Board, leading the development of the Company’s culture by the Board of Directors as well as leading the development
of, and monitoring the effective implementation of, policies and procedures for the induction, training and professional
development of all members of the Board. The Chair promotes open debate and facilitates constructive discussion within
the board by ensuring that Directors receive meeting papers at least four working days prior to the scheduled Board
meetings.
The CEO has responsibility for the day-to-day management and operations of the Company, supported by the International
Executive Management Board (‘International EMB’), which the CEO chairs. The CEO is responsible for leading,
directing and being accountable for the performance of the Company and reporting to the Board of Directors in respect of
these matters.
This separation of roles ensures that the balance of responsibilities, accountabilities and decision making are effectively
maintained. Directors have equal voting rights when making decisions and the Chair has a casting vote when required.
All Directors have access to the advice and services of the Company Secretary and are able to seek professional advice at
the Company’s expense.
Mr Tim Wade was appointed as an independent NED from 1 March 2024, and became chair of the Audit Committee from
1 July 2024, replacing Mr McCaig. Mr McCaig resigned his position as an independent NED, Senior Independent Director
and Chair of the Audit Committee effective 30 June 2024. Ms Catherine Brown replaced Mr McCaig as the Senior
Independent Director, effective 1 July 2024.
The Board considers that the experience and areas of focus which each Board member brings to the Company results in a
strong and balanced leadership team. The independent NEDs have no material business or relationships with the Company
that might influence their independence or judgement and bring a range of financial services and wider industry experience
to the Board. As such, the size and composition of the Board is considered to be appropriate.
QBE SYNDICATE 2999
ANNUAL REPORT 10 31 DECEMBER 2024
STRATEGIC REPORT (continued)
The Board of QBE Underwriting Limited (continued)
QBE Group have a continuing professional development programme which requires each NED to undertake ten hours of
continuous professional development each year covering areas such as Regulation, Insurance and Customer. A NED skills
matrix is maintained by Company Secretarial, together with NED training records.
In conjunction with QBE Group and supported by the Nomination Committee, succession planning is undertaken in
accordance with the talent and culture objective within the strategic priorities of both QBE EO and QBE Group whilst
ensuring the Board has the right balance of skills, background, knowledge, experience and diversity to be effective.
The duties of the Board are executed, to some degree, through Board Committees that are each chaired by a NED. The
Board and other regulated companies in QBE EO have jointly constituted these Board Committees which comprise
appropriately skilled members and are supported by attendees as necessary. QBE EO’s key Committees comprise: Audit
Committee; People and Remuneration Committee (‘PARC’); Nomination Committee; and Risk and Capital Committee
(‘RCC’).
In addition, the International EMB has also been constituted to act as a Management Committee of the Company and
other UK regulated companies in QBE EO. The International EMB is Chaired by the CEO (and its management groups
are each chaired by an EMB member). The Board delegates authority for day-to-day management of the Company to the
CEO, who is supported by the EMB. Membership of the International EMB includes the Chief Financial Officer
International (‘CFO’), Chief Risk Officer International (‘CRO’), leaders of the Insurance and Reinsurance business areas,
Chief Underwriting Officer, Chief People Officer, Chief Operations Officer, Chief Information Officer, Head of
Executive Governance & Strategy, Claims Director and (with effect from April 2024) the CEO Asia. The International
EMB’s responsibilities include formulating and implementing approved strategies and plans, and management of the day-
to-day effective running of the Company. During the year, the International EMB met formally ten times and additional
regular informal discussion forums took place during the year.
Section 172 Companies Act 2006 statement
The Directors are fully aware of their duty under section 172 of the Companies Act 2006 to act in the way which they
consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a
whole and, in doing so, to have regard amongst other matters to the duties contained therein.
The Directors have acted in accordance with such responsibilities during the year. The Board has identified that its key
stakeholders are its employees, shareholders, customers, suppliers, regulators, brokers, and other intermediaries, together
with communities and the environment.
Being a part of QBE Group, the Company adheres to QBE’s purpose and DNA values. QBE’s purpose is to enable a more
resilient future. QBE is committed to the highest standards of corporate governance as reflected in its DNA. The QBE
DNA interlinks seven cultural elements (listed below) that are fundamental to QBE and how QBE needs to operate in the
future to succeed, recognising its customers, employees, shareholders, and the community. QBE believes that a culture,
which rewards transparency, integrity and performance will promote its long-term substantiality and the ongoing success
of its business.
The QBE DNA is as follows:
• customer-focused – we proactively listen with empathy to guide how we meet customer needs and have an impact
(#Outside In)
• technical experts
– we build and share our expertise, striving for excellence and knowing when to ask for guidance
(#Know your stuff)
• fast-paced – we move with pace, adapting with our purpose and future in mind (#Ramp It Up)
• inclusive – we treat each other with respect and fairness, and value diverse perspectives (#Value All Views)
• courageous – we act with integrity and challenge the status quo, feeling safe to speak up and experiment with new
ideas (#Do the Right Thing)
• accountable – we take ownership and follow through to deliver, managing risks and learning from mistakes (#Own
It Now)
• a team – we support each other and collaborate widely to achieve common goals, knowing we are stronger together
(#Together)
QBE SYNDICATE 2999
ANNUAL REPORT 11 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Section 172 Companies Act 2006 statement (continued)
How the Board engages
QBE employees
• A comprehensive communications and engagement plan ensures regular employee and leader updates on strategic
priorities and business performance by the Group and Divisional CEO’s;
• Each International EMB member (of which five are QBE EO board members) host Town Halls on a quarterly basis.
Further engagement opportunities are available through informal connection opportunities and email
communications;
• The CEO and NEDs visit and engage with regional and overseas offices, and have deep dives and other update
sessions with management and staff across the business;
• The Chief People Officer Report includes an overview on progress against the People and Culture strategic priorities;
• The International EMB proactively encourage and act on employee feedback through regular pulse surveys,
Together@QBE forums and employee networks to help identify opportunities to improve our ways of working,
benefits, policies and overall culture;
• The CEO chairs a bi-annual Inclusion Forum with the Chief People Officer, the EMB, Inclusion team, employee
network chairs (MIX, Circle, Pride, Workability, Open Mind and Sustainability), and executive sponsors to track
progress against our Inclusion and Diversity strategy and plans;
• Recurring EMB Discussion Forums with opportunities for executive network sponsors to present; and
• There is a strong focus on culture and whistleblowing reports, and updates from internal and external auditors around
controls.
Our shareholder
• There is regular interaction with the shareholder, QBE Group, on a frequent basis. The QBE Group Board receives
on an annual basis a presentation on the financial plans for the forthcoming year;
• There is regular interaction with Members’ Agents, including quarterly forecast letters and at least twice-yearly
meetings to review year-end results, latest market conditions and draft Syndicate Business Forecast; and
• There is a global NED conference held on a bi-annual basis. Chairs of Board Committees around the globe meet
frequently to discuss key matters.
Our customers
• The Board reviews strategy and monitors performance during the year with the aim of meeting customers’ needs
more effectively/efficiently;
• The Board receives competitor updates to understand QBE’s competitive performance and its strengths and
weaknesses as regards to meeting customer needs;
• Benchmarks performance in relation to customers using research and survey results;
• Customer is one of our priorities for 2025 with an aim of being our customers’ favourite insurer; and
• QBE EO has applied the Consumer duty in line with the Financial Conduct Authority (‘FCA’) policy statement
PS22/9 “A new consumer duty” to all in scope new and existing products and services open to sale or renewal,
effective 31 July 2023 and has also applied the consumer duty to in scope products and services held in closed books
from 31 July 2024.
Our brokers and other intermediaries
• The Board receives updates regarding partner relationships, development and engagement;
• Consideration of key strategic partnerships and technology; and
• Understand our approach with partners.
Our regulators including the PRA, National Bank of Belgium, FCA, Financial Services and Markets Authority
(Belgium) and Lloyd’s of London
• There is transparent and regular communication with our regulators and Lloyd’s which is facilitated through our
Compliance Department; and
• Various teams in the business and Board members including NEDs have ongoing engagement with our regulators
on a frequent basis, including discussion on specific matters requested. All material regulator engagements are
reported to the respective EO Boards.
QBE SYNDICATE 2999
ANNUAL REPORT 12 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Section 172 Companies Act 2006 statement (continued)
How the Board engages (continued)
Our suppliers
• The Board receives updates as necessary from management on suppliers (e.g. claim service providers and IT and
operational suppliers) and reviews and approves applicable policies and procedures. Key areas of focus for regulators
include the fair treatment of customers, fair pricing and product value, controls for the management of outsourcing
and third-party risk, and employee conduct standards and awareness of the regulatory environment they operate in
as well as financial risks arising from climate change; and
• The Board receives updates as necessary from management on suppliers (e.g. IT and operational suppliers) and
reviews and approves applicable policies and procedures.
Our communities and the environment
• The Board receives updates on the QBE Group wide approach to sustainability and was jointly led by the Chief Risk
Officer and Chief Underwriting Officer who were responsible for identifying and managing the financial risks arising
from climate change up to 1 January 2024. From 1 January 2024, the Head of Executive Governance & Strategy was
appointed as the Chair of the ESG Management Group;
• The Board receives regular updates on the work underway across QBE EO to better identify, measure, monitor,
manage, and report on our exposure to the risks arising from climate change;
• The Board supports the following initiatives:
o As part of the sustainability initiatives across the QBE Group, the 2024 Sustainability Report is published on
the QBE Group website and provides detailed explanation of this (Group-wide) framework and includes case
studies and examples, highlighting the active steps that QBE Group is taking to embed sustainability into its
business practices;
o Tax transparency through the annual publication of the QBE Group Tax Transparency Report and the
production of a Tax strategy document outlining its UK tax strategy; and Efforts to integrate human rights
considerations across the business, as outlined in the QBE Group Human Rights Policy and in our Modern
Slavery and Human Trafficking Statements. Premiums4Good is the collaboration between QBE, our customers,
partners and shareholders through which we invest a portion of everyday premiums into investments that have
additional social or environmental benefits at no extra cost to the customer. Premiums4Good now has US$2.3
billion invested in 135 securities across our key impact areas.
• The Board endorses a culture of “giving back to the community” time and skills (e.g. through employee volunteer
days and pro bono support); and
• The QBE Foundation EO, which supports involvement in the community by promoting employee volunteering,
employee matching, and through grant donations to registered charities aligned to the Foundation’s focus areas.
For all of the above interactions, the Board seeks to ensure that all stakeholder interests are considered.
Climate-related Financial Disclosures (‘CFD’)
The Company, as part of the QBE Group, recognises the material risk that climate change poses to its business, including
the Syndicate and is committed to embedding climate change considerations within its decision making. Our approach to
managing the Financial Risks from Climate Change (‘FRCC’) has been guided by our Board-approved Roadmap to meet
the requirements of the PRA’s Supervisory Statement ‘SS3/19’.
QBE EO is guided by the QBE Group’s Risk Management Strategy to ensure we achieve our strategic priorities while
also establishing effective governance and fundamental principles for the management of risk across all levels of the
organisation. The FRCC are a component of ESG risk, which is classified as a strategic risk sub-class.
In line with SS3/19, exposures to physical, transition and liability risks are monitored and reported to the Risk & Capital
Group (‘RCG’), RCC and the Board on a quarterly basis using the EO Climate Risk Dashboard (‘CRD’). The CRD
includes the following assessments:
x Physical risks: modelling of natural climate perils, for example assessing how EO’s Insurance Concentrations
risk appetites statements would be impacted by future climate stress scenarios. When considering physical risks,
Representative Concentration Pathway 8.5 (‘RCP 8.5’) is adopted, which is considered a ‘worst-case scenario’
and is based on a substantial global temperature increase;
x Underwriting transition risks: modelling transition scenario impacts on sensitive industry sectors and assessing
how they could impact EO’s GWP derived from products written for customers in these sectors.
x Investments transition risks: assessments of specific EO investment portfolios’ exposure to transition risks;
QBE SYNDICATE 2999
ANNUAL REPORT 13 31 DECEMBER 2024
STRATEGIC REPORT (continued)
Climate-related Financial Disclosures (‘CFD’) (continued)
x Liability risks: climate-related litigation trends are monitored, and scenario assessments are conducted –
supported by the litigation monitoring work performed by the Legal team; and
x Climate-related risks as they pertain to own operations and Claims trends.
During 2024, the Company has continued to enhance and refresh its approach to meeting the requirements of SS3/19.
Further developments to our approach to managing the FRCC, and broader ESG risks, have included:
x Further training on climate risk for the EO Board and International EMB;
x Updated scenario assessments of physical risks to estimate changes in exposure materiality and to inform
underwriting strategy updates for EO insurance products;
x Reassessing hypothetical climate litigation scenarios to ensure that frequency and severity estimates are updated
and appropriate, including in relation to internal model validation;
x Engaged with priority commercial customers to further understand their transition risks; and
x Our Accumulation Management team provides technical catastrophe pricing for a large proportion of our
commercial property policies which is refreshed frequently to reflect current catastrophe accumulations,
reinsurance costs and required return on allocated capital.
In 2025, QBE Group published the 2024 Sustainability Report, which included details of the Sustainability Strategy to
better support the ambition and purpose of enabling a more resilient future. Climate change is a key consideration and is
relevant to the three areas of focus identified:
x Focus area 1: Foster an orderly and inclusive transition to a net-zero economy.
x Focus area 2: Enable a sustainable and resilient workforce.
x Focus area 3: Partner for growth through innovative, sustainable, and impactful solutions.
Progress against each of these focus areas is reported to the QBE Group at the level of the EO division on a regular basis.
The Company does not enter into any direct energy consumption contracts. All disclosure relating to the Company’s
Streamlined Energy and Carbon Reporting (‘SECR’) requirements can be found in the accounts of its parent, QBE
European Operations plc.
QBE EO remains committed in this area over the short to medium term to strengthening our data and scenario analysis
and adapting our modelling; pricing; capital management; financial reporting and disclosure, in partnership with QBE
Group and external stakeholders.
Business continuity management
An established business continuity management framework is in place to ensure the Company is able to respond
effectively to incidents that threaten business continuity and is designed to ensure that the impact of any major disruption
is minimised. The business continuity management framework is complimented by an operational resilience framework.
The business continuity framework includes a set of crisis and specialist team plans, department-level business continuity
plans and technology recovery plans. It is supported by a range of activities, including staff awareness and testing.
For all of the above interactions, the Board seeks to ensure that all stakeholder interests are considered.
This Strategic report was approved by the Board of Directors on 4 March 2025 and signed on its behalf by:
R C Stone
Director
QBE Underwriting Limited
London
QBE SYNDICATE 2999
ANNUAL REPORT 14 31 DECEMBER 2024
REPORT OF THE DIRECTORS OF THE MANAGING AGENT
The Directors of QUL, the Managing Agent for the Syndicate, present their report and the audited annual accounts of the
Syndicate for the year ended 31 December 2024.
This annual report is prepared using the annual basis of accounting as required by regulation 5 of the Insurance Accounts
Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (‘the 2008 Regulations’).
Directors and officers
Details of the Directors and officers of the Managing Agent for the Syndicate are set out on page 2.
Strategic report
The Strategic report, which includes details of the Syndicate’s principal activities, business review, position and future
developments, performance and KPI’s, governance structure, risk management framework and climate change, is set out
on pages 3 to 13.
Internal audit
An internal audit department provides assurance to the Audit Committee as to the effectiveness of internal systems and
controls, makes recommendations for improvement and monitors progress towards completion via management action
plans. Internal audit also provides feedback on the risk management process.
Going concern
The Directors of the Managing Agent have reasonable expectations, having made appropriate enquiries, that the Syndicate
has adequate resources to continue in operational existence for the foreseeable future. The Directors of the Managing
Agent have not identified any material uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Syndicate’s ability to continue as a going concern for a period of at least 12 months from the
date on which the accounts are authorised for issue. For this reason, they continue to adopt the going concern basis in
preparing the accounts.
Relationship with Managing Agent
QUL has adopted a code of conduct which outlines a set of general business ethics that apply to all employees when
conducting any activity on behalf of the Syndicate. The code of conduct requires employees to carry on business in an
open and honest manner with customers, shareholders, employees, regulatory bodies, outside suppliers, intermediaries,
and the community at large. The code also deals with a number of other requirements including whistleblowing,
confidentiality, disclosure of information, conflicts of interest and treating customers fairly. Other policies are in place to
cover areas such as health and safety, harassment, equal opportunities and financial crime.
Statement of Managing Agent’s responsibilities
The Directors of the Managing Agent are responsible for preparing the Strategic report, report of the Directors of the
Managing Agent and the annual accounts in accordance with applicable law and regulations.
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (‘IAD’) requires the
Managing Agent to prepare annual accounts for each financial year. Under that law, the Directors are required to prepare
the Syndicate annual accounts in accordance with UK generally accepted accounting practice (UK accounting standards
and applicable law). The IAD requires that the Directors must not approve the annual accounts unless they are satisfied
that they give a true and fair view of the state of affairs of the Syndicate and of the profit and loss of the Syndicate for
that period.
In preparing these Syndicate annual accounts, the Managing Agent is required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• State whether applicable UK accounting standards have been followed, subject to any material departures
disclosed and explained in the annual accounts;
• Prepare the annual accounts on the basis that the Syndicate will continue to write business unless it is
inappropriate to presume that the Syndicate will do so; and
• Prepare and review that the iXBRL tagging that has been applied to the Syndicate Accounts in accordance with
the instructions issued by Lloyd’s, including designing, implementing and maintaining systems, processes and
internal controls, results in tagging that is free from material non-compliance with the instructions issued by
Lloyd’s, whether due to fraud or error.
The Directors of the Managing Agent are responsible for keeping proper accounting records that are sufficient to show
and explain the Syndicate’s transactions and disclose with reasonable accuracy at any time the financial position of the
QBE SYNDICATE 2999
ANNUAL REPORT 15 31 DECEMBER 2024
REPORT OF THE DIRECTORS OF THE MANAGING AGENT (continued)
Statement of Managing Agent’s responsibilities (continued)
Syndicate and enable them to ensure that the Syndicate annual accounts comply with the IAD. They are also responsible
for safeguarding the assets of the Syndicate and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors of the Managing Agent are responsible for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of annual accounts may differ from
legislation in other jurisdictions.
Statement of disclosure of information to auditors
Each person who is a Director of the Managing Agent at the date of this report confirms that:
• So far as the Director is aware, there is no information relevant to the audit of the Syndicate’s annual accounts
for the year ended 31 December 2024 of which the auditors are unaware; and
• The Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or
herself aware of, and to establish that the Syndicate’s auditors are aware of, any relevant audit information.
Independent auditors
The Directors of the Managing Agent intend to reappoint PricewaterhouseCoopers LLP as the Syndicate’s auditors.
On behalf of the Board of the Managing Agent.
R C Stone
Director
QBE Underwriting Limited
London
4 March 2025
QBE SYNDICATE 2999
ANNUAL REPORT 16 31 DECEMBER 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF QBE SYNDICATE 2999
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 2999’s syndicate annual accounts:
● give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit and cash
flows for the year then ended;
● have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland”, and applicable law); and
● have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate Accounts
Instructions version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the
Lloyd’s Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Annual Report, which comprise: the Balance sheet
as at 31 December 2024; the Profit and loss account – Technical account – General business, the Profit and loss account
– Non-technical account, the Statement of cash flows, and the Statement of changes in member’s balance for the year
then ended; and the notes to the syndicate annual accounts.
B
asis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions
and other applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for
the audit of the syndicate annual accounts section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of
public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 4, we have provided no non-audit services to the syndicate in the period under audit.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going concern for
a period of at least twelve months from when the syndicate annual accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern basis
of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual accounts and
our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the syndicate
annual accounts does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
ANNUAL REPORT 17 31 DECEMBER 2024
QBE SYNDICATE 2999
INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF QBE SYNDICATE 2999
(continued)
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the syndicate annual accounts or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an appar
ent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
With respect to the Report of the Directors of the Managing Agent (the “Managing Agent’s Report”), we also considered
whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Managing Agent’s
Report for the year ended 31 December 2024 is consistent with the syndicate annual accounts and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of Managing Agent’s responsibilities, the Managing Agent is responsible for
the preparation of the syndicate annual accounts in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The Managing Agent is also responsible for such internal control as they determine is
necessary to enable the preparation of syndicate annual accounts that are free from material misstatement, whether due to
fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis
of accounting unless it is intended for the syndicate to cease operations, or it has no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation
Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered
the extent to which non-compliance might have a material effect on the syndicate annual accounts. We also considered
those laws and regulations that have a direct impact on the syndicate annual accounts such as The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate
Instructions. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
syndicate annual accounts (including the risk of override of controls), and determined that the principal risks were
related to the risk of fraud in revenue recognition and management override of controls, including the potential for
management bias in significant accounting estimates, particularly in relation to the claims incurred but not reported
portion of outstanding claims reserves (gross and reinsurers’ share), and the estimated portion of gross premiums
written. Audit procedures performed by the engagement team included:
QBE SYNDICATE 2999
ANNUAL REPORT 18 31 DECEMBER 2024
INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OF QBE SYNDICATE 2999
(continued)
● inspecting relevan
t meeting minutes, including those of the Board and Audit Committee of the Managing
Agent, and correspondence with regulatory authorities, including Lloyd’s of London, the Prudential Regulatory
Authority and the Financial Conduct Authority;
● discussions with the Board, management, the compliance function and internal audit function of the Managi
ng
Agent, including consideration of known or suspected instances of fraud and non-compliance with laws and
reg
ulations;
● testing and challenging where appropriate the assumptions and judgements made by management in their
significant accounting estimates, particularly in relation to the claims incurred but not reported portion
of
outstanding claims reserves (gross and reinsurer’s share), and the estimated portion of gross premiums written;
● testing journal entries identified in accordance with our risk assessment; and
● designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testi
ng.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s member in accordance with part 2
of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for no other
purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
Other required reporting
Under The
Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required
to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
● certain disclosures of Managing Agent remuneration specified by law are not made; or
● the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been
applied. This auditors’ report provides no assurance over whether the iXBRL tagging has been applied in accordance with
section 2 of the Lloyd’s Syndicate Instructions 2.0.
Matthew Nichols (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
4 March 2025
QBE SYNDICATE 2999
ANNUAL REPORT 19 31 DECEMBER 2024
PROFIT AND LOSS ACCOUNT -
TECHNICAL ACCOUNT - GENERAL BUSINESS
for the year ended 31 December 2024
2024 | 2023 | ||||
Note | £’000 | £’000 | £’000 | £’000 | |
| Earned premiums, net of reinsurance | |||||
Gross premiums written | 3 | ||||
Outward reinsurance premiums | ( | ( | |||
Premiums written, net of reinsurance | |||||
| Change in the gross provision for unearned premiums | 12 | ( | ( | ||
| Change in the provision for unearned premiums, reinsurers’ share | 12 | ||||
Net change in provisions for unearned premiums | ( | ( | |||
| Earned premiums, net of reinsurance | |||||
Allocated investment return transferred from the non-technical account | 7 | ||||
| Claims incurred, net of reinsurance | |||||
Claims paid | |||||
Gross amount | 12 | ( | ( | ||
| Reinsurers’ share | 12 | ||||
| Net claims paid | ( | ( | |||
Change in the provision for claims | |||||
Gross amount | 12 | ( | ( | ||
| Reinsurers’ share | 12 | ( | |||
| Change in the net provision for claims | ( | ( | |||
Claims incurred, net of reinsurance | ( | ( | |||
Net operating expenses | 4 | ( | ( | ||
| Balance on the technical account for general business |
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 20 31 DECEMBER 2024
PROFIT AND LOSS ACCOUNT -
NON-TECHNICAL ACCOUNT
for the year ended 31 December 2024
Restated * | |||
2024 | 2023 | ||
Note | £’000 | £’000 | |
| Balance on the general business technical account | |||
Investment income | 7 | ||
Unrealised (losses) / gains on investments | 7 | ( | |
Investment expenses and charges | 7 | ( | ( |
Realised gains / (losses) on investments | 7 | ( | |
| Investment return | |||
| Allocated investment return transferred to the general business technical account | ( | ( | |
Gain on foreign exchange | |||
| Profit for the financial year | |||
Total comprehensive income for the year |
* The comparative figures for the realised and unrealised gains and losses on investments have been restated to present
them on a disaggregated basis to align with Lloyd’s reporting requirements whilst maintaining FRS 102 compliance.
Please see note 1(m) for further information.
The results above are derived from continuing operations.
There are no recognised gains or losses for the current and preceding year other than those included in the profit and loss
account above and therefore no statement of comprehensive income has been presented.
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 21 31 DECEMBER 2024
STATEMENT OF CHANGES IN MEMBERS’ BALANCE
for the year ended 31 December 2024
2024 | 2023 | |
| £’000 | £’000 | |
| Member’s balance brought forward at 1 January | ( | |
Total comprehensive income for the year | ||
| Payments of profit to members’ personal reserve funds | ( | ( |
| Other - Non-standard personal income / (expense) | ( | |
| Member’s balance carried forward at 31 December |
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 22 31 DECEMBER 2024
BALANCE SHEET
as at 31 December 2024
Restated * | |||
2024 | 2023 | ||
| Assets | Note | £’000 | £’000 |
| Investments | |||
Financial investments | 8 | ||
Deposits with ceding undertakings | |||
| Reinsurers’ share of technical provisions | |||
Provision for unearned premiums | 12 | ||
Claims outstanding | 12 | ||
| Debtors Debtors arising out of direct insurance operations | 14(i) | ||
Debtors arising out of reinsurance operations | 14(ii) | ||
Other debtors | 14(iii) | ||
| Other assets Cash at bank and in hand | |||
Other | 16 | ||
| Prepayments and accrued income | |||
Accrued interest and rent | |||
Deferred acquisition costs | 17 | ||
Other prepayments and accrued income | |||
Total assets |
* The comparative figures have been restated to account for the reclassification of money market as investments. In
addition, overseas deposits, previously shown as a separate balance sheet item, has been reclassified as “Other” within
other assets. Please see note 1(m) for further information.
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 23 31 DECEMBER 2024
BALANCE SHEET (continued)
as at 31 December 2024
2024 | 2023 | ||
| Liabilities | Note | £’000 | £’000 |
Capital and reserves | |||
| Members’ balance | |||
| Technical provisions | |||
Provision for unearned premiums | 12 | ||
Claims outstanding | 12 | ||
| Creditors | |||
| Creditors arising out of direct insurance operations | 22(i) | ||
Creditors arising out of reinsurance operations | 22(ii) | ||
| Other creditors including taxation and social security | 23 | ||
Accruals and deferred income | |||
Total liabilities | |||
| Total liabilities, Capital and reserves |
These annual accounts on pages 19 to 55 were approved by the Board of QBE Underwriting Limited on 4 March 2025
and were signed on its behalf by:
R C Stone
Director
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 24 31 DECEMBER 2024
STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
2024
2023
Cash flow from operating activities
£’000
£’000
Profit for the financial year
Increase in gross technical provisions
Increase in reinsurers’ share of technical provisions
(91,063 )
(12,500 )
Increase in debtors
(194,452 )
(344,500 )
Increase in creditors
Investment return
(101,197 )
(100,900 )
Other (incl. foreign exchange)
(17,000 )
Net cash flows from operating activities:
Cash flows from investing activities
Purchase of equity and debt instruments
(5,703,423 )
(3,483,500 )
Sale of equity and debt instruments
Investment income received
Purchase of derivatives
Sale of derivatives
(972 )
Other (incl. deposits with ceded undertakings)
Net cash flows used in investing activities
(499,595 )
(130,400 )
Cash flow from financing activities
Distribution of profit
Open year profit release
(97,164 )
(100,000 )
(72,000 )
Other - Non-standard personal income / (expense)
(1,620 )
(16,900 )
Net cash flows used in financing activities
(198,784 )
(88,900 )
Movement in cash and cash equivalents during year
Cash and cash equivalents at the beginning of the year
Net increase in cash and cash equivalents
Foreign exchange movement on cash and cash equivalents
(2,500 )
Cash and cash equivalents at the end of the year | 15 |
.
The notes set out on pages 25 to 55 form an integral part of these annual accounts.
QBE SYNDICATE 2999
ANNUAL REPORT 25 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS
for the year ended 31 December 2024
1. Accounting policies
The principal accounting policies adopted in the preparation of these annual accounts are set out below. These policies
have been consistently applied to all the years presented unless otherwise stated.
(a) Basis of preparation
These annual accounts have been prepared in accordance with regulation 5 of the Insurance Accounts Directive (Lloyd’s
Syndicate and Aggregate Accounts) Regulations 2008, and in compliance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and
the Republic of Ireland” (‘FRS 102’) and Financial Reporting Standard 103 “Insurance Contracts” (‘FRS 103’) and the
Lloyd’s Syndicate Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1 issued
by Lloyd’s.
These annual accounts incorporate all transactions committed to by the 2024 year of account and prior years of account.
The Directors of the Managing Agent have prepared the annual accounts on the basis that the Syndicate will continue to
write business. The ability of the Syndicate to meet its obligations as they fall due is underpinned by the support provided
by Lloyd’s solvency process and its chain of security for any members who are unable to meet their underwriting
liabilities. Members’ Funds at Lloyd’s are further explained in note 2.
All amounts have been rounded to the nearest thousand, unless otherwise indicated. Comparative balances previously
rounded to the nearest million, have been re-presented in thousands without recalibrating the amounts to the nearest
thousand. In certain movement disclosures, this has resulted in a gap between comparative closing balances and current
year opening balances, which are deemed not material. Certain comparative balances in the primary statements and
disclosure notes have been restated based on the disclosure requirements from Lloyd’s. These restatements have not
resulted in any impact in opening member’s balance. Details of the restatements are set out in note 1(m).
(b) Basis of accounting for insurance
The result is determined on an annual basis whereby the incurred cost of claims, commission and related expenses are
charged against the earned portion of premiums, net of reinsurance, as described below.
(i) Premiums written
Premium comprises amounts charged to policyholders, excluding taxes collected on behalf of third parties. The
earned portion of premium received and receivable, including unclosed business, is recognised as revenue.
Premium on unclosed business is brought to account based upon the pattern of booking of renewals and new
business. Unclosed business is insurance written close to the year end for which the date of attachment of risk is
prior to the year end, and where an estimate is made due to insufficient information being available.
(ii) Unearned premiums
Unearned premiums represent the proportion of premiums written in the year that relates to the unexpired terms
of policies in force at the balance sheet date, calculated on the basis of established earnings patterns using either
the daily pro-rata method or the 24ths method, adjusted where appropriate to reflect different risk patterns, and
may include straight line earnings patterns where appropriate.
(iii) Outwards reinsurance premiums written
Outwards reinsurance premiums written relate to business ceded during the year, including an estimate of any
adjustment premiums payable, together with any differences between estimates in the prior years and that
actually ceded. Outwards premiums are recognised as earned over the period of the policy having regard to the
incidence of risk. Policies that respond with reference to the attachment point are earned in line with the related
inwards written premiums.
(iv) Claims incurred
Claims incurred comprise claims and related expenses paid in the year and changes in provisions for outstanding
claims, including provisions for claims incurred but not reported and related expenses, together with any other
adjustments to claims from previous years. Where applicable, deductions are made for salvage and other
recoveries.
(v) Claims outstanding
Provisions are made for the estimated cost of claims incurred but not settled at the balance sheet date, including
the cost of claims incurred but not yet reported to the Syndicate. The estimated cost of claims includes expenses
to be incurred in settling claims and allows for the expected value of salvage and other recoveries.
QBE SYNDICATE 2999
ANNUAL REPORT 26 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(b) Basis of accounting for insurance (continued)
(v) Claims outstanding (continued)
Outstanding claims are estimated by reviewing individual claims and making allowance for claims incurred but
not reported using past experience and trends adjusted for foreseeable events.
Case estimates are set by experienced claims technicians, applying their skill and specialist knowledge to the
circumstances of individual claims. The ultimate cost of outstanding claims, including claims incurred but not
reported, is estimated by the Syndicate actuaries who apply recognised actuarial techniques considered
appropriate for each portfolio, such as the Chain Ladder and Bornhuetter-Ferguson methods. These methods take
into account, amongst other things, statistical analysis of the development of the value and frequency of past
claims and the results of analyses undertaken at the point of underwriting. Techniques considered appropriate
for specific portfolios include contract by contract analysis, segmentation by subclass, and stochastic analysis.
Classes of business are analysed at a level of detail appropriate to their materiality. Allowance is made for
changes or uncertainties which may create distortions in the underlying statistics, or which might cause the cost
of unsettled claims to increase or decrease when compared with the cost of previously settled claims, for example,
one-off occurrences and changes in mix of business, policy conditions or the legal environment.
The Syndicate actuaries produce an estimate of reserves, which is reviewed by an independent actuarial firm,
and is then assessed by QBE EO management with input from the Syndicate underwriting and claims experts.
As provisions for claims outstanding are based on information, which is currently available, the eventual outcome
may vary from the original assessment depending on the nature of information received or developments in
future periods. For certain classes of business, including liability and other long-tail classes written by the
Syndicate, claims may not be apparent for many years after the event giving rise to the claim has happened.
These classes will typically display greater variation between initial estimates and final outcomes.
Differences between the estimated cost and subsequent re-estimation or settlement of claims are reflected in the
technical account for the year in which these claims are re-estimated or settled.
Provisions are calculated gross of any reinsurance recoveries. In accordance with accounting regulations,
discounting of outstanding claims is permitted in certain circumstances. For the Syndicate, this includes
discounting of outstanding reserves in respect of liabilities relating to periodical payment orders.
(vi) Reinsurance recoveries
An estimate is made of the amounts that will be recoverable from reinsurers based upon the gross claims
provisions and having due regard to collectability. Reinsurance recoveries are estimated by reviewing individual
claims including allowance for claims incurred but not reported and assessing the reinsurance recovery which is
expected based on the outwards reinsurance protections. Reinsurance recoveries estimates are set by experienced
outwards reinsurance technicians, applying their skill and specialist knowledge to the circumstances of individual
claims and the outwards reinsurance protections.
(vii) Unexpired risks provision
Provisions are made for any deficiencies arising when unearned premiums, net of associated acquisition costs,
are insufficient to meet expected claims and expenses after taking into account future investment return on the
investments supporting the unearned premiums provision and unexpired risks provision. The expected claims
are calculated having regard to events that have occurred prior to the balance sheet date.
All business classes are managed together, therefore unexpired risk surpluses and deficits at the class of business
level can be offset.
(viii) Acquisition costs
Acquisition costs (which include commission costs) are the costs associated with obtaining and recording
insurance contracts. Acquisition costs are capitalised when they relate to the acquisition of new business or
renewal of existing business and are referred to as deferred acquisition costs. These costs are amortised on the
same basis as the earning pattern of the premium, over the period of the insurance contract to which they relate.
At the reporting date, deferred acquisition costs represent the capitalised costs that relate to the unearned
premium. Acquisition costs are deferred in recognition of their future benefit and are measured at cost.
QBE SYNDICATE 2999
ANNUAL REPORT 27 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(c) Foreign currency
The functional currency of the Syndicate is UK pound sterling . The Syndicate presents its accounts in thousands of pounds
Transactions denominated in foreign currencies are translated into sterling at the rates of exchange prevailing at the time
of the transactions. Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of
exchange prevailing at the balance sheet date with the exception of non-monetary assets and liabilities, which are
maintained at historic rates. Open foreign exchange derivatives are marked to market at year end date. All assets and
liabilities arising from insurance contracts are treated as monetary items.
Exchange gains or losses are recognised in the profit and loss non-technical account.
(d) Investments
(i) Other financial investments
Other financial investments comprise shares and other variable yield securities, units in unit trusts, debt
securities, other fixed income securities, loans and deposits with credit institutions. These are managed on a fair
value basis in accordance with the Syndicate’s investment strategy. The Syndicate has elected to measure other
financial investments at fair value through the profit and loss non-technical account. All fair value gains and
losses on other financial investments are reallocated to the technical account as all investments held by the
Syndicate support its insurance operations.
Listed investments are stated at fair value using quoted prices in active markets for the same instruments where
available. In the absence of an active market, current or recent prices for similar instruments may be used to
estimate fair value, or other valuation techniques for which all significant inputs are based on observable market
data.
Units in unit trusts, including unit trusts which invest in property, are stated at fair value using current unit prices
as advised by the responsible entity, trustee or equivalent of the investment management scheme.
Other unlisted investments are carried at the Directors’ estimate of the current fair value, where prices are sourced
from the investment manager who may use a combination of observable and comparable market prices where
available and carried book value where none exist.
Loans to the Central Fund at Lloyd’s are included within Shares and other variable yield securities and units in
unit trusts. The loans are valued based on amounts collected by Lloyd’s on a percentage of the Syndicate gross
written premium forecast. There is no contractual obligation for Lloyd’s to settle the loans and there is no market
in which these loans are tradeable. The loans are valued at fair value.
Other financial investments are derecognised when the right to receive future cash flows from the assets has
expired, or when the Syndicate has transferred substantially all the risks and rewards of ownership.
(ii) Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and
are subsequently stated at fair value through the profit and loss non-technical account, using valuation techniques
for which all significant inputs are based on observable market data.
(e) Cash at bank and in hand
Cash comprises cash at bank and deposits which are used by the Syndicate in the management of its short-term
commitments and operational cash requirements.
(f) Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and other short-term, highly liquid investments that are readily
convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.
(g) Overseas deposits
Overseas deposits, classified as “Other” in Other Assets, comprise funds held in overseas deposits which are subject to
Lloyd’s trust fund arrangements. These are managed on a fair value basis in accordance with Lloyd’s investment strategy.
The Syndicate has elected to measure overseas deposits at fair value through the profit and loss non-technical account.
QBE SYNDICATE 2999
ANNUAL REPORT 28 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(f) Overseas deposits (continued)
Overseas deposits are stated at fair value using quoted prices in active markets for the same instruments where available.
In the absence of an active market, current or recent prices for similar instruments may be used to estimate fair value, or
other valuation techniques for which all significant inputs are based on observable market data.
Overseas deposits are derecognised when the right to receive future cash flows from the assets has expired, or when the
Syndicate has transferred substantially all the risks and rewards of ownership.
(g) Debtors
Debtors comprise amounts receivable in the normal course of business. Debtors are initially recognised at transaction
price, and where applicable are subsequently measured at amortised cost using the effective interest rate method. The
recoverability of these assets is assessed at each balance date and appropriate provision made to ensure that the balances
properly reflect the amounts that will ultimately be received, taking into account counterparty credit risk and the
contractual terms of the contract.
(h) Creditors
Creditors comprise amounts due in the normal course of business. Creditors are initially recognised at transaction price,
and where applicable are subsequently measured at amortised cost using the effective interest rate method. Amounts owed
to group undertakings are unsecured, interest free and payable on demand, except where specific loan agreements exist
prescribing the term and other features of the loan.
(i) Investment income
Investment income is taken into account in the profit and loss non-technical account on an accruals basis, except for
dividends which are taken into account when quoted ex-dividend. Investment income includes realised gains or losses on
the disposal of financial assets.
A transfer is made from the non-technical account to the technical account for the entire return on investments which
support the insurance technical provisions.
(j) Taxation
Under Schedule 19 of the Finance Act 1993, Managing Agents are not required to deduct basic rate income tax from
trading income. In addition, all UK basic rate income tax deducted from Syndicate investment income is recoverable by
Managing Agents and consequently the distribution made to the member is gross of tax. Capital appreciation falls within
trading income and is also distributed gross of tax.
No provision has been made for any United States Federal Income tax payable on underwriting results or investment
earnings. Any payments on account made by the Syndicate on behalf of the member during the year are included in the
balance sheet under the heading “Members’ balance”.
No provision has been made for any overseas tax payable by the member on underwriting results.
(k) Administrative expenses
Administrative expenses are taken into account on an accrual basis. These recharged expenses include the costs of staff,
who are employed by QBE Management Services (UK) Limited. QBE Management Services (UK) Limited operates both
defined benefit and defined contribution pension schemes, the expense of which is included in the recharges. The
recharged expenses also include the costs of various service and claims handling companies.
(l) Profit commission
Profit commission is recognised on the basis of the annual accounting result for each year of account and charged to the
Syndicate as incurred. No profit commission has been charged by the Managing Agent.
(m) Restatement of comparative information
During 2024, Lloyd’s introduced changes to the Syndicate accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative information has been restated to ensure consistency with the
current year presentation and compliance with the Lloyd’s Syndicate Accounts instructions. The changes comprise:
QBE SYNDICATE 2999
ANNUAL REPORT 29 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(m) Restatement of comparative information (continued)
Reclassification changes
Certain accounts line items have been reclassified whilst the underlying amounts remain unchanged. The principal change
is the reclassification of overseas deposits, previously shown as a separate balance sheet item, to form part of other assets.
The comparative balances in note 15 have also been represented to align with the current period presentation.
Aggregation changes
To align with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated
or disaggregated within the accounts and related notes. This includes the presentation of realised and unrealised gains and
losses on investments, which are now shown on a disaggregated basis in the Non-technical account of the Statement of
profit or loss and other comprehensive income.
Classification correction
A correction to the classification of money market funds as investments (previously included in cash at bank and in hand)
in line with the requirements of FRS 102. The correction resulted in a decrease of £53,050k in cash at bank and in hand
and an increase in investments.
The restatements have been applied retrospectively and had no impact on previously reported profit, total comprehensive
income, total assets, total liabilities or total capital and reserves.
(n) Critical accounting estimates and judgements
The Syndicate makes estimates and judgments in respect of the reported amounts of certain assets, liabilities and income.
These estimates and judgments are determined by qualified and experienced employees with reference to historical data
and reasoned expectations of future events and are continually updated. Actual results may differ from these estimates.
Estimates which are sensitive to changes in future economic conditions could be impacted by significant changes in the
economic and regulatory environment, such as geopolitical unrest, supply chain disruptions, climate change and inflation.
The key uncertainty is the risk that inflation remains higher than expected over the coming years, and elevated for longer
than expected, or the impact on claims inflation is significantly higher which would lead to increased claims reserves.
Our estimates include an explicit allowance for the impact of increased levels of inflation. Management continues to
monitor the geopolitical environment in which the Syndicate operates, the war in Ukraine (including legal uncertainty
relating to Aviation), the unrest in the Middle East and any developments that may impact its assessment of potential
exposures.
The following are the critical estimates that the Syndicate has made in the process of applying the accounting policies
and that have the most significant effect on the amounts recognised in the accounts.
Outstanding claims provisions
The Syndicate’s net outstanding claims provision comprises:
• The gross estimate of expected future claims payments; and
• Amounts recoverable from reinsurers based on the gross estimate.
Gross estimate
The provision for expected future payments includes claims reported but not yet paid; claims incurred but not reported
(
‘IBNR’); claims incurred but not enough reported (‘IBNER’); and estimated claims handling costs, being the direct and
indirect expenses incurred in the settlement of claims.
The estimation of IBNR is generally subject to a greater degree of uncertainty than the estimation of the cost of settling
claims already notified to the Syndicate, where more information about the claims is generally available. Liability and
other long tail classes of business, where claims settlement may not happen for many years after the event giving rise to
the claim, typically display greater variability between initial estimates and final settlement due to delays in reporting
claims and uncertainty in respect of court awards and future claims inflation. Claims in respect of property and other short
tail classes are typically reported and settled sooner after the claim event, giving rise to more certainty. The estimation
techniques and assumptions used in determining the gross estimate are described below.
The Syndicate’s process for establishing the gross estimate involves extensive consultation with internal and external
actuaries, claim managers, underwriters and other senior management. This process includes quarterly in-house claims
review meetings attended by senior divisional and management and detailed review by external actuaries at least annually.
The determination of the amounts that the Syndicate will ultimately pay for claims arising under insurance and reinsurance
contracts involves a number of critical assumptions. Some of the uncertainties impacting these assumptions are as follows:
QBE SYNDICATE 2999
ANNUAL REPORT 30 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
1. Accounting policies (continued)
(n) Critical accounting estimates and judgements (continued)
Gross estimate (continued)
• Changes in patterns of claims incidence, reporting and payment;
• Volatility in the estimation of future costs for long tail insurance classes due to the longer period of time that
elapses before a definitive determination of the ultimate claims cost can be made;
• Incidence of catastrophic events close to the balance sheet date;
• Changes in the legal environment, including the interpretation of liability laws and the quantum of damages
including but not limited to Ogden rate changes; and
• Social and economic trends, for example price and wage inflation and interest rates.
Gross estimates for each class of business are determined by reference to a variety of estimation techniques, generally
based on a statistical analysis of historical experience which assumes an underlying pattern of claims development and
payment. The final selected estimates are based on a judgmental consideration of the results of each method and
qualitative information, for example, the class of business, the maturity of the portfolio and the expected term to settlement
of the class. Projections are based on both historical experience and external benchmarks where relevant.
Estimates are calculated gross of any reinsurance recoveries. A separate estimate is made of the amounts recoverable
from reinsurers based on the gross estimate.
Assets arising from contracts with reinsurers
Assets arising from reinsurance recoveries under contracts with the Syndicate’s reinsurers are determined using the same
methods described above. The recoverability of these assets is assessed at each balance date and appropriate provision
made to ensure that the balances properly reflect the amounts that will ultimately be received, taking into account
counterparty credit risk and the contractual terms of the reinsurance contract.
The Syndicate benefits from an aggregate reinsurance programme that provides cover for certain large and catastrophe
events. A key input into the calculation of recoveries on this contract is an estimate of the ultimate claims for the
contributing large and catastrophe events by accident year. Actuarial reserving primarily produces ultimate claims by
underwriting year, with some judgement required to assign IBNR to an accident year, particularly on more recent accident
years which are still immature in their development for certain large losses on long tail classes of business.
Premiums estimates
Premiums written and earned include signed premiums as well as unclosed premiums, being business which has an
attachment date prior to the end of the reporting period but which has not yet been processed into the systems utilised by
the Syndicate. This unclosed premium is initially based on the estimated premium income (‘EPI’) of each contract, before
being written and earned based on established patterns which reflect expected timings and risk exposures. If premium
cannot be reliably estimated at that date, then the premium written is recognised as soon as it can be reliably determined.
The underwriters adjust their EPI estimates as the year of account matures. At the end of the calendar year, premiums are
adjusted to match the actual signed premium for the closing year of account and all closed years of account, as appropriate.
Estimation techniques are necessary to quantify the EPI on all syndicate business written and are commonly used within
the Lloyd’s insurance market. The process of determining the EPI is based on a number of factors, which can include:
• Historical trends of business written versus expectation;
• Current and expected market conditions for the line of business; and
• Cover holder business plan documents provided prior to binding.
Due to the nature of the Lloyd’s business and the settlement patterns of the underlying business it is also not uncommon
for some contracts to take a number of years to finalise and settle, and as such remain as a receivable on the balance sheet.
There are no critical judgments made in the preparation of these annual accounts.
2. Capital management
Capital Framework at Lloyd’s
The Society of Lloyd’s (‘Lloyd’s’) is a regulated undertaking and subject to supervision by the PRA under the Financial
Services and Markets Act 2000, and in accordance with the Solvency II Framework.
QBE SYNDICATE 2999
ANNUAL REPORT 31 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
2. Capital management (continued)
Capital Framework at Lloyd’s (continued)
Within this supervisory framework, Lloyd’s applies capital requirements at member level and centrally to ensure that
Lloyd’s would comply with the Solvency II requirements, and beyond that to meet its own financial strength, licence and
ratings objectives.
Although, as described below, Lloyd’s capital setting processes use a capital requirement set at syndicate level as a starting
point, the requirement to meet Solvency II and Lloyd’s capital requirements apply at an overall and member level only
respectively, not at syndicate level. Accordingly, the capital requirement in respect of Syndicate 2999 is not disclosed in
these accounts.
Lloyd’s capital setting process
In order to meet Lloyd’s requirements, each syndicate is required to calculate its Solvency Capital Requirements (‘SCR’)
for the prospective underwriting year. This amount must be sufficient to cover a 1 in 200-year loss reflecting uncertainty
in the ultimate run-off of underwriting liabilities (SCR ‘to ultimate’). The Syndicate must also calculate its SCR at the
same confidence level but reflecting uncertainty over a one-year time horizon (one year SCR) for Lloyd’s to use in
meeting Solvency II requirements. The SCRs of each syndicate are subject to review by Lloyd’s and approval by the
Lloyd’s Capital and Planning Group.
A syndicate comprises one or more underwriting members of Lloyd’s. Each member is liable for its own share of
underwriting liabilities on the syndicates on which it is participating but not other member’s shares. Accordingly, the
capital requirements that Lloyd’s set for each member operate on a similar basis. Each member’s SCR shall thus be
determined by the sum of the member’s share of the syndicate’s SCR ‘to ultimate’.
Where a member participates on more than one syndicate, a credit for diversification is provided to reflect the spread of
risk, but consistent with determining an SCR which reflects the capital requirement to cover a 1 in 200 loss ‘to ultimate’
for that member. Over and above this, Lloyd’s applies a capital uplift to the member’s capital requirement, known as the
Economic Capital Assessment (‘ECA’). The purpose of this uplift, which is a Lloyd’s and not a Solvency II requirement,
is to meet Lloyd’s financial strength, licence and rating objectives. The capital uplift applied for 2024 was maintained at
35% of the member’s SCR ‘to ultimate’.
Provision of capital by members
Each member may provide capital to meet its ECA either by assets held in trust by Lloyd’s specifically for that member
(‘Funds at Lloyd’s’ or ‘FAL’), assets held and managed within a syndicate (funds in syndicate), or as the member’s share
of the members’ balances on each syndicate on which it participates.
Accordingly, all of the assets less liabilities of the syndicate, as represented in the members’ balances reported on the
Balance Sheet on pages 22 and 23, represent resources
available to meet members’ and Lloyd’s capital requirements.
Funds at Lloyd’s
FAL are intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating
members’ underwriting liabilities. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s
based on PRA requirements and resource criteria. FAL has regard to a number of factors including the nature and amount
of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has been
underwritten. Since FAL is not under the management of the Managing Agent, no amount has been shown in these
accounts by way of such capital resources. However, the Managing Agent is able to make a call on the member’s FAL to
meet liquidity requirements or to settle losses through a formal process controlled by Lloyd’s.
QBE SYNDICATE 2999
ANNUAL REPORT 32 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
3. Segmental information
The below is an additional disclosure for Lloyd’s reporting purposes and is included to facilitate the classification of the
above segments into the Lloyd’s aggregate classes of business:
20
24
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Total
£’000
£’000
£’000
£’000
£’000
£’000
Direct Insurance
Accident and health
11,139
10,599
(6,393)
(6,316)
(1,077)
(3,187)
Motor (third party liability)
17,487
18,947
(10,670)
(6,040)
(2,550)
(313)
Marine, aviation and transport
277,154
279,113
(165,207)
(56,189)
(18,185)
39,532
Fire and other damage to property
655,139
602,302
(234,800)
(164,455)
(98,646)
104,401
Third party liability
600,572
582,869
(421,589)
(167,188)
16,229
10,321
Credit and suretyship
49,353
42,524
(8,539)
(12,652)
(9,495)
11,838
Miscellaneous
-
-
6
4,126
(2)
4,130
Total direct insurance
1,610,844
1,536,354
(847,192)
(408,714)
(113,726)
166,722
Reinsurance acceptances
925,365
827,718
(509,032)
(188,891)
(56,345)
73,450
Total
2,536,209
2,364,072
(1,356,224)
(597,605)
(170,071)
240,172
2023 Restated
Gross
premium
written
Gross
premium
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Total
£’000
£’000
£’000
£’000
£’000
£’000
Direct insurance
Accident and health
9,500
8,500
(5,000)
(3,700)
1,500
1,300
Motor (third party liability)
24,300
23,300
(7,000)
(5,000)
(100)
11,200
Marine, aviation and transport
281,800
245,100
(97,500)
(46,500)
(42,800)
58,300
Fire and other damage to property
561,400
479,400
(207,900)
(140,600)
(51,000)
79,900
Third party liability
485,200
499,200
(372,600)
(159,800)
(300)
(33,500)
Credit and suretyship
39,100
37,700
6,800
(9,400)
(25,200)
9,900
Miscellaneous
-
-
-
(3,100)
(300)
(3,400)
Total direct insurance
1,401,300
1,293,200
(683,200)
(368,100)
(118,200)
123,700
Reinsurance acceptances
823,600
705,100
(278,100)
(156,100)
(90,000)
180,900
Total
2,224,900
1,998,300
(961,300)
(524,200)
(208,200)
304,600
The comparative figures have been restated to reclassify the Reinsurance commission revenue from Gross operating
expenses to the Reinsurance balance. The total restatement resulted in a decrease of Gross operating expenses of £32,600k
and an increase in the reinsurance balance.
A loss of £170,071k was recognised in profit or loss during the year on buying reinsurance (2023: Loss of £208,200k).
Operating expenses includes standard personal expenses.
QBE SYNDICATE 2999
ANNUAL REPORT 33 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
3. Segmental information (continued)
The geographical analysis of gross premiums written by destination of risk is as follows:
2024
2023
£’000
£’000
United Kingdom
188,499
167,000
European Union Member States
31,801
32,800
United States
482,492
380,000
Rest of the world *
1,833,417
1,645,100
2,536,209
2,224,900
* Rest of world include Worldwide cover, Non-EU Europe, Other America, Asia, Africa, Oceania and Middle East.
All premiums were concluded in the UK.
4. Net operating expenses
2024
2023
£’000
£’000
Acquisition costs
570,818
498,700
Changes in deferred acquisition costs
(52,460)
(40,300)
Administrative expenses
79,247
65,800
Reinsurance commission revenue
(53,028)
(32,600)
544,577
491,600
Total commissions for direct insurance business for the year amounted to:
2024
2023
£’000
£’000
Total commissions for direct insurance business
271,984
244,100
Administrative expenses include:
2024
2023
£’000
£’000
Auditors’ remuneration:
Fees payable to the Syndicate’s auditors for the auditing of these accounts
805
600
Fees payable to the Syndicate’s auditors for other services pursuant to regulatory
requirements
107
300
5. Employees
The Syndicate and managing agent did not directly incur staff costs during the year (2023: £nil). Staff are jointly employed
by QBE Management Services (UK) Limited and QBE Europe SA/NV, as well as QBE Management (Ireland) Limited,
to provide services to the Company during the year and up to the date of signing. QBE Management Services (UK)
Limited recharged the Syndicate for the services, provided by these staff, via QBE Partner Services (Europe) LLP up to
August 2023 and then directly for the remainder of the prior and current year. QBE Management Services (UK) Limited,
QBE Europe SA/NV and QBE Partner Services (Europe) LLP (up to August 2023) are fellow group undertakings.
QBE SYNDICATE 2999
ANNUAL REPORT 34 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
6. Directors’ emoluments and Key management compensation
The Directors of QUL and the Active Underwriters received the following aggregate remuneration charged to the
Syndicate and included within net operating expenses:
2024
2023
£’000
£’000
Directors of the Managing Agent
2,815
2,600
Active Underwriters
1,253
1,300
Further information in respect of the Directors of QUL is provided in that Company’s annual report.
7. Investment return
Restated *
2024
2023
£’000
£’000
Interest and similar income
From financial assets designated at fair value through profit or loss
Interest and similar income
64,592
48,000
Dividend income
3,880
2,000
From financial assets at amortised cost
Interest on cash at bank
3,489
2,600
Other income from investments
From financial assets designated at fair value through profit or loss
Gains on the realisation of investments
35,732
-
Losses on the realisation of investments
-
(9,600)
Unrealised gains on investments
-
59,600
Unrealised losses on investments
(3,599)
-
Investment management expenses
(2,897)
(1,700)
Total investment return
101,197
100,900
Transferred to the technical account from the non-technical account
(101,197)
(100,900)
* The comparative figures for the investment return have been restated to align with Lloyd's reporting requirements
whilst maintaining FRS 102 compliance. Interest and similar income (previously included in Income from
investments) have been presented on a disaggregated basis, whilst net losses on the realisation of investments are
presented on an aggregated basis (previously separately disclosed as gains on realisation of investments and losses on
realisation of investments), as set out in note 1(m).
The investment return was wholly reallocated to the technical account as all investments held support the underwriting
activities of the Syndicate.
8. Financial investments
Restated *
2024
2023
Cost
Fair value
Cost
Fair value
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in
unit trusts
195,634
214,908
163,000
172,800
Debt securities and other fixed income securities
2,489,337
2,434,854
1,970,300
1,920,200
Derivative assets
-
17,485
-
1,300
2,684,971
2,667,247
2,133,300
2,094,300
QBE SYNDICATE 2999
ANNUAL REPORT 35 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
8. Financial investments (continued)
The amount ascribable to listed investments is £2,635,815k (2023: £2,075,896k).
The table below presents an analysis of financial investments by their measurement classification:
Restated *
2024
2023
£’000
£’000
Financial assets measured at fair value through profit and loss
2,667,247
2,094,300
Total financial investments
2,667,247
2,094,300
* The comparative figures have been restated to account for the reclassification of money market funds as investments,
as set out in note 1(m).
9. Derivative financial instrument - assets
The below table analyses the derivative assets and liabilities by type:
2024
2023
Notional
amount
Fair value
Notional
amount
Fair value
£’000
£’000
£’000
£’000
Foreign exchange forward contracts
561,026
17,485
532,000
1,300
Total
561,026
17,485
532,000
1,300
Foreign currency derivatives
The Syndicate uses forward foreign exchange derivatives in order to hedge its exposure to foreign currencies. These are
valued using the underlying foreign exchange rates at the year end. Contractual amounts for foreign currency exchange
derivatives outstanding at the balance sheet date include foreign exchange contracts to buy the net contractual equivalent
of £561,026k (2023: buy £532,000k).
The forward foreign exchange derivatives outstanding at year end all expire by 10 October 2025 (2023: 2 October 2024).
During the year a gain of £38,967k (2023: gain of £7,800k) relating to such contracts was recognised in the profit and
loss non-technical account.
10. Valuation hierarchy
The table below shows the financial instruments carried at fair value by valuation method.
2024
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in
unit trusts
97,593
57,432
59,883
214,908
Debt securities and other fixed income securities
514,186
1,920,668
-
2,434,854
Other assets – Overseas deposits
154,980
145,341
-
300,321
Derivative assets
-
17,485
-
17,485
766,759
2,140,926
59,883
2,967,568
QBE SYNDICATE 2999
ANNUAL REPORT 36 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
10. Valuation hierarchy (continued)
The table below shows the financial instruments carried at fair value by valuation method.
2023 Restated
Level 1
Level 2
Level 3
Total
£’000
£’000
£’000
£’000
Shares and other variable yield securities and units in
unit trusts
60,300
53,200
59,300
172,800
Debt securities and other fixed income securities
221,500
1,698,700
-
1,920,200
Other assets – Overseas deposits
183,400
128,200
-
311,600
Derivative assets
-
1,300
-
1,300
465,200
1,881,400
59,300
2,405,900
The comparative figures have been restated to account for the reclassification of money market funds as investments, as
set out in note 1(m).
Level 1 Valuation is based on quoted prices in active markets for the same instruments.
Level 2 Valuation is based on quoted market prices in active markets for similar assets or liabilities or other valuation
techniques for which all significant inputs are based on observable market data, for example, consensus
pricing using broker quotes and valuation models with observable input. For valuation of the syndicate
holdings in collective investment schemes, including those which invest into unlisted property, fair value is
determined by using the current unit price as advised by the responsible entity, trustee or equivalent of the
Investment management scheme.
Level 3 Valuation techniques are applied in situations where any one or more significant valuation input is not based
on observable market data. This includes infrastructure assets, unlisted property and loans to the Lloyd's
central fund. Infrastructure asset prices are sourced from the investment manager who may use a combination
of observable and comparable market prices where available, and other valuation techniques. For unlisted
property, fair value is determined by using the current unit price as advised by the responsible entity, trustee
or equivalent of the investment management scheme. Loan amounts to the Lloyd's Central Fund are valued
at fair value.
2024
2023
Movements in level 3 investments
£’000
£’000
At 1 January
59,324
61,300
Purchases
1,329
700
Unrealised gains
4,062
500
Disposals
(4,832)
(3,200)
At 31 December
59,883
59,300
The Syndicate’s approach to measuring the fair value of investments is described below:
(i) Shares and other variable yield securities and units in unit trusts
These assets mainly comprise listed equities traded in active markets valued by reference to quoted prices.
(ii) Debt securities and other fixed income securities
These assets are valued based no quoted prices sourced from external data providers. The fair value categorisation of
these assets is based on the observability of the inputs.
(iii) Derivative assets
For derivative assets traded in an active market, the fair value is determined by reference to quoted market prices.
(iv) Other assets – overseas deposits
Overseas deposits managed as part of the investment portfolio is categorised as Level 1 in the fair value hierarchy. Term
are valued at par.
QBE SYNDICATE 2999
ANNUAL REPORT 37 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk
The activities of the Syndicate expose it to financial risks such as market risk (including currency risk, interest rate risk
and equity price risk), credit risk and liquidity risk. The Syndicate’s risk management framework recognises the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Syndicate.
The key objectives of the Syndicate’s asset and liability management strategy are to ensure sufficient liquidity is
maintained at all times to meet the Syndicate’s obligations, including its settlement of insurance liabilities and, within
these parameters, to optimise investment returns for the Syndicate.
(i) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market factors. Market risk comprises three types of risk: currency risk (due to fluctuations in
foreign exchange rates), interest rate risk (due to fluctuations in market interest rates) and price risk (due to
fluctuations in market prices).
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk. The nature of the Syndicate exposures to market risk and its
objectives, policies and processes for managing market risk have not changed significantly from the prior
year.
a) Management of market risks
For each of the major components of market risk the Syndicate has policies and procedures in place which
detail how each risk should be managed and monitored. The management of each of these major components
of major risk and the exposure of the Syndicate at the reporting date to each major risk are addressed below.
b) Sensitivity analyses
The sensitivity analyses in the sections below are performed for reasonably possible movements in indices
on financial instruments with all other variables held constant, showing the impact on the result before tax
due to changes in fair value of financial assets and liabilities (whose fair values are recorded in the profit and
loss account) and members’ balances.
The sensitivity analyses demonstrate the effect of a change in a key variable while other assumptions remain
unchanged. However, the occurrence of a change in a single market factor may lead to changes in other
market factors as a result of correlations.
The sensitivity analyses do not take into consideration that the Syndicate’s financial investments are actively
managed. Additionally, the sensitivity analyses are based on the Syndicate’s financial position at the reporting
date and may vary at the time that any actual market movement occurs. As investment markets move past
pre-determined trigger points, action would be taken which would alter the Syndicate’s position.
c) Currency risk
The Syndicate writes business primarily in Sterling
(‘GBP’), US dollar (‘USD’), Euro, Canadian dollar
(‘CAD’), Australian dollar (‘AUD’) and Japanese Yen (‘JPY’) and is therefore exposed to foreign currency
risk in respect of its foreign currency exposures arising from fluctuations in these exchange rates. The
Syndicate manages its exposure to foreign currencies based on the balance sheet by currency which also
includes insurance assets and liabilities. Forward foreign exchange derivatives are used to protect the
currency positions.
The risk management process covering forward foreign exchange derivatives involves close senior
management scrutiny, including regular board and other management reporting. All forward foreign
exchange derivatives are subject to delegated authority levels provided to management, and levels of
exposure are reviewed on an ongoing basis.
QBE SYNDICATE 2999
ANNUAL REPORT 38 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
c) Currency risk (continued)
The table below summarises the carrying value of the Syndicate’s assets and liabilities, at the reporting date:
The comparative figures have been restated to account for the reclassification of money market funds as investments, as
set out in note 1(m).
2024
GBP
USD
Euro
CAD
AUD
JPY
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
535,267
994,572
186,159
904,766
50,132
2
-
2,670,898
Reinsurer’s share of
technical provisions
146,419
751,557
52,230
82,098
110,616
5,321
-
1,148,241
Debtors
30,227
1,386,642
(22,075)
(56,490)
(28,178)
(414)
-
1,309,712
Other assets
58,726
18,714
2,544
106,467
135,529
596
-
322,576
Prepayments and accrued
income
82,163
194,028
11,895
89,748
5,680
1,315
-
384,829
Total assets
852,802
3,345,513
230,753
1,126,589
273,779
6,820
-
5,836,256
Technical provisions
(785,187)
(3,078,021)
(227,868)
(575,341)
(279,088)
(18,699)
-
(4,964,204)
Creditors
(7,367)
(466,695)
(19,091)
3,552
(12,735)
415
-
(501,921)
Accruals and deferred
income
(672)
(10,116)
(1)
(47)
(39)
(1)
-
(10,876)
Total liabilities
(793,226)
(3,554,832)
(246,960)
(571,836)
(291,862)
(18,285)
-
(5,477,001)
Total capital and reserves
59,576
(209,319)
(16,207)
554,753
(18,083)
(11,465)
-
359,255
Restated
2023
GBP
USD
Euro
CAD
AUD
JPY
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Investments
287,300
994,800
4,200
812,100
400
-
-
2,098,800
Reinsurer’s share of
technical provisions
126,500
757,200
43,600
91,200
38,700
7,400
-
1,064,600
Debtors
121,000
1,025,000
(10,600)
(21,000)
(400)
(1,000)
42,000
1,155,000
Other assets
31,400
46,800
3,400
117,500
131,200
600
-
330,900
Prepayments and accrued
income
73,600
143,100
8,100
96,300
9,000
500
-
330,600
Total assets
639,800
2,966,900
48,700
1,096,100
178,900
7,500
42,000
4,979,900
Technical provisions
(710,100)
(2,520,000)
(182,100)
(605,100)
(278,700)
(23,500)
-
(4,319,500)
Creditors
13,500
(398,700)
(9,200)
15,200
(17,100)
(3,800)
(42,000)
(442,100)
Accruals and deferred
income
(7,700)
5,900
300
(8,800)
-
300
(200)
(10,200)
Total liabilities
(704,300)
(2,912,800)
(191,000)
(598,700)
(295,800)
(27,000)
(42,200)
(4,771,800)
Total capital and reserves
(64,500)
54,100
(142,300)
497,400
(116,900)
(19,500)
(200)
208,100
QBE SYNDICATE 2999
ANNUAL REPORT 39 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
c) Currency risk (continued)
The table below shows the impact on profit and loss and members’ balance as a result of movements in foreign
exchange rates. The basis for this sensitivity analysis is the residual foreign currency exposures at the balance
sheet date.
2024
2023
Movement in
Profit / (loss) and
members’
balance
Profit / (loss) and
members’
balance
variable %
£’000
£’000
USD
+10
(10,029)
(3,500)
-10
10,029
3,500
New Zealand dollar
+10
711
700
-10
(711)
(700)
Euro
+10
223
(400)
-10
(223)
400
JPY
+10
39
(100)
-10
(39)
100
CAD
+10
-10
(2,065)
2,065
(300)
300
AUD
+10
-10
(1,147)
1,147
(1,100)
1,100
d) Interest rate risk
Interest rate risk is the risk that the fair value and/or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.
The Syndicate is exposed to interest rate risk arising on interest bearing assets. Assets with floating interest rate
expose the Syndicate to cash flow interest rate risk. Fixed interest rate assets expose the Syndicate to fair value
interest rate risk. The Syndicate’s strategy is to invest in high quality, liquid fixed interest securities and cash
and to actively manage duration. The investment portfolios are actively managed to achieve a balance between
cash flow interest rate risk and fair value interest rate risk bearing in mind the need to meet the liquidity
requirements of the business.
The investment committee monitors the duration of these assets on a regular basis, targeting an investment
portfolio duration that, in the event of changes in interest rates, always maintains internal capital requirements.
The Syndicate’s sensitivity to movements in interest rates in relation to the value of fixed interest securities is
shown in the table below. A 50-basis point increase (or decrease) in yield curves has been selected based on
Lloyd’s requirement to be a reasonably possible change in the risk variable over the following year.
2024
2024
2023
2023
Impact on results
before tax
Impact on
members’
balances
Impact on results
before tax
Impact on
members’
balances
£’000
£’000
£’000
£’000
Interest rate risk
+50 basis points shift in yield
curves
(35,474)
(35,474)
(24,000)
(24,000)
-50 basis points shift in yield
curves
35,474
35,474
24,000
24,000
QBE SYNDICATE 2999
ANNUAL REPORT 40 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(i) Market risk (continued)
d) Interest rate risk (continued)
The Syndicate’s exposure to interest rate risk for each significant class of interest-bearing financial assets and
liabilities is as follows:
2024
Floating
interest
rate
Fixed interest rate maturing in
Total
1 year or
less
1 to 2
years
2 to 3
years
3 years
over
£m
£m
£m
£m
£m
£m
Interest bearing assets
434,722
935,294
304,569
172,238
910,607
2,757,430
2023
Floating
interest
rate
Fixed interest rate maturing in
Total
1 year or
less
1 to 2
years
2 to 3
years
3 years
over
£m
£m
£m
£m
£m
£m
Interest bearing assets
314,600
1,068,200
263,400
180,600
424,400
2,251,200
e) Equity price risk
Equity price risk is the risk that the fair value of an equity instrument will fluctuate because of changes in market
prices (other than those arising from interest rate or currency risk), whether those changes are caused by factors
specific to the individual equity instrument or its issuer, or factors affecting all similar equity instruments traded
on the market. The potential impact of movements in the market value of equities on the profit and loss account
and balance sheet is shown in the sensitivity analysis below.
The Syndicate holds a limited portfolio of equities which are subject to equity price risk. This exposure benefits
members through the enhanced longer-term returns on equities compared with debt securities.
Equity price risks are managed by setting and monitoring objectives and constraints on investments,
diversification plans and limits on investments. The management ensures that the Syndicate’s internal capital
requirements are met at all times, as well as those mandated by the Syndicate’s external regulators.
The potential impact of movements in the market value of equities on the profit and loss account and balance
sheet is shown in the sensitivity analysis below. A 5% increase (or decrease) in equity prices has been selected
based on Lloyd’s requirement as this is considered to be a reasonably possible change in the risk variable over
the following year.
The impact has been shown on the basis that equity funds are fully exposed to market price fluctuations. Equity
portfolios are from time to time hedged in order to manage this exposure. Exchange traded futures contracts used
from time to time to provide the hedges are not perfectly correlated to the composition of the underlying equity
fund. At 31 December 2024, the Syndicate held developed market equity investment in FTSE 100 Exchange
Traded Fund.
2024
2024
2023
2023
Movement in
Equity price risk
Movement in
Equity price
risk
variable %
£’000
variable %
£’000
FTSE 100
+5.0
4,829
+5.0
3,000
-5.0
(4,829)
-5.0
(3,000)
QBE SYNDICATE 2999
ANNUAL REPORT 41 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk
Credit risk is the risk that one party to a financial instrument will cause financial loss to the other party by failing
to discharge an obligation.
The Syndicate is exposed to credit risk in respect of the following:
x Debt securities and derivative financial instruments;
x Reinsurers’ share of claims outstanding;
x Amounts due from intermediaries;
x Amounts due from reinsurers in respect of settled claims;
x Cash and cash equivalents; and
x Other debtors and accrued interest.
The nature of the Syndicate’s exposures to credit risk and its objectives, policies and processes for managing
credit risk have not changed significantly from the prior year.
a) Management of credit risk
The Syndicate’s credit risk in respect of debt securities is managed by placing limits on its exposure to a single
counterparty, by reference to the credit rating of the counterparty. Financial assets are graded according to current
credit ratings issued by rating agencies such as Standard and Poor’s. The Syndicate has a policy of investing
mainly in government issued and government backed debts. The Syndicate does not currently invest new monies
in speculative grade assets (i.e. those rated below BBB). The Syndicate does not expect any investment
counterparties to fail to meet their obligations given their strong credit ratings. The Syndicate only uses
derivatives in highly liquid markets.
The Syndicate limits the amount of cash and cash equivalents that can be deposited with a single counterparty
and maintains an authorised list of acceptable cash counterparties.
The Syndicate’s exposure to intermediaries and reinsurance counterparties is monitored by the individual
business units as part of their credit control processes.
All intermediaries must meet minimum requirements established by the Syndicate. The credit ratings and
payment histories of intermediaries are monitored on a regular basis.
Credit risk exposures are calculated regularly and compared with authorised credit limits before further
transactions are undertaken with counterparties. The credit ratings and payment histories of intermediaries are
monitored on a regular basis.
b) Exposure to credit risk
The carrying amount of financial assets and reinsurance assets represents the maximum credit risk exposure. The
Syndicate holds letters of credit as security to mitigate credit risk exposure to reinsurers. At the balance sheet
date, the Syndicate held £5,990k (2023: £12,584k) in the form of letters of credit and £283,082k (2023:
£225,847k) as investment assets pledged.
The following table analyses the credit rating by investment grade of financial investments, debt securities and
derivative financial instruments, reinsurers’ share of claims outstanding, amounts due from reinsurers in respect
of settled claims, cash and cash equivalents, and other debtors and accrued interest.
QBE SYNDICATE 2999
ANNUAL REPORT 42 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk
b) Exposure to credit risk (continued)
2024
AAA
AA
A
BBB
Other
Not rated
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities and unit trusts
43,617
-
13,816
-
-
157,475
214,908
Debt securities and other fixed income
securities
388,659
994,335
703,727
249,425
97,212
1,496
2,434,854
Overseas deposits
152,847
30,310
32,462
25,553
18,221
40,928
300,321
Deposits with ceding undertakings
-
-
-
-
-
3,651
3,651
Reinsurers’ share of claims outstanding
546
452,603
511,141
71
-
40,752
1,005,113
Debtors arising out of direct insurance
operations
-
-
-
-
-
597,179
597,179
Debtors arising out of reinsurance
operations
-
-
-
-
-
703,848
703,848
Cash at bank and in hand
-
9,028
13,116
111
-
-
22,255
Derivative assets
-
-
-
-
-
17,485
17,485
Provision for unearned premium
-
-
-
-
-
143,128
143,128
Other debtors and prepayments
-
-
-
-
-
393,514
393,514
Total
585,669
1,486,276
1,274,262
275,160
115,433
2,099,456
5,836,256
2023
AAA
AA
A
BBB
Other
Not rated
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield
securities and unit trusts
-
-
46,300
-
-
126,500
172,800
Debt securities and other fixed income
securities
452,600
723,600
629,100
110,300
4,500
100
1,920,200
Overseas deposits
179,000
107,300
3,200
22,100
-
-
311,600
Deposits with ceding undertakings
-
-
-
-
-
4,500
4,500
Reinsurers’ share of claims outstanding
500
246,300
660,900
-
-
35,300
943,000
Debtors arising out of direct insurance
operations
-
-
-
-
-
590,500
590,500
Debtors arising out of reinsurance
operations
-
-
-
-
-
516,900
516,900
Cash at bank and in hand
-
5,600
13,600
100
-
-
19,300
Derivative assets
-
-
-
-
-
1,300
1,300
Provision for unearned premium
121,600
121,600
Other debtors and prepayments
-
-
-
-
-
378,200
378,200
Total
632,100
1,082,800
1,353,100
132,500
4,500
1,774,900
4,979,900
The reinsurers’ share of claims outstanding, and debtors is also exposed to credit risk, where 97.6% (2023: 95.7%) of the
balance is with reinsurers with an S&P rating of “A-” or greater.
84.6% (2023: 91.6%) of total fixed interest and cash investments are with counterparties having a Standard & Poor’s
rating of A or better.
QBE SYNDICATE 2999
ANNUAL REPORT 43 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk (continued)
c) Financial assets that are past due or impaired
2024
Neither past
due nor
impaired
Past due but
not impaired
Gross value
of impaired
assets
Impairment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and unit trusts
214,908
-
-
-
214,908
Debt securities and other fixed income
securities
2,434,854
-
-
-
2,434,854
Overseas deposits
300,321
-
-
-
300,321
Deposits with ceding undertakings
3,651
-
-
-
3,651
Reinsurers’ share of claims outstanding
1,005,113
-
-
-
1,005,113
Debtors arising out of direct insurance
operations
499,568
97,611
-
-
597,179
Debtors arising out of reinsurance
operations
531,865
171,983
-
-
703,848
Cash at bank and in hand
22,255
-
-
22,255
Derivative assets
17,485
-
-
-
17,485
Provision for unearned premium
143,128
-
-
-
143,128
Other debtors and prepayments
393,514
-
-
393,514
Total
5,566,662
269,594
-
-
5,836,256
2023
Neither past
due nor
impaired
Past due but
not impaired
Gross value
of impaired
assets
Impairment
allowance
Total
£’000
£’000
£’000
£’000
£’000
Shares and other variable yield securities
and unit trusts
172,800
-
-
-
172,800
Debt securities and other fixed income
securities
1,920,200
-
-
-
1,920,200
Overseas deposits
311,600
-
-
-
311,600
Deposits with ceding undertakings
4,500
-
-
-
4,500
Reinsurers’ share of claims outstanding
943,000
-
-
-
943,000
Debtors arising out of direct insurance
operations
546,800
43,700
-
-
590,500
Debtors arising out of reinsurance
operations
365,100
151,800
-
-
516,900
Cash at bank and in hand
19,300
-
-
-
19,300
Derivative assets
1,300
-
-
-
1,300
Provision for unearned premium
121,600
121,600
Other debtors and prepayments
378,200
-
-
-
378,200
Total
4,784,400
195,500
-
-
4,979,900
QBE SYNDICATE 2999
ANNUAL REPORT 44 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
(ii) Credit risk (continued)
c) Financial assets that are past due or impaired (continued)
Past due but not impaired by
2024
Up to 3
months
3 to 6
months
6 months to
1 year
Greater
than 1 year
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of direct insurance
operations
61,285
12,654
9,368
14,304
97,611
Debtors arising out of reinsurance operations
106,610
19,619
18,079
27,675
171,983
167,895
32,273
27,447
41,979
269,594
Past due but not impaired by
2023
Up to 3
months
3 to 6
months
6 months to
1 year
Greater
than 1 year
Total
£’000
£’000
£’000
£’000
£’000
Debtors arising out of direct insurance
operations
20,400
6,200
7,200
9,900
43,700
Debtors arising out of reinsurance operations
55,200
66,000
8,000
22,600
151,800
75,600
72,200
15,200
32,500
195,500
iii) Liquidity risk
Liquidity risk is the risk that the Syndicate will encounter difficulty in meeting obligations arising from insurance
contracts and financial liabilities. The Syndicate is exposed to daily calls on its available cash resources mainly
from claims arising from insurance contracts.
The nature of the Syndicate’s exposures to liquidity risk and its objectives, policies and processes for managing
liquidity risk have not changed significantly from the prior year.
a) Financial assets that are past due or impaired
The Syndicate’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Syndicate’s approach to managing its liquidity risk is as follows:
x Forecasts are prepared and revised on a regular basis to predict cash outflows from insurance
contracts over the short, medium and long term;
x The Syndicate purchases assets with durations not greater than its estimated insurance contract
outflows;
x Assets purchased by the Syndicate are required to satisfy specified marketability requirements;
x The Syndicate maintains cash and liquid assets to meet daily calls on its insurance contracts;
x The Syndicate holds significant committed borrowing facilities from a range of highly rated banks
to enable cash to be raised in a relatively short time span; and
x The Syndicate regularly updates its contingency funding plans to ensure that adequate liquid
financial resources are in place to meet obligations as they fall due in the event of reasonably
foreseeable abnormal circumstances.
QBE SYNDICATE 2999
ANNUAL REPORT 45 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
11. Financial risk (continued)
i. Liquidity risk (continued)
a. Financial assets that are past due or impaired (continued)
In addition to the treasury cash held for working capital requirements, a minimum percentage of the Syndicate’s
total financial assets is held in liquid, short term money market securities to ensure there are sufficient liquid
funds available to meet current obligations.
b) Maturity analysis of Syndicate liabilities
The maturity analysis presented in the table below shows the remaining contractual maturities for the Syndicate’s
insurance contracts and financial instruments. For insurance and reinsurance contracts, the contractual maturity is the
estimated date when the gross undiscounted contractually required cash flows will occur. For financial liabilities, it is the
earliest date on which the gross undiscounted cash flows (including the contractual interest payments) could be paid
assuming conditions are consistent with those at the reporting date.
Undiscounted net cash flows
2024
No
maturity
stated
Up to 1 year
1 to 3 years
3 to 5 years
Greater
than 5
years
Total
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
-
969,910
1,154,704
668,711
954,272
3,747,597
Creditors
-
501,921
-
-
-
501,921
Total
-
1,471,831
1,154,704
668,711
954,272
4,249,518
Undiscounted net cash flows
2023
No
maturity
stated
Up to 1 year
1 to 3 years
3 to 5 years
Greater
than 5
years
Total
£’000
£’000
£’000
£’000
£’000
£’000
Claims outstanding
-
916,800
1,025,500
574,500
713,100
3,229,900
Creditors
-
442,100
-
-
-
442,100
Total
-
1,358,900
1,025,500
574,500
713,100
3,672,000
At 31 December 2024, the average duration of cash and fixed interest securities was 2.4 years (2023: 2.1 years).
The Syndicate has no significant concentration of liquidity risk.
QBE SYNDICATE 2999
ANNUAL REPORT 46 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
12. Technical provisions
The tables below show the changes in the insurance contract liabilities and assets from the beginning of the period to the
end of the period.
2024
Gross
Reinsurance
Net
Provision for unearned premiums
£’000
£’000
£’000
At 1 January
1,165,049
(121,598)
1,043,451
Premiums written during the year
2,536,209
(596,735)
1,939,474
Premiums earned during the year
(2,364,072)
582,736
(1,781,336)
Effect of foreign exchange
(24,635)
(7,531)
(32,166)
At 31 December
1,312,551
(143,128)
1,169,423
Claims outstanding
At 1 January
3,154,495
(943,013)
2,211,482
Claims paid during the year
(833,123)
268,846
(564,277)
Expected cost of current year claims
1,279,836
(312,936)
966,900
Change in estimates of prior year
provisions
96,953
(46,949)
50,004
Discount unwind
(20,565)
248
(20,317)
Effect of foreign exchange
(24,561)
27,103
2,542
Other
(1,382)
1,588
206
At 31 December
3,651,653
(1,005,113)
2,646,540
Total technical provisions
4,964,204
(1,148,241)
3,815,963
The Syndicate applies discounting of outstanding reserves in respect of liabilities relating to periodical payment orders
on third party liability and motor lines of business. See note 13 for further information on the impact of discounting on
the outstanding reserves.
The unwind of discount has been included within the Statement of profit or loss – technical account – within Net change
in provisions for claims.
During the current period, the Syndicate entered into a transaction to reinsure certain prior year claims liabilities. The
transaction had a positive net impact on the reported profit for the financial year.
QBE SYNDICATE 2999
ANNUAL REPORT 47 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
12. Technical provisions (continued)
Claims outstanding
At 1 January
3,299,700
(1,016,600)
2,283,100
Claims paid during the year
(947,800)
341,400
(606,400)
Expected cost of current year claims
873,900
(58,600)
815,300
Change in estimates of prior year
provisions
102,100
(264,500)
(162,400)
Discount unwind (14,700)
100 (14,600)
Effect of foreign exchange
(158,700) 55,200 (103,500)
At 31 December
3,154,500 (943,000) 2,211,500
Total at 31 December 2023
4,319,500 (1,064,600) 3,254,900
Refer to note 20 for the sensitivity analysis performed over the value of insurance liabilities, disclosed in the accounts, to
potential movements in the assumptions applied within the technical provisions.
13. Discounted claims
Discounting may be applied to claims provisions where there re individual claims with structured settlements that have
annuity-like characteristics, or for books of business with mean term payments greater than four years from the accounting
date.
The claims have been discounted as follows:
Average discounted rates
Average mean term of
liabilities
2024
2023
2024
2023
%
%
Years
Years
Class of business
Motor (Third party liability)
4.9
4.0
29.5
30.6
Third party liability
4.9
3.9
33.4
35.3
2023
Gross
Reinsurance
Net
Provision for unearned premiums
£’000
£’000
£’000
At 1 January
994,900
(86,900)
908,000
Premiums written during the year
2,224,900
(603,200)
1,621,700
Premiums earned during the year
(1,998,300)
563,700
(1,434,600)
Effect of foreign exchange
(56,500)
4,800
(51,700)
At 31 December
1,165,000
(121,600)
1,043,400
QBE SYNDICATE 2999
ANNUAL REPORT 48 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
13. Discounted claims (continued)
The claims provision before and after discounting is as follows:
Undiscounted claims
Effect of discounting
After discounting
2024
2023
2024
2023
2024
2023
£’000
£’000
£’000
£’000
£’000
£’000
Gross claims provisions
142,487
119,000
(95,944)
(75,400)
46,543
43,600
Reinsurers’ share of total claims
(4,680)
(4,600)
2,290
2,100
(2,390)
(2,500)
137,807
114,400
(93,654)
(73,300)
44,153
41,100
14. Debtors
(i) Debtors arising out of direct insurance operations
2024
2023
£’000
£’000
Due from intermediaries
Due within one year
597,179
590,500
597,179
590,500
(ii) Debtors arising out of reinsurance operations
2024
2023
£’000
£’000
Due within one year
703,848
516,900
703,848
516,900
(iii) Other debtors
2024
2023
£’000
£’000
Other related party balances (non-syndicate)
1,347
42,300
Other
7,338
5,300
8,685
47,600
15. Cash and cash equivalents
2024
Restated *
2023
£’000
£’000
Cash at bank and in hand
22,255
19,300
Short term debt instruments presented within other financial investments
57,432
53,100
79,687
72,400
* The comparative figures have been restated to account for the reclassification of money market funds as investments,
as set out in note 1(m).
Only deposits with credit institutions with maturities of three months or less that are used by the Syndicate in the
management of its short-term commitments are included at bank and in hand.
QBE SYNDICATE 2999
ANNUAL REPORT 49 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
16. Other Assets
2024
2023
£’000
£’000
Overseas deposits
300,321
311,600
300,321
311,600
Use of overseas deposit funds is restricted under the terms of the trust agreements where the deposits are lodged.
17. Deferred acquisition costs
2024
Gross
Reinsurance
Net
£’000
£’000
£’000
At 1 January
309,251
-
309,251
Incurred deferred acquisition costs
570,818
-
570,818
Amortised deferred acquisition costs
(518,358)
-
(518,358)
Foreign exchange rate movement
(7,300)
-
(7,300)
At 31 December
354,411
-
354,411
2023
Gross
Reinsurance
Net
£’000
£’000
£’000
At 1 January
274,400
-
274,400
Incurred deferred acquisition costs
498,700
-
498,700
Amortised deferred acquisition costs
(458,300)
-
(458,300)
Foreign exchange rate movement
(5,500)
-
(5,500)
At 31 December
309,300
-
309,300
QBE SYNDICATE 2999
ANNUAL REPORT 50 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
18. Outstanding claims – claims development
The following tables illustrate the development of the estimates of earned ultimate cumulative claims incurred, including
claims notified and IBNR, for each successive underwriting year, illustrating how amounts estimated have changed from
the first estimates made.
The Syndicate has applied a consistent approach to prior years in establishing the technical provisions for claims
outstanding and reinsurers share thereof.
2024
2014 and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
Net basis
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At end of year
184,371
281,250
321,200
288,651
277,341
309,162
372,391
447,654
457,285
558,606
3,497,911
One year later
423,520
512,946
563,762
506,359
519,431
534,331
728,860
741,017
856,769
5,386,995
Two years later
496,367
579,542
662,436
584,408
624,715
672,357
762,767
752,853
5,135,445
Three years later
482,301
557,530
652,737
586,731
651,898
663,957
737,900
4,333,054
Four years later
455,017
550,416
647,646
638,930
675,497
678,447
3,645,953
Five years later
463,508
564,355
690,763
608,541
677,975
3,005,142
Six years later
462,304
594,383
647,511
607,029
2,311,227
Seven years later
492,309
566,319
653,553
1,712,181
Eight years later
447,261
571,644
1,018,905
Nine years later
452,478
452,478
Current estimate of
net
cumulative
claims cost
452,478
571,644
653,553
607,029
677,975
678,447
737,900
752,853
856,769
558,606
Cumulative net
claims payments to
date
(416,418)
(511,082)
(623,377)
(536,402)
(541,653)
(457,323)
(426,747)
(395,911)
(159,287)
(43)
Net outstanding
claims
167,529
36,060
60,562
30,176
70,627
136,322
221,124
311,153
356,942
697,482
558,563
2,646,540
2024
2014 and
prior
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total
Gross basis
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At end of year
225,635
352,662
625,515
403,070
320,096
378,846
501,226
585,277
516,907
696,870
4,606,104
One year later
535,089
673,219
986,005
728,835
701,915
690,688
978,855
880,975
993,486
7,169,067
Two years later
623,622
768,700
1,153,981
800,704
815,763
860,459
977,111
908,016
6,908,356
Three years later
649,959
759,137
1,154,107
809,794
844,461
815,181
987,927
6,020,566
Four years later
635,143
755,845
1,166,090
866,140
886,455
860,013
5,169,686
Five years later
665,469
781,646
1,208,616
869,506
911,735
4,436,972
Six years later
667,722
804,126
1,204,081
889,773
3,565,702
Seven years later
688,287
817,811
1,225,966
2,732,064
Eight years later
691,725
820,536
1,512,261
Nine years later
679,478
679,478
Current estimate of
gross cumulative
claims cost
679,478
820,536
1,225,966
889,773
911,735
860,013
987,927
908,016
993,486
696,870
Cumulative gross
claims payments to
date
(582,901)
(733,151)
(1,109,640)
(709,351)
(703,731)
(583,632)
(559,055)
(432,303)
(179,615)
(1,999)
Gross outstanding
claims
273,231
96,577
87,385
116,326
180,422
208,004
276,381
428,872
475,713
813,871
694,871
3,651,653
QBE SYNDICATE 2999
ANNUAL REPORT 51 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
18. Outstanding claims – claims development (continued)
The claims development tables express the development on an underwriting year basis. At the end of the opening year,
the underwriting year has not yet fully earned. One year after the opening year, the underwriting year has substantially
earned, and the development of that underwriting year becomes evident. The table demonstrates developments in actuarial
assumptions.
The Syndicate writes business in currencies other than Pound Sterling. The translation of outstanding claims denominated
in foreign currencies gives rise to foreign exchange movements which have no direct bearing on the development of the
underlying claims. To eliminate this distortion, claims liabilities have been retranslated to the Pound Sterling at constant
rate of exchange.
All estimates of cumulative claims cost and cumulative claims payments for the nine most recent reporting years reported
in functional currencies other than Pound Sterling have been retranslated to Pound Sterling using the exchange rate at the
end of the reporting year.
19. Concentration of insurance risk
The Syndicate’s exposure to concentrations of insurance risk is mitigated by a portfolio diversified across countries and
classes of business. Product diversification is achieved through a strategy of developing strong underwriting skills in a
wide variety of classes of business. A combination of core and speciality products under the control of employees skilled
in underwriting such products allows the Syndicate to lead underwrite in many of the markets in which they operate.
The segmental and geographical analysis at note 3 demonstrates the diversity of the Syndicate’s operations.
The Syndicate has potential exposure to catastrophe losses. Each year, the Syndicate sets its tolerance to concentration
risk. Realistic Disaster Scenarios (‘RDSs’), using industry standard and the Syndicate determined probable maximum
losses and various catastrophe models, are calculated for each portfolio as part of the business planning process. These
RDSs are aggregated across all portfolios to determine the Syndicate’s maximum event retention (‘MER’) which is the
estimated maximum net claim from a one in 250-year natural catastrophe event. The MER must be less than the
Syndicate’s concentration risk tolerance, otherwise steps such as the purchase of additional reinsurance are taken to limit
the exposure.
20. Impact of changes of key variables on the outstanding claims provision
Net claims outstanding could be lower or higher than the ultimate cost of settling the claims arising. This level of
uncertainty would vary between the classes of business and the underlying nature of the risk being underwritten and can
arise from developments in reserving for large losses catastrophes or from changes in the level of attritional losses. A five
percent increase or decrease in the ultimate cost of settling gross claims arising is considered to be reasonable possible at
the reporting date. Net outstanding claims in respect of liabilities relating to long term personal injury lines of business
could be lower or higher as a result of movements in the Ogden rate, a half a percent increase or decrease in the Ogden
rate movement is considered to be reasonably possible. Net outstanding claims could be lower or high as a result of
movements in exchange rates. A ten percent increase or decrease in the exchange rate movement of currency reserves is
considered to be reasonably possible.
The approximate impact on the result of the Syndicate of changes in these variables used in the calculation of the
outstanding claims provision is summarised in the table below. Each change has been calculated in isolation from the
other changes and each change shows the impact on profit assuming that there is no change to any of the other variables.
QBE SYNDICATE 2999
ANNUAL REPORT 52 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
20. Impact of changes of key variables on the outstanding claims provision (continued)
2024
2023
Profit / (loss) and
members’ balance
Profit / (loss) and
members’ balance
Sensitivity
Gross
Net
Gross
Net
%
£’000
£’000
£’000
£’000
Claims outstanding
+5%
182,583
132,327
157,700
110,600
-5%
(182,583)
(132,327)
(157,700)
(110,600)
Change in Ogden rate on certain long term
personal injury claims
+0.5%
(6,277)
(6,277)
(17,100)
(17,100)
-0.5%
7,348
7,348
20,000
20,000
Sterling to US Dollar exchange rate
+10%
205,146
146,330
242,400
148,000
-10%
(205,146)
(146,330)
(242,400)
(148,000)
Sterling to Australian Dollar exchange rate
+10%
24,488
22,231
32,200
30,700
-10%
(24,488)
(22,231)
(32,200)
(30,700)
Sterling to Euro exchange rate
+10%
17,160
14,874
19,400
18,900
-10%
(17,160)
(14,874)
(19,400)
(18,900)
Sterling to Canadian Dollar exchange rate
+10%
36,610
31,275
16,200
15,800
-10%
(36,610)
(31,275)
(16,200)
(15,800)
The syndicate’s current year exposure to the sensitivity on foreign exchange movements compared to the prior year has
increased as a result of increases business written in foreign currencies.
21. Expected maturity profile of net outstanding claims
1 year or
less
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Over 5
years
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
2024
613,929
464,781
336,164
273,267
218,477
739,921
2,646,539
2023
548,300
393,200
289,700
225,200
177,300
577,800
2,211,500
22. Creditors
(i) Creditors arising out of direct insurance operations
2024
2023
£’000
£’000
Due to intermediaries
Due within one year
51,050
87,000
(ii) Creditors arising out of reinsurance operations
2024
2023
£’000
£’000
Due within one year
430,006
316,400
QBE SYNDICATE 2999
ANNUAL REPORT 53 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
23. Other creditors including taxation and social security
2024
2023
£’000
£’000
Due within one year
Other related party balances (non-syndicate)
17,687
10,100
Other liabilities *
3,178
28,600
20,865
38,700
* Other liabilities include Taxation and social security of £nil (2023: £22,600k) and Unsettled investment trade creditors
of £2,204k (2023: £6,000k) and other payables of £974k (2023: £nil).
24. Financial assets and liabilities
The assets and liabilities of the Syndicate, excluding deferred acquisition costs, unearned premiums, prepayments,
accruals and deferred income, gross and net technical provisions, and members’ balances, are financial assets and
liabilities. The Directors consider the carrying value of the financial assets and liabilities to be equal to their fair value.
25. Related parties
The Managing Agent, QUL, and the corporate member QBE Corporate Limited (‘QCORP’), are wholly owned
subsidiaries of the ultimate parent company QBE Insurance Group Limited.
The Syndicate is managed at the QBE EO level, which is headed by QBE European Operations plc. The immediate parent
company of QUL and QCORP is QBE Holdings (‘EO’) Limited (‘QHEO’). QHEO is a wholly owned subsidiary of QBE
European Operations plc. QBE European Operations plc, QUL, QCORP and QHEO are incorporated in the United
Kingdom.
The consolidated annual report for QBE Insurance Group Limited is available from QUL’s registered office at 388 George
Street, Sydney, NSW 2000, Australia.
Directors’ interests
All of the executive Directors listed on page 2 hold, or held in the year, executive directorships of companies within the
QBE EO division. In addition, C A Brown, M G McCaig, S Maddock, Sir N K Skeoch and TC Wade, are, or were in the
year, Non-Executive Directors of related companies within QBE EO.
Inter-syndicate transactions
In certain instances, the Syndicate has underwritten reinsurances of QBE’s other managed syndicate. During the current
and prior financial year, there were no instances of reinsurances underwritten between QBE’s syndicates.
Inwards reinsurance contracts with related QBE companies
In certain instances, the Syndicate has underwritten inwards reinsurance business from companies within the QBE Group.
During the year, inwards premiums totalling £43,670k (2023: £34,200k) were written in the year with related QBE
companies. At the year end, balances due from related QBE companies in respect of inwards reinsurance premium were
£9,541k (2023: £15,200k). At the year end, there was a £39,129k (2023: £35,100k) share of technical provisions.
QBE SYNDICATE 2999
ANNUAL REPORT 54 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
25. Related parties (continued)
Inwards reinsurance contracts with related QBE companies (continued)
Inwards Premium
Balance
outstanding
Share of
technical
provisions
2024
2023
2024
2023
2024
2023
£’000
£’000
£’000
£’000
£’000
£’000
QBE Insurance Corporation
21,410
11,500
1,123
-
3,777
1,000
Stonington Insurance Company
953
-
-
-
3,178
4,300
QBE Capital (Global) Ltd (formerly Equator
Reinsurances Limited)
3,641
3,500
3,758
2,700
13,835
7,700
QBE Insurance (Singapore) Pte Ltd
14,922
16,300
1,426
9,700
12,970
17,100
QBE Insurance (Malaysia) Berhad
-
-
408
-
138
100
QBE Capital Ltd (formerly QBE Blue Ocean Re
Limited)
2,744
2,900
2,826
2,800
5,231
4,900
43,670
34,200
9,541
15,200
39,129
35,100
Outwards reinsurance contracts with related QBE companies
The Syndicate has purchased reinsurance from companies within the QBE Group during the year. Outward premiums
totalling £249,287k (2023: £133,400k) were booked with QBE Capital (Global) Ltd (‘QCAP Global’). At the year end,
balances due from QCAP Global in respect of reinsurers’ share of technical provisions were £380,407k (2023:
£397,600k).
Administrative expenses
Total expenses recharged from QBE Partner Services (Europe) LLP in respect of services provided to the Syndicate
amounted to £nil (2023: £102,500k). The balance outstanding at year end to QBE Partner Services (Europe) LLP is £nil
(2023: £nil). Total expenses recharged from QBE Management Services (UK) Ltd (‘MSUK’) in respect of services
provided to the Syndicate amounted to £190,463k (2023: £56,100k). The balance outstanding at year end from MSUK is
£7,425k (2023: £42,000k) and will be settled throughout 2025 as part of the usual expense recharges. There are no other
transactions or arrangements to be disclosed.
Service companies
Certain QBE EO service companies provided administrative services to the Syndicate and charged fees equal to the costs
they incurred in placing the business with the Syndicate. These charges are centrally administered within QBE EO and
are included within recharges made to the Syndicate by QBE Partner Services (Europe) LLP for the prior year and MSUK.
26. Foreign exchange rates
The following currency exchange rates have been used for principal foreign currency transactions against the Syndicate’s
functional currency:
2024
2023
Start of year
rate
Year-end
rate
Average rate
Start of year
rate
Year-end
rate
Average rate
Sterling | ||||||
Euro | ||||||
US dollar | ||||||
Canadian dollar | ||||||
Australian dollar | ||||||
Japanese Yen |
QBE SYNDICATE 2999
ANNUAL REPORT 55 31 DECEMBER 2024
NOTES TO THE ANNUAL ACCOUNTS (continued)
for the year ended 31 December 2024
27. Subsequent events
In January 2025, devastating wildfires broke out in Southern California. The Syndicate continues to evaluate the financial
impact on its insurance result for 2025.
