2005
1 1 3. 3. 4. 4. 5. 6. 7 2 9. 9. 5 9. 9. 11. 13. 13. 14 3 19. 19. 19. 20. 24. 25. 25. 26
17 2004 2003 3 1997 111 199 240 1 3 2005
. 3. 4. 4 1. 4 2. 4. 5 1. 5 2. 5 3. 5. 6 1. 6 2. 6 3. 6 1 6 2 6 3 6 4. 6. 7 1. 7 2. 7 3. 7 4. 7 5. 7 2
. 1996 8 7 105 9 100% 1997 1 4 2 5 6 2005
. James C. Sardeson. 1. 1,000 100% 2. 3 Participation Agreement 4
. 1. 2005 4 1 Andrew F. Beazley CEO, Beazley Furlonge Ltd. James C. Sardeson Julian James Director, Lloyd's World Wide Markets David Foreman plc Chief Underwriting Officer, Wellington Underwriting plc Robert Wyatt 2001 Amlin Syndicate 2001, Global Property Underwriter Elizabeth Rogula 2. Corporation of Lloyd's Legal CommitteeRemuneration Committee 3. Review of Financial Statements 2005
. 1. 2. 2004 06 11 2005 03 31 3. 1 2 2002 2003 2004 21 16 23 3 4. 6
. 1. 2. 2 3. 4. 5. 2005
. 9. 5 9. 9 1. 9 2. 10 3. 10 4. 10 5. 10 6. 11 7. 11. 11 1. 11 2. 11 3. 11 4. 12 5. 12. 13. 13. 14 1. 14 2. 15 3. 16 4. 16 1 16 2 17 3 17 5. 17 6. 17 7. 17 8
. 2004 16 2004 4 1 2005 3 31 12.1 7.4 4.2 11.6 7.1 0.5 6.9 5.6 1.3 13.1 1.1 0.7 70.3% 91.6% 1.0 3.0 2.9 0.2. 5,% 2000 2001 2002 2003 2004 1,267 1,274 1,186 1,280 1,209 677 18 1,853 713 48 743 94 1,923 780 21 496 412 688 581 895 1,877 1,942 2,639 2,175 2,453 777 655 335 408 303 - - - 201 201 1,568.9 641.8 316.0 543.7 823.3 11 11 10 9 10 1,257 1,145 866 691 556 1. 2.. 1.,% 2002 2003 2004 200 26.6 172 870.8 107 46.1 344 99.5 115 7.3 632 83.6 182 21.8 166 17.3 117 35.5 63 61.8 96 18.5 44 30.3 12 47.4 1 57.7 7 41.5 - - 11 51.4 - - 10 75.6 10 74.9 0-0 - - 100.0-100.0 459 21.6 698 5.3 458 0.2 775 11.0 333 27.4 593 23.4 866 24.4 1,049 13.1 691 20.1 1,182 12.7 556 19.6 1,270 7.4 2005
2.,% 2002 2003 2004 249 37.0 221 57.9 80 67.5 317 43.3 58 27.9 574 81.2 115 21.9 99 14.2 155 34.6 101 2.2 134 13.8 82 18.7 11 92.6 - - 7 36.0 - - 11 51.4 - - - 100.0 - - - - - - - - - - 41 32.8 280 105.6 37 10.1 353 26.2 37 0.0 297 15.8 417 31.9 600 53.2 281 32.7 772 28.5 240 14.3 954 23.6 3.,% 2002 2003 2004 6 25 0 13 13 30-969 2 732-110 - 5-4 - 0-2 - 5-2 15 904 23 38 0 116 22 1,841 26 700 15 38 4.,% 2002 2003 2004 85 42.8 0 0.3 109 101.8 1 0.4 12 10.4 1 0.2 554 303.4 517 311.2 1,270 1,078.5 735 1,158.9 67 70.5 18 42.5 0 0.0 0 0.2 - - - - - - - - 29 275.8 29 272.7 4-4 - 0-0 - 1,072 233.3 1,069 153.1 35 7.8 14 1.9 31 9.3 9 1.7 1,742 201.2 1,616 154.1 1,421 205.4 756 63.9 111 20.0 30 2.4 5.,% 2002 2003 2004 85 56.7-100.0 108 27.4 - - 10 90.1 - - 43 24.7 6 41.1 709 1,524.7 174 2,556.0 62 91.2 13 92.1 - - - - - - - - - - - - 0 84.2 - - - - - - 0 - - - 3 33.5 - - 21 528.9 0-21 0.2 0 89.2 132 49.4 6 43.3 839 533.2 174 2,556.4 94 88.7 13 92.1 10
6. 2002 2003 2004,% 144 72.2 78 72.5 96 83.1 106 58.2 70 59.9 81 85.0 7 60.8 4 54.9 10 94.7 7 67.3 0 71.0 - - 320 69.7 33 73.3 321 96.4 586 67.7 486 70.3 509 91.6 7. 2000 2001 2002 2003 2004 1 87 84 95 131 127. 1. 2. 2002 2003 2004 2,625 2,155 2,440 2,639 2,175 2,453 2002 2,625 2003 1,953 2004 1,379 3.,% 2002 2003 2004 - - 0 0.98 2 1.38 - - - - - - - - - - - - - 0 2 5 10 2005 1
4.,% 2002 2003 2004 0 0.01 0 0.01 0 0.01 - - - - - - - - - - - - - - - - - - - - 0 0.98 2 1.38 - - - - - - - - - - - - 0 0.01 0 0.03 3 0.13 0 0 0 0 0 3 5. 65 2 1 6 2002 2003 2004 - - 201-2 201 2 - - 201-2 201 2 12
,% 2003 2004 2004 3 31 2005 3 31 A 840 1,172 200 200 58 77 581 895 B 309 284 299 275 11 16 0 8 11 7 0 0 9 8 C AB x 50% = C 543.7 823.3 1. 86 87 8 50 2. 3 2002 2005 8 1. 2. B A C *1 *2 *3 *4 *5 *1 *2 *3 *4 *1 *3 *5 *5 3. %. 2005 1
. 1. 2003 2004 2004 3 31 2005 3 31 2003 2004 2004 3 31 2005 3 31-859 201 201 1,973 1,393 - - 17 10-0 - 1 1,953 1,379 1 0 0 0 0 1 0 0 - - 701 598 293 294 408 303 892 959 - - - - 382 575 6 6 22 23 201 201 275 125 2 40 - - 1,593 1,558 3,815 2,239 3,233 1,344 3,233 1,344 780 21 581 895 2,175 2,453 2,175 2,453 2004 1. 2. 3. 4. 5. + 329 35 294 0 294 6. + 763 537 226 77 303 7. 2004 2003 3 2001 3 2004 1,911 8. 9. 14
2. 2003 2004 2003 4 1 2004 3 31 2004 4 1 2005 3 31 1,280 1,209 1,279 1,198 691 556 0 0 588 293-349 - - 0 0 0 3-7 0 0 1,993 1,160 1,635 740 1,421 111 141 89-294 72 244-0 13-13 - 345 420 - - - - 713 48 - - 713 48 67 70 780 21 2,673 3,233 220 1,911 3,233 1,344 2004 1. 3. 1,511 204 954 115 556 89 2. 4. 125 0 13 2 111 0 3 5. 6. 3 2001 3 1,911 7. 2005 1
3. 2003 2004 713 48 588 1 72 104 0 3-7 7 6 158 67 1,076 9 0 3 67 70 1,143 58 - - - - + 1,143 57 - - 781 405 441 453 333 383 673 335-7 672 285 2,625 1,953 1,953 2,238 1. 2. 3. 4. 2002 2003 2004 179 112 88 590 99 156 2 1 2 16 6 3 429 482 346 1,217 701 598 1 IBNR 2002 2003 2004 2002 2003 2004 2002 2003 2004 101 13 6 - - - 101 13 6 549 38 107 - - - 549 38 107 0 0-0 0 0 0 0 0 5 2 1 10 3 1 15 5 2 202 220 162 11 14 14 213 234 176 858 274 278 22 18 16 881 293 294 16
2 2002 2003 2004 2002 2003 2004 2002 2003 2004 69 87 66 8 11 16 78 98 82 25 43 28 14 17 20 40 61 49 0-0 0 0 0 1 0 1 - - - 0 0-0 0-202 220 132 13 27 37 215 247 170 298 350 227 37 58 76 335 408 303 3 5. 2003 2004 2004 2004 - - - - 6. 2002 2003 2004 0 - - - - - 3 - - - - - - 0 - - 40 97 96 1 3 4 3 3 3 3 7. 2005 1
. 19. 19. 20 1. 20 2. 20 1 20 2 21 3 22 3. 23 1 23 2 23 3 23. Chain of Security 24 1. Premiums Trust Funds 24 2. Funds at Lloyd's 24 3. Other Personal Wealth 24 4. Central Fund 24. 25. 25. 26 1. GAAP 26 2. GAAP 27 3. 3 28 4. 3 29 18
. The Society of Lloyd's Lloyd's Act, 1982 One Lime Street London EC3M 7HA 2004 145 7,300 2004 1 1 2004 12 31 2 9,120 / 199.81 2004 120 4,000 2 4,160 2005 137 2,200 2 7,420 Chairman of Lloyd's Lord Peter Levene of Portsoken. Lloyd's Act, 1982 Lloyd's Byelaw 1998 2000 Financial Services Authority 2005 1
. 1. 17 Excess of Loss Reinsurance 2. 1 Underwriting Members Name Syndicate 1994 2004 150 3 2005 137 2,200 2 7,400 1,625 14 4,500 2,890 705 122 7,700 2 4,530 89.5% 16,000 14,000 12,000 10,000 8,000 6,000 9,258 10,430 12,552 13,092 12,277 4,000 2,000 0 1,844 1,766 1,800 2001 2002 2003 1,869 2004 1,445 2005 20
2 1,000 Spread Vehicle 1994 Spread Vehicle Corporate Syndicate2005 62 33 58.5% 2001 2002 2003 2004 2005 108 86 71 66 62 2005 2
3 Council of Lloyd's Compliance Committee Audit Committee Nomination, Appointments and Compensation Committee Franchise Board Market Supervision Advisory Committee Capacity Transfer PanelUnderwriting Advisory Committee Investment Committee 4 Corporation of Lloyd's 22
3. 2001 Chairman's Strategy Group= CSG 1 2003 1 Franchisee Franchisor 2 2003 1 300 2007 3 3 2002 3 2004 2001 2005 2002 6 EU 2007 3 UK GAAP US GAAP 2005 2
. Chain of Security Chain of Security 1. Premiums Trust Funds 2 2. Funds at Lloyd's 40% 3. Other Personal Wealth 4. Central Fund 5 600 1,010 40% 24
. Solvency Margin Financial Services Authority EU 2004 12 31 22 5,600 4,510 100 700 2 120 446.4% Lloyd's Solvency Margin Global Basis 2003 2004 2003 12 31 2004 12 31 1. Amount of the required minimum margin 2,289 2,256 2. Total assets available to meet the required minimum margin 8,565 10,070 3 2 1 Solvency Margin Ratio 374.1% 446.4%. S&P 2004 7 AM Best 2005 7 Fitch 2004 9 A Strong A Excellent A Strong S&P A Strong AM Best Excellent 2004 9 Fitch A Strong 2005 2
. 2001 3 UK GAAP 1. GAAP 2003 2004 2003 12 31 2004 12 31 as at 31 December 2003 as at 31 December 2004 1= 190.07 1= 199.81 Assets Shares and other variable yield securities 1,626 309,054 1,753 350,267 Debt securities and other fixed income securities 12,221 2,322,845 14,992 2,995,552 Participation in investment pools 256 48,658 407 81,323 Loans and deposits with credit institutions 704 133,809 890 177,831 Deposits with ceding undertakings 14 2,661 9 1,798 Members' funds at Lloyd's 9,659 1,835,886 9,622 1,922,572 Other investment 23 4,372 34 6,794 Total investments 24,503 4,657,285 27,707 5,536,136 Claims outstanding 9,959 1,892,907 9,001 1,798,490 Unearned premiums 1,221 232,075 875 174,834 11,180 2,124,983 9,876 1,973,324 Debtors arising out of direct operations 3,694 702,119 3,250 649,383 Debtors arising out of reinsurance operations 3,972 754,958 3,654 730,106 Other debtors 469 89,143 402 80,324 8,135 1,546,219 7,306 1,459,812 Tangible assets 15 2,851 15 2,997 Cash at bank and in hand 2,140 406,750 2,325 464,558 Overseas deposits 1,250 237,588 1,330 265,747 Other 70 13,305 74 14,786 3,475 660,493 3,744 748,089 Accrued interest and rent 39 7,413 73 14,586 Deferred acquisition costs 1,467 278,833 1,438 287,327 Other prepayments and accrued income 104 19,767 104 20,780 Total prepayments and accrued income 1,610 306,013 1,615 322,693 48,903 9,294,993 50,248 10,040,053 Liabilities Members' funds at Lloyd's 9,659 1,835,886 9,622 1,922,572 Syndicate profits / (losses) due to / (from) members 295 56,071 1,363 272,341 Central Fund balance 711 135,139 556 110,094 Corporation reserves 70 13,304 122 24,376 Subordinated loan notes - - 506 101,103 Provision for unearned premiums 7,335 1,394,163 6,769 1,352,514 Claims outstanding 27,758 5,275,963 28,144 5,623,453 35,093 6,670,127 34,913 6,975,967 Deposits received from reinsurers 92 17,486 37 7,393 Creditors arising out of direct insurance operations 446 84,771 487 97,307 Creditors arising out of reinsurance operations 2,264 430,318 1,742 348,069 Amounts owed to credit institutions 14 2,661 7 1,399 Other creditors including taxation 718 136,470 703 140,466 Total creditors 3,442 654,221 2,939 587,242 Accruals and deferred income 131 24,899 190 37,964 Total liabilities 48,903 9,294,993 50,248 10,040,053 26
2. GAAP 2003 2004 2003 1 1 2003 12 31 2004 1 1 2004 12 31 for the year ended 31 December 2003 for the year ended 31 December 2004 m n m n 1= 190.07 1= 199.81 Pro forma annual accounting technical account Gross premiums written -continuing operations 16,144 3,068,490 14,402 2,877,664 -discontinued operations 278 52,839 311 62,141 16,422 3,121,330 14,713 2,939,805 Outward reinsurance premiums 4,172 792,972 2,908 581,047 Premiums written, net of reinsurance 12,250 2,328,358 11,805 2,358,757 Change in the gross provision for unearned premiums 246 46,757 290 57,945 Change in the provision for unearned premiums, reinsurers' share 293 55,691 306 61,142 Earned premiums, net of reinsurance 11,711 2,225,910 11,789 2,355,560 Allocated investment return from the non-techical account 445 84,581 536 107,098 12,156 2,310,491 12,325 2,462,658 Gross amount 9,204 1,749,404 8,281 1,654,627 Reinsurers' share 3,661 695,846 2,981 595,634 5,543 1,053,558 5,300 1,058,993 Gross amount 108 20,528 1,556 310,904 Reinsurers' share 1,262 239,868 811 162,046 1,154 219,341 2,367 472,950 Claims incurred, net of reinsurance 6,697 1,272,899 7,667 1,531,943 Acquisition costs 3,038 577,433 2,801 559,668 Administrative expenses 854 162,320 900 179,829 Loss on exchange 30 5,702 51 10,190 Operating expenses 3,922 745,455 3,752 749,687 Balance on the technical account for general business 1,537 292,138 906 181,028 Pro forma annual accounting non-technical account Syndicate investment return 445 84,581 536 107,098 Investment return on funds at Lloyd's 448 85,151 487 97,307 Other investment returns & other income 127 24,139 148 29,572 1,020 193,871 1,171 233,978 Allocated investment return transferred to the technical account 445 84,581 536 107,098 575 109,290 635 126,879 Other expenses 220 41,815 184 36,765 Pro forma profit / loss on ordinary activities before tax 1,892 359,612 1,357 271,142 2005 2
3. 3 2001 2002 2003 12 31 2004 12 31 as at 31 December 2003 as at 31 December 2004 1= 190.07 1= 199.81 % Assets Financial investments 14,172 2,693,672 16,867 3,370,195 119.0 Deposits with ceding undertakings 14 2,661 9 1,798 64.3 Debtors 5,173 983,232 3,886 776,462 75.1 Other assets 3,481 661,634 3,693 737,898 106.1 Payments and accrued income 91 17,296 143 28,573 157.1 Total assets 22,931 4,358,495 24,598 4,914,926 107.3 Liabilities 2001 2001 and prior years of account 2,378 451,986 2001 Result for the 2001 year of account 2,093 397,817 2000 Result for the 2000 and prior 285 54,170 run-off years of account 2002 2002 and prior years of account 1,193 228,373 2002 Result for the 2002 year of account 1,493 298,316 2001 Result for the 2001 and prior 300 59,943 run-off years of account Balance of net uncalled deficiency 290 55,120 501 100,105 172.8 on run-off years of account balances on open years of account: Balance on open years of account: 16,244 3,087,497 2002 Balance on 2002 year of account 11,446 2,175,541 2003 Balance on 2003 year of account 4,798 911,956 Balance on open years of account: 17,380 3,472,698 2003 Balance on 2003 year of account 12,929 2,583,343 2004 Balance on 2004 year of account 4,451 889,354 Reserves retained in respect of 4,822 916,518 4,594 917,927 95.3 run-off years of account Deposits received from reinsurers 92 17,486 37 7,393 40.2 Creditors 4,371 830,796 1,830 365,652 41.9 Accruals and deferred income 70 13,305 65 12,988 92.9 Total liabilities 22,931 4,358,495 24,598 4,904,926 107.3 28
4. 3 2001 2002 2003 12 31 2004 12 31 as at 31 December 2003 as at 31 December 2004 1= 190.07 1= 199.81 % 1 Gross premiums written net of brokerage 11,085 2,106,926 11,528 2,303,410 104.0 2 Outward reinsurance premiums 4,293 815,971 3,969 793,046 92.5 3 1-2 Net premiums 6,792 1,290,955 7,559 1,510,364 111.3 4 Reinsurance to close premiums received 6,023 1,144,792 6,236 1,246,015 103.5 from earlier years of account 5 Amounts retained to meet all known and 2,792 530,675 4,612 921,524 165.2 unknown outstanding liabilities brought forward 6 3 5 15,607 2,966,422 18,407 3,677,903 117.9 7 Gross claims paid 11,196 2,128,024 7,399 1,478,394 66.1 8 Reinsurers' share 5,096 968,597 2,744 548,279 53.8 9 7-8 Net claims 6,100 1,159,427 4,655 930,115 76.3 10 Reinsurance premiums paid to close the 6,661 1,266,056 7,313 1,461,211 109.8 year of account 11 Amounts retained to meet all known and 4,822 916,518 4,594 917,927 95.3 unknown outstanding liabilities carried forward 12 9 11 17,583 3,342,001 16,562 3,309,253 94.2 13 6-12 Underwriting result 1,976 375,578 1,845 368,649 93.4 14 Profit on exchange 30 5,702 96 19,182 320.0 15 Syndicate operating expenses 658 125,066 711 142,065 108.1 16 13 15 Balance of technical account 2,604 494,942 1,230 245,766 47.2 17 Investment income 600 114,042 638 127,479 106.3 18 Investment expenses and charges 18 3,421 15 2,997 83.3 19 Investment gains less losses 60 11,404 128 25,576 213.3 20 16 19 Result before personal expenses 2,082 395,726 1,725 344,672 82.9 21 Personal expenses 296 56,261 532 106,299 179.7 22 20+21 Result after personal expenses 2,378 451,986 1,193 238,373 50.2 2001 2002 2000 2001 2005 2
100-0004 1-5-4 17 03 3215 5291