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The purchase, maturity and disposal of financial assets and liabilities, including derivatives, is part of the Group\u2019s insurance
activities and is therefore classified as an operating cash flow.
Included within cash and cash equivalents held by the Group are balances totalling $105.0 million (2024: $156.0 million) not
available\u00a0for immediate use by the Group outside of the Lloyd\u2019s syndicate within which they are held. Additionally, $13.0 million
(2024:\u00a0$32.6 million) is pledged cash held against Funds at Lloyd\u2019s, and $29.2 million (2024: $19.5 million) is held within trust
funds against reinsurance arrangements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-371": { "value": "105000000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:CashBalanceNotAvailableForImmediateUseByTheGroupOutsideLloydsSyndicate", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2026-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-372": { "value": "156000000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:CashBalanceNotAvailableForImmediateUseByTheGroupOutsideLloydsSyndicate", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-373": { "value": "13000000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:PledgedCashHeldAgainstFundsAtLloyds", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2026-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-374": { "value": "32600000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:PledgedCashHeldAgainstFundsAtLloyds", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-375": { "value": "29200000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:CashHeldWithinTrustFundsAgainstReinsuranceArrangements", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2026-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-376": { "value": "19500000.0", "decimals": -5, "dimensions": { "concept": "hiscoxltd:CashHeldWithinTrustFundsAgainstReinsuranceArrangements", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "f-377": { "value": "
1 General information
The Hiscox Group, which is headquartered in Hamilton,
Bermuda, comprises Hiscox Ltd (the parent company, referred
to herein as the \u2018Company\u2019) and its subsidiaries (collectively,
the \u2018The Hiscox Group\u2019 or the \u2018Group\u2019). For the current period
the Group provided insurance and reinsurance services to its
clients worldwide. It has operations in Bermuda, UK, Europe
and USA and currently has over 3,000 staff.
The Company is registered and domiciled in Bermuda and
its\u00a0ordinary shares are listed on the London Stock Exchange.
The address of its registered office is: Chesney House,
96 Pitts Bay Road, Pembroke HM 08, Bermuda.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-378": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-379": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-380": { "value": "Hiscox Ltd", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-381": { "value": "Hiscox Ltd", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-382": { "value": "Ltd", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-383": { "value": "For the current period the Group provided insurance and reinsurance services to its clients worldwide.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-384": { "value": "Bermuda, UK, Europe and USA", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-385": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-386": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-387": { "value": "Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-388": { "value": "
2 Basis of preparation
The financial statements of the Group have been prepared
in\u00a0accordance with UK-adopted International Accounting
Standards, and Section 4.1 of the Disclosure Guidance and
Transparency Rules and the Listing Rules, both issued by
the\u00a0Financial Conduct Authority (FCA) and in accordance
with\u00a0the provisions of the Bermuda Companies Act 1981.
The consolidated financial statements have been
prepared\u00a0under the historical cost convention, as
modified\u00a0by\u00a0the revaluation of financial assets and
financial\u00a0liabilities (including derivative instruments)
at\u00a0fair\u00a0value\u00a0through profit or\u00a0loss.
The consolidated financial statements have been prepared on
a going concern basis. In adopting the going concern basis,
the Board has reviewed the Group\u2019s current and forecast
solvency and liquidity positions for the next 12 months and
beyond. As part of the consideration of the appropriateness of
adopting the going concern basis, the Directors use scenario
analysis and stress testing to assess the robustness of the
Group\u2019s solvency and liquidity positions. In undertaking this
analysis, no material uncertainty in relation to going concern
has been identified, due to the Group\u2019s strong capital and
liquidity positions providing resilience to shocks, underpinned
by the Group\u2019s approach to risk management described in
note 3. After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence over a period of\u00a0at least
12\u00a0months from the date of this report. For this reason,
the\u00a0Group continues to adopt the going concern basis\u00a0in
preparing\u00a0the consolidated financial statements.
Items included in the financial statements of each of the
Group\u2019s entities are measured in the currency of the primary
economic environment in which that entity operates (the
functional currency). The consolidated financial statements
are\u00a0presented in US Dollars millions ($m) and rounded to the
nearest hundred thousand Dollars, unless otherwise stated.
The consolidated statement of financial position is presented
in\u00a0order of increasing liquidity. All amounts presented in the
income statement and statement of comprehensive income
relate to continuing operations.
The financial statements were approved for issue by the
Board\u00a0of Directors on 24\u00a0February 2026.
2.1 Material accounting policies information
The principal accounting policies applied in the preparation
of\u00a0these consolidated financial statements are set out below.
The\u00a0most critical individual components of these financial
statements that involve the highest degree of judgement or
significant assumptions and estimations are identified in
note\u00a02.19. Except as described in section (a) below, the
accounting policies\u00a0adopted are consistent with those of
the\u00a0previous financial year.
(a) Change in functional currency
With effect from 1 July 2025, the functional currency of the
Company, Hiscox plc and Hiscox Holdings Limited
(subsidiaries of the Group) changed from Sterling to US Dollars
taking into consideration the following changes:
\u2022 significant growth in Hiscox Ltd's US Dollar income over
the past five years;
\u2022 issuance of $500m subordinated notes by Hiscox Ltd;
and
\u2022 substantial increase in investment in the US subsidiaries.
This change has been accounted for prospectively from
1\u00a0July\u00a02025.
(b) New accounting standards, interpretations and
amendments to published standards
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not
yet effective. New standards, amendments to standards and
interpretations, as adopted by\u00a0the UK, that are effective for
annual periods beginning on\u00a01\u00a0January 2025 have been
applied in preparing these consolidated financial statements
and had no material impact on the Group.
\u2022 Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates, Lack of exchangeability
(c) Future accounting developments
The following new standards, and amendments to existing
standards have been issued, are not yet effective for the Group
and have not been applied in preparing these consolidated
financial statements:
\u2022 Amendments to IFRS 9 \u2013 Financial Instruments
and\u00a0IFRS 7 Financial Instruments: Disclosures \u2013
Classification and Measurement of
Financial\u00a0Instruments
Amendments to the classification and measurement of
financial instruments which address:
\u2013 derecognition of financial liabilities settled through
electronic transfers;
\u2013 classification of financial assets; and
\u2013 disclosures.
The amendments are effective for the Group from
1\u00a0January 2026 and have been endorsed for use in
the\u00a0UK. The application of these amendments is not
expected to have a significant impact on the Group.
\u2022 Amendments to IFRS 9 and IFRS 7 \u2013 Contracts
Referencing Nature-dependent Electricity
Targeted amendments for better reporting of the financial
effects of nature-dependent electricity contracts, which
are often structured as power purchase agreements
(PPAs). The amendments are effective for the Group from
1 January 2026 and have been endorsed for use in the
UK. They are not expected to have a significant impact
on the Group.
\u2022 Annual improvements to IFRS Accounting standards \u2013
Volume 11: Amendments to:
o IFRS 1 \u2013 First-time Adoption of International
Financial Reporting Standards;
o IFRS 7 \u2013 Financial Instruments: Disclosures and its
accompanying Guidance;
o IFRS 10 \u2013 Consolidated Financial Statements;
o IAS 7 \u2013 Statement of Cash Flows.
All amendments have been endorsed for use in the UK
and are effective 1 January 2026. The application of
these amendments is not expected to have a material
impact on the Group.
\u2022 IFRS 18 \u2013 Presentation and Disclosure in
Financial\u00a0Statements
The standard is aimed at improving the way companies
communicate in their financial statements. It introduces:
\u2013 new defined subtotals in the income statement,
including operating profit;
\u2013 disclosures about management-defined
performance measures; and
\u2013 additional guidance on aggregation
and\u00a0disaggregation of information in
financial\u00a0statements.
The standard is effective for annual reporting periods
beginning on or after 1 January 2027 and has been
endorsed for use in the UK. It is expected to result in
presentational changes to the Group\u2019s consolidated
income statement and consolidated cash flow statement
as well as new disclosures of management-defined
performance measures in the notes.
While the standard will impact presentation and
disclosure, no changes to recognition or measurement
are anticipated. The Group is in the early stages of
implementation planning.
\u2022 IFRS 19 \u2013 Subsidiaries without Public
Accountability:\u00a0Disclosures
The new standard provides reduced disclosure
requirements, replacing the disclosure requirements
of\u00a0other IFRS accounting standards, but does not
change\u00a0recognition and measurement requirements.
The standard is effective for annual reporting
periods\u00a0beginning on or after 1 January 2027 and
has\u00a0not\u00a0yet been endorsed in the UK. This standard
cannot be applied by the Group or the Company
because it is only\u00a0applicable to subsidiaries that have
no\u00a0public accountability.
\u2013 Amendments to IAS 21 \u2013 Translation to a
Hyperinflationary Presentation Currency
These narrow-scope amendments clarify how
companies\u00a0should translate financial statements
from\u00a0a\u00a0non-hyperinflationary currency into a
hyperinflationary one.
The amendments are effective for the Group from
1\u00a0January 2027 and have not yet been endorsed for use
in the UK. The application of these amendments is not
expected to have a significant impact on the Group.
2.2 Basis of consolidation
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
(b) Associates
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is generally identified with a
shareholding of between 20% and 50% of an entity\u2019s voting
rights. The consolidated financial statements include the
Group\u2019s share of the total recognised gains and losses of
associates on an equity-accounted basis from the date that
significant influence commences until the date that significant
influence ceases.
The Group\u2019s share of its associates\u2019 post-acquisition profits or
losses after tax is recognised in the income statement for each
period, and its share of the movement in the associates\u2019 net
assets is reflected in the investments\u2019 carrying values on the
statement of financial position. When the Group\u2019s share of
losses equals or exceeds the carrying amount of the associate,
the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has
incurred obligations in respect of the associate.
(c) Transactions eliminated on consolidation
Intragroup balances, transactions and any unrealised gains
arising from intragroup transactions are eliminated in preparing
the consolidated financial statements. Unrealised losses are
also eliminated unless the transaction provides evidence of
an\u00a0impairment of the asset transferred. Foreign currency
gains\u00a0and losses on intragroup monetary assets and liabilities
may not fully eliminate on consolidation when the intragroup
monetary item concerned is transacted between two Group
entities that have different functional currencies. Unrealised
gains arising from transactions with associates are eliminated
to the extent of the Group\u2019s interest in the entity. Unrealised
losses are eliminated in the same way as unrealised gains,
but\u00a0only to the extent that there is no evidence of impairment.
2.3 Foreign currency translation
(a) Functional currency
Items included in the financial statements of each of the
Group\u2019s entities are measured using the currency of the
primary economic environment in which the entity operates (the
\u2018functional currency\u2019). Entities operating in France, Germany,
The Netherlands, Spain, Portugal, Ireland, Italy and Belgium
have a functional currency of Euros; those subsidiary entities
operating from the USA, Bermuda, Guernsey and Syndicates
have a functional currency of US Dollars. Functional currencies
of\u00a0entities operating in Asia include US Dollars and Singapore
Dollars. All other entities have a functional currency of Sterling
except Hiscox plc and Hiscox Holdings Limited which have a
functional currency of US Dollars.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the
retranslation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised
in the income statement, except when deferred in equity as
IFRS 9 effective net investment hedges or when the underlying
balance is deemed to form part of the Group\u2019s net investment
in a subsidiary operation and is unlikely to be settled in the
foreseeable future. Non-monetary items carried at historical
cost are translated on the statement of financial position at
the\u00a0exchange rate prevailing on the original transaction
date.\u00a0Non-monetary items measured at fair value are
translated\u00a0using the exchange rate ruling when the fair
value\u00a0was determined.
(c) Group companies
The results and financial position of all the Group entities that
have a functional currency different from the presentation
currency are translated into the presentation currency
as\u00a0follows:
\u2022 assets and liabilities for each statement of financial
position presented are\u00a0translated at the closing rate at
the\u00a0end of the reporting period;
\u2022 income and expenses for each income statement are
translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the date of
the transactions); and
\u2022 all resulting exchange differences are recognised as a
separate component of equity.
When a foreign operation is sold, such exchange differences
are recognised in the income statement as part of the gain, or
loss, on sale.
2.4 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
depreciation and any impairment loss. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items. Subsequent costs are included in the asset\u2019s carrying
amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance items
are charged to the income statement during the financial
period in which they are incurred.
Land is not depreciated as it is deemed to have an indefinite
useful economic life. The cost of leasehold improvements is
amortised over the unexpired term of the underlying lease
or\u00a0the estimated useful life of the asset, whichever is
shorter.\u00a0Depreciation on other assets is calculated using
the\u00a0straight-line method to allocate their cost, less their
residual\u00a0values, over their estimated useful lives.
The rates applied are as follows:
\u2022 buildings20-50 years
\u2022 vehicles3 years
\u2022 leasehold improvements including
fixtures and fittings10-15 years
\u2022 furniture, fittings and equipment 3-15 years
The assets\u2019 residual values and useful lives are reviewed at the
end of the reporting period and adjusted if appropriate.
An asset\u2019s carrying amount is written down immediately to its
recoverable amount if the asset\u2019s carrying amount is greater
than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing proceeds with the
carrying amount. These are included in the income statement.
2.5 Intangible assets
(a) Goodwill
Goodwill represents amounts arising on acquisition of
subsidiaries and associates. In respect of acquisitions that
have occurred since 1 January 2004, goodwill represents
the\u00a0excess of the fair value of consideration of an acquisition
over the fair value of the Group\u2019s share of the net identifiable
assets and contingent liabilities assumed of the acquired
subsidiary or associate at the acquisition date. In respect
of\u00a0acquisitions prior to 1 January 2004, goodwill is included
on\u00a0the basis of its deemed cost, which represents the
amount\u00a0recorded under previous generally accepted
accounting principles.
Goodwill on acquisition of subsidiaries is included in intangible
assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is not amortised but is tested at least annually
for\u00a0impairment and carried at cost, less accumulated
impairment losses.
Goodwill is allocated to the Group\u2019s cash-generating units,
identified according to the smallest identifiable group of
assets\u00a0from which cash flows are generated that are largely
independent of the cash flows generated by other assets or
groups of assets.
The impairment review process examines whether or not
the\u00a0carrying value of the goodwill attributable to individual
cash-generating units exceeds its recoverable amount.
Any\u00a0excess of goodwill over the recoverable amount arising
from the review process indicates impairment. Any impairment
charges are presented as part of operational expenses. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(b) Other intangible assets
Intangible assets acquired separately from a business are
carried initially at cost. An intangible asset acquired as part
of\u00a0a\u00a0business combination is recognised outside of goodwill if
the\u00a0asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably. Customer
relationships, syndicate capacity, trademarks and software
acquired are capitalised at cost, being the fair value of the
consideration paid. Software is capitalised on the basis of
the\u00a0costs incurred to acquire and bring it into use. Intangible
assets with indefinite lives such as syndicate capacity are
subsequently valued at cost and are subject to annual
impairment assessment.
Intangible assets with finite useful lives are consequently
carried at cost, less accumulated amortisation and
impairment.\u00a0The useful life of the asset is reviewed annually.
Any changes in estimated useful lives are accounted for
prospectively with the effect of the change being recognised
in\u00a0the current and future periods, if relevant.
Amortisation is calculated using the straight-line method
to\u00a0allocate the cost over the estimated useful lives of the
intangible assets.
Subsequent expenditure on other intangible assets is
capitalised only when it increases the future economic
benefits\u00a0embodied in the specific asset to which it relates.
All\u00a0other expenditure is expensed as incurred.
Those intangible assets with finite lives are assessed for
indicators of impairment at each reporting date. Where there
is\u00a0an indication of impairment then a full impairment test is
performed. An impairment loss recognised for an intangible
asset in prior years should be reversed if, and only if, there
has\u00a0been a change in the estimates used to determine the
asset\u2019s recoverable amount since the last impairment loss
was\u00a0recognised.
2.6 Impairment of non-financial assets
Non-financial assets (such as goodwill, an intangible asset
or\u00a0item of property, plant and equipment) that have an
indefinite useful life are not subject to amortisation and are
tested annually or whenever there is an indication of
impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not
be\u00a0recoverable.
Objective factors that are considered when determining
whether a non-financial asset or group of non-financial assets
may be impaired include, but are not limited to, the following:
\u2022 adverse economic, regulatory or environmental conditions
that may restrict future cash flows and asset usage
and/or recoverability;
\u2022 the likelihood of accelerated obsolescence arising from
the development of new technologies and products; and
\u2022 the disintegration of the active market(s) to which the
asset is related.
An impairment loss is recognised for the amount by which the
asset\u2019s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset\u2019s fair value less
costs to sell or value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating
units). Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset in prior periods. A reversal
of an impairment loss is recognised as income immediately.
Impairment losses recognised in respect of goodwill are not
subsequently reversed.
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
2.8 Cash and cash equivalents
The Group has classified cash deposits and short-term
highly-liquid investments as cash and cash equivalents.
These\u00a0assets are readily convertible into known amounts of
cash and are subject to inconsequential changes in value.
Cash equivalents are financial investments with less than
three\u00a0months to maturity at the date of acquisition.
2.9 Derivative financial instruments
Derivatives are initially recognised at fair value on the date
on\u00a0which a derivative contract is entered into and are
subsequently valued at fair value at the end of the reporting
period. Fair values are obtained from quoted market values
and, if these are not available, valuation techniques including
option pricing models are used as appropriate. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. For derivatives not formally
designated as a hedging instrument, fair value changes are
recognised immediately in the consolidated income statement.
Changes in the value of derivatives and other financial
instruments formally designated as hedges of net investments
in foreign operations are recognised in the currency translation
reserve to the extent they are effective; gains or losses relating
to the ineffective portion of the hedging instruments are
recognised immediately in the consolidated income statement.
The Group had no derivative instruments designated for hedge
accounting during the current period and prior financial year.
2.10 Own shares
Where any Group company purchases the Parent Company\u2019s
equity share capital (own shares), the consideration paid,
including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the
Company\u2019s owners on consolidation. Where such shares are
subsequently sold, reissued or otherwise disposed of, any
consideration received is included in equity attributable to the
Company\u2019s owners, net of any directly attributable incremental
transaction costs and the related tax effects.
2.11 Insurance and reinsurance contracts
The accounting policy set out below is applicable to insurance
and reinsurance contracts that are issued by the Group
and\u00a0reinsurance contracts held by the Group unless
indicated\u00a0otherwise.
(a) Classification
Insurance contracts are defined as those containing significant
insurance risk. Significant insurance risk criteria are met if,
and\u00a0only if, an insured event could cause an insurer to make
significant additional payments in any scenario, excluding
scenarios that lack commercial substance, at the inception
of\u00a0the contract. Such contracts remain insurance contracts
until all rights and obligations are extinguished or expire.
The Group issues short-term casualty and property
(re)insurance contracts in the normal course of business,
under\u00a0which it accepts significant insurance risk from its
policyholders. The Group also enters into ceded reinsurance
contracts with reinsurers under which the Group transfers
significant insurance risk to reinsurers and is compensated
for\u00a0claims on contracts issued by the Group.
(b) Separating components
The Group assesses its insurance and reinsurance products
to\u00a0determine whether they contain distinct components which
must be accounted for under another IFRS instead of under
IFRS 17. After separating any distinct components, the Group
applies IFRS 17 to all remaining components of the (host)
insurance contract. Currently, the Group\u2019s products do not
include any distinct components that require separation.
Some reinsurance contracts issued contain profit commission
arrangements. Under these arrangements, there is a
guaranteed minimum amount that the policyholder will always
receive \u2013 either in the form of profit commission, or as claims,
or another contractual payment irrespective of the insured
event happening. The guaranteed minimum amounts have
been assessed to be highly interrelated with the insurance
component of the reinsurance contracts and are, therefore,
non-distinct investment components which are not accounted
for separately. However, receipts and payments of these
investment components are excluded from insurance revenue
and expenses.
(c) Level of aggregation
Insurance contracts are aggregated into groups for
measurement purposes. The level of aggregation for the Group
is determined firstly by grouping contracts into portfolios which,
with some limited exceptions, are set as the reserving classes
of each legal entity. Portfolios comprise groups of contracts
with similar risks which are managed together. Portfolios are
further divided based on expected profitability at inception
into\u00a0three categories: onerous contracts, contracts with no
significant risk of becoming onerous, and the remainder.
No\u00a0group for level of aggregation purposes may contain
contracts issued more than one year apart. The grouping
of\u00a0contracts is not subsequently reconsidered.
A group of insurance contracts is considered to be onerous
at\u00a0initial recognition if the fulfilment cash flows allocated to
that\u00a0group of contracts in total are a net outflow. That is if
the\u00a0present value of expected claims, attributable expenses
and\u00a0risk adjustment exceeds the premium.
Portfolios of reinsurance contracts held are assessed
for\u00a0aggregation separately from portfolios of insurance
contracts\u00a0issued. Reinsurance contracts held cannot
be\u00a0onerous.
(d) Recognition and derecognition
Groups of insurance contracts issued are initially recognised
from the earliest of the following:
\u2022 the beginning of the coverage period;
\u2022 the date when the first payment from the policyholder
is\u00a0due, or actually received if there is no due date; and
\u2022 when the Group determines that a group of contracts
becomes onerous.
Insurance contracts acquired in a business combination
within\u00a0the scope of IFRS 3 Business Combinations or a
portfolio transfer are accounted for as if they were entered
into\u00a0at the\u00a0date of acquisition or transfer.
Reinsurance contracts held are recognised as follows:
\u2022 a group of reinsurance contracts held that provide
proportionate coverage is recognised at the later of
the\u00a0following dates (unless underlying contracts are
onerous, in which case earlier recognition is required):
o the beginning of the coverage period of the
group;\u00a0and
o the initial recognition of any underlying
insurance\u00a0contract;
\u2022 all other groups of reinsurance contracts held are
recognised from the beginning of the coverage period
of\u00a0the group of reinsurance contracts held; unless
the\u00a0Group entered into the reinsurance contract
held\u00a0at\u00a0or\u00a0before the date when an onerous group
of\u00a0underlying\u00a0contracts is recognised prior to the
beginning\u00a0of the coverage period of the group of
reinsurance contracts\u00a0held, in which case the
reinsurance\u00a0contract\u00a0held is recognised at the
same\u00a0time\u00a0as\u00a0the\u00a0group\u00a0of underlying insurance
contracts\u00a0is\u00a0recognised.
Only contracts that individually meet the recognition criteria
by\u00a0the end of the reporting period are included in the
groups.\u00a0When contracts meet the recognition criteria in
the\u00a0groups after\u00a0the reporting date, they are added to
the\u00a0groups in the reporting period in which they meet the
recognition criteria. The\u00a0composition of the groups is not
reassessed in subsequent periods.
An insurance contract is derecognised when it is:
\u2022 extinguished (that is, when the obligation specified
in\u00a0the\u00a0insurance contract expires or is discharged or
cancelled); or
\u2022 the contract is modified such that the modification results
in a change in the measurement model (for example, the
general measurement model (GMM)) or the applicable
standard for measuring a component of the contract,
substantially changes the contract boundary, or requires
the modified contracts to be included in a different group.
When a modification is not treated as a derecognition,
the\u00a0Group recognises amounts paid or received for the
modification of the contract as an adjustment to the
relevant\u00a0liability or asset for remaining coverage.
When a group of insurance contracts is derecognised,
adjustments to remove related rights and obligations result
in\u00a0the following amounts being charged immediately to
consolidated income statement:
\u2022 if the contract is extinguished, any net difference
between\u00a0the derecognised part of the liability for
remaining coverage (LRC) of the original contract and
any\u00a0other cash flows arising from extinguishment;
\u2022 if the contract is transferred to the third party, any net
difference between the derecognised part of the LRC
of\u00a0the original contract and the premium charged by
the\u00a0third party; or
\u2022 if the original contract is modified resulting in its
derecognition, any net difference between the
derecognised part of the LRC and the hypothetical
premium that the entity would have charged if it had
entered into a contract with equivalent terms to the new
contract at the date of the contract modification, less
any\u00a0additional premium charged for the modification.
(e) Contract boundary
The Group uses the concept of contract boundary to
determine what cash flows should be considered in the
measurement of groups of insurance contracts. Cash flows
are\u00a0within the boundary of an insurance contract if they
arise\u00a0from substantive rights and obligations that exist during
the reporting period in which the Group can compel the
policyholder to pay the premiums, or in which the Group has a
substantive obligation to provide the policyholder with services.
A substantive obligation to provide services ends when:
\u2022 the Group has the practical ability to reassess the risks of
the particular policyholder and, as a result, can set a price
or level of benefits that fully reflects those risks; or
\u2022 both of the following criteria are satisfied:
o the Group has the practical ability to reassess the
risks of the portfolio of insurance contracts that
contain the contract and, as a result, can set a
price\u00a0or level of benefits that fully reflects the risk
of\u00a0that portfolio;
o the pricing of the premiums for coverage up to the
date when the risks are reassessed does not take
into account the risks that relate to periods after the
reassessment date.
A liability or asset relating to expected premiums or claims
outside the boundary of the insurance contract is not
recognised. Such amounts relate to future insurance contracts.
(f) Measurement \u2013 premium allocation approach
Initial measurement
The Group applies the premium allocation approach (PAA)
to\u00a0the majority of the insurance contracts that it issues and
reinsurance contracts that it holds, because:
\u2022 the coverage period of each contract in the group is
one\u00a0year or less; or
\u2022 for contracts longer than one year, the Group has
modelled possible future scenarios and reasonably
expects that the measurement of the LRC for the
group\u00a0containing those contracts under the PAA does
not differ materially from the measurement that would
be\u00a0produced applying the general model.
For insurance contracts issued, on initial recognition, the Group
measures the LRC as the amount of premiums received, less
any acquisition cash flows paid and any amounts arising from
the derecognition of the insurance acquisition cash flows asset
and the derecognition of any other relevant pre-recognition
cash flows.
For reinsurance contracts held, on initial recognition, the
Group\u00a0measures assets for the remaining coverage at the
amount of ceding premiums paid, plus broker fees paid to a
party other than the reinsurer and any amounts arising from the
derecognition of any other relevant pre-recognition cash flows.
For insurance contracts issued, insurance acquisition cash
flows allocated to a group are recognised over the coverage
period of contracts in the group. For reinsurance contracts
held, broker fees are recognised over the coverage period
of\u00a0contracts in a group.
Subsequent measurement
For insurance contracts issued, at each of the subsequent
reporting dates, the LRC is:
\u2022 increased for premiums received in the period;
\u2022 decreased for insurance acquisition cash flows paid
in\u00a0the\u00a0period;
\u2022 decreased for the amounts of expected premium
receipts\u00a0recognised as insurance revenue for the
services\u00a0provided in the period;
\u2022 increased for the amortisation of insurance acquisition
cash flows in the period recognised as insurance
service\u00a0expenses; and
\u2022 decreased for any investment component paid or
transferred to the liability for incurred claims.
For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
\u2022 increased for ceding premiums paid in the period;
\u2022 increased for broker fees paid in the period;
\u2022 decreased for the expected amounts of ceding premiums
and broker fees recognised as reinsurance expenses for
the services received in the period; and
\u2022 decreased for any investment component paid or
transferred to the reinsurance assets for incurred claims.
The Group does not adjust the LRC for insurance contracts
issued or the remaining coverage for reinsurance contracts
held for the effect of the time value of money, because
associated premiums are due within one year of the coverage
period. The Group only adjusts the remaining coverage for
reinsurance contracts held for the time value of money in
relation to the legacy portfolio transactions (LPT) that were
held,\u00a0as the associated premiums are not due within one year
of the coverage period.
The Group estimates the liability for incurred claims (LIC) as the
fulfilment cash flows related to incurred claims. The fulfilment
cash flows incorporate, in an unbiased way, all reasonable and
supportable information available without undue cost or effort
about the amount, timing and uncertainty of those future
cash\u00a0flows.
If facts and circumstances indicate that a group of insurance
contracts measured under the PAA is onerous on initial
recognition or has become onerous subsequently, the Group
increases the carrying amount of the LRC, recognising a loss
component, to the amounts of the excess of the fulfilment cash
flows that relate to the remaining coverage of the group of
contracts, over the carrying amount of the LRC of the group.
The amount of such an increase is recognised in insurance
service expenses. Subsequently, the loss component is
amortised over the coverage period of the group of contracts.
When a loss is recognised on initial recognition of an onerous
group of underlying insurance contracts or on addition of
onerous underlying insurance contracts to that group, the
carrying amount of the reinsurance asset for remaining
coverage for reinsurance contracts held measured under the
PAA is increased by the amount of expected recoveries that
will be in the consolidated income statement and a loss
recovery component is established or adjusted for that
amount. The loss recovery component is calculated by
multiplying the loss component recognised on underlying
insurance contracts by the percentage of claims on underlying
insurance contracts that the Group expects to recover from the
reinsurance contracts held that are entered into before or at
the same time as the loss is recognised on the underlying
insurance contracts. When underlying insurance contracts that
are reinsured are included in the same group as insurance
contracts issued that are not reinsured, the Group applies a
systematic and rational method of allocation to determine the
portion of losses that relates to underlying insurance contracts.
(g) Insurance revenue
The insurance revenue for the period is the amount of
expected premium receipts (excluding any investment
component) allocated to the period. The Group allocates
the\u00a0expected premium receipts to each period of insurance
contract services on the basis of the passage of time. But if the
expected pattern of release of risk during the coverage period
differs significantly from the passage of time, for example a
group of contracts that is exposed to large natural catastrophe
risk concentrated in the first or second half of the year, then
the\u00a0allocation is made on the basis of the expected timing of
incurred insurance service expenses.
Changes to the basis of allocation are accounted for
prospectively as a change in accounting estimate.
(h) Insurance service expenses
Insurance service expenses include the following:
\u2022 incurred claims, excluding investment components
reduced by loss component allocations;
\u2022 other incurred directly attributable expenses;
\u2022 insurance acquisition cash flows amortisation using the
pattern that is consistent with the insurance revenue;
\u2022 changes that relate to past service;
\u2022 changes that relate to future service;
\u2022 insurance acquisition cash flows assets impairment; and
\u2022 mandatory reinstatement premiums.
Other expenses not meeting the above categories are
included\u00a0in other operating expenses in the consolidated
income statement.
(i) Allocation of reinsurance premiums
The allocation of reinsurance premiums includes reinsurance
premiums and other incurred directly attributable expenses.
Reinsurance premium and expenses are recognised similarly
to\u00a0insurance revenue. The amount of reinsurance expenses
recognised in the reporting period depicts the transfer of
received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay
in exchange for those services. Additionally, broker fees and
ceding commissions that are not contingent on claims of the
underlying contracts issued reduce ceding premiums and are
accounted for as part of reinsurance premiums.
In addition, the allocation of reinsurance premiums also
includes changes in the reinsurance assets arising from
retroactive reinsurance contracts held and voluntary
reinstatement ceded premiums.
(j) Amounts recoverable from reinsurers for incurred claims
The amounts recoverable from reinsurers for incurred
claims\u00a0include:
\u2022 incurred claims recoveries, excluding
investment\u00a0components;
\u2022 loss-recovery component allocations;
\u2022 changes that relate to past service;
\u2022 effect of changes in the risk of reinsurers\u2019
non-performance;
\u2022 amounts relating to accounting for onerous groups
of\u00a0underlying insurance contracts issued;
\u2022 ceding commissions that are contingent on claims
of\u00a0the\u00a0underlying contracts issued (these reduce incurred
claims\u00a0recovery); and
\u2022 mandatory reinstatement ceded premiums.\u00a0
(k) Insurance finance income or expenses
Insurance finance income or expenses comprise the change
in\u00a0the carrying amount of the group of insurance contracts
arising from:
\u2022 the effect of the time value of money and changes in
the\u00a0time value of money. This mainly comprises interest
accreted on the LIC and interest unwind on the assets
for\u00a0incurred claims (AIC); and
\u2022 the effect of financial risk and changes in financial risk.
This mainly includes the effect of changes in interest
rates\u00a0(for example, discount rates).
The Group does not disaggregate changes in the risk
adjustment for non-financial risk between insurance service
result and insurance finance income or expenses. The change
in the risk adjustment is entirely presented as part of the
insurance service result.
Foreign exchange gains and losses continue to be presented
in\u00a0the net other foreign exchange (losses)/gains line item.
2.12 Taxation
Current tax, including corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively
enacted by the end of the reporting period. A provision is
recognised for those matters for which the tax determination is
uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are
measured at the best estimate of the amount expected to
become payable. The assessment is based on the judgement
of tax professionals within the Group supported by previous
experience in respect of such activities and in certain cases
based on advice sought from specialist tax advisors.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, if the deferred income tax arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is
not\u00a0recognised. With the exception of deferred tax related to
top-up income taxes arising from tax law enacted to implement
'Pillar Two' legislation, deferred tax is determined using tax
rates and laws that have been enacted or substantively
enacted by the end of the reporting period and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled. Deferred tax assets are
recognised to the\u00a0extent that it is probable that future taxable
profit will be available against which the temporary differences
can be utilised. Deferred tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except where the Group controls the timing of the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
2.13 Employee benefits
(a) Pension obligations
The Group has defined contribution and defined benefit
pension schemes. The defined benefit scheme closed to
future\u00a0accrual with effect from 31 December 2006 and
active\u00a0members were offered membership of the defined
contribution scheme from 1 January 2007. A defined
contribution plan is a pension plan under which the Group
pays\u00a0fixed contributions into a separate entity and has no
further obligation beyond the agreed contribution rate. A
defined benefit plan is a pension plan that defines an amount
of\u00a0pension benefit that an employee will receive on retirement,
usually dependent on one\u00a0or more factors such as age, years
of service and compensation.
For defined contribution plans, the Group pays contributions
to\u00a0publicly or privately administered pension insurance plans
on\u00a0a contractual basis. The contributions are recognised as
an\u00a0employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that
a\u00a0cash refund or a reduction in future payments is available.
The amount recognised on the statement of financial position
in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the end of the reporting
period, less the fair value of plan assets. The calculation of the
defined benefit obligation is performed annually by a qualified
actuary using the projected unit method. As the plan is closed
to all future benefit accruals, each participant\u2019s benefits under
the plan are based on their service to the date of closure or
earlier leaving date and their final pensionable earnings.
The\u00a0service cost is the expected administration cost during
the\u00a0year. Past\u00a0service costs are recognised immediately in
the\u00a0income\u00a0statement.
Remeasurements of the net defined benefit asset, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any),
are recognised immediately in other comprehensive income.
The Group determines the net interest expense/(income) on
the\u00a0net defined benefit asset for the period by applying the
discount rate used to measure the defined benefit obligation
at\u00a0the beginning of the annual period to the then net\u00a0defined
benefit asset, taking into account any changes in the net
defined benefit asset during the period as a result of
contributions and benefit payments. Net\u00a0interest expense and
other expenses related to defined benefit\u00a0plans are recognised
in the income statement through\u00a0operating expenses.
To the extent that a surplus emerges on the defined benefit
obligation, it is only recognisable as an asset when it is
probable that future economic benefits will be recovered
by\u00a0the\u00a0Group.
(b) Other long-term employee benefits
The Group provides sabbatical leave to employees on
completion of every five years\u2019 service. The present value
of\u00a0the\u00a0expected costs of these benefits is accrued over
the\u00a0period\u00a0of employment. In determining this liability,
consideration is given to future increases in salary
levels,\u00a0experience with employee departures and
periods\u00a0of\u00a0service.
(c) Share-based compensation
The Group operates equity settled share-based
employee\u00a0compensation plans. These include the share
option\u00a0schemes,\u00a0and the Group\u2019s Performance Share
Plans,\u00a0outlined\u00a0in the Directors\u2019 remuneration report,
together\u00a0with\u00a0the\u00a0Group\u2019s Save As You Earn (SAYE)
schemes.\u00a0The\u00a0fair\u00a0value\u00a0of the employee services
received,\u00a0measured\u00a0at\u00a0grant\u00a0date, in exchange for the
grant\u00a0of\u00a0the\u00a0awards is recognised as\u00a0an expense, with
the\u00a0corresponding credit being\u00a0recorded in\u00a0retained
earnings\u00a0within equity. The total\u00a0amount to be expensed
over\u00a0the\u00a0vesting period is determined\u00a0by reference to the
fair\u00a0value\u00a0of\u00a0the awards granted, excluding the impact of
any\u00a0non-market vesting conditions (for example, profitability
or\u00a0net asset growth\u00a0targets). Non-market vesting conditions
are\u00a0included\u00a0in\u00a0assumptions about the number of awards
that\u00a0are\u00a0expected\u00a0to become exercisable. At the end of
the\u00a0reporting period, the Group revises its estimates of
the\u00a0number of awards that are expected to vest.
The Group recognises the impact of the revision of
original\u00a0estimates, if any, in the income statement, and
a\u00a0corresponding adjustment to equity, in periods in
which\u00a0the\u00a0estimates are revised.
When the terms and conditions of an equity settled
share-based employee compensation plan are modified,
and\u00a0the expense to be recognised increases as a result of
the\u00a0modification, then the increase is recognised evenly
over\u00a0the remaining vesting period. When a modification
reduces the expense to be recognised, there is no
adjustment\u00a0recognised and the pre-modification expense
continues to be applied. The\u00a0proceeds received net of any
directly attributable transaction costs are credited to share
capital and share\u00a0premium when the options are exercised.
(d) Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or whenever
an\u00a0employee accepts voluntary redundancy in exchange for
these\u00a0benefits. The Group recognises termination benefits
when it is demonstrably committed to either: terminating the
employment of current employees according to a detailed
formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage
voluntary redundancy.
(e) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses
and profit sharing, based on a formula that takes into
consideration the profit attributable to the Company\u2019s
shareholders after certain adjustments. The Group
recognises\u00a0a provision where a contractual obligation to
employees exists, or where there is a past practice that
has\u00a0created a constructive obligation.
2.14 Finance costs
Finance costs consist of interest charges accruing on the
Group\u2019s borrowings and bank overdrafts together with
commission fees charged in respect of Letters of Credit
and\u00a0interest in respect of lease liabilities. Arrangement fees
in\u00a0respect of financing arrangements are charged over the
life\u00a0of the related facilities.
2.15 Leases
(a) Hiscox as lessee
The Group recognises right-of-use assets at the
commencement date of the lease (for example, the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the
commencement date, less any lease incentives received.
Unless the Group is reasonably certain to obtain ownership of
the leased asset at the end of the lease term, the recognised
right-of-use assets are depreciated on a straight-line basis over
the shorter of their estimated useful life and the lease term.
Right-of-use assets are subject to impairment. Right-of-use
assets are presented on the statement of financial position as
\u2018property, plant and equipment\u2019.
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating a lease, if
the\u00a0lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend
on\u00a0an index or a rate are recognised as an expense in the
period in which the event or condition that triggers the
payment\u00a0occurs. Lease liabilities are included in \u2018trade and
other payables\u2019 on the statement of financial position.
In calculating the present value of lease payments, the
Group\u00a0uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is
a modification that is not accounted for as a separate lease:
future lease payments that are linked to a rate or index, a
change in the lease term, a change in the in-substance fixed
lease payments, a change in the assessment to purchase the
underlying asset or a change in the amounts expected to be
payable under a residual value guarantee.
The Group applies the short-term lease recognition exemption
to its applicable short-term leases. It also applies the low-value
assets recognition exemption to leases of office equipment that
are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as an
expense on a straight-line basis over the lease term.
(b) Hiscox as lessor
Rental income from operating leases is recognised on
a\u00a0straight-line basis over the term of the relevant
contractual\u00a0agreement.
2.16 Dividend distribution
Dividend distribution to the Company\u2019s shareholders is
recognised as a liability in the Group\u2019s financial statements
in\u00a0the period in which the dividends are approved.
2.17 Operations held for sale
Assets and liabilities held for disposal as part of operations
which are held for sale are shown separately in the
consolidated statement of financial position. Operations
held\u00a0for sale are recorded at the lower of their carrying
amount\u00a0and their fair value less the estimated selling costs.
2.18 Provisions and contingent liabilities
Provisions are recognised when there is a present legal or
constructive obligation as a result of a past event that can be
measured reliably, and it is probable that an outflow of
economic benefits will be required to settle that obligation.
The amount recorded as a provision is the best estimate
of\u00a0the\u00a0expenditure required to settle the present obligation
at\u00a0the\u00a0end of the reporting period. Discounting is applied
to\u00a0the\u00a0provision where the effect of the time value of
money\u00a0is\u00a0material. Provisions are not recognised for
future\u00a0operating losses. A provision for restructuring is
recognised\u00a0when the Group\u00a0has\u00a0approved a detailed
and\u00a0formal restructuring plan\u00a0and the\u00a0restructuring has
either\u00a0commenced or has\u00a0been\u00a0announced\u00a0publicly.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from the
contracts are less than the related unavoidable cost of
meeting\u00a0its obligations under the contract.
A provision for a termination payment is recognised when the
Group has a demonstrable commitment to either terminate
the\u00a0employment of an employee or group of employees
before\u00a0the\u00a0normal retirement date, or to provide termination
benefits as a result of an offer made in order to encourage
voluntary\u00a0redundancy.
Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain.
Contingent liabilities are disclosed if there is a possible future
obligation as a result of a past event, or if there is a present
obligation as a result of a past event but either a payment is
not probable or the amount cannot be reasonably estimated.
2.19 Use of significant accounting judgements, estimates
and assumptions
The preparation of financial statements requires the Group to
select accounting policies and make judgements (other than
those involving estimations) that have a significant impact on
the amounts recognised and to make estimates and
assumptions that affect the reported amounts of assets,
liabilities, income and expenses in the consolidated
financial\u00a0statements.
The Audit Committee reviews the reasonableness of critical
judgements, estimates and assumptions applied and the
appropriateness of material accounting policies information.
The significant issues considered by the Committee in the
year\u00a0are included within the Audit Committee report on pages
102 to 105.
Significant accounting judgements
The following accounting policies are the critical judgements,
apart from those involving estimations (which are presented
separately below), that the Directors have made in the process
of applying the Group's accounting policies and that have the
most significant impact on the amounts recognised in the
consolidated financial statements.
\u2022 Consolidation: assessment of whether the Group controls
or has significant influence over an underlying entity, for
example the treatment of insurance-linked securities
funds including consideration of its decision-making
authority and its rights to the variable returns from
the\u00a0entity.
\u2022 Financial investments: classification and measurement
of\u00a0investments including the application of the fair
value\u00a0option.
(a) Liability for incurred claims
The ultimate cost of outstanding claims is estimated by using a
range of standard actuarial claims projection techniques. The
Group relies on actuarial analysis to estimate the settlement
cost of future claims. Via a formal governed process, there is
close communication between the actuaries and other key
stakeholders, such as the underwriters, claims and finance
teams when setting and validating the assumptions. The main
assumption underlying these techniques is that a Group\u2019s past
claims development experience can be used to project future
claims development and hence ultimate claims costs. These
methods extrapolate the development of paid and incurred
losses, average costs per claim (including claims handling costs),
and claim numbers based on the observed development of
earlier years and expected loss ratios. Historical claims
development is mainly analysed by accident years, but can also
be further analysed by geographical area, as well as by significant
business lines and claim types. In most cases, no explicit
assumptions are made regarding future rates of claims inflation
or loss ratios. Instead, the assumptions used are those implicit in
the historical claims development data on which the projections
are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (for example,
to reflect one-off occurrences, changes in external or market
factors such as public attitudes to claiming, economic conditions,
levels of claims inflation, levels of recoveries from salvage or
subrogation, judicial decisions and legislation, as well as internal
factors such as portfolio mix, policy features and claims\u00a0handling
procedures) in order to arrive at the estimated ultimate cost of
claims that present the probability-weighted expected value
outcome from the range of possible outcomes, taking account
of\u00a0all the uncertainties involved.
(b) Premium allocation approach eligibility assessment
A simplified measurement model, the PAA, can be applied if
certain eligibility criteria are met. The majority of the Group\u2019s
policies have a coverage period of 12 months or less and so
are eligible for the PAA. Management applies significant
judgement to whether applying PAA to those groups of
contracts\u00a0differs materially from general measurement model
(GMM) with a coverage period\u00a0extending beyond 12 months.
Significant accounting estimates
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment
to\u00a0the carrying amounts of assets and liabilities within the
next\u00a0financial year, are discussed below.
All estimates are based on management\u2019s knowledge of
current facts and circumstances, assumptions based on
that\u00a0knowledge and their predictions of future events. Actual
results may differ from those estimates, possibly significantly.
Revisions to accounting estimates are recognised in the
period\u00a0in which the estimate is revised and in any future
periods affected.
The most critical estimate included within the consolidated
statement of financial position is the measurement of insurance
contract liabilities and reinsurance contract assets, and in
particular the estimate of the liability for incurred claims (LIC).
The total gross estimate of LIC as at 31\u00a0December 2025 is
$6,460.9 million (2024: $6,040.7\u00a0million). The total estimate for
reinsurance asset for incurred claims as at 31\u00a0December 2025
is $1,966.8 million (2024:\u00a0$2,046.5 million).
Insurance and reinsurance contracts
In applying IFRS 17 measurement requirements, the following
inputs and methods were used that include significant
estimates. The present value of future cash flows is
estimated\u00a0using deterministic scenarios. The assumptions
used\u00a0in the deterministic scenarios are derived to approximate
the probability-weighted mean of a full range of scenarios.
For\u00a0the sensitivities with regard to the assumptions made
that\u00a0have the most significant impact on measurement under
IFRS 17 please refer to note 3 management of risk.
(a) Discount rates
Insurance contract liabilities are calculated by discounting
expected future cash flows at a risk-free rate, plus an illiquidity
premium where applicable. Risk-free rates were derived using
swap rates available in the market denominated in the same
currency as the insurance contracts being measured. When
swap rates are not available, highly liquid sovereign bonds with
the highest (for example, AAA/AA) credit rating were used.
Management uses judgement to assess liquidity characteristics
of the liability cash flows. The illiquidity premium was estimated
based on market observable liquidity premiums in financial
assets, adjusted to reflect the illiquidity characteristics of the
liability cash flows. The illiquidity premium is determined by
reference to market observable AA-rated bonds yield curve
in\u00a0the currency of the insurance contract being measured,
adjusted to remove both expected and unexpected credit risk.
The following discount rates were applied for the currencies
and periods presented below:
Year end 31 December 2025
1 year
3 year
5 year
%
%
%
USD
3.51
3.47
3.64
GBP
3.81
3.90
4.06
EUR
2.19
2.43
2.71
CAD
2.42
2.75
3.00
Year end 31 December 2024
1 year
3 year
5 year
%
%
%
USD
4.27
4.18
4.24
GBP
4.68
4.40
4.35
EUR
2.46
2.35
2.49
CAD
2.96
2.88
2.98
(b) Estimates of future cash flows to fulfil insurance contracts
Included in the measurement of each group of contracts within
the scope of IFRS 17 are all of the future cash flows within the
boundary of each group of contracts. The estimates of these
future cash flows are based on probability-weighted expected
future cash flows. The Group estimates which cash flows are
expected and the probability that they will occur as at the
measurement date. In setting these expectations, the Group
uses information about past events, current conditions and
forecasts of future conditions. The Group\u2019s estimate of
future\u00a0cash flows is the mean of a range of scenarios that
reflect the\u00a0full range of possible outcomes. Each scenario
specifies\u00a0the amount, timing and probability of cash flows.
The\u00a0probability-weighted average of the future cash flows is
calculated using a deterministic scenario representing the
probability-weighted mean of a range of scenarios.
Where estimates of expenses-related cash flows are determined
at the portfolio level or higher, they are allocated\u00a0to\u00a0groups of
contracts on a systematic basis, such as\u00a0activity-based costing
method. The Group has determined that this method results in
a\u00a0systematic and rational allocation. Similar methods are
consistently applied to allocate expenses of a similar nature.
Acquisition cash flows are typically allocated to groups of
contracts based on gross premiums written. This\u00a0includes an
allocation of acquisition cash flows among existing\u00a0groups of
insurance contracts issued. Claims settlement-related expenses
are largely allocated based on\u00a0claims costs.
Uncertainty in the estimation of future claims and benefit
payments arises primarily from the severity and frequency
of\u00a0claims and uncertainties regarding future inflation rates
leading to claims and claims-handling expenses growth.
Assumptions used to develop estimates about future cash
flows are reassessed at each reporting date and adjusted
where required.
(c) Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation
that the Group requires for bearing the uncertainty about the
amount and timing of the cash flows of groups of insurance
contracts. The risk adjustment reflects an amount that an
insurer would charge to make it indifferent between the cash
flows with a range of probable scenarios versus equivalent
fixed cash flows.
To determine the risk adjustment for non-financial risk for
reinsurance contracts, the Group applies a combination
of\u00a0a\u00a0value at risk (VaR) (or a percentile) approach and a
scenario-based approach, both gross and net of reinsurance,
and derives the amount of risk being transferred to the
reinsurer as the difference between the two results. Most
business is measured under the PAA model and therefore
the\u00a0Group does not calculate a risk adjustment in relation
to\u00a0LRC excluding loss component.
The Group calculates the risk adjustment for incurred
claims\u00a0liabilities at each insurance undertaking entity level in
accordance with its risk profile using a combination of the VaR
method and scenario analysis, targeting an overall confidence
level range for the aggregate risk distribution. Scenario analysis
is used to determine the level of compensation that the Group
requires for bearing uncertainty for qualitative risks not
captured in the risk distribution and large event-driven claims,
such as natural catastrophes. Given the nature of the
underlying business and losses it is normal for new risks to
become apparent or for the magnitude of existing risks to
change over time. The risk adjustment in its entirety is judged
to provide adequate compensation for the risk in the reserves.
Group diversification benefit is not considered at the
individual\u00a0insurance undertaking entity level but is considered
in\u00a0determining the confidence level at a consolidated level
for\u00a0disclosure purposes. At 31\u00a0December 2025, the risk
adjustment in respect of the LIC net of reinsurance is at
the\u00a086th percentile (2024: 83rd percentile).
(d) Fair value measurement
The Group carries its financial investments at fair value through
profit or loss, with fair values determined using published price
quotations in the most active financial markets in which the
assets trade, where available. Where quoted market prices are
not available, valuation techniques are used to value financial
instruments. These include third-party valuation reports and
models utilising both observable and unobservable market
inputs. Valuation techniques involve judgement, including the
use of valuation models and their inputs, which can lead to a
range of plausible valuations for financial investments. Note
3.3(a) discusses the reliability of the Group\u2019s fair values.
(e) Employee benefit
The employee retirement benefit scheme obligations are
calculated and valued with reference to a number of actuarial
assumptions including mortality, inflation rates and discount
rate, many of which have been subject to recent volatility.
This\u00a0complex set of economic variables can have a significant
impact on the financial statements, as shown in note 24.
(f) Tax
The Group operates in a multinational environment, and
legislation concerning the determination of taxation of assets
and liabilities is complex and continually evolving. In preparing
the financial statements, the Group applies significant
judgements in identifying uncertainties over tax treatments
and\u00a0in the measurement of the provision being the best estimate
of the amount expected to become payable. The assessment is
based on the judgement of tax professionals within the Group
supported by previous experience in respect of such activities
and based on advice sought from specialist tax advisors.
A deferred tax asset can be recognised only to the extent
that\u00a0it\u00a0is recoverable. The recoverability of deferred tax assets\u00a0in
respect of carry forward losses requires consideration\u00a0of the
future levels of taxable profit in the Group.\u00a0In preparing the
Group\u2019s financial statements, management estimates taxation
assets and liabilities after taking appropriate professional advice,
as shown in note 22. Significant estimates and assumptions
used in the valuation of\u00a0deferred tax relate to the forecast
taxable profits, taking into account the Group\u2019s financial and
strategic plans. See note 23 for further details of adjustments
made to deferred tax during the year.
The determination and finalisation of agreed taxation assets
and liabilities may not occur until several years after the
reporting date and consequently the final amounts payable
or\u00a0receivable may differ from those presented in these
financial\u00a0statements.
2.20 Reporting of alternative performance measures
The Directors consider that the combined, claims and expense
ratio measures reported in respect of operating segments and
the Group overall in note 4, net asset value per share and return
on equity measures disclosed in notes 5 and 6, the adjusted
operating profit (AOP) before tax and AOP after tax, adjusted
operating earnings per share, operating return on tangible equity,
net tangible asset per share, insurance contract written premium
and prior-year developments disclosed in the alternative
performance measures section, provide useful information
regarding the underlying performance of the Group\u2019s businesses.
These measures are widely recognised by the insurance industry
and are consistent with the internal performance measures
reviewed by senior management including the chief\u00a0operating
decision-maker. However, these measures are\u00a0not defined
within the accounting standards and interpretations, and
therefore may not be directly comparable with similarly titled
alternative performance measures reported by other companies.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-389": { "value": "
The financial statements of the Group have been prepared
in\u00a0accordance with UK-adopted International Accounting
Standards, and Section 4.1 of the Disclosure Guidance and
Transparency Rules and the Listing Rules, both issued by
the\u00a0Financial Conduct Authority (FCA) and in accordance
with\u00a0the provisions of the Bermuda Companies Act 1981.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-390": { "value": "
The consolidated financial statements have been prepared on
a going concern basis. In adopting the going concern basis,
the Board has reviewed the Group\u2019s current and forecast
solvency and liquidity positions for the next 12 months and
beyond. As part of the consideration of the appropriateness of
adopting the going concern basis, the Directors use scenario
analysis and stress testing to assess the robustness of the
Group\u2019s solvency and liquidity positions. In undertaking this
analysis, no material uncertainty in relation to going concern
has been identified, due to the Group\u2019s strong capital and
liquidity positions providing resilience to shocks, underpinned
by the Group\u2019s approach to risk management described in
note 3. After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence over a period of\u00a0at least
12\u00a0months from the date of this report. For this reason,
the\u00a0Group continues to adopt the going concern basis\u00a0in
preparing\u00a0the consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-391": { "value": "
2.1 Material accounting policies information
The principal accounting policies applied in the preparation
of\u00a0these consolidated financial statements are set out below.
The\u00a0most critical individual components of these financial
statements that involve the highest degree of judgement or
significant assumptions and estimations are identified in
note\u00a02.19. Except as described in section (a) below, the
accounting policies\u00a0adopted are consistent with those of
the\u00a0previous financial year.
(a) Change in functional currency
With effect from 1 July 2025, the functional currency of the
Company, Hiscox plc and Hiscox Holdings Limited
(subsidiaries of the Group) changed from Sterling to US Dollars
taking into consideration the following changes:
\u2022 significant growth in Hiscox Ltd's US Dollar income over
the past five years;
\u2022 issuance of $500m subordinated notes by Hiscox Ltd;
and
\u2022 substantial increase in investment in the US subsidiaries.
This change has been accounted for prospectively from
1\u00a0July\u00a02025.
(b) New accounting standards, interpretations and
amendments to published standards
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not
yet effective. New standards, amendments to standards and
interpretations, as adopted by\u00a0the UK, that are effective for
annual periods beginning on\u00a01\u00a0January 2025 have been
applied in preparing these consolidated financial statements
and had no material impact on the Group.
\u2022 Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates, Lack of exchangeability
(c) Future accounting developments
The following new standards, and amendments to existing
standards have been issued, are not yet effective for the Group
and have not been applied in preparing these consolidated
financial statements:
\u2022 Amendments to IFRS 9 \u2013 Financial Instruments
and\u00a0IFRS 7 Financial Instruments: Disclosures \u2013
Classification and Measurement of
Financial\u00a0Instruments
Amendments to the classification and measurement of
financial instruments which address:
\u2013 derecognition of financial liabilities settled through
electronic transfers;
\u2013 classification of financial assets; and
\u2013 disclosures.
The amendments are effective for the Group from
1\u00a0January 2026 and have been endorsed for use in
the\u00a0UK. The application of these amendments is not
expected to have a significant impact on the Group.
\u2022 Amendments to IFRS 9 and IFRS 7 \u2013 Contracts
Referencing Nature-dependent Electricity
Targeted amendments for better reporting of the financial
effects of nature-dependent electricity contracts, which
are often structured as power purchase agreements
(PPAs). The amendments are effective for the Group from
1 January 2026 and have been endorsed for use in the
UK. They are not expected to have a significant impact
on the Group.
\u2022 Annual improvements to IFRS Accounting standards \u2013
Volume 11: Amendments to:
o IFRS 1 \u2013 First-time Adoption of International
Financial Reporting Standards;
o IFRS 7 \u2013 Financial Instruments: Disclosures and its
accompanying Guidance;
o IFRS 10 \u2013 Consolidated Financial Statements;
o IAS 7 \u2013 Statement of Cash Flows.
All amendments have been endorsed for use in the UK
and are effective 1 January 2026. The application of
these amendments is not expected to have a material
impact on the Group.
\u2022 IFRS 18 \u2013 Presentation and Disclosure in
Financial\u00a0Statements
The standard is aimed at improving the way companies
communicate in their financial statements. It introduces:
\u2013 new defined subtotals in the income statement,
including operating profit;
\u2013 disclosures about management-defined
performance measures; and
\u2013 additional guidance on aggregation
and\u00a0disaggregation of information in
financial\u00a0statements.
The standard is effective for annual reporting periods
beginning on or after 1 January 2027 and has been
endorsed for use in the UK. It is expected to result in
presentational changes to the Group\u2019s consolidated
income statement and consolidated cash flow statement
as well as new disclosures of management-defined
performance measures in the notes.
While the standard will impact presentation and
disclosure, no changes to recognition or measurement
are anticipated. The Group is in the early stages of
implementation planning.
\u2022 IFRS 19 \u2013 Subsidiaries without Public
Accountability:\u00a0Disclosures
The new standard provides reduced disclosure
requirements, replacing the disclosure requirements
of\u00a0other IFRS accounting standards, but does not
change\u00a0recognition and measurement requirements.
The standard is effective for annual reporting
periods\u00a0beginning on or after 1 January 2027 and
has\u00a0not\u00a0yet been endorsed in the UK. This standard
cannot be applied by the Group or the Company
because it is only\u00a0applicable to subsidiaries that have
no\u00a0public accountability.
\u2013 Amendments to IAS 21 \u2013 Translation to a
Hyperinflationary Presentation Currency
These narrow-scope amendments clarify how
companies\u00a0should translate financial statements
from\u00a0a\u00a0non-hyperinflationary currency into a
hyperinflationary one.
The amendments are effective for the Group from
1\u00a0January 2027 and have not yet been endorsed for use
in the UK. The application of these amendments is not
expected to have a significant impact on the Group.
2.2 Basis of consolidation
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
(b) Associates
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is generally identified with a
shareholding of between 20% and 50% of an entity\u2019s voting
rights. The consolidated financial statements include the
Group\u2019s share of the total recognised gains and losses of
associates on an equity-accounted basis from the date that
significant influence commences until the date that significant
influence ceases.
The Group\u2019s share of its associates\u2019 post-acquisition profits or
losses after tax is recognised in the income statement for each
period, and its share of the movement in the associates\u2019 net
assets is reflected in the investments\u2019 carrying values on the
statement of financial position. When the Group\u2019s share of
losses equals or exceeds the carrying amount of the associate,
the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has
incurred obligations in respect of the associate.
(c) Transactions eliminated on consolidation
Intragroup balances, transactions and any unrealised gains
arising from intragroup transactions are eliminated in preparing
the consolidated financial statements. Unrealised losses are
also eliminated unless the transaction provides evidence of
an\u00a0impairment of the asset transferred. Foreign currency
gains\u00a0and losses on intragroup monetary assets and liabilities
may not fully eliminate on consolidation when the intragroup
monetary item concerned is transacted between two Group
entities that have different functional currencies. Unrealised
gains arising from transactions with associates are eliminated
to the extent of the Group\u2019s interest in the entity. Unrealised
losses are eliminated in the same way as unrealised gains,
but\u00a0only to the extent that there is no evidence of impairment.
2.3 Foreign currency translation
(a) Functional currency
Items included in the financial statements of each of the
Group\u2019s entities are measured using the currency of the
primary economic environment in which the entity operates (the
\u2018functional currency\u2019). Entities operating in France, Germany,
The Netherlands, Spain, Portugal, Ireland, Italy and Belgium
have a functional currency of Euros; those subsidiary entities
operating from the USA, Bermuda, Guernsey and Syndicates
have a functional currency of US Dollars. Functional currencies
of\u00a0entities operating in Asia include US Dollars and Singapore
Dollars. All other entities have a functional currency of Sterling
except Hiscox plc and Hiscox Holdings Limited which have a
functional currency of US Dollars.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the
retranslation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised
in the income statement, except when deferred in equity as
IFRS 9 effective net investment hedges or when the underlying
balance is deemed to form part of the Group\u2019s net investment
in a subsidiary operation and is unlikely to be settled in the
foreseeable future. Non-monetary items carried at historical
cost are translated on the statement of financial position at
the\u00a0exchange rate prevailing on the original transaction
date.\u00a0Non-monetary items measured at fair value are
translated\u00a0using the exchange rate ruling when the fair
value\u00a0was determined.
(c) Group companies
The results and financial position of all the Group entities that
have a functional currency different from the presentation
currency are translated into the presentation currency
as\u00a0follows:
\u2022 assets and liabilities for each statement of financial
position presented are\u00a0translated at the closing rate at
the\u00a0end of the reporting period;
\u2022 income and expenses for each income statement are
translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the date of
the transactions); and
\u2022 all resulting exchange differences are recognised as a
separate component of equity.
When a foreign operation is sold, such exchange differences
are recognised in the income statement as part of the gain, or
loss, on sale.
2.4 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
depreciation and any impairment loss. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items. Subsequent costs are included in the asset\u2019s carrying
amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance items
are charged to the income statement during the financial
period in which they are incurred.
Land is not depreciated as it is deemed to have an indefinite
useful economic life. The cost of leasehold improvements is
amortised over the unexpired term of the underlying lease
or\u00a0the estimated useful life of the asset, whichever is
shorter.\u00a0Depreciation on other assets is calculated using
the\u00a0straight-line method to allocate their cost, less their
residual\u00a0values, over their estimated useful lives.
The rates applied are as follows:
\u2022 buildings20-50 years
\u2022 vehicles3 years
\u2022 leasehold improvements including
fixtures and fittings10-15 years
\u2022 furniture, fittings and equipment 3-15 years
The assets\u2019 residual values and useful lives are reviewed at the
end of the reporting period and adjusted if appropriate.
An asset\u2019s carrying amount is written down immediately to its
recoverable amount if the asset\u2019s carrying amount is greater
than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing proceeds with the
carrying amount. These are included in the income statement.
2.5 Intangible assets
(a) Goodwill
Goodwill represents amounts arising on acquisition of
subsidiaries and associates. In respect of acquisitions that
have occurred since 1 January 2004, goodwill represents
the\u00a0excess of the fair value of consideration of an acquisition
over the fair value of the Group\u2019s share of the net identifiable
assets and contingent liabilities assumed of the acquired
subsidiary or associate at the acquisition date. In respect
of\u00a0acquisitions prior to 1 January 2004, goodwill is included
on\u00a0the basis of its deemed cost, which represents the
amount\u00a0recorded under previous generally accepted
accounting principles.
Goodwill on acquisition of subsidiaries is included in intangible
assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is not amortised but is tested at least annually
for\u00a0impairment and carried at cost, less accumulated
impairment losses.
Goodwill is allocated to the Group\u2019s cash-generating units,
identified according to the smallest identifiable group of
assets\u00a0from which cash flows are generated that are largely
independent of the cash flows generated by other assets or
groups of assets.
The impairment review process examines whether or not
the\u00a0carrying value of the goodwill attributable to individual
cash-generating units exceeds its recoverable amount.
Any\u00a0excess of goodwill over the recoverable amount arising
from the review process indicates impairment. Any impairment
charges are presented as part of operational expenses. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(b) Other intangible assets
Intangible assets acquired separately from a business are
carried initially at cost. An intangible asset acquired as part
of\u00a0a\u00a0business combination is recognised outside of goodwill if
the\u00a0asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably. Customer
relationships, syndicate capacity, trademarks and software
acquired are capitalised at cost, being the fair value of the
consideration paid. Software is capitalised on the basis of
the\u00a0costs incurred to acquire and bring it into use. Intangible
assets with indefinite lives such as syndicate capacity are
subsequently valued at cost and are subject to annual
impairment assessment.
Intangible assets with finite useful lives are consequently
carried at cost, less accumulated amortisation and
impairment.\u00a0The useful life of the asset is reviewed annually.
Any changes in estimated useful lives are accounted for
prospectively with the effect of the change being recognised
in\u00a0the current and future periods, if relevant.
Amortisation is calculated using the straight-line method
to\u00a0allocate the cost over the estimated useful lives of the
intangible assets.
Subsequent expenditure on other intangible assets is
capitalised only when it increases the future economic
benefits\u00a0embodied in the specific asset to which it relates.
All\u00a0other expenditure is expensed as incurred.
Those intangible assets with finite lives are assessed for
indicators of impairment at each reporting date. Where there
is\u00a0an indication of impairment then a full impairment test is
performed. An impairment loss recognised for an intangible
asset in prior years should be reversed if, and only if, there
has\u00a0been a change in the estimates used to determine the
asset\u2019s recoverable amount since the last impairment loss
was\u00a0recognised.
2.6 Impairment of non-financial assets
Non-financial assets (such as goodwill, an intangible asset
or\u00a0item of property, plant and equipment) that have an
indefinite useful life are not subject to amortisation and are
tested annually or whenever there is an indication of
impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not
be\u00a0recoverable.
Objective factors that are considered when determining
whether a non-financial asset or group of non-financial assets
may be impaired include, but are not limited to, the following:
\u2022 adverse economic, regulatory or environmental conditions
that may restrict future cash flows and asset usage
and/or recoverability;
\u2022 the likelihood of accelerated obsolescence arising from
the development of new technologies and products; and
\u2022 the disintegration of the active market(s) to which the
asset is related.
An impairment loss is recognised for the amount by which the
asset\u2019s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset\u2019s fair value less
costs to sell or value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating
units). Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset in prior periods. A reversal
of an impairment loss is recognised as income immediately.
Impairment losses recognised in respect of goodwill are not
subsequently reversed.
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
2.8 Cash and cash equivalents
The Group has classified cash deposits and short-term
highly-liquid investments as cash and cash equivalents.
These\u00a0assets are readily convertible into known amounts of
cash and are subject to inconsequential changes in value.
Cash equivalents are financial investments with less than
three\u00a0months to maturity at the date of acquisition.
2.9 Derivative financial instruments
Derivatives are initially recognised at fair value on the date
on\u00a0which a derivative contract is entered into and are
subsequently valued at fair value at the end of the reporting
period. Fair values are obtained from quoted market values
and, if these are not available, valuation techniques including
option pricing models are used as appropriate. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. For derivatives not formally
designated as a hedging instrument, fair value changes are
recognised immediately in the consolidated income statement.
Changes in the value of derivatives and other financial
instruments formally designated as hedges of net investments
in foreign operations are recognised in the currency translation
reserve to the extent they are effective; gains or losses relating
to the ineffective portion of the hedging instruments are
recognised immediately in the consolidated income statement.
The Group had no derivative instruments designated for hedge
accounting during the current period and prior financial year.
2.10 Own shares
Where any Group company purchases the Parent Company\u2019s
equity share capital (own shares), the consideration paid,
including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the
Company\u2019s owners on consolidation. Where such shares are
subsequently sold, reissued or otherwise disposed of, any
consideration received is included in equity attributable to the
Company\u2019s owners, net of any directly attributable incremental
transaction costs and the related tax effects.
2.11 Insurance and reinsurance contracts
The accounting policy set out below is applicable to insurance
and reinsurance contracts that are issued by the Group
and\u00a0reinsurance contracts held by the Group unless
indicated\u00a0otherwise.
(a) Classification
Insurance contracts are defined as those containing significant
insurance risk. Significant insurance risk criteria are met if,
and\u00a0only if, an insured event could cause an insurer to make
significant additional payments in any scenario, excluding
scenarios that lack commercial substance, at the inception
of\u00a0the contract. Such contracts remain insurance contracts
until all rights and obligations are extinguished or expire.
The Group issues short-term casualty and property
(re)insurance contracts in the normal course of business,
under\u00a0which it accepts significant insurance risk from its
policyholders. The Group also enters into ceded reinsurance
contracts with reinsurers under which the Group transfers
significant insurance risk to reinsurers and is compensated
for\u00a0claims on contracts issued by the Group.
(b) Separating components
The Group assesses its insurance and reinsurance products
to\u00a0determine whether they contain distinct components which
must be accounted for under another IFRS instead of under
IFRS 17. After separating any distinct components, the Group
applies IFRS 17 to all remaining components of the (host)
insurance contract. Currently, the Group\u2019s products do not
include any distinct components that require separation.
Some reinsurance contracts issued contain profit commission
arrangements. Under these arrangements, there is a
guaranteed minimum amount that the policyholder will always
receive \u2013 either in the form of profit commission, or as claims,
or another contractual payment irrespective of the insured
event happening. The guaranteed minimum amounts have
been assessed to be highly interrelated with the insurance
component of the reinsurance contracts and are, therefore,
non-distinct investment components which are not accounted
for separately. However, receipts and payments of these
investment components are excluded from insurance revenue
and expenses.
(c) Level of aggregation
Insurance contracts are aggregated into groups for
measurement purposes. The level of aggregation for the Group
is determined firstly by grouping contracts into portfolios which,
with some limited exceptions, are set as the reserving classes
of each legal entity. Portfolios comprise groups of contracts
with similar risks which are managed together. Portfolios are
further divided based on expected profitability at inception
into\u00a0three categories: onerous contracts, contracts with no
significant risk of becoming onerous, and the remainder.
No\u00a0group for level of aggregation purposes may contain
contracts issued more than one year apart. The grouping
of\u00a0contracts is not subsequently reconsidered.
A group of insurance contracts is considered to be onerous
at\u00a0initial recognition if the fulfilment cash flows allocated to
that\u00a0group of contracts in total are a net outflow. That is if
the\u00a0present value of expected claims, attributable expenses
and\u00a0risk adjustment exceeds the premium.
Portfolios of reinsurance contracts held are assessed
for\u00a0aggregation separately from portfolios of insurance
contracts\u00a0issued. Reinsurance contracts held cannot
be\u00a0onerous.
(d) Recognition and derecognition
Groups of insurance contracts issued are initially recognised
from the earliest of the following:
\u2022 the beginning of the coverage period;
\u2022 the date when the first payment from the policyholder
is\u00a0due, or actually received if there is no due date; and
\u2022 when the Group determines that a group of contracts
becomes onerous.
Insurance contracts acquired in a business combination
within\u00a0the scope of IFRS 3 Business Combinations or a
portfolio transfer are accounted for as if they were entered
into\u00a0at the\u00a0date of acquisition or transfer.
Reinsurance contracts held are recognised as follows:
\u2022 a group of reinsurance contracts held that provide
proportionate coverage is recognised at the later of
the\u00a0following dates (unless underlying contracts are
onerous, in which case earlier recognition is required):
o the beginning of the coverage period of the
group;\u00a0and
o the initial recognition of any underlying
insurance\u00a0contract;
\u2022 all other groups of reinsurance contracts held are
recognised from the beginning of the coverage period
of\u00a0the group of reinsurance contracts held; unless
the\u00a0Group entered into the reinsurance contract
held\u00a0at\u00a0or\u00a0before the date when an onerous group
of\u00a0underlying\u00a0contracts is recognised prior to the
beginning\u00a0of the coverage period of the group of
reinsurance contracts\u00a0held, in which case the
reinsurance\u00a0contract\u00a0held is recognised at the
same\u00a0time\u00a0as\u00a0the\u00a0group\u00a0of underlying insurance
contracts\u00a0is\u00a0recognised.
Only contracts that individually meet the recognition criteria
by\u00a0the end of the reporting period are included in the
groups.\u00a0When contracts meet the recognition criteria in
the\u00a0groups after\u00a0the reporting date, they are added to
the\u00a0groups in the reporting period in which they meet the
recognition criteria. The\u00a0composition of the groups is not
reassessed in subsequent periods.
An insurance contract is derecognised when it is:
\u2022 extinguished (that is, when the obligation specified
in\u00a0the\u00a0insurance contract expires or is discharged or
cancelled); or
\u2022 the contract is modified such that the modification results
in a change in the measurement model (for example, the
general measurement model (GMM)) or the applicable
standard for measuring a component of the contract,
substantially changes the contract boundary, or requires
the modified contracts to be included in a different group.
When a modification is not treated as a derecognition,
the\u00a0Group recognises amounts paid or received for the
modification of the contract as an adjustment to the
relevant\u00a0liability or asset for remaining coverage.
When a group of insurance contracts is derecognised,
adjustments to remove related rights and obligations result
in\u00a0the following amounts being charged immediately to
consolidated income statement:
\u2022 if the contract is extinguished, any net difference
between\u00a0the derecognised part of the liability for
remaining coverage (LRC) of the original contract and
any\u00a0other cash flows arising from extinguishment;
\u2022 if the contract is transferred to the third party, any net
difference between the derecognised part of the LRC
of\u00a0the original contract and the premium charged by
the\u00a0third party; or
\u2022 if the original contract is modified resulting in its
derecognition, any net difference between the
derecognised part of the LRC and the hypothetical
premium that the entity would have charged if it had
entered into a contract with equivalent terms to the new
contract at the date of the contract modification, less
any\u00a0additional premium charged for the modification.
(e) Contract boundary
The Group uses the concept of contract boundary to
determine what cash flows should be considered in the
measurement of groups of insurance contracts. Cash flows
are\u00a0within the boundary of an insurance contract if they
arise\u00a0from substantive rights and obligations that exist during
the reporting period in which the Group can compel the
policyholder to pay the premiums, or in which the Group has a
substantive obligation to provide the policyholder with services.
A substantive obligation to provide services ends when:
\u2022 the Group has the practical ability to reassess the risks of
the particular policyholder and, as a result, can set a price
or level of benefits that fully reflects those risks; or
\u2022 both of the following criteria are satisfied:
o the Group has the practical ability to reassess the
risks of the portfolio of insurance contracts that
contain the contract and, as a result, can set a
price\u00a0or level of benefits that fully reflects the risk
of\u00a0that portfolio;
o the pricing of the premiums for coverage up to the
date when the risks are reassessed does not take
into account the risks that relate to periods after the
reassessment date.
A liability or asset relating to expected premiums or claims
outside the boundary of the insurance contract is not
recognised. Such amounts relate to future insurance contracts.
(f) Measurement \u2013 premium allocation approach
Initial measurement
The Group applies the premium allocation approach (PAA)
to\u00a0the majority of the insurance contracts that it issues and
reinsurance contracts that it holds, because:
\u2022 the coverage period of each contract in the group is
one\u00a0year or less; or
\u2022 for contracts longer than one year, the Group has
modelled possible future scenarios and reasonably
expects that the measurement of the LRC for the
group\u00a0containing those contracts under the PAA does
not differ materially from the measurement that would
be\u00a0produced applying the general model.
For insurance contracts issued, on initial recognition, the Group
measures the LRC as the amount of premiums received, less
any acquisition cash flows paid and any amounts arising from
the derecognition of the insurance acquisition cash flows asset
and the derecognition of any other relevant pre-recognition
cash flows.
For reinsurance contracts held, on initial recognition, the
Group\u00a0measures assets for the remaining coverage at the
amount of ceding premiums paid, plus broker fees paid to a
party other than the reinsurer and any amounts arising from the
derecognition of any other relevant pre-recognition cash flows.
For insurance contracts issued, insurance acquisition cash
flows allocated to a group are recognised over the coverage
period of contracts in the group. For reinsurance contracts
held, broker fees are recognised over the coverage period
of\u00a0contracts in a group.
Subsequent measurement
For insurance contracts issued, at each of the subsequent
reporting dates, the LRC is:
\u2022 increased for premiums received in the period;
\u2022 decreased for insurance acquisition cash flows paid
in\u00a0the\u00a0period;
\u2022 decreased for the amounts of expected premium
receipts\u00a0recognised as insurance revenue for the
services\u00a0provided in the period;
\u2022 increased for the amortisation of insurance acquisition
cash flows in the period recognised as insurance
service\u00a0expenses; and
\u2022 decreased for any investment component paid or
transferred to the liability for incurred claims.
For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
\u2022 increased for ceding premiums paid in the period;
\u2022 increased for broker fees paid in the period;
\u2022 decreased for the expected amounts of ceding premiums
and broker fees recognised as reinsurance expenses for
the services received in the period; and
\u2022 decreased for any investment component paid or
transferred to the reinsurance assets for incurred claims.
The Group does not adjust the LRC for insurance contracts
issued or the remaining coverage for reinsurance contracts
held for the effect of the time value of money, because
associated premiums are due within one year of the coverage
period. The Group only adjusts the remaining coverage for
reinsurance contracts held for the time value of money in
relation to the legacy portfolio transactions (LPT) that were
held,\u00a0as the associated premiums are not due within one year
of the coverage period.
The Group estimates the liability for incurred claims (LIC) as the
fulfilment cash flows related to incurred claims. The fulfilment
cash flows incorporate, in an unbiased way, all reasonable and
supportable information available without undue cost or effort
about the amount, timing and uncertainty of those future
cash\u00a0flows.
If facts and circumstances indicate that a group of insurance
contracts measured under the PAA is onerous on initial
recognition or has become onerous subsequently, the Group
increases the carrying amount of the LRC, recognising a loss
component, to the amounts of the excess of the fulfilment cash
flows that relate to the remaining coverage of the group of
contracts, over the carrying amount of the LRC of the group.
The amount of such an increase is recognised in insurance
service expenses. Subsequently, the loss component is
amortised over the coverage period of the group of contracts.
When a loss is recognised on initial recognition of an onerous
group of underlying insurance contracts or on addition of
onerous underlying insurance contracts to that group, the
carrying amount of the reinsurance asset for remaining
coverage for reinsurance contracts held measured under the
PAA is increased by the amount of expected recoveries that
will be in the consolidated income statement and a loss
recovery component is established or adjusted for that
amount. The loss recovery component is calculated by
multiplying the loss component recognised on underlying
insurance contracts by the percentage of claims on underlying
insurance contracts that the Group expects to recover from the
reinsurance contracts held that are entered into before or at
the same time as the loss is recognised on the underlying
insurance contracts. When underlying insurance contracts that
are reinsured are included in the same group as insurance
contracts issued that are not reinsured, the Group applies a
systematic and rational method of allocation to determine the
portion of losses that relates to underlying insurance contracts.
(g) Insurance revenue
The insurance revenue for the period is the amount of
expected premium receipts (excluding any investment
component) allocated to the period. The Group allocates
the\u00a0expected premium receipts to each period of insurance
contract services on the basis of the passage of time. But if the
expected pattern of release of risk during the coverage period
differs significantly from the passage of time, for example a
group of contracts that is exposed to large natural catastrophe
risk concentrated in the first or second half of the year, then
the\u00a0allocation is made on the basis of the expected timing of
incurred insurance service expenses.
Changes to the basis of allocation are accounted for
prospectively as a change in accounting estimate.
(h) Insurance service expenses
Insurance service expenses include the following:
\u2022 incurred claims, excluding investment components
reduced by loss component allocations;
\u2022 other incurred directly attributable expenses;
\u2022 insurance acquisition cash flows amortisation using the
pattern that is consistent with the insurance revenue;
\u2022 changes that relate to past service;
\u2022 changes that relate to future service;
\u2022 insurance acquisition cash flows assets impairment; and
\u2022 mandatory reinstatement premiums.
Other expenses not meeting the above categories are
included\u00a0in other operating expenses in the consolidated
income statement.
(i) Allocation of reinsurance premiums
The allocation of reinsurance premiums includes reinsurance
premiums and other incurred directly attributable expenses.
Reinsurance premium and expenses are recognised similarly
to\u00a0insurance revenue. The amount of reinsurance expenses
recognised in the reporting period depicts the transfer of
received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay
in exchange for those services. Additionally, broker fees and
ceding commissions that are not contingent on claims of the
underlying contracts issued reduce ceding premiums and are
accounted for as part of reinsurance premiums.
In addition, the allocation of reinsurance premiums also
includes changes in the reinsurance assets arising from
retroactive reinsurance contracts held and voluntary
reinstatement ceded premiums.
(j) Amounts recoverable from reinsurers for incurred claims
The amounts recoverable from reinsurers for incurred
claims\u00a0include:
\u2022 incurred claims recoveries, excluding
investment\u00a0components;
\u2022 loss-recovery component allocations;
\u2022 changes that relate to past service;
\u2022 effect of changes in the risk of reinsurers\u2019
non-performance;
\u2022 amounts relating to accounting for onerous groups
of\u00a0underlying insurance contracts issued;
\u2022 ceding commissions that are contingent on claims
of\u00a0the\u00a0underlying contracts issued (these reduce incurred
claims\u00a0recovery); and
\u2022 mandatory reinstatement ceded premiums.\u00a0
(k) Insurance finance income or expenses
Insurance finance income or expenses comprise the change
in\u00a0the carrying amount of the group of insurance contracts
arising from:
\u2022 the effect of the time value of money and changes in
the\u00a0time value of money. This mainly comprises interest
accreted on the LIC and interest unwind on the assets
for\u00a0incurred claims (AIC); and
\u2022 the effect of financial risk and changes in financial risk.
This mainly includes the effect of changes in interest
rates\u00a0(for example, discount rates).
The Group does not disaggregate changes in the risk
adjustment for non-financial risk between insurance service
result and insurance finance income or expenses. The change
in the risk adjustment is entirely presented as part of the
insurance service result.
Foreign exchange gains and losses continue to be presented
in\u00a0the net other foreign exchange (losses)/gains line item.
2.12 Taxation
Current tax, including corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively
enacted by the end of the reporting period. A provision is
recognised for those matters for which the tax determination is
uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are
measured at the best estimate of the amount expected to
become payable. The assessment is based on the judgement
of tax professionals within the Group supported by previous
experience in respect of such activities and in certain cases
based on advice sought from specialist tax advisors.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, if the deferred income tax arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is
not\u00a0recognised. With the exception of deferred tax related to
top-up income taxes arising from tax law enacted to implement
'Pillar Two' legislation, deferred tax is determined using tax
rates and laws that have been enacted or substantively
enacted by the end of the reporting period and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled. Deferred tax assets are
recognised to the\u00a0extent that it is probable that future taxable
profit will be available against which the temporary differences
can be utilised. Deferred tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except where the Group controls the timing of the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
2.13 Employee benefits
(a) Pension obligations
The Group has defined contribution and defined benefit
pension schemes. The defined benefit scheme closed to
future\u00a0accrual with effect from 31 December 2006 and
active\u00a0members were offered membership of the defined
contribution scheme from 1 January 2007. A defined
contribution plan is a pension plan under which the Group
pays\u00a0fixed contributions into a separate entity and has no
further obligation beyond the agreed contribution rate. A
defined benefit plan is a pension plan that defines an amount
of\u00a0pension benefit that an employee will receive on retirement,
usually dependent on one\u00a0or more factors such as age, years
of service and compensation.
For defined contribution plans, the Group pays contributions
to\u00a0publicly or privately administered pension insurance plans
on\u00a0a contractual basis. The contributions are recognised as
an\u00a0employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that
a\u00a0cash refund or a reduction in future payments is available.
The amount recognised on the statement of financial position
in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the end of the reporting
period, less the fair value of plan assets. The calculation of the
defined benefit obligation is performed annually by a qualified
actuary using the projected unit method. As the plan is closed
to all future benefit accruals, each participant\u2019s benefits under
the plan are based on their service to the date of closure or
earlier leaving date and their final pensionable earnings.
The\u00a0service cost is the expected administration cost during
the\u00a0year. Past\u00a0service costs are recognised immediately in
the\u00a0income\u00a0statement.
Remeasurements of the net defined benefit asset, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any),
are recognised immediately in other comprehensive income.
The Group determines the net interest expense/(income) on
the\u00a0net defined benefit asset for the period by applying the
discount rate used to measure the defined benefit obligation
at\u00a0the beginning of the annual period to the then net\u00a0defined
benefit asset, taking into account any changes in the net
defined benefit asset during the period as a result of
contributions and benefit payments. Net\u00a0interest expense and
other expenses related to defined benefit\u00a0plans are recognised
in the income statement through\u00a0operating expenses.
To the extent that a surplus emerges on the defined benefit
obligation, it is only recognisable as an asset when it is
probable that future economic benefits will be recovered
by\u00a0the\u00a0Group.
(b) Other long-term employee benefits
The Group provides sabbatical leave to employees on
completion of every five years\u2019 service. The present value
of\u00a0the\u00a0expected costs of these benefits is accrued over
the\u00a0period\u00a0of employment. In determining this liability,
consideration is given to future increases in salary
levels,\u00a0experience with employee departures and
periods\u00a0of\u00a0service.
(c) Share-based compensation
The Group operates equity settled share-based
employee\u00a0compensation plans. These include the share
option\u00a0schemes,\u00a0and the Group\u2019s Performance Share
Plans,\u00a0outlined\u00a0in the Directors\u2019 remuneration report,
together\u00a0with\u00a0the\u00a0Group\u2019s Save As You Earn (SAYE)
schemes.\u00a0The\u00a0fair\u00a0value\u00a0of the employee services
received,\u00a0measured\u00a0at\u00a0grant\u00a0date, in exchange for the
grant\u00a0of\u00a0the\u00a0awards is recognised as\u00a0an expense, with
the\u00a0corresponding credit being\u00a0recorded in\u00a0retained
earnings\u00a0within equity. The total\u00a0amount to be expensed
over\u00a0the\u00a0vesting period is determined\u00a0by reference to the
fair\u00a0value\u00a0of\u00a0the awards granted, excluding the impact of
any\u00a0non-market vesting conditions (for example, profitability
or\u00a0net asset growth\u00a0targets). Non-market vesting conditions
are\u00a0included\u00a0in\u00a0assumptions about the number of awards
that\u00a0are\u00a0expected\u00a0to become exercisable. At the end of
the\u00a0reporting period, the Group revises its estimates of
the\u00a0number of awards that are expected to vest.
The Group recognises the impact of the revision of
original\u00a0estimates, if any, in the income statement, and
a\u00a0corresponding adjustment to equity, in periods in
which\u00a0the\u00a0estimates are revised.
When the terms and conditions of an equity settled
share-based employee compensation plan are modified,
and\u00a0the expense to be recognised increases as a result of
the\u00a0modification, then the increase is recognised evenly
over\u00a0the remaining vesting period. When a modification
reduces the expense to be recognised, there is no
adjustment\u00a0recognised and the pre-modification expense
continues to be applied. The\u00a0proceeds received net of any
directly attributable transaction costs are credited to share
capital and share\u00a0premium when the options are exercised.
(d) Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or whenever
an\u00a0employee accepts voluntary redundancy in exchange for
these\u00a0benefits. The Group recognises termination benefits
when it is demonstrably committed to either: terminating the
employment of current employees according to a detailed
formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage
voluntary redundancy.
(e) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses
and profit sharing, based on a formula that takes into
consideration the profit attributable to the Company\u2019s
shareholders after certain adjustments. The Group
recognises\u00a0a provision where a contractual obligation to
employees exists, or where there is a past practice that
has\u00a0created a constructive obligation.
2.14 Finance costs
Finance costs consist of interest charges accruing on the
Group\u2019s borrowings and bank overdrafts together with
commission fees charged in respect of Letters of Credit
and\u00a0interest in respect of lease liabilities. Arrangement fees
in\u00a0respect of financing arrangements are charged over the
life\u00a0of the related facilities.
2.15 Leases
(a) Hiscox as lessee
The Group recognises right-of-use assets at the
commencement date of the lease (for example, the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the
commencement date, less any lease incentives received.
Unless the Group is reasonably certain to obtain ownership of
the leased asset at the end of the lease term, the recognised
right-of-use assets are depreciated on a straight-line basis over
the shorter of their estimated useful life and the lease term.
Right-of-use assets are subject to impairment. Right-of-use
assets are presented on the statement of financial position as
\u2018property, plant and equipment\u2019.
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating a lease, if
the\u00a0lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend
on\u00a0an index or a rate are recognised as an expense in the
period in which the event or condition that triggers the
payment\u00a0occurs. Lease liabilities are included in \u2018trade and
other payables\u2019 on the statement of financial position.
In calculating the present value of lease payments, the
Group\u00a0uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is
a modification that is not accounted for as a separate lease:
future lease payments that are linked to a rate or index, a
change in the lease term, a change in the in-substance fixed
lease payments, a change in the assessment to purchase the
underlying asset or a change in the amounts expected to be
payable under a residual value guarantee.
The Group applies the short-term lease recognition exemption
to its applicable short-term leases. It also applies the low-value
assets recognition exemption to leases of office equipment that
are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as an
expense on a straight-line basis over the lease term.
(b) Hiscox as lessor
Rental income from operating leases is recognised on
a\u00a0straight-line basis over the term of the relevant
contractual\u00a0agreement.
2.16 Dividend distribution
Dividend distribution to the Company\u2019s shareholders is
recognised as a liability in the Group\u2019s financial statements
in\u00a0the period in which the dividends are approved.
2.17 Operations held for sale
Assets and liabilities held for disposal as part of operations
which are held for sale are shown separately in the
consolidated statement of financial position. Operations
held\u00a0for sale are recorded at the lower of their carrying
amount\u00a0and their fair value less the estimated selling costs.
2.18 Provisions and contingent liabilities
Provisions are recognised when there is a present legal or
constructive obligation as a result of a past event that can be
measured reliably, and it is probable that an outflow of
economic benefits will be required to settle that obligation.
The amount recorded as a provision is the best estimate
of\u00a0the\u00a0expenditure required to settle the present obligation
at\u00a0the\u00a0end of the reporting period. Discounting is applied
to\u00a0the\u00a0provision where the effect of the time value of
money\u00a0is\u00a0material. Provisions are not recognised for
future\u00a0operating losses. A provision for restructuring is
recognised\u00a0when the Group\u00a0has\u00a0approved a detailed
and\u00a0formal restructuring plan\u00a0and the\u00a0restructuring has
either\u00a0commenced or has\u00a0been\u00a0announced\u00a0publicly.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from the
contracts are less than the related unavoidable cost of
meeting\u00a0its obligations under the contract.
A provision for a termination payment is recognised when the
Group has a demonstrable commitment to either terminate
the\u00a0employment of an employee or group of employees
before\u00a0the\u00a0normal retirement date, or to provide termination
benefits as a result of an offer made in order to encourage
voluntary\u00a0redundancy.
Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain.
Contingent liabilities are disclosed if there is a possible future
obligation as a result of a past event, or if there is a present
obligation as a result of a past event but either a payment is
not probable or the amount cannot be reasonably estimated.
2.19 Use of significant accounting judgements, estimates
and assumptions
The preparation of financial statements requires the Group to
select accounting policies and make judgements (other than
those involving estimations) that have a significant impact on
the amounts recognised and to make estimates and
assumptions that affect the reported amounts of assets,
liabilities, income and expenses in the consolidated
financial\u00a0statements.
The Audit Committee reviews the reasonableness of critical
judgements, estimates and assumptions applied and the
appropriateness of material accounting policies information.
The significant issues considered by the Committee in the
year\u00a0are included within the Audit Committee report on pages
102 to 105.
Significant accounting judgements
The following accounting policies are the critical judgements,
apart from those involving estimations (which are presented
separately below), that the Directors have made in the process
of applying the Group's accounting policies and that have the
most significant impact on the amounts recognised in the
consolidated financial statements.
\u2022 Consolidation: assessment of whether the Group controls
or has significant influence over an underlying entity, for
example the treatment of insurance-linked securities
funds including consideration of its decision-making
authority and its rights to the variable returns from
the\u00a0entity.
\u2022 Financial investments: classification and measurement
of\u00a0investments including the application of the fair
value\u00a0option.
(a) Liability for incurred claims
The ultimate cost of outstanding claims is estimated by using a
range of standard actuarial claims projection techniques. The
Group relies on actuarial analysis to estimate the settlement
cost of future claims. Via a formal governed process, there is
close communication between the actuaries and other key
stakeholders, such as the underwriters, claims and finance
teams when setting and validating the assumptions. The main
assumption underlying these techniques is that a Group\u2019s past
claims development experience can be used to project future
claims development and hence ultimate claims costs. These
methods extrapolate the development of paid and incurred
losses, average costs per claim (including claims handling costs),
and claim numbers based on the observed development of
earlier years and expected loss ratios. Historical claims
development is mainly analysed by accident years, but can also
be further analysed by geographical area, as well as by significant
business lines and claim types. In most cases, no explicit
assumptions are made regarding future rates of claims inflation
or loss ratios. Instead, the assumptions used are those implicit in
the historical claims development data on which the projections
are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (for example,
to reflect one-off occurrences, changes in external or market
factors such as public attitudes to claiming, economic conditions,
levels of claims inflation, levels of recoveries from salvage or
subrogation, judicial decisions and legislation, as well as internal
factors such as portfolio mix, policy features and claims\u00a0handling
procedures) in order to arrive at the estimated ultimate cost of
claims that present the probability-weighted expected value
outcome from the range of possible outcomes, taking account
of\u00a0all the uncertainties involved.
(b) Premium allocation approach eligibility assessment
A simplified measurement model, the PAA, can be applied if
certain eligibility criteria are met. The majority of the Group\u2019s
policies have a coverage period of 12 months or less and so
are eligible for the PAA. Management applies significant
judgement to whether applying PAA to those groups of
contracts\u00a0differs materially from general measurement model
(GMM) with a coverage period\u00a0extending beyond 12 months.
Significant accounting estimates
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment
to\u00a0the carrying amounts of assets and liabilities within the
next\u00a0financial year, are discussed below.
All estimates are based on management\u2019s knowledge of
current facts and circumstances, assumptions based on
that\u00a0knowledge and their predictions of future events. Actual
results may differ from those estimates, possibly significantly.
Revisions to accounting estimates are recognised in the
period\u00a0in which the estimate is revised and in any future
periods affected.
The most critical estimate included within the consolidated
statement of financial position is the measurement of insurance
contract liabilities and reinsurance contract assets, and in
particular the estimate of the liability for incurred claims (LIC).
The total gross estimate of LIC as at 31\u00a0December 2025 is
$6,460.9 million (2024: $6,040.7\u00a0million). The total estimate for
reinsurance asset for incurred claims as at 31\u00a0December 2025
is $1,966.8 million (2024:\u00a0$2,046.5 million).
Insurance and reinsurance contracts
In applying IFRS 17 measurement requirements, the following
inputs and methods were used that include significant
estimates. The present value of future cash flows is
estimated\u00a0using deterministic scenarios. The assumptions
used\u00a0in the deterministic scenarios are derived to approximate
the probability-weighted mean of a full range of scenarios.
For\u00a0the sensitivities with regard to the assumptions made
that\u00a0have the most significant impact on measurement under
IFRS 17 please refer to note 3 management of risk.
(a) Discount rates
Insurance contract liabilities are calculated by discounting
expected future cash flows at a risk-free rate, plus an illiquidity
premium where applicable. Risk-free rates were derived using
swap rates available in the market denominated in the same
currency as the insurance contracts being measured. When
swap rates are not available, highly liquid sovereign bonds with
the highest (for example, AAA/AA) credit rating were used.
Management uses judgement to assess liquidity characteristics
of the liability cash flows. The illiquidity premium was estimated
based on market observable liquidity premiums in financial
assets, adjusted to reflect the illiquidity characteristics of the
liability cash flows. The illiquidity premium is determined by
reference to market observable AA-rated bonds yield curve
in\u00a0the currency of the insurance contract being measured,
adjusted to remove both expected and unexpected credit risk.
The following discount rates were applied for the currencies
and periods presented below:
Year end 31 December 2025
1 year
3 year
5 year
%
%
%
USD
3.51
3.47
3.64
GBP
3.81
3.90
4.06
EUR
2.19
2.43
2.71
CAD
2.42
2.75
3.00
Year end 31 December 2024
1 year
3 year
5 year
%
%
%
USD
4.27
4.18
4.24
GBP
4.68
4.40
4.35
EUR
2.46
2.35
2.49
CAD
2.96
2.88
2.98
(b) Estimates of future cash flows to fulfil insurance contracts
Included in the measurement of each group of contracts within
the scope of IFRS 17 are all of the future cash flows within the
boundary of each group of contracts. The estimates of these
future cash flows are based on probability-weighted expected
future cash flows. The Group estimates which cash flows are
expected and the probability that they will occur as at the
measurement date. In setting these expectations, the Group
uses information about past events, current conditions and
forecasts of future conditions. The Group\u2019s estimate of
future\u00a0cash flows is the mean of a range of scenarios that
reflect the\u00a0full range of possible outcomes. Each scenario
specifies\u00a0the amount, timing and probability of cash flows.
The\u00a0probability-weighted average of the future cash flows is
calculated using a deterministic scenario representing the
probability-weighted mean of a range of scenarios.
Where estimates of expenses-related cash flows are determined
at the portfolio level or higher, they are allocated\u00a0to\u00a0groups of
contracts on a systematic basis, such as\u00a0activity-based costing
method. The Group has determined that this method results in
a\u00a0systematic and rational allocation. Similar methods are
consistently applied to allocate expenses of a similar nature.
Acquisition cash flows are typically allocated to groups of
contracts based on gross premiums written. This\u00a0includes an
allocation of acquisition cash flows among existing\u00a0groups of
insurance contracts issued. Claims settlement-related expenses
are largely allocated based on\u00a0claims costs.
Uncertainty in the estimation of future claims and benefit
payments arises primarily from the severity and frequency
of\u00a0claims and uncertainties regarding future inflation rates
leading to claims and claims-handling expenses growth.
Assumptions used to develop estimates about future cash
flows are reassessed at each reporting date and adjusted
where required.
(c) Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation
that the Group requires for bearing the uncertainty about the
amount and timing of the cash flows of groups of insurance
contracts. The risk adjustment reflects an amount that an
insurer would charge to make it indifferent between the cash
flows with a range of probable scenarios versus equivalent
fixed cash flows.
To determine the risk adjustment for non-financial risk for
reinsurance contracts, the Group applies a combination
of\u00a0a\u00a0value at risk (VaR) (or a percentile) approach and a
scenario-based approach, both gross and net of reinsurance,
and derives the amount of risk being transferred to the
reinsurer as the difference between the two results. Most
business is measured under the PAA model and therefore
the\u00a0Group does not calculate a risk adjustment in relation
to\u00a0LRC excluding loss component.
The Group calculates the risk adjustment for incurred
claims\u00a0liabilities at each insurance undertaking entity level in
accordance with its risk profile using a combination of the VaR
method and scenario analysis, targeting an overall confidence
level range for the aggregate risk distribution. Scenario analysis
is used to determine the level of compensation that the Group
requires for bearing uncertainty for qualitative risks not
captured in the risk distribution and large event-driven claims,
such as natural catastrophes. Given the nature of the
underlying business and losses it is normal for new risks to
become apparent or for the magnitude of existing risks to
change over time. The risk adjustment in its entirety is judged
to provide adequate compensation for the risk in the reserves.
Group diversification benefit is not considered at the
individual\u00a0insurance undertaking entity level but is considered
in\u00a0determining the confidence level at a consolidated level
for\u00a0disclosure purposes. At 31\u00a0December 2025, the risk
adjustment in respect of the LIC net of reinsurance is at
the\u00a086th percentile (2024: 83rd percentile).
(d) Fair value measurement
The Group carries its financial investments at fair value through
profit or loss, with fair values determined using published price
quotations in the most active financial markets in which the
assets trade, where available. Where quoted market prices are
not available, valuation techniques are used to value financial
instruments. These include third-party valuation reports and
models utilising both observable and unobservable market
inputs. Valuation techniques involve judgement, including the
use of valuation models and their inputs, which can lead to a
range of plausible valuations for financial investments. Note
3.3(a) discusses the reliability of the Group\u2019s fair values.
(e) Employee benefit
The employee retirement benefit scheme obligations are
calculated and valued with reference to a number of actuarial
assumptions including mortality, inflation rates and discount
rate, many of which have been subject to recent volatility.
This\u00a0complex set of economic variables can have a significant
impact on the financial statements, as shown in note 24.
(f) Tax
The Group operates in a multinational environment, and
legislation concerning the determination of taxation of assets
and liabilities is complex and continually evolving. In preparing
the financial statements, the Group applies significant
judgements in identifying uncertainties over tax treatments
and\u00a0in the measurement of the provision being the best estimate
of the amount expected to become payable. The assessment is
based on the judgement of tax professionals within the Group
supported by previous experience in respect of such activities
and based on advice sought from specialist tax advisors.
A deferred tax asset can be recognised only to the extent
that\u00a0it\u00a0is recoverable. The recoverability of deferred tax assets\u00a0in
respect of carry forward losses requires consideration\u00a0of the
future levels of taxable profit in the Group.\u00a0In preparing the
Group\u2019s financial statements, management estimates taxation
assets and liabilities after taking appropriate professional advice,
as shown in note 22. Significant estimates and assumptions
used in the valuation of\u00a0deferred tax relate to the forecast
taxable profits, taking into account the Group\u2019s financial and
strategic plans. See note 23 for further details of adjustments
made to deferred tax during the year.
The determination and finalisation of agreed taxation assets
and liabilities may not occur until several years after the
reporting date and consequently the final amounts payable
or\u00a0receivable may differ from those presented in these
financial\u00a0statements.
2.20 Reporting of alternative performance measures
The Directors consider that the combined, claims and expense
ratio measures reported in respect of operating segments and
the Group overall in note 4, net asset value per share and return
on equity measures disclosed in notes 5 and 6, the adjusted
operating profit (AOP) before tax and AOP after tax, adjusted
operating earnings per share, operating return on tangible equity,
net tangible asset per share, insurance contract written premium
and prior-year developments disclosed in the alternative
performance measures section, provide useful information
regarding the underlying performance of the Group\u2019s businesses.
These measures are widely recognised by the insurance industry
and are consistent with the internal performance measures
reviewed by senior management including the chief\u00a0operating
decision-maker. However, these measures are\u00a0not defined
within the accounting standards and interpretations, and
therefore may not be directly comparable with similarly titled
alternative performance measures reported by other companies.", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-393": { "value": "
(a) Change in functional currency
With effect from 1 July 2025, the functional currency of the
Company, Hiscox plc and Hiscox Holdings Limited
(subsidiaries of the Group) changed from Sterling to US Dollars
taking into consideration the following changes:
\u2022 significant growth in Hiscox Ltd's US Dollar income over
the past five years;
\u2022 issuance of $500m subordinated notes by Hiscox Ltd;
and
\u2022 substantial increase in investment in the US subsidiaries.
This change has been accounted for prospectively from
1\u00a0July\u00a02025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-392": { "value": "
(a) Change in functional currency
With effect from 1 July 2025, the functional currency of the
Company, Hiscox plc and Hiscox Holdings Limited
(subsidiaries of the Group) changed from Sterling to US Dollars
taking into consideration the following changes:
\u2022 significant growth in Hiscox Ltd's US Dollar income over
the past five years;
\u2022 issuance of $500m subordinated notes by Hiscox Ltd;
and
\u2022 substantial increase in investment in the US subsidiaries.
This change has been accounted for prospectively from
1\u00a0July\u00a02025.
(a) Functional currency
Items included in the financial statements of each of the
Group\u2019s entities are measured using the currency of the
primary economic environment in which the entity operates (the
\u2018functional currency\u2019). Entities operating in France, Germany,
The Netherlands, Spain, Portugal, Ireland, Italy and Belgium
have a functional currency of Euros; those subsidiary entities
operating from the USA, Bermuda, Guernsey and Syndicates
have a functional currency of US Dollars. Functional currencies
of\u00a0entities operating in Asia include US Dollars and Singapore
Dollars. All other entities have a functional currency of Sterling
except Hiscox plc and Hiscox Holdings Limited which have a
functional currency of US Dollars.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-395": { "value": "
(b) New accounting standards, interpretations and
amendments to published standards
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not
yet effective. New standards, amendments to standards and
interpretations, as adopted by\u00a0the UK, that are effective for
annual periods beginning on\u00a01\u00a0January 2025 have been
applied in preparing these consolidated financial statements
and had no material impact on the Group.
\u2022 Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates, Lack of exchangeability
(c) Future accounting developments
The following new standards, and amendments to existing
standards have been issued, are not yet effective for the Group
and have not been applied in preparing these consolidated
financial statements:
\u2022 Amendments to IFRS 9 \u2013 Financial Instruments
and\u00a0IFRS 7 Financial Instruments: Disclosures \u2013
Classification and Measurement of
Financial\u00a0Instruments
Amendments to the classification and measurement of
financial instruments which address:
\u2013 derecognition of financial liabilities settled through
electronic transfers;
\u2013 classification of financial assets; and
\u2013 disclosures.
The amendments are effective for the Group from
1\u00a0January 2026 and have been endorsed for use in
the\u00a0UK. The application of these amendments is not
expected to have a significant impact on the Group.
\u2022 Amendments to IFRS 9 and IFRS 7 \u2013 Contracts
Referencing Nature-dependent Electricity
Targeted amendments for better reporting of the financial
effects of nature-dependent electricity contracts, which
are often structured as power purchase agreements
(PPAs). The amendments are effective for the Group from
1 January 2026 and have been endorsed for use in the
UK. They are not expected to have a significant impact
on the Group.
\u2022 Annual improvements to IFRS Accounting standards \u2013
Volume 11: Amendments to:
o IFRS 1 \u2013 First-time Adoption of International
Financial Reporting Standards;
o IFRS 7 \u2013 Financial Instruments: Disclosures and its
accompanying Guidance;
o IFRS 10 \u2013 Consolidated Financial Statements;
o IAS 7 \u2013 Statement of Cash Flows.
All amendments have been endorsed for use in the UK
and are effective 1 January 2026. The application of
these amendments is not expected to have a material
impact on the Group.
\u2022 IFRS 18 \u2013 Presentation and Disclosure in
Financial\u00a0Statements
The standard is aimed at improving the way companies
communicate in their financial statements. It introduces:
\u2013 new defined subtotals in the income statement,
including operating profit;
\u2013 disclosures about management-defined
performance measures; and
\u2013 additional guidance on aggregation
and\u00a0disaggregation of information in
financial\u00a0statements.
The standard is effective for annual reporting periods
beginning on or after 1 January 2027 and has been
endorsed for use in the UK. It is expected to result in
presentational changes to the Group\u2019s consolidated
income statement and consolidated cash flow statement
as well as new disclosures of management-defined
performance measures in the notes.
While the standard will impact presentation and
disclosure, no changes to recognition or measurement
are anticipated. The Group is in the early stages of
implementation planning.
\u2022 IFRS 19 \u2013 Subsidiaries without Public
Accountability:\u00a0Disclosures
The new standard provides reduced disclosure
requirements, replacing the disclosure requirements
of\u00a0other IFRS accounting standards, but does not
change\u00a0recognition and measurement requirements.
The standard is effective for annual reporting
periods\u00a0beginning on or after 1 January 2027 and
has\u00a0not\u00a0yet been endorsed in the UK. This standard
cannot be applied by the Group or the Company
because it is only\u00a0applicable to subsidiaries that have
no\u00a0public accountability.
\u2013 Amendments to IAS 21 \u2013 Translation to a
Hyperinflationary Presentation Currency
These narrow-scope amendments clarify how
companies\u00a0should translate financial statements
from\u00a0a\u00a0non-hyperinflationary currency into a
hyperinflationary one.
The amendments are effective for the Group from
1\u00a0January 2027 and have not yet been endorsed for use
in the UK. The application of these amendments is not
expected to have a significant impact on the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-394": { "value": "
(b) New accounting standards, interpretations and
amendments to published standards
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not
yet effective. New standards, amendments to standards and
interpretations, as adopted by\u00a0the UK, that are effective for
annual periods beginning on\u00a01\u00a0January 2025 have been
applied in preparing these consolidated financial statements
and had no material impact on the Group.
\u2022 Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates, Lack of exchangeability
(c) Future accounting developments
The following new standards, and amendments to existing
standards have been issued, are not yet effective for the Group
and have not been applied in preparing these consolidated
financial statements:
\u2022 Amendments to IFRS 9 \u2013 Financial Instruments
and\u00a0IFRS 7 Financial Instruments: Disclosures \u2013
Classification and Measurement of
Financial\u00a0Instruments
Amendments to the classification and measurement of
financial instruments which address:
\u2013 derecognition of financial liabilities settled through
electronic transfers;
\u2013 classification of financial assets; and
\u2013 disclosures.
The amendments are effective for the Group from
1\u00a0January 2026 and have been endorsed for use in
the\u00a0UK. The application of these amendments is not
expected to have a significant impact on the Group.
\u2022 Amendments to IFRS 9 and IFRS 7 \u2013 Contracts
Referencing Nature-dependent Electricity
Targeted amendments for better reporting of the financial
effects of nature-dependent electricity contracts, which
are often structured as power purchase agreements
(PPAs). The amendments are effective for the Group from
1 January 2026 and have been endorsed for use in the
UK. They are not expected to have a significant impact
on the Group.
\u2022 Annual improvements to IFRS Accounting standards \u2013
Volume 11: Amendments to:
o IFRS 1 \u2013 First-time Adoption of International
Financial Reporting Standards;
o IFRS 7 \u2013 Financial Instruments: Disclosures and its
accompanying Guidance;
o IFRS 10 \u2013 Consolidated Financial Statements;
o IAS 7 \u2013 Statement of Cash Flows.
All amendments have been endorsed for use in the UK
and are effective 1 January 2026. The application of
these amendments is not expected to have a material
impact on the Group.
\u2022 IFRS 18 \u2013 Presentation and Disclosure in
Financial\u00a0Statements
The standard is aimed at improving the way companies
communicate in their financial statements. It introduces:
\u2013 new defined subtotals in the income statement,
including operating profit;
\u2013 disclosures about management-defined
performance measures; and
\u2013 additional guidance on aggregation
and\u00a0disaggregation of information in
financial\u00a0statements.
The standard is effective for annual reporting periods
beginning on or after 1 January 2027 and has been
endorsed for use in the UK. It is expected to result in
presentational changes to the Group\u2019s consolidated
income statement and consolidated cash flow statement
as well as new disclosures of management-defined
performance measures in the notes.
While the standard will impact presentation and
disclosure, no changes to recognition or measurement
are anticipated. The Group is in the early stages of
implementation planning.
\u2022 IFRS 19 \u2013 Subsidiaries without Public
Accountability:\u00a0Disclosures
The new standard provides reduced disclosure
requirements, replacing the disclosure requirements
of\u00a0other IFRS accounting standards, but does not
change\u00a0recognition and measurement requirements.
The standard is effective for annual reporting
periods\u00a0beginning on or after 1 January 2027 and
has\u00a0not\u00a0yet been endorsed in the UK. This standard
cannot be applied by the Group or the Company
because it is only\u00a0applicable to subsidiaries that have
no\u00a0public accountability.
\u2013 Amendments to IAS 21 \u2013 Translation to a
Hyperinflationary Presentation Currency
These narrow-scope amendments clarify how
companies\u00a0should translate financial statements
from\u00a0a\u00a0non-hyperinflationary currency into a
hyperinflationary one.
The amendments are effective for the Group from
1\u00a0January 2027 and have not yet been endorsed for use
in the UK. The application of these amendments is not
expected to have a significant impact on the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-396": { "value": "
(b) New accounting standards, interpretations and
amendments to published standards
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not
yet effective. New standards, amendments to standards and
interpretations, as adopted by\u00a0the UK, that are effective for
annual periods beginning on\u00a01\u00a0January 2025 have been
applied in preparing these consolidated financial statements
and had no material impact on the Group.
\u2022 Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates, Lack of exchangeability
", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-398": { "value": "
2.2 Basis of consolidation
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
(b) Associates
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is generally identified with a
shareholding of between 20% and 50% of an entity\u2019s voting
rights. The consolidated financial statements include the
Group\u2019s share of the total recognised gains and losses of
associates on an equity-accounted basis from the date that
significant influence commences until the date that significant
influence ceases.
The Group\u2019s share of its associates\u2019 post-acquisition profits or
losses after tax is recognised in the income statement for each
period, and its share of the movement in the associates\u2019 net
assets is reflected in the investments\u2019 carrying values on the
statement of financial position. When the Group\u2019s share of
losses equals or exceeds the carrying amount of the associate,
the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has
incurred obligations in respect of the associate.
(c) Transactions eliminated on consolidation
Intragroup balances, transactions and any unrealised gains
arising from intragroup transactions are eliminated in preparing
the consolidated financial statements. Unrealised losses are
also eliminated unless the transaction provides evidence of
an\u00a0impairment of the asset transferred. Foreign currency
gains\u00a0and losses on intragroup monetary assets and liabilities
may not fully eliminate on consolidation when the intragroup
monetary item concerned is transacted between two Group
entities that have different functional currencies. Unrealised
gains arising from transactions with associates are eliminated
to the extent of the Group\u2019s interest in the entity. Unrealised
losses are eliminated in the same way as unrealised gains,
but\u00a0only to the extent that there is no evidence of impairment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-397": { "value": "
2.2 Basis of consolidation
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
(b) Associates
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is generally identified with a
shareholding of between 20% and 50% of an entity\u2019s voting
rights. The consolidated financial statements include the
Group\u2019s share of the total recognised gains and losses of
associates on an equity-accounted basis from the date that
significant influence commences until the date that significant
influence ceases.
The Group\u2019s share of its associates\u2019 post-acquisition profits or
losses after tax is recognised in the income statement for each
period, and its share of the movement in the associates\u2019 net
assets is reflected in the investments\u2019 carrying values on the
statement of financial position. When the Group\u2019s share of
losses equals or exceeds the carrying amount of the associate,
the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has
incurred obligations in respect of the associate.
(c) Transactions eliminated on consolidation
Intragroup balances, transactions and any unrealised gains
arising from intragroup transactions are eliminated in preparing
the consolidated financial statements. Unrealised losses are
also eliminated unless the transaction provides evidence of
an\u00a0impairment of the asset transferred. Foreign currency
gains\u00a0and losses on intragroup monetary assets and liabilities
may not fully eliminate on consolidation when the intragroup
monetary item concerned is transacted between two Group
entities that have different functional currencies. Unrealised
gains arising from transactions with associates are eliminated
to the extent of the Group\u2019s interest in the entity. Unrealised
losses are eliminated in the same way as unrealised gains,
but\u00a0only to the extent that there is no evidence of impairment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-401": { "value": "
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
(a) Goodwill
Goodwill represents amounts arising on acquisition of
subsidiaries and associates. In respect of acquisitions that
have occurred since 1 January 2004, goodwill represents
the\u00a0excess of the fair value of consideration of an acquisition
over the fair value of the Group\u2019s share of the net identifiable
assets and contingent liabilities assumed of the acquired
subsidiary or associate at the acquisition date. In respect
of\u00a0acquisitions prior to 1 January 2004, goodwill is included
on\u00a0the basis of its deemed cost, which represents the
amount\u00a0recorded under previous generally accepted
accounting principles.
Goodwill on acquisition of subsidiaries is included in intangible
assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is not amortised but is tested at least annually
for\u00a0impairment and carried at cost, less accumulated
impairment losses.
Goodwill is allocated to the Group\u2019s cash-generating units,
identified according to the smallest identifiable group of
assets\u00a0from which cash flows are generated that are largely
independent of the cash flows generated by other assets or
groups of assets.
The impairment review process examines whether or not
the\u00a0carrying value of the goodwill attributable to individual
cash-generating units exceeds its recoverable amount.
Any\u00a0excess of goodwill over the recoverable amount arising
from the review process indicates impairment. Any impairment
charges are presented as part of operational expenses. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-400": { "value": "
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-399": { "value": "
(a) Subsidiaries
Subsidiaries are those entities controlled by the Group. Control
exists when the Group has power over an entity, exposure or
rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns. The
consolidated financial statements include the assets, liabilities
and results of the Group up to 31 December each year.
The\u00a0financial statements of subsidiaries are included in the
consolidated financial statements only from the date that
control commences until the date that control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquiree
on an acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest\u2019s proportionate share of the
recognised amounts of acquiree\u2019s identifiable net assets.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions \u2013 that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid
and\u00a0the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity. Gains or
losses\u00a0on disposals to non-controlling interests are also
recorded in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-402": { "value": "
(b) Associates
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is generally identified with a
shareholding of between 20% and 50% of an entity\u2019s voting
rights. The consolidated financial statements include the
Group\u2019s share of the total recognised gains and losses of
associates on an equity-accounted basis from the date that
significant influence commences until the date that significant
influence ceases.
The Group\u2019s share of its associates\u2019 post-acquisition profits or
losses after tax is recognised in the income statement for each
period, and its share of the movement in the associates\u2019 net
assets is reflected in the investments\u2019 carrying values on the
statement of financial position. When the Group\u2019s share of
losses equals or exceeds the carrying amount of the associate,
the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has
incurred obligations in respect of the associate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-403": { "value": "
2.3 Foreign currency translation
(a) Functional currency
Items included in the financial statements of each of the
Group\u2019s entities are measured using the currency of the
primary economic environment in which the entity operates (the
\u2018functional currency\u2019). Entities operating in France, Germany,
The Netherlands, Spain, Portugal, Ireland, Italy and Belgium
have a functional currency of Euros; those subsidiary entities
operating from the USA, Bermuda, Guernsey and Syndicates
have a functional currency of US Dollars. Functional currencies
of\u00a0entities operating in Asia include US Dollars and Singapore
Dollars. All other entities have a functional currency of Sterling
except Hiscox plc and Hiscox Holdings Limited which have a
functional currency of US Dollars.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the
retranslation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised
in the income statement, except when deferred in equity as
IFRS 9 effective net investment hedges or when the underlying
balance is deemed to form part of the Group\u2019s net investment
in a subsidiary operation and is unlikely to be settled in the
foreseeable future. Non-monetary items carried at historical
cost are translated on the statement of financial position at
the\u00a0exchange rate prevailing on the original transaction
date.\u00a0Non-monetary items measured at fair value are
translated\u00a0using the exchange rate ruling when the fair
value\u00a0was determined.
(c) Group companies
The results and financial position of all the Group entities that
have a functional currency different from the presentation
currency are translated into the presentation currency
as\u00a0follows:
\u2022 assets and liabilities for each statement of financial
position presented are\u00a0translated at the closing rate at
the\u00a0end of the reporting period;
\u2022 income and expenses for each income statement are
translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the date of
the transactions); and
\u2022 all resulting exchange differences are recognised as a
separate component of equity.
When a foreign operation is sold, such exchange differences
are recognised in the income statement as part of the gain, or
loss, on sale.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-404": { "value": "
2.4 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
depreciation and any impairment loss. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items. Subsequent costs are included in the asset\u2019s carrying
amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance items
are charged to the income statement during the financial
period in which they are incurred.
Land is not depreciated as it is deemed to have an indefinite
useful economic life. The cost of leasehold improvements is
amortised over the unexpired term of the underlying lease
or\u00a0the estimated useful life of the asset, whichever is
shorter.\u00a0Depreciation on other assets is calculated using
the\u00a0straight-line method to allocate their cost, less their
residual\u00a0values, over their estimated useful lives.
The rates applied are as follows:
\u2022 buildings20-50 years
\u2022 vehicles3 years
\u2022 leasehold improvements including
fixtures and fittings10-15 years
\u2022 furniture, fittings and equipment 3-15 years
The assets\u2019 residual values and useful lives are reviewed at the
end of the reporting period and adjusted if appropriate.
An asset\u2019s carrying amount is written down immediately to its
recoverable amount if the asset\u2019s carrying amount is greater
than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing proceeds with the
carrying amount. These are included in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-405": { "value": "
Land is not depreciated as it is deemed to have an indefinite
useful economic life. The cost of leasehold improvements is
amortised over the unexpired term of the underlying lease
or\u00a0the estimated useful life of the asset, whichever is
shorter.\u00a0Depreciation on other assets is calculated using
the\u00a0straight-line method to allocate their cost, less their
residual\u00a0values, over their estimated useful lives.
The rates applied are as follows:
\u2022 buildings20-50 years
\u2022 vehicles3 years
\u2022 leasehold improvements including
fixtures and fittings10-15 years
\u2022 furniture, fittings and equipment 3-15 years
The assets\u2019 residual values and useful lives are reviewed at the
end of the reporting period and adjusted if appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-406": { "value": "
2.5 Intangible assets
(a) Goodwill
Goodwill represents amounts arising on acquisition of
subsidiaries and associates. In respect of acquisitions that
have occurred since 1 January 2004, goodwill represents
the\u00a0excess of the fair value of consideration of an acquisition
over the fair value of the Group\u2019s share of the net identifiable
assets and contingent liabilities assumed of the acquired
subsidiary or associate at the acquisition date. In respect
of\u00a0acquisitions prior to 1 January 2004, goodwill is included
on\u00a0the basis of its deemed cost, which represents the
amount\u00a0recorded under previous generally accepted
accounting principles.
Goodwill on acquisition of subsidiaries is included in intangible
assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is not amortised but is tested at least annually
for\u00a0impairment and carried at cost, less accumulated
impairment losses.
Goodwill is allocated to the Group\u2019s cash-generating units,
identified according to the smallest identifiable group of
assets\u00a0from which cash flows are generated that are largely
independent of the cash flows generated by other assets or
groups of assets.
The impairment review process examines whether or not
the\u00a0carrying value of the goodwill attributable to individual
cash-generating units exceeds its recoverable amount.
Any\u00a0excess of goodwill over the recoverable amount arising
from the review process indicates impairment. Any impairment
charges are presented as part of operational expenses. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(b) Other intangible assets
Intangible assets acquired separately from a business are
carried initially at cost. An intangible asset acquired as part
of\u00a0a\u00a0business combination is recognised outside of goodwill if
the\u00a0asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably. Customer
relationships, syndicate capacity, trademarks and software
acquired are capitalised at cost, being the fair value of the
consideration paid. Software is capitalised on the basis of
the\u00a0costs incurred to acquire and bring it into use. Intangible
assets with indefinite lives such as syndicate capacity are
subsequently valued at cost and are subject to annual
impairment assessment.
Intangible assets with finite useful lives are consequently
carried at cost, less accumulated amortisation and
impairment.\u00a0The useful life of the asset is reviewed annually.
Any changes in estimated useful lives are accounted for
prospectively with the effect of the change being recognised
in\u00a0the current and future periods, if relevant.
Amortisation is calculated using the straight-line method
to\u00a0allocate the cost over the estimated useful lives of the
intangible assets.
Subsequent expenditure on other intangible assets is
capitalised only when it increases the future economic
benefits\u00a0embodied in the specific asset to which it relates.
All\u00a0other expenditure is expensed as incurred.
Those intangible assets with finite lives are assessed for
indicators of impairment at each reporting date. Where there
is\u00a0an indication of impairment then a full impairment test is
performed. An impairment loss recognised for an intangible
asset in prior years should be reversed if, and only if, there
has\u00a0been a change in the estimates used to determine the
asset\u2019s recoverable amount since the last impairment loss
was\u00a0recognised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-407": { "value": "
(a) Goodwill
Goodwill represents amounts arising on acquisition of
subsidiaries and associates. In respect of acquisitions that
have occurred since 1 January 2004, goodwill represents
the\u00a0excess of the fair value of consideration of an acquisition
over the fair value of the Group\u2019s share of the net identifiable
assets and contingent liabilities assumed of the acquired
subsidiary or associate at the acquisition date. In respect
of\u00a0acquisitions prior to 1 January 2004, goodwill is included
on\u00a0the basis of its deemed cost, which represents the
amount\u00a0recorded under previous generally accepted
accounting principles.
Goodwill on acquisition of subsidiaries is included in intangible
assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is not amortised but is tested at least annually
for\u00a0impairment and carried at cost, less accumulated
impairment losses.
Goodwill is allocated to the Group\u2019s cash-generating units,
identified according to the smallest identifiable group of
assets\u00a0from which cash flows are generated that are largely
independent of the cash flows generated by other assets or
groups of assets.
The impairment review process examines whether or not
the\u00a0carrying value of the goodwill attributable to individual
cash-generating units exceeds its recoverable amount.
Any\u00a0excess of goodwill over the recoverable amount arising
from the review process indicates impairment. Any impairment
charges are presented as part of operational expenses. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-408": { "value": "
(b) Other intangible assets
Intangible assets acquired separately from a business are
carried initially at cost. An intangible asset acquired as part
of\u00a0a\u00a0business combination is recognised outside of goodwill if
the\u00a0asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably. Customer
relationships, syndicate capacity, trademarks and software
acquired are capitalised at cost, being the fair value of the
consideration paid. Software is capitalised on the basis of
the\u00a0costs incurred to acquire and bring it into use. Intangible
assets with indefinite lives such as syndicate capacity are
subsequently valued at cost and are subject to annual
impairment assessment.
Intangible assets with finite useful lives are consequently
carried at cost, less accumulated amortisation and
impairment.\u00a0The useful life of the asset is reviewed annually.
Any changes in estimated useful lives are accounted for
prospectively with the effect of the change being recognised
in\u00a0the current and future periods, if relevant.
Amortisation is calculated using the straight-line method
to\u00a0allocate the cost over the estimated useful lives of the
intangible assets.
Subsequent expenditure on other intangible assets is
capitalised only when it increases the future economic
benefits\u00a0embodied in the specific asset to which it relates.
All\u00a0other expenditure is expensed as incurred.
Those intangible assets with finite lives are assessed for
indicators of impairment at each reporting date. Where there
is\u00a0an indication of impairment then a full impairment test is
performed. An impairment loss recognised for an intangible
asset in prior years should be reversed if, and only if, there
has\u00a0been a change in the estimates used to determine the
asset\u2019s recoverable amount since the last impairment loss
was\u00a0recognised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-410": { "value": "
2.6 Impairment of non-financial assets
Non-financial assets (such as goodwill, an intangible asset
or\u00a0item of property, plant and equipment) that have an
indefinite useful life are not subject to amortisation and are
tested annually or whenever there is an indication of
impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not
be\u00a0recoverable.
Objective factors that are considered when determining
whether a non-financial asset or group of non-financial assets
may be impaired include, but are not limited to, the following:
\u2022 adverse economic, regulatory or environmental conditions
that may restrict future cash flows and asset usage
and/or recoverability;
\u2022 the likelihood of accelerated obsolescence arising from
the development of new technologies and products; and
\u2022 the disintegration of the active market(s) to which the
asset is related.
An impairment loss is recognised for the amount by which the
asset\u2019s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset\u2019s fair value less
costs to sell or value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating
units). Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset in prior periods. A reversal
of an impairment loss is recognised as income immediately.
Impairment losses recognised in respect of goodwill are not
subsequently reversed.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-409": { "value": "
2.6 Impairment of non-financial assets
Non-financial assets (such as goodwill, an intangible asset
or\u00a0item of property, plant and equipment) that have an
indefinite useful life are not subject to amortisation and are
tested annually or whenever there is an indication of
impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not
be\u00a0recoverable.
Objective factors that are considered when determining
whether a non-financial asset or group of non-financial assets
may be impaired include, but are not limited to, the following:
\u2022 adverse economic, regulatory or environmental conditions
that may restrict future cash flows and asset usage
and/or recoverability;
\u2022 the likelihood of accelerated obsolescence arising from
the development of new technologies and products; and
\u2022 the disintegration of the active market(s) to which the
asset is related.
An impairment loss is recognised for the amount by which the
asset\u2019s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset\u2019s fair value less
costs to sell or value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating
units). Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset in prior periods. A reversal
of an impairment loss is recognised as income immediately.
Impairment losses recognised in respect of goodwill are not
subsequently reversed.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-414": { "value": "
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-413": { "value": "
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognisingDifferenceBetweenFairValueAtInitialRecognitionAndAmountDeterminedUsingValuationTechniqueExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-412": { "value": "
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-411": { "value": "
2.7 Financial assets and liabilities
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-416": { "value": "
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.\u00a0
(a) Recognition
The Group recognises a financial asset or a financial
liability\u00a0in\u00a0its statement of financial position when, and
only\u00a0when, it\u00a0becomes a party to the contractual
provisions\u00a0of\u00a0the instrument. At initial recognition, the
Group\u00a0measures a\u00a0financial asset at its fair value plus, in
the\u00a0case of a financial asset not at fair value through profit
or\u00a0loss, transaction costs that are incremental and directly
attributable to the acquisition or issue of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-415": { "value": "
The Group classifies its financial assets in the following
measurement categories, which depend on the business
model for managing the financial assets and the contractual
terms of the cash flows.
\u2022 Amortised cost: assets that are held for collection of
contractual cash flows, where those cash flows
represent\u00a0solely payments of principal and interest
(SPPI),\u00a0and that are not designated at fair value
through\u00a0profit or loss (FVPL), are measured at
amortised\u00a0cost. Interest income from these
financial\u00a0assets is included in interest income using
the\u00a0effective interest rate method. Such assets
held\u00a0by\u00a0the Group include cash and cash equivalents,
receivables from brokers, prepayments and accrued
income, receivables and accrued interest and
other\u00a0debtors.
\u2022 Fair value through other comprehensive income (FVOCI):
assets that are held for collection of contractual cash
flows and for selling the financial assets, and where
the\u00a0cash flows represent SPPI, and that are not
designated as FVPL, are measured at FVOCI.
Movements\u00a0in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or\u00a0losses, interest revenue and foreign exchange
gains\u00a0and losses which are recognised in profit or
loss.\u00a0When the financial asset\u00a0is derecognised, the
cumulative gain or loss on the\u00a0instrument\u2019s amortised
cost previously recognised in\u00a0OCI\u00a0is reclassified from
equity to profit or loss. Interest\u00a0from these financial
assets\u00a0is included in interest\u00a0income using the
effective\u00a0interest rate method.\u00a0The Group does not
hold\u00a0any assets at FVOCI\u00a0as the business model
criteria\u00a0are not met.
\u2022 Fair value through profit or loss (FVPL): assets that
do\u00a0not\u00a0meet the criteria for amortised cost or
FVOCI\u00a0are\u00a0measured at FVPL. Assets can also be
designated\u00a0to\u00a0FVPL if in doing so it eliminates, or
significantly reduces, an accounting mismatch. The
gains\u00a0or losses\u00a0arising from\u00a0fair value changes on
assets\u00a0measured at FVPL are\u00a0recognised in profit or
loss\u00a0and presented within the investment result in the
period in which they arise. The Group\u2019s investment
assets\u00a0in this category include government bonds,
corporate bonds, asset and mortgage-backed
securities,\u00a0other fixed income holdings,\u00a0equities,
investment funds, private credit funds,\u00a0insurance-linked
funds and derivatives. All these\u00a0assets are at
FVPL\u00a0because of the business model\u00a0test and
the\u00a0characteristics of the associated contractual
cash\u00a0flows.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-417": { "value": "
(b) Impairment allowances
An expected credit loss (ECL) model is applicable for all assets
measured at amortised cost and FVOCI. The assessment of
credit risk and the estimation of an ECL are unbiased,
probability-weighted and incorporate all available information
relevant to the assessment, including information about past
events, current conditions and reasonable and supportable
forecasts of economic conditions at the reporting date. The
forward-looking aspect of IFRS 9 requires judgement as to
how changes in economic factors affect ECLs. Impairment
charges are recognised in the income statement within
operational expenses.
The ECL is a three-stage model based on forward-looking
information regarding changes in credit quality since inception.\u00a0
Credit risk is measured using a probability of default (PD);
exposure at default (EAD); and loss given default (LGD)
approach as follows.
\u2022 PD is an estimate of the likelihood of default of the asset.
\u2022 EAD is an estimate of the exposure at that future default
date, taking into account expected changes in the
exposure after the reporting date.
\u2022 LGD is an estimate of the loss arising in the case where
a\u00a0default occurs at a given time. It is based on the
difference between the contractual cash flows due and
those that the Group would expect to receive. It is usually
expressed as a percentage of the exposure at default.
The three stages of ECL are defined and assessed as follows.
\u2022 Stage 1 \u2013 no significant increase in credit risk since
inception, ECL is calculated using a 12-month PD.
\u2022 Stage 2 \u2013 a significant increase in credit risk since
inception, ECL is calculated using a lifetime PD.
\u2022 Stage 3 \u2013 credit impaired, ECL is calculated using a
lifetime PD.
A significant increase in credit risk is considered to have
incurred when payments are 30 days past due, or earlier if
other factors indicate the risk has increased significantly since
inception. Financial assets are written off when there is no
reasonable expectation of recovery on a case-by-case basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-418": { "value": "
(c) Derecognition
Financial assets are derecognised when the contractual
rights\u00a0to receive the cash flows from the financial assets
have\u00a0expired; or they have been transferred and the Group
transfers\u00a0substantially all the risks and rewards of ownership;
or\u00a0they have been transferred and the Group neither transfers
nor retains substantially all the risks and rewards of ownership
and the Group has not retained control. Any gain or loss
arising\u00a0from derecognition is recognised directly in the
income\u00a0statement. A financial liability is derecognised when
the\u00a0obligation under that liability is discharged, cancelled
or\u00a0expires.
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-419": { "value": "
(d) Investment income
The total gain/loss from financial assets carried at fair
value\u00a0through profit or loss (FVPL) is recognised in profit
or\u00a0loss\u00a0and\u00a0disclosed in the notes as investment income
comprising\u00a0interest received, realised gains/losses and
unrealised gains/losses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-422": { "value": "
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-421": { "value": "
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-420": { "value": "
(e) Financial liabilities
At initial recognition, the Group classifies a financial liability
at\u00a0fair value and subsequently at amortised cost using the
effective interest rate method. Financial liabilities mainly
include\u00a0payables to brokerage customers, short-term
borrowings, long-term borrowings and bonds payable.
When all or part of the current obligations of a financial liability
have been discharged, the Group derecognises the portion of
the financial liability or obligation that has been discharged. The
difference between the carrying amount of the derecognised
liability and the consideration is recognised in profit or loss.
Derivative financial liabilities are measured at fair value through
profit or loss. All the related realised and unrealised gains or
losses and transaction costs are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-423": { "value": "
2.8 Cash and cash equivalents
The Group has classified cash deposits and short-term
highly-liquid investments as cash and cash equivalents.
These\u00a0assets are readily convertible into known amounts of
cash and are subject to inconsequential changes in value.
Cash equivalents are financial investments with less than
three\u00a0months to maturity at the date of acquisition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-426": { "value": "
2.9 Derivative financial instruments
Derivatives are initially recognised at fair value on the date
on\u00a0which a derivative contract is entered into and are
subsequently valued at fair value at the end of the reporting
period. Fair values are obtained from quoted market values
and, if these are not available, valuation techniques including
option pricing models are used as appropriate. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. For derivatives not formally
designated as a hedging instrument, fair value changes are
recognised immediately in the consolidated income statement.
Changes in the value of derivatives and other financial
instruments formally designated as hedges of net investments
in foreign operations are recognised in the currency translation
reserve to the extent they are effective; gains or losses relating
to the ineffective portion of the hedging instruments are
recognised immediately in the consolidated income statement.
The Group had no derivative instruments designated for hedge
accounting during the current period and prior financial year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-425": { "value": "
2.9 Derivative financial instruments
Derivatives are initially recognised at fair value on the date
on\u00a0which a derivative contract is entered into and are
subsequently valued at fair value at the end of the reporting
period. Fair values are obtained from quoted market values
and, if these are not available, valuation techniques including
option pricing models are used as appropriate. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. For derivatives not formally
designated as a hedging instrument, fair value changes are
recognised immediately in the consolidated income statement.
Changes in the value of derivatives and other financial
instruments formally designated as hedges of net investments
in foreign operations are recognised in the currency translation
reserve to the extent they are effective; gains or losses relating
to the ineffective portion of the hedging instruments are
recognised immediately in the consolidated income statement.
The Group had no derivative instruments designated for hedge
accounting during the current period and prior financial year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-424": { "value": "
2.9 Derivative financial instruments
Derivatives are initially recognised at fair value on the date
on\u00a0which a derivative contract is entered into and are
subsequently valued at fair value at the end of the reporting
period. Fair values are obtained from quoted market values
and, if these are not available, valuation techniques including
option pricing models are used as appropriate. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. For derivatives not formally
designated as a hedging instrument, fair value changes are
recognised immediately in the consolidated income statement.
Changes in the value of derivatives and other financial
instruments formally designated as hedges of net investments
in foreign operations are recognised in the currency translation
reserve to the extent they are effective; gains or losses relating
to the ineffective portion of the hedging instruments are
recognised immediately in the consolidated income statement.
The Group had no derivative instruments designated for hedge
accounting during the current period and prior financial year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-427": { "value": "
2.10 Own shares
Where any Group company purchases the Parent Company\u2019s
equity share capital (own shares), the consideration paid,
including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the
Company\u2019s owners on consolidation. Where such shares are
subsequently sold, reissued or otherwise disposed of, any
consideration received is included in equity attributable to the
Company\u2019s owners, net of any directly attributable incremental
transaction costs and the related tax effects.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-429": { "value": "
2.11 Insurance and reinsurance contracts
The accounting policy set out below is applicable to insurance
and reinsurance contracts that are issued by the Group
and\u00a0reinsurance contracts held by the Group unless
indicated\u00a0otherwise.
(a) Classification
Insurance contracts are defined as those containing significant
insurance risk. Significant insurance risk criteria are met if,
and\u00a0only if, an insured event could cause an insurer to make
significant additional payments in any scenario, excluding
scenarios that lack commercial substance, at the inception
of\u00a0the contract. Such contracts remain insurance contracts
until all rights and obligations are extinguished or expire.
The Group issues short-term casualty and property
(re)insurance contracts in the normal course of business,
under\u00a0which it accepts significant insurance risk from its
policyholders. The Group also enters into ceded reinsurance
contracts with reinsurers under which the Group transfers
significant insurance risk to reinsurers and is compensated
for\u00a0claims on contracts issued by the Group.
(b) Separating components
The Group assesses its insurance and reinsurance products
to\u00a0determine whether they contain distinct components which
must be accounted for under another IFRS instead of under
IFRS 17. After separating any distinct components, the Group
applies IFRS 17 to all remaining components of the (host)
insurance contract. Currently, the Group\u2019s products do not
include any distinct components that require separation.
Some reinsurance contracts issued contain profit commission
arrangements. Under these arrangements, there is a
guaranteed minimum amount that the policyholder will always
receive \u2013 either in the form of profit commission, or as claims,
or another contractual payment irrespective of the insured
event happening. The guaranteed minimum amounts have
been assessed to be highly interrelated with the insurance
component of the reinsurance contracts and are, therefore,
non-distinct investment components which are not accounted
for separately. However, receipts and payments of these
investment components are excluded from insurance revenue
and expenses.
(c) Level of aggregation
Insurance contracts are aggregated into groups for
measurement purposes. The level of aggregation for the Group
is determined firstly by grouping contracts into portfolios which,
with some limited exceptions, are set as the reserving classes
of each legal entity. Portfolios comprise groups of contracts
with similar risks which are managed together. Portfolios are
further divided based on expected profitability at inception
into\u00a0three categories: onerous contracts, contracts with no
significant risk of becoming onerous, and the remainder.
No\u00a0group for level of aggregation purposes may contain
contracts issued more than one year apart. The grouping
of\u00a0contracts is not subsequently reconsidered.
A group of insurance contracts is considered to be onerous
at\u00a0initial recognition if the fulfilment cash flows allocated to
that\u00a0group of contracts in total are a net outflow. That is if
the\u00a0present value of expected claims, attributable expenses
and\u00a0risk adjustment exceeds the premium.
Portfolios of reinsurance contracts held are assessed
for\u00a0aggregation separately from portfolios of insurance
contracts\u00a0issued. Reinsurance contracts held cannot
be\u00a0onerous.
(d) Recognition and derecognition
Groups of insurance contracts issued are initially recognised
from the earliest of the following:
\u2022 the beginning of the coverage period;
\u2022 the date when the first payment from the policyholder
is\u00a0due, or actually received if there is no due date; and
\u2022 when the Group determines that a group of contracts
becomes onerous.
Insurance contracts acquired in a business combination
within\u00a0the scope of IFRS 3 Business Combinations or a
portfolio transfer are accounted for as if they were entered
into\u00a0at the\u00a0date of acquisition or transfer.
Reinsurance contracts held are recognised as follows:
\u2022 a group of reinsurance contracts held that provide
proportionate coverage is recognised at the later of
the\u00a0following dates (unless underlying contracts are
onerous, in which case earlier recognition is required):
o the beginning of the coverage period of the
group;\u00a0and
o the initial recognition of any underlying
insurance\u00a0contract;
\u2022 all other groups of reinsurance contracts held are
recognised from the beginning of the coverage period
of\u00a0the group of reinsurance contracts held; unless
the\u00a0Group entered into the reinsurance contract
held\u00a0at\u00a0or\u00a0before the date when an onerous group
of\u00a0underlying\u00a0contracts is recognised prior to the
beginning\u00a0of the coverage period of the group of
reinsurance contracts\u00a0held, in which case the
reinsurance\u00a0contract\u00a0held is recognised at the
same\u00a0time\u00a0as\u00a0the\u00a0group\u00a0of underlying insurance
contracts\u00a0is\u00a0recognised.
Only contracts that individually meet the recognition criteria
by\u00a0the end of the reporting period are included in the
groups.\u00a0When contracts meet the recognition criteria in
the\u00a0groups after\u00a0the reporting date, they are added to
the\u00a0groups in the reporting period in which they meet the
recognition criteria. The\u00a0composition of the groups is not
reassessed in subsequent periods.
An insurance contract is derecognised when it is:
\u2022 extinguished (that is, when the obligation specified
in\u00a0the\u00a0insurance contract expires or is discharged or
cancelled); or
\u2022 the contract is modified such that the modification results
in a change in the measurement model (for example, the
general measurement model (GMM)) or the applicable
standard for measuring a component of the contract,
substantially changes the contract boundary, or requires
the modified contracts to be included in a different group.
When a modification is not treated as a derecognition,
the\u00a0Group recognises amounts paid or received for the
modification of the contract as an adjustment to the
relevant\u00a0liability or asset for remaining coverage.
When a group of insurance contracts is derecognised,
adjustments to remove related rights and obligations result
in\u00a0the following amounts being charged immediately to
consolidated income statement:
\u2022 if the contract is extinguished, any net difference
between\u00a0the derecognised part of the liability for
remaining coverage (LRC) of the original contract and
any\u00a0other cash flows arising from extinguishment;
\u2022 if the contract is transferred to the third party, any net
difference between the derecognised part of the LRC
of\u00a0the original contract and the premium charged by
the\u00a0third party; or
\u2022 if the original contract is modified resulting in its
derecognition, any net difference between the
derecognised part of the LRC and the hypothetical
premium that the entity would have charged if it had
entered into a contract with equivalent terms to the new
contract at the date of the contract modification, less
any\u00a0additional premium charged for the modification.
(e) Contract boundary
The Group uses the concept of contract boundary to
determine what cash flows should be considered in the
measurement of groups of insurance contracts. Cash flows
are\u00a0within the boundary of an insurance contract if they
arise\u00a0from substantive rights and obligations that exist during
the reporting period in which the Group can compel the
policyholder to pay the premiums, or in which the Group has a
substantive obligation to provide the policyholder with services.
A substantive obligation to provide services ends when:
\u2022 the Group has the practical ability to reassess the risks of
the particular policyholder and, as a result, can set a price
or level of benefits that fully reflects those risks; or
\u2022 both of the following criteria are satisfied:
o the Group has the practical ability to reassess the
risks of the portfolio of insurance contracts that
contain the contract and, as a result, can set a
price\u00a0or level of benefits that fully reflects the risk
of\u00a0that portfolio;
o the pricing of the premiums for coverage up to the
date when the risks are reassessed does not take
into account the risks that relate to periods after the
reassessment date.
A liability or asset relating to expected premiums or claims
outside the boundary of the insurance contract is not
recognised. Such amounts relate to future insurance contracts.
(f) Measurement \u2013 premium allocation approach
Initial measurement
The Group applies the premium allocation approach (PAA)
to\u00a0the majority of the insurance contracts that it issues and
reinsurance contracts that it holds, because:
\u2022 the coverage period of each contract in the group is
one\u00a0year or less; or
\u2022 for contracts longer than one year, the Group has
modelled possible future scenarios and reasonably
expects that the measurement of the LRC for the
group\u00a0containing those contracts under the PAA does
not differ materially from the measurement that would
be\u00a0produced applying the general model.
For insurance contracts issued, on initial recognition, the Group
measures the LRC as the amount of premiums received, less
any acquisition cash flows paid and any amounts arising from
the derecognition of the insurance acquisition cash flows asset
and the derecognition of any other relevant pre-recognition
cash flows.
For reinsurance contracts held, on initial recognition, the
Group\u00a0measures assets for the remaining coverage at the
amount of ceding premiums paid, plus broker fees paid to a
party other than the reinsurer and any amounts arising from the
derecognition of any other relevant pre-recognition cash flows.
For insurance contracts issued, insurance acquisition cash
flows allocated to a group are recognised over the coverage
period of contracts in the group. For reinsurance contracts
held, broker fees are recognised over the coverage period
of\u00a0contracts in a group.
Subsequent measurement
For insurance contracts issued, at each of the subsequent
reporting dates, the LRC is:
\u2022 increased for premiums received in the period;
\u2022 decreased for insurance acquisition cash flows paid
in\u00a0the\u00a0period;
\u2022 decreased for the amounts of expected premium
receipts\u00a0recognised as insurance revenue for the
services\u00a0provided in the period;
\u2022 increased for the amortisation of insurance acquisition
cash flows in the period recognised as insurance
service\u00a0expenses; and
\u2022 decreased for any investment component paid or
transferred to the liability for incurred claims.
For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
\u2022 increased for ceding premiums paid in the period;
\u2022 increased for broker fees paid in the period;
\u2022 decreased for the expected amounts of ceding premiums
and broker fees recognised as reinsurance expenses for
the services received in the period; and
\u2022 decreased for any investment component paid or
transferred to the reinsurance assets for incurred claims.
The Group does not adjust the LRC for insurance contracts
issued or the remaining coverage for reinsurance contracts
held for the effect of the time value of money, because
associated premiums are due within one year of the coverage
period. The Group only adjusts the remaining coverage for
reinsurance contracts held for the time value of money in
relation to the legacy portfolio transactions (LPT) that were
held,\u00a0as the associated premiums are not due within one year
of the coverage period.
The Group estimates the liability for incurred claims (LIC) as the
fulfilment cash flows related to incurred claims. The fulfilment
cash flows incorporate, in an unbiased way, all reasonable and
supportable information available without undue cost or effort
about the amount, timing and uncertainty of those future
cash\u00a0flows.
If facts and circumstances indicate that a group of insurance
contracts measured under the PAA is onerous on initial
recognition or has become onerous subsequently, the Group
increases the carrying amount of the LRC, recognising a loss
component, to the amounts of the excess of the fulfilment cash
flows that relate to the remaining coverage of the group of
contracts, over the carrying amount of the LRC of the group.
The amount of such an increase is recognised in insurance
service expenses. Subsequently, the loss component is
amortised over the coverage period of the group of contracts.
When a loss is recognised on initial recognition of an onerous
group of underlying insurance contracts or on addition of
onerous underlying insurance contracts to that group, the
carrying amount of the reinsurance asset for remaining
coverage for reinsurance contracts held measured under the
PAA is increased by the amount of expected recoveries that
will be in the consolidated income statement and a loss
recovery component is established or adjusted for that
amount. The loss recovery component is calculated by
multiplying the loss component recognised on underlying
insurance contracts by the percentage of claims on underlying
insurance contracts that the Group expects to recover from the
reinsurance contracts held that are entered into before or at
the same time as the loss is recognised on the underlying
insurance contracts. When underlying insurance contracts that
are reinsured are included in the same group as insurance
contracts issued that are not reinsured, the Group applies a
systematic and rational method of allocation to determine the
portion of losses that relates to underlying insurance contracts.
(g) Insurance revenue
The insurance revenue for the period is the amount of
expected premium receipts (excluding any investment
component) allocated to the period. The Group allocates
the\u00a0expected premium receipts to each period of insurance
contract services on the basis of the passage of time. But if the
expected pattern of release of risk during the coverage period
differs significantly from the passage of time, for example a
group of contracts that is exposed to large natural catastrophe
risk concentrated in the first or second half of the year, then
the\u00a0allocation is made on the basis of the expected timing of
incurred insurance service expenses.
Changes to the basis of allocation are accounted for
prospectively as a change in accounting estimate.
(h) Insurance service expenses
Insurance service expenses include the following:
\u2022 incurred claims, excluding investment components
reduced by loss component allocations;
\u2022 other incurred directly attributable expenses;
\u2022 insurance acquisition cash flows amortisation using the
pattern that is consistent with the insurance revenue;
\u2022 changes that relate to past service;
\u2022 changes that relate to future service;
\u2022 insurance acquisition cash flows assets impairment; and
\u2022 mandatory reinstatement premiums.
Other expenses not meeting the above categories are
included\u00a0in other operating expenses in the consolidated
income statement.
(i) Allocation of reinsurance premiums
The allocation of reinsurance premiums includes reinsurance
premiums and other incurred directly attributable expenses.
Reinsurance premium and expenses are recognised similarly
to\u00a0insurance revenue. The amount of reinsurance expenses
recognised in the reporting period depicts the transfer of
received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay
in exchange for those services. Additionally, broker fees and
ceding commissions that are not contingent on claims of the
underlying contracts issued reduce ceding premiums and are
accounted for as part of reinsurance premiums.
In addition, the allocation of reinsurance premiums also
includes changes in the reinsurance assets arising from
retroactive reinsurance contracts held and voluntary
reinstatement ceded premiums.
(j) Amounts recoverable from reinsurers for incurred claims
The amounts recoverable from reinsurers for incurred
claims\u00a0include:
\u2022 incurred claims recoveries, excluding
investment\u00a0components;
\u2022 loss-recovery component allocations;
\u2022 changes that relate to past service;
\u2022 effect of changes in the risk of reinsurers\u2019
non-performance;
\u2022 amounts relating to accounting for onerous groups
of\u00a0underlying insurance contracts issued;
\u2022 ceding commissions that are contingent on claims
of\u00a0the\u00a0underlying contracts issued (these reduce incurred
claims\u00a0recovery); and
\u2022 mandatory reinstatement ceded premiums.\u00a0
(k) Insurance finance income or expenses
Insurance finance income or expenses comprise the change
in\u00a0the carrying amount of the group of insurance contracts
arising from:
\u2022 the effect of the time value of money and changes in
the\u00a0time value of money. This mainly comprises interest
accreted on the LIC and interest unwind on the assets
for\u00a0incurred claims (AIC); and
\u2022 the effect of financial risk and changes in financial risk.
This mainly includes the effect of changes in interest
rates\u00a0(for example, discount rates).
The Group does not disaggregate changes in the risk
adjustment for non-financial risk between insurance service
result and insurance finance income or expenses. The change
in the risk adjustment is entirely presented as part of the
insurance service result.
Foreign exchange gains and losses continue to be presented
in\u00a0the net other foreign exchange (losses)/gains line item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-428": { "value": "
2.11 Insurance and reinsurance contracts
The accounting policy set out below is applicable to insurance
and reinsurance contracts that are issued by the Group
and\u00a0reinsurance contracts held by the Group unless
indicated\u00a0otherwise.
(a) Classification
Insurance contracts are defined as those containing significant
insurance risk. Significant insurance risk criteria are met if,
and\u00a0only if, an insured event could cause an insurer to make
significant additional payments in any scenario, excluding
scenarios that lack commercial substance, at the inception
of\u00a0the contract. Such contracts remain insurance contracts
until all rights and obligations are extinguished or expire.
The Group issues short-term casualty and property
(re)insurance contracts in the normal course of business,
under\u00a0which it accepts significant insurance risk from its
policyholders. The Group also enters into ceded reinsurance
contracts with reinsurers under which the Group transfers
significant insurance risk to reinsurers and is compensated
for\u00a0claims on contracts issued by the Group.
(b) Separating components
The Group assesses its insurance and reinsurance products
to\u00a0determine whether they contain distinct components which
must be accounted for under another IFRS instead of under
IFRS 17. After separating any distinct components, the Group
applies IFRS 17 to all remaining components of the (host)
insurance contract. Currently, the Group\u2019s products do not
include any distinct components that require separation.
Some reinsurance contracts issued contain profit commission
arrangements. Under these arrangements, there is a
guaranteed minimum amount that the policyholder will always
receive \u2013 either in the form of profit commission, or as claims,
or another contractual payment irrespective of the insured
event happening. The guaranteed minimum amounts have
been assessed to be highly interrelated with the insurance
component of the reinsurance contracts and are, therefore,
non-distinct investment components which are not accounted
for separately. However, receipts and payments of these
investment components are excluded from insurance revenue
and expenses.
(c) Level of aggregation
Insurance contracts are aggregated into groups for
measurement purposes. The level of aggregation for the Group
is determined firstly by grouping contracts into portfolios which,
with some limited exceptions, are set as the reserving classes
of each legal entity. Portfolios comprise groups of contracts
with similar risks which are managed together. Portfolios are
further divided based on expected profitability at inception
into\u00a0three categories: onerous contracts, contracts with no
significant risk of becoming onerous, and the remainder.
No\u00a0group for level of aggregation purposes may contain
contracts issued more than one year apart. The grouping
of\u00a0contracts is not subsequently reconsidered.
A group of insurance contracts is considered to be onerous
at\u00a0initial recognition if the fulfilment cash flows allocated to
that\u00a0group of contracts in total are a net outflow. That is if
the\u00a0present value of expected claims, attributable expenses
and\u00a0risk adjustment exceeds the premium.
Portfolios of reinsurance contracts held are assessed
for\u00a0aggregation separately from portfolios of insurance
contracts\u00a0issued. Reinsurance contracts held cannot
be\u00a0onerous.
(d) Recognition and derecognition
Groups of insurance contracts issued are initially recognised
from the earliest of the following:
\u2022 the beginning of the coverage period;
\u2022 the date when the first payment from the policyholder
is\u00a0due, or actually received if there is no due date; and
\u2022 when the Group determines that a group of contracts
becomes onerous.
Insurance contracts acquired in a business combination
within\u00a0the scope of IFRS 3 Business Combinations or a
portfolio transfer are accounted for as if they were entered
into\u00a0at the\u00a0date of acquisition or transfer.
Reinsurance contracts held are recognised as follows:
\u2022 a group of reinsurance contracts held that provide
proportionate coverage is recognised at the later of
the\u00a0following dates (unless underlying contracts are
onerous, in which case earlier recognition is required):
o the beginning of the coverage period of the
group;\u00a0and
o the initial recognition of any underlying
insurance\u00a0contract;
\u2022 all other groups of reinsurance contracts held are
recognised from the beginning of the coverage period
of\u00a0the group of reinsurance contracts held; unless
the\u00a0Group entered into the reinsurance contract
held\u00a0at\u00a0or\u00a0before the date when an onerous group
of\u00a0underlying\u00a0contracts is recognised prior to the
beginning\u00a0of the coverage period of the group of
reinsurance contracts\u00a0held, in which case the
reinsurance\u00a0contract\u00a0held is recognised at the
same\u00a0time\u00a0as\u00a0the\u00a0group\u00a0of underlying insurance
contracts\u00a0is\u00a0recognised.
Only contracts that individually meet the recognition criteria
by\u00a0the end of the reporting period are included in the
groups.\u00a0When contracts meet the recognition criteria in
the\u00a0groups after\u00a0the reporting date, they are added to
the\u00a0groups in the reporting period in which they meet the
recognition criteria. The\u00a0composition of the groups is not
reassessed in subsequent periods.
An insurance contract is derecognised when it is:
\u2022 extinguished (that is, when the obligation specified
in\u00a0the\u00a0insurance contract expires or is discharged or
cancelled); or
\u2022 the contract is modified such that the modification results
in a change in the measurement model (for example, the
general measurement model (GMM)) or the applicable
standard for measuring a component of the contract,
substantially changes the contract boundary, or requires
the modified contracts to be included in a different group.
When a modification is not treated as a derecognition,
the\u00a0Group recognises amounts paid or received for the
modification of the contract as an adjustment to the
relevant\u00a0liability or asset for remaining coverage.
When a group of insurance contracts is derecognised,
adjustments to remove related rights and obligations result
in\u00a0the following amounts being charged immediately to
consolidated income statement:
\u2022 if the contract is extinguished, any net difference
between\u00a0the derecognised part of the liability for
remaining coverage (LRC) of the original contract and
any\u00a0other cash flows arising from extinguishment;
\u2022 if the contract is transferred to the third party, any net
difference between the derecognised part of the LRC
of\u00a0the original contract and the premium charged by
the\u00a0third party; or
\u2022 if the original contract is modified resulting in its
derecognition, any net difference between the
derecognised part of the LRC and the hypothetical
premium that the entity would have charged if it had
entered into a contract with equivalent terms to the new
contract at the date of the contract modification, less
any\u00a0additional premium charged for the modification.
(e) Contract boundary
The Group uses the concept of contract boundary to
determine what cash flows should be considered in the
measurement of groups of insurance contracts. Cash flows
are\u00a0within the boundary of an insurance contract if they
arise\u00a0from substantive rights and obligations that exist during
the reporting period in which the Group can compel the
policyholder to pay the premiums, or in which the Group has a
substantive obligation to provide the policyholder with services.
A substantive obligation to provide services ends when:
\u2022 the Group has the practical ability to reassess the risks of
the particular policyholder and, as a result, can set a price
or level of benefits that fully reflects those risks; or
\u2022 both of the following criteria are satisfied:
o the Group has the practical ability to reassess the
risks of the portfolio of insurance contracts that
contain the contract and, as a result, can set a
price\u00a0or level of benefits that fully reflects the risk
of\u00a0that portfolio;
o the pricing of the premiums for coverage up to the
date when the risks are reassessed does not take
into account the risks that relate to periods after the
reassessment date.
A liability or asset relating to expected premiums or claims
outside the boundary of the insurance contract is not
recognised. Such amounts relate to future insurance contracts.
(f) Measurement \u2013 premium allocation approach
Initial measurement
The Group applies the premium allocation approach (PAA)
to\u00a0the majority of the insurance contracts that it issues and
reinsurance contracts that it holds, because:
\u2022 the coverage period of each contract in the group is
one\u00a0year or less; or
\u2022 for contracts longer than one year, the Group has
modelled possible future scenarios and reasonably
expects that the measurement of the LRC for the
group\u00a0containing those contracts under the PAA does
not differ materially from the measurement that would
be\u00a0produced applying the general model.
For insurance contracts issued, on initial recognition, the Group
measures the LRC as the amount of premiums received, less
any acquisition cash flows paid and any amounts arising from
the derecognition of the insurance acquisition cash flows asset
and the derecognition of any other relevant pre-recognition
cash flows.
For reinsurance contracts held, on initial recognition, the
Group\u00a0measures assets for the remaining coverage at the
amount of ceding premiums paid, plus broker fees paid to a
party other than the reinsurer and any amounts arising from the
derecognition of any other relevant pre-recognition cash flows.
For insurance contracts issued, insurance acquisition cash
flows allocated to a group are recognised over the coverage
period of contracts in the group. For reinsurance contracts
held, broker fees are recognised over the coverage period
of\u00a0contracts in a group.
Subsequent measurement
For insurance contracts issued, at each of the subsequent
reporting dates, the LRC is:
\u2022 increased for premiums received in the period;
\u2022 decreased for insurance acquisition cash flows paid
in\u00a0the\u00a0period;
\u2022 decreased for the amounts of expected premium
receipts\u00a0recognised as insurance revenue for the
services\u00a0provided in the period;
\u2022 increased for the amortisation of insurance acquisition
cash flows in the period recognised as insurance
service\u00a0expenses; and
\u2022 decreased for any investment component paid or
transferred to the liability for incurred claims.
For reinsurance contracts held, at each of the subsequent
reporting dates, the remaining coverage is:
\u2022 increased for ceding premiums paid in the period;
\u2022 increased for broker fees paid in the period;
\u2022 decreased for the expected amounts of ceding premiums
and broker fees recognised as reinsurance expenses for
the services received in the period; and
\u2022 decreased for any investment component paid or
transferred to the reinsurance assets for incurred claims.
The Group does not adjust the LRC for insurance contracts
issued or the remaining coverage for reinsurance contracts
held for the effect of the time value of money, because
associated premiums are due within one year of the coverage
period. The Group only adjusts the remaining coverage for
reinsurance contracts held for the time value of money in
relation to the legacy portfolio transactions (LPT) that were
held,\u00a0as the associated premiums are not due within one year
of the coverage period.
The Group estimates the liability for incurred claims (LIC) as the
fulfilment cash flows related to incurred claims. The fulfilment
cash flows incorporate, in an unbiased way, all reasonable and
supportable information available without undue cost or effort
about the amount, timing and uncertainty of those future
cash\u00a0flows.
If facts and circumstances indicate that a group of insurance
contracts measured under the PAA is onerous on initial
recognition or has become onerous subsequently, the Group
increases the carrying amount of the LRC, recognising a loss
component, to the amounts of the excess of the fulfilment cash
flows that relate to the remaining coverage of the group of
contracts, over the carrying amount of the LRC of the group.
The amount of such an increase is recognised in insurance
service expenses. Subsequently, the loss component is
amortised over the coverage period of the group of contracts.
When a loss is recognised on initial recognition of an onerous
group of underlying insurance contracts or on addition of
onerous underlying insurance contracts to that group, the
carrying amount of the reinsurance asset for remaining
coverage for reinsurance contracts held measured under the
PAA is increased by the amount of expected recoveries that
will be in the consolidated income statement and a loss
recovery component is established or adjusted for that
amount. The loss recovery component is calculated by
multiplying the loss component recognised on underlying
insurance contracts by the percentage of claims on underlying
insurance contracts that the Group expects to recover from the
reinsurance contracts held that are entered into before or at
the same time as the loss is recognised on the underlying
insurance contracts. When underlying insurance contracts that
are reinsured are included in the same group as insurance
contracts issued that are not reinsured, the Group applies a
systematic and rational method of allocation to determine the
portion of losses that relates to underlying insurance contracts.
(g) Insurance revenue
The insurance revenue for the period is the amount of
expected premium receipts (excluding any investment
component) allocated to the period. The Group allocates
the\u00a0expected premium receipts to each period of insurance
contract services on the basis of the passage of time. But if the
expected pattern of release of risk during the coverage period
differs significantly from the passage of time, for example a
group of contracts that is exposed to large natural catastrophe
risk concentrated in the first or second half of the year, then
the\u00a0allocation is made on the basis of the expected timing of
incurred insurance service expenses.
Changes to the basis of allocation are accounted for
prospectively as a change in accounting estimate.
(h) Insurance service expenses
Insurance service expenses include the following:
\u2022 incurred claims, excluding investment components
reduced by loss component allocations;
\u2022 other incurred directly attributable expenses;
\u2022 insurance acquisition cash flows amortisation using the
pattern that is consistent with the insurance revenue;
\u2022 changes that relate to past service;
\u2022 changes that relate to future service;
\u2022 insurance acquisition cash flows assets impairment; and
\u2022 mandatory reinstatement premiums.
Other expenses not meeting the above categories are
included\u00a0in other operating expenses in the consolidated
income statement.
(i) Allocation of reinsurance premiums
The allocation of reinsurance premiums includes reinsurance
premiums and other incurred directly attributable expenses.
Reinsurance premium and expenses are recognised similarly
to\u00a0insurance revenue. The amount of reinsurance expenses
recognised in the reporting period depicts the transfer of
received insurance contract services at an amount that reflects
the portion of ceding premiums that the Group expects to pay
in exchange for those services. Additionally, broker fees and
ceding commissions that are not contingent on claims of the
underlying contracts issued reduce ceding premiums and are
accounted for as part of reinsurance premiums.
In addition, the allocation of reinsurance premiums also
includes changes in the reinsurance assets arising from
retroactive reinsurance contracts held and voluntary
reinstatement ceded premiums.
(j) Amounts recoverable from reinsurers for incurred claims
The amounts recoverable from reinsurers for incurred
claims\u00a0include:
\u2022 incurred claims recoveries, excluding
investment\u00a0components;
\u2022 loss-recovery component allocations;
\u2022 changes that relate to past service;
\u2022 effect of changes in the risk of reinsurers\u2019
non-performance;
\u2022 amounts relating to accounting for onerous groups
of\u00a0underlying insurance contracts issued;
\u2022 ceding commissions that are contingent on claims
of\u00a0the\u00a0underlying contracts issued (these reduce incurred
claims\u00a0recovery); and
\u2022 mandatory reinstatement ceded premiums.\u00a0
(k) Insurance finance income or expenses
Insurance finance income or expenses comprise the change
in\u00a0the carrying amount of the group of insurance contracts
arising from:
\u2022 the effect of the time value of money and changes in
the\u00a0time value of money. This mainly comprises interest
accreted on the LIC and interest unwind on the assets
for\u00a0incurred claims (AIC); and
\u2022 the effect of financial risk and changes in financial risk.
This mainly includes the effect of changes in interest
rates\u00a0(for example, discount rates).
The Group does not disaggregate changes in the risk
adjustment for non-financial risk between insurance service
result and insurance finance income or expenses. The change
in the risk adjustment is entirely presented as part of the
insurance service result.
Foreign exchange gains and losses continue to be presented
in\u00a0the net other foreign exchange (losses)/gains line item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-430": { "value": "
(b) Separating components
The Group assesses its insurance and reinsurance products
to\u00a0determine whether they contain distinct components which
must be accounted for under another IFRS instead of under
IFRS 17. After separating any distinct components, the Group
applies IFRS 17 to all remaining components of the (host)
insurance contract. Currently, the Group\u2019s products do not
include any distinct components that require separation.
Some reinsurance contracts issued contain profit commission
arrangements. Under these arrangements, there is a
guaranteed minimum amount that the policyholder will always
receive \u2013 either in the form of profit commission, or as claims,
or another contractual payment irrespective of the insured
event happening. The guaranteed minimum amounts have
been assessed to be highly interrelated with the insurance
component of the reinsurance contracts and are, therefore,
non-distinct investment components which are not accounted
for separately. However, receipts and payments of these
investment components are excluded from insurance revenue
and expenses.
ceding commissions that are contingent on claims
of\u00a0the\u00a0underlying contracts issued (these reduce incurred
claims\u00a0recovery)", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-431": { "value": "
(h) Insurance service expenses
Insurance service expenses include the following:
\u2022 incurred claims, excluding investment components
reduced by loss component allocations;
\u2022 other incurred directly attributable expenses;
\u2022 insurance acquisition cash flows amortisation using the
pattern that is consistent with the insurance revenue;
\u2022 changes that relate to past service;
\u2022 changes that relate to future service;
\u2022 insurance acquisition cash flows assets impairment; and
\u2022 mandatory reinstatement premiums.
Other expenses not meeting the above categories are
included\u00a0in other operating expenses in the consolidated
income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-433": { "value": "
2.12 Taxation
Current tax, including corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively
enacted by the end of the reporting period. A provision is
recognised for those matters for which the tax determination is
uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are
measured at the best estimate of the amount expected to
become payable. The assessment is based on the judgement
of tax professionals within the Group supported by previous
experience in respect of such activities and in certain cases
based on advice sought from specialist tax advisors.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, if the deferred income tax arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is
not\u00a0recognised. With the exception of deferred tax related to
top-up income taxes arising from tax law enacted to implement
'Pillar Two' legislation, deferred tax is determined using tax
rates and laws that have been enacted or substantively
enacted by the end of the reporting period and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled. Deferred tax assets are
recognised to the\u00a0extent that it is probable that future taxable
profit will be available against which the temporary differences
can be utilised. Deferred tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except where the Group controls the timing of the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-432": { "value": "
2.12 Taxation
Current tax, including corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively
enacted by the end of the reporting period. A provision is
recognised for those matters for which the tax determination is
uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are
measured at the best estimate of the amount expected to
become payable. The assessment is based on the judgement
of tax professionals within the Group supported by previous
experience in respect of such activities and in certain cases
based on advice sought from specialist tax advisors.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, if the deferred income tax arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is
not\u00a0recognised. With the exception of deferred tax related to
top-up income taxes arising from tax law enacted to implement
'Pillar Two' legislation, deferred tax is determined using tax
rates and laws that have been enacted or substantively
enacted by the end of the reporting period and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled. Deferred tax assets are
recognised to the\u00a0extent that it is probable that future taxable
profit will be available against which the temporary differences
can be utilised. Deferred tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except where the Group controls the timing of the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-434": { "value": "
2.13 Employee benefits
(a) Pension obligations
The Group has defined contribution and defined benefit
pension schemes. The defined benefit scheme closed to
future\u00a0accrual with effect from 31 December 2006 and
active\u00a0members were offered membership of the defined
contribution scheme from 1 January 2007. A defined
contribution plan is a pension plan under which the Group
pays\u00a0fixed contributions into a separate entity and has no
further obligation beyond the agreed contribution rate. A
defined benefit plan is a pension plan that defines an amount
of\u00a0pension benefit that an employee will receive on retirement,
usually dependent on one\u00a0or more factors such as age, years
of service and compensation.
For defined contribution plans, the Group pays contributions
to\u00a0publicly or privately administered pension insurance plans
on\u00a0a contractual basis. The contributions are recognised as
an\u00a0employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that
a\u00a0cash refund or a reduction in future payments is available.
The amount recognised on the statement of financial position
in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the end of the reporting
period, less the fair value of plan assets. The calculation of the
defined benefit obligation is performed annually by a qualified
actuary using the projected unit method. As the plan is closed
to all future benefit accruals, each participant\u2019s benefits under
the plan are based on their service to the date of closure or
earlier leaving date and their final pensionable earnings.
The\u00a0service cost is the expected administration cost during
the\u00a0year. Past\u00a0service costs are recognised immediately in
the\u00a0income\u00a0statement.
Remeasurements of the net defined benefit asset, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any),
are recognised immediately in other comprehensive income.
The Group determines the net interest expense/(income) on
the\u00a0net defined benefit asset for the period by applying the
discount rate used to measure the defined benefit obligation
at\u00a0the beginning of the annual period to the then net\u00a0defined
benefit asset, taking into account any changes in the net
defined benefit asset during the period as a result of
contributions and benefit payments. Net\u00a0interest expense and
other expenses related to defined benefit\u00a0plans are recognised
in the income statement through\u00a0operating expenses.
To the extent that a surplus emerges on the defined benefit
obligation, it is only recognisable as an asset when it is
probable that future economic benefits will be recovered
by\u00a0the\u00a0Group.
(b) Other long-term employee benefits
The Group provides sabbatical leave to employees on
completion of every five years\u2019 service. The present value
of\u00a0the\u00a0expected costs of these benefits is accrued over
the\u00a0period\u00a0of employment. In determining this liability,
consideration is given to future increases in salary
levels,\u00a0experience with employee departures and
periods\u00a0of\u00a0service.
(c) Share-based compensation
The Group operates equity settled share-based
employee\u00a0compensation plans. These include the share
option\u00a0schemes,\u00a0and the Group\u2019s Performance Share
Plans,\u00a0outlined\u00a0in the Directors\u2019 remuneration report,
together\u00a0with\u00a0the\u00a0Group\u2019s Save As You Earn (SAYE)
schemes.\u00a0The\u00a0fair\u00a0value\u00a0of the employee services
received,\u00a0measured\u00a0at\u00a0grant\u00a0date, in exchange for the
grant\u00a0of\u00a0the\u00a0awards is recognised as\u00a0an expense, with
the\u00a0corresponding credit being\u00a0recorded in\u00a0retained
earnings\u00a0within equity. The total\u00a0amount to be expensed
over\u00a0the\u00a0vesting period is determined\u00a0by reference to the
fair\u00a0value\u00a0of\u00a0the awards granted, excluding the impact of
any\u00a0non-market vesting conditions (for example, profitability
or\u00a0net asset growth\u00a0targets). Non-market vesting conditions
are\u00a0included\u00a0in\u00a0assumptions about the number of awards
that\u00a0are\u00a0expected\u00a0to become exercisable. At the end of
the\u00a0reporting period, the Group revises its estimates of
the\u00a0number of awards that are expected to vest.
The Group recognises the impact of the revision of
original\u00a0estimates, if any, in the income statement, and
a\u00a0corresponding adjustment to equity, in periods in
which\u00a0the\u00a0estimates are revised.
When the terms and conditions of an equity settled
share-based employee compensation plan are modified,
and\u00a0the expense to be recognised increases as a result of
the\u00a0modification, then the increase is recognised evenly
over\u00a0the remaining vesting period. When a modification
reduces the expense to be recognised, there is no
adjustment\u00a0recognised and the pre-modification expense
continues to be applied. The\u00a0proceeds received net of any
directly attributable transaction costs are credited to share
capital and share\u00a0premium when the options are exercised.
(d) Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or whenever
an\u00a0employee accepts voluntary redundancy in exchange for
these\u00a0benefits. The Group recognises termination benefits
when it is demonstrably committed to either: terminating the
employment of current employees according to a detailed
formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage
voluntary redundancy.
(e) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses
and profit sharing, based on a formula that takes into
consideration the profit attributable to the Company\u2019s
shareholders after certain adjustments. The Group
recognises\u00a0a provision where a contractual obligation to
employees exists, or where there is a past practice that
has\u00a0created a constructive obligation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-435": { "value": "c) Share-based compensation
The Group operates equity settled share-based
employee\u00a0compensation plans. These include the share
option\u00a0schemes,\u00a0and the Group\u2019s Performance Share
Plans,\u00a0outlined\u00a0in the Directors\u2019 remuneration report,
together\u00a0with\u00a0the\u00a0Group\u2019s Save As You Earn (SAYE)
schemes.\u00a0The\u00a0fair\u00a0value\u00a0of the employee services
received,\u00a0measured\u00a0at\u00a0grant\u00a0date, in exchange for the
grant\u00a0of\u00a0the\u00a0awards is recognised as\u00a0an expense, with
the\u00a0corresponding credit being\u00a0recorded in\u00a0retained
earnings\u00a0within equity. The total\u00a0amount to be expensed
over\u00a0the\u00a0vesting period is determined\u00a0by reference to the
fair\u00a0value\u00a0of\u00a0the awards granted, excluding the impact of
any\u00a0non-market vesting conditions (for example, profitability
or\u00a0net asset growth\u00a0targets). Non-market vesting conditions
are\u00a0included\u00a0in\u00a0assumptions about the number of awards
that\u00a0are\u00a0expected\u00a0to become exercisable. At the end of
the\u00a0reporting period, the Group revises its estimates of
the\u00a0number of awards that are expected to vest.
The Group recognises the impact of the revision of
original\u00a0estimates, if any, in the income statement, and
a\u00a0corresponding adjustment to equity, in periods in
which\u00a0the\u00a0estimates are revised.
When the terms and conditions of an equity settled
share-based employee compensation plan are modified,
and\u00a0the expense to be recognised increases as a result of
the\u00a0modification, then the increase is recognised evenly
over\u00a0the remaining vesting period. When a modification
reduces the expense to be recognised, there is no
adjustment\u00a0recognised and the pre-modification expense
continues to be applied. The\u00a0proceeds received net of any
directly attributable transaction costs are credited to share
capital and share\u00a0premium when the options are exercised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-436": { "value": "
(d) Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or whenever
an\u00a0employee accepts voluntary redundancy in exchange for
these\u00a0benefits. The Group recognises termination benefits
when it is demonstrably committed to either: terminating the
employment of current employees according to a detailed
formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage
voluntary redundancy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-439": { "value": "
2.14 Finance costs
Finance costs consist of interest charges accruing on the
Group\u2019s borrowings and bank overdrafts together with
commission fees charged in respect of Letters of Credit
and\u00a0interest in respect of lease liabilities. Arrangement fees
in\u00a0respect of financing arrangements are charged over the
life\u00a0of the related facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-438": { "value": "
2.14 Finance costs
Finance costs consist of interest charges accruing on the
Group\u2019s borrowings and bank overdrafts together with
commission fees charged in respect of Letters of Credit
and\u00a0interest in respect of lease liabilities. Arrangement fees
in\u00a0respect of financing arrangements are charged over the
life\u00a0of the related facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-437": { "value": "
2.14 Finance costs
Finance costs consist of interest charges accruing on the
Group\u2019s borrowings and bank overdrafts together with
commission fees charged in respect of Letters of Credit
and\u00a0interest in respect of lease liabilities. Arrangement fees
in\u00a0respect of financing arrangements are charged over the
life\u00a0of the related facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-440": { "value": "
2.15 Leases
(a) Hiscox as lessee
The Group recognises right-of-use assets at the
commencement date of the lease (for example, the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the
commencement date, less any lease incentives received.
Unless the Group is reasonably certain to obtain ownership of
the leased asset at the end of the lease term, the recognised
right-of-use assets are depreciated on a straight-line basis over
the shorter of their estimated useful life and the lease term.
Right-of-use assets are subject to impairment. Right-of-use
assets are presented on the statement of financial position as
\u2018property, plant and equipment\u2019.
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating a lease, if
the\u00a0lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend
on\u00a0an index or a rate are recognised as an expense in the
period in which the event or condition that triggers the
payment\u00a0occurs. Lease liabilities are included in \u2018trade and
other payables\u2019 on the statement of financial position.
In calculating the present value of lease payments, the
Group\u00a0uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is
a modification that is not accounted for as a separate lease:
future lease payments that are linked to a rate or index, a
change in the lease term, a change in the in-substance fixed
lease payments, a change in the assessment to purchase the
underlying asset or a change in the amounts expected to be
payable under a residual value guarantee.
The Group applies the short-term lease recognition exemption
to its applicable short-term leases. It also applies the low-value
assets recognition exemption to leases of office equipment that
are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as an
expense on a straight-line basis over the lease term.
(b) Hiscox as lessor
Rental income from operating leases is recognised on
a\u00a0straight-line basis over the term of the relevant
contractual\u00a0agreement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-441": { "value": "
2.16 Dividend distribution
Dividend distribution to the Company\u2019s shareholders is
recognised as a liability in the Group\u2019s financial statements
in\u00a0the period in which the dividends are approved.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-442": { "value": "
2.17 Operations held for sale
Assets and liabilities held for disposal as part of operations
which are held for sale are shown separately in the
consolidated statement of financial position. Operations
held\u00a0for sale are recorded at the lower of their carrying
amount\u00a0and their fair value less the estimated selling costs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-444": { "value": "
2.18 Provisions and contingent liabilities
Provisions are recognised when there is a present legal or
constructive obligation as a result of a past event that can be
measured reliably, and it is probable that an outflow of
economic benefits will be required to settle that obligation.
The amount recorded as a provision is the best estimate
of\u00a0the\u00a0expenditure required to settle the present obligation
at\u00a0the\u00a0end of the reporting period. Discounting is applied
to\u00a0the\u00a0provision where the effect of the time value of
money\u00a0is\u00a0material. Provisions are not recognised for
future\u00a0operating losses. A provision for restructuring is
recognised\u00a0when the Group\u00a0has\u00a0approved a detailed
and\u00a0formal restructuring plan\u00a0and the\u00a0restructuring has
either\u00a0commenced or has\u00a0been\u00a0announced\u00a0publicly.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from the
contracts are less than the related unavoidable cost of
meeting\u00a0its obligations under the contract.
A provision for a termination payment is recognised when the
Group has a demonstrable commitment to either terminate
the\u00a0employment of an employee or group of employees
before\u00a0the\u00a0normal retirement date, or to provide termination
benefits as a result of an offer made in order to encourage
voluntary\u00a0redundancy.
Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain.
Contingent liabilities are disclosed if there is a possible future
obligation as a result of a past event, or if there is a present
obligation as a result of a past event but either a payment is
not probable or the amount cannot be reasonably estimated.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-443": { "value": "
2.18 Provisions and contingent liabilities
Provisions are recognised when there is a present legal or
constructive obligation as a result of a past event that can be
measured reliably, and it is probable that an outflow of
economic benefits will be required to settle that obligation.
The amount recorded as a provision is the best estimate
of\u00a0the\u00a0expenditure required to settle the present obligation
at\u00a0the\u00a0end of the reporting period. Discounting is applied
to\u00a0the\u00a0provision where the effect of the time value of
money\u00a0is\u00a0material. Provisions are not recognised for
future\u00a0operating losses. A provision for restructuring is
recognised\u00a0when the Group\u00a0has\u00a0approved a detailed
and\u00a0formal restructuring plan\u00a0and the\u00a0restructuring has
either\u00a0commenced or has\u00a0been\u00a0announced\u00a0publicly.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from the
contracts are less than the related unavoidable cost of
meeting\u00a0its obligations under the contract.
A provision for a termination payment is recognised when the
Group has a demonstrable commitment to either terminate
the\u00a0employment of an employee or group of employees
before\u00a0the\u00a0normal retirement date, or to provide termination
benefits as a result of an offer made in order to encourage
voluntary\u00a0redundancy.
Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain.
Contingent liabilities are disclosed if there is a possible future
obligation as a result of a past event, or if there is a present
obligation as a result of a past event but either a payment is
not probable or the amount cannot be reasonably estimated.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-447": { "value": "
2.19 Use of significant accounting judgements, estimates
and assumptions
The preparation of financial statements requires the Group to
select accounting policies and make judgements (other than
those involving estimations) that have a significant impact on
the amounts recognised and to make estimates and
assumptions that affect the reported amounts of assets,
liabilities, income and expenses in the consolidated
financial\u00a0statements.
The Audit Committee reviews the reasonableness of critical
judgements, estimates and assumptions applied and the
appropriateness of material accounting policies information.
The significant issues considered by the Committee in the
year\u00a0are included within the Audit Committee report on pages
102 to 105.
Significant accounting judgements
The following accounting policies are the critical judgements,
apart from those involving estimations (which are presented
separately below), that the Directors have made in the process
of applying the Group's accounting policies and that have the
most significant impact on the amounts recognised in the
consolidated financial statements.
\u2022 Consolidation: assessment of whether the Group controls
or has significant influence over an underlying entity, for
example the treatment of insurance-linked securities
funds including consideration of its decision-making
authority and its rights to the variable returns from
the\u00a0entity.
\u2022 Financial investments: classification and measurement
of\u00a0investments including the application of the fair
value\u00a0option.
(a) Liability for incurred claims
The ultimate cost of outstanding claims is estimated by using a
range of standard actuarial claims projection techniques. The
Group relies on actuarial analysis to estimate the settlement
cost of future claims. Via a formal governed process, there is
close communication between the actuaries and other key
stakeholders, such as the underwriters, claims and finance
teams when setting and validating the assumptions. The main
assumption underlying these techniques is that a Group\u2019s past
claims development experience can be used to project future
claims development and hence ultimate claims costs. These
methods extrapolate the development of paid and incurred
losses, average costs per claim (including claims handling costs),
and claim numbers based on the observed development of
earlier years and expected loss ratios. Historical claims
development is mainly analysed by accident years, but can also
be further analysed by geographical area, as well as by significant
business lines and claim types. In most cases, no explicit
assumptions are made regarding future rates of claims inflation
or loss ratios. Instead, the assumptions used are those implicit in
the historical claims development data on which the projections
are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (for example,
to reflect one-off occurrences, changes in external or market
factors such as public attitudes to claiming, economic conditions,
levels of claims inflation, levels of recoveries from salvage or
subrogation, judicial decisions and legislation, as well as internal
factors such as portfolio mix, policy features and claims\u00a0handling
procedures) in order to arrive at the estimated ultimate cost of
claims that present the probability-weighted expected value
outcome from the range of possible outcomes, taking account
of\u00a0all the uncertainties involved.
(b) Premium allocation approach eligibility assessment
A simplified measurement model, the PAA, can be applied if
certain eligibility criteria are met. The majority of the Group\u2019s
policies have a coverage period of 12 months or less and so
are eligible for the PAA. Management applies significant
judgement to whether applying PAA to those groups of
contracts\u00a0differs materially from general measurement model
(GMM) with a coverage period\u00a0extending beyond 12 months.
Significant accounting estimates
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment
to\u00a0the carrying amounts of assets and liabilities within the
next\u00a0financial year, are discussed below.
All estimates are based on management\u2019s knowledge of
current facts and circumstances, assumptions based on
that\u00a0knowledge and their predictions of future events. Actual
results may differ from those estimates, possibly significantly.
Revisions to accounting estimates are recognised in the
period\u00a0in which the estimate is revised and in any future
periods affected.
The most critical estimate included within the consolidated
statement of financial position is the measurement of insurance
contract liabilities and reinsurance contract assets, and in
particular the estimate of the liability for incurred claims (LIC).
The total gross estimate of LIC as at 31\u00a0December 2025 is
$6,460.9 million (2024: $6,040.7\u00a0million). The total estimate for
reinsurance asset for incurred claims as at 31\u00a0December 2025
is $1,966.8 million (2024:\u00a0$2,046.5 million).
Insurance and reinsurance contracts
In applying IFRS 17 measurement requirements, the following
inputs and methods were used that include significant
estimates. The present value of future cash flows is
estimated\u00a0using deterministic scenarios. The assumptions
used\u00a0in the deterministic scenarios are derived to approximate
the probability-weighted mean of a full range of scenarios.
For\u00a0the sensitivities with regard to the assumptions made
that\u00a0have the most significant impact on measurement under
IFRS 17 please refer to note 3 management of risk.
(a) Discount rates
Insurance contract liabilities are calculated by discounting
expected future cash flows at a risk-free rate, plus an illiquidity
premium where applicable. Risk-free rates were derived using
swap rates available in the market denominated in the same
currency as the insurance contracts being measured. When
swap rates are not available, highly liquid sovereign bonds with
the highest (for example, AAA/AA) credit rating were used.
Management uses judgement to assess liquidity characteristics
of the liability cash flows. The illiquidity premium was estimated
based on market observable liquidity premiums in financial
assets, adjusted to reflect the illiquidity characteristics of the
liability cash flows. The illiquidity premium is determined by
reference to market observable AA-rated bonds yield curve
in\u00a0the currency of the insurance contract being measured,
adjusted to remove both expected and unexpected credit risk.
The following discount rates were applied for the currencies
and periods presented below:
Year end 31 December 2025
1 year
3 year
5 year
%
%
%
USD
3.51
3.47
3.64
GBP
3.81
3.90
4.06
EUR
2.19
2.43
2.71
CAD
2.42
2.75
3.00
Year end 31 December 2024
1 year
3 year
5 year
%
%
%
USD
4.27
4.18
4.24
GBP
4.68
4.40
4.35
EUR
2.46
2.35
2.49
CAD
2.96
2.88
2.98
(b) Estimates of future cash flows to fulfil insurance contracts
Included in the measurement of each group of contracts within
the scope of IFRS 17 are all of the future cash flows within the
boundary of each group of contracts. The estimates of these
future cash flows are based on probability-weighted expected
future cash flows. The Group estimates which cash flows are
expected and the probability that they will occur as at the
measurement date. In setting these expectations, the Group
uses information about past events, current conditions and
forecasts of future conditions. The Group\u2019s estimate of
future\u00a0cash flows is the mean of a range of scenarios that
reflect the\u00a0full range of possible outcomes. Each scenario
specifies\u00a0the amount, timing and probability of cash flows.
The\u00a0probability-weighted average of the future cash flows is
calculated using a deterministic scenario representing the
probability-weighted mean of a range of scenarios.
Where estimates of expenses-related cash flows are determined
at the portfolio level or higher, they are allocated\u00a0to\u00a0groups of
contracts on a systematic basis, such as\u00a0activity-based costing
method. The Group has determined that this method results in
a\u00a0systematic and rational allocation. Similar methods are
consistently applied to allocate expenses of a similar nature.
Acquisition cash flows are typically allocated to groups of
contracts based on gross premiums written. This\u00a0includes an
allocation of acquisition cash flows among existing\u00a0groups of
insurance contracts issued. Claims settlement-related expenses
are largely allocated based on\u00a0claims costs.
Uncertainty in the estimation of future claims and benefit
payments arises primarily from the severity and frequency
of\u00a0claims and uncertainties regarding future inflation rates
leading to claims and claims-handling expenses growth.
Assumptions used to develop estimates about future cash
flows are reassessed at each reporting date and adjusted
where required.
(c) Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation
that the Group requires for bearing the uncertainty about the
amount and timing of the cash flows of groups of insurance
contracts. The risk adjustment reflects an amount that an
insurer would charge to make it indifferent between the cash
flows with a range of probable scenarios versus equivalent
fixed cash flows.
To determine the risk adjustment for non-financial risk for
reinsurance contracts, the Group applies a combination
of\u00a0a\u00a0value at risk (VaR) (or a percentile) approach and a
scenario-based approach, both gross and net of reinsurance,
and derives the amount of risk being transferred to the
reinsurer as the difference between the two results. Most
business is measured under the PAA model and therefore
the\u00a0Group does not calculate a risk adjustment in relation
to\u00a0LRC excluding loss component.
The Group calculates the risk adjustment for incurred
claims\u00a0liabilities at each insurance undertaking entity level in
accordance with its risk profile using a combination of the VaR
method and scenario analysis, targeting an overall confidence
level range for the aggregate risk distribution. Scenario analysis
is used to determine the level of compensation that the Group
requires for bearing uncertainty for qualitative risks not
captured in the risk distribution and large event-driven claims,
such as natural catastrophes. Given the nature of the
underlying business and losses it is normal for new risks to
become apparent or for the magnitude of existing risks to
change over time. The risk adjustment in its entirety is judged
to provide adequate compensation for the risk in the reserves.
Group diversification benefit is not considered at the
individual\u00a0insurance undertaking entity level but is considered
in\u00a0determining the confidence level at a consolidated level
for\u00a0disclosure purposes. At 31\u00a0December 2025, the risk
adjustment in respect of the LIC net of reinsurance is at
the\u00a086th percentile (2024: 83rd percentile).
(d) Fair value measurement
The Group carries its financial investments at fair value through
profit or loss, with fair values determined using published price
quotations in the most active financial markets in which the
assets trade, where available. Where quoted market prices are
not available, valuation techniques are used to value financial
instruments. These include third-party valuation reports and
models utilising both observable and unobservable market
inputs. Valuation techniques involve judgement, including the
use of valuation models and their inputs, which can lead to a
range of plausible valuations for financial investments. Note
3.3(a) discusses the reliability of the Group\u2019s fair values.
(e) Employee benefit
The employee retirement benefit scheme obligations are
calculated and valued with reference to a number of actuarial
assumptions including mortality, inflation rates and discount
rate, many of which have been subject to recent volatility.
This\u00a0complex set of economic variables can have a significant
impact on the financial statements, as shown in note 24.
(f) Tax
The Group operates in a multinational environment, and
legislation concerning the determination of taxation of assets
and liabilities is complex and continually evolving. In preparing
the financial statements, the Group applies significant
judgements in identifying uncertainties over tax treatments
and\u00a0in the measurement of the provision being the best estimate
of the amount expected to become payable. The assessment is
based on the judgement of tax professionals within the Group
supported by previous experience in respect of such activities
and based on advice sought from specialist tax advisors.
A deferred tax asset can be recognised only to the extent
that\u00a0it\u00a0is recoverable. The recoverability of deferred tax assets\u00a0in
respect of carry forward losses requires consideration\u00a0of the
future levels of taxable profit in the Group.\u00a0In preparing the
Group\u2019s financial statements, management estimates taxation
assets and liabilities after taking appropriate professional advice,
as shown in note 22. Significant estimates and assumptions
used in the valuation of\u00a0deferred tax relate to the forecast
taxable profits, taking into account the Group\u2019s financial and
strategic plans. See note 23 for further details of adjustments
made to deferred tax during the year.
The determination and finalisation of agreed taxation assets
and liabilities may not occur until several years after the
reporting date and consequently the final amounts payable
or\u00a0receivable may differ from those presented in these
financial\u00a0statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-446": { "value": "
2.19 Use of significant accounting judgements, estimates
and assumptions
The preparation of financial statements requires the Group to
select accounting policies and make judgements (other than
those involving estimations) that have a significant impact on
the amounts recognised and to make estimates and
assumptions that affect the reported amounts of assets,
liabilities, income and expenses in the consolidated
financial\u00a0statements.
The Audit Committee reviews the reasonableness of critical
judgements, estimates and assumptions applied and the
appropriateness of material accounting policies information.
The significant issues considered by the Committee in the
year\u00a0are included within the Audit Committee report on pages
102 to 105.
Significant accounting judgements
The following accounting policies are the critical judgements,
apart from those involving estimations (which are presented
separately below), that the Directors have made in the process
of applying the Group's accounting policies and that have the
most significant impact on the amounts recognised in the
consolidated financial statements.
\u2022 Consolidation: assessment of whether the Group controls
or has significant influence over an underlying entity, for
example the treatment of insurance-linked securities
funds including consideration of its decision-making
authority and its rights to the variable returns from
the\u00a0entity.
\u2022 Financial investments: classification and measurement
of\u00a0investments including the application of the fair
value\u00a0option.
(a) Liability for incurred claims
The ultimate cost of outstanding claims is estimated by using a
range of standard actuarial claims projection techniques. The
Group relies on actuarial analysis to estimate the settlement
cost of future claims. Via a formal governed process, there is
close communication between the actuaries and other key
stakeholders, such as the underwriters, claims and finance
teams when setting and validating the assumptions. The main
assumption underlying these techniques is that a Group\u2019s past
claims development experience can be used to project future
claims development and hence ultimate claims costs. These
methods extrapolate the development of paid and incurred
losses, average costs per claim (including claims handling costs),
and claim numbers based on the observed development of
earlier years and expected loss ratios. Historical claims
development is mainly analysed by accident years, but can also
be further analysed by geographical area, as well as by significant
business lines and claim types. In most cases, no explicit
assumptions are made regarding future rates of claims inflation
or loss ratios. Instead, the assumptions used are those implicit in
the historical claims development data on which the projections
are based. Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future (for example,
to reflect one-off occurrences, changes in external or market
factors such as public attitudes to claiming, economic conditions,
levels of claims inflation, levels of recoveries from salvage or
subrogation, judicial decisions and legislation, as well as internal
factors such as portfolio mix, policy features and claims\u00a0handling
procedures) in order to arrive at the estimated ultimate cost of
claims that present the probability-weighted expected value
outcome from the range of possible outcomes, taking account
of\u00a0all the uncertainties involved.
(b) Premium allocation approach eligibility assessment
A simplified measurement model, the PAA, can be applied if
certain eligibility criteria are met. The majority of the Group\u2019s
policies have a coverage period of 12 months or less and so
are eligible for the PAA. Management applies significant
judgement to whether applying PAA to those groups of
contracts\u00a0differs materially from general measurement model
(GMM) with a coverage period\u00a0extending beyond 12 months.
Significant accounting estimates
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment
to\u00a0the carrying amounts of assets and liabilities within the
next\u00a0financial year, are discussed below.
All estimates are based on management\u2019s knowledge of
current facts and circumstances, assumptions based on
that\u00a0knowledge and their predictions of future events. Actual
results may differ from those estimates, possibly significantly.
Revisions to accounting estimates are recognised in the
period\u00a0in which the estimate is revised and in any future
periods affected.
The most critical estimate included within the consolidated
statement of financial position is the measurement of insurance
contract liabilities and reinsurance contract assets, and in
particular the estimate of the liability for incurred claims (LIC).
The total gross estimate of LIC as at 31\u00a0December 2025 is
$6,460.9 million (2024: $6,040.7\u00a0million). The total estimate for
reinsurance asset for incurred claims as at 31\u00a0December 2025
is $1,966.8 million (2024:\u00a0$2,046.5 million).
Insurance and reinsurance contracts
In applying IFRS 17 measurement requirements, the following
inputs and methods were used that include significant
estimates. The present value of future cash flows is
estimated\u00a0using deterministic scenarios. The assumptions
used\u00a0in the deterministic scenarios are derived to approximate
the probability-weighted mean of a full range of scenarios.
For\u00a0the sensitivities with regard to the assumptions made
that\u00a0have the most significant impact on measurement under
IFRS 17 please refer to note 3 management of risk.
(a) Discount rates
Insurance contract liabilities are calculated by discounting
expected future cash flows at a risk-free rate, plus an illiquidity
premium where applicable. Risk-free rates were derived using
swap rates available in the market denominated in the same
currency as the insurance contracts being measured. When
swap rates are not available, highly liquid sovereign bonds with
the highest (for example, AAA/AA) credit rating were used.
Management uses judgement to assess liquidity characteristics
of the liability cash flows. The illiquidity premium was estimated
based on market observable liquidity premiums in financial
assets, adjusted to reflect the illiquidity characteristics of the
liability cash flows. The illiquidity premium is determined by
reference to market observable AA-rated bonds yield curve
in\u00a0the currency of the insurance contract being measured,
adjusted to remove both expected and unexpected credit risk.
The following discount rates were applied for the currencies
and periods presented below:
Year end 31 December 2025
1 year
3 year
5 year
%
%
%
USD
3.51
3.47
3.64
GBP
3.81
3.90
4.06
EUR
2.19
2.43
2.71
CAD
2.42
2.75
3.00
Year end 31 December 2024
1 year
3 year
5 year
%
%
%
USD
4.27
4.18
4.24
GBP
4.68
4.40
4.35
EUR
2.46
2.35
2.49
CAD
2.96
2.88
2.98
(b) Estimates of future cash flows to fulfil insurance contracts
Included in the measurement of each group of contracts within
the scope of IFRS 17 are all of the future cash flows within the
boundary of each group of contracts. The estimates of these
future cash flows are based on probability-weighted expected
future cash flows. The Group estimates which cash flows are
expected and the probability that they will occur as at the
measurement date. In setting these expectations, the Group
uses information about past events, current conditions and
forecasts of future conditions. The Group\u2019s estimate of
future\u00a0cash flows is the mean of a range of scenarios that
reflect the\u00a0full range of possible outcomes. Each scenario
specifies\u00a0the amount, timing and probability of cash flows.
The\u00a0probability-weighted average of the future cash flows is
calculated using a deterministic scenario representing the
probability-weighted mean of a range of scenarios.
Where estimates of expenses-related cash flows are determined
at the portfolio level or higher, they are allocated\u00a0to\u00a0groups of
contracts on a systematic basis, such as\u00a0activity-based costing
method. The Group has determined that this method results in
a\u00a0systematic and rational allocation. Similar methods are
consistently applied to allocate expenses of a similar nature.
Acquisition cash flows are typically allocated to groups of
contracts based on gross premiums written. This\u00a0includes an
allocation of acquisition cash flows among existing\u00a0groups of
insurance contracts issued. Claims settlement-related expenses
are largely allocated based on\u00a0claims costs.
Uncertainty in the estimation of future claims and benefit
payments arises primarily from the severity and frequency
of\u00a0claims and uncertainties regarding future inflation rates
leading to claims and claims-handling expenses growth.
Assumptions used to develop estimates about future cash
flows are reassessed at each reporting date and adjusted
where required.
(c) Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation
that the Group requires for bearing the uncertainty about the
amount and timing of the cash flows of groups of insurance
contracts. The risk adjustment reflects an amount that an
insurer would charge to make it indifferent between the cash
flows with a range of probable scenarios versus equivalent
fixed cash flows.
To determine the risk adjustment for non-financial risk for
reinsurance contracts, the Group applies a combination
of\u00a0a\u00a0value at risk (VaR) (or a percentile) approach and a
scenario-based approach, both gross and net of reinsurance,
and derives the amount of risk being transferred to the
reinsurer as the difference between the two results. Most
business is measured under the PAA model and therefore
the\u00a0Group does not calculate a risk adjustment in relation
to\u00a0LRC excluding loss component.
The Group calculates the risk adjustment for incurred
claims\u00a0liabilities at each insurance undertaking entity level in
accordance with its risk profile using a combination of the VaR
method and scenario analysis, targeting an overall confidence
level range for the aggregate risk distribution. Scenario analysis
is used to determine the level of compensation that the Group
requires for bearing uncertainty for qualitative risks not
captured in the risk distribution and large event-driven claims,
such as natural catastrophes. Given the nature of the
underlying business and losses it is normal for new risks to
become apparent or for the magnitude of existing risks to
change over time. The risk adjustment in its entirety is judged
to provide adequate compensation for the risk in the reserves.
Group diversification benefit is not considered at the
individual\u00a0insurance undertaking entity level but is considered
in\u00a0determining the confidence level at a consolidated level
for\u00a0disclosure purposes. At 31\u00a0December 2025, the risk
adjustment in respect of the LIC net of reinsurance is at
the\u00a086th percentile (2024: 83rd percentile).
(d) Fair value measurement
The Group carries its financial investments at fair value through
profit or loss, with fair values determined using published price
quotations in the most active financial markets in which the
assets trade, where available. Where quoted market prices are
not available, valuation techniques are used to value financial
instruments. These include third-party valuation reports and
models utilising both observable and unobservable market
inputs. Valuation techniques involve judgement, including the
use of valuation models and their inputs, which can lead to a
range of plausible valuations for financial investments. Note
3.3(a) discusses the reliability of the Group\u2019s fair values.
(e) Employee benefit
The employee retirement benefit scheme obligations are
calculated and valued with reference to a number of actuarial
assumptions including mortality, inflation rates and discount
rate, many of which have been subject to recent volatility.
This\u00a0complex set of economic variables can have a significant
impact on the financial statements, as shown in note 24.
(f) Tax
The Group operates in a multinational environment, and
legislation concerning the determination of taxation of assets
and liabilities is complex and continually evolving. In preparing
the financial statements, the Group applies significant
judgements in identifying uncertainties over tax treatments
and\u00a0in the measurement of the provision being the best estimate
of the amount expected to become payable. The assessment is
based on the judgement of tax professionals within the Group
supported by previous experience in respect of such activities
and based on advice sought from specialist tax advisors.
A deferred tax asset can be recognised only to the extent
that\u00a0it\u00a0is recoverable. The recoverability of deferred tax assets\u00a0in
respect of carry forward losses requires consideration\u00a0of the
future levels of taxable profit in the Group.\u00a0In preparing the
Group\u2019s financial statements, management estimates taxation
assets and liabilities after taking appropriate professional advice,
as shown in note 22. Significant estimates and assumptions
used in the valuation of\u00a0deferred tax relate to the forecast
taxable profits, taking into account the Group\u2019s financial and
strategic plans. See note 23 for further details of adjustments
made to deferred tax during the year.
The determination and finalisation of agreed taxation assets
and liabilities may not occur until several years after the
reporting date and consequently the final amounts payable
or\u00a0receivable may differ from those presented in these
financial\u00a0statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantJudgementsAndChangesInJudgementsMadeInApplyingIFRS17Explanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-445": { "value": "2.19 Use of significant accounting judgements, estimates and assumptionsThe preparation of financial statements requires the Group to select accounting policies and make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses in the consolidated financial\u00a0statements.The Audit Committee reviews the reasonableness of critical judgements, estimates and assumptions applied and the appropriateness of material accounting policies information. The significant issues considered by the Committee in the year\u00a0are included within the Audit Committee report on pages 102 to 105.Significant accounting judgementsThe following accounting policies are the critical judgements, apart from those involving estimations (which are presented separately below), that the Directors have made in the process of applying the Group's accounting policies and that have the most significant impact on the amounts recognised in the consolidated financial statements.\u2022 Consolidation: assessment of whether the Group controls or has significant influence over an underlying entity, for example the treatment of insurance-linked securities funds including consideration of its decision-making authority and its rights to the variable returns from the\u00a0entity. \u2022 Financial investments: classification and measurement of\u00a0investments including the application of the fair value\u00a0option.(a) Liability for incurred claimsThe ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques. The Group relies on actuarial analysis to estimate the settlement cost of future claims. Via a formal governed process, there is close communication between the actuaries and other key stakeholders, such as the underwriters, claims and finance teams when setting and validating the assumptions. The main assumption underlying these techniques is that a Group\u2019s past claims development experience can be used to project future claims development and hence ultimate claims costs. These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling costs), and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years, but can also be further analysed by geographical area, as well as by significant business lines and claim types. In most cases, no explicit assumptions are made regarding future rates of claims inflation or loss ratios. Instead, the assumptions used are those implicit in the historical claims development data on which the projections are based. Additional qualitative judgement is used to assess the extent to which past trends may not apply in future (for example, to reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims inflation, levels of recoveries from salvage or subrogation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims\u00a0handling procedures) in order to arrive at the estimated ultimate cost of claims that present the probability-weighted expected value outcome from the range of possible outcomes, taking account of\u00a0all the uncertainties involved.(b) Premium allocation approach eligibility assessmentA simplified measurement model, the PAA, can be applied if certain eligibility criteria are met. The majority of the Group\u2019s policies have a coverage period of 12 months or less and so are eligible for the PAA. Management applies significant judgement to whether applying PAA to those groups of contracts\u00a0differs materially from general measurement model (GMM) with a coverage period\u00a0extending beyond 12 months.Significant accounting estimatesThe key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to\u00a0the carrying amounts of assets and liabilities within the next\u00a0financial year, are discussed below. All estimates are based on management\u2019s knowledge of current facts and circumstances, assumptions based on that\u00a0knowledge and their predictions of future events. Actual results may differ from those estimates, possibly significantly. Revisions to accounting estimates are recognised in the period\u00a0in which the estimate is revised and in any future periods affected.The most critical estimate included within the consolidated statement of financial position is the measurement of insurance contract liabilities and reinsurance contract assets, and in particular the estimate of the liability for incurred claims (LIC). The total gross estimate of LIC as at 31\u00a0December 2025 is $6,460.9 million (2024: $6,040.7\u00a0million). The total estimate for reinsurance asset for incurred claims as at 31\u00a0December 2025 is $1,966.8 million (2024:\u00a0$2,046.5 million).Insurance and reinsurance contractsIn applying IFRS 17 measurement requirements, the following inputs and methods were used that include significant estimates. The present value of future cash flows is estimated\u00a0using deterministic scenarios. The assumptions used\u00a0in the deterministic scenarios are derived to approximate the probability-weighted mean of a full range of scenarios. For\u00a0the sensitivities with regard to the assumptions made that\u00a0have the most significant impact on measurement under IFRS 17 please refer to note 3 management of risk.(a) Discount ratesInsurance contract liabilities are calculated by discounting expected future cash flows at a risk-free rate, plus an illiquidity premium where applicable. Risk-free rates were derived using swap rates available in the market denominated in the same currency as the insurance contracts being measured. When swap rates are not available, highly liquid sovereign bonds with the highest (for example, AAA/AA) credit rating were used.Management uses judgement to assess liquidity characteristics of the liability cash flows. The illiquidity premium was estimated based on market observable liquidity premiums in financial assets, adjusted to reflect the illiquidity characteristics of the liability cash flows. The illiquidity premium is determined by reference to market observable AA-rated bonds yield curve in\u00a0the currency of the insurance contract being measured, adjusted to remove both expected and unexpected credit risk.The following discount rates were applied for the currencies and periods presented below:Year end 31 December 2025 1 year 3 year 5 year % % % USD 3.513.473.64GBP 3.813.904.06EUR 2.192.432.71CAD 2.422.753.00Year end 31 December 2024 1 year 3 year 5 year % % % USD 4.274.184.24GBP 4.684.404.35EUR 2.462.352.49CAD 2.962.882.98(b) Estimates of future cash flows to fulfil insurance contractsIncluded in the measurement of each group of contracts within the scope of IFRS 17 are all of the future cash flows within the boundary of each group of contracts. The estimates of these future cash flows are based on probability-weighted expected future cash flows. The Group estimates which cash flows are expected and the probability that they will occur as at the measurement date. In setting these expectations, the Group uses information about past events, current conditions and forecasts of future conditions. The Group\u2019s estimate of future\u00a0cash flows is the mean of a range of scenarios that reflect the\u00a0full range of possible outcomes. Each scenario specifies\u00a0the amount, timing and probability of cash flows. The\u00a0probability-weighted average of the future cash flows is calculated using a deterministic scenario representing the probability-weighted mean of a range of scenarios.Where estimates of expenses-related cash flows are determined at the portfolio level or higher, they are allocated\u00a0to\u00a0groups of contracts on a systematic basis, such as\u00a0activity-based costing method. The Group has determined that this method results in a\u00a0systematic and rational allocation. Similar methods are consistently applied to allocate expenses of a similar nature. Acquisition cash flows are typically allocated to groups of contracts based on gross premiums written. This\u00a0includes an allocation of acquisition cash flows among existing\u00a0groups of insurance contracts issued. Claims settlement-related expenses are largely allocated based on\u00a0claims costs.Uncertainty in the estimation of future claims and benefit payments arises primarily from the severity and frequency of\u00a0claims and uncertainties regarding future inflation rates leading to claims and claims-handling expenses growth. Assumptions used to develop estimates about future cash flows are reassessed at each reporting date and adjusted where required.(c) Risk adjustment for non-financial riskThe risk adjustment for non-financial risk is the compensation that the Group requires for bearing the uncertainty about the amount and timing of the cash flows of groups of insurance contracts. The risk adjustment reflects an amount that an insurer would charge to make it indifferent between the cash flows with a range of probable scenarios versus equivalent fixed cash flows.To determine the risk adjustment for non-financial risk for reinsurance contracts, the Group applies a combination of\u00a0a\u00a0value at risk (VaR) (or a percentile) approach and a scenario-based approach, both gross and net of reinsurance, and derives the amount of risk being transferred to the reinsurer as the difference between the two results. Most business is measured under the PAA model and therefore the\u00a0Group does not calculate a risk adjustment in relation to\u00a0LRC excluding loss component.The Group calculates the risk adjustment for incurred claims\u00a0liabilities at each insurance undertaking entity level in accordance with its risk profile using a combination of the VaR method and scenario analysis, targeting an overall confidence level range for the aggregate risk distribution. Scenario analysis is used to determine the level of compensation that the Group requires for bearing uncertainty for qualitative risks not captured in the risk distribution and large event-driven claims, such as natural catastrophes. Given the nature of the underlying business and losses it is normal for new risks to become apparent or for the magnitude of existing risks to change over time. The risk adjustment in its entirety is judged to provide adequate compensation for the risk in the reserves.Group diversification benefit is not considered at the individual\u00a0insurance undertaking entity level but is considered in\u00a0determining the confidence level at a consolidated level for\u00a0disclosure purposes. At 31\u00a0December 2025, the risk adjustment in respect of the LIC net of reinsurance is at the\u00a086th percentile (2024: 83rd percentile).(d) Fair value measurementThe Group carries its financial investments at fair value through profit or loss, with fair values determined using published price quotations in the most active financial markets in which the assets trade, where available. Where quoted market prices are not available, valuation techniques are used to value financial instruments. These include third-party valuation reports and models utilising both observable and unobservable market inputs. Valuation techniques involve judgement, including the use of valuation models and their inputs, which can lead to a range of plausible valuations for financial investments. Note 3.3(a) discusses the reliability of the Group\u2019s fair values.(e) Employee benefitThe employee retirement benefit scheme obligations are calculated and valued with reference to a number of actuarial assumptions including mortality, inflation rates and discount rate, many of which have been subject to recent volatility. This\u00a0complex set of economic variables can have a significant impact on the financial statements, as shown in note 24. (f) TaxThe Group operates in a multinational environment, and legislation concerning the determination of taxation of assets and liabilities is complex and continually evolving. In preparing the financial statements, the Group applies significant judgements in identifying uncertainties over tax treatments and\u00a0in the measurement of the provision being the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Group supported by previous experience in respect of such activities and based on advice sought from specialist tax advisors. A deferred tax asset can be recognised only to the extent that\u00a0it\u00a0is recoverable. The recoverability of deferred tax assets\u00a0in respect of carry forward losses requires consideration\u00a0of the future levels of taxable profit in the Group.\u00a0In preparing the Group\u2019s financial statements, management estimates taxation assets and liabilities after taking appropriate professional advice, as shown in note 22. Significant estimates and assumptions used in the valuation of\u00a0deferred tax relate to the forecast taxable profits, taking into account the Group\u2019s financial and strategic plans. See note 23 for further details of adjustments made to deferred tax during the year.The determination and finalisation of agreed taxation assets and liabilities may not occur until several years after the reporting date and consequently the final amounts payable or\u00a0receivable may differ from those presented in these financial\u00a0statements.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-448": { "value": "2.20 Reporting of alternative performance measuresThe Directors consider that the combined, claims and expense ratio measures reported in respect of operating segments and the Group overall in note 4, net asset value per share and return on equity measures disclosed in notes 5 and 6, the adjusted operating profit (AOP) before tax and AOP after tax, adjusted operating earnings per share, operating return on tangible equity, net tangible asset per share, insurance contract written premium and prior-year developments disclosed in the alternative performance measures section, provide useful information regarding the underlying performance of the Group\u2019s businesses.These measures are widely recognised by the insurance industry and are consistent with the internal performance measures reviewed by senior management including the chief\u00a0operating decision-maker. However, these measures are\u00a0not defined within the accounting standards and interpretations, and therefore may not be directly comparable with similarly titled alternative performance measures reported by other companies.", "dimensions": { "concept": "ifrs-full:DescriptionOfReasonWhyFinancialStatementsAreNotEntirelyComparable", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-449": { "value": "
3 Management of risk
The Group\u2019s overall appetite for accepting and managing
varying classes of risk is defined by the Group\u2019s Board
of\u00a0Directors. The Board has developed a governance
framework and has set Group-wide risk management
policies\u00a0and procedures which include risk identification, risk
management and mitigation and risk reporting. The objective
of\u00a0these policies and procedures is to protect the Group\u2019s
shareholders, policyholders and other stakeholders from
negative events that could hinder the Group\u2019s delivery of its
contractual obligations and its achievement of sustainable
profitable economic and social performance.
The Board exercises oversight of the development and
operational implementation of its risk management policies
and\u00a0procedures through the Risk Committee, and ongoing
compliance through a dedicated internal audit function,
which\u00a0has operational independence, clear terms of
reference\u00a0influenced by the Board\u2019s Non Executive Directors
and a clear upwards reporting structure back into the
Board.\u00a0The Group, in\u00a0line with the non-life insurance industry
generally,\u00a0is fundamentally driven by a desire to originate,
retain\u00a0and service insurance contracts to maturity. The
Group\u2019s\u00a0cash flows are funded mainly through advance
premium collections and the timing of such premium inflows
is\u00a0reasonably predictable. In addition, the majority of material
cash outflows are typically triggered by the occurrence of
insured events, although the timing, frequency and severity
of\u00a0claims can fluctuate.
The principal sources of risk relevant to the Group\u2019s operations
and its financial statements fall into three broad categories:
operational risk, insurance risk and financial risk, which are
described in notes 3.1, 3.2 and 3.3 below. The Group also
actively manages its capital risks as detailed in note 3.4 and
tax risks as detailed in note 3.5. Additional unaudited
information is also provided in the corporate governance,
risk\u00a0management and capital sections of this Annual Report
and Accounts.
3.1 Operational risk
The Group is exposed to the risk of direct or indirect loss
resulting from internal processes, people or systems, or
from\u00a0external events. This includes cyber security risk, as
well\u00a0as major IT, systems or service failures. The Group has
demonstrated continued resilience, underscoring the benefits
of its business model, disciplined risk management and
ongoing investment in technology and infrastructure.
Hiscox has implemented several operational risk management
processes, which include a continued focus on Group-wide
crisis management response planning and enhancing its
defences and response to information security and cyber
threats. Hiscox regularly reassesses its information security
standards and methodologies, including a specific standard
on\u00a0the use of artificial intelligence, to ensure appropriate
governance and consistency in its approach.
Hiscox uses a governance, risk and control system to perform
the annual risk and control self-assessment exercise, as well
as\u00a0for reporting and managing operational risk events. It\u00a0also
enables robust reporting and analysis, driving insight
and\u00a0continuous improvement.
Our third-party suppliers are often crucial to our business,
enabling the delivery of high-quality service to our customers.
We have an established supplier code of conduct which sets
out the standards we expect our suppliers to operate to. Due
diligence is carried out not only as part of an initial sourcing
exercise but refreshed on an annual basis. We have invested in
supply chain management tools and processes which help us
better manage risk, including being part of the Financial
Services Qualification Scheme, utilising ESG ratings and
verification tooling.
3.2 Insurance risk
The predominant risk to which the Group is exposed is
insurance risk which is assumed through the underwriting
process. Insurance risk can be sub-categorised into
i)\u00a0underwriting risk including the risk of catastrophe,
systemic\u00a0insurance losses and the market cycle, and
ii)\u00a0reserving risk.
i) Underwriting risk
The Board sets the Group\u2019s underwriting strategy and risk
appetite, seeking to exploit identified opportunities in light of
other relevant anticipated market conditions.
The Board requires all underwriters to operate within an overall
Group appetite for individual events. This defines the maximum
exposure that the Group is prepared to retain on its own
account for any one potential catastrophe event or disaster.
In\u00a0addition, the Group\u2019s overall underwriting risk appetite
seeks\u00a0to ensure that in a 1-in-200 bad year we are within the
underwriting risk limit. The limit is calibrated each year based
on exposure, expected profit and the size of other correlated
risks to enable us to continue in business and take advantage
of market opportunities that arise.
Specific underwriting objectives such as aggregation limits,
reinsurance protection thresholds and geographical disaster
event risk exposures are prepared and reviewed by the Group
Chief Underwriting Officer in order to translate the Board\u2019s
summarised underwriting strategy into specific measurable
actions and targets. These actions and targets are reviewed
and approved by the Board in advance of each underwriting
year. The underwriting strategy is continually reviewed
throughout each underwriting year in light of the evolving
market pricing and loss conditions and as opportunities
present themselves. The Group\u2019s underwriters and
management consider underwriting risk at an individual
contract level, and also from a portfolio perspective where the
risks assumed in similar classes of policies are aggregated and
the exposure evaluated in light of historical portfolio experience
and prospective factors.
To assist with the process of pricing and managing
underwriting risk, the Group routinely performs a wide range
of\u00a0activities including the following:
\u2022 regularly updating the Group\u2019s risk models;
\u2022 documenting, monitoring and reporting on the Group\u2019s
strategy to manage risk;
\u2022 developing systems that facilitate the identification of
emerging issues promptly;
\u2022 utilising sophisticated computer modelling tools to
simulate catastrophes and measure the resultant
potential losses before and after reinsurance;
\u2022 monitoring legal developments and amending the
wording of policies when necessary;
\u2022 regularly aggregating risk exposures across individual
underwriting portfolios and known accumulations of risk;
\u2022 examining the aggregated exposures in advance of
underwriting further large risks; and
\u2022 developing processes that factor market intelligence
into\u00a0the pricing process.
The delegation of underwriting authority to specific individuals,
both internally and externally, is subject to regular review.
All\u00a0underwriting staff and binding agencies are set with strict
parameters in relation to the levels and types of business they
can underwrite, based on individual levels of experience and
competence. These parameters cover areas such as the
maximum sums insured per insurance contract, maximum
gross premiums written and maximum aggregated exposures
per geographical zone and risk class. Regular meetings are
held between underwriting, claims and actuarial teams in order
to monitor claims development patterns and discuss individual
underwriting issues as they arise. The Group compiles
estimates of losses arising from extreme loss events using
statistical models alongside input from its underwriters. These
require significant management judgement. The extreme loss
scenarios, shown on pages 40 and 42, represent hypothetical
major events occurring in areas with large insured\u00a0values.
They also represent areas of potentially significant exposure for
Hiscox. In addition to understanding the loss Hiscox may suffer
from an event, it is important to ensure that the risk models
used are calibrated to the risks faced today. This includes
recognising and forecasting inflationary trends, updating trends
in claims payments, and capturing climate change-related
impacts. Hiscox has a climate risk framework, which is used
to\u00a0assess where research resources should be focused,
and\u00a0models updated, and as a result improves not only the
Group\u2019s\u00a0understanding of the potential impact of a changing
climate but also the Group\u2019s ability to respond.
The selection of extreme loss scenario events is adjusted each
year and they are not therefore necessarily directly comparable
from one year to the next. The events are extreme and
unprecedented, and as such these estimates may prove
inadequate as a result of incorrect assumptions, model
deficiencies, or losses from unmodelled risks. This means that
should an extreme loss event actually occur, the Group\u2019s final
ultimate losses could materially differ from those estimates
modelled by management. The Group\u2019s insurance contracts
include provisions to contain losses, such as the ability to
impose deductibles and demand reinstatement premiums in
certain cases. In addition, in order to manage the Group\u2019s
exposure to repeated catastrophic events (both man-made
and natural catastrophes), relevant policies frequently contain
payment limits to cap the maximum amount payable from
these insured events over the contract period. In the case
of\u00a0climate-exposed risks specifically, the vast majority of
contracts written by the Group are annual in nature and
thus\u00a0can be revised frequently. This flexibility is a key tool
for\u00a0managing the multi-decade challenge of climate
risks\u00a0holistically.
The Group also manages underwriting risk by purchasing
reinsurance. Reinsurance protection is purchased at an entity
level and is also considered at an overall Group level to mitigate
the effect of catastrophes and unexpected concentrations of
risk. However, the scope and type of reinsurance protection
purchased may change depending on the extent and
competitiveness of cover available in the market.
The estimated liquidity profile to settle the net claims liabilities
is\u00a0given in note 3.3(e).
The specific insurance risks accepted by the Group fall
broadly\u00a0into the following main categories: reinsurance
inwards, marine and major asset property, other property
risks,\u00a0casualty professional indemnity and casualty other
insurance risks. These specific categories are defined for
risk\u00a0review purposes only, as each contains risks specific to
the\u00a0nature of the cover provided. They are not exclusively
aligned to any specific reportable segment in the Group\u2019s
operational structure or to the primary internal reports
reviewed\u00a0by the chief operating decision-maker. The Group
also considers climate change to be a cross-cutting risk
with\u00a0potential to impact each existing risk type, rather than a
stand-alone risk. By design, the established and embedded
Group risk management framework provides a controlled
and\u00a0consistent system for\u00a0the\u00a0identification, measurement,
mitigation, monitoring and\u00a0reporting of risks (both current
and\u00a0emerging) and so\u00a0is\u00a0structured in a way that allows us
to\u00a0continually and consistently manage the various impacts
of\u00a0climate risk on the risk profile. This is supported by equally
robust processes and policies that address climate-related
underwriting risks, such as the Group-wide ESG exclusions
policy which represents a commitment to reduce steadily,
and\u00a0eliminate by 2030, both underwriting and investment
exposure to coal-fired power plants and coal mines; Arctic
energy exploration, beginning with the Arctic National
Wildlife\u00a0Refuge; oil sands; and controversial weapons such
as\u00a0landmines.
More information on the strategy and governance structures in
place to manage climate-related risks can be found on pages
64 to 75. The following describes the policies and procedures
used to identify and measure the risks associated with each
individual category of business.
Estimated concentration of insurance risks measured in insurance revenue is as follows:
Estimated concentration of insurance
risk in 2025
Types of insurance risk in the Group
Reinsurance
inwards
Property \u2013 marine
and major assets
Property \u2013 other
assets
Casualty \u2013
professional
indemnity
Casualty \u2013 other
risks
Other*
Total
$m
$m
$m
$m
$m
$m
$m
Total
1,083.3
395.5
968.1
1,128.7
879.0
429.1
4,883.7
Estimated concentration of insurance risk
in 2024
Types of insurance risk in the Group
Reinsurance
inwards
Property \u2013 marine
and major assets
Property \u2013 other
assets
Casualty \u2013
professional
indemnity
Casualty \u2013 other
risks
Other*
Total
$m
$m
$m
$m
$m
$m
$m
Total
1,034.6
386.5
938.4
1,091.4
811.8
409.8
4,672.5
*Includes a diverse mix of certain specialty lines such as kidnap and ransom, terrorism and other risks which contain a mix of property and casualty exposures.
Reinsurance inwards
The Group\u2019s reinsurance inwards acceptances are primarily
focused on large commercial property, homeowner and marine
and short-tail specialty exposures held by other insurance
companies predominantly in North America and other
developed economies. This business is characterised more by
large claims arising from individual events or catastrophes than
the high-frequency, low-severity attritional losses associated
with certain other business written by the Group. Multiple
insured losses can periodically arise out of a single natural or
man-made occurrence. The main circumstances that result in
claims against the reinsurance inwards book are conventional
catastrophes, such as earthquakes or storms, but also include
other events including fires, explosions and cyber events. The
occurrence and impact of these events are very difficult to
predict over the short term, which complicates attempts to
anticipate claims frequencies on an annual basis. In those
years where there is a low incidence of severe catastrophes,
claims frequencies on the reinsurance inwards\u00a0book can be
relatively low.
A significant proportion of the reinsurance inwards business
provides cover on an excess of loss basis for individual events.
The Group agrees to reimburse the cedant once their losses
exceed a minimum level. Consequently, the frequency and
severity of reinsurance inwards claims are related not only to
the number of significant insured events that occur, but also to
their individual magnitude. If numerous catastrophes occurred
in any one year, but the cedant\u2019s individual loss on each was
below the minimum stated, then the Group would have no
liability under such contracts. Maximum gross line sizes and
aggregate exposures are set for each type of programme.
The Group writes reinsurance risks for periods of mainly one
year so that contracts can be assessed for pricing and terms
and adjusted to reflect any changes in market conditions and
the evolving impact of climate change.
Property risks \u2013 marine and major assets
The Group directly underwrites a diverse range of property
risks. The risk profile of the property covered under marine
and\u00a0major asset policies is different to that typically contained
in the other classes of property (such as private households
and contents insurance) covered by the Group.
Typical property covered by marine and other major property
contracts includes fixed and moveable assets such as ships
and other vessels, cargo in transit, energy platforms and
installations, pipelines, other subsea assets, satellites,
commercial buildings and industrial plants and machinery.
These assets are typically exposed to a blend of catastrophic
and other large loss events and attritional claims arising from
conventional hazards such as collision, flooding, fire and theft.
Climate change may give rise to more frequent and severe
extreme weather events (for example, windstorms and river
flooding) and it may be expected that their frequency will
increase over time. For this reason, the Group accepts major
property insurance risks for periods of mainly one year so
that\u00a0each contract can be repriced on renewal to reflect the
continually evolving risk profile. The most significant risks
covered for periods exceeding one year are certain specialist
lines such as marine and offshore construction projects which
can typically have building and assembling periods of between
three and four years. These form a small proportion of the
Group\u2019s overall portfolio.
Marine and major property contracts are normally underwritten
by reference to the commercial replacement value of the
property covered. The cost of repairing or rebuilding assets, of
replacement or indemnity for contents and time taken to restart
or resume operations to original levels for business interruption
losses are the key factors that influence the level of claims
under these policies. The Group\u2019s exposure to commodity
price risk in relation to these types of insurance contracts is
very limited, given the controlled extent of business interruption
cover offered in the areas prone to losses of asset production.
Other property risks
The Group provides building and contents insurance, together
with cover for artwork, antiques, classic cars, jewellery,
collectables and other assets in relation to personal customers
and small business owners. The Group also extends cover
to\u00a0reimburse certain policyholders when named insureds or
insured assets are seized for kidnap and a ransom demand is
subsequently met. Events which can generate claims on these
contracts include burglary, kidnap, seizure of assets, acts of
vandalism, fires, flooding and storm damage. Losses on most
classes can be predicted with a greater degree of certainty as
there is a rich history of actual loss experience data and the
locations of the assets covered, and the individual levels of
security taken by owners, are relatively static from one year
to\u00a0the next.
The losses associated with these contracts tend to be of a
higher frequency and lower severity than the marine and other
major property assets covered above. The Group\u2019s building
and contents insurance contracts are exposed to weather and
climate-related risks such as floods and windstorms and their
consequences. As outlined earlier, the frequency and severity
of these losses do not lend themselves to accurate prediction
over the short term. Contract periods are therefore not
normally more than one year at a time to enable risks to
be\u00a0regularly repriced.
Contracts are underwritten by reference to the commercial
replacement value of the properties and contents insured.
Claims payment limits are always included to cap the amount
payable on occurrence of the insured event.
Casualty insurance risks
The casualty underwriting strategy attempts to ensure that the
underwritten risks are well diversified in terms of type and
amount of potential hazard, industry and geography. However,
the Group\u2019s exposure is more focused towards professional,
general, technological and marine liability risks. Claims typically
arise from incidents such as errors and omissions attributed to
the insured, professional negligence and general liability losses
which can be property damage or bodily injury in nature. The
provision of insurance to cover allegations made against
individuals acting in the course of fiduciary or managerial
responsibilities, including directors and officers\u2019 insurance,
is\u00a0one example of a casualty insurance risk.
The Group\u2019s casualty insurance contracts mainly experience
low-severity attritional losses. By nature, some casualty losses
may take longer to settle than other categories of business.
In\u00a0addition, there is increased potential for accumulation in
casualty risk due to the growing complexity of business,
technological advances, and greater interconnectivity and
interdependency across the world due to globalisation. The
Group\u2019s pricing strategy for casualty insurance policies is
typically based on historical claim frequencies and average
claim severities, adjusted for inflation and extrapolated
forwards to incorporate projected changes in claims patterns.
In determining the price of each policy, an allowance is also
made for acquisition and administration expenses, reinsurance
costs, investment returns and the Group\u2019s cost of capital.
The market for cyber insurance is still a relatively immature one,
complicated by the fast-moving nature of the threat, as the
world becomes even more connected. The risks associated
with cyber insurance are multiplying in both diversity and scale,
with associated financial and reputational consequences of
failing to prepare for them. The Group has focused its cyber
expertise on prevention, in addition to the more traditional
recovery product. Cyber products are sold through our
businesses in the UK, USA, Bermuda and Europe, and the
product is sold both direct to consumers and through a
more\u00a0traditional broker channel.
ii) Reserving risk
The Group\u2019s procedures for estimating the outstanding costs
of settling insured losses at the end of the reporting period,
including liability of incurred claims, are detailed in note 20.2.
The\u00a0Group\u2019s provision estimates are subject to rigorous review
by senior management from all areas of the business. The
auditor provides an external review of the reserves together
with an independent actuarial opinion for the managed
Syndicates and US business. The final provision is approved
by\u00a0the relevant boards on the recommendation of dedicated
reserving committees. Similar to the underwriting risk
detailed\u00a0above, the Group\u2019s reserve risks are well diversified.
Short-tailed claims are normally notified and settled within 12
to\u00a024 months of the insured event occurring. Those claims
taking the longest time to develop and settle typically relate to
casualty risks, where legal complexities occasionally develop
regarding the insured\u2019s alleged omissions or negligence. The
length of time required to obtain definitive legal judgments and
make eventual settlements exposes the Group to a degree of
reserving risk in an inflationary environment.
The final quantum for casualty claims may not be established
for many years after the event. A significant proportion of
the\u00a0casualty insurance amounts reserved on the statement
of\u00a0financial position may not be expected to settle within
24\u00a0months of the end of the reporting period. Consequently,
our\u00a0approach is not to recognise favourable experience in
the\u00a0early years of development in the reserving process
when\u00a0setting the booked\u00a0reserve.
Certain marine and property insurance contracts, such as
those relating to subsea and other energy assets and the
related business interruption risks, can also take longer than
normal to settle. This is because of the length of time required
for detailed subsea surveys to be carried out and damage
assessments agreed, together with difficulties in predicting
when the assets can be brought back into full production.
For the inwards reinsurance lines, there is often a time lag
between the establishment and re-estimate of case reserves
and reporting to the Group. The Group works closely with the
reinsured to ensure timely reporting and also centrally analyses
industry loss data to verify the reported reserves.
The Group maintains explicit reserve uplifts to allow for the
impact of high inflation in recent years. Loss ratios are also
closely monitored to ensure they include an appropriate
allowance for future inflation.
Losses from Covid-19 continue to settle within expectations.
As time passes and legal cases are gradually settled, the
outcome becomes more certain and so the level of\u00a0risk
adjustment above the best estimate can be reduced.
3.3 Financial risk
Overview
The Group is exposed to financial risk through its ownership of
financial instruments including financial liabilities. These items
collectively represent a significant element of the Group\u2019s net
shareholder funds. The Group invests in financial assets in
order to fund obligations arising from its insurance contracts
and financial liabilities.
The key financial risk for the Group is that the proceeds from
its\u00a0financial assets and investment result generated thereon
are\u00a0not sufficient to fund the Group\u2019s obligations. The most
important elements and economic variables that could result in
such an outcome relate to the reliability of fair value measures,
equity price risk, interest rate risk, credit risk, liquidity risk and
currency risk. The Group\u2019s policies and procedures for managing
exposure to these specific categories of risk are\u00a0detailed below.
(a) Reliability of fair values
The Group has elected to carry trade and other receivables
at\u00a0amortised cost and all financial investments at fair
value\u00a0through profit or loss as they are managed and
evaluated\u00a0on a\u00a0fair value basis in accordance with a
documented strategy.
With the exception of any unquoted investments shown in
note\u00a017, all of the financial investments held by the Group
are\u00a0available to trade in markets and the Group therefore
seeks\u00a0 to\u00a0determine fair value by reference to published
prices\u00a0or as derived by pricing vendors using observable
quotations in\u00a0the most active financial markets in which
the\u00a0assets trade.
The fair value of financial assets is measured primarily with
reference to their closing market prices at the end of the
reporting period. The ability to obtain quoted market prices
may be reduced in periods of diminished liquidity. In addition,
those quoted prices that may be available may represent an
unrealistic proportion of market holdings or individual trade
sizes that could not be readily available to the Group. In
such\u00a0instances, fair values may be determined or partially
supplemented using other observable market inputs such
as\u00a0prices provided by market makers such as dealers and
brokers, and prices achieved in the most recent regular
transaction of identical or closely-related instruments
occurring\u00a0before the end of the reporting period, but
updated\u00a0for relevant perceived changes in market conditions.
Valuation of securities will continue to be impacted by
external\u00a0market factors including interest rates, default rates,
rating agency actions and liquidity. The Group will make
adjustments to the investment portfolio as appropriate as
part\u00a0of its overall\u00a0portfolio strategy, but its ability to mitigate
its\u00a0risk by\u00a0selling or hedging its exposures may be limited
by\u00a0the market\u00a0environment.
The Group\u2019s future results may be impacted, both
positively\u00a0and negatively, by the valuation adjustments
applied\u00a0to securities.
Note 17 provides an analysis of the measurement attributes
of\u00a0the Group\u2019s financial instruments.
(b) Price risk
The Group is exposed to price risk through its holdings of
equities and investment funds. This is limited to a relatively
small and controlled proportion of the overall investment
portfolio and the equities and investment funds involved
are\u00a0diversified over a number of companies and industries.
The fair value of equities and investment fund assets in the
consolidated statement of financial position at 31\u00a0December
2025 was $170.8\u00a0million (2024: $210.2\u00a0million). This includes
a\u00a0$60.7 million (2024: $nil) prepayment in relation to a
forward\u00a0contract held by the Group Employee Benefit Trust
to\u00a0purchase a variable number of Hiscox shares. The Group
is\u00a0not exposed to price risk in respect of the forward contract.
A 10% downward correction in equities and investment fund
prices at\u00a031\u00a0December 2025, excluding the forward contract,
would have been expected to reduce Group equity and profit
after tax by approximately $11 million (2024: $18 million).
These may be analysed as follows:
Nature of equity and investment
fund holdings
2025
2024
% weighting
% weighting
Directly held equity securities
9
15
Equity funds
\u2014
34
Hedge funds
91
51
Geographic focus
Specific UK mandates
39
36
Global mandates
61
64
The allocation of price risk is not heavily confined to any one
market index so as to reduce the Group\u2019s exposure to
individual sensitivities. We make allocations to diversifying and
less volatile strategies, such as absolute return strategies, so
as to balance our desire to maximise returns with the need
to\u00a0ensure capital is available to support our underwriting
throughout any downturn in financial markets.
(c) Interest rate risk
Debt and fixed income investments represent a significant
proportion of the Group\u2019s assets and the Board continually
monitors investment strategy to minimise the risk of a fall in the
portfolio\u2019s market value which could affect the amount of
business that the Group is able to underwrite or its ability to
settle claims as they fall due. The fair value of the Group\u2019s
investment portfolio of debt and fixed income holdings and
some private credit funds is normally inversely correlated to
movements in market interest rates. If market interest rates
rise, the fair value of the Group\u2019s debt and fixed income
investments and private credit funds with underlying fixed-rate
debt would tend to fall and vice versa if credit spreads
remained constant. Debt and fixed income assets are
predominantly invested in high-quality corporate,
government\u00a0and asset-backed bonds. The investments
typically have relatively short durations. The portfolio
is\u00a0managed to minimise\u00a0the impact of interest rate risk on
anticipated Group cash flows. The Group may also, from
time\u00a0to time, enter into interest rate future contracts in order
to\u00a0reduce interest rate risk\u00a0on specific portfolios. The fair
value\u00a0of debt and fixed income assets in the\u00a0consolidated
statement of financial position at 31\u00a0December 2025 was
$7,919.3\u00a0million\u00a0(2024:\u00a0$6,660.9\u00a0million). These may be
analysed below as\u00a0follows:
Nature of debt and fixed income
holdings
2025
2024
% weighting
% weighting
Government issued
18
18
Agency and government supported
2
3
Corporate bonds
57
63
Asset-backed securities
9
7
Mortgage-backed instruments
9
7
Lloyd\u2019s deposits and bond funds
5
2
The fair value of private credit funds with exposures to
interest\u00a0rate risk at 31\u00a0December 2025 was $274.4 million
(2024: $148.2 million) of which more than 88% are
floating\u00a0rate.
One method of assessing interest rate sensitivity is through
the\u00a0examination of duration-convexity factors in the
underlying\u00a0portfolio. Duration is the weighted average
length\u00a0of\u00a0time required for an instrument\u2019s cash flow stream
to\u00a0be recovered, where the weightings involved are based
on\u00a0the discounted present values of each cash flow. A
closely\u00a0related\u00a0concept, modified duration, measures the
sensitivity of\u00a0the instrument\u2019s price to a change in its yield
to\u00a0maturity. Convexity measures the sensitivity of modified
duration to changes in the yield to maturity. Using these
three\u00a0concepts, scenario modelling derives the below
estimated impact on instruments\u2019 fair values for a 100
basis\u00a0point change in the term structure of market
interest\u00a0rates.
The Group has used a duration-convexity-based sensitivity
analysis for the debt and fixed income holdings and
private\u00a0credit funds, and recalculated the discounting
impact\u00a0for the\u00a0reinsurance contract assets and insurance
contract liabilities. If\u00a0market interest rates had increased or
decreased\u00a0by 100 basis points at the end of the reporting
period, the Group equity and profit after tax for the year
might\u00a0have been expected to decrease or increase by the
following amounts:
1% increase/decrease in interest rates
31 December 2025
Equity/profit after tax
$m
Reinsurance contract assets
(28)/28
Insurance contract liabilities
88/(88)
Debt and fixed income holdings
(135)/135
Private credit funds
0/0
1% increase/decrease in interest rates
31 December 2024
Equity/profit after tax
$m
Reinsurance contract assets
(32)/32
Insurance contract liabilities
91/(91)
Debt and fixed income holdings
(113)/113
Private credit funds
0/0
The liability for incurred claims, reinsurance assets for
incurred\u00a0claims and certain reinsurance assets for
remaining\u00a0coverage are subject to discounting. Please
refer\u00a0to\u00a0note 2.19(a) for further details regarding the
discount\u00a0rate\u00a0used.
At 31\u00a0December 2025, the Group had long-term borrowings
at\u00a0nominal\u00a0value of $836 million (2024: $658 million),\u00a0which
includes two listed instruments of \u00a3250 million and\u00a0$500
million, as explained in note 14: the first being fixed rate
notes\u00a0maturing in September 2027; the second being
fixed-to-floating rate callable subordinated notes where the
floating rate becomes effective from November 2035. The
Group also has a revolving credit facility of $650 million
(2024:\u00a0$650 million), which is $nil drawn (2024: $nil) and,
therefore, is not presenting interest rate risk. The Group has
no\u00a0other significant borrowings or other assets or liabilities
carrying interest rate risk, other than the facilities and Letters
of\u00a0Credit (LOCs) outlined in note 28.
(d) Credit risk
The Group has exposure to credit risk, which is the risk that
a\u00a0counterparty will suffer a deterioration in actual or perceived
financial strength and be unable to pay amounts in full when
due, or that for any other reason they renege on a contract or
alter the terms of an agreement. The concentrations of credit
risk exposures held by insurers may be expected to be greater
than those associated with other industries, due to the specific
nature of reinsurance markets and the extent of investments
held in financial markets. In both markets, the Group interacts
with a number of counterparties who are engaged in similar
activities with similar customer profiles, and often in the same
geographical areas and industry sectors. Consequently, as
many of these counterparties are themselves exposed to
similar economic characteristics, one single localised or
macroeconomic change could severely disrupt the ability of
a\u00a0significant number of counterparties to meet the Group\u2019s
agreed contractual terms and obligations.
Key areas of exposure to credit risk include:
\u2022 reinsurance asset for incurred claims including amounts
due from reinsurers in respect of claims already paid;
\u2022 amounts due from insurance contract holders; and
\u2022 counterparty risk with respect to investments, derivative
transactions and catastrophe bonds.
The Group\u2019s maximum exposure to credit risk is represented
by the carrying values of financial assets and reinsurance
assets included in the consolidated statement of financial
position at any given point in time. The Group does not use
credit derivatives or other products to mitigate maximum credit
risk exposures on reinsurance assets, but collateral may be
requested to be held against these assets. The Group
structures the levels of credit risk accepted by placing limits
on\u00a0its exposure to a single counterparty, or groups of
counterparties, and having regard to geographical locations.
Such risks are subject to an annual or more frequent review.
There is no significant concentration of credit risk with respect
to trade and other receivables, as the Group has a large
number of internationally dispersed debtors with unrelated
operations. Reinsurance is used to contain insurance risk. This
does not, however, discharge the Group\u2019s liability as primary
insurer. If a reinsurer fails to pay a claim for any reason, the
Group remains liable for the payment to the policyholder. The
creditworthiness of reinsurers is therefore continually reviewed
throughout the year.
The Group Reinsurance Credit Committee (RCC) assesses
the\u00a0creditworthiness of all reinsurers by reviewing credit
grades\u00a0provided by rating agencies and other publicly
available\u00a0financial information detailing their financial strength
and performance, as well as detailed analysis from the Group\u2019s
analysis team. The financial analysis of reinsurers produces an
assessment categorised by factors including their S&P rating
(or equivalent when not available from S&P).
Despite the rigorous nature of this assessment exercise, and
the resultant restricted range of reinsurance counterparties
with\u00a0acceptable strength and credit credentials that emerges
therefrom, some degree of credit risk concentration
remains\u00a0inevitable.
While the rating agencies provide strong analysis on the financials and governance of a reinsurance security, the RCC also takes
account of qualitative factors. The RCC considers the reputation of its reinsurance partners and also receives details of recent
payment history and the status of any ongoing negotiations between Group companies and these third parties. The final score
that a security receives will determine how much reinsurance credit risk Hiscox is willing to have with\u00a0that security based on the
exposure guidelines.
This information is used to update the reinsurance purchasing\u00a0strategy.
Individual operating units maintain records of the payment history for significant brokers and contract holders with whom they
conduct regular business. The exposure to individual counterparties is also managed by other mechanisms, such as the right of
offset, where counterparties are both debtors and creditors of the Group, and obtaining collateral from unrated counterparties.
Management information reports detailed provisions for impairment on trade and other receivables and subsequent write-off.
Exposures to individual intermediaries and groups of intermediaries are collected within the ongoing monitoring of the controls
associated with regulatory solvency.
The Group also mitigates counterparty credit risk by focusing debt and fixed income investments in a portfolio of typically
high-quality corporate and government bonds.
Derivative contracts may be traded on an exchange or over the counter. Many over-the-counter transactions are contracted and
documented under International Swaps and Derivatives Association Master Agreements or their equivalent, which are designed
to provide legally enforceable set-off in the event of default, reducing the Group's exposure to credit risk.
An analysis of the Group\u2019s major exposures to counterparty credit risk, excluding derivative assets, trade and other receivables,
and equities and units in unit trusts, based on S&P or equivalent rating, is presented below:
As at 31 December 2025
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
1,414.6
2,277.5
2,134.3
1,759.7
333.2
7,919.3
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
274.4
274.4
Reinsurance contract assets
20
416.7
879.6
524.5
\u2013
4.0
1,824.8
Total
1,831.3
3,157.1
2,658.8
1,759.7
611.6
10,018.5
As at 31 December 2024
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
885.9
1,775.8
1,969.2
1,689.9
340.1
6,660.9
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
148.2
148.2
Reinsurance contract assets
20
370.0
1,118.6
480.7
\u2013
7.5
1,976.8
Total
1,255.9
2,894.4
2,449.9
1,689.9
495.8
8,785.9
Within the debt and fixed income holdings, which include debt securities, deposits with credit institutions and cash equivalent
assets, there are exposures to a range of government borrowers, on either a direct or guaranteed basis, and banking institutions.
The Group, together with its investment managers, closely manages its geographical exposures across government issued and
supported debt.
The largest aggregated counterparty exposure related to debt and fixed income holdings at 31\u00a0December 2025 of $972 million
is\u00a0to the US Treasury (2024: $776 million).
Within private credit fund holdings, which include commingled vehicles which hold mainly loans, there are exposures to a range
of\u00a0corporate borrowers. The Group manages its exposure to individual funds and, together with the investment managers of the
funds, closely manages the sector and geographical exposures within the funds.
The Group is exposed to concentrations of risk with individual reinsurers due to the nature of the reinsurance market and the
restricted range of reinsurers that have acceptable credit ratings. The largest counterparty exposure included in reinsurance
assets at 31\u00a0December 2025 is to Munich Reinsurance Company (2024: Munich Reinsurance Company). The recoverable
amount from Munich Reinsurance Company represents 27% (2024: Munich Reinsurance Company 23%) of this category
of\u00a0assets.
For the current period and prior period, the Group did not experience any material defaults on debt securities. The Group\u2019s
AAA-rated reinsurance contract assets include fully collateralised positions at 31\u00a0December 2025 and 2024.
(e) Liquidity risk
The Group is exposed to daily calls on its available cash resources, mainly from claims arising from insurance and reinsurance
contracts. Liquidity risk is the risk of being unable to meet customer or other third-party payment obligations from available
resources as they fall due. This could result in higher than expected costs in selling assets or raising money quickly to meet our
obligations. The Board sets limits on the minimum level of cash and maturing funds available to meet such calls and on the
minimum level of borrowing facilities that should be in place to cover unexpected levels of claims and other cash demands.
A significant proportion of the Group\u2019s investments is in highly liquid assets which could be converted to cash in a prompt fashion
and at minimal expense. The Group\u2019s exposure to equities is concentrated on shares and funds that are traded on internationally
recognised stock exchanges.
The main focus of the investment portfolio is on high-quality, short-duration debt and fixed income securities and cash. There are
no significant holdings of investments with specific repricing dates. Notwithstanding the regular interest receipts and also the
Group\u2019s ability to liquidate these securities and the majority of its other financial instrument assets for cash in a prompt and
reasonable manner, the contractual maturity profile of the fair value of these securities at 31 December is as follows.
As at 31 December 2025
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Debt and fixed
income holdings
14
1,038.6
1,056.4
1,556.4
1,319.3
1,067.2
1,881.4
7,919.3
Cash and cash equivalents
18
878.0
\u2013
\u2013
\u2013
\u2013
\u2013
878.0
Total
1,916.6
1,056.4
1,556.4
1,319.3
1,067.2
1,881.4
8,797.3
As at 31 December 2024
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Debt and fixed
income holdings
14
1,392.3
1,336.0
1,185.7
926.5
836.9
983.5
6,660.9
Cash and cash equivalents
18
1,227.0
\u2013
\u2013
\u2013
\u2013
\u2013
1,227.0
Total
2,619.3
1,336.0
1,185.7
926.5
836.9
983.5
7,887.9
The Group\u2019s equities, equity funds, hedge funds and other non-dated instruments have no contractual maturity terms but
predominantly could be liquidated in an orderly manner for cash in a prompt and reasonable time frame within one year of the
end of the reporting period. The Group's private credit funds are not readily realisable and the principal will be returned over the
life of the underlying assets which have a typical contractual maturity of five to seven years.
The available headroom of working capital is monitored through the use of a detailed Group cash flow forecast which is reviewed
by management monthly, or more frequently as required.
Average contractual maturity analysed by denominational currency of investments as at 31 December
2025
2024
In years
In years
US Dollar
6.67
5.58
Sterling
3.07
2.48
Euro
3.11
2.92
Canadian Dollar
2.68
2.65
The following is an analysis by liability type of the estimated timing of net cash flows based on the liability for incurred claims.
The\u00a0estimated phasing of settlement is based on current estimates and historical trends and the actual timing of future
settlement\u00a0cash flows may differ materially from the disclosure below.
Liquidity requirements to settle estimated profile of net undiscounted liability for incurred claims on statement of financial position:
As at 31 December 2025
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Total
20
1,839.7
1,160.5
696.3
434.6
261.7
404.9
4,797.7
As at 31 December 2024
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Total
20
1,813.4
1,043.2
586.5
322.4
197.0
344.8
4,307.3
Details of the payment profile of the Group\u2019s borrowings, derivative instruments and other liabilities are given in notes 14,
16\u00a0and\u00a021.
(f) Currency risk
Currency risk is the risk of loss resulting from fluctuations in exchange rates. The Group operates internationally and therefore
is\u00a0exposed to the financial impact of fluctuations in the exchange rates of various currencies.
The Group\u2019s exposures to foreign exchange risk arise mainly with respect to the US Dollar, Sterling and the Euro. These
exposures may be classified in two main categories:
\u2022 operational foreign exchange exposure arises from the conversion of foreign currency transactions resulting from the
activities of entering into insurance, investment, financing and operational contracts in a currency that is different to each
respective entity\u2019s functional currency; and
\u2022 structural foreign exchange exposure arises from the translation of the Group\u2019s net investment in foreign operations to the
US Dollar, the Group\u2019s presentation currency.
Operational currency risk
Operational foreign exchange risk is principally managed within the Group\u2019s individual insurance carriers by broadly matching
assets and liabilities by currency and liquidity. Due attention is paid to local regulatory solvency and risk-based capital
requirements. All foreign currency derivative transactions with external parties are managed centrally. The Group also
manages\u00a0some exchange risk centrally through matching intragroup loans and balances.
Structural currency risk
The Group\u2019s exposure to structural currency risks mainly relates to Sterling and the Euro net investments in businesses operating
in the UK and Europe. The Group does not ordinarily seek to use derivatives to mitigate the structural risk because:
\u2022 the currency translation gains and losses are accounted for in the currency translation reserve (a component of equity)
and\u00a0do not affect the income statement unless the related foreign operation is disposed of;
\u2022 the currency translation gains and losses have no cash flow.
In periods of significant volatility that are expected to persist for an extended period of time, the Group may elect to utilise
derivatives to mitigate or reduce the risk in order to preserve capital.
The currency profile of the Group\u2019s assets and liabilities is as follows:
Year ended 31 December 2025
US Dollar
Sterling
Euro
Other
2025
$m
$m
$m
$m
$m
Goodwill and intangible assets
157.7
110.5
112.8
\u2014
381.0
Financial assets carried at fair value
6,165.8
1,106.6
966.2
193.4
8,432.0
Cash and cash equivalents
514.1
193.3
129.0
41.6
878.0
Reinsurance contract assets
1,540.5
144.1
137.8
2.4
1,824.8
Other assets
472.6
136.9
58.0
5.9
673.4
Total assets
8,850.7
1,691.4
1,403.8
243.3
12,189.2
Insurance contract liabilities
4,855.9
860.0
1,049.1
112.5
6,877.5
Other liabilities
674.5
618.3
66.4
4.6
1,363.8
Total liabilities
5,530.4
1,478.3
1,115.5
117.1
8,241.3
Total equity
3,320.3
213.1
288.3
126.2
3,947.9
Year ended 31 December 2024
US Dollar
Sterling
Euro
Other
2024
$m
$m
$m
$m
$m
Goodwill and intangible assets
115.3
112.1
81.4
\u2014
308.8
Financial assets carried at fair value
5,269.7
932.9
710.0
165.0
7,077.6
Cash and cash equivalents
747.3
316.1
120.8
42.8
1,227.0
Reinsurance contract assets
1,668.6
158.4
139.3
10.5
1,976.8
Other assets
381.4
170.0
50.8
48.4
650.6
Total assets
8,182.3
1,689.5
1,102.3
266.7
11,240.8
Insurance contract liabilities
4,679.5
762.7
865.7
88.4
6,396.3
Other liabilities
101.6
940.0
60.7
52.3
1,154.6
Total liabilities
4,781.1
1,702.7
926.4
140.7
7,550.9
Total equity
3,401.2
(13.2)
175.9
126.0
3,689.9
Sensitivity analysis
As at 31\u00a0December 2025, the Group used closing rates of exchange of $1: \u00a30.74 and $1: \u20ac0.85 (2024: of $1: \u00a30.80 and
$1:\u00a0\u20ac0.97). The Group performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling.
This analysis assumes that all other variables, in particular interest rates, remain constant and that the underlying valuation of
assets and liabilities in their base currency is unchanged. The estimated sensitivities below take account of the retranslation
movements of foreign currency monetary assets and liabilities in Group entities and, for the effect on equity, the impact on the
retranslation of entities with non-US Dollar functional currencies. The methodology includes inter-company balances that are
eliminated on consolidation, but still expose the Group to foreign currency risk.
During the year, the Group transacted in a number of over-the-counter forward currency derivative contracts. The contracts
remaining at 31\u00a0December 2025 had a negligible impact on the sensitivity analysis. In 2024, the impact of such contracts
increased the sensitivity of equity after tax and reduced the sensitivity of profit after tax.
As at 31 December
December 2025
effect on equity
after tax
December 2025
effect on profit
after tax
December 2024
effect on equity
after tax
December 2024
effect on profit
after tax
$m
$m
$m
$m
Strengthening of Sterling
33.5
(2.9)
48.6
1.5
Weakening of Sterling
(33.5)
2.9
(51.4)
(4.3)
(g) Limitations of sensitivity analysis
The sensitivity information given in notes 3.3 (a) to (f) demonstrates the estimated impact of a change in a major input
assumption, while other assumptions remain unchanged. In reality, there are normally significant levels of correlation between
the\u00a0assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts
should not be interpolated or extrapolated from these results. The same limitations exist in respect to the retirement benefit
scheme sensitivities presented in note 24 to these financial statements. Furthermore, estimates of sensitivity may become less
reliable in unusual market conditions, such as instances when risk-free interest rates fall towards zero.
The sensitivity analysis does not take into consideration that the Group\u2019s assets and liabilities are actively managed. Additionally,
the financial position of the Group may vary at the time that any actual market movement occurs. For example, the Group\u2019s
financial risk management strategy aims to manage the exposure to market fluctuations. As investment markets move past
various trigger levels, management actions could include selling investments, changing the investment portfolio allocation and
taking other protective action.
3.4 Capital risk management
The Group\u2019s primary objectives when managing its capital position are:
\u2022 to safeguard its ability to continue as a going concern, so that it can continue to provide long-term growth and progressive
dividend returns for shareholders;
\u2022 to provide an adequate return to the Group\u2019s shareholders by pricing its insurance products and services commensurately
with the level of risk;
\u2022 to maintain an efficient cost of capital;
\u2022 to comply with all regulatory requirements by an appropriate margin;
\u2022 to maintain financial strength ratings of A in each of its insurance entities; and
\u2022 to settle policyholders\u2019 claims as they arise.
The Group sets the amount of capital required in its funding structure in proportion to risk. The Group then manages the
capital\u00a0structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying\u00a0assets. In order to obtain or maintain an optimal capital structure, the Group may adjust the amount of dividends
paid\u00a0to shareholders, return capital to shareholders, issue new shares, assume debt, or sell assets to reduce debt.
The Group measures its capital requirements against its available capital. Available capital is defined by the Group as the total
of\u00a0net tangible asset value and subordinated debt.
The subordinated debt issued by the Group is hybrid in nature, which means it counts towards regulatory and rating agency
capital requirements.
At 31\u00a0December 2025, the available capital was $4,066.9 million (2024: $3,725.6 million), comprising net tangible asset value
of\u00a0$3,566.9 million\u00a0(2024: $3,381.1 million) and subordinated debt of $500.0 million (2024: $344.5 million).
The Board ensures that the use and allocation of capital are given a primary focus in all significant operational actions. With that
in\u00a0mind, the Group has developed and embedded capital modelling tools within its business. These join together short-term and
long-term business plans and link divisional aspirations with the Group\u2019s overall strategy.
The model provides the basis of the allocation of capital to different business lines, as well as the regulatory and rating agency
capital processes.
Gearing
The Group currently utilises gearing as an additional source of funds to maximise the opportunities from strong markets and to
reduce the risk profile of the business in weaker markets, particularly with respect to the more volatile business. The Group\u2019s
gearing is obtained from a number of sources, including:
\u2022 Letter of Credit (LOC) and revolving credit facility \u2013 the Group\u2019s main facility may be drawn in cash up to $650 million
(2024:\u00a0$650 million) under a revolving credit facility and utilised as LOC up to $266 million (2024: $266 million). The facility
was renewed during 2024, enabling the Group to utilise the LOC as Funds at Lloyd\u2019s to support underwriting on the 2024,
2025 and 2026 years of account. The revolving credit facility is available until the end of 2026. As at 31\u00a0December 2025,
$266 million\u00a0was utilised by way of LOC to support the Funds at\u00a0Lloyd\u2019s requirement and the revolving credit facility was
undrawn (2024: $266 million and the revolving credit facility was\u00a0undrawn);
\u2022 in 2020, the Group sourced an additional $65 million of funding in the form of a Funds at Lloyd\u2019s facility. Under this facility
assets are pledged with the Corporation of Lloyd\u2019s on the Group\u2019s behalf, providing regulatory Tier 1 capital. As at
31\u00a0December 2025 and 2024 the facility was fully drawn;
\u2022 $500 million of fixed-to-floating rate callable subordinated notes due 2036 with a first call date of 2035 raised in June 2025.
The debt is rated BBB- by S&P;
\u2022 \u00a3250 million of fixed rate senior notes raised in September 2022 and maturing in September 2027. The debt is rated BBB+
by S&P;
\u2022 external Names \u2013 27.4% (2024: 27.4%) of Syndicate 33\u2019s capacity is capitalised by third parties, who also pay a profit share
of approximately 20%;
\u2022 Syndicate 6104 at Lloyd\u2019s \u2013 with a capacity of \u00a3100.7 million for the 2026 year of account (2025 year of account:
\u00a378.5 million \u2013 in 2024, this was \u00a356.4 million). This Syndicate is wholly backed by external members and takes pure
year\u00a0of\u00a0account quota share of Syndicate 33\u2019s applicable excess of loss property catastrophe reinsurance, marine,
terrorism\u00a0and\u00a0cyber accounts;
\u2022 gearing quota shares \u2013 historically the Group has used reinsurance capital to fund its capital requirement for short-term
expansions in the volume of business underwritten by the Syndicate and Hiscox Insurance Company (Bermuda)
Limited;\u00a0and
\u2022 qualifying quota shares and legacy portfolio transactions \u2013 these are reinsurance arrangements that allow the Group to
increase the amount of premium it writes.
The Group\u2019s LOC and revolving credit facility and Funds at Lloyd's facility include financial covenants that are standard in such
arrangements, including certain metrics relating to the Group's financial position. These are monitored on a regular basis, at least
quarterly, but more frequently where necessary.
Financial strength
The financial strength ratings of the Group\u2019s significant insurance company subsidiaries are outlined below:
A.M. Best
S&P
Hiscox Insurance Company Limited
A (Excellent)
A (Strong)
Hiscox Insurance Company (Bermuda) Limited
A (Excellent)
A (Strong)
Hiscox Insurance Company (Guernsey) Limited
A (Excellent)
\u2013
Hiscox Insurance Company Inc.
A (Excellent)
\u2013
Hiscox Soci\u00e9t\u00e9 Anonyme
\u2013
A (Strong)
Syndicate 33 has an A.M. Best rating of A+ (Superior). It also benefits from Lloyd\u2019s own ratings of A+ (Superior) from A.M. Best,
AA- (Very Strong) from S&P, AA- (Very Strong) from Fitch and AA- (Very Strong) from Kroll Bond Rating Agency.
Capital performance
The Group\u2019s main capital performance measure is the achieved return on equity (ROE). This marker aligns the aspirations of
employees and shareholders. As variable remuneration relates directly to ROE and it is used as a key performance indicator
within the business planning process, this concept is embedded in the workings and culture of the Group. The Group seeks
to\u00a0maintain its cost of capital levels and its debt to overall equity ratios in line with others in the non-life insurance industry.
Capital modelling and regulation
The capital requirements of an insurance group are determined by its exposure to risk and the solvency criteria established by
management and statutory regulations.
The Group\u2019s capital requirements are managed both centrally and at a regulated entity level. The assessed capital requirement
for\u00a0the business placed through Hiscox Insurance Company Limited, Hiscox Insurance Company (Bermuda) Limited, Hiscox
Insurance Company (Guernsey) Limited, Hiscox Insurance Company Inc. and Hiscox Soci\u00e9t\u00e9 Anonyme is driven by the level of
resources necessary to maintain regulatory requirements.
The Group\u2019s regulatory capital is supervised by the Bermuda Monetary Authority (BMA). The Group had sufficient capital at all
times throughout the year to meet the BMA\u2019s requirements. Hiscox Insurance Company Limited and Hiscox Soci\u00e9t\u00e9 Anonyme
use the standard formula to calculate their regulatory capital requirements under the Solvency UK regime and Solvency II regime
respectively. Their risk profiles are sufficiently well represented by the standard formula not to warrant going through the internal
model approval process. Hiscox\u2019s Lloyd\u2019s operations use the internal model that has been built to meet the requirements of the
Solvency UK regime. The model is concentrated specifically on the particular product lines, market conditions and risk appetite
of\u00a0each risk carrier.
For Syndicate 33 and Syndicate 3624, internal model results are uplifted by Lloyd\u2019s to the level of capital required to support its
ratings. Capital models are used more widely across the Group to monitor exposure to key risk types, inform decision-making
and measure ROE across different segments of the business.
The Group is required to publish a financial condition report, as part of its regulatory filing with the BMA. This is a public
document and sets out the financial performance and solvency position of the Group in accordance with the economic balance
sheet return filed with the BMA. It is intended to provide the public with certain information to be able to make informed
assessments about the Group. In the Group\u2019s other geographical territories, including the USA, its subsidiaries underwriting
insurance business are required to operate within broadly similar risk-based externally imposed capital requirements when
accepting business.
During the year the Group was in compliance with capital requirements imposed by regulators in each jurisdiction where the
Group operates.
3.5 Tax risk
The Group is subject to income taxes levied by the various jurisdictions in which the Group operates, and the division of taxing
rights between these jurisdictions results in the Group tax expense and effective rate of income tax disclosed in these financial
statements. Due to the Group\u2019s operating model, there is an unquantifiable risk that this division of taxing rights could be altered
materially, either by a change to the tax residence, or permanent establishment profile, of Hiscox Ltd or its principal subsidiaries;
or due to the repricing or recharacterisation for tax purposes of transactions between members of the Group, under local transfer
pricing or related tax legislation. The Group seeks to manage this risk by:
\u2022 maintaining appropriate internal policies and controls over its operations worldwide;
\u2022 monitoring compliance with these policies on an ongoing basis;
\u2022 adhering to internationally recognised best practice in determining the appropriate division of profits between
taxing\u00a0jurisdictions;
\u2022 taking additional advice and obtaining legal opinions from local third-party professionals with the necessary experience
in\u00a0the particular area.
The Group seeks to maintain an open dialogue with the relevant tax authorities and to resolve any issues arising promptly.
Various jurisdictions in which the Group operates have now enacted legislation implementing the principles of the OECD \u2018Pillar
Two\u2019 tax rules, intended to apply a global minimum tax to the profits of multinational enterprises such as Hiscox with effect from
1\u00a0January 2024. Pillar Two legislation represents a departure from existing corporate income tax principles, introducing new
concepts and design features to the corporate income tax landscape. The model rules issued by the OECD in December 2021
have been designed and implemented at speed, and continue to be subject to changes and updates through guidance. On
15\u00a0January 2025, the OECD issued new guidance on the\u00a0treatment of deferred tax assets for the purposes of calculating Pillar
Two tax, which, if enacted into local legislation, is likely\u00a0to result in additional Pillar Two tax payable over the eight years, from
2027, of up to 80% of the 2025 opening value of the $154.6 million Bermuda deferred tax asset. In 2025, the deferred tax asset
was reduced by $15.2 million reflecting the current year amortisation of the economic transition adjustment (ETA). On 5 January
2026 the OECD released the 'Side-by-Side package' of further rule changes to the Pillar Two rules, none of which are expected
to have a material impact on the Group. However, in this context, there is a risk that new legislation could prove to have further
unintended and/or unforeseen consequences for the Group, which could also have an impact on the Group\u2019s income tax payable
in future periods. The Group relies on expert advice from third-party professionals, as\u00a0well as open dialogue with implementing
tax authorities, to manage this risk.
In alignment with the adoption of Pillar Two legislation by other jurisdictions, in December 2023 Bermuda enacted a corporate
income tax which has applied to the Group\u2019s Bermudian resident entities with effect from 1 January 2025 at a rate of 15%. The
impact of this new tax on the overall effective tax rate to which the Group is exposed is therefore reflected in these accounts.
The Group recognises uncertain tax provisions where there is uncertainty that a tax treatment will be accepted under local law,
including matters which are under discussion with the tax authorities. Based on facts and circumstances at the end of the
reporting period, the range of the total exposure is estimated between $20.6 million and $50.7 million. The estimate is subject
to\u00a0review on an ongoing basis and is susceptible to the progress of the settlement discussions with the tax authorities. Matters
under discussion which could affect the estimate include the Hiscox Group\u2019s policy on the allocation of expenses between
companies within the Group, the allocation of income and expenses between branches of the same company, and the period
subject to re-assessment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-450": { "value": "
3.2 Insurance risk
The predominant risk to which the Group is exposed is
insurance risk which is assumed through the underwriting
process. Insurance risk can be sub-categorised into
i)\u00a0underwriting risk including the risk of catastrophe,
systemic\u00a0insurance losses and the market cycle, and
ii)\u00a0reserving risk.
i) Underwriting risk
The Board sets the Group\u2019s underwriting strategy and risk
appetite, seeking to exploit identified opportunities in light of
other relevant anticipated market conditions.
The Board requires all underwriters to operate within an overall
Group appetite for individual events. This defines the maximum
exposure that the Group is prepared to retain on its own
account for any one potential catastrophe event or disaster.
In\u00a0addition, the Group\u2019s overall underwriting risk appetite
seeks\u00a0to ensure that in a 1-in-200 bad year we are within the
underwriting risk limit. The limit is calibrated each year based
on exposure, expected profit and the size of other correlated
risks to enable us to continue in business and take advantage
of market opportunities that arise.
Specific underwriting objectives such as aggregation limits,
reinsurance protection thresholds and geographical disaster
event risk exposures are prepared and reviewed by the Group
Chief Underwriting Officer in order to translate the Board\u2019s
summarised underwriting strategy into specific measurable
actions and targets. These actions and targets are reviewed
and approved by the Board in advance of each underwriting
year. The underwriting strategy is continually reviewed
throughout each underwriting year in light of the evolving
market pricing and loss conditions and as opportunities
present themselves. The Group\u2019s underwriters and
management consider underwriting risk at an individual
contract level, and also from a portfolio perspective where the
risks assumed in similar classes of policies are aggregated and
the exposure evaluated in light of historical portfolio experience
and prospective factors.
To assist with the process of pricing and managing
underwriting risk, the Group routinely performs a wide range
of\u00a0activities including the following:
\u2022 regularly updating the Group\u2019s risk models;
\u2022 documenting, monitoring and reporting on the Group\u2019s
strategy to manage risk;
\u2022 developing systems that facilitate the identification of
emerging issues promptly;
\u2022 utilising sophisticated computer modelling tools to
simulate catastrophes and measure the resultant
potential losses before and after reinsurance;
\u2022 monitoring legal developments and amending the
wording of policies when necessary;
\u2022 regularly aggregating risk exposures across individual
underwriting portfolios and known accumulations of risk;
\u2022 examining the aggregated exposures in advance of
underwriting further large risks; and
\u2022 developing processes that factor market intelligence
into\u00a0the pricing process.
The delegation of underwriting authority to specific individuals,
both internally and externally, is subject to regular review.
All\u00a0underwriting staff and binding agencies are set with strict
parameters in relation to the levels and types of business they
can underwrite, based on individual levels of experience and
competence. These parameters cover areas such as the
maximum sums insured per insurance contract, maximum
gross premiums written and maximum aggregated exposures
per geographical zone and risk class. Regular meetings are
held between underwriting, claims and actuarial teams in order
to monitor claims development patterns and discuss individual
underwriting issues as they arise. The Group compiles
estimates of losses arising from extreme loss events using
statistical models alongside input from its underwriters. These
require significant management judgement. The extreme loss
scenarios, shown on pages 40 and 42, represent hypothetical
major events occurring in areas with large insured\u00a0values.
They also represent areas of potentially significant exposure for
Hiscox. In addition to understanding the loss Hiscox may suffer
from an event, it is important to ensure that the risk models
used are calibrated to the risks faced today. This includes
recognising and forecasting inflationary trends, updating trends
in claims payments, and capturing climate change-related
impacts. Hiscox has a climate risk framework, which is used
to\u00a0assess where research resources should be focused,
and\u00a0models updated, and as a result improves not only the
Group\u2019s\u00a0understanding of the potential impact of a changing
climate but also the Group\u2019s ability to respond.
The selection of extreme loss scenario events is adjusted each
year and they are not therefore necessarily directly comparable
from one year to the next. The events are extreme and
unprecedented, and as such these estimates may prove
inadequate as a result of incorrect assumptions, model
deficiencies, or losses from unmodelled risks. This means that
should an extreme loss event actually occur, the Group\u2019s final
ultimate losses could materially differ from those estimates
modelled by management. The Group\u2019s insurance contracts
include provisions to contain losses, such as the ability to
impose deductibles and demand reinstatement premiums in
certain cases. In addition, in order to manage the Group\u2019s
exposure to repeated catastrophic events (both man-made
and natural catastrophes), relevant policies frequently contain
payment limits to cap the maximum amount payable from
these insured events over the contract period. In the case
of\u00a0climate-exposed risks specifically, the vast majority of
contracts written by the Group are annual in nature and
thus\u00a0can be revised frequently. This flexibility is a key tool
for\u00a0managing the multi-decade challenge of climate
risks\u00a0holistically.
The Group also manages underwriting risk by purchasing
reinsurance. Reinsurance protection is purchased at an entity
level and is also considered at an overall Group level to mitigate
the effect of catastrophes and unexpected concentrations of
risk. However, the scope and type of reinsurance protection
purchased may change depending on the extent and
competitiveness of cover available in the market.
The estimated liquidity profile to settle the net claims liabilities
is\u00a0given in note 3.3(e).
The specific insurance risks accepted by the Group fall
broadly\u00a0into the following main categories: reinsurance
inwards, marine and major asset property, other property
risks,\u00a0casualty professional indemnity and casualty other
insurance risks. These specific categories are defined for
risk\u00a0review purposes only, as each contains risks specific to
the\u00a0nature of the cover provided. They are not exclusively
aligned to any specific reportable segment in the Group\u2019s
operational structure or to the primary internal reports
reviewed\u00a0by the chief operating decision-maker. The Group
also considers climate change to be a cross-cutting risk
with\u00a0potential to impact each existing risk type, rather than a
stand-alone risk. By design, the established and embedded
Group risk management framework provides a controlled
and\u00a0consistent system for\u00a0the\u00a0identification, measurement,
mitigation, monitoring and\u00a0reporting of risks (both current
and\u00a0emerging) and so\u00a0is\u00a0structured in a way that allows us
to\u00a0continually and consistently manage the various impacts
of\u00a0climate risk on the risk profile. This is supported by equally
robust processes and policies that address climate-related
underwriting risks, such as the Group-wide ESG exclusions
policy which represents a commitment to reduce steadily,
and\u00a0eliminate by 2030, both underwriting and investment
exposure to coal-fired power plants and coal mines; Arctic
energy exploration, beginning with the Arctic National
Wildlife\u00a0Refuge; oil sands; and controversial weapons such
as\u00a0landmines.
More information on the strategy and governance structures in
place to manage climate-related risks can be found on pages
64 to 75. The following describes the policies and procedures
used to identify and measure the risks associated with each
individual category of business.
Estimated concentration of insurance risks measured in insurance revenue is as follows:
Estimated concentration of insurance
risk in 2025
Types of insurance risk in the Group
Reinsurance
inwards
Property \u2013 marine
and major assets
Property \u2013 other
assets
Casualty \u2013
professional
indemnity
Casualty \u2013 other
risks
Other*
Total
$m
$m
$m
$m
$m
$m
$m
Total
1,083.3
395.5
968.1
1,128.7
879.0
429.1
4,883.7
Estimated concentration of insurance risk
in 2024
Types of insurance risk in the Group
Reinsurance
inwards
Property \u2013 marine
and major assets
Property \u2013 other
assets
Casualty \u2013
professional
indemnity
Casualty \u2013 other
risks
Other*
Total
$m
$m
$m
$m
$m
$m
$m
Total
1,034.6
386.5
938.4
1,091.4
811.8
409.8
4,672.5
*Includes a diverse mix of certain specialty lines such as kidnap and ransom, terrorism and other risks which contain a mix of property and casualty exposures.
Reinsurance inwards
The Group\u2019s reinsurance inwards acceptances are primarily
focused on large commercial property, homeowner and marine
and short-tail specialty exposures held by other insurance
companies predominantly in North America and other
developed economies. This business is characterised more by
large claims arising from individual events or catastrophes than
the high-frequency, low-severity attritional losses associated
with certain other business written by the Group. Multiple
insured losses can periodically arise out of a single natural or
man-made occurrence. The main circumstances that result in
claims against the reinsurance inwards book are conventional
catastrophes, such as earthquakes or storms, but also include
other events including fires, explosions and cyber events. The
occurrence and impact of these events are very difficult to
predict over the short term, which complicates attempts to
anticipate claims frequencies on an annual basis. In those
years where there is a low incidence of severe catastrophes,
claims frequencies on the reinsurance inwards\u00a0book can be
relatively low.
A significant proportion of the reinsurance inwards business
provides cover on an excess of loss basis for individual events.
The Group agrees to reimburse the cedant once their losses
exceed a minimum level. Consequently, the frequency and
severity of reinsurance inwards claims are related not only to
the number of significant insured events that occur, but also to
their individual magnitude. If numerous catastrophes occurred
in any one year, but the cedant\u2019s individual loss on each was
below the minimum stated, then the Group would have no
liability under such contracts. Maximum gross line sizes and
aggregate exposures are set for each type of programme.
The Group writes reinsurance risks for periods of mainly one
year so that contracts can be assessed for pricing and terms
and adjusted to reflect any changes in market conditions and
the evolving impact of climate change.
Property risks \u2013 marine and major assets
The Group directly underwrites a diverse range of property
risks. The risk profile of the property covered under marine
and\u00a0major asset policies is different to that typically contained
in the other classes of property (such as private households
and contents insurance) covered by the Group.
Typical property covered by marine and other major property
contracts includes fixed and moveable assets such as ships
and other vessels, cargo in transit, energy platforms and
installations, pipelines, other subsea assets, satellites,
commercial buildings and industrial plants and machinery.
These assets are typically exposed to a blend of catastrophic
and other large loss events and attritional claims arising from
conventional hazards such as collision, flooding, fire and theft.
Climate change may give rise to more frequent and severe
extreme weather events (for example, windstorms and river
flooding) and it may be expected that their frequency will
increase over time. For this reason, the Group accepts major
property insurance risks for periods of mainly one year so
that\u00a0each contract can be repriced on renewal to reflect the
continually evolving risk profile. The most significant risks
covered for periods exceeding one year are certain specialist
lines such as marine and offshore construction projects which
can typically have building and assembling periods of between
three and four years. These form a small proportion of the
Group\u2019s overall portfolio.
Marine and major property contracts are normally underwritten
by reference to the commercial replacement value of the
property covered. The cost of repairing or rebuilding assets, of
replacement or indemnity for contents and time taken to restart
or resume operations to original levels for business interruption
losses are the key factors that influence the level of claims
under these policies. The Group\u2019s exposure to commodity
price risk in relation to these types of insurance contracts is
very limited, given the controlled extent of business interruption
cover offered in the areas prone to losses of asset production.
Other property risks
The Group provides building and contents insurance, together
with cover for artwork, antiques, classic cars, jewellery,
collectables and other assets in relation to personal customers
and small business owners. The Group also extends cover
to\u00a0reimburse certain policyholders when named insureds or
insured assets are seized for kidnap and a ransom demand is
subsequently met. Events which can generate claims on these
contracts include burglary, kidnap, seizure of assets, acts of
vandalism, fires, flooding and storm damage. Losses on most
classes can be predicted with a greater degree of certainty as
there is a rich history of actual loss experience data and the
locations of the assets covered, and the individual levels of
security taken by owners, are relatively static from one year
to\u00a0the next.
The losses associated with these contracts tend to be of a
higher frequency and lower severity than the marine and other
major property assets covered above. The Group\u2019s building
and contents insurance contracts are exposed to weather and
climate-related risks such as floods and windstorms and their
consequences. As outlined earlier, the frequency and severity
of these losses do not lend themselves to accurate prediction
over the short term. Contract periods are therefore not
normally more than one year at a time to enable risks to
be\u00a0regularly repriced.
Contracts are underwritten by reference to the commercial
replacement value of the properties and contents insured.
Claims payment limits are always included to cap the amount
payable on occurrence of the insured event.
Casualty insurance risks
The casualty underwriting strategy attempts to ensure that the
underwritten risks are well diversified in terms of type and
amount of potential hazard, industry and geography. However,
the Group\u2019s exposure is more focused towards professional,
general, technological and marine liability risks. Claims typically
arise from incidents such as errors and omissions attributed to
the insured, professional negligence and general liability losses
which can be property damage or bodily injury in nature. The
provision of insurance to cover allegations made against
individuals acting in the course of fiduciary or managerial
responsibilities, including directors and officers\u2019 insurance,
is\u00a0one example of a casualty insurance risk.
The Group\u2019s casualty insurance contracts mainly experience
low-severity attritional losses. By nature, some casualty losses
may take longer to settle than other categories of business.
In\u00a0addition, there is increased potential for accumulation in
casualty risk due to the growing complexity of business,
technological advances, and greater interconnectivity and
interdependency across the world due to globalisation. The
Group\u2019s pricing strategy for casualty insurance policies is
typically based on historical claim frequencies and average
claim severities, adjusted for inflation and extrapolated
forwards to incorporate projected changes in claims patterns.
In determining the price of each policy, an allowance is also
made for acquisition and administration expenses, reinsurance
costs, investment returns and the Group\u2019s cost of capital.
The market for cyber insurance is still a relatively immature one,
complicated by the fast-moving nature of the threat, as the
world becomes even more connected. The risks associated
with cyber insurance are multiplying in both diversity and scale,
with associated financial and reputational consequences of
failing to prepare for them. The Group has focused its cyber
expertise on prevention, in addition to the more traditional
recovery product. Cyber products are sold through our
businesses in the UK, USA, Bermuda and Europe, and the
product is sold both direct to consumers and through a
more\u00a0traditional broker channel.
ii) Reserving risk
The Group\u2019s procedures for estimating the outstanding costs
of settling insured losses at the end of the reporting period,
including liability of incurred claims, are detailed in note 20.2.
The\u00a0Group\u2019s provision estimates are subject to rigorous review
by senior management from all areas of the business. The
auditor provides an external review of the reserves together
with an independent actuarial opinion for the managed
Syndicates and US business. The final provision is approved
by\u00a0the relevant boards on the recommendation of dedicated
reserving committees. Similar to the underwriting risk
detailed\u00a0above, the Group\u2019s reserve risks are well diversified.
Short-tailed claims are normally notified and settled within 12
to\u00a024 months of the insured event occurring. Those claims
taking the longest time to develop and settle typically relate to
casualty risks, where legal complexities occasionally develop
regarding the insured\u2019s alleged omissions or negligence. The
length of time required to obtain definitive legal judgments and
make eventual settlements exposes the Group to a degree of
reserving risk in an inflationary environment.
The final quantum for casualty claims may not be established
for many years after the event. A significant proportion of
the\u00a0casualty insurance amounts reserved on the statement
of\u00a0financial position may not be expected to settle within
24\u00a0months of the end of the reporting period. Consequently,
our\u00a0approach is not to recognise favourable experience in
the\u00a0early years of development in the reserving process
when\u00a0setting the booked\u00a0reserve.
Certain marine and property insurance contracts, such as
those relating to subsea and other energy assets and the
related business interruption risks, can also take longer than
normal to settle. This is because of the length of time required
for detailed subsea surveys to be carried out and damage
assessments agreed, together with difficulties in predicting
when the assets can be brought back into full production.
For the inwards reinsurance lines, there is often a time lag
between the establishment and re-estimate of case reserves
and reporting to the Group. The Group works closely with the
reinsured to ensure timely reporting and also centrally analyses
industry loss data to verify the reported reserves.
The Group maintains explicit reserve uplifts to allow for the
impact of high inflation in recent years. Loss ratios are also
closely monitored to ensure they include an appropriate
allowance for future inflation.
Losses from Covid-19 continue to settle within expectations.
As time passes and legal cases are gradually settled, the
outcome becomes more certain and so the level of\u00a0risk
adjustment above the best estimate can be reduced.
", "dimensions": { "concept": "hiscoxltd:DisclosureOfInsuranceRiskExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-451": { "value": "
(b) Price risk
The Group is exposed to price risk through its holdings of
equities and investment funds. This is limited to a relatively
small and controlled proportion of the overall investment
portfolio and the equities and investment funds involved
are\u00a0diversified over a number of companies and industries.
The fair value of equities and investment fund assets in the
consolidated statement of financial position at 31\u00a0December
2025 was $170.8\u00a0million (2024: $210.2\u00a0million). This includes
a\u00a0$60.7 million (2024: $nil) prepayment in relation to a
forward\u00a0contract held by the Group Employee Benefit Trust
to\u00a0purchase a variable number of Hiscox shares. The Group
is\u00a0not exposed to price risk in respect of the forward contract.
A 10% downward correction in equities and investment fund
prices at\u00a031\u00a0December 2025, excluding the forward contract,
would have been expected to reduce Group equity and profit
after tax by approximately $11 million (2024: $18 million).
These may be analysed as follows:
Nature of equity and investment
fund holdings
2025
2024
% weighting
% weighting
Directly held equity securities
9
15
Equity funds
\u2014
34
Hedge funds
91
51
Geographic focus
Specific UK mandates
39
36
Global mandates
61
64
The allocation of price risk is not heavily confined to any one
market index so as to reduce the Group\u2019s exposure to
individual sensitivities. We make allocations to diversifying and
less volatile strategies, such as absolute return strategies, so
as to balance our desire to maximise returns with the need
to\u00a0ensure capital is available to support our underwriting
throughout any downturn in financial markets.
(c) Interest rate risk
Debt and fixed income investments represent a significant
proportion of the Group\u2019s assets and the Board continually
monitors investment strategy to minimise the risk of a fall in the
portfolio\u2019s market value which could affect the amount of
business that the Group is able to underwrite or its ability to
settle claims as they fall due. The fair value of the Group\u2019s
investment portfolio of debt and fixed income holdings and
some private credit funds is normally inversely correlated to
movements in market interest rates. If market interest rates
rise, the fair value of the Group\u2019s debt and fixed income
investments and private credit funds with underlying fixed-rate
debt would tend to fall and vice versa if credit spreads
remained constant. Debt and fixed income assets are
predominantly invested in high-quality corporate,
government\u00a0and asset-backed bonds. The investments
typically have relatively short durations. The portfolio
is\u00a0managed to minimise\u00a0the impact of interest rate risk on
anticipated Group cash flows. The Group may also, from
time\u00a0to time, enter into interest rate future contracts in order
to\u00a0reduce interest rate risk\u00a0on specific portfolios. The fair
value\u00a0of debt and fixed income assets in the\u00a0consolidated
statement of financial position at 31\u00a0December 2025 was
$7,919.3\u00a0million\u00a0(2024:\u00a0$6,660.9\u00a0million). These may be
analysed below as\u00a0follows:
Nature of debt and fixed income
holdings
2025
2024
% weighting
% weighting
Government issued
18
18
Agency and government supported
2
3
Corporate bonds
57
63
Asset-backed securities
9
7
Mortgage-backed instruments
9
7
Lloyd\u2019s deposits and bond funds
5
2
The fair value of private credit funds with exposures to
interest\u00a0rate risk at 31\u00a0December 2025 was $274.4 million
(2024: $148.2 million) of which more than 88% are
floating\u00a0rate.
One method of assessing interest rate sensitivity is through
the\u00a0examination of duration-convexity factors in the
underlying\u00a0portfolio. Duration is the weighted average
length\u00a0of\u00a0time required for an instrument\u2019s cash flow stream
to\u00a0be recovered, where the weightings involved are based
on\u00a0the discounted present values of each cash flow. A
closely\u00a0related\u00a0concept, modified duration, measures the
sensitivity of\u00a0the instrument\u2019s price to a change in its yield
to\u00a0maturity. Convexity measures the sensitivity of modified
duration to changes in the yield to maturity. Using these
three\u00a0concepts, scenario modelling derives the below
estimated impact on instruments\u2019 fair values for a 100
basis\u00a0point change in the term structure of market
interest\u00a0rates.
The Group has used a duration-convexity-based sensitivity
analysis for the debt and fixed income holdings and
private\u00a0credit funds, and recalculated the discounting
impact\u00a0for the\u00a0reinsurance contract assets and insurance
contract liabilities. If\u00a0market interest rates had increased or
decreased\u00a0by 100 basis points at the end of the reporting
period, the Group equity and profit after tax for the year
might\u00a0have been expected to decrease or increase by the
following amounts:
1% increase/decrease in interest rates
31 December 2025
Equity/profit after tax
$m
Reinsurance contract assets
(28)/28
Insurance contract liabilities
88/(88)
Debt and fixed income holdings
(135)/135
Private credit funds
0/0
1% increase/decrease in interest rates
31 December 2024
Equity/profit after tax
$m
Reinsurance contract assets
(32)/32
Insurance contract liabilities
91/(91)
Debt and fixed income holdings
(113)/113
Private credit funds
0/0
The liability for incurred claims, reinsurance assets for
incurred\u00a0claims and certain reinsurance assets for
remaining\u00a0coverage are subject to discounting. Please
refer\u00a0to\u00a0note 2.19(a) for further details regarding the
discount\u00a0rate\u00a0used.
At 31\u00a0December 2025, the Group had long-term borrowings
at\u00a0nominal\u00a0value of $836 million (2024: $658 million),\u00a0which
includes two listed instruments of \u00a3250 million and\u00a0$500
million, as explained in note 14: the first being fixed rate
notes\u00a0maturing in September 2027; the second being
fixed-to-floating rate callable subordinated notes where the
floating rate becomes effective from November 2035. The
Group also has a revolving credit facility of $650 million
(2024:\u00a0$650 million), which is $nil drawn (2024: $nil) and,
therefore, is not presenting interest rate risk. The Group has
no\u00a0other significant borrowings or other assets or liabilities
carrying interest rate risk, other than the facilities and Letters
of\u00a0Credit (LOCs) outlined in note 28.
(f) Currency risk
Currency risk is the risk of loss resulting from fluctuations in exchange rates. The Group operates internationally and therefore
is\u00a0exposed to the financial impact of fluctuations in the exchange rates of various currencies.
The Group\u2019s exposures to foreign exchange risk arise mainly with respect to the US Dollar, Sterling and the Euro. These
exposures may be classified in two main categories:
\u2022 operational foreign exchange exposure arises from the conversion of foreign currency transactions resulting from the
activities of entering into insurance, investment, financing and operational contracts in a currency that is different to each
respective entity\u2019s functional currency; and
\u2022 structural foreign exchange exposure arises from the translation of the Group\u2019s net investment in foreign operations to the
US Dollar, the Group\u2019s presentation currency.
Operational currency risk
Operational foreign exchange risk is principally managed within the Group\u2019s individual insurance carriers by broadly matching
assets and liabilities by currency and liquidity. Due attention is paid to local regulatory solvency and risk-based capital
requirements. All foreign currency derivative transactions with external parties are managed centrally. The Group also
manages\u00a0some exchange risk centrally through matching intragroup loans and balances.
Structural currency risk
The Group\u2019s exposure to structural currency risks mainly relates to Sterling and the Euro net investments in businesses operating
in the UK and Europe. The Group does not ordinarily seek to use derivatives to mitigate the structural risk because:
\u2022 the currency translation gains and losses are accounted for in the currency translation reserve (a component of equity)
and\u00a0do not affect the income statement unless the related foreign operation is disposed of;
\u2022 the currency translation gains and losses have no cash flow.
In periods of significant volatility that are expected to persist for an extended period of time, the Group may elect to utilise
derivatives to mitigate or reduce the risk in order to preserve capital.
The currency profile of the Group\u2019s assets and liabilities is as follows:
Year ended 31 December 2025
US Dollar
Sterling
Euro
Other
2025
$m
$m
$m
$m
$m
Goodwill and intangible assets
157.7
110.5
112.8
\u2014
381.0
Financial assets carried at fair value
6,165.8
1,106.6
966.2
193.4
8,432.0
Cash and cash equivalents
514.1
193.3
129.0
41.6
878.0
Reinsurance contract assets
1,540.5
144.1
137.8
2.4
1,824.8
Other assets
472.6
136.9
58.0
5.9
673.4
Total assets
8,850.7
1,691.4
1,403.8
243.3
12,189.2
Insurance contract liabilities
4,855.9
860.0
1,049.1
112.5
6,877.5
Other liabilities
674.5
618.3
66.4
4.6
1,363.8
Total liabilities
5,530.4
1,478.3
1,115.5
117.1
8,241.3
Total equity
3,320.3
213.1
288.3
126.2
3,947.9
Year ended 31 December 2024
US Dollar
Sterling
Euro
Other
2024
$m
$m
$m
$m
$m
Goodwill and intangible assets
115.3
112.1
81.4
\u2014
308.8
Financial assets carried at fair value
5,269.7
932.9
710.0
165.0
7,077.6
Cash and cash equivalents
747.3
316.1
120.8
42.8
1,227.0
Reinsurance contract assets
1,668.6
158.4
139.3
10.5
1,976.8
Other assets
381.4
170.0
50.8
48.4
650.6
Total assets
8,182.3
1,689.5
1,102.3
266.7
11,240.8
Insurance contract liabilities
4,679.5
762.7
865.7
88.4
6,396.3
Other liabilities
101.6
940.0
60.7
52.3
1,154.6
Total liabilities
4,781.1
1,702.7
926.4
140.7
7,550.9
Total equity
3,401.2
(13.2)
175.9
126.0
3,689.9
Sensitivity analysis
As at 31\u00a0December 2025, the Group used closing rates of exchange of $1: \u00a30.74 and $1: \u20ac0.85 (2024: of $1: \u00a30.80 and
$1:\u00a0\u20ac0.97). The Group performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling.
This analysis assumes that all other variables, in particular interest rates, remain constant and that the underlying valuation of
assets and liabilities in their base currency is unchanged. The estimated sensitivities below take account of the retranslation
movements of foreign currency monetary assets and liabilities in Group entities and, for the effect on equity, the impact on the
retranslation of entities with non-US Dollar functional currencies. The methodology includes inter-company balances that are
eliminated on consolidation, but still expose the Group to foreign currency risk.
During the year, the Group transacted in a number of over-the-counter forward currency derivative contracts. The contracts
remaining at 31\u00a0December 2025 had a negligible impact on the sensitivity analysis. In 2024, the impact of such contracts
increased the sensitivity of equity after tax and reduced the sensitivity of profit after tax.
As at 31 December
December 2025
effect on equity
after tax
December 2025
effect on profit
after tax
December 2024
effect on equity
after tax
December 2024
effect on profit
after tax
$m
$m
$m
$m
Strengthening of Sterling
33.5
(2.9)
48.6
1.5
Weakening of Sterling
(33.5)
2.9
(51.4)
(4.3)
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-452": { "value": "
The fair value of equities and investment fund assets in the
consolidated statement of financial position at 31\u00a0December
2025 was $170.8\u00a0million (2024: $210.2\u00a0million). This includes
a\u00a0$60.7 million (2024: $nil) prepayment in relation to a
forward\u00a0contract held by the Group Employee Benefit Trust
to\u00a0purchase a variable number of Hiscox shares. The Group
is\u00a0not exposed to price risk in respect of the forward contract.
A 10% downward correction in equities and investment fund
prices at\u00a031\u00a0December 2025, excluding the forward contract,
would have been expected to reduce Group equity and profit
after tax by approximately $11 million (2024: $18 million).
These may be analysed as follows:
Nature of equity and investment
fund holdings
2025
2024
% weighting
% weighting
Directly held equity securities
9
15
Equity funds
\u2014
34
Hedge funds
91
51
Geographic focus
Specific UK mandates
39
36
Global mandates
61
64
The allocation of price risk is not heavily confined to any one
market index so as to reduce the Group\u2019s exposure to
individual sensitivities. We make allocations to diversifying and
less volatile strategies, such as absolute return strategies, so
as to balance our desire to maximise returns with the need
to\u00a0ensure capital is available to support our underwriting
throughout any downturn in financial markets.
The Group has used a duration-convexity-based sensitivity
analysis for the debt and fixed income holdings and
private\u00a0credit funds, and recalculated the discounting
impact\u00a0for the\u00a0reinsurance contract assets and insurance
contract liabilities. If\u00a0market interest rates had increased or
decreased\u00a0by 100 basis points at the end of the reporting
period, the Group equity and profit after tax for the year
might\u00a0have been expected to decrease or increase by the
following amounts:
1% increase/decrease in interest rates
31 December 2025
Equity/profit after tax
$m
Reinsurance contract assets
(28)/28
Insurance contract liabilities
88/(88)
Debt and fixed income holdings
(135)/135
Private credit funds
0/0
1% increase/decrease in interest rates
31 December 2024
Equity/profit after tax
$m
Reinsurance contract assets
(32)/32
Insurance contract liabilities
91/(91)
Debt and fixed income holdings
(113)/113
Private credit funds
0/0
Sensitivity analysis
As at 31\u00a0December 2025, the Group used closing rates of exchange of $1: \u00a30.74 and $1: \u20ac0.85 (2024: of $1: \u00a30.80 and
$1:\u00a0\u20ac0.97). The Group performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling.
This analysis assumes that all other variables, in particular interest rates, remain constant and that the underlying valuation of
assets and liabilities in their base currency is unchanged. The estimated sensitivities below take account of the retranslation
movements of foreign currency monetary assets and liabilities in Group entities and, for the effect on equity, the impact on the
retranslation of entities with non-US Dollar functional currencies. The methodology includes inter-company balances that are
eliminated on consolidation, but still expose the Group to foreign currency risk.
During the year, the Group transacted in a number of over-the-counter forward currency derivative contracts. The contracts
remaining at 31\u00a0December 2025 had a negligible impact on the sensitivity analysis. In 2024, the impact of such contracts
increased the sensitivity of equity after tax and reduced the sensitivity of profit after tax.
As at 31 December
December 2025
effect on equity
after tax
December 2025
effect on profit
after tax
December 2024
effect on equity
after tax
December 2024
effect on profit
after tax
$m
$m
$m
$m
Strengthening of Sterling
33.5
(2.9)
48.6
1.5
Weakening of Sterling
(33.5)
2.9
(51.4)
(4.3)
(g) Limitations of sensitivity analysis
The sensitivity information given in notes 3.3 (a) to (f) demonstrates the estimated impact of a change in a major input
assumption, while other assumptions remain unchanged. In reality, there are normally significant levels of correlation between
the\u00a0assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts
should not be interpolated or extrapolated from these results. The same limitations exist in respect to the retirement benefit
scheme sensitivities presented in note 24 to these financial statements. Furthermore, estimates of sensitivity may become less
reliable in unusual market conditions, such as instances when risk-free interest rates fall towards zero.
The sensitivity analysis does not take into consideration that the Group\u2019s assets and liabilities are actively managed. Additionally,
the financial position of the Group may vary at the time that any actual market movement occurs. For example, the Group\u2019s
financial risk management strategy aims to manage the exposure to market fluctuations. As investment markets move past
various trigger levels, management actions could include selling investments, changing the investment portfolio allocation and
taking other protective action.
", "dimensions": { "concept": "ifrs-full:SensitivityAnalysisForEachTypeOfMarketRisk", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-453": { "value": "
Debt and fixed income investments represent a significant
proportion of the Group\u2019s assets and the Board continually
monitors investment strategy to minimise the risk of a fall in the
portfolio\u2019s market value which could affect the amount of
business that the Group is able to underwrite or its ability to
settle claims as they fall due. The fair value of the Group\u2019s
investment portfolio of debt and fixed income holdings and
some private credit funds is normally inversely correlated to
movements in market interest rates. If market interest rates
rise, the fair value of the Group\u2019s debt and fixed income
investments and private credit funds with underlying fixed-rate
debt would tend to fall and vice versa if credit spreads
remained constant. Debt and fixed income assets are
predominantly invested in high-quality corporate,
government\u00a0and asset-backed bonds. The investments
typically have relatively short durations. The portfolio
is\u00a0managed to minimise\u00a0the impact of interest rate risk on
anticipated Group cash flows. The Group may also, from
time\u00a0to time, enter into interest rate future contracts in order
to\u00a0reduce interest rate risk\u00a0on specific portfolios. The fair
value\u00a0of debt and fixed income assets in the\u00a0consolidated
statement of financial position at 31\u00a0December 2025 was
$7,919.3\u00a0million\u00a0(2024:\u00a0$6,660.9\u00a0million). These may be
analysed below as\u00a0follows:
Nature of debt and fixed income
holdings
2025
2024
% weighting
% weighting
Government issued
18
18
Agency and government supported
2
3
Corporate bonds
57
63
Asset-backed securities
9
7
Mortgage-backed instruments
9
7
Lloyd\u2019s deposits and bond funds
5
2
The fair value of private credit funds with exposures to
interest\u00a0rate risk at 31\u00a0December 2025 was $274.4 million
(2024: $148.2 million) of which more than 88% are
floating\u00a0rate.
One method of assessing interest rate sensitivity is through
the\u00a0examination of duration-convexity factors in the
underlying\u00a0portfolio. Duration is the weighted average
length\u00a0of\u00a0time required for an instrument\u2019s cash flow stream
to\u00a0be recovered, where the weightings involved are based
on\u00a0the discounted present values of each cash flow. A
closely\u00a0related\u00a0concept, modified duration, measures the
sensitivity of\u00a0the instrument\u2019s price to a change in its yield
to\u00a0maturity. Convexity measures the sensitivity of modified
duration to changes in the yield to maturity. Using these
three\u00a0concepts, scenario modelling derives the below
estimated impact on instruments\u2019 fair values for a 100
basis\u00a0point change in the term structure of market
interest\u00a0rates.
The Group has used a duration-convexity-based sensitivity
analysis for the debt and fixed income holdings and
private\u00a0credit funds, and recalculated the discounting
impact\u00a0for the\u00a0reinsurance contract assets and insurance
contract liabilities. If\u00a0market interest rates had increased or
decreased\u00a0by 100 basis points at the end of the reporting
period, the Group equity and profit after tax for the year
might\u00a0have been expected to decrease or increase by the
following amounts:
1% increase/decrease in interest rates
31 December 2025
Equity/profit after tax
$m
Reinsurance contract assets
(28)/28
Insurance contract liabilities
88/(88)
Debt and fixed income holdings
(135)/135
Private credit funds
0/0
1% increase/decrease in interest rates
31 December 2024
Equity/profit after tax
$m
Reinsurance contract assets
(32)/32
Insurance contract liabilities
91/(91)
Debt and fixed income holdings
(113)/113
Private credit funds
0/0
The liability for incurred claims, reinsurance assets for
incurred\u00a0claims and certain reinsurance assets for
remaining\u00a0coverage are subject to discounting. Please
refer\u00a0to\u00a0note 2.19(a) for further details regarding the
discount\u00a0rate\u00a0used.
At 31\u00a0December 2025, the Group had long-term borrowings
at\u00a0nominal\u00a0value of $836 million (2024: $658 million),\u00a0which
includes two listed instruments of \u00a3250 million and\u00a0$500
million, as explained in note 14: the first being fixed rate
notes\u00a0maturing in September 2027; the second being
fixed-to-floating rate callable subordinated notes where the
floating rate becomes effective from November 2035. The
Group also has a revolving credit facility of $650 million
(2024:\u00a0$650 million), which is $nil drawn (2024: $nil) and,
therefore, is not presenting interest rate risk. The Group has
no\u00a0other significant borrowings or other assets or liabilities
carrying interest rate risk, other than the facilities and Letters
of\u00a0Credit (LOCs) outlined in note 28.
(d) Credit risk
The Group has exposure to credit risk, which is the risk that
a\u00a0counterparty will suffer a deterioration in actual or perceived
financial strength and be unable to pay amounts in full when
due, or that for any other reason they renege on a contract or
alter the terms of an agreement. The concentrations of credit
risk exposures held by insurers may be expected to be greater
than those associated with other industries, due to the specific
nature of reinsurance markets and the extent of investments
held in financial markets. In both markets, the Group interacts
with a number of counterparties who are engaged in similar
activities with similar customer profiles, and often in the same
geographical areas and industry sectors. Consequently, as
many of these counterparties are themselves exposed to
similar economic characteristics, one single localised or
macroeconomic change could severely disrupt the ability of
a\u00a0significant number of counterparties to meet the Group\u2019s
agreed contractual terms and obligations.
Key areas of exposure to credit risk include:
\u2022 reinsurance asset for incurred claims including amounts
due from reinsurers in respect of claims already paid;
\u2022 amounts due from insurance contract holders; and
\u2022 counterparty risk with respect to investments, derivative
transactions and catastrophe bonds.
The Group\u2019s maximum exposure to credit risk is represented
by the carrying values of financial assets and reinsurance
assets included in the consolidated statement of financial
position at any given point in time. The Group does not use
credit derivatives or other products to mitigate maximum credit
risk exposures on reinsurance assets, but collateral may be
requested to be held against these assets. The Group
structures the levels of credit risk accepted by placing limits
on\u00a0its exposure to a single counterparty, or groups of
counterparties, and having regard to geographical locations.
Such risks are subject to an annual or more frequent review.
There is no significant concentration of credit risk with respect
to trade and other receivables, as the Group has a large
number of internationally dispersed debtors with unrelated
operations. Reinsurance is used to contain insurance risk. This
does not, however, discharge the Group\u2019s liability as primary
insurer. If a reinsurer fails to pay a claim for any reason, the
Group remains liable for the payment to the policyholder. The
creditworthiness of reinsurers is therefore continually reviewed
throughout the year.
The Group Reinsurance Credit Committee (RCC) assesses
the\u00a0creditworthiness of all reinsurers by reviewing credit
grades\u00a0provided by rating agencies and other publicly
available\u00a0financial information detailing their financial strength
and performance, as well as detailed analysis from the Group\u2019s
analysis team. The financial analysis of reinsurers produces an
assessment categorised by factors including their S&P rating
(or equivalent when not available from S&P).
Despite the rigorous nature of this assessment exercise, and
the resultant restricted range of reinsurance counterparties
with\u00a0acceptable strength and credit credentials that emerges
therefrom, some degree of credit risk concentration
remains\u00a0inevitable.
While the rating agencies provide strong analysis on the financials and governance of a reinsurance security, the RCC also takes
account of qualitative factors. The RCC considers the reputation of its reinsurance partners and also receives details of recent
payment history and the status of any ongoing negotiations between Group companies and these third parties. The final score
that a security receives will determine how much reinsurance credit risk Hiscox is willing to have with\u00a0that security based on the
exposure guidelines.
This information is used to update the reinsurance purchasing\u00a0strategy.
Individual operating units maintain records of the payment history for significant brokers and contract holders with whom they
conduct regular business. The exposure to individual counterparties is also managed by other mechanisms, such as the right of
offset, where counterparties are both debtors and creditors of the Group, and obtaining collateral from unrated counterparties.
Management information reports detailed provisions for impairment on trade and other receivables and subsequent write-off.
Exposures to individual intermediaries and groups of intermediaries are collected within the ongoing monitoring of the controls
associated with regulatory solvency.
The Group also mitigates counterparty credit risk by focusing debt and fixed income investments in a portfolio of typically
high-quality corporate and government bonds.
Derivative contracts may be traded on an exchange or over the counter. Many over-the-counter transactions are contracted and
documented under International Swaps and Derivatives Association Master Agreements or their equivalent, which are designed
to provide legally enforceable set-off in the event of default, reducing the Group's exposure to credit risk.
An analysis of the Group\u2019s major exposures to counterparty credit risk, excluding derivative assets, trade and other receivables,
and equities and units in unit trusts, based on S&P or equivalent rating, is presented below:
As at 31 December 2025
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
1,414.6
2,277.5
2,134.3
1,759.7
333.2
7,919.3
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
274.4
274.4
Reinsurance contract assets
20
416.7
879.6
524.5
\u2013
4.0
1,824.8
Total
1,831.3
3,157.1
2,658.8
1,759.7
611.6
10,018.5
As at 31 December 2024
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
885.9
1,775.8
1,969.2
1,689.9
340.1
6,660.9
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
148.2
148.2
Reinsurance contract assets
20
370.0
1,118.6
480.7
\u2013
7.5
1,976.8
Total
1,255.9
2,894.4
2,449.9
1,689.9
495.8
8,785.9
Within the debt and fixed income holdings, which include debt securities, deposits with credit institutions and cash equivalent
assets, there are exposures to a range of government borrowers, on either a direct or guaranteed basis, and banking institutions.
The Group, together with its investment managers, closely manages its geographical exposures across government issued and
supported debt.
The largest aggregated counterparty exposure related to debt and fixed income holdings at 31\u00a0December 2025 of $972 million
is\u00a0to the US Treasury (2024: $776 million).
Within private credit fund holdings, which include commingled vehicles which hold mainly loans, there are exposures to a range
of\u00a0corporate borrowers. The Group manages its exposure to individual funds and, together with the investment managers of the
funds, closely manages the sector and geographical exposures within the funds.
The Group is exposed to concentrations of risk with individual reinsurers due to the nature of the reinsurance market and the
restricted range of reinsurers that have acceptable credit ratings. The largest counterparty exposure included in reinsurance
assets at 31\u00a0December 2025 is to Munich Reinsurance Company (2024: Munich Reinsurance Company). The recoverable
amount from Munich Reinsurance Company represents 27% (2024: Munich Reinsurance Company 23%) of this category
of\u00a0assets.
For the current period and prior period, the Group did not experience any material defaults on debt securities. The Group\u2019s
AAA-rated reinsurance contract assets include fully collateralised positions at 31\u00a0December 2025 and 2024.
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-454": { "value": "
(d) Credit risk
The Group has exposure to credit risk, which is the risk that
a\u00a0counterparty will suffer a deterioration in actual or perceived
financial strength and be unable to pay amounts in full when
due, or that for any other reason they renege on a contract or
alter the terms of an agreement. The concentrations of credit
risk exposures held by insurers may be expected to be greater
than those associated with other industries, due to the specific
nature of reinsurance markets and the extent of investments
held in financial markets. In both markets, the Group interacts
with a number of counterparties who are engaged in similar
activities with similar customer profiles, and often in the same
geographical areas and industry sectors. Consequently, as
many of these counterparties are themselves exposed to
similar economic characteristics, one single localised or
macroeconomic change could severely disrupt the ability of
a\u00a0significant number of counterparties to meet the Group\u2019s
agreed contractual terms and obligations.
Key areas of exposure to credit risk include:
\u2022 reinsurance asset for incurred claims including amounts
due from reinsurers in respect of claims already paid;
\u2022 amounts due from insurance contract holders; and
\u2022 counterparty risk with respect to investments, derivative
transactions and catastrophe bonds.
The Group\u2019s maximum exposure to credit risk is represented
by the carrying values of financial assets and reinsurance
assets included in the consolidated statement of financial
position at any given point in time. The Group does not use
credit derivatives or other products to mitigate maximum credit
risk exposures on reinsurance assets, but collateral may be
requested to be held against these assets. The Group
structures the levels of credit risk accepted by placing limits
on\u00a0its exposure to a single counterparty, or groups of
counterparties, and having regard to geographical locations.
Such risks are subject to an annual or more frequent review.
There is no significant concentration of credit risk with respect
to trade and other receivables, as the Group has a large
number of internationally dispersed debtors with unrelated
operations. Reinsurance is used to contain insurance risk. This
does not, however, discharge the Group\u2019s liability as primary
insurer. If a reinsurer fails to pay a claim for any reason, the
Group remains liable for the payment to the policyholder. The
creditworthiness of reinsurers is therefore continually reviewed
throughout the year.
The Group Reinsurance Credit Committee (RCC) assesses
the\u00a0creditworthiness of all reinsurers by reviewing credit
grades\u00a0provided by rating agencies and other publicly
available\u00a0financial information detailing their financial strength
and performance, as well as detailed analysis from the Group\u2019s
analysis team. The financial analysis of reinsurers produces an
assessment categorised by factors including their S&P rating
(or equivalent when not available from S&P).
Despite the rigorous nature of this assessment exercise, and
the resultant restricted range of reinsurance counterparties
with\u00a0acceptable strength and credit credentials that emerges
therefrom, some degree of credit risk concentration
remains\u00a0inevitable.
While the rating agencies provide strong analysis on the financials and governance of a reinsurance security, the RCC also takes
account of qualitative factors. The RCC considers the reputation of its reinsurance partners and also receives details of recent
payment history and the status of any ongoing negotiations between Group companies and these third parties. The final score
that a security receives will determine how much reinsurance credit risk Hiscox is willing to have with\u00a0that security based on the
exposure guidelines.
This information is used to update the reinsurance purchasing\u00a0strategy.
Individual operating units maintain records of the payment history for significant brokers and contract holders with whom they
conduct regular business. The exposure to individual counterparties is also managed by other mechanisms, such as the right of
offset, where counterparties are both debtors and creditors of the Group, and obtaining collateral from unrated counterparties.
Management information reports detailed provisions for impairment on trade and other receivables and subsequent write-off.
Exposures to individual intermediaries and groups of intermediaries are collected within the ongoing monitoring of the controls
associated with regulatory solvency.
The Group also mitigates counterparty credit risk by focusing debt and fixed income investments in a portfolio of typically
high-quality corporate and government bonds.
Derivative contracts may be traded on an exchange or over the counter. Many over-the-counter transactions are contracted and
documented under International Swaps and Derivatives Association Master Agreements or their equivalent, which are designed
to provide legally enforceable set-off in the event of default, reducing the Group's exposure to credit risk.
An analysis of the Group\u2019s major exposures to counterparty credit risk, excluding derivative assets, trade and other receivables,
and equities and units in unit trusts, based on S&P or equivalent rating, is presented below:
As at 31 December 2025
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
1,414.6
2,277.5
2,134.3
1,759.7
333.2
7,919.3
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
274.4
274.4
Reinsurance contract assets
20
416.7
879.6
524.5
\u2013
4.0
1,824.8
Total
1,831.3
3,157.1
2,658.8
1,759.7
611.6
10,018.5
As at 31 December 2024
AAA
AA
A
BBB
Other/non-rated
Total
Note
$m
$m
$m
$m
$m
$m
Debt and fixed income holdings
14
885.9
1,775.8
1,969.2
1,689.9
340.1
6,660.9
Private credit funds
14
\u2013
\u2013
\u2013
\u2013
148.2
148.2
Reinsurance contract assets
20
370.0
1,118.6
480.7
\u2013
7.5
1,976.8
Total
1,255.9
2,894.4
2,449.9
1,689.9
495.8
8,785.9
Within the debt and fixed income holdings, which include debt securities, deposits with credit institutions and cash equivalent
assets, there are exposures to a range of government borrowers, on either a direct or guaranteed basis, and banking institutions.
The Group, together with its investment managers, closely manages its geographical exposures across government issued and
supported debt.
The largest aggregated counterparty exposure related to debt and fixed income holdings at 31\u00a0December 2025 of $972 million
is\u00a0to the US Treasury (2024: $776 million).
Within private credit fund holdings, which include commingled vehicles which hold mainly loans, there are exposures to a range
of\u00a0corporate borrowers. The Group manages its exposure to individual funds and, together with the investment managers of the
funds, closely manages the sector and geographical exposures within the funds.
The Group is exposed to concentrations of risk with individual reinsurers due to the nature of the reinsurance market and the
restricted range of reinsurers that have acceptable credit ratings. The largest counterparty exposure included in reinsurance
assets at 31\u00a0December 2025 is to Munich Reinsurance Company (2024: Munich Reinsurance Company). The recoverable
amount from Munich Reinsurance Company represents 27% (2024: Munich Reinsurance Company 23%) of this category
of\u00a0assets.
For the current period and prior period, the Group did not experience any material defaults on debt securities. The Group\u2019s
AAA-rated reinsurance contract assets include fully collateralised positions at 31\u00a0December 2025 and 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-455": { "value": "
(e) Liquidity risk
The Group is exposed to daily calls on its available cash resources, mainly from claims arising from insurance and reinsurance
contracts. Liquidity risk is the risk of being unable to meet customer or other third-party payment obligations from available
resources as they fall due. This could result in higher than expected costs in selling assets or raising money quickly to meet our
obligations. The Board sets limits on the minimum level of cash and maturing funds available to meet such calls and on the
minimum level of borrowing facilities that should be in place to cover unexpected levels of claims and other cash demands.
A significant proportion of the Group\u2019s investments is in highly liquid assets which could be converted to cash in a prompt fashion
and at minimal expense. The Group\u2019s exposure to equities is concentrated on shares and funds that are traded on internationally
recognised stock exchanges.
The main focus of the investment portfolio is on high-quality, short-duration debt and fixed income securities and cash. There are
no significant holdings of investments with specific repricing dates. Notwithstanding the regular interest receipts and also the
Group\u2019s ability to liquidate these securities and the majority of its other financial instrument assets for cash in a prompt and
reasonable manner, the contractual maturity profile of the fair value of these securities at 31 December is as follows.
As at 31 December 2025
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Debt and fixed
income holdings
14
1,038.6
1,056.4
1,556.4
1,319.3
1,067.2
1,881.4
7,919.3
Cash and cash equivalents
18
878.0
\u2013
\u2013
\u2013
\u2013
\u2013
878.0
Total
1,916.6
1,056.4
1,556.4
1,319.3
1,067.2
1,881.4
8,797.3
As at 31 December 2024
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Debt and fixed
income holdings
14
1,392.3
1,336.0
1,185.7
926.5
836.9
983.5
6,660.9
Cash and cash equivalents
18
1,227.0
\u2013
\u2013
\u2013
\u2013
\u2013
1,227.0
Total
2,619.3
1,336.0
1,185.7
926.5
836.9
983.5
7,887.9
The Group\u2019s equities, equity funds, hedge funds and other non-dated instruments have no contractual maturity terms but
predominantly could be liquidated in an orderly manner for cash in a prompt and reasonable time frame within one year of the
end of the reporting period. The Group's private credit funds are not readily realisable and the principal will be returned over the
life of the underlying assets which have a typical contractual maturity of five to seven years.
The available headroom of working capital is monitored through the use of a detailed Group cash flow forecast which is reviewed
by management monthly, or more frequently as required.
Average contractual maturity analysed by denominational currency of investments as at 31 December
2025
2024
In years
In years
US Dollar
6.67
5.58
Sterling
3.07
2.48
Euro
3.11
2.92
Canadian Dollar
2.68
2.65
The following is an analysis by liability type of the estimated timing of net cash flows based on the liability for incurred claims.
The\u00a0estimated phasing of settlement is based on current estimates and historical trends and the actual timing of future
settlement\u00a0cash flows may differ materially from the disclosure below.
Liquidity requirements to settle estimated profile of net undiscounted liability for incurred claims on statement of financial position:
As at 31 December 2025
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Total
20
1,839.7
1,160.5
696.3
434.6
261.7
404.9
4,797.7
As at 31 December 2024
Within
one year
Between one
and two years
Between two
and three years
Between three
and four years
Between four
and five years
Over
five years
Total
Note
$m
$m
$m
$m
$m
$m
$m
Total
20
1,813.4
1,043.2
586.5
322.4
197.0
344.8
4,307.3
Details of the payment profile of the Group\u2019s borrowings, derivative instruments and other liabilities are given in notes 14,
16\u00a0and\u00a021.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-456": { "value": "
(f) Currency risk
Currency risk is the risk of loss resulting from fluctuations in exchange rates. The Group operates internationally and therefore
is\u00a0exposed to the financial impact of fluctuations in the exchange rates of various currencies.
The Group\u2019s exposures to foreign exchange risk arise mainly with respect to the US Dollar, Sterling and the Euro. These
exposures may be classified in two main categories:
\u2022 operational foreign exchange exposure arises from the conversion of foreign currency transactions resulting from the
activities of entering into insurance, investment, financing and operational contracts in a currency that is different to each
respective entity\u2019s functional currency; and
\u2022 structural foreign exchange exposure arises from the translation of the Group\u2019s net investment in foreign operations to the
US Dollar, the Group\u2019s presentation currency.
Operational currency risk
Operational foreign exchange risk is principally managed within the Group\u2019s individual insurance carriers by broadly matching
assets and liabilities by currency and liquidity. Due attention is paid to local regulatory solvency and risk-based capital
requirements. All foreign currency derivative transactions with external parties are managed centrally. The Group also
manages\u00a0some exchange risk centrally through matching intragroup loans and balances.
Structural currency risk
The Group\u2019s exposure to structural currency risks mainly relates to Sterling and the Euro net investments in businesses operating
in the UK and Europe. The Group does not ordinarily seek to use derivatives to mitigate the structural risk because:
\u2022 the currency translation gains and losses are accounted for in the currency translation reserve (a component of equity)
and\u00a0do not affect the income statement unless the related foreign operation is disposed of;
\u2022 the currency translation gains and losses have no cash flow.
In periods of significant volatility that are expected to persist for an extended period of time, the Group may elect to utilise
derivatives to mitigate or reduce the risk in order to preserve capital.
The currency profile of the Group\u2019s assets and liabilities is as follows:
Year ended 31 December 2025
US Dollar
Sterling
Euro
Other
2025
$m
$m
$m
$m
$m
Goodwill and intangible assets
157.7
110.5
112.8
\u2014
381.0
Financial assets carried at fair value
6,165.8
1,106.6
966.2
193.4
8,432.0
Cash and cash equivalents
514.1
193.3
129.0
41.6
878.0
Reinsurance contract assets
1,540.5
144.1
137.8
2.4
1,824.8
Other assets
472.6
136.9
58.0
5.9
673.4
Total assets
8,850.7
1,691.4
1,403.8
243.3
12,189.2
Insurance contract liabilities
4,855.9
860.0
1,049.1
112.5
6,877.5
Other liabilities
674.5
618.3
66.4
4.6
1,363.8
Total liabilities
5,530.4
1,478.3
1,115.5
117.1
8,241.3
Total equity
3,320.3
213.1
288.3
126.2
3,947.9
Year ended 31 December 2024
US Dollar
Sterling
Euro
Other
2024
$m
$m
$m
$m
$m
Goodwill and intangible assets
115.3
112.1
81.4
\u2014
308.8
Financial assets carried at fair value
5,269.7
932.9
710.0
165.0
7,077.6
Cash and cash equivalents
747.3
316.1
120.8
42.8
1,227.0
Reinsurance contract assets
1,668.6
158.4
139.3
10.5
1,976.8
Other assets
381.4
170.0
50.8
48.4
650.6
Total assets
8,182.3
1,689.5
1,102.3
266.7
11,240.8
Insurance contract liabilities
4,679.5
762.7
865.7
88.4
6,396.3
Other liabilities
101.6
940.0
60.7
52.3
1,154.6
Total liabilities
4,781.1
1,702.7
926.4
140.7
7,550.9
Total equity
3,401.2
(13.2)
175.9
126.0
3,689.9
Sensitivity analysis
As at 31\u00a0December 2025, the Group used closing rates of exchange of $1: \u00a30.74 and $1: \u20ac0.85 (2024: of $1: \u00a30.80 and
$1:\u00a0\u20ac0.97). The Group performs sensitivity analysis based on a 10% strengthening or weakening of the US Dollar against Sterling.
This analysis assumes that all other variables, in particular interest rates, remain constant and that the underlying valuation of
assets and liabilities in their base currency is unchanged. The estimated sensitivities below take account of the retranslation
movements of foreign currency monetary assets and liabilities in Group entities and, for the effect on equity, the impact on the
retranslation of entities with non-US Dollar functional currencies. The methodology includes inter-company balances that are
eliminated on consolidation, but still expose the Group to foreign currency risk.
During the year, the Group transacted in a number of over-the-counter forward currency derivative contracts. The contracts
remaining at 31\u00a0December 2025 had a negligible impact on the sensitivity analysis. In 2024, the impact of such contracts
increased the sensitivity of equity after tax and reduced the sensitivity of profit after tax.
As at 31 December
December 2025
effect on equity
after tax
December 2025
effect on profit
after tax
December 2024
effect on equity
after tax
December 2024
effect on profit
after tax
$m
$m
$m
$m
Strengthening of Sterling
33.5
(2.9)
48.6
1.5
Weakening of Sterling
(33.5)
2.9
(51.4)
(4.3)
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-457": { "value": "
3.4 Capital risk management
The Group\u2019s primary objectives when managing its capital position are:
\u2022 to safeguard its ability to continue as a going concern, so that it can continue to provide long-term growth and progressive
dividend returns for shareholders;
\u2022 to provide an adequate return to the Group\u2019s shareholders by pricing its insurance products and services commensurately
with the level of risk;
\u2022 to maintain an efficient cost of capital;
\u2022 to comply with all regulatory requirements by an appropriate margin;
\u2022 to maintain financial strength ratings of A in each of its insurance entities; and
\u2022 to settle policyholders\u2019 claims as they arise.
The Group sets the amount of capital required in its funding structure in proportion to risk. The Group then manages the
capital\u00a0structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying\u00a0assets. In order to obtain or maintain an optimal capital structure, the Group may adjust the amount of dividends
paid\u00a0to shareholders, return capital to shareholders, issue new shares, assume debt, or sell assets to reduce debt.
The Group measures its capital requirements against its available capital. Available capital is defined by the Group as the total
of\u00a0net tangible asset value and subordinated debt.
The subordinated debt issued by the Group is hybrid in nature, which means it counts towards regulatory and rating agency
capital requirements.
At 31\u00a0December 2025, the available capital was $4,066.9 million (2024: $3,725.6 million), comprising net tangible asset value
of\u00a0$3,566.9 million\u00a0(2024: $3,381.1 million) and subordinated debt of $500.0 million (2024: $344.5 million).
The Board ensures that the use and allocation of capital are given a primary focus in all significant operational actions. With that
in\u00a0mind, the Group has developed and embedded capital modelling tools within its business. These join together short-term and
long-term business plans and link divisional aspirations with the Group\u2019s overall strategy.
The model provides the basis of the allocation of capital to different business lines, as well as the regulatory and rating agency
capital processes.
Gearing
The Group currently utilises gearing as an additional source of funds to maximise the opportunities from strong markets and to
reduce the risk profile of the business in weaker markets, particularly with respect to the more volatile business. The Group\u2019s
gearing is obtained from a number of sources, including:
\u2022 Letter of Credit (LOC) and revolving credit facility \u2013 the Group\u2019s main facility may be drawn in cash up to $650 million
(2024:\u00a0$650 million) under a revolving credit facility and utilised as LOC up to $266 million (2024: $266 million). The facility
was renewed during 2024, enabling the Group to utilise the LOC as Funds at Lloyd\u2019s to support underwriting on the 2024,
2025 and 2026 years of account. The revolving credit facility is available until the end of 2026. As at 31\u00a0December 2025,
$266 million\u00a0was utilised by way of LOC to support the Funds at\u00a0Lloyd\u2019s requirement and the revolving credit facility was
undrawn (2024: $266 million and the revolving credit facility was\u00a0undrawn);
\u2022 in 2020, the Group sourced an additional $65 million of funding in the form of a Funds at Lloyd\u2019s facility. Under this facility
assets are pledged with the Corporation of Lloyd\u2019s on the Group\u2019s behalf, providing regulatory Tier 1 capital. As at
31\u00a0December 2025 and 2024 the facility was fully drawn;
\u2022 $500 million of fixed-to-floating rate callable subordinated notes due 2036 with a first call date of 2035 raised in June 2025.
The debt is rated BBB- by S&P;
\u2022 \u00a3250 million of fixed rate senior notes raised in September 2022 and maturing in September 2027. The debt is rated BBB+
by S&P;
\u2022 external Names \u2013 27.4% (2024: 27.4%) of Syndicate 33\u2019s capacity is capitalised by third parties, who also pay a profit share
of approximately 20%;
\u2022 Syndicate 6104 at Lloyd\u2019s \u2013 with a capacity of \u00a3100.7 million for the 2026 year of account (2025 year of account:
\u00a378.5 million \u2013 in 2024, this was \u00a356.4 million). This Syndicate is wholly backed by external members and takes pure
year\u00a0of\u00a0account quota share of Syndicate 33\u2019s applicable excess of loss property catastrophe reinsurance, marine,
terrorism\u00a0and\u00a0cyber accounts;
\u2022 gearing quota shares \u2013 historically the Group has used reinsurance capital to fund its capital requirement for short-term
expansions in the volume of business underwritten by the Syndicate and Hiscox Insurance Company (Bermuda)
Limited;\u00a0and
\u2022 qualifying quota shares and legacy portfolio transactions \u2013 these are reinsurance arrangements that allow the Group to
increase the amount of premium it writes.
The Group\u2019s LOC and revolving credit facility and Funds at Lloyd's facility include financial covenants that are standard in such
arrangements, including certain metrics relating to the Group's financial position. These are monitored on a regular basis, at least
quarterly, but more frequently where necessary.
Financial strength
The financial strength ratings of the Group\u2019s significant insurance company subsidiaries are outlined below:
A.M. Best
S&P
Hiscox Insurance Company Limited
A (Excellent)
A (Strong)
Hiscox Insurance Company (Bermuda) Limited
A (Excellent)
A (Strong)
Hiscox Insurance Company (Guernsey) Limited
A (Excellent)
\u2013
Hiscox Insurance Company Inc.
A (Excellent)
\u2013
Hiscox Soci\u00e9t\u00e9 Anonyme
\u2013
A (Strong)
Syndicate 33 has an A.M. Best rating of A+ (Superior). It also benefits from Lloyd\u2019s own ratings of A+ (Superior) from A.M. Best,
AA- (Very Strong) from S&P, AA- (Very Strong) from Fitch and AA- (Very Strong) from Kroll Bond Rating Agency.
Capital performance
The Group\u2019s main capital performance measure is the achieved return on equity (ROE). This marker aligns the aspirations of
employees and shareholders. As variable remuneration relates directly to ROE and it is used as a key performance indicator
within the business planning process, this concept is embedded in the workings and culture of the Group. The Group seeks
to\u00a0maintain its cost of capital levels and its debt to overall equity ratios in line with others in the non-life insurance industry.
Capital modelling and regulation
The capital requirements of an insurance group are determined by its exposure to risk and the solvency criteria established by
management and statutory regulations.
The Group\u2019s capital requirements are managed both centrally and at a regulated entity level. The assessed capital requirement
for\u00a0the business placed through Hiscox Insurance Company Limited, Hiscox Insurance Company (Bermuda) Limited, Hiscox
Insurance Company (Guernsey) Limited, Hiscox Insurance Company Inc. and Hiscox Soci\u00e9t\u00e9 Anonyme is driven by the level of
resources necessary to maintain regulatory requirements.
The Group\u2019s regulatory capital is supervised by the Bermuda Monetary Authority (BMA). The Group had sufficient capital at all
times throughout the year to meet the BMA\u2019s requirements. Hiscox Insurance Company Limited and Hiscox Soci\u00e9t\u00e9 Anonyme
use the standard formula to calculate their regulatory capital requirements under the Solvency UK regime and Solvency II regime
respectively. Their risk profiles are sufficiently well represented by the standard formula not to warrant going through the internal
model approval process. Hiscox\u2019s Lloyd\u2019s operations use the internal model that has been built to meet the requirements of the
Solvency UK regime. The model is concentrated specifically on the particular product lines, market conditions and risk appetite
of\u00a0each risk carrier.
For Syndicate 33 and Syndicate 3624, internal model results are uplifted by Lloyd\u2019s to the level of capital required to support its
ratings. Capital models are used more widely across the Group to monitor exposure to key risk types, inform decision-making
and measure ROE across different segments of the business.
The Group is required to publish a financial condition report, as part of its regulatory filing with the BMA. This is a public
document and sets out the financial performance and solvency position of the Group in accordance with the economic balance
sheet return filed with the BMA. It is intended to provide the public with certain information to be able to make informed
assessments about the Group. In the Group\u2019s other geographical territories, including the USA, its subsidiaries underwriting
insurance business are required to operate within broadly similar risk-based externally imposed capital requirements when
accepting business.
During the year the Group was in compliance with capital requirements imposed by regulators in each jurisdiction where the
Group operates.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-458": { "value": "
The Group measures its capital requirements against its available capital. Available capital is defined by the Group as the total
of\u00a0net tangible asset value and subordinated debt.
The subordinated debt issued by the Group is hybrid in nature, which means it counts towards regulatory and rating agency
capital requirements.
At 31\u00a0December 2025, the available capital was $4,066.9 million (2024: $3,725.6 million), comprising net tangible asset value
of\u00a0$3,566.9 million\u00a0(2024: $3,381.1 million) and subordinated debt of $500.0 million (2024: $344.5 million).
The Board ensures that the use and allocation of capital are given a primary focus in all significant operational actions. With that
in\u00a0mind, the Group has developed and embedded capital modelling tools within its business. These join together short-term and
long-term business plans and link divisional aspirations with the Group\u2019s overall strategy.
The model provides the basis of the allocation of capital to different business lines, as well as the regulatory and rating agency
capital processes.
Gearing
The Group currently utilises gearing as an additional source of funds to maximise the opportunities from strong markets and to
reduce the risk profile of the business in weaker markets, particularly with respect to the more volatile business. The Group\u2019s
gearing is obtained from a number of sources, including:
\u2022 Letter of Credit (LOC) and revolving credit facility \u2013 the Group\u2019s main facility may be drawn in cash up to $650 million
(2024:\u00a0$650 million) under a revolving credit facility and utilised as LOC up to $266 million (2024: $266 million). The facility
was renewed during 2024, enabling the Group to utilise the LOC as Funds at Lloyd\u2019s to support underwriting on the 2024,
2025 and 2026 years of account. The revolving credit facility is available until the end of 2026. As at 31\u00a0December 2025,
$266 million\u00a0was utilised by way of LOC to support the Funds at\u00a0Lloyd\u2019s requirement and the revolving credit facility was
undrawn (2024: $266 million and the revolving credit facility was\u00a0undrawn);
\u2022 in 2020, the Group sourced an additional $65 million of funding in the form of a Funds at Lloyd\u2019s facility. Under this facility
assets are pledged with the Corporation of Lloyd\u2019s on the Group\u2019s behalf, providing regulatory Tier 1 capital. As at
31\u00a0December 2025 and 2024 the facility was fully drawn;
\u2022 $500 million of fixed-to-floating rate callable subordinated notes due 2036 with a first call date of 2035 raised in June 2025.
The debt is rated BBB- by S&P;
\u2022 \u00a3250 million of fixed rate senior notes raised in September 2022 and maturing in September 2027. The debt is rated BBB+
by S&P;
\u2022 external Names \u2013 27.4% (2024: 27.4%) of Syndicate 33\u2019s capacity is capitalised by third parties, who also pay a profit share
of approximately 20%;
\u2022 Syndicate 6104 at Lloyd\u2019s \u2013 with a capacity of \u00a3100.7 million for the 2026 year of account (2025 year of account:
\u00a378.5 million \u2013 in 2024, this was \u00a356.4 million). This Syndicate is wholly backed by external members and takes pure
year\u00a0of\u00a0account quota share of Syndicate 33\u2019s applicable excess of loss property catastrophe reinsurance, marine,
terrorism\u00a0and\u00a0cyber accounts;
\u2022 gearing quota shares \u2013 historically the Group has used reinsurance capital to fund its capital requirement for short-term
expansions in the volume of business underwritten by the Syndicate and Hiscox Insurance Company (Bermuda)
Limited;\u00a0and
\u2022 qualifying quota shares and legacy portfolio transactions \u2013 these are reinsurance arrangements that allow the Group to
increase the amount of premium it writes.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-459": { "value": "
4 Operating segments
The Group\u2019s operating segment reporting follows the organisational structure and management\u2019s internal reporting systems,
which form the basis for assessing the financial reporting performance of, and allocation of resources to, each business segment.
The Group\u2019s four primary business segments are identified as follows:
\u2022 Hiscox Retail brings together the results of the Group\u2019s retail business divisions in the UK, Europe and the USA. Hiscox UK
and Hiscox Europe underwrite personal and commercial lines of business through Hiscox Insurance Company Limited,
Hiscox Soci\u00e9t\u00e9 Anonyme, Syndicate 33 and Syndicate 3624. Hiscox USA comprises commercial, property and specialty
business written by Hiscox Insurance Company Inc., Syndicate 33 and Syndicate 3624;
\u2022 Hiscox London Market comprises the internationally traded insurance business written by the Group\u2019s London-based
underwriters via Syndicate 33, including lines in property, marine and energy, casualty and other specialty insurance lines;
\u2022 Hiscox Re comprises the Group's reinsurance business and third-party capital platform. The reinsurance business
comprises the reinsurance contracts written by Hiscox Insurance Company (Bermuda) Limited (HIB), including the open
market placed reinsurance arrangements with other Hiscox Group entities, and the reinsurance contracts written by
Syndicate 33. The third-party capital platform comprises the results of Hiscox Capital Partners which offers third-party
capital providers access to our underwriting expertise and risk selection through both insurance-linked securities (ILS) and
quota-share partnerships;
\u2022 Other segment comprises other income and costs that are not directly attributable to the Group's principal operating
segments, including finance costs and administrative costs associated with Group management activities and intragroup
borrowings, foreign exchange gains and losses, as well as consolidation adjustments to eliminate the results relating to
open market placed intragroup reinsurance arrangements.
In July 2025, the Group completed the sale of Direct Asia Singapore. The remaining Asia business which is classified as a
disposal group is no longer considered part of the core Hiscox Retail segment and is now disclosed within the 'other' segment.
The comparative period has been restated to present on a consistent basis. The fine art business previously reported in London
Market is now reported within the Retail segment. Additionally, following an increase in the level of HIB's participation in the
business placed by Hiscox Retail and Hiscox London Market in the open market, the results of Hiscox Retail, Hiscox London
Market and Hiscox Re now include the results of such open market placed intragroup reinsurance arrangements, with the related
consolidation adjustments being presented within the 'other' segment.
All amounts reported on the following pages in respect of these segments represent transactions with external parties, as well as
various open market placed intragroup reinsurance arrangements, which they enter into in the normal course of business. The
related results of these transactions are\u00a0eliminated on consolidation, and the consolidation adjustments are included within the
'other' segment. This is consistent with the information used by the chief operating decision-maker when evaluating the results of
the Group. Performance is measured based on each reportable segment\u2019s profit or loss before tax and combined ratio.
(a) Profit before tax by segment
Year ended 31 December 2025
Hiscox
Retail\u2020
Hiscox
London
Market\u2020
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,581.2
1,191.3
1,087.5
23.7
4,883.7
Insurance service expenses
(2,157.5)
(828.8)
(695.5)
(22.7)
(3,704.5)
Incurred claims and changes to liabilities for incurred claims
(979.7)
(444.3)
(472.4)
(11.6)
(1,908.0)
Amortisation of insurance acquisition cash flows*
(744.3)
(260.5)
(135.5)
(5.1)
(1,145.4)
Other attributable expenses*
(429.4)
(124.0)
(87.6)
(6.0)
(647.0)
Losses on onerous contracts and reversals
(4.1)
\u2013
\u2013
\u2013
(4.1)
Insurance service result before reinsurance contracts held
423.7
362.5
392.0
1.0
1,179.2
Allocation of reinsurance premiums
(260.8)
(379.3)
(600.9)
4.5
(1,236.5)
Amounts recoverable from reinsurers for incurred claims
104.5
177.1
398.3
(8.7)
671.2
Net expense from reinsurance contracts held
(156.3)
(202.2)
(202.6)
(4.2)
(565.3)
Insurance service result
267.4
160.3
189.4
(3.2)
613.9
Investment result
241.2
116.7
84.2
0.6
442.7
Net finance expense from insurance contracts
(113.2)
(78.9)
(45.8)
(0.7)
(238.6)
Net finance income from reinsurance contracts
13.6
30.9
28.9
0.2
73.6
Net insurance finance expense
(99.6)
(48.0)
(16.9)
(0.5)
(165.0)
Net financial result
141.6
68.7
67.3
0.1
277.7
Other income
16.6
29.5
49.9
3.6
99.6
Other operational expenses*
(71.8)
(22.7)
(18.8)
(85.4)
(198.7)
Net foreign exchange gains
\u2013
\u2013
\u2013
7.1
7.1
Other finance costs
(1.8)
(0.5)
(1.1)
(63.4)
(66.8)
Share of profits of associates
0.1
\u2013
\u2013
(0.2)
(0.1)
Profit/(loss) before tax
352.1
235.3
286.7
(141.4)
732.7
Ratio analysis
Claims ratio (%)
39.5
36.1
20.0
36.3
Acquisition cost ratio (%)
31.2
30.6
26.3
30.3
Administrative expense ratio (%)
18.0
14.5
17.0
17.1
Combined ratio (%)
88.7
81.2
63.3
83.7
*Total marketing expenditure for the year was $109.2\u00a0million (2024: $101.1\u00a0million).
\u2020The fine art business previously reported in Hiscox London Market is now reported within the Hiscox Retail segment.
The claims ratio is calculated as incurred claims and losses on onerous contracts net of reinsurance recoveries, as a proportion of
insurance revenue net of allocation of reinsurance premiums. The acquisition cost ratio is calculated as amortisation of insurance
acquisition cash flows, as a proportion of insurance revenue net of allocation of reinsurance premiums. The administrative
expense ratio is calculated as other attributable expenses, as a proportion of insurance revenue net of allocation of reinsurance
premiums. The combined ratio is the total of the claims, acquisition cost and administrative expense ratios. All ratios are on an
own share basis, which reflects the Group\u2019s share in Syndicate 33, and includes a reclassification of LPT premium from allocation
of reinsurance premium into amounts recoverable from reinsurers as detailed below.
Non-attributable expenses and other costs allocated to the 'other' segment are not included within the combined ratio.
Consolidation adjustments for open market placed intragroup reinsurance arrangements are included within the Group's
combined\u00a0ratio.
As noted above, the claims ratio, acquisition cost, administrative expense ratio and combined ratio include a reclassification of
LPT premium from allocation of reinsurance premiums into amounts recoverable from reinsurers for incurred claims. The
subsequent impacts of LPTs within reinsurance expenses and reinsurance income are analysed on a net basis within the net
claims to provide a view of the underlying development on these contracts, against the corresponding development of the gross
reserves, consistent with the focus on net performance when assessing underwriting performance. The impact on profit is
neutral, however this reclassification for the ratios removes any volatility on a year-on-year comparison.
Year ended 31 December 2025
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,581.2
1,191.3
1,087.5
23.7
4,883.7
Allocation of reinsurance premiums
(260.8)
(379.3)
(600.9)
4.5
(1,236.5)
LPT premium
62.6
40.4
29.3
\u2013
132.3
Allocation of reinsurance premiums after reclassifying LPT
premium
(198.2)
(338.9)
(571.6)
4.5
(1,104.2)
Adjusted net insurance revenue
2,383.0
852.4
515.9
28.2
3,779.5
Incurred claims and changes to liabilities for incurred claims
(979.7)
(444.3)
(472.4)
(11.6)
(1,908.0)
Amounts recoverable from reinsurers for incurred claims
104.5
177.1
398.3
(8.7)
671.2
LPT premium
(62.6)
(40.4)
(29.3)
\u2013
(132.3)
Amounts recoverable from reinsurers for incurred claims after
reclassifying LPT premium
41.9
136.7
369.0
(8.7)
538.9
Adjusted net incurred claims
(937.8)
(307.6)
(103.4)
(20.3)
(1,369.1)
Remove benefit from discounting of claims
(91.3)
(40.6)
(21.0)
(0.7)
(153.6)
Undiscounted adjusted net incurred claims
(1,029.1)
(348.2)
(124.4)
(21.0)
(1,522.7)
The following ratios reflect the reclassification of LPT premium and remove the impact of discounting.
Ratio analysis (undiscounted)
Claims ratio (%)
43.4
40.8
24.1
40.4
Acquisition cost ratio (%)
31.2
30.6
26.3
30.3
Administrative expense ratio (%)
18.0
14.5
17.0
17.1
Combined ratio (%)
92.6
85.9
67.4
87.8
The impact on profit before tax of a 1% change in each component of the segmental combined ratios is shown in the following
table. Any further ratio change is linear in nature.
Year ended 31 December 2025
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
$m
$m
$m
1% change in claims or expense ratio
23.8
8.5
5.2
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,381.5
1,201.4
1,028.2
61.4
4,672.5
Insurance service expenses
(2,006.7)
(1,004.2)
(245.1)
(75.0)
(3,331.0)
Incurred claims and changes to liabilities for incurred claims
(918.1)
(619.5)
(37.8)
(42.5)
(1,617.9)
Amortisation of insurance acquisition cash flows
(674.5)
(262.5)
(124.5)
(14.1)
(1,075.6)
Other attributable expenses
(401.8)
(122.2)
(82.8)
(18.4)
(625.2)
Losses on onerous contracts and reversals
(12.3)
\u2013
\u2013
\u2013
(12.3)
Insurance service result before reinsurance contracts held
374.8
197.2
783.1
(13.6)
1,341.5
Allocation of reinsurance premiums
(249.8)
(364.9)
(585.3)
(9.4)
(1,209.4)
Amounts recoverable from reinsurers for incurred claims
136.1
309.0
(32.1)
8.4
421.4
Net expense from reinsurance contracts held
(113.7)
(55.9)
(617.4)
(1.0)
(788.0)
Insurance service result
261.1
141.3
165.7
(14.6)
553.5
Investment result
199.3
113.3
70.5
0.8
383.9
Net finance expense from insurance contracts
(115.5)
(66.1)
(43.0)
(0.9)
(225.5)
Net finance income from reinsurance contracts
18.2
25.2
29.8
0.2
73.4
Net insurance finance expense
(97.3)
(40.9)
(13.2)
(0.7)
(152.1)
Net financial result
102.0
72.4
57.3
0.1
231.8
Other income
18.0
26.3
64.6
4.6
113.5
Other operational expenses
(62.9)
(24.7)
(18.5)
(43.3)
(149.4)
Net foreign exchange losses
\u2013
\u2013
\u2013
(11.2)
(11.2)
Other finance costs
(1.0)
(0.3)
(1.6)
(50.2)
(53.1)
Share of profits of associates
\u2013
\u2013
\u2013
0.3
0.3
Profit/(loss) before tax
317.2
215.0
267.5
(114.3)
685.4
Ratio analysis
Claims ratio (%)
38.9
40.1
22.8
37.4
Acquisition cost ratio (%)
30.8
29.9
25.8
29.9
Administrative expense ratio (%)
18.4
13.9
17.1
17.4
Combined ratio (%)
88.1
83.9
65.7
84.7
The impact of the reclassification of LPT premium is shown in the following table.
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,381.5
1,201.4
1,028.2
61.4
4,672.5
Allocation of reinsurance premiums
(249.8)
(364.9)
(585.3)
(9.4)
(1,209.4)
LPT premium
57.5
41.6
40.1
\u2013
139.2
Allocation of reinsurance premiums after reclassifying
LPT\u00a0premium
(192.3)
(323.3)
(545.2)
(9.4)
(1,070.2)
Adjusted net insurance revenue
2,189.2
878.1
483.0
52.0
3,602.3
Incurred claims and changes to liabilities for incurred claims
(918.1)
(619.5)
(37.8)
(42.5)
(1,617.9)
Amounts recoverable from reinsurers for incurred claims
136.1
309.0
(32.1)
8.4
421.4
LPT premium
(57.5)
(41.6)
(40.1)
\u2013
(139.2)
Amounts recoverable from reinsurers for incurred claims after
reclassifying LPT premium
78.6
267.4
(72.2)
8.4
282.2
Adjusted net incurred claims
(839.5)
(352.1)
(110.0)
(34.1)
(1,335.7)
Remove benefit from discounting of claims
(104.6)
(41.1)
(15.9)
(0.3)
(161.9)
Undiscounted adjusted net incurred claims
(944.1)
(393.2)
(125.9)
(34.4)
(1,497.6)
Ratio analysis (undiscounted)
Claims ratio (%)
43.7
44.8
26.1
41.9
Acquisition cost ratio (%)
30.8
29.9
25.8
29.9
Administrative expense ratio (%)
18.4
13.9
17.1
17.4
Combined ratio (%)
92.9
88.6
69.0
89.2
The impact on profit before tax of a 1% change in each component of the segmental combined ratios is shown in the following
table. Any further ratio change is linear in nature.
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
$m
$m
$m
1% change in claims or expense ratio
21.9
8.8
4.8
(b) Geographical information
The Group\u2019s operational segments underwrite business domestically in Bermuda and from locations in the UK, USA, Guernsey,
France, Germany, Belgium, The Netherlands, Spain, Portugal and Ireland.
The following table provides an analysis of the Group\u2019s insurance revenue earned, by material geographical location from
external\u00a0parties:
Year to 31 December 2025
Year to 31 December 2024
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
UK
875.9
61.7
40.7
\u2013
978.3
778.9
86.5
41.3
\u2013
906.7
Europe
717.7
103.9
76.3
\u2013
897.9
643.5
89.2
77.1
\u2013
809.8
USA
968.9
744.9
653.5
1.7
2,369.0
936.9
738.8
598.5
\u2013
2,274.2
Rest of world
18.7
280.8
317.0
22.0
638.5
22.2
286.9
311.3
61.4
681.8
2,581.2
1,191.3
1,087.5
23.7
4,883.7
2,381.5
1,201.4
1,028.2
61.4
4,672.5
The following table provides an analysis of the Group\u2019s non-current assets by material geographical location excluding financial
instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts:
Non-current assets
2025 total
2024 total
$m
$m
UK
219.6
234.9
Europe
135.9
104.8
USA
133.8
94.2
Rest of world
0.7
1.3
490.0
435.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-460": { "value": "
The Group\u2019s operating segment reporting follows the organisational structure and management\u2019s internal reporting systems,
which form the basis for assessing the financial reporting performance of, and allocation of resources to, each business segment.
The Group\u2019s four primary business segments are identified as follows:
\u2022 Hiscox Retail brings together the results of the Group\u2019s retail business divisions in the UK, Europe and the USA. Hiscox UK
and Hiscox Europe underwrite personal and commercial lines of business through Hiscox Insurance Company Limited,
Hiscox Soci\u00e9t\u00e9 Anonyme, Syndicate 33 and Syndicate 3624. Hiscox USA comprises commercial, property and specialty
business written by Hiscox Insurance Company Inc., Syndicate 33 and Syndicate 3624;
\u2022 Hiscox London Market comprises the internationally traded insurance business written by the Group\u2019s London-based
underwriters via Syndicate 33, including lines in property, marine and energy, casualty and other specialty insurance lines;
\u2022 Hiscox Re comprises the Group's reinsurance business and third-party capital platform. The reinsurance business
comprises the reinsurance contracts written by Hiscox Insurance Company (Bermuda) Limited (HIB), including the open
market placed reinsurance arrangements with other Hiscox Group entities, and the reinsurance contracts written by
Syndicate 33. The third-party capital platform comprises the results of Hiscox Capital Partners which offers third-party
capital providers access to our underwriting expertise and risk selection through both insurance-linked securities (ILS) and
quota-share partnerships;
\u2022 Other segment comprises other income and costs that are not directly attributable to the Group's principal operating
segments, including finance costs and administrative costs associated with Group management activities and intragroup
borrowings, foreign exchange gains and losses, as well as consolidation adjustments to eliminate the results relating to
open market placed intragroup reinsurance arrangements.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-461": { "value": "
In July 2025, the Group completed the sale of Direct Asia Singapore. The remaining Asia business which is classified as a
disposal group is no longer considered part of the core Hiscox Retail segment and is now disclosed within the 'other' segment.
The comparative period has been restated to present on a consistent basis. The fine art business previously reported in London
Market is now reported within the Retail segment. Additionally, following an increase in the level of HIB's participation in the
business placed by Hiscox Retail and Hiscox London Market in the open market, the results of Hiscox Retail, Hiscox London
Market and Hiscox Re now include the results of such open market placed intragroup reinsurance arrangements, with the related
consolidation adjustments being presented within the 'other' segment.
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,381.5
1,201.4
1,028.2
61.4
4,672.5
Insurance service expenses
(2,006.7)
(1,004.2)
(245.1)
(75.0)
(3,331.0)
Incurred claims and changes to liabilities for incurred claims
(918.1)
(619.5)
(37.8)
(42.5)
(1,617.9)
Amortisation of insurance acquisition cash flows
(674.5)
(262.5)
(124.5)
(14.1)
(1,075.6)
Other attributable expenses
(401.8)
(122.2)
(82.8)
(18.4)
(625.2)
Losses on onerous contracts and reversals
(12.3)
\u2013
\u2013
\u2013
(12.3)
Insurance service result before reinsurance contracts held
374.8
197.2
783.1
(13.6)
1,341.5
Allocation of reinsurance premiums
(249.8)
(364.9)
(585.3)
(9.4)
(1,209.4)
Amounts recoverable from reinsurers for incurred claims
136.1
309.0
(32.1)
8.4
421.4
Net expense from reinsurance contracts held
(113.7)
(55.9)
(617.4)
(1.0)
(788.0)
Insurance service result
261.1
141.3
165.7
(14.6)
553.5
Investment result
199.3
113.3
70.5
0.8
383.9
Net finance expense from insurance contracts
(115.5)
(66.1)
(43.0)
(0.9)
(225.5)
Net finance income from reinsurance contracts
18.2
25.2
29.8
0.2
73.4
Net insurance finance expense
(97.3)
(40.9)
(13.2)
(0.7)
(152.1)
Net financial result
102.0
72.4
57.3
0.1
231.8
Other income
18.0
26.3
64.6
4.6
113.5
Other operational expenses
(62.9)
(24.7)
(18.5)
(43.3)
(149.4)
Net foreign exchange losses
\u2013
\u2013
\u2013
(11.2)
(11.2)
Other finance costs
(1.0)
(0.3)
(1.6)
(50.2)
(53.1)
Share of profits of associates
\u2013
\u2013
\u2013
0.3
0.3
Profit/(loss) before tax
317.2
215.0
267.5
(114.3)
685.4
Ratio analysis
Claims ratio (%)
38.9
40.1
22.8
37.4
Acquisition cost ratio (%)
30.8
29.9
25.8
29.9
Administrative expense ratio (%)
18.4
13.9
17.1
17.4
Combined ratio (%)
88.1
83.9
65.7
84.7
The impact of the reclassification of LPT premium is shown in the following table.
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
Insurance revenue
2,381.5
1,201.4
1,028.2
61.4
4,672.5
Allocation of reinsurance premiums
(249.8)
(364.9)
(585.3)
(9.4)
(1,209.4)
LPT premium
57.5
41.6
40.1
\u2013
139.2
Allocation of reinsurance premiums after reclassifying
LPT\u00a0premium
(192.3)
(323.3)
(545.2)
(9.4)
(1,070.2)
Adjusted net insurance revenue
2,189.2
878.1
483.0
52.0
3,602.3
Incurred claims and changes to liabilities for incurred claims
(918.1)
(619.5)
(37.8)
(42.5)
(1,617.9)
Amounts recoverable from reinsurers for incurred claims
136.1
309.0
(32.1)
8.4
421.4
LPT premium
(57.5)
(41.6)
(40.1)
\u2013
(139.2)
Amounts recoverable from reinsurers for incurred claims after
reclassifying LPT premium
78.6
267.4
(72.2)
8.4
282.2
Adjusted net incurred claims
(839.5)
(352.1)
(110.0)
(34.1)
(1,335.7)
Remove benefit from discounting of claims
(104.6)
(41.1)
(15.9)
(0.3)
(161.9)
Undiscounted adjusted net incurred claims
(944.1)
(393.2)
(125.9)
(34.4)
(1,497.6)
Ratio analysis (undiscounted)
Claims ratio (%)
43.7
44.8
26.1
41.9
Acquisition cost ratio (%)
30.8
29.9
25.8
29.9
Administrative expense ratio (%)
18.4
13.9
17.1
17.4
Combined ratio (%)
92.9
88.6
69.0
89.2
The impact on profit before tax of a 1% change in each component of the segmental combined ratios is shown in the following
table. Any further ratio change is linear in nature.
Year ended 31 December 2024 (restated)
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
$m
$m
$m
1% change in claims or expense ratio
21.9
8.8
4.8
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Fees payable to the Group\u2019s external auditor, PwC, its member firms and its associates (exclusive of VAT) include the following
amounts recorded in the consolidated income statement:
Group
2025
2024
(restated)*
$m
$m
Amounts receivable by the auditors and its associates in respect of:
The auditing of the accounts of the Group and its subsidiaries
5.2
5.4
All audit-related assurance services
1.0
0.7
All other non-audit services
\u2013
\u2013
6.2
6.1
*The 2024 comparative balance has been restated to include fees of $0.5 million relating to Direct Asia.
discount rate \u2013 a discount factor, based on a pre-tax weighted average cost of capital (WACC) for the Group, of 10.6%
(2024 (restated): 10.3%), has been applied to the cash flow projections to determine the net present value.
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-462": { "value": "
(b) Geographical information
The Group\u2019s operational segments underwrite business domestically in Bermuda and from locations in the UK, USA, Guernsey,
France, Germany, Belgium, The Netherlands, Spain, Portugal and Ireland.
The following table provides an analysis of the Group\u2019s insurance revenue earned, by material geographical location from
external\u00a0parties:
Year to 31 December 2025
Year to 31 December 2024
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
UK
875.9
61.7
40.7
\u2013
978.3
778.9
86.5
41.3
\u2013
906.7
Europe
717.7
103.9
76.3
\u2013
897.9
643.5
89.2
77.1
\u2013
809.8
USA
968.9
744.9
653.5
1.7
2,369.0
936.9
738.8
598.5
\u2013
2,274.2
Rest of world
18.7
280.8
317.0
22.0
638.5
22.2
286.9
311.3
61.4
681.8
2,581.2
1,191.3
1,087.5
23.7
4,883.7
2,381.5
1,201.4
1,028.2
61.4
4,672.5
The following table provides an analysis of the Group\u2019s non-current assets by material geographical location excluding financial
instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts:
Non-current assets
2025 total
2024 total
$m
$m
UK
219.6
234.9
Europe
135.9
104.8
USA
133.8
94.2
Rest of world
0.7
1.3
490.0
435.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeographicalAreasExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-463": { "value": "
The following table provides an analysis of the Group\u2019s insurance revenue earned, by material geographical location from
external\u00a0parties:
Year to 31 December 2025
Year to 31 December 2024
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
Hiscox
Retail
Hiscox
London
Market
Hiscox
Re
Other
Total
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
UK
875.9
61.7
40.7
\u2013
978.3
778.9
86.5
41.3
\u2013
906.7
Europe
717.7
103.9
76.3
\u2013
897.9
643.5
89.2
77.1
\u2013
809.8
USA
968.9
744.9
653.5
1.7
2,369.0
936.9
738.8
598.5
\u2013
2,274.2
Rest of world
18.7
280.8
317.0
22.0
638.5
22.2
286.9
311.3
61.4
681.8
2,581.2
1,191.3
1,087.5
23.7
4,883.7
2,381.5
1,201.4
1,028.2
61.4
4,672.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-464": { "value": "
5 Net asset value (NAV) per share and net tangible asset value per share
31 December 2025
31 December 2024
Net asset value
(total equity)
Net asset value
per share
Net asset value
(total equity)
Net asset value
per share
$m
cents
$m
cents
Net asset value
3,947.9
1,220.0
3,689.9
1,086.4
Net tangible asset value
3,566.9
1,102.2
3,381.1
995.5
The NAV per share is based on 323,603,134 shares ( 2024: 339,636,268) , being the shares in issue at 31\u00a0December 2025, less
those held in treasury and those held by the Group Employee Benefit Trust. Net tangible assets comprise total equity excluding
intangible assets.", "dimensions": { "concept": "ifrs-full:DisclosureOfNetAssetValueAttributableToUnitholdersExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-465": { "value": "
6 Return on equity
2025
2024
$m
$m
Profit for the year (all attributable to the owners of the Company)
604.1
627.2
Opening total equity
3,689.9
3,296.7
Adjusted for the time-weighted impact of capital distributions, share buyback and issuance of shares
(160.8)
(136.8)
Adjusted opening total equity
3,529.1
3,159.9
Return on equity (%)
17.1
19.8
The return on equity (ROE) is calculated by using profit or loss for the period divided by the adjusted opening total equity. The
adjusted opening total equity represents the equity on 1\u00a0January of the relevant year as adjusted for time-weighted aspects of
capital distributions, share buyback and issuing of shares or treasury share purchases during the period. The time-weighted
positions are calculated on a daily basis with reference to the proportion of time from the transaction to the end of the period.", "dimensions": { "concept": "hiscoxltd:DisclosureOfReturnOnEquityTextBlock", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-468": { "value": "
7 Net investment and insurance finance result
2025
2024
Note
$m
$m
Investment income including interest receivable
326.1
316.4
Net realised gains/(losses) on financial investments at fair value through profit or loss
69.4
1.5
Net fair value gains on financial investments at fair value through profit or loss
57.1
71.5
Investment return \u2013 financial assets
452.6
389.4
Net fair value (losses)/gains on derivative financial instruments
16
(1.7)
0.4
Investment expenses
(8.2)
(5.9)
Total investment result
442.7
383.9
Net finance (expense)/income from insurance contracts:
Interest accreted
(208.4)
(241.6)
Effects of changes in interest rates and other financial assumptions
(30.2)
16.1
Total net finance (expense)/income from insurance contracts
(238.6)
(225.5)
Net finance income/(expenses) from reinsurance contracts:
Interest accreted
62.3
81.4
Effects of changes in interest rates and other financial assumptions
11.3
(8.0)
Total net finance income/(expenses) from reinsurance contracts
73.6
73.4
Net insurance finance (expense)/income
(165.0)
(152.1)
Net financial result
277.7
231.8
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-467": { "value": "
7 Net investment and insurance finance result
2025
2024
Note
$m
$m
Investment income including interest receivable
326.1
316.4
Net realised gains/(losses) on financial investments at fair value through profit or loss
69.4
1.5
Net fair value gains on financial investments at fair value through profit or loss
57.1
71.5
Investment return \u2013 financial assets
452.6
389.4
Net fair value (losses)/gains on derivative financial instruments
16
(1.7)
0.4
Investment expenses
(8.2)
(5.9)
Total investment result
442.7
383.9
Net finance (expense)/income from insurance contracts:
Interest accreted
(208.4)
(241.6)
Effects of changes in interest rates and other financial assumptions
(30.2)
16.1
Total net finance (expense)/income from insurance contracts
(238.6)
(225.5)
Net finance income/(expenses) from reinsurance contracts:
Interest accreted
62.3
81.4
Effects of changes in interest rates and other financial assumptions
11.3
(8.0)
Total net finance income/(expenses) from reinsurance contracts
73.6
73.4
Net insurance finance (expense)/income
(165.0)
(152.1)
Net financial result
277.7
231.8
", "dimensions": { "concept": "hiscoxltd:DisclosureOfInvestmentIncomeTextBlock", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-466": { "value": "
7 Net investment and insurance finance result
2025
2024
Note
$m
$m
Investment income including interest receivable
326.1
316.4
Net realised gains/(losses) on financial investments at fair value through profit or loss
69.4
1.5
Net fair value gains on financial investments at fair value through profit or loss
57.1
71.5
Investment return \u2013 financial assets
452.6
389.4
Net fair value (losses)/gains on derivative financial instruments
16
(1.7)
0.4
Investment expenses
(8.2)
(5.9)
Total investment result
442.7
383.9
Net finance (expense)/income from insurance contracts:
Interest accreted
(208.4)
(241.6)
Effects of changes in interest rates and other financial assumptions
(30.2)
16.1
Total net finance (expense)/income from insurance contracts
(238.6)
(225.5)
Net finance income/(expenses) from reinsurance contracts:
Interest accreted
62.3
81.4
Effects of changes in interest rates and other financial assumptions
11.3
(8.0)
Total net finance income/(expenses) from reinsurance contracts
73.6
73.4
Net insurance finance (expense)/income
(165.0)
(152.1)
Net financial result
277.7
231.8
9 Other finance costs
2025
2024
Note
$m
$m
Interest charge associated with borrowings
14
50.6
40.7
Other interest expenses
16.2
12.4
Other finance costs
66.8
53.1
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-474": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
11 Goodwill and intangible assets
Goodwill
Syndicate
capacity
State
authorisation
licences
Software and
development
costs
Other
Total
$m
$m
$m
$m
$m
$m
At 1 January 2024
Cost
10.8
33.1
8.5
467.3
23.4
543.1
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(196.1)
(20.5)
(219.2)
Net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Year ended 31 December 2024
Opening net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Additions
\u2013
\u2013
\u2013
33.0
1.0
34.0
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Amortisation charges
\u2013
\u2013
\u2013
(41.6)
(2.2)
(43.8)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.1)
\u2013
\u2013
(5.2)
\u2013
(5.3)
Closing net book amount
8.1
33.1
8.5
257.4
1.7
308.8
At 31 December 2024
Cost
10.7
33.1
8.5
483.7
23.8
559.8
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(226.3)
(22.1)
(251.0)
Net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Year ended 31 December 2025
Opening net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Additions*
41.7
\u2013
\u2013
57.8
2.7
102.2
Disposals
\u2013
\u2013
\u2013
(0.7)
\u2013
(0.7)
Amortisation charges
\u2013
\u2013
\u2013
(46.9)
(1.7)
(48.6)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
0.6
\u2013
\u2013
18.3
0.4
19.3
Closing net book amount
50.4
33.1
8.5
285.9
3.1
381.0
At 31 December 2025
Cost
53.3
33.1
8.5
570.8
19.1
684.8
Accumulated amortisation and impairment
(2.9)
\u2013
\u2013
(284.9)
(16.0)
(303.8)
Net book amount
50.4
33.1
8.5
285.9
3.1
381.0
*Additions to goodwill related to business combinations during the year. Further details are provided in note 25.
Goodwill
Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) identified according to the smallest identifiable unit
to\u00a0which\u00a0cash flows are generated. $7.7 million (2024: $7.3 million) is allocated to the London Market CGU and $42.7\u00a0million
(2024: $0.8\u00a0million) is allocated to the CGUs within the Hiscox Retail business segment. Goodwill is considered to have an
indefinite useful life\u00a0and as such is tested annually for impairment based on the recoverable amount which is considered to be
the\u00a0higher\u00a0of the fair value less cost to sell or value in use. During 2025, there was no impairment charge on goodwill (2024:\u00a0$nil).
Value in use is considered to be the best indication of the recoverable amount for goodwill. Value in use calculations are
performed using the following key assumptions:
\u2022 projected cash flows \u2013 the Group uses projected cash flows based on financial forecasts for a five-year period. Cash flow
projections for the next three years are based on management-approved forecasted profit before tax figures. We assume
a\u00a00% growth rate for cash flow projections beyond the three-year period and terminal value;
\u2022 discount rate \u2013 a discount factor, based on a pre-tax weighted average cost of capital (WACC) for the Group, of 10.6%
(2024 (restated): 10.3%), has been applied to the cash flow projections to determine the net present value.
The outcome of the value in use calculation is measured against the carrying value of the asset and, where the carrying value
is\u00a0in\u00a0excess of the value in use, the asset is written down to this amount.
Impairment assessments
To test the sensitivity of the assessment, management flexed the key assumptions within a reasonably expected range. Within
this range, goodwill and other intangible assets recoveries were stress tested and remain supportable across all cash-generating
units or assets.
Intangible assets
All intangible assets have a finite useful life except for the Syndicate capacity and US state authorisation licences.
(a) Syndicate capacity
The cost of purchasing the Group\u2019s participation in the Lloyd\u2019s insurance syndicates is not amortised, but is tested annually for
impairment and is carried at cost less accumulated impairment losses. Having considered the future prospects of the London
insurance market, the Board believes that the Group\u2019s ownership of Syndicate capacity will provide economic benefits over an
indefinite number of future periods. This assumption is reviewed annually to determine whether the asset continues to have an
indefinite life.
The Group\u2019s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to the active
Lloyd\u2019s corporate member entity. The asset is tested annually for impairment based on its recoverable amount which is
considered to be the higher of the asset\u2019s fair value less costs to sell or its value in use. The value in use is determined using
cash\u00a0flow projections based on business plans approved by management and discounted at the applicable WACC rate.
At\u00a031\u00a0December 2025, the recoverable amount, being the value in use, exceeded the carrying value of Syndicate capacity
recognised on the statement of financial position.
(b) US state authorisation licences
In 2007, the Group acquired insurance authorisation licences for 50 US states as part of a business combination. The licences
are allocated for impairment testing to the Group\u2019s North American underwriting business. The carrying value of this asset is
calculated using a projected cash flow based on business plans approved by management and discounted at the same rate
used for goodwill. The asset is tested annually for impairment based on its value in use, and the results show no impairment.
(c) Software and development costs
The Group capitalises acquired software licences based on the costs incurred. Amortisation is performed through applying the
straight-line method over a period of three to ten years.
Internally developed software is capitalised only if future economic benefits are probable and can be measured reliably.
Amortisation of internally developed computer software begins when the software is available for use and is allocated on
a\u00a0straight-line basis over the expected useful life of the asset.
The useful life of the asset is reviewed annually and, if different from previous estimates, is revised accordingly with the change
being accounted for as a change in accounting estimates in accordance with IAS 8.
The carrying value of software and development costs is reviewed for impairment on an ongoing basis by reference to the stage
and expectation of a project. Additionally, at the end of each reporting period, the Group reviews the positions for any indication
of impairment and as a result of this no impairment was provided in 2025 (2024: $nil).
At 31\u00a0December 2025 there were $30.5 million of assets under development on which amortisation has yet to be charged
(2024:\u00a0$27.6 million).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
(d) Other
Intangible costs related to trademarks, as well as securing customer contractual relationships are recognised as an asset where
they can be identified separately and measured reliably and it is probable that they will be recovered by directly related future
profits. These costs are amortised on a straight-line basis over the useful economic life, which is deemed to be five years for
trademarks and ten years for customer contractual relationships, and are carried at cost less accumulated amortisation and
impairment losses.
At the end of each reporting period, the carrying value arrived at using value in use is tested for impairment. Value in use is
calculated using the same method as described above for goodwill and the same discount rate used. The impairment charge
in\u00a02025 was $nil (2024: $nil) for intangible costs related to securing customer contractual relationships and $nil (2024: $nil)
for\u00a0trademarks.
12 Property, plant and equipment
Land and
buildings
Leasehold
improvements
Furniture,
fittings and
equipment
and art
Right-of-use
assets:
property
and other
Total
$m
$m
$m
$m
$m
Year ended 31 December 2024
Opening net book amount
18.1
0.5
41.5
72.6
132.7
Additions
\u2013
\u2013
5.2
12.4
17.6
Disposals
\u2013
\u2013
(0.1)
(2.4)
(2.5)
Depreciation charge
(1.2)
(0.5)
(4.7)
(12.8)
(19.2)
Impairment
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.3)
0.1
(0.9)
(1.3)
(2.4)
Closing net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
At 31 December 2024
Cost
27.6
12.6
86.1
105.1
231.4
Accumulated depreciation
(11.0)
(12.5)
(45.1)
(36.6)
(105.2)
Net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Less: assets held for sale
\u2013
\u2013
\u2013
(0.6)
(0.6)
Net book amount
16.6
0.1
41.0
67.9
125.6
Year ended 31 December 2025
Opening net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Additions
\u2013
\u2013
1.3
6.5
7.8
Disposals
\u2013
\u2013
(2.8)
(15.1)
(17.9)
Depreciation charge
(1.3)
(0.1)
(4.6)
(11.1)
(17.1)
Foreign exchange movements
1.3
\u2013
3.0
5.3
9.6
Closing net book amount
16.6
\u2013
37.9
54.1
108.6
At 31 December 2025
Cost
29.8
10.7
75.2
105.5
221.2
Accumulated depreciation
(13.2)
(10.7)
(37.3)
(51.4)
(112.6)
Net book amount
16.6
\u2013
37.9
54.1
108.6
The Group\u2019s land and buildings assets relate to freehold property in the UK. There was no impairment charge on these assets
during the year (2024:\u00a0$nil).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
The income from subleasing right-of-use assets amounted to $0.2\u00a0million (2024:\u00a0$0.4\u00a0million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-473": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-472": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-471": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-470": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-469": { "value": "
8 Other income and operational expenses
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-476": { "value": "
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-475": { "value": "
2025
2024
(restated)
$m
$m
Other income\u00a0
99.6
113.5
Staff costs
399.5
386.6
Depreciation, amortisation and impairment
65.8
60.7
Restructuring, integration and other one-off project costs*
32.2
7.3
Other expenses*
348.2
320.0
Operational expenses\u00a0
845.7
774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment management services are rendered to the
ILS\u00a0funds and commissions paid to the Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0 million (2024: $625.2 million) included within
insurance service expense, and non-attributable expenses amounting to $198.7 million (2024: $149.4 million) included within
other operational\u00a0expenses.", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-478": { "value": "
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-477": { "value": "
In July 2025, the Group completed the sale of Direct Asia Insurance (Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte
Ltd. The $3.9 million loss on disposal is included within other expenses. The remaining Asia entities which include Hiscox Asia
Holdings Pte Ltd and Hiscox Asia Management Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses incurred in connection with the Group's restructuring
initiatives, integration of acquired business and other one-off project costs. They include $24.0 million of costs in relation to an
accelerated change programme which commenced in 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-480": { "value": "
9 Other finance costs
2025
2024
Note
$m
$m
Interest charge associated with borrowings
14
50.6
40.7
Other interest expenses
16.2
12.4
Other finance costs
66.8
53.1
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-479": { "value": "
9 Other finance costs
2025
2024
Note
$m
$m
Interest charge associated with borrowings
14
50.6
40.7
Other interest expenses
16.2
12.4
Other finance costs
66.8
53.1
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-481": { "value": "
10 Auditor\u2019s remuneration
Fees payable to the Group\u2019s external auditor, PwC, its member firms and its associates (exclusive of VAT) include the following
amounts recorded in the consolidated income statement:
Group
2025
2024
(restated)*
$m
$m
Amounts receivable by the auditors and its associates in respect of:
The auditing of the accounts of the Group and its subsidiaries
5.2
5.4
All audit-related assurance services
1.0
0.7
All other non-audit services
\u2013
\u2013
6.2
6.1
*The 2024 comparative balance has been restated to include fees of $0.5 million relating to Direct Asia.
The full audit fee payable for the Syndicate 33 and Syndicate 6104 audit has been included above, although an element of this is
borne by the third-party participants in the Syndicate.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-484": { "value": "
11 Goodwill and intangible assets
Goodwill
Syndicate
capacity
State
authorisation
licences
Software and
development
costs
Other
Total
$m
$m
$m
$m
$m
$m
At 1 January 2024
Cost
10.8
33.1
8.5
467.3
23.4
543.1
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(196.1)
(20.5)
(219.2)
Net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Year ended 31 December 2024
Opening net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Additions
\u2013
\u2013
\u2013
33.0
1.0
34.0
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Amortisation charges
\u2013
\u2013
\u2013
(41.6)
(2.2)
(43.8)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.1)
\u2013
\u2013
(5.2)
\u2013
(5.3)
Closing net book amount
8.1
33.1
8.5
257.4
1.7
308.8
At 31 December 2024
Cost
10.7
33.1
8.5
483.7
23.8
559.8
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(226.3)
(22.1)
(251.0)
Net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Year ended 31 December 2025
Opening net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Additions*
41.7
\u2013
\u2013
57.8
2.7
102.2
Disposals
\u2013
\u2013
\u2013
(0.7)
\u2013
(0.7)
Amortisation charges
\u2013
\u2013
\u2013
(46.9)
(1.7)
(48.6)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
0.6
\u2013
\u2013
18.3
0.4
19.3
Closing net book amount
50.4
33.1
8.5
285.9
3.1
381.0
At 31 December 2025
Cost
53.3
33.1
8.5
570.8
19.1
684.8
Accumulated amortisation and impairment
(2.9)
\u2013
\u2013
(284.9)
(16.0)
(303.8)
Net book amount
50.4
33.1
8.5
285.9
3.1
381.0
*Additions to goodwill related to business combinations during the year. Further details are provided in note 25.
Goodwill
Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) identified according to the smallest identifiable unit
to\u00a0which\u00a0cash flows are generated. $7.7 million (2024: $7.3 million) is allocated to the London Market CGU and $42.7\u00a0million
(2024: $0.8\u00a0million) is allocated to the CGUs within the Hiscox Retail business segment. Goodwill is considered to have an
indefinite useful life\u00a0and as such is tested annually for impairment based on the recoverable amount which is considered to be
the\u00a0higher\u00a0of the fair value less cost to sell or value in use. During 2025, there was no impairment charge on goodwill (2024:\u00a0$nil).
Value in use is considered to be the best indication of the recoverable amount for goodwill. Value in use calculations are
performed using the following key assumptions:
\u2022 projected cash flows \u2013 the Group uses projected cash flows based on financial forecasts for a five-year period. Cash flow
projections for the next three years are based on management-approved forecasted profit before tax figures. We assume
a\u00a00% growth rate for cash flow projections beyond the three-year period and terminal value;
\u2022 discount rate \u2013 a discount factor, based on a pre-tax weighted average cost of capital (WACC) for the Group, of 10.6%
(2024 (restated): 10.3%), has been applied to the cash flow projections to determine the net present value.
The outcome of the value in use calculation is measured against the carrying value of the asset and, where the carrying value
is\u00a0in\u00a0excess of the value in use, the asset is written down to this amount.
Impairment assessments
To test the sensitivity of the assessment, management flexed the key assumptions within a reasonably expected range. Within
this range, goodwill and other intangible assets recoveries were stress tested and remain supportable across all cash-generating
units or assets.
Intangible assets
All intangible assets have a finite useful life except for the Syndicate capacity and US state authorisation licences.
(a) Syndicate capacity
The cost of purchasing the Group\u2019s participation in the Lloyd\u2019s insurance syndicates is not amortised, but is tested annually for
impairment and is carried at cost less accumulated impairment losses. Having considered the future prospects of the London
insurance market, the Board believes that the Group\u2019s ownership of Syndicate capacity will provide economic benefits over an
indefinite number of future periods. This assumption is reviewed annually to determine whether the asset continues to have an
indefinite life.
The Group\u2019s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to the active
Lloyd\u2019s corporate member entity. The asset is tested annually for impairment based on its recoverable amount which is
considered to be the higher of the asset\u2019s fair value less costs to sell or its value in use. The value in use is determined using
cash\u00a0flow projections based on business plans approved by management and discounted at the applicable WACC rate.
At\u00a031\u00a0December 2025, the recoverable amount, being the value in use, exceeded the carrying value of Syndicate capacity
recognised on the statement of financial position.
(b) US state authorisation licences
In 2007, the Group acquired insurance authorisation licences for 50 US states as part of a business combination. The licences
are allocated for impairment testing to the Group\u2019s North American underwriting business. The carrying value of this asset is
calculated using a projected cash flow based on business plans approved by management and discounted at the same rate
used for goodwill. The asset is tested annually for impairment based on its value in use, and the results show no impairment.
(c) Software and development costs
The Group capitalises acquired software licences based on the costs incurred. Amortisation is performed through applying the
straight-line method over a period of three to ten years.
Internally developed software is capitalised only if future economic benefits are probable and can be measured reliably.
Amortisation of internally developed computer software begins when the software is available for use and is allocated on
a\u00a0straight-line basis over the expected useful life of the asset.
The useful life of the asset is reviewed annually and, if different from previous estimates, is revised accordingly with the change
being accounted for as a change in accounting estimates in accordance with IAS 8.
The carrying value of software and development costs is reviewed for impairment on an ongoing basis by reference to the stage
and expectation of a project. Additionally, at the end of each reporting period, the Group reviews the positions for any indication
of impairment and as a result of this no impairment was provided in 2025 (2024: $nil).
At 31\u00a0December 2025 there were $30.5 million of assets under development on which amortisation has yet to be charged
(2024:\u00a0$27.6 million).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
(d) Other
Intangible costs related to trademarks, as well as securing customer contractual relationships are recognised as an asset where
they can be identified separately and measured reliably and it is probable that they will be recovered by directly related future
profits. These costs are amortised on a straight-line basis over the useful economic life, which is deemed to be five years for
trademarks and ten years for customer contractual relationships, and are carried at cost less accumulated amortisation and
impairment losses.
At the end of each reporting period, the carrying value arrived at using value in use is tested for impairment. Value in use is
calculated using the same method as described above for goodwill and the same discount rate used. The impairment charge
in\u00a02025 was $nil (2024: $nil) for intangible costs related to securing customer contractual relationships and $nil (2024: $nil)
for\u00a0trademarks.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-483": { "value": "
11 Goodwill and intangible assets
Goodwill
Syndicate
capacity
State
authorisation
licences
Software and
development
costs
Other
Total
$m
$m
$m
$m
$m
$m
At 1 January 2024
Cost
10.8
33.1
8.5
467.3
23.4
543.1
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(196.1)
(20.5)
(219.2)
Net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Year ended 31 December 2024
Opening net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Additions
\u2013
\u2013
\u2013
33.0
1.0
34.0
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Amortisation charges
\u2013
\u2013
\u2013
(41.6)
(2.2)
(43.8)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.1)
\u2013
\u2013
(5.2)
\u2013
(5.3)
Closing net book amount
8.1
33.1
8.5
257.4
1.7
308.8
At 31 December 2024
Cost
10.7
33.1
8.5
483.7
23.8
559.8
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(226.3)
(22.1)
(251.0)
Net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Year ended 31 December 2025
Opening net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Additions*
41.7
\u2013
\u2013
57.8
2.7
102.2
Disposals
\u2013
\u2013
\u2013
(0.7)
\u2013
(0.7)
Amortisation charges
\u2013
\u2013
\u2013
(46.9)
(1.7)
(48.6)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
0.6
\u2013
\u2013
18.3
0.4
19.3
Closing net book amount
50.4
33.1
8.5
285.9
3.1
381.0
At 31 December 2025
Cost
53.3
33.1
8.5
570.8
19.1
684.8
Accumulated amortisation and impairment
(2.9)
\u2013
\u2013
(284.9)
(16.0)
(303.8)
Net book amount
50.4
33.1
8.5
285.9
3.1
381.0
*Additions to goodwill related to business combinations during the year. Further details are provided in note 25.
Goodwill
Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) identified according to the smallest identifiable unit
to\u00a0which\u00a0cash flows are generated. $7.7 million (2024: $7.3 million) is allocated to the London Market CGU and $42.7\u00a0million
(2024: $0.8\u00a0million) is allocated to the CGUs within the Hiscox Retail business segment. Goodwill is considered to have an
indefinite useful life\u00a0and as such is tested annually for impairment based on the recoverable amount which is considered to be
the\u00a0higher\u00a0of the fair value less cost to sell or value in use. During 2025, there was no impairment charge on goodwill (2024:\u00a0$nil).
Value in use is considered to be the best indication of the recoverable amount for goodwill. Value in use calculations are
performed using the following key assumptions:
\u2022 projected cash flows \u2013 the Group uses projected cash flows based on financial forecasts for a five-year period. Cash flow
projections for the next three years are based on management-approved forecasted profit before tax figures. We assume
a\u00a00% growth rate for cash flow projections beyond the three-year period and terminal value;
\u2022 discount rate \u2013 a discount factor, based on a pre-tax weighted average cost of capital (WACC) for the Group, of 10.6%
(2024 (restated): 10.3%), has been applied to the cash flow projections to determine the net present value.
The outcome of the value in use calculation is measured against the carrying value of the asset and, where the carrying value
is\u00a0in\u00a0excess of the value in use, the asset is written down to this amount.
Impairment assessments
To test the sensitivity of the assessment, management flexed the key assumptions within a reasonably expected range. Within
this range, goodwill and other intangible assets recoveries were stress tested and remain supportable across all cash-generating
units or assets.
Intangible assets
All intangible assets have a finite useful life except for the Syndicate capacity and US state authorisation licences.
(a) Syndicate capacity
The cost of purchasing the Group\u2019s participation in the Lloyd\u2019s insurance syndicates is not amortised, but is tested annually for
impairment and is carried at cost less accumulated impairment losses. Having considered the future prospects of the London
insurance market, the Board believes that the Group\u2019s ownership of Syndicate capacity will provide economic benefits over an
indefinite number of future periods. This assumption is reviewed annually to determine whether the asset continues to have an
indefinite life.
The Group\u2019s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to the active
Lloyd\u2019s corporate member entity. The asset is tested annually for impairment based on its recoverable amount which is
considered to be the higher of the asset\u2019s fair value less costs to sell or its value in use. The value in use is determined using
cash\u00a0flow projections based on business plans approved by management and discounted at the applicable WACC rate.
At\u00a031\u00a0December 2025, the recoverable amount, being the value in use, exceeded the carrying value of Syndicate capacity
recognised on the statement of financial position.
(b) US state authorisation licences
In 2007, the Group acquired insurance authorisation licences for 50 US states as part of a business combination. The licences
are allocated for impairment testing to the Group\u2019s North American underwriting business. The carrying value of this asset is
calculated using a projected cash flow based on business plans approved by management and discounted at the same rate
used for goodwill. The asset is tested annually for impairment based on its value in use, and the results show no impairment.
(c) Software and development costs
The Group capitalises acquired software licences based on the costs incurred. Amortisation is performed through applying the
straight-line method over a period of three to ten years.
Internally developed software is capitalised only if future economic benefits are probable and can be measured reliably.
Amortisation of internally developed computer software begins when the software is available for use and is allocated on
a\u00a0straight-line basis over the expected useful life of the asset.
The useful life of the asset is reviewed annually and, if different from previous estimates, is revised accordingly with the change
being accounted for as a change in accounting estimates in accordance with IAS 8.
The carrying value of software and development costs is reviewed for impairment on an ongoing basis by reference to the stage
and expectation of a project. Additionally, at the end of each reporting period, the Group reviews the positions for any indication
of impairment and as a result of this no impairment was provided in 2025 (2024: $nil).
At 31\u00a0December 2025 there were $30.5 million of assets under development on which amortisation has yet to be charged
(2024:\u00a0$27.6 million).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
(d) Other
Intangible costs related to trademarks, as well as securing customer contractual relationships are recognised as an asset where
they can be identified separately and measured reliably and it is probable that they will be recovered by directly related future
profits. These costs are amortised on a straight-line basis over the useful economic life, which is deemed to be five years for
trademarks and ten years for customer contractual relationships, and are carried at cost less accumulated amortisation and
impairment losses.
At the end of each reporting period, the carrying value arrived at using value in use is tested for impairment. Value in use is
calculated using the same method as described above for goodwill and the same discount rate used. The impairment charge
in\u00a02025 was $nil (2024: $nil) for intangible costs related to securing customer contractual relationships and $nil (2024: $nil)
for\u00a0trademarks.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-482": { "value": "
11 Goodwill and intangible assets
Goodwill
Syndicate
capacity
State
authorisation
licences
Software and
development
costs
Other
Total
$m
$m
$m
$m
$m
$m
At 1 January 2024
Cost
10.8
33.1
8.5
467.3
23.4
543.1
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(196.1)
(20.5)
(219.2)
Net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Year ended 31 December 2024
Opening net book amount
8.2
33.1
8.5
271.2
2.9
323.9
Additions
\u2013
\u2013
\u2013
33.0
1.0
34.0
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Amortisation charges
\u2013
\u2013
\u2013
(41.6)
(2.2)
(43.8)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.1)
\u2013
\u2013
(5.2)
\u2013
(5.3)
Closing net book amount
8.1
33.1
8.5
257.4
1.7
308.8
At 31 December 2024
Cost
10.7
33.1
8.5
483.7
23.8
559.8
Accumulated amortisation and impairment
(2.6)
\u2013
\u2013
(226.3)
(22.1)
(251.0)
Net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Year ended 31 December 2025
Opening net book amount
8.1
33.1
8.5
257.4
1.7
308.8
Additions*
41.7
\u2013
\u2013
57.8
2.7
102.2
Disposals
\u2013
\u2013
\u2013
(0.7)
\u2013
(0.7)
Amortisation charges
\u2013
\u2013
\u2013
(46.9)
(1.7)
(48.6)
Impairment charge
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
0.6
\u2013
\u2013
18.3
0.4
19.3
Closing net book amount
50.4
33.1
8.5
285.9
3.1
381.0
At 31 December 2025
Cost
53.3
33.1
8.5
570.8
19.1
684.8
Accumulated amortisation and impairment
(2.9)
\u2013
\u2013
(284.9)
(16.0)
(303.8)
Net book amount
50.4
33.1
8.5
285.9
3.1
381.0
*Additions to goodwill related to business combinations during the year. Further details are provided in note 25.
Goodwill
Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) identified according to the smallest identifiable unit
to\u00a0which\u00a0cash flows are generated. $7.7 million (2024: $7.3 million) is allocated to the London Market CGU and $42.7\u00a0million
(2024: $0.8\u00a0million) is allocated to the CGUs within the Hiscox Retail business segment. Goodwill is considered to have an
indefinite useful life\u00a0and as such is tested annually for impairment based on the recoverable amount which is considered to be
the\u00a0higher\u00a0of the fair value less cost to sell or value in use. During 2025, there was no impairment charge on goodwill (2024:\u00a0$nil).
Value in use is considered to be the best indication of the recoverable amount for goodwill. Value in use calculations are
performed using the following key assumptions:
\u2022 projected cash flows \u2013 the Group uses projected cash flows based on financial forecasts for a five-year period. Cash flow
projections for the next three years are based on management-approved forecasted profit before tax figures. We assume
a\u00a00% growth rate for cash flow projections beyond the three-year period and terminal value;
\u2022 discount rate \u2013 a discount factor, based on a pre-tax weighted average cost of capital (WACC) for the Group, of 10.6%
(2024 (restated): 10.3%), has been applied to the cash flow projections to determine the net present value.
The outcome of the value in use calculation is measured against the carrying value of the asset and, where the carrying value
is\u00a0in\u00a0excess of the value in use, the asset is written down to this amount.
Impairment assessments
To test the sensitivity of the assessment, management flexed the key assumptions within a reasonably expected range. Within
this range, goodwill and other intangible assets recoveries were stress tested and remain supportable across all cash-generating
units or assets.
Intangible assets
All intangible assets have a finite useful life except for the Syndicate capacity and US state authorisation licences.
(a) Syndicate capacity
The cost of purchasing the Group\u2019s participation in the Lloyd\u2019s insurance syndicates is not amortised, but is tested annually for
impairment and is carried at cost less accumulated impairment losses. Having considered the future prospects of the London
insurance market, the Board believes that the Group\u2019s ownership of Syndicate capacity will provide economic benefits over an
indefinite number of future periods. This assumption is reviewed annually to determine whether the asset continues to have an
indefinite life.
The Group\u2019s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to the active
Lloyd\u2019s corporate member entity. The asset is tested annually for impairment based on its recoverable amount which is
considered to be the higher of the asset\u2019s fair value less costs to sell or its value in use. The value in use is determined using
cash\u00a0flow projections based on business plans approved by management and discounted at the applicable WACC rate.
At\u00a031\u00a0December 2025, the recoverable amount, being the value in use, exceeded the carrying value of Syndicate capacity
recognised on the statement of financial position.
(b) US state authorisation licences
In 2007, the Group acquired insurance authorisation licences for 50 US states as part of a business combination. The licences
are allocated for impairment testing to the Group\u2019s North American underwriting business. The carrying value of this asset is
calculated using a projected cash flow based on business plans approved by management and discounted at the same rate
used for goodwill. The asset is tested annually for impairment based on its value in use, and the results show no impairment.
(c) Software and development costs
The Group capitalises acquired software licences based on the costs incurred. Amortisation is performed through applying the
straight-line method over a period of three to ten years.
Internally developed software is capitalised only if future economic benefits are probable and can be measured reliably.
Amortisation of internally developed computer software begins when the software is available for use and is allocated on
a\u00a0straight-line basis over the expected useful life of the asset.
The useful life of the asset is reviewed annually and, if different from previous estimates, is revised accordingly with the change
being accounted for as a change in accounting estimates in accordance with IAS 8.
The carrying value of software and development costs is reviewed for impairment on an ongoing basis by reference to the stage
and expectation of a project. Additionally, at the end of each reporting period, the Group reviews the positions for any indication
of impairment and as a result of this no impairment was provided in 2025 (2024: $nil).
At 31\u00a0December 2025 there were $30.5 million of assets under development on which amortisation has yet to be charged
(2024:\u00a0$27.6 million).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
(d) Other
Intangible costs related to trademarks, as well as securing customer contractual relationships are recognised as an asset where
they can be identified separately and measured reliably and it is probable that they will be recovered by directly related future
profits. These costs are amortised on a straight-line basis over the useful economic life, which is deemed to be five years for
trademarks and ten years for customer contractual relationships, and are carried at cost less accumulated amortisation and
impairment losses.
At the end of each reporting period, the carrying value arrived at using value in use is tested for impairment. Value in use is
calculated using the same method as described above for goodwill and the same discount rate used. The impairment charge
in\u00a02025 was $nil (2024: $nil) for intangible costs related to securing customer contractual relationships and $nil (2024: $nil)
for\u00a0trademarks.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-485": { "value": "
Impairment assessments
To test the sensitivity of the assessment, management flexed the key assumptions within a reasonably expected range. Within
this range, goodwill and other intangible assets recoveries were stress tested and remain supportable across all cash-generating
units or assets.
Intangible assets
All intangible assets have a finite useful life except for the Syndicate capacity and US state authorisation licences.
(a) Syndicate capacity
The cost of purchasing the Group\u2019s participation in the Lloyd\u2019s insurance syndicates is not amortised, but is tested annually for
impairment and is carried at cost less accumulated impairment losses. Having considered the future prospects of the London
insurance market, the Board believes that the Group\u2019s ownership of Syndicate capacity will provide economic benefits over an
indefinite number of future periods. This assumption is reviewed annually to determine whether the asset continues to have an
indefinite life.
The Group\u2019s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to the active
Lloyd\u2019s corporate member entity. The asset is tested annually for impairment based on its recoverable amount which is
considered to be the higher of the asset\u2019s fair value less costs to sell or its value in use. The value in use is determined using
cash\u00a0flow projections based on business plans approved by management and discounted at the applicable WACC rate.
At\u00a031\u00a0December 2025, the recoverable amount, being the value in use, exceeded the carrying value of Syndicate capacity
recognised on the statement of financial position.
(b) US state authorisation licences
In 2007, the Group acquired insurance authorisation licences for 50 US states as part of a business combination. The licences
are allocated for impairment testing to the Group\u2019s North American underwriting business. The carrying value of this asset is
calculated using a projected cash flow based on business plans approved by management and discounted at the same rate
used for goodwill. The asset is tested annually for impairment based on its value in use, and the results show no impairment.
(c) Software and development costs
The Group capitalises acquired software licences based on the costs incurred. Amortisation is performed through applying the
straight-line method over a period of three to ten years.
Internally developed software is capitalised only if future economic benefits are probable and can be measured reliably.
Amortisation of internally developed computer software begins when the software is available for use and is allocated on
a\u00a0straight-line basis over the expected useful life of the asset.
The useful life of the asset is reviewed annually and, if different from previous estimates, is revised accordingly with the change
being accounted for as a change in accounting estimates in accordance with IAS 8.
The carrying value of software and development costs is reviewed for impairment on an ongoing basis by reference to the stage
and expectation of a project. Additionally, at the end of each reporting period, the Group reviews the positions for any indication
of impairment and as a result of this no impairment was provided in 2025 (2024: $nil).
At 31\u00a0December 2025 there were $30.5 million of assets under development on which amortisation has yet to be charged
(2024:\u00a0$27.6 million).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
(d) Other
Intangible costs related to trademarks, as well as securing customer contractual relationships are recognised as an asset where
they can be identified separately and measured reliably and it is probable that they will be recovered by directly related future
profits. These costs are amortised on a straight-line basis over the useful economic life, which is deemed to be five years for
trademarks and ten years for customer contractual relationships, and are carried at cost less accumulated amortisation and
impairment losses.
At the end of each reporting period, the carrying value arrived at using value in use is tested for impairment. Value in use is
calculated using the same method as described above for goodwill and the same discount rate used. The impairment charge
in\u00a02025 was $nil (2024: $nil) for intangible costs related to securing customer contractual relationships and $nil (2024: $nil)
for\u00a0trademarks.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-487": { "value": "
12 Property, plant and equipment
Land and
buildings
Leasehold
improvements
Furniture,
fittings and
equipment
and art
Right-of-use
assets:
property
and other
Total
$m
$m
$m
$m
$m
Year ended 31 December 2024
Opening net book amount
18.1
0.5
41.5
72.6
132.7
Additions
\u2013
\u2013
5.2
12.4
17.6
Disposals
\u2013
\u2013
(0.1)
(2.4)
(2.5)
Depreciation charge
(1.2)
(0.5)
(4.7)
(12.8)
(19.2)
Impairment
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.3)
0.1
(0.9)
(1.3)
(2.4)
Closing net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
At 31 December 2024
Cost
27.6
12.6
86.1
105.1
231.4
Accumulated depreciation
(11.0)
(12.5)
(45.1)
(36.6)
(105.2)
Net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Less: assets held for sale
\u2013
\u2013
\u2013
(0.6)
(0.6)
Net book amount
16.6
0.1
41.0
67.9
125.6
Year ended 31 December 2025
Opening net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Additions
\u2013
\u2013
1.3
6.5
7.8
Disposals
\u2013
\u2013
(2.8)
(15.1)
(17.9)
Depreciation charge
(1.3)
(0.1)
(4.6)
(11.1)
(17.1)
Foreign exchange movements
1.3
\u2013
3.0
5.3
9.6
Closing net book amount
16.6
\u2013
37.9
54.1
108.6
At 31 December 2025
Cost
29.8
10.7
75.2
105.5
221.2
Accumulated depreciation
(13.2)
(10.7)
(37.3)
(51.4)
(112.6)
Net book amount
16.6
\u2013
37.9
54.1
108.6
The Group\u2019s land and buildings assets relate to freehold property in the UK. There was no impairment charge on these assets
during the year (2024:\u00a0$nil).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
The income from subleasing right-of-use assets amounted to $0.2\u00a0million (2024:\u00a0$0.4\u00a0million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfReconciliationOfChangesInPropertyPlantAndEquipmentIncludingRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-486": { "value": "
12 Property, plant and equipment
Land and
buildings
Leasehold
improvements
Furniture,
fittings and
equipment
and art
Right-of-use
assets:
property
and other
Total
$m
$m
$m
$m
$m
Year ended 31 December 2024
Opening net book amount
18.1
0.5
41.5
72.6
132.7
Additions
\u2013
\u2013
5.2
12.4
17.6
Disposals
\u2013
\u2013
(0.1)
(2.4)
(2.5)
Depreciation charge
(1.2)
(0.5)
(4.7)
(12.8)
(19.2)
Impairment
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign exchange movements
(0.3)
0.1
(0.9)
(1.3)
(2.4)
Closing net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
At 31 December 2024
Cost
27.6
12.6
86.1
105.1
231.4
Accumulated depreciation
(11.0)
(12.5)
(45.1)
(36.6)
(105.2)
Net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Less: assets held for sale
\u2013
\u2013
\u2013
(0.6)
(0.6)
Net book amount
16.6
0.1
41.0
67.9
125.6
Year ended 31 December 2025
Opening net book amount, including assets held for sale
16.6
0.1
41.0
68.5
126.2
Additions
\u2013
\u2013
1.3
6.5
7.8
Disposals
\u2013
\u2013
(2.8)
(15.1)
(17.9)
Depreciation charge
(1.3)
(0.1)
(4.6)
(11.1)
(17.1)
Foreign exchange movements
1.3
\u2013
3.0
5.3
9.6
Closing net book amount
16.6
\u2013
37.9
54.1
108.6
At 31 December 2025
Cost
29.8
10.7
75.2
105.5
221.2
Accumulated depreciation
(13.2)
(10.7)
(37.3)
(51.4)
(112.6)
Net book amount
16.6
\u2013
37.9
54.1
108.6
The Group\u2019s land and buildings assets relate to freehold property in the UK. There was no impairment charge on these assets
during the year (2024:\u00a0$nil).
The assets are expected to be recovered or settled more than 12 months after the reporting date and, as such, are considered
to\u00a0be non-current.
The income from subleasing right-of-use assets amounted to $0.2\u00a0million (2024:\u00a0$0.4\u00a0million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-492": { "value": "
13 Subsidiaries, associates and interests in other entities
This note provides details of the Syndicates and Special Purpose Insurers (SPIs) managed by the Group, the acquisition and
disposal of subsidiaries and associates during the year and investments in associates.
(a) Subsidiaries
Hiscox Dedicated Corporate Member Limited (HDCM) underwrites as a corporate member of Lloyd\u2019s on the main Syndicates
managed by Hiscox Syndicates Limited (the main managed Syndicates numbered 33 and 3624).
As at 31\u00a0December 2025, HDCM owned 72.6% of Syndicate 33 ( 2024: 72.6%), and 100% of Syndicate 3624 (2024: 100%).
In\u00a0view of the several but not joint liability of underwriting members at Lloyd\u2019s for the transactions of Syndicates in which they
participate, the Group\u2019s attributable share of the transactions, assets and liabilities of these Syndicates has been included in
the\u00a0financial statements. The Group manages the underwriting of, but does not participate as a member of, Syndicate 6104
at\u00a0Lloyd\u2019s which provides reinsurance to Syndicate 33 on a normal commercial basis. Consequently, aside from the receipt
of\u00a0managing agency fees, defined profit commissions as appropriate and interest arising on effective assets included within
the\u00a0experience account, the Group has no share in the assets, liabilities or transactions of Syndicate 6104. The position and
performance of that Syndicate is therefore not included in the Group\u2019s financial statements.
(b) SPIs
The Kiskadee Diversified Fund and Kiskadee Select Fund were launched in 2014 to offer institutional investors access to
property\u00a0catastrophe reinsurance and insurance-linked strategies. In 2019, the Kiskadee Latitude Fund was introduced, offering
a\u00a0broader mix of insurance and reinsurance risks, with less emphasis on property catastrophe. Subsequently in December 2019,
the Kiskadee Cadence Fund, a segregated account of Kiskadee ILS Fund SAC Ltd, was launched, and aims to achieve attractive
risk-adjusted returns by investing primarily in a worldwide reinsurance and retrocession portfolio.
The Group does not control these Funds, so they are not consolidated.
The Kiskadee Select Plus Fund, launched in January 2021 as a segregated account of Kiskadee ILS Fund SAC Ltd, invests in
a\u00a0global portfolio of property catastrophe and some non-catastrophe reinsurance to deliver strong risk-adjusted returns, that have
a low correlation to broader financial markets. The Group controls this fund so it is consolidated.
All the funds above are managed by Hiscox\u00a0Re Insurance Linked Strategies Limited (formerly known as Kiskadee Investment
Managers Limited), a wholly owned subsidiary of the Group.
As at 31\u00a0December 2025, the Group recognised a financial asset at fair value of $67.0 million (2024: $58.3 million) in relation to
its investment in the unconsolidated funds (note 17). In assessing the maximum exposure to loss from its interest in the funds,
the\u00a0Group has determined it is no greater than the fair value recognised as at the end of the reporting period. The total size of the
unconsolidated funds was $815.2 million at 31\u00a0December 2025 (2024: $694.7 million). In addition to the return on the financial
asset, the Group also receives fee income through Hiscox Re Insurance Linked Strategies Limited and Hiscox Insurance
Company (Bermuda) Limited, both wholly owned subsidiaries, under normal commercial terms.
The Group is exposed to credit risk associated with reinsurance recoveries on risks fronted for the SPIs. Note 3.3(d) discusses
how the Group manages credit risk associated with reinsurance assets. The operations of the funds and SPIs are financed
through the issuance of preference shares to external investors. The Group does not intend to provide any further financial
support to the funds or SPIs.
(c) Investments in associates
Year ended 31 December
2025
2024
$m
$m
At beginning of year
0.8
0.8
Disposals during the year
\u2013
\u2013
Distributions received
(0.4)
(0.3)
Net (loss)/profit from investments from associates
(0.1)
0.3
Foreign exchange movements
0.1
\u2013
At end of year
0.4
0.8
The Group\u2019s interests in its principal associates, all of which are unlisted, were as follows:
Assets
Liabilities
Revenues
Profit after tax
% interest held at
31 December
$m
$m
$m
$m
2025
Associates incorporated in the UK
32%
3.9
3.6
5.3
(0.6)
Associates incorporated in Europe
26%
2.4
1.9
2.8
0.5
Total at the year ended 2025
6.3
5.5
8.1
(0.1)
2024
Associates incorporated in the UK
32%
3.0
2.1
5.9
0.1
Associates incorporated in Europe
26%
2.1
1.1
2.0
1.1
Total at the year ended 2024
5.1
3.2
7.9
1.2
The equity interests held by the Group in respect of associates do not have quoted market prices and are not traded regularly
in\u00a0any active recognised market. The associates concerned have no material impact on the results or assets of the Group.
The assets are expected to be recovered or settled more than 12 months after the reporting date and as such are considered
to\u00a0be non-current.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-491": { "value": "
13 Subsidiaries, associates and interests in other entities
This note provides details of the Syndicates and Special Purpose Insurers (SPIs) managed by the Group, the acquisition and
disposal of subsidiaries and associates during the year and investments in associates.
(a) Subsidiaries
Hiscox Dedicated Corporate Member Limited (HDCM) underwrites as a corporate member of Lloyd\u2019s on the main Syndicates
managed by Hiscox Syndicates Limited (the main managed Syndicates numbered 33 and 3624).
As at 31\u00a0December 2025, HDCM owned 72.6% of Syndicate 33 ( 2024: 72.6%), and 100% of Syndicate 3624 (2024: 100%).
In\u00a0view of the several but not joint liability of underwriting members at Lloyd\u2019s for the transactions of Syndicates in which they
participate, the Group\u2019s attributable share of the transactions, assets and liabilities of these Syndicates has been included in
the\u00a0financial statements. The Group manages the underwriting of, but does not participate as a member of, Syndicate 6104
at\u00a0Lloyd\u2019s which provides reinsurance to Syndicate 33 on a normal commercial basis. Consequently, aside from the receipt
of\u00a0managing agency fees, defined profit commissions as appropriate and interest arising on effective assets included within
the\u00a0experience account, the Group has no share in the assets, liabilities or transactions of Syndicate 6104. The position and
performance of that Syndicate is therefore not included in the Group\u2019s financial statements.
(b) SPIs
The Kiskadee Diversified Fund and Kiskadee Select Fund were launched in 2014 to offer institutional investors access to
property\u00a0catastrophe reinsurance and insurance-linked strategies. In 2019, the Kiskadee Latitude Fund was introduced, offering
a\u00a0broader mix of insurance and reinsurance risks, with less emphasis on property catastrophe. Subsequently in December 2019,
the Kiskadee Cadence Fund, a segregated account of Kiskadee ILS Fund SAC Ltd, was launched, and aims to achieve attractive
risk-adjusted returns by investing primarily in a worldwide reinsurance and retrocession portfolio.
The Group does not control these Funds, so they are not consolidated.
The Kiskadee Select Plus Fund, launched in January 2021 as a segregated account of Kiskadee ILS Fund SAC Ltd, invests in
a\u00a0global portfolio of property catastrophe and some non-catastrophe reinsurance to deliver strong risk-adjusted returns, that have
a low correlation to broader financial markets. The Group controls this fund so it is consolidated.
All the funds above are managed by Hiscox\u00a0Re Insurance Linked Strategies Limited (formerly known as Kiskadee Investment
Managers Limited), a wholly owned subsidiary of the Group.
As at 31\u00a0December 2025, the Group recognised a financial asset at fair value of $67.0 million (2024: $58.3 million) in relation to
its investment in the unconsolidated funds (note 17). In assessing the maximum exposure to loss from its interest in the funds,
the\u00a0Group has determined it is no greater than the fair value recognised as at the end of the reporting period. The total size of the
unconsolidated funds was $815.2 million at 31\u00a0December 2025 (2024: $694.7 million). In addition to the return on the financial
asset, the Group also receives fee income through Hiscox Re Insurance Linked Strategies Limited and Hiscox Insurance
Company (Bermuda) Limited, both wholly owned subsidiaries, under normal commercial terms.
The Group is exposed to credit risk associated with reinsurance recoveries on risks fronted for the SPIs. Note 3.3(d) discusses
how the Group manages credit risk associated with reinsurance assets. The operations of the funds and SPIs are financed
through the issuance of preference shares to external investors. The Group does not intend to provide any further financial
support to the funds or SPIs.
(c) Investments in associates
Year ended 31 December
2025
2024
$m
$m
At beginning of year
0.8
0.8
Disposals during the year
\u2013
\u2013
Distributions received
(0.4)
(0.3)
Net (loss)/profit from investments from associates
(0.1)
0.3
Foreign exchange movements
0.1
\u2013
At end of year
0.4
0.8
The Group\u2019s interests in its principal associates, all of which are unlisted, were as follows:
Assets
Liabilities
Revenues
Profit after tax
% interest held at
31 December
$m
$m
$m
$m
2025
Associates incorporated in the UK
32%
3.9
3.6
5.3
(0.6)
Associates incorporated in Europe
26%
2.4
1.9
2.8
0.5
Total at the year ended 2025
6.3
5.5
8.1
(0.1)
2024
Associates incorporated in the UK
32%
3.0
2.1
5.9
0.1
Associates incorporated in Europe
26%
2.1
1.1
2.0
1.1
Total at the year ended 2024
5.1
3.2
7.9
1.2
The equity interests held by the Group in respect of associates do not have quoted market prices and are not traded regularly
in\u00a0any active recognised market. The associates concerned have no material impact on the results or assets of the Group.
The assets are expected to be recovered or settled more than 12 months after the reporting date and as such are considered
to\u00a0be non-current.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-490": { "value": "
13 Subsidiaries, associates and interests in other entities
This note provides details of the Syndicates and Special Purpose Insurers (SPIs) managed by the Group, the acquisition and
disposal of subsidiaries and associates during the year and investments in associates.
(a) Subsidiaries
Hiscox Dedicated Corporate Member Limited (HDCM) underwrites as a corporate member of Lloyd\u2019s on the main Syndicates
managed by Hiscox Syndicates Limited (the main managed Syndicates numbered 33 and 3624).
As at 31\u00a0December 2025, HDCM owned 72.6% of Syndicate 33 ( 2024: 72.6%), and 100% of Syndicate 3624 (2024: 100%).
In\u00a0view of the several but not joint liability of underwriting members at Lloyd\u2019s for the transactions of Syndicates in which they
participate, the Group\u2019s attributable share of the transactions, assets and liabilities of these Syndicates has been included in
the\u00a0financial statements. The Group manages the underwriting of, but does not participate as a member of, Syndicate 6104
at\u00a0Lloyd\u2019s which provides reinsurance to Syndicate 33 on a normal commercial basis. Consequently, aside from the receipt
of\u00a0managing agency fees, defined profit commissions as appropriate and interest arising on effective assets included within
the\u00a0experience account, the Group has no share in the assets, liabilities or transactions of Syndicate 6104. The position and
performance of that Syndicate is therefore not included in the Group\u2019s financial statements.
(b) SPIs
The Kiskadee Diversified Fund and Kiskadee Select Fund were launched in 2014 to offer institutional investors access to
property\u00a0catastrophe reinsurance and insurance-linked strategies. In 2019, the Kiskadee Latitude Fund was introduced, offering
a\u00a0broader mix of insurance and reinsurance risks, with less emphasis on property catastrophe. Subsequently in December 2019,
the Kiskadee Cadence Fund, a segregated account of Kiskadee ILS Fund SAC Ltd, was launched, and aims to achieve attractive
risk-adjusted returns by investing primarily in a worldwide reinsurance and retrocession portfolio.
The Group does not control these Funds, so they are not consolidated.
The Kiskadee Select Plus Fund, launched in January 2021 as a segregated account of Kiskadee ILS Fund SAC Ltd, invests in
a\u00a0global portfolio of property catastrophe and some non-catastrophe reinsurance to deliver strong risk-adjusted returns, that have
a low correlation to broader financial markets. The Group controls this fund so it is consolidated.
All the funds above are managed by Hiscox\u00a0Re Insurance Linked Strategies Limited (formerly known as Kiskadee Investment
Managers Limited), a wholly owned subsidiary of the Group.
As at 31\u00a0December 2025, the Group recognised a financial asset at fair value of $67.0 million (2024: $58.3 million) in relation to
its investment in the unconsolidated funds (note 17). In assessing the maximum exposure to loss from its interest in the funds,
the\u00a0Group has determined it is no greater than the fair value recognised as at the end of the reporting period. The total size of the
unconsolidated funds was $815.2 million at 31\u00a0December 2025 (2024: $694.7 million). In addition to the return on the financial
asset, the Group also receives fee income through Hiscox Re Insurance Linked Strategies Limited and Hiscox Insurance
Company (Bermuda) Limited, both wholly owned subsidiaries, under normal commercial terms.
The Group is exposed to credit risk associated with reinsurance recoveries on risks fronted for the SPIs. Note 3.3(d) discusses
how the Group manages credit risk associated with reinsurance assets. The operations of the funds and SPIs are financed
through the issuance of preference shares to external investors. The Group does not intend to provide any further financial
support to the funds or SPIs.
(c) Investments in associates
Year ended 31 December
2025
2024
$m
$m
At beginning of year
0.8
0.8
Disposals during the year
\u2013
\u2013
Distributions received
(0.4)
(0.3)
Net (loss)/profit from investments from associates
(0.1)
0.3
Foreign exchange movements
0.1
\u2013
At end of year
0.4
0.8
The Group\u2019s interests in its principal associates, all of which are unlisted, were as follows:
Assets
Liabilities
Revenues
Profit after tax
% interest held at
31 December
$m
$m
$m
$m
2025
Associates incorporated in the UK
32%
3.9
3.6
5.3
(0.6)
Associates incorporated in Europe
26%
2.4
1.9
2.8
0.5
Total at the year ended 2025
6.3
5.5
8.1
(0.1)
2024
Associates incorporated in the UK
32%
3.0
2.1
5.9
0.1
Associates incorporated in Europe
26%
2.1
1.1
2.0
1.1
Total at the year ended 2024
5.1
3.2
7.9
1.2
The equity interests held by the Group in respect of associates do not have quoted market prices and are not traded regularly
in\u00a0any active recognised market. The associates concerned have no material impact on the results or assets of the Group.
The assets are expected to be recovered or settled more than 12 months after the reporting date and as such are considered
to\u00a0be non-current.
30 Principal subsidiary companies of Hiscox Ltd at 31 December 2025
Company
Nature of business
Country
Hiscox plc*
Holding company
United Kingdom
Hiscox Insurance Company Limited
General insurance
United Kingdom
Hiscox Insurance Company (Guernsey) Limited*
General insurance
Guernsey
Hiscox Holdings Inc.
Holding company
USA (Delaware)
ALTOHA, Inc.
Insurance holding company
USA (Delaware)
Hiscox Insurance Company Inc.
General insurance
USA (Illinois)
Hiscox Inc.
Insurance intermediary
USA (Delaware)
Hiscox Special Risks Agency (Americas) Inc.
Underwriting agency
USA (Delaware)
Hiscox Insurance Services Inc.
Insurance intermediary
USA (Delaware)
Hiscox Speciality Insurance Company Inc.
General insurance
USA (Illinois)
Hiscox Insurance Company (Bermuda) Limited*
General insurance and reinsurance
Bermuda
Hiscox Dedicated Corporate Member Limited
Lloyd\u2019s corporate Name
United Kingdom
Hiscox Re Insurance Linked Strategies Limited*
Investment manager
Bermuda
Hiscox Agency Limited*
Lloyd\u2019s service company
Bermuda
Hiscox Dollar Holdings Ltd*
Investment company
Bermuda
Hiscox Services Ltd*
Service company
Bermuda
Hiscox Holdings Limited
Insurance holding company
United Kingdom
Hiscox Syndicates Limited
Lloyd\u2019s managing agent
United Kingdom
Hiscox ASM Ltd.
Insurance intermediary
United Kingdom
Hiscox Underwriting Group Services Limited
Service company
United Kingdom
Hiscox Underwriting Ltd
Underwriting agent
United Kingdom
Hiscox Soci\u00e9t\u00e9 Anonyme*
General insurance
Luxembourg
Hiscox Insurance Services (Guernsey) Limited
Underwriting agency
Guernsey
Hiscox MGA Limited
Insurance intermediary
United Kingdom
Hiscox Insurance Holdings Limited
Holding company
United Kingdom
Hiscox Connect Limited
Service company
United Kingdom
Hiscox Assure SAS
Insurance intermediary
France
Hiscox Europe Holdings Ltd*
Holding company
Luxembourg
Lokky S.r.l
Insurance intermediary
Italy
Lokky Agency S.r.l
Insurance agent
Italy
Corix Insurance Services LLC
Managing general agent
USA
Hiscox Asia Holdings Pte Ltd
Holding company
Singapore
Hiscox Asia Management Services Pte Ltd
Service company
Singapore
*Held directly by Hiscox Ltd.
All principal subsidiaries are wholly owned. The proportion of voting rights of subsidiaries held is the same as the proportion
of\u00a0equity shares held.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-489": { "value": "
13 Subsidiaries, associates and interests in other entities
This note provides details of the Syndicates and Special Purpose Insurers (SPIs) managed by the Group, the acquisition and
disposal of subsidiaries and associates during the year and investments in associates.
(a) Subsidiaries
Hiscox Dedicated Corporate Member Limited (HDCM) underwrites as a corporate member of Lloyd\u2019s on the main Syndicates
managed by Hiscox Syndicates Limited (the main managed Syndicates numbered 33 and 3624).
As at 31\u00a0December 2025, HDCM owned 72.6% of Syndicate 33 ( 2024: 72.6%), and 100% of Syndicate 3624 (2024: 100%).
In\u00a0view of the several but not joint liability of underwriting members at Lloyd\u2019s for the transactions of Syndicates in which they
participate, the Group\u2019s attributable share of the transactions, assets and liabilities of these Syndicates has been included in
the\u00a0financial statements. The Group manages the underwriting of, but does not participate as a member of, Syndicate 6104
at\u00a0Lloyd\u2019s which provides reinsurance to Syndicate 33 on a normal commercial basis. Consequently, aside from the receipt
of\u00a0managing agency fees, defined profit commissions as appropriate and interest arising on effective assets included within
the\u00a0experience account, the Group has no share in the assets, liabilities or transactions of Syndicate 6104. The position and
performance of that Syndicate is therefore not included in the Group\u2019s financial statements.
(b) SPIs
The Kiskadee Diversified Fund and Kiskadee Select Fund were launched in 2014 to offer institutional investors access to
property\u00a0catastrophe reinsurance and insurance-linked strategies. In 2019, the Kiskadee Latitude Fund was introduced, offering
a\u00a0broader mix of insurance and reinsurance risks, with less emphasis on property catastrophe. Subsequently in December 2019,
the Kiskadee Cadence Fund, a segregated account of Kiskadee ILS Fund SAC Ltd, was launched, and aims to achieve attractive
risk-adjusted returns by investing primarily in a worldwide reinsurance and retrocession portfolio.
The Group does not control these Funds, so they are not consolidated.
The Kiskadee Select Plus Fund, launched in January 2021 as a segregated account of Kiskadee ILS Fund SAC Ltd, invests in
a\u00a0global portfolio of property catastrophe and some non-catastrophe reinsurance to deliver strong risk-adjusted returns, that have
a low correlation to broader financial markets. The Group controls this fund so it is consolidated.
All the funds above are managed by Hiscox\u00a0Re Insurance Linked Strategies Limited (formerly known as Kiskadee Investment
Managers Limited), a wholly owned subsidiary of the Group.
As at 31\u00a0December 2025, the Group recognised a financial asset at fair value of $67.0 million (2024: $58.3 million) in relation to
its investment in the unconsolidated funds (note 17). In assessing the maximum exposure to loss from its interest in the funds,
the\u00a0Group has determined it is no greater than the fair value recognised as at the end of the reporting period. The total size of the
unconsolidated funds was $815.2 million at 31\u00a0December 2025 (2024: $694.7 million). In addition to the return on the financial
asset, the Group also receives fee income through Hiscox Re Insurance Linked Strategies Limited and Hiscox Insurance
Company (Bermuda) Limited, both wholly owned subsidiaries, under normal commercial terms.
The Group is exposed to credit risk associated with reinsurance recoveries on risks fronted for the SPIs. Note 3.3(d) discusses
how the Group manages credit risk associated with reinsurance assets. The operations of the funds and SPIs are financed
through the issuance of preference shares to external investors. The Group does not intend to provide any further financial
support to the funds or SPIs.
(c) Investments in associates
Year ended 31 December
2025
2024
$m
$m
At beginning of year
0.8
0.8
Disposals during the year
\u2013
\u2013
Distributions received
(0.4)
(0.3)
Net (loss)/profit from investments from associates
(0.1)
0.3
Foreign exchange movements
0.1
\u2013
At end of year
0.4
0.8
The Group\u2019s interests in its principal associates, all of which are unlisted, were as follows:
Assets
Liabilities
Revenues
Profit after tax
% interest held at
31 December
$m
$m
$m
$m
2025
Associates incorporated in the UK
32%
3.9
3.6
5.3
(0.6)
Associates incorporated in Europe
26%
2.4
1.9
2.8
0.5
Total at the year ended 2025
6.3
5.5
8.1
(0.1)
2024
Associates incorporated in the UK
32%
3.0
2.1
5.9
0.1
Associates incorporated in Europe
26%
2.1
1.1
2.0
1.1
Total at the year ended 2024
5.1
3.2
7.9
1.2
The equity interests held by the Group in respect of associates do not have quoted market prices and are not traded regularly
in\u00a0any active recognised market. The associates concerned have no material impact on the results or assets of the Group.
The assets are expected to be recovered or settled more than 12 months after the reporting date and as such are considered
to\u00a0be non-current.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-488": { "value": "
13 Subsidiaries, associates and interests in other entities
This note provides details of the Syndicates and Special Purpose Insurers (SPIs) managed by the Group, the acquisition and
disposal of subsidiaries and associates during the year and investments in associates.
(a) Subsidiaries
Hiscox Dedicated Corporate Member Limited (HDCM) underwrites as a corporate member of Lloyd\u2019s on the main Syndicates
managed by Hiscox Syndicates Limited (the main managed Syndicates numbered 33 and 3624).
As at 31\u00a0December 2025, HDCM owned 72.6% of Syndicate 33 ( 2024: 72.6%), and 100% of Syndicate 3624 (2024: 100%).
In\u00a0view of the several but not joint liability of underwriting members at Lloyd\u2019s for the transactions of Syndicates in which they
participate, the Group\u2019s attributable share of the transactions, assets and liabilities of these Syndicates has been included in
the\u00a0financial statements. The Group manages the underwriting of, but does not participate as a member of, Syndicate 6104
at\u00a0Lloyd\u2019s which provides reinsurance to Syndicate 33 on a normal commercial basis. Consequently, aside from the receipt
of\u00a0managing agency fees, defined profit commissions as appropriate and interest arising on effective assets included within
the\u00a0experience account, the Group has no share in the assets, liabilities or transactions of Syndicate 6104. The position and
performance of that Syndicate is therefore not included in the Group\u2019s financial statements.
(b) SPIs
The Kiskadee Diversified Fund and Kiskadee Select Fund were launched in 2014 to offer institutional investors access to
property\u00a0catastrophe reinsurance and insurance-linked strategies. In 2019, the Kiskadee Latitude Fund was introduced, offering
a\u00a0broader mix of insurance and reinsurance risks, with less emphasis on property catastrophe. Subsequently in December 2019,
the Kiskadee Cadence Fund, a segregated account of Kiskadee ILS Fund SAC Ltd, was launched, and aims to achieve attractive
risk-adjusted returns by investing primarily in a worldwide reinsurance and retrocession portfolio.
The Group does not control these Funds, so they are not consolidated.
The Kiskadee Select Plus Fund, launched in January 2021 as a segregated account of Kiskadee ILS Fund SAC Ltd, invests in
a\u00a0global portfolio of property catastrophe and some non-catastrophe reinsurance to deliver strong risk-adjusted returns, that have
a low correlation to broader financial markets. The Group controls this fund so it is consolidated.
All the funds above are managed by Hiscox\u00a0Re Insurance Linked Strategies Limited (formerly known as Kiskadee Investment
Managers Limited), a wholly owned subsidiary of the Group.
As at 31\u00a0December 2025, the Group recognised a financial asset at fair value of $67.0 million (2024: $58.3 million) in relation to
its investment in the unconsolidated funds (note 17). In assessing the maximum exposure to loss from its interest in the funds,
the\u00a0Group has determined it is no greater than the fair value recognised as at the end of the reporting period. The total size of the
unconsolidated funds was $815.2 million at 31\u00a0December 2025 (2024: $694.7 million). In addition to the return on the financial
asset, the Group also receives fee income through Hiscox Re Insurance Linked Strategies Limited and Hiscox Insurance
Company (Bermuda) Limited, both wholly owned subsidiaries, under normal commercial terms.
The Group is exposed to credit risk associated with reinsurance recoveries on risks fronted for the SPIs. Note 3.3(d) discusses
how the Group manages credit risk associated with reinsurance assets. The operations of the funds and SPIs are financed
through the issuance of preference shares to external investors. The Group does not intend to provide any further financial
support to the funds or SPIs.
(c) Investments in associates
Year ended 31 December
2025
2024
$m
$m
At beginning of year
0.8
0.8
Disposals during the year
\u2013
\u2013
Distributions received
(0.4)
(0.3)
Net (loss)/profit from investments from associates
(0.1)
0.3
Foreign exchange movements
0.1
\u2013
At end of year
0.4
0.8
The Group\u2019s interests in its principal associates, all of which are unlisted, were as follows:
Assets
Liabilities
Revenues
Profit after tax
% interest held at
31 December
$m
$m
$m
$m
2025
Associates incorporated in the UK
32%
3.9
3.6
5.3
(0.6)
Associates incorporated in Europe
26%
2.4
1.9
2.8
0.5
Total at the year ended 2025
6.3
5.5
8.1
(0.1)
2024
Associates incorporated in the UK
32%
3.0
2.1
5.9
0.1
Associates incorporated in Europe
26%
2.1
1.1
2.0
1.1
Total at the year ended 2024
5.1
3.2
7.9
1.2
The equity interests held by the Group in respect of associates do not have quoted market prices and are not traded regularly
in\u00a0any active recognised market. The associates concerned have no material impact on the results or assets of the Group.
The assets are expected to be recovered or settled more than 12 months after the reporting date and as such are considered
to\u00a0be non-current.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-497": { "value": "
14 Financial assets and liabilities
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
16 Derivative financial instruments
The Group entered into both exchange-traded and over-the-counter derivative contracts for a number of purposes during 2025.
The Group had the right and intention to settle each contract on a net basis. The assets and liabilities of these contracts at
31\u00a0December 2025 all mature within one year of the end of the reporting period and are detailed below:
31 December 2025
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
73.8
0.5
(0.6)
(0.1)
Interest rate futures contracts
19.8
\u2013
\u2013
\u2013
0.5
(0.6)
(0.1)
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2025
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
11.6
29.7
41.3
Gross fair value of liabilities
(11.1)
(30.3)
(41.4)
0.5
(0.6)
(0.1)
31 December 2024
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
200.0
\u2013
\u2013
\u2013
Interest rate futures contracts
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2024
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
\u2013
3.5
3.5
Gross fair value of liabilities
\u2013
(3.5)
(3.5)
\u2013
\u2013
\u2013
Foreign exchange forward contracts
During the current and prior year, the Group entered into a series of conventional over-the-counter forward contracts in order to
secure translation gains made on Euro, US Dollar and other non-Sterling denominated monetary assets. The contracts require
the Group to forward sell a fixed amount of the relevant currency for Sterling at pre-agreed future exchange rates. The Group
made a loss of $0.3 million on the forward contracts during the year (2024: gain of $0.5 million).
Interest rate futures contracts
To substantially hedge the interest rate risk the Group is exposed to, it continued to sell a number of government bond
futures\u00a0denominated in a range of\u00a0currencies. All are exchange traded and the Group made a loss on these futures contracts
of\u00a0$1.4 million (2024: loss of $0.1 million) as included in the investment result in note 7.
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-496": { "value": "
14 Financial assets and liabilities
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
17 Fair value measurements
In accordance with IFRS 13 Fair Value Measurement, the fair value of financial instruments, based on a\u00a0three-level fair value
hierarchy that reflects the significance of the inputs used in measuring the fair value, is set out below.
As at 31 December 2025
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,342.9
6,565.7
10.7
7,919.3
Equities and investment funds
\u2013
160.4
10.4
170.8
Private credit funds
\u2013
\u2013
274.4
274.4
Insurance-linked funds
\u2013
\u2013
67.0
67.0
Derivative financial instruments
\u2013
0.5
\u2013
0.5
Total
1,342.9
6,726.6
362.5
8,432.0
Financial liabilities
Derivative financial instruments
\u2013
0.6
\u2013
0.6
Total
\u2013
0.6
\u2013
0.6
As at 31 December 2024
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,127.5
5,523.4
10.0
6,660.9
Equities and investment funds
\u2013
179.3
30.9
210.2
Private credit funds
\u2013
\u2013
148.2
148.2
Insurance-linked funds
\u2013
\u2013
58.3
58.3
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
1,127.5
5,702.7
247.4
7,077.6
Financial liabilities
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
\u2013
\u2013
\u2013
\u2013
The levels of the fair value hierarchy are defined by the standard as follows:
\u2022 Level 1 \u2013 fair values measured using quoted prices (unadjusted) in active markets for identical instruments;
\u2022 Level 2 \u2013 fair values measured using directly or indirectly observable inputs or other similar valuation techniques
for\u00a0which\u00a0all\u00a0significant inputs are based on market-observable data;
\u2022 Level 3 \u2013 fair values measured using valuation techniques for which significant inputs are not based on
market-observable\u00a0data.
The fair values of the Group\u2019s financial assets are typically based on prices from numerous independent pricing services. The
pricing services used by the investment manager obtain actual transaction prices for securities that have quoted prices in active
markets. For those securities which are not actively traded, the pricing services use common market valuation pricing models.
Observable inputs used in common market valuation pricing models include, but are not limited to, broker quotes, credit ratings,
interest rates and yield curves, prepayment speeds, default rates and other such inputs which are available from market sources.
Investments in mutual funds comprise a\u00a0portfolio of stock investments in trading entities which are invested in various quoted and
unquoted investments. The fair value of these investment funds is based on the net asset value of the fund as reported by
independent pricing sources or the fund manager.
Included within Level 1 of the fair value hierarchy are certain government bonds, treasury bills, corporate bonds having a quoted
price in active markets, and exchange-traded funds which are measured based on quoted prices in active markets.
The fair value of the borrowings carried at amortised cost is estimated at $889.1 million (2024:\u00a0$672.0 million) and is considered
as Level 1 in the fair value hierarchy.
Level 2 of the hierarchy contains certain government bonds, US government agencies, corporate securities, asset-backed
securities, mortgage-backed securities and certain commingled funds. The fair value of these assets is based on the prices
obtained from independent pricing sources, investment managers and investment custodians as discussed above. The Group
records the unadjusted price provided and validates the price through a\u00a0number of methods including a\u00a0comparison of the prices
provided by the investment managers with the investment custodians and the valuation used by external parties to derive fair
value. Quoted prices for US government agencies and corporate securities are based on a\u00a0limited number of transactions for
those securities and as such\u00a0the\u00a0Group considers these instruments to have similar characteristics to those instruments classified
as Level 2. Also included within Level 2 are units held in collective investment vehicles investing in traditional and alternative
investment strategies\u00a0and over-the-counter derivatives. In 2025, Level 2 also included a non-derivative forward contract asset.
Level 3 contains investments in limited partnerships, unquoted equity securities, private credit funds and insurance-linked funds
which have limited observable inputs on which to measure fair value. Unquoted equities, including equity instruments in limited
partnerships, are carried at fair value. Fair value is determined to be net asset value for the limited partnerships, and for the equity
holdings it is determined to be the latest available traded price. The effect of changing one or more inputs used in the
measurement of fair value of these instruments to another reasonably possible assumption would not be significant.
Private credit funds comprise holdings in funds which, in turn, hold debt investments in private companies that are not quoted
on\u00a0an active market. The fair value of the private credit funds is determined based on the net asset values reported by the
investment managers. The underlying loan values, on which the investments are based, are valued by the investment managers
using a discounted cash flow model. The inputs to the valuation are cash flows, risk-free rate and a credit spread. The cash flow
projections are determined by the loan terms and the risk-free rate is the overnight rate for the issuing currency; these are all
observable inputs. The credit spread applied is based on synthetic rating analysis, whereby an equivalent corporate bond rating
is\u00a0assigned to a private loan based on structural analysis of the issuer's statement of financial position and performance since
investment. This is an unobservable input but is not deemed to be significant. Given the Group\u2019s knowledge of the underlying
investments and the size of the Group\u2019s investment therein, the Group would not anticipate any material variance between the
statements and the final net asset values reported by the investment managers.
At 31\u00a0December 2025, the insurance-linked funds of $67.0\u00a0million represent the Group\u2019s investment in the unconsolidated
Kiskadee funds (2024:\u00a0$58.3\u00a0million) as described in note 14.
The fair value of the Kiskadee funds is estimated to be the net asset value as at the end of the reporting period. The net asset
value is based on the fair value of the assets and liabilities in the fund. The majority of the assets of the funds are cash and cash
equivalents. Significant inputs and assumptions in calculating the fair value of the assets and liabilities associated with reinsurance
contracts written by the Kiskadee funds include the amount and timing of claims payable in respect of claims incurred and
periods of unexpired risk. The Group has considered changes in the net asset valuation of the Kiskadee funds if reasonably
different inputs and assumptions were used and has found that a 12% change to the fair value of the liabilities would
increase\u00a0or\u00a0decrease the fair value of funds by $2.2\u00a0million.
In certain cases, the inputs used to measure the fair value of a\u00a0financial instrument may fall into more than one level within
the\u00a0fair\u00a0value hierarchy. In this instance, the fair value of the instrument in its entirety is classified based on the lowest level
of\u00a0input\u00a0that is significant to the fair value measurement.
The table below sets forth a\u00a0reconciliation of opening and closing balances for financial instruments classified under Level 3 of the
fair value hierarchy:
2025
2024
$m
$m
Balance at 1 January
247.4
130.3
Fair value gains/(losses) through profit or loss
17.5
(4.5)
Foreign exchange gains/(losses)
6.0
(0.8)
Purchases
134.5
136.6
Disposals
(42.9)
(14.2)
Transfers
\u2013
\u2013
Closing balance
362.5
247.4
Net unrealised gains/(losses) in the period on securities held at the end of the period
14.2
(4.0)
The closing balance at year end comprised $10.7\u00a0million debt and fixed income holdings (2024: $10.0 million), $10.4\u00a0million
equities and investment funds (2024: $30.9\u00a0million), $274.4\u00a0million private credit funds (2024: $148.2 million) and $67.0\u00a0million
insurance-linked funds (2024: $58.3 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-495": { "value": "
14 Financial assets and liabilities
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
16 Derivative financial instruments
The Group entered into both exchange-traded and over-the-counter derivative contracts for a number of purposes during 2025.
The Group had the right and intention to settle each contract on a net basis. The assets and liabilities of these contracts at
31\u00a0December 2025 all mature within one year of the end of the reporting period and are detailed below:
31 December 2025
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
73.8
0.5
(0.6)
(0.1)
Interest rate futures contracts
19.8
\u2013
\u2013
\u2013
0.5
(0.6)
(0.1)
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2025
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
11.6
29.7
41.3
Gross fair value of liabilities
(11.1)
(30.3)
(41.4)
0.5
(0.6)
(0.1)
31 December 2024
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
200.0
\u2013
\u2013
\u2013
Interest rate futures contracts
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2024
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
\u2013
3.5
3.5
Gross fair value of liabilities
\u2013
(3.5)
(3.5)
\u2013
\u2013
\u2013
Foreign exchange forward contracts
During the current and prior year, the Group entered into a series of conventional over-the-counter forward contracts in order to
secure translation gains made on Euro, US Dollar and other non-Sterling denominated monetary assets. The contracts require
the Group to forward sell a fixed amount of the relevant currency for Sterling at pre-agreed future exchange rates. The Group
made a loss of $0.3 million on the forward contracts during the year (2024: gain of $0.5 million).
Interest rate futures contracts
To substantially hedge the interest rate risk the Group is exposed to, it continued to sell a number of government bond
futures\u00a0denominated in a range of\u00a0currencies. All are exchange traded and the Group made a loss on these futures contracts
of\u00a0$1.4 million (2024: loss of $0.1 million) as included in the investment result in note 7.
17 Fair value measurements
In accordance with IFRS 13 Fair Value Measurement, the fair value of financial instruments, based on a\u00a0three-level fair value
hierarchy that reflects the significance of the inputs used in measuring the fair value, is set out below.
As at 31 December 2025
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,342.9
6,565.7
10.7
7,919.3
Equities and investment funds
\u2013
160.4
10.4
170.8
Private credit funds
\u2013
\u2013
274.4
274.4
Insurance-linked funds
\u2013
\u2013
67.0
67.0
Derivative financial instruments
\u2013
0.5
\u2013
0.5
Total
1,342.9
6,726.6
362.5
8,432.0
Financial liabilities
Derivative financial instruments
\u2013
0.6
\u2013
0.6
Total
\u2013
0.6
\u2013
0.6
As at 31 December 2024
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,127.5
5,523.4
10.0
6,660.9
Equities and investment funds
\u2013
179.3
30.9
210.2
Private credit funds
\u2013
\u2013
148.2
148.2
Insurance-linked funds
\u2013
\u2013
58.3
58.3
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
1,127.5
5,702.7
247.4
7,077.6
Financial liabilities
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
\u2013
\u2013
\u2013
\u2013
The levels of the fair value hierarchy are defined by the standard as follows:
\u2022 Level 1 \u2013 fair values measured using quoted prices (unadjusted) in active markets for identical instruments;
\u2022 Level 2 \u2013 fair values measured using directly or indirectly observable inputs or other similar valuation techniques
for\u00a0which\u00a0all\u00a0significant inputs are based on market-observable data;
\u2022 Level 3 \u2013 fair values measured using valuation techniques for which significant inputs are not based on
market-observable\u00a0data.
The fair values of the Group\u2019s financial assets are typically based on prices from numerous independent pricing services. The
pricing services used by the investment manager obtain actual transaction prices for securities that have quoted prices in active
markets. For those securities which are not actively traded, the pricing services use common market valuation pricing models.
Observable inputs used in common market valuation pricing models include, but are not limited to, broker quotes, credit ratings,
interest rates and yield curves, prepayment speeds, default rates and other such inputs which are available from market sources.
Investments in mutual funds comprise a\u00a0portfolio of stock investments in trading entities which are invested in various quoted and
unquoted investments. The fair value of these investment funds is based on the net asset value of the fund as reported by
independent pricing sources or the fund manager.
Included within Level 1 of the fair value hierarchy are certain government bonds, treasury bills, corporate bonds having a quoted
price in active markets, and exchange-traded funds which are measured based on quoted prices in active markets.
The fair value of the borrowings carried at amortised cost is estimated at $889.1 million (2024:\u00a0$672.0 million) and is considered
as Level 1 in the fair value hierarchy.
Level 2 of the hierarchy contains certain government bonds, US government agencies, corporate securities, asset-backed
securities, mortgage-backed securities and certain commingled funds. The fair value of these assets is based on the prices
obtained from independent pricing sources, investment managers and investment custodians as discussed above. The Group
records the unadjusted price provided and validates the price through a\u00a0number of methods including a\u00a0comparison of the prices
provided by the investment managers with the investment custodians and the valuation used by external parties to derive fair
value. Quoted prices for US government agencies and corporate securities are based on a\u00a0limited number of transactions for
those securities and as such\u00a0the\u00a0Group considers these instruments to have similar characteristics to those instruments classified
as Level 2. Also included within Level 2 are units held in collective investment vehicles investing in traditional and alternative
investment strategies\u00a0and over-the-counter derivatives. In 2025, Level 2 also included a non-derivative forward contract asset.
Level 3 contains investments in limited partnerships, unquoted equity securities, private credit funds and insurance-linked funds
which have limited observable inputs on which to measure fair value. Unquoted equities, including equity instruments in limited
partnerships, are carried at fair value. Fair value is determined to be net asset value for the limited partnerships, and for the equity
holdings it is determined to be the latest available traded price. The effect of changing one or more inputs used in the
measurement of fair value of these instruments to another reasonably possible assumption would not be significant.
Private credit funds comprise holdings in funds which, in turn, hold debt investments in private companies that are not quoted
on\u00a0an active market. The fair value of the private credit funds is determined based on the net asset values reported by the
investment managers. The underlying loan values, on which the investments are based, are valued by the investment managers
using a discounted cash flow model. The inputs to the valuation are cash flows, risk-free rate and a credit spread. The cash flow
projections are determined by the loan terms and the risk-free rate is the overnight rate for the issuing currency; these are all
observable inputs. The credit spread applied is based on synthetic rating analysis, whereby an equivalent corporate bond rating
is\u00a0assigned to a private loan based on structural analysis of the issuer's statement of financial position and performance since
investment. This is an unobservable input but is not deemed to be significant. Given the Group\u2019s knowledge of the underlying
investments and the size of the Group\u2019s investment therein, the Group would not anticipate any material variance between the
statements and the final net asset values reported by the investment managers.
At 31\u00a0December 2025, the insurance-linked funds of $67.0\u00a0million represent the Group\u2019s investment in the unconsolidated
Kiskadee funds (2024:\u00a0$58.3\u00a0million) as described in note 14.
The fair value of the Kiskadee funds is estimated to be the net asset value as at the end of the reporting period. The net asset
value is based on the fair value of the assets and liabilities in the fund. The majority of the assets of the funds are cash and cash
equivalents. Significant inputs and assumptions in calculating the fair value of the assets and liabilities associated with reinsurance
contracts written by the Kiskadee funds include the amount and timing of claims payable in respect of claims incurred and
periods of unexpired risk. The Group has considered changes in the net asset valuation of the Kiskadee funds if reasonably
different inputs and assumptions were used and has found that a 12% change to the fair value of the liabilities would
increase\u00a0or\u00a0decrease the fair value of funds by $2.2\u00a0million.
In certain cases, the inputs used to measure the fair value of a\u00a0financial instrument may fall into more than one level within
the\u00a0fair\u00a0value hierarchy. In this instance, the fair value of the instrument in its entirety is classified based on the lowest level
of\u00a0input\u00a0that is significant to the fair value measurement.
The table below sets forth a\u00a0reconciliation of opening and closing balances for financial instruments classified under Level 3 of the
fair value hierarchy:
2025
2024
$m
$m
Balance at 1 January
247.4
130.3
Fair value gains/(losses) through profit or loss
17.5
(4.5)
Foreign exchange gains/(losses)
6.0
(0.8)
Purchases
134.5
136.6
Disposals
(42.9)
(14.2)
Transfers
\u2013
\u2013
Closing balance
362.5
247.4
Net unrealised gains/(losses) in the period on securities held at the end of the period
14.2
(4.0)
The closing balance at year end comprised $10.7\u00a0million debt and fixed income holdings (2024: $10.0 million), $10.4\u00a0million
equities and investment funds (2024: $30.9\u00a0million), $274.4\u00a0million private credit funds (2024: $148.2 million) and $67.0\u00a0million
insurance-linked funds (2024: $58.3 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-494": { "value": "
14 Financial assets and liabilities
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
16 Derivative financial instruments
The Group entered into both exchange-traded and over-the-counter derivative contracts for a number of purposes during 2025.
The Group had the right and intention to settle each contract on a net basis. The assets and liabilities of these contracts at
31\u00a0December 2025 all mature within one year of the end of the reporting period and are detailed below:
31 December 2025
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
73.8
0.5
(0.6)
(0.1)
Interest rate futures contracts
19.8
\u2013
\u2013
\u2013
0.5
(0.6)
(0.1)
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2025
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
11.6
29.7
41.3
Gross fair value of liabilities
(11.1)
(30.3)
(41.4)
0.5
(0.6)
(0.1)
31 December 2024
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
200.0
\u2013
\u2013
\u2013
Interest rate futures contracts
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2024
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
\u2013
3.5
3.5
Gross fair value of liabilities
\u2013
(3.5)
(3.5)
\u2013
\u2013
\u2013
Foreign exchange forward contracts
During the current and prior year, the Group entered into a series of conventional over-the-counter forward contracts in order to
secure translation gains made on Euro, US Dollar and other non-Sterling denominated monetary assets. The contracts require
the Group to forward sell a fixed amount of the relevant currency for Sterling at pre-agreed future exchange rates. The Group
made a loss of $0.3 million on the forward contracts during the year (2024: gain of $0.5 million).
Interest rate futures contracts
To substantially hedge the interest rate risk the Group is exposed to, it continued to sell a number of government bond
futures\u00a0denominated in a range of\u00a0currencies. All are exchange traded and the Group made a loss on these futures contracts
of\u00a0$1.4 million (2024: loss of $0.1 million) as included in the investment result in note 7.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-493": { "value": "
14 Financial assets and liabilities
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment in relation to a forward contract held by the
Group\u00a0Employee Benefit Trust to purchase a variable number of Hiscox shares. The shares are expected to be delivered by
February 2026.
The effective maturity of the debt and fixed income holdings due within and after one year is as follows:
2025
2024
$m
$m
Within one year
1,038.6
1,392.3
After one year
6,880.7
5,268.6
7,919.3
6,660.9
Equities, investment funds, private credit funds and insurance-linked securities do not have any maturity dates. The effective
maturity of all other financial assets is due within one year. An analysis of the credit risk and contractual maturity profiles of the
Group\u2019s financial instruments is given in notes 3.3(d) and 3.3(e).
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
Note 9 includes details of the interest expense for the year included in finance costs.
Investments at 31\u00a0December are denominated in the following currencies at their fair value:
2025
2024
$m
$m
Debt and fixed income holdings
US Dollars
5,838.2
4,998.4
Sterling
986.1
835.8
Euro and other currencies\u00a0
1,095.0
826.7
7,919.3
6,660.9
Equities and investment funds
US Dollars
39.1
95.5
Sterling
93.7
80.6
Euro and other currencies
38.0
34.1
170.8
210.2
Private credit funds
US Dollars
221.4
117.5
Sterling
26.8
16.5
Euro and other currencies
26.2
14.2
274.4
148.2
Total investments
8,364.5
7,019.3
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
16 Derivative financial instruments
The Group entered into both exchange-traded and over-the-counter derivative contracts for a number of purposes during 2025.
The Group had the right and intention to settle each contract on a net basis. The assets and liabilities of these contracts at
31\u00a0December 2025 all mature within one year of the end of the reporting period and are detailed below:
31 December 2025
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
73.8
0.5
(0.6)
(0.1)
Interest rate futures contracts
19.8
\u2013
\u2013
\u2013
0.5
(0.6)
(0.1)
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2025
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
11.6
29.7
41.3
Gross fair value of liabilities
(11.1)
(30.3)
(41.4)
0.5
(0.6)
(0.1)
31 December 2024
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
200.0
\u2013
\u2013
\u2013
Interest rate futures contracts
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2024
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
\u2013
3.5
3.5
Gross fair value of liabilities
\u2013
(3.5)
(3.5)
\u2013
\u2013
\u2013
Foreign exchange forward contracts
During the current and prior year, the Group entered into a series of conventional over-the-counter forward contracts in order to
secure translation gains made on Euro, US Dollar and other non-Sterling denominated monetary assets. The contracts require
the Group to forward sell a fixed amount of the relevant currency for Sterling at pre-agreed future exchange rates. The Group
made a loss of $0.3 million on the forward contracts during the year (2024: gain of $0.5 million).
Interest rate futures contracts
To substantially hedge the interest rate risk the Group is exposed to, it continued to sell a number of government bond
futures\u00a0denominated in a range of\u00a0currencies. All are exchange traded and the Group made a loss on these futures contracts
of\u00a0$1.4 million (2024: loss of $0.1 million) as included in the investment result in note 7.
17 Fair value measurements
In accordance with IFRS 13 Fair Value Measurement, the fair value of financial instruments, based on a\u00a0three-level fair value
hierarchy that reflects the significance of the inputs used in measuring the fair value, is set out below.
As at 31 December 2025
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,342.9
6,565.7
10.7
7,919.3
Equities and investment funds
\u2013
160.4
10.4
170.8
Private credit funds
\u2013
\u2013
274.4
274.4
Insurance-linked funds
\u2013
\u2013
67.0
67.0
Derivative financial instruments
\u2013
0.5
\u2013
0.5
Total
1,342.9
6,726.6
362.5
8,432.0
Financial liabilities
Derivative financial instruments
\u2013
0.6
\u2013
0.6
Total
\u2013
0.6
\u2013
0.6
As at 31 December 2024
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,127.5
5,523.4
10.0
6,660.9
Equities and investment funds
\u2013
179.3
30.9
210.2
Private credit funds
\u2013
\u2013
148.2
148.2
Insurance-linked funds
\u2013
\u2013
58.3
58.3
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
1,127.5
5,702.7
247.4
7,077.6
Financial liabilities
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
\u2013
\u2013
\u2013
\u2013
The levels of the fair value hierarchy are defined by the standard as follows:
\u2022 Level 1 \u2013 fair values measured using quoted prices (unadjusted) in active markets for identical instruments;
\u2022 Level 2 \u2013 fair values measured using directly or indirectly observable inputs or other similar valuation techniques
for\u00a0which\u00a0all\u00a0significant inputs are based on market-observable data;
\u2022 Level 3 \u2013 fair values measured using valuation techniques for which significant inputs are not based on
market-observable\u00a0data.
The fair values of the Group\u2019s financial assets are typically based on prices from numerous independent pricing services. The
pricing services used by the investment manager obtain actual transaction prices for securities that have quoted prices in active
markets. For those securities which are not actively traded, the pricing services use common market valuation pricing models.
Observable inputs used in common market valuation pricing models include, but are not limited to, broker quotes, credit ratings,
interest rates and yield curves, prepayment speeds, default rates and other such inputs which are available from market sources.
Investments in mutual funds comprise a\u00a0portfolio of stock investments in trading entities which are invested in various quoted and
unquoted investments. The fair value of these investment funds is based on the net asset value of the fund as reported by
independent pricing sources or the fund manager.
Included within Level 1 of the fair value hierarchy are certain government bonds, treasury bills, corporate bonds having a quoted
price in active markets, and exchange-traded funds which are measured based on quoted prices in active markets.
The fair value of the borrowings carried at amortised cost is estimated at $889.1 million (2024:\u00a0$672.0 million) and is considered
as Level 1 in the fair value hierarchy.
Level 2 of the hierarchy contains certain government bonds, US government agencies, corporate securities, asset-backed
securities, mortgage-backed securities and certain commingled funds. The fair value of these assets is based on the prices
obtained from independent pricing sources, investment managers and investment custodians as discussed above. The Group
records the unadjusted price provided and validates the price through a\u00a0number of methods including a\u00a0comparison of the prices
provided by the investment managers with the investment custodians and the valuation used by external parties to derive fair
value. Quoted prices for US government agencies and corporate securities are based on a\u00a0limited number of transactions for
those securities and as such\u00a0the\u00a0Group considers these instruments to have similar characteristics to those instruments classified
as Level 2. Also included within Level 2 are units held in collective investment vehicles investing in traditional and alternative
investment strategies\u00a0and over-the-counter derivatives. In 2025, Level 2 also included a non-derivative forward contract asset.
Level 3 contains investments in limited partnerships, unquoted equity securities, private credit funds and insurance-linked funds
which have limited observable inputs on which to measure fair value. Unquoted equities, including equity instruments in limited
partnerships, are carried at fair value. Fair value is determined to be net asset value for the limited partnerships, and for the equity
holdings it is determined to be the latest available traded price. The effect of changing one or more inputs used in the
measurement of fair value of these instruments to another reasonably possible assumption would not be significant.
Private credit funds comprise holdings in funds which, in turn, hold debt investments in private companies that are not quoted
on\u00a0an active market. The fair value of the private credit funds is determined based on the net asset values reported by the
investment managers. The underlying loan values, on which the investments are based, are valued by the investment managers
using a discounted cash flow model. The inputs to the valuation are cash flows, risk-free rate and a credit spread. The cash flow
projections are determined by the loan terms and the risk-free rate is the overnight rate for the issuing currency; these are all
observable inputs. The credit spread applied is based on synthetic rating analysis, whereby an equivalent corporate bond rating
is\u00a0assigned to a private loan based on structural analysis of the issuer's statement of financial position and performance since
investment. This is an unobservable input but is not deemed to be significant. Given the Group\u2019s knowledge of the underlying
investments and the size of the Group\u2019s investment therein, the Group would not anticipate any material variance between the
statements and the final net asset values reported by the investment managers.
At 31\u00a0December 2025, the insurance-linked funds of $67.0\u00a0million represent the Group\u2019s investment in the unconsolidated
Kiskadee funds (2024:\u00a0$58.3\u00a0million) as described in note 14.
The fair value of the Kiskadee funds is estimated to be the net asset value as at the end of the reporting period. The net asset
value is based on the fair value of the assets and liabilities in the fund. The majority of the assets of the funds are cash and cash
equivalents. Significant inputs and assumptions in calculating the fair value of the assets and liabilities associated with reinsurance
contracts written by the Kiskadee funds include the amount and timing of claims payable in respect of claims incurred and
periods of unexpired risk. The Group has considered changes in the net asset valuation of the Kiskadee funds if reasonably
different inputs and assumptions were used and has found that a 12% change to the fair value of the liabilities would
increase\u00a0or\u00a0decrease the fair value of funds by $2.2\u00a0million.
In certain cases, the inputs used to measure the fair value of a\u00a0financial instrument may fall into more than one level within
the\u00a0fair\u00a0value hierarchy. In this instance, the fair value of the instrument in its entirety is classified based on the lowest level
of\u00a0input\u00a0that is significant to the fair value measurement.
The table below sets forth a\u00a0reconciliation of opening and closing balances for financial instruments classified under Level 3 of the
fair value hierarchy:
2025
2024
$m
$m
Balance at 1 January
247.4
130.3
Fair value gains/(losses) through profit or loss
17.5
(4.5)
Foreign exchange gains/(losses)
6.0
(0.8)
Purchases
134.5
136.6
Disposals
(42.9)
(14.2)
Transfers
\u2013
\u2013
Closing balance
362.5
247.4
Net unrealised gains/(losses) in the period on securities held at the end of the period
14.2
(4.0)
The closing balance at year end comprised $10.7\u00a0million debt and fixed income holdings (2024: $10.0 million), $10.4\u00a0million
equities and investment funds (2024: $30.9\u00a0million), $274.4\u00a0million private credit funds (2024: $148.2 million) and $67.0\u00a0million
insurance-linked funds (2024: $58.3 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-498": { "value": "
Financial assets designated at fair value through profit or loss are measured at fair values, with all changes from one accounting
period to the next being recorded through the income statement.
2025
2024
Note
$m
$m
Debt and fixed income holdings
17
7,919.3
6,660.9
Equities and investment funds
17
170.8
210.2
Private credit funds
17
274.4
148.2
Total investments
8,364.5
7,019.3
Insurance-linked funds
17
67.0
58.3
Derivative financial instruments
16
0.5
\u2013
Total financial assets carried at fair value\u00a0
8,432.0
7,077.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-499": { "value": "
Financial liabilities of the Group are:
2025
2024
Note
$m
$m
Derivative financial instruments
16
0.6
\u2013
Financial liabilities carried at fair value\u00a0
0.6
\u2013
Borrowings\u00a0
832.3
656.2
Accrued interest on borrowings
7.5
7.3
Financial liabilities carried at amortised cost\u00a0
839.8
663.5
Total financial liabilities
840.4
663.5
All of the financial liabilities carried at fair value are due within one year and all the borrowings are due after one year. Accrued
interest on long-term debt is due within one year.
On 24 November 2015, the Group issued \u00a3275.0 million 6.125% fixed-to-floating rate callable subordinated notes due 2045,
with\u00a0a first call date of 24 November 2025. On 2 June 2025, the Group announced an invitation to note holders to tender their
notes for cash. The aggregate principal amount of the notes purchased and cancelled by the Group under this offer was
\u00a3261.2\u00a0million. The remaining outstanding notes were redeemed at their principal amount on the first call date.
On 22 September 2022, the Group issued \u00a3250.0 million 6% fixed-rate senior notes due September 2027.
On 11\u00a0June 2025, the Group issued $500.0 million 7% fixed-to-floating rate callable subordinated notes due 2036, with a first
call\u00a0date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024:\u00a0$672.0 million). The fair value measurement is
classified\u00a0within Level 1 of the fair value hierarchy. The fair value is estimated by reference to the actively traded value on
the\u00a0stock exchanges.
The increase in the carrying value of the borrowings and accrued interest during the year comprises the new issue of
subordinated notes of $500 million ($496.8 million net of fees) (2024: $nil), the repayment of the \u00a3275.0 million fixed-to-floating
rate callable subordinated notes of $373.6 million (2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9\u00a0million (2024: $0.7\u00a0million), the decrease in accrued interest of $0.8\u00a0million (2024:
decrease of $0.7 million), plus exchange movements of $53.0\u00a0million (2024: less exchange movements of $10.9 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-504": { "value": "
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-503": { "value": "
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-502": { "value": "
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-501": { "value": "
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
23 Deferred tax
2025
2024
$m
$m
Deferred tax assets
164.0
179.4
Deferred tax liabilities
(64.4)
(75.8)
Net deferred tax asset
99.6
103.6
2025
2024
$m
$m
Bermuda ETA
139.4
154.6
Trading losses in overseas entities
28.5
33.4
Employee retirement benefit assets
(12.8)
(11.4)
Goodwill and intangible assets
(21.5)
(21.2)
Property, plant and equipment
0.8
(1.0)
Financial assets
(4.4)
(1.5)
Insurance contract liabilities
(66.8)
(66.6)
Employee share options
31.0
16.5
Other
5.4
0.8
Net deferred tax asset
99.6
103.6
Deferred tax assets and deferred tax liabilities relating to the same tax authority are presented net in the consolidated statement
of financial position.
At 31 December
2024
Income
statement
(charge)
/credit
Recognised
in other
comprehensive
income/equity
Foreign
exchange
2025
$m
$m
$m
$m
$m
Bermuda ETA
154.6
(15.2)
\u2013
\u2013
139.4
Trading losses in overseas entities
33.4
(5.3)
\u2013
0.4
28.5
Employee retirement benefit assets
(11.4)
(0.2)
(0.3)
(0.9)
(12.8)
Goodwill and intangible assets
(21.2)
0.4
\u2013
(0.7)
(21.5)
Property, plant and equipment
(1.0)
1.9
\u2013
(0.1)
0.8
Financial assets
(1.5)
(2.8)
\u2013
(0.1)
(4.4)
Insurance contract liabilities
(66.6)
3.7
\u2013
(3.9)
(66.8)
Employee share options
16.5
1.7
10.8
2.0
31.0
Other
0.8
4.6
\u2013
\u2013
5.4
Net deferred tax asset
103.6
(11.2)
10.5
(3.3)
99.6
Movements in deferred and current tax relating to tax deductions arising on employee share options are recognised in the
statement of changes in equity to the extent that the movement exceeds the corresponding charge to the income statement.
Movements in deferred tax relating to the employee retirement benefit obligation are recognised in the statement of
comprehensive income to the extent that the movement corresponds to actuarial gains and losses recognised in the
statement\u00a0of\u00a0comprehensive income.
The total income recognised outside the income statement is $10.5 million (2024: income of $4.2 million), all comprising deferred
tax (2024: $1.4 million deferred tax income and $2.8 million current tax\u00a0income).
Deferred tax assets of $28.5 million (2024: $33.4 million), relating to losses arising in overseas entities, which depend on the
availability of future taxable profits, have been recognised. Business projections indicate it is probable that sufficient future
taxable\u00a0income will be available against which to offset these recognised deferred tax assets within five years. $27.7 million
(2024:\u00a0$27.7 million) of the tax losses to which these assets relate will expire within ten years; a further $0.8 million
(2024:\u00a0$5.9\u00a0million) will expire after ten years or will be available indefinitely. The Group has not provided for deferred tax
assets\u00a0totalling $82.7 million (2024: $91.6 million) in relation to losses in overseas companies and unutilised tax credits of
$408.4 million (2024: $439.8 million).
In accordance with IAS 12, all deferred tax assets and liabilities are classified as non-current. The amount of deferred tax asset
expected to be recovered after more than 12 months is $99.6 million (2024: $101.8 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-500": { "value": "
15 Trade and other receivables
2025
2024
$m
$m
Prepayments and accrued income
29.1
37.3
Trade and other receivables:
Accrued interest
75.9
68.0
Other debtors including related party amounts
244.7
143.7
Total trade and other receivables
349.7
249.0
The amounts expected to be recovered before and after one year are estimated as follows:
Within one year
333.1
233.2
After one year
16.6
15.8
349.7
249.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-505": { "value": "
16 Derivative financial instruments
The Group entered into both exchange-traded and over-the-counter derivative contracts for a number of purposes during 2025.
The Group had the right and intention to settle each contract on a net basis. The assets and liabilities of these contracts at
31\u00a0December 2025 all mature within one year of the end of the reporting period and are detailed below:
31 December 2025
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
73.8
0.5
(0.6)
(0.1)
Interest rate futures contracts
19.8
\u2013
\u2013
\u2013
0.5
(0.6)
(0.1)
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2025
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
11.6
29.7
41.3
Gross fair value of liabilities
(11.1)
(30.3)
(41.4)
0.5
(0.6)
(0.1)
31 December 2024
Gross contract
notional amount
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
$m
Derivative financial instruments included on statement of financial position
Foreign exchange forward contracts
200.0
\u2013
\u2013
\u2013
Interest rate futures contracts
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The foreign exchange forward contracts are represented by gross fair value of assets and liabilities as detailed below:
31 December 2024
Fair value
of assets
Fair value
of liabilities
Net balance
sheet position
$m
$m
$m
Gross fair value of assets
\u2013
3.5
3.5
Gross fair value of liabilities
\u2013
(3.5)
(3.5)
\u2013
\u2013
\u2013
Foreign exchange forward contracts
During the current and prior year, the Group entered into a series of conventional over-the-counter forward contracts in order to
secure translation gains made on Euro, US Dollar and other non-Sterling denominated monetary assets. The contracts require
the Group to forward sell a fixed amount of the relevant currency for Sterling at pre-agreed future exchange rates. The Group
made a loss of $0.3 million on the forward contracts during the year (2024: gain of $0.5 million).
Interest rate futures contracts
To substantially hedge the interest rate risk the Group is exposed to, it continued to sell a number of government bond
futures\u00a0denominated in a range of\u00a0currencies. All are exchange traded and the Group made a loss on these futures contracts
of\u00a0$1.4 million (2024: loss of $0.1 million) as included in the investment result in note 7.", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-506": { "value": "
17 Fair value measurements
In accordance with IFRS 13 Fair Value Measurement, the fair value of financial instruments, based on a\u00a0three-level fair value
hierarchy that reflects the significance of the inputs used in measuring the fair value, is set out below.
As at 31 December 2025
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,342.9
6,565.7
10.7
7,919.3
Equities and investment funds
\u2013
160.4
10.4
170.8
Private credit funds
\u2013
\u2013
274.4
274.4
Insurance-linked funds
\u2013
\u2013
67.0
67.0
Derivative financial instruments
\u2013
0.5
\u2013
0.5
Total
1,342.9
6,726.6
362.5
8,432.0
Financial liabilities
Derivative financial instruments
\u2013
0.6
\u2013
0.6
Total
\u2013
0.6
\u2013
0.6
As at 31 December 2024
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
Financial assets
Debt and fixed income holdings
1,127.5
5,523.4
10.0
6,660.9
Equities and investment funds
\u2013
179.3
30.9
210.2
Private credit funds
\u2013
\u2013
148.2
148.2
Insurance-linked funds
\u2013
\u2013
58.3
58.3
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
1,127.5
5,702.7
247.4
7,077.6
Financial liabilities
Derivative financial instruments
\u2013
\u2013
\u2013
\u2013
Total
\u2013
\u2013
\u2013
\u2013
The levels of the fair value hierarchy are defined by the standard as follows:
\u2022 Level 1 \u2013 fair values measured using quoted prices (unadjusted) in active markets for identical instruments;
\u2022 Level 2 \u2013 fair values measured using directly or indirectly observable inputs or other similar valuation techniques
for\u00a0which\u00a0all\u00a0significant inputs are based on market-observable data;
\u2022 Level 3 \u2013 fair values measured using valuation techniques for which significant inputs are not based on
market-observable\u00a0data.
The fair values of the Group\u2019s financial assets are typically based on prices from numerous independent pricing services. The
pricing services used by the investment manager obtain actual transaction prices for securities that have quoted prices in active
markets. For those securities which are not actively traded, the pricing services use common market valuation pricing models.
Observable inputs used in common market valuation pricing models include, but are not limited to, broker quotes, credit ratings,
interest rates and yield curves, prepayment speeds, default rates and other such inputs which are available from market sources.
Investments in mutual funds comprise a\u00a0portfolio of stock investments in trading entities which are invested in various quoted and
unquoted investments. The fair value of these investment funds is based on the net asset value of the fund as reported by
independent pricing sources or the fund manager.
Included within Level 1 of the fair value hierarchy are certain government bonds, treasury bills, corporate bonds having a quoted
price in active markets, and exchange-traded funds which are measured based on quoted prices in active markets.
The fair value of the borrowings carried at amortised cost is estimated at $889.1 million (2024:\u00a0$672.0 million) and is considered
as Level 1 in the fair value hierarchy.
Level 2 of the hierarchy contains certain government bonds, US government agencies, corporate securities, asset-backed
securities, mortgage-backed securities and certain commingled funds. The fair value of these assets is based on the prices
obtained from independent pricing sources, investment managers and investment custodians as discussed above. The Group
records the unadjusted price provided and validates the price through a\u00a0number of methods including a\u00a0comparison of the prices
provided by the investment managers with the investment custodians and the valuation used by external parties to derive fair
value. Quoted prices for US government agencies and corporate securities are based on a\u00a0limited number of transactions for
those securities and as such\u00a0the\u00a0Group considers these instruments to have similar characteristics to those instruments classified
as Level 2. Also included within Level 2 are units held in collective investment vehicles investing in traditional and alternative
investment strategies\u00a0and over-the-counter derivatives. In 2025, Level 2 also included a non-derivative forward contract asset.
Level 3 contains investments in limited partnerships, unquoted equity securities, private credit funds and insurance-linked funds
which have limited observable inputs on which to measure fair value. Unquoted equities, including equity instruments in limited
partnerships, are carried at fair value. Fair value is determined to be net asset value for the limited partnerships, and for the equity
holdings it is determined to be the latest available traded price. The effect of changing one or more inputs used in the
measurement of fair value of these instruments to another reasonably possible assumption would not be significant.
Private credit funds comprise holdings in funds which, in turn, hold debt investments in private companies that are not quoted
on\u00a0an active market. The fair value of the private credit funds is determined based on the net asset values reported by the
investment managers. The underlying loan values, on which the investments are based, are valued by the investment managers
using a discounted cash flow model. The inputs to the valuation are cash flows, risk-free rate and a credit spread. The cash flow
projections are determined by the loan terms and the risk-free rate is the overnight rate for the issuing currency; these are all
observable inputs. The credit spread applied is based on synthetic rating analysis, whereby an equivalent corporate bond rating
is\u00a0assigned to a private loan based on structural analysis of the issuer's statement of financial position and performance since
investment. This is an unobservable input but is not deemed to be significant. Given the Group\u2019s knowledge of the underlying
investments and the size of the Group\u2019s investment therein, the Group would not anticipate any material variance between the
statements and the final net asset values reported by the investment managers.
At 31\u00a0December 2025, the insurance-linked funds of $67.0\u00a0million represent the Group\u2019s investment in the unconsolidated
Kiskadee funds (2024:\u00a0$58.3\u00a0million) as described in note 14.
The fair value of the Kiskadee funds is estimated to be the net asset value as at the end of the reporting period. The net asset
value is based on the fair value of the assets and liabilities in the fund. The majority of the assets of the funds are cash and cash
equivalents. Significant inputs and assumptions in calculating the fair value of the assets and liabilities associated with reinsurance
contracts written by the Kiskadee funds include the amount and timing of claims payable in respect of claims incurred and
periods of unexpired risk. The Group has considered changes in the net asset valuation of the Kiskadee funds if reasonably
different inputs and assumptions were used and has found that a 12% change to the fair value of the liabilities would
increase\u00a0or\u00a0decrease the fair value of funds by $2.2\u00a0million.
In certain cases, the inputs used to measure the fair value of a\u00a0financial instrument may fall into more than one level within
the\u00a0fair\u00a0value hierarchy. In this instance, the fair value of the instrument in its entirety is classified based on the lowest level
of\u00a0input\u00a0that is significant to the fair value measurement.
The table below sets forth a\u00a0reconciliation of opening and closing balances for financial instruments classified under Level 3 of the
fair value hierarchy:
2025
2024
$m
$m
Balance at 1 January
247.4
130.3
Fair value gains/(losses) through profit or loss
17.5
(4.5)
Foreign exchange gains/(losses)
6.0
(0.8)
Purchases
134.5
136.6
Disposals
(42.9)
(14.2)
Transfers
\u2013
\u2013
Closing balance
362.5
247.4
Net unrealised gains/(losses) in the period on securities held at the end of the period
14.2
(4.0)
The closing balance at year end comprised $10.7\u00a0million debt and fixed income holdings (2024: $10.0 million), $10.4\u00a0million
equities and investment funds (2024: $30.9\u00a0million), $274.4\u00a0million private credit funds (2024: $148.2 million) and $67.0\u00a0million
insurance-linked funds (2024: $58.3 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-508": { "value": "
18 Cash and cash equivalents
2025
2024
$m
$m
Cash at bank and in hand
777.5
1,141.3
Short-term deposits
100.5
85.7
Total
878.0
1,227.0
The Group holds its cash deposits with a well-diversified range of banks and financial institutions. Cash includes overnight deposits.
Short-term deposits include debt securities with an original maturity date of less than three months and money market\u00a0funds.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-507": { "value": "
18 Cash and cash equivalents
2025
2024
$m
$m
Cash at bank and in hand
777.5
1,141.3
Short-term deposits
100.5
85.7
Total
878.0
1,227.0
The Group holds its cash deposits with a well-diversified range of banks and financial institutions. Cash includes overnight deposits.
Short-term deposits include debt securities with an original maturity date of less than three months and money market\u00a0funds.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-510": { "value": "
19 Share capital
31 December 2025
31 December 2024
Group
Share
capital
Number
of shares
Share
capital
Number of
shares
$m
000
$m
000
Authorised ordinary share capital of 6.5p (2024: 6.5p)
425.8
3,692,308
425.8
3,692,308
Issued ordinary share capital of 6.5p (2024: 6.5p)
36.8
332,375
38.1
347,503
The amounts presented in the equity section of the Group\u2019s consolidated statement of financial position relate to Hiscox Ltd, the
legal parent\u00a0company.
Changes in Group share capital and contributed surplus
Ordinary share
capital
Share
premium
Contributed
surplus
$000
$000
$000
At 1 January 2024
38,767
528,832
183,969
Employee share option scheme \u2013 proceeds from shares issued
159
21,252
\u2013
Scrip Dividends to owners of the Company
21
3,821
\u2013
Share buyback
(819)
(148,349)
\u2013
At 31 December 2024
38,128
405,556
183,969
Employee share option scheme \u2013 proceeds from shares issued
46
5,054
\u2014
Scrip Dividends to owners of the Company
21
3,951
\u2014
Share buyback
(1,373)
(274,350)
\u2014
At 31 December 2025
36,822
140,211
183,969
On 27 February 2025, the Group announced a share buyback programme for up to a maximum aggregate consideration of
$175\u00a0million to commence on the same day. On 6 August 2025, the Group announced the increase of $100 million to the
ongoing share buyback. In\u00a0total, 15,894,323 shares were purchased with a nominal value of $1.4 million and were subsequently
cancelled. The 15,894,323 shares were acquired at an average price of 1,305 pence per share.
Contributed surplus is a\u00a0distributable reserve and arose on the reverse acquisition of Hiscox plc on 12\u00a0December\u00a02006.
The Company relies on dividend streams from its subsidiary companies to provide the cash flow required for distributions to be
made to shareholders. The ability of the subsidiaries to pay dividends is subject to regulatory restrictions within the jurisdiction
from which they operate.
Shares held by the Group Employee Benefit Trust
The Trustees of the Group Employee Benefit Trust purchased 2,974,660 shares (2024: nil shares) to facilitate the settlement of
vesting awards under the Group\u2019s Performance Share Plan. As the Trust is consolidated into the Group financial results, these
purchases are accounted for in the same way as treasury shares and are charged against retained earnings. The shares are held
by the Trustees for the beneficiaries of the Trust. The following movements were noted in the number of shares held by the Group
Employee Benefit Trust during the year:
2025
2024
Number of shares
Number of shares
At 1 January
343,420
1,054,472
Additions
2,974,660
\u2013
Transfer of shares to employees
(2,069,147)
(711,052)
Total
1,248,933
343,420
Share repurchase
Equity structure of Hiscox Ltd
Number of
ordinary shares
in issue 2025
Number of
ordinary shares
in issue 2024
Note
000
000
At 1 January
347,503
355,283
Employee share option scheme \u2013 ordinary shares issued
531
1,916
Scrip Dividends to owners of the Company
27
235
253
Share buyback
(15,894)
(9,949)
At 31 December
332,375
347,503
All issued shares are fully paid.
Performance Share Plan awards
Performance Share Plan (PSP) awards are granted to Directors and other senior employees. Awards normally vest after a
three-year period subject to the achievement of performance conditions which can be a mix of financial and non-financial
measures. Awards are generally subject to continued employment; however, awards may vest to leavers in certain scenarios.
Awards granted under the all-employee share ownership scheme (HSX:26) vest in April 2026 subject to continued employment
and satisfactory personal performance between the date of grant and vesting.
In accordance with IFRS 2, the Group recognises an expense for the fair value of shares, share options and PSP award
instruments issued to employees, over their vesting period through the income statement. The amount recognised in the
consolidated income statement during the year was an expense of $48.8 million (2024: $49.1 million). This comprises an expense
of $40.5 million ( 2024: $33.3 million) in respect of PSP awards, an expense of $3.5 million (2024: $3.1 million) in respect of share
option awards and an expense of $4.8 million (2024: $12.7 million) in respect of employee share awards. The Group has applied
the principles outlined in the Black-Scholes option pricing model when determining the fair value of each share option instrument.
For the fair value pricing of PSPs, the Group uses the share price on the date of grant of the options. For any options contingent
on achieving targets linked to total shareholder returns, the fair value price on date of grant is adjusted to take account of the
probability of achieving the performance targets.
The range of principal Group assumptions applied in determining the fair value of share-based payment instruments granted
during the year under review are:
Assumptions affecting inputs to fair value models
2025
2024
Annual risk-free rates of return and discount rates(%)
3.88-4.26
3.7-3.97
Long-term dividends yield (%)
1.75
1.54
Expected life of options (years)
3.25
3.25
Implied volatility of share price (%)
33.5
34.6
Weighted average share price (p)
1,106.0
1,186.6
The weighted average fair value of each share option granted during the year was 418.9p (2024: 409.5p). The weighted average
fair value of each Performance Share Plan award granted during the year was 1,083.9p (2024: 1,186.2p).
Movements in the number of share options and PSP awards during the year and details of the balances outstanding at
31\u00a0December 2025 for the Executive Directors are shown in the annual report on remuneration 2025. The total number of
options\u00a0and PSP awards outstanding is 10,559,893 (2024: 10,376,020) of which 1,389,958 are exercisable (2024: 1,014,399).
The\u00a0total number of SAYE options outstanding is 1,859,102 ( 2024: 2,054,494) and employee share awards is 3,704,505
(2024:\u00a04,729,792) of which 700 are exercisable (2024: 12,700).
The implied volatility assumption is based on historical data for periods of between five and ten years immediately preceding
grant\u00a0date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-509": { "value": "
19 Share capital
31 December 2025
31 December 2024
Group
Share
capital
Number
of shares
Share
capital
Number of
shares
$m
000
$m
000
Authorised ordinary share capital of 6.5p (2024: 6.5p)
425.8
3,692,308
425.8
3,692,308
Issued ordinary share capital of 6.5p (2024: 6.5p)
36.8
332,375
38.1
347,503
The amounts presented in the equity section of the Group\u2019s consolidated statement of financial position relate to Hiscox Ltd, the
legal parent\u00a0company.
Changes in Group share capital and contributed surplus
Ordinary share
capital
Share
premium
Contributed
surplus
$000
$000
$000
At 1 January 2024
38,767
528,832
183,969
Employee share option scheme \u2013 proceeds from shares issued
159
21,252
\u2013
Scrip Dividends to owners of the Company
21
3,821
\u2013
Share buyback
(819)
(148,349)
\u2013
At 31 December 2024
38,128
405,556
183,969
Employee share option scheme \u2013 proceeds from shares issued
46
5,054
\u2014
Scrip Dividends to owners of the Company
21
3,951
\u2014
Share buyback
(1,373)
(274,350)
\u2014
At 31 December 2025
36,822
140,211
183,969
On 27 February 2025, the Group announced a share buyback programme for up to a maximum aggregate consideration of
$175\u00a0million to commence on the same day. On 6 August 2025, the Group announced the increase of $100 million to the
ongoing share buyback. In\u00a0total, 15,894,323 shares were purchased with a nominal value of $1.4 million and were subsequently
cancelled. The 15,894,323 shares were acquired at an average price of 1,305 pence per share.
Contributed surplus is a\u00a0distributable reserve and arose on the reverse acquisition of Hiscox plc on 12\u00a0December\u00a02006.
The Company relies on dividend streams from its subsidiary companies to provide the cash flow required for distributions to be
made to shareholders. The ability of the subsidiaries to pay dividends is subject to regulatory restrictions within the jurisdiction
from which they operate.
Shares held by the Group Employee Benefit Trust
The Trustees of the Group Employee Benefit Trust purchased 2,974,660 shares (2024: nil shares) to facilitate the settlement of
vesting awards under the Group\u2019s Performance Share Plan. As the Trust is consolidated into the Group financial results, these
purchases are accounted for in the same way as treasury shares and are charged against retained earnings. The shares are held
by the Trustees for the beneficiaries of the Trust. The following movements were noted in the number of shares held by the Group
Employee Benefit Trust during the year:
2025
2024
Number of shares
Number of shares
At 1 January
343,420
1,054,472
Additions
2,974,660
\u2013
Transfer of shares to employees
(2,069,147)
(711,052)
Total
1,248,933
343,420
Share repurchase
Equity structure of Hiscox Ltd
Number of
ordinary shares
in issue 2025
Number of
ordinary shares
in issue 2024
Note
000
000
At 1 January
347,503
355,283
Employee share option scheme \u2013 ordinary shares issued
531
1,916
Scrip Dividends to owners of the Company
27
235
253
Share buyback
(15,894)
(9,949)
At 31 December
332,375
347,503
All issued shares are fully paid.
Performance Share Plan awards
Performance Share Plan (PSP) awards are granted to Directors and other senior employees. Awards normally vest after a
three-year period subject to the achievement of performance conditions which can be a mix of financial and non-financial
measures. Awards are generally subject to continued employment; however, awards may vest to leavers in certain scenarios.
Awards granted under the all-employee share ownership scheme (HSX:26) vest in April 2026 subject to continued employment
and satisfactory personal performance between the date of grant and vesting.
In accordance with IFRS 2, the Group recognises an expense for the fair value of shares, share options and PSP award
instruments issued to employees, over their vesting period through the income statement. The amount recognised in the
consolidated income statement during the year was an expense of $48.8 million (2024: $49.1 million). This comprises an expense
of $40.5 million ( 2024: $33.3 million) in respect of PSP awards, an expense of $3.5 million (2024: $3.1 million) in respect of share
option awards and an expense of $4.8 million (2024: $12.7 million) in respect of employee share awards. The Group has applied
the principles outlined in the Black-Scholes option pricing model when determining the fair value of each share option instrument.
For the fair value pricing of PSPs, the Group uses the share price on the date of grant of the options. For any options contingent
on achieving targets linked to total shareholder returns, the fair value price on date of grant is adjusted to take account of the
probability of achieving the performance targets.
The range of principal Group assumptions applied in determining the fair value of share-based payment instruments granted
during the year under review are:
Assumptions affecting inputs to fair value models
2025
2024
Annual risk-free rates of return and discount rates(%)
3.88-4.26
3.7-3.97
Long-term dividends yield (%)
1.75
1.54
Expected life of options (years)
3.25
3.25
Implied volatility of share price (%)
33.5
34.6
Weighted average share price (p)
1,106.0
1,186.6
The weighted average fair value of each share option granted during the year was 418.9p (2024: 409.5p). The weighted average
fair value of each Performance Share Plan award granted during the year was 1,083.9p (2024: 1,186.2p).
Movements in the number of share options and PSP awards during the year and details of the balances outstanding at
31\u00a0December 2025 for the Executive Directors are shown in the annual report on remuneration 2025. The total number of
options\u00a0and PSP awards outstanding is 10,559,893 (2024: 10,376,020) of which 1,389,958 are exercisable (2024: 1,014,399).
The\u00a0total number of SAYE options outstanding is 1,859,102 ( 2024: 2,054,494) and employee share awards is 3,704,505
(2024:\u00a04,729,792) of which 700 are exercisable (2024: 12,700).
The implied volatility assumption is based on historical data for periods of between five and ten years immediately preceding
grant\u00a0date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-511": { "value": "
Performance Share Plan awards
Performance Share Plan (PSP) awards are granted to Directors and other senior employees. Awards normally vest after a
three-year period subject to the achievement of performance conditions which can be a mix of financial and non-financial
measures. Awards are generally subject to continued employment; however, awards may vest to leavers in certain scenarios.
Awards granted under the all-employee share ownership scheme (HSX:26) vest in April 2026 subject to continued employment
and satisfactory personal performance between the date of grant and vesting.
In accordance with IFRS 2, the Group recognises an expense for the fair value of shares, share options and PSP award
instruments issued to employees, over their vesting period through the income statement. The amount recognised in the
consolidated income statement during the year was an expense of $48.8 million (2024: $49.1 million). This comprises an expense
of $40.5 million ( 2024: $33.3 million) in respect of PSP awards, an expense of $3.5 million (2024: $3.1 million) in respect of share
option awards and an expense of $4.8 million (2024: $12.7 million) in respect of employee share awards. The Group has applied
the principles outlined in the Black-Scholes option pricing model when determining the fair value of each share option instrument.
For the fair value pricing of PSPs, the Group uses the share price on the date of grant of the options. For any options contingent
on achieving targets linked to total shareholder returns, the fair value price on date of grant is adjusted to take account of the
probability of achieving the performance targets.
The range of principal Group assumptions applied in determining the fair value of share-based payment instruments granted
during the year under review are:
Assumptions affecting inputs to fair value models
2025
2024
Annual risk-free rates of return and discount rates(%)
3.88-4.26
3.7-3.97
Long-term dividends yield (%)
1.75
1.54
Expected life of options (years)
3.25
3.25
Implied volatility of share price (%)
33.5
34.6
Weighted average share price (p)
1,106.0
1,186.6
The weighted average fair value of each share option granted during the year was 418.9p (2024: 409.5p). The weighted average
fair value of each Performance Share Plan award granted during the year was 1,083.9p (2024: 1,186.2p).
Movements in the number of share options and PSP awards during the year and details of the balances outstanding at
31\u00a0December 2025 for the Executive Directors are shown in the annual report on remuneration 2025. The total number of
options\u00a0and PSP awards outstanding is 10,559,893 (2024: 10,376,020) of which 1,389,958 are exercisable (2024: 1,014,399).
The\u00a0total number of SAYE options outstanding is 1,859,102 ( 2024: 2,054,494) and employee share awards is 3,704,505
(2024:\u00a04,729,792) of which 700 are exercisable (2024: 12,700).
The implied volatility assumption is based on historical data for periods of between five and ten years immediately preceding
grant\u00a0date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-515": { "value": "
20 Insurance contract liabilities and reinsurance contract assets
2025
2024
$m
$m
Insurance contract liabilities
6,877.5
6,396.3
Reinsurance contract assets
(1,824.8)
(1,976.8)
Net insurance contract liabilities
5,052.7
4,419.5
Detailed reconciliation of changes in insurance contract balances during the year is included below in note 20.1.
The analysis of changes is disclosed at a consolidated level in line with how the Group manages and monitors the statement
of\u00a0financial position. Further details related to changes in the consolidated income statement by segmental reporting are
disclosed in note 4.
20.1(a) Net insurance contract liabilities
Net insurance contracts \u2013 analysis by remaining coverage and incurred claims
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2025
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
415.9
9.4
3,701.3
292.9
4,419.5
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,647.2)
\u2013
\u2013
\u2013
(3,647.2)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(11.5)
2,185.4
160.9
2,334.8
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(353.8)
(96.5)
(450.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.7)
\u2013
(0.7)
Total net insurance service expenses
1,145.4
(7.4)
1,830.9
64.4
3,033.3
Insurance service result
(2,501.8)
(7.4)
1,830.9
64.4
(613.9)
Net finance (income)/expenses from insurance contracts
(6.8)
\u2013
171.8
\u2013
165.0
Net foreign exchange losses
37.7
0.1
110.4
8.9
157.1
Total change recognised in comprehensive income
(2,470.9)
(7.3)
2,113.1
73.3
(291.8)
Investment components
39.7
\u2013
(39.7)
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Net cash flows
Net premium received
3,757.1
\u2013
\u2013
\u2013
3,757.1
Net claims and other insurance service expenses paid
\u2013
\u2013
(935.5)
\u2013
(935.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
2,852.8
\u2013
(935.5)
\u2013
1,917.3
Closing assets
142.0*
\u2013
(1,613.7)
(353.1)
(1,824.8)
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing balance
556.5
2.1
4,127.8
366.3
5,052.7
*The net liabilities for remaining coverage, excluding loss component, includes LPT ARC gross of premium payables of $407.0 million at 31\u00a0December 2024 and
$288.4 million at 31\u00a0December 2025.
\u2020Includes allocation of LPT premium of $132.3 million.
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2024
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
118.8*
\u2013
(1,696.3)
(520.8)
(2,098.3)
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
465.7
7.5
3,731.5
301.0
4,505.7
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,463.1)
\u2013
\u2013
\u2013
(3,463.1)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(10.4)
2,089.9
57.6
2,137.1
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(255.4)
(59.4)
(314.8)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.6)
\u2013
(0.6)
Total net insurance service expenses
1,075.6
1.9
1,833.9
(1.8)
2,909.6
Insurance service result
(2,387.5)
1.9
1,833.9
(1.8)
(553.5)
Net finance (income)/expenses from insurance contracts
(10.0)
\u2013
162.1
\u2013
152.1
Net foreign exchange gains
(24.1)
\u2013
(44.4)
(5.6)
(74.1)
Total change recognised in comprehensive income
(2,421.6)
1.9
1,951.6
(7.4)
(475.5)
Investment components
36.3
\u2013
(36.3)
\u2013
\u2013
Transfer to other items in statement of financial position
(271.8)
\u2013
(702.1)
(0.7)
(974.6)
Net cash flows
Net premium received
3,440.6
\u2013
\u2013
\u2013
3,440.6
Net claims and other insurance service expenses paid
\u2013
\u2013
(1,243.4)
\u2013
(1,243.4)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
2,607.3
\u2013
(1,243.4)
\u2013
1,363.9
Closing assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing balance
415.9
9.4
3,701.3
292.9
4,419.5
*Includes LPT ARC gross of premium receivable $532.3 million at 31\u00a0December 2023 and $407.0 million at 31\u00a0December 2024.
\u2020Includes allocation of LPT premium of $139.2 million.
20.1(b) Insurance contract liabilities
Insurance contracts \u2013 analysis by remaining coverage and incurred claims
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2025
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
346.2
9.4
5,427.5
613.2
6,396.3
Changes in the consolidated income statement
Insurance revenue
(4,883.7)
\u2013
\u2013
\u2013
(4,883.7)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(11.5)
2,828.6
343.2
3,160.3
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(352.6)
(252.7)
(605.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Total insurance service expenses
1,145.4
(7.4)
2,476.0
90.5
3,704.5
Insurance service result
(3,738.3)
(7.4)
2,476.0
90.5
(1,179.2)
Net finance expense from insurance contracts
\u2013
\u2013
238.6
\u2013
238.6
Foreign exchange movements
29.2
0.1
167.9
15.6
212.8
Total change in the consolidated income statement
(3,709.1)
(7.3)
2,882.5
106.1
(727.8)
Investment components
(0.4)
\u2013
0.4
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Cash flows
Premium received
4,963.1
\u2013
\u2013
\u2013
4,963.1
Claims and other insurance service expenses paid
\u2013
\u2013
(1,857.5)
\u2013
(1,857.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
4,058.8
\u2013
(1,857.5)
\u2013
2,201.3
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2024
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
346.9
7.5
5,427.8
821.8
6,604.0
Changes in the consolidated income statement
Insurance revenue
(4,672.5)
\u2013
\u2013
\u2013
(4,672.5)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(10.4)
2,612.6
136.6
2,738.8
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(155.2)
(340.5)
(495.7)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Total insurance service expenses
1,075.6
1.9
2,457.4
(203.9)
3,331.0
Insurance service result
(3,596.9)
1.9
2,457.4
(203.9)
(1,341.5)
Net finance expense from insurance contracts
\u2013
\u2013
225.5
\u2013
225.5
Foreign exchange movements
(11.1)
\u2013
(69.2)
(3.5)
(83.8)
Total change in the consolidated income statement
(3,608.0)
1.9
2,613.7
(207.4)
(1,199.8)
Investment components
(0.6)
\u2013
0.6
\u2013
\u2013
Transfer to other items in statement of financial position
(277.1)
\u2013
(709.6)
(1.2)
(987.9)
Cash flows
Premium received
4,718.3
\u2013
\u2013
\u2013
4,718.3
Claims and other insurance service expenses paid
\u2013
\u2013
(1,905.0)
\u2013
(1,905.0)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
3,885.0
\u2013
(1,905.0)
\u2013
1,980.0
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
20.1(c) Reinsurance contract assets \u2013 analysis by remaining coverage and incurred claims
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2025
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,236.5)
\u2013
\u2013
\u2013
(1,236.5)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
643.2
182.3
825.5
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
1.2
(156.2)
(155.0)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.7
\u2013
0.7
Total amounts recoverable from reinsurers
\u2013
\u2013
645.1
26.1
671.2
Net expense from reinsurance contracts held
(1,236.5)
\u2013
645.1
26.1
(565.3)
Net finance income from reinsurance contracts
6.8
\u2013
66.8
\u2013
73.6
Foreign exchange movements
(8.5)
\u2013
57.5
6.7
55.7
Total changes in the consolidated income statement
(1,238.2)
\u2013
769.4
32.8
(436.0)
Investment components
(40.1)
\u2013
40.1
\u2013
\u2013
Transfer to other items in the statement of financial position
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premium paid
1,206.0
\u2013
\u2013
\u2013
1,206.0
Amounts received
\u2013
\u2013
(922.0)
\u2013
(922.0)
Total cash flows
1,206.0
\u2013
(922.0)
\u2013
284.0
Closing assets
(142.0)
\u2013
1,613.7
353.1
1,824.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(142.0)
\u2013
1,613.7
353.1
1,824.8
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2024
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(118.8)
\u2013
1,696.3
520.8
2,098.3
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(118.8)
\u2013
1,696.3
520.8
2,098.3
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,209.4)
\u2013
\u2013
\u2013
(1,209.4)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
522.7
79.0
601.7
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
100.2
(281.1)
(180.9)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.6
\u2013
0.6
Total amounts recoverable from reinsurers
\u2013
\u2013
623.5
(202.1)
421.4
Net expense from reinsurance contracts held
(1,209.4)
\u2013
623.5
(202.1)
(788.0)
Net finance income from reinsurance contracts
10.0
\u2013
63.4
\u2013
73.4
Foreign exchange movements
13.0
\u2013
(24.8)
2.1
(9.7)
Total changes in the consolidated income statement
(1,186.4)
\u2013
662.1
(200.0)
(724.3)
Investment components
(36.9)
\u2013
36.9
\u2013
\u2013
Transfer to other items in the statement of financial position
(5.3)
\u2013
(7.5)
(0.5)
(13.3)
Cash flows
Premium paid
1,277.7
\u2013
\u2013
\u2013
1,277.7
Amounts received
\u2013
\u2013
(661.6)
\u2013
(661.6)
Total cash flows
1,277.7
\u2013
(661.6)
\u2013
616.1
Closing assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
The development of insurance contract liabilities provides a\u00a0measure of the Group\u2019s ability to estimate the ultimate cost of claims.
The Group analyses actual claims development compared with previous estimates on an accident year basis.
The Group provides information on the gross and net claims development for the current reporting period and four years prior
to\u00a0it. The Group considers that there is no significant uncertainty with regard to claims that were incurred more than four years
before the reporting period.
(a) Insurance contract liability for incurred claims \u2013 net of reinsurance
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
1,616.1
1,552.8
1,528.6
1,668.7
1,803.5
8,169.7
one period later
1,522.6
1,557.2
1,485.2
1,585.6
6,150.6
two periods later
1,466.4
1,454.1
1,412.4
4,332.9
three periods later
1,439.8
1,375.4
2,815.2
four periods later
1,407.4
1,407.4
Current estimate of cumulative claims
1,407.4
1,375.4
1,412.4
1,585.6
1,803.5
7,584.3
Cumulative payments to date
(1,041.3)
(951.6)
(879.9)
(637.9)
(467.3)
(3,978.0)
Net cumulative liability for incurred claims \u2013 accident
years from 2021 to 2025
366.1
423.8
532.5
947.7
1,336.2
3,606.3
Net cumulative liability for incurred claims in respect of
accident years before 2021
1,191.4
Effect of discounting
(303.6)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 net
4,494.1
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
The table above excludes reinsurance recoveries related to the retroactive reinsurance contracts, for example legacy portfolio transfer arrangements where the
financial effect of the underlying claims is still uncertain. These are included in reinsurance contract asset for remaining coverage.
(b) Insurance contract liability for incurred claims \u2013 gross
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
2,608.2
2,581.2
2,047.9
2,328.1
2,680.5
12,245.9
one period later
2,498.7
2,566.0
1,992.3
2,152.3
9,209.3
two periods later
2,329.3
2,235.2
1,853.1
6,417.6
three periods later
2,265.4
2,154.4
4,419.8
four periods later
2,201.7
2,201.7
Current estimate of cumulative claims
2,201.7
2,154.4
1,853.1
2,152.3
2,680.5
11,042.0
Cumulative payments to date
(1,742.2)
(1,474.0)
(1,075.2)
(797.5)
(594.3)
(5,683.2)
Gross cumulative liability for incurred claims \u2013
accident years from 2021 to 2025
459.5
680.4
777.9
1,354.8
2,086.2
5,358.8
Gross cumulative liability for incurred claims in respect
of accident years before 2021
1,515.1
Effect of discounting
(413.0)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 gross
6,460.9
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-514": { "value": "
20 Insurance contract liabilities and reinsurance contract assets
2025
2024
$m
$m
Insurance contract liabilities
6,877.5
6,396.3
Reinsurance contract assets
(1,824.8)
(1,976.8)
Net insurance contract liabilities
5,052.7
4,419.5
Detailed reconciliation of changes in insurance contract balances during the year is included below in note 20.1.
The analysis of changes is disclosed at a consolidated level in line with how the Group manages and monitors the statement
of\u00a0financial position. Further details related to changes in the consolidated income statement by segmental reporting are
disclosed in note 4.
20.1(a) Net insurance contract liabilities
Net insurance contracts \u2013 analysis by remaining coverage and incurred claims
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2025
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
415.9
9.4
3,701.3
292.9
4,419.5
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,647.2)
\u2013
\u2013
\u2013
(3,647.2)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(11.5)
2,185.4
160.9
2,334.8
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(353.8)
(96.5)
(450.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.7)
\u2013
(0.7)
Total net insurance service expenses
1,145.4
(7.4)
1,830.9
64.4
3,033.3
Insurance service result
(2,501.8)
(7.4)
1,830.9
64.4
(613.9)
Net finance (income)/expenses from insurance contracts
(6.8)
\u2013
171.8
\u2013
165.0
Net foreign exchange losses
37.7
0.1
110.4
8.9
157.1
Total change recognised in comprehensive income
(2,470.9)
(7.3)
2,113.1
73.3
(291.8)
Investment components
39.7
\u2013
(39.7)
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Net cash flows
Net premium received
3,757.1
\u2013
\u2013
\u2013
3,757.1
Net claims and other insurance service expenses paid
\u2013
\u2013
(935.5)
\u2013
(935.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
2,852.8
\u2013
(935.5)
\u2013
1,917.3
Closing assets
142.0*
\u2013
(1,613.7)
(353.1)
(1,824.8)
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing balance
556.5
2.1
4,127.8
366.3
5,052.7
*The net liabilities for remaining coverage, excluding loss component, includes LPT ARC gross of premium payables of $407.0 million at 31\u00a0December 2024 and
$288.4 million at 31\u00a0December 2025.
\u2020Includes allocation of LPT premium of $132.3 million.
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2024
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
118.8*
\u2013
(1,696.3)
(520.8)
(2,098.3)
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
465.7
7.5
3,731.5
301.0
4,505.7
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,463.1)
\u2013
\u2013
\u2013
(3,463.1)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(10.4)
2,089.9
57.6
2,137.1
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(255.4)
(59.4)
(314.8)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.6)
\u2013
(0.6)
Total net insurance service expenses
1,075.6
1.9
1,833.9
(1.8)
2,909.6
Insurance service result
(2,387.5)
1.9
1,833.9
(1.8)
(553.5)
Net finance (income)/expenses from insurance contracts
(10.0)
\u2013
162.1
\u2013
152.1
Net foreign exchange gains
(24.1)
\u2013
(44.4)
(5.6)
(74.1)
Total change recognised in comprehensive income
(2,421.6)
1.9
1,951.6
(7.4)
(475.5)
Investment components
36.3
\u2013
(36.3)
\u2013
\u2013
Transfer to other items in statement of financial position
(271.8)
\u2013
(702.1)
(0.7)
(974.6)
Net cash flows
Net premium received
3,440.6
\u2013
\u2013
\u2013
3,440.6
Net claims and other insurance service expenses paid
\u2013
\u2013
(1,243.4)
\u2013
(1,243.4)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
2,607.3
\u2013
(1,243.4)
\u2013
1,363.9
Closing assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing balance
415.9
9.4
3,701.3
292.9
4,419.5
*Includes LPT ARC gross of premium receivable $532.3 million at 31\u00a0December 2023 and $407.0 million at 31\u00a0December 2024.
\u2020Includes allocation of LPT premium of $139.2 million.
20.1(b) Insurance contract liabilities
Insurance contracts \u2013 analysis by remaining coverage and incurred claims
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2025
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
346.2
9.4
5,427.5
613.2
6,396.3
Changes in the consolidated income statement
Insurance revenue
(4,883.7)
\u2013
\u2013
\u2013
(4,883.7)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(11.5)
2,828.6
343.2
3,160.3
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(352.6)
(252.7)
(605.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Total insurance service expenses
1,145.4
(7.4)
2,476.0
90.5
3,704.5
Insurance service result
(3,738.3)
(7.4)
2,476.0
90.5
(1,179.2)
Net finance expense from insurance contracts
\u2013
\u2013
238.6
\u2013
238.6
Foreign exchange movements
29.2
0.1
167.9
15.6
212.8
Total change in the consolidated income statement
(3,709.1)
(7.3)
2,882.5
106.1
(727.8)
Investment components
(0.4)
\u2013
0.4
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Cash flows
Premium received
4,963.1
\u2013
\u2013
\u2013
4,963.1
Claims and other insurance service expenses paid
\u2013
\u2013
(1,857.5)
\u2013
(1,857.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
4,058.8
\u2013
(1,857.5)
\u2013
2,201.3
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2024
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
346.9
7.5
5,427.8
821.8
6,604.0
Changes in the consolidated income statement
Insurance revenue
(4,672.5)
\u2013
\u2013
\u2013
(4,672.5)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(10.4)
2,612.6
136.6
2,738.8
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(155.2)
(340.5)
(495.7)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Total insurance service expenses
1,075.6
1.9
2,457.4
(203.9)
3,331.0
Insurance service result
(3,596.9)
1.9
2,457.4
(203.9)
(1,341.5)
Net finance expense from insurance contracts
\u2013
\u2013
225.5
\u2013
225.5
Foreign exchange movements
(11.1)
\u2013
(69.2)
(3.5)
(83.8)
Total change in the consolidated income statement
(3,608.0)
1.9
2,613.7
(207.4)
(1,199.8)
Investment components
(0.6)
\u2013
0.6
\u2013
\u2013
Transfer to other items in statement of financial position
(277.1)
\u2013
(709.6)
(1.2)
(987.9)
Cash flows
Premium received
4,718.3
\u2013
\u2013
\u2013
4,718.3
Claims and other insurance service expenses paid
\u2013
\u2013
(1,905.0)
\u2013
(1,905.0)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
3,885.0
\u2013
(1,905.0)
\u2013
1,980.0
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
20.1(c) Reinsurance contract assets \u2013 analysis by remaining coverage and incurred claims
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2025
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,236.5)
\u2013
\u2013
\u2013
(1,236.5)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
643.2
182.3
825.5
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
1.2
(156.2)
(155.0)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.7
\u2013
0.7
Total amounts recoverable from reinsurers
\u2013
\u2013
645.1
26.1
671.2
Net expense from reinsurance contracts held
(1,236.5)
\u2013
645.1
26.1
(565.3)
Net finance income from reinsurance contracts
6.8
\u2013
66.8
\u2013
73.6
Foreign exchange movements
(8.5)
\u2013
57.5
6.7
55.7
Total changes in the consolidated income statement
(1,238.2)
\u2013
769.4
32.8
(436.0)
Investment components
(40.1)
\u2013
40.1
\u2013
\u2013
Transfer to other items in the statement of financial position
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premium paid
1,206.0
\u2013
\u2013
\u2013
1,206.0
Amounts received
\u2013
\u2013
(922.0)
\u2013
(922.0)
Total cash flows
1,206.0
\u2013
(922.0)
\u2013
284.0
Closing assets
(142.0)
\u2013
1,613.7
353.1
1,824.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(142.0)
\u2013
1,613.7
353.1
1,824.8
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2024
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(118.8)
\u2013
1,696.3
520.8
2,098.3
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(118.8)
\u2013
1,696.3
520.8
2,098.3
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,209.4)
\u2013
\u2013
\u2013
(1,209.4)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
522.7
79.0
601.7
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
100.2
(281.1)
(180.9)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.6
\u2013
0.6
Total amounts recoverable from reinsurers
\u2013
\u2013
623.5
(202.1)
421.4
Net expense from reinsurance contracts held
(1,209.4)
\u2013
623.5
(202.1)
(788.0)
Net finance income from reinsurance contracts
10.0
\u2013
63.4
\u2013
73.4
Foreign exchange movements
13.0
\u2013
(24.8)
2.1
(9.7)
Total changes in the consolidated income statement
(1,186.4)
\u2013
662.1
(200.0)
(724.3)
Investment components
(36.9)
\u2013
36.9
\u2013
\u2013
Transfer to other items in the statement of financial position
(5.3)
\u2013
(7.5)
(0.5)
(13.3)
Cash flows
Premium paid
1,277.7
\u2013
\u2013
\u2013
1,277.7
Amounts received
\u2013
\u2013
(661.6)
\u2013
(661.6)
Total cash flows
1,277.7
\u2013
(661.6)
\u2013
616.1
Closing assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
The development of insurance contract liabilities provides a\u00a0measure of the Group\u2019s ability to estimate the ultimate cost of claims.
The Group analyses actual claims development compared with previous estimates on an accident year basis.
The Group provides information on the gross and net claims development for the current reporting period and four years prior
to\u00a0it. The Group considers that there is no significant uncertainty with regard to claims that were incurred more than four years
before the reporting period.
(a) Insurance contract liability for incurred claims \u2013 net of reinsurance
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
1,616.1
1,552.8
1,528.6
1,668.7
1,803.5
8,169.7
one period later
1,522.6
1,557.2
1,485.2
1,585.6
6,150.6
two periods later
1,466.4
1,454.1
1,412.4
4,332.9
three periods later
1,439.8
1,375.4
2,815.2
four periods later
1,407.4
1,407.4
Current estimate of cumulative claims
1,407.4
1,375.4
1,412.4
1,585.6
1,803.5
7,584.3
Cumulative payments to date
(1,041.3)
(951.6)
(879.9)
(637.9)
(467.3)
(3,978.0)
Net cumulative liability for incurred claims \u2013 accident
years from 2021 to 2025
366.1
423.8
532.5
947.7
1,336.2
3,606.3
Net cumulative liability for incurred claims in respect of
accident years before 2021
1,191.4
Effect of discounting
(303.6)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 net
4,494.1
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
The table above excludes reinsurance recoveries related to the retroactive reinsurance contracts, for example legacy portfolio transfer arrangements where the
financial effect of the underlying claims is still uncertain. These are included in reinsurance contract asset for remaining coverage.
(b) Insurance contract liability for incurred claims \u2013 gross
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
2,608.2
2,581.2
2,047.9
2,328.1
2,680.5
12,245.9
one period later
2,498.7
2,566.0
1,992.3
2,152.3
9,209.3
two periods later
2,329.3
2,235.2
1,853.1
6,417.6
three periods later
2,265.4
2,154.4
4,419.8
four periods later
2,201.7
2,201.7
Current estimate of cumulative claims
2,201.7
2,154.4
1,853.1
2,152.3
2,680.5
11,042.0
Cumulative payments to date
(1,742.2)
(1,474.0)
(1,075.2)
(797.5)
(594.3)
(5,683.2)
Gross cumulative liability for incurred claims \u2013
accident years from 2021 to 2025
459.5
680.4
777.9
1,354.8
2,086.2
5,358.8
Gross cumulative liability for incurred claims in respect
of accident years before 2021
1,515.1
Effect of discounting
(413.0)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 gross
6,460.9
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-513": { "value": "
20 Insurance contract liabilities and reinsurance contract assets
2025
2024
$m
$m
Insurance contract liabilities
6,877.5
6,396.3
Reinsurance contract assets
(1,824.8)
(1,976.8)
Net insurance contract liabilities
5,052.7
4,419.5
Detailed reconciliation of changes in insurance contract balances during the year is included below in note 20.1.
The analysis of changes is disclosed at a consolidated level in line with how the Group manages and monitors the statement
of\u00a0financial position. Further details related to changes in the consolidated income statement by segmental reporting are
disclosed in note 4.
20.1(a) Net insurance contract liabilities
Net insurance contracts \u2013 analysis by remaining coverage and incurred claims
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2025
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
415.9
9.4
3,701.3
292.9
4,419.5
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,647.2)
\u2013
\u2013
\u2013
(3,647.2)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(11.5)
2,185.4
160.9
2,334.8
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(353.8)
(96.5)
(450.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.7)
\u2013
(0.7)
Total net insurance service expenses
1,145.4
(7.4)
1,830.9
64.4
3,033.3
Insurance service result
(2,501.8)
(7.4)
1,830.9
64.4
(613.9)
Net finance (income)/expenses from insurance contracts
(6.8)
\u2013
171.8
\u2013
165.0
Net foreign exchange losses
37.7
0.1
110.4
8.9
157.1
Total change recognised in comprehensive income
(2,470.9)
(7.3)
2,113.1
73.3
(291.8)
Investment components
39.7
\u2013
(39.7)
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Net cash flows
Net premium received
3,757.1
\u2013
\u2013
\u2013
3,757.1
Net claims and other insurance service expenses paid
\u2013
\u2013
(935.5)
\u2013
(935.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
2,852.8
\u2013
(935.5)
\u2013
1,917.3
Closing assets
142.0*
\u2013
(1,613.7)
(353.1)
(1,824.8)
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing balance
556.5
2.1
4,127.8
366.3
5,052.7
*The net liabilities for remaining coverage, excluding loss component, includes LPT ARC gross of premium payables of $407.0 million at 31\u00a0December 2024 and
$288.4 million at 31\u00a0December 2025.
\u2020Includes allocation of LPT premium of $132.3 million.
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2024
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
118.8*
\u2013
(1,696.3)
(520.8)
(2,098.3)
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
465.7
7.5
3,731.5
301.0
4,505.7
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,463.1)
\u2013
\u2013
\u2013
(3,463.1)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(10.4)
2,089.9
57.6
2,137.1
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(255.4)
(59.4)
(314.8)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.6)
\u2013
(0.6)
Total net insurance service expenses
1,075.6
1.9
1,833.9
(1.8)
2,909.6
Insurance service result
(2,387.5)
1.9
1,833.9
(1.8)
(553.5)
Net finance (income)/expenses from insurance contracts
(10.0)
\u2013
162.1
\u2013
152.1
Net foreign exchange gains
(24.1)
\u2013
(44.4)
(5.6)
(74.1)
Total change recognised in comprehensive income
(2,421.6)
1.9
1,951.6
(7.4)
(475.5)
Investment components
36.3
\u2013
(36.3)
\u2013
\u2013
Transfer to other items in statement of financial position
(271.8)
\u2013
(702.1)
(0.7)
(974.6)
Net cash flows
Net premium received
3,440.6
\u2013
\u2013
\u2013
3,440.6
Net claims and other insurance service expenses paid
\u2013
\u2013
(1,243.4)
\u2013
(1,243.4)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
2,607.3
\u2013
(1,243.4)
\u2013
1,363.9
Closing assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing balance
415.9
9.4
3,701.3
292.9
4,419.5
*Includes LPT ARC gross of premium receivable $532.3 million at 31\u00a0December 2023 and $407.0 million at 31\u00a0December 2024.
\u2020Includes allocation of LPT premium of $139.2 million.
20.1(b) Insurance contract liabilities
Insurance contracts \u2013 analysis by remaining coverage and incurred claims
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2025
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
346.2
9.4
5,427.5
613.2
6,396.3
Changes in the consolidated income statement
Insurance revenue
(4,883.7)
\u2013
\u2013
\u2013
(4,883.7)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(11.5)
2,828.6
343.2
3,160.3
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(352.6)
(252.7)
(605.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Total insurance service expenses
1,145.4
(7.4)
2,476.0
90.5
3,704.5
Insurance service result
(3,738.3)
(7.4)
2,476.0
90.5
(1,179.2)
Net finance expense from insurance contracts
\u2013
\u2013
238.6
\u2013
238.6
Foreign exchange movements
29.2
0.1
167.9
15.6
212.8
Total change in the consolidated income statement
(3,709.1)
(7.3)
2,882.5
106.1
(727.8)
Investment components
(0.4)
\u2013
0.4
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Cash flows
Premium received
4,963.1
\u2013
\u2013
\u2013
4,963.1
Claims and other insurance service expenses paid
\u2013
\u2013
(1,857.5)
\u2013
(1,857.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
4,058.8
\u2013
(1,857.5)
\u2013
2,201.3
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2024
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
346.9
7.5
5,427.8
821.8
6,604.0
Changes in the consolidated income statement
Insurance revenue
(4,672.5)
\u2013
\u2013
\u2013
(4,672.5)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(10.4)
2,612.6
136.6
2,738.8
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(155.2)
(340.5)
(495.7)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Total insurance service expenses
1,075.6
1.9
2,457.4
(203.9)
3,331.0
Insurance service result
(3,596.9)
1.9
2,457.4
(203.9)
(1,341.5)
Net finance expense from insurance contracts
\u2013
\u2013
225.5
\u2013
225.5
Foreign exchange movements
(11.1)
\u2013
(69.2)
(3.5)
(83.8)
Total change in the consolidated income statement
(3,608.0)
1.9
2,613.7
(207.4)
(1,199.8)
Investment components
(0.6)
\u2013
0.6
\u2013
\u2013
Transfer to other items in statement of financial position
(277.1)
\u2013
(709.6)
(1.2)
(987.9)
Cash flows
Premium received
4,718.3
\u2013
\u2013
\u2013
4,718.3
Claims and other insurance service expenses paid
\u2013
\u2013
(1,905.0)
\u2013
(1,905.0)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
3,885.0
\u2013
(1,905.0)
\u2013
1,980.0
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
20.1(c) Reinsurance contract assets \u2013 analysis by remaining coverage and incurred claims
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2025
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,236.5)
\u2013
\u2013
\u2013
(1,236.5)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
643.2
182.3
825.5
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
1.2
(156.2)
(155.0)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.7
\u2013
0.7
Total amounts recoverable from reinsurers
\u2013
\u2013
645.1
26.1
671.2
Net expense from reinsurance contracts held
(1,236.5)
\u2013
645.1
26.1
(565.3)
Net finance income from reinsurance contracts
6.8
\u2013
66.8
\u2013
73.6
Foreign exchange movements
(8.5)
\u2013
57.5
6.7
55.7
Total changes in the consolidated income statement
(1,238.2)
\u2013
769.4
32.8
(436.0)
Investment components
(40.1)
\u2013
40.1
\u2013
\u2013
Transfer to other items in the statement of financial position
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premium paid
1,206.0
\u2013
\u2013
\u2013
1,206.0
Amounts received
\u2013
\u2013
(922.0)
\u2013
(922.0)
Total cash flows
1,206.0
\u2013
(922.0)
\u2013
284.0
Closing assets
(142.0)
\u2013
1,613.7
353.1
1,824.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(142.0)
\u2013
1,613.7
353.1
1,824.8
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2024
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(118.8)
\u2013
1,696.3
520.8
2,098.3
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(118.8)
\u2013
1,696.3
520.8
2,098.3
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,209.4)
\u2013
\u2013
\u2013
(1,209.4)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
522.7
79.0
601.7
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
100.2
(281.1)
(180.9)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.6
\u2013
0.6
Total amounts recoverable from reinsurers
\u2013
\u2013
623.5
(202.1)
421.4
Net expense from reinsurance contracts held
(1,209.4)
\u2013
623.5
(202.1)
(788.0)
Net finance income from reinsurance contracts
10.0
\u2013
63.4
\u2013
73.4
Foreign exchange movements
13.0
\u2013
(24.8)
2.1
(9.7)
Total changes in the consolidated income statement
(1,186.4)
\u2013
662.1
(200.0)
(724.3)
Investment components
(36.9)
\u2013
36.9
\u2013
\u2013
Transfer to other items in the statement of financial position
(5.3)
\u2013
(7.5)
(0.5)
(13.3)
Cash flows
Premium paid
1,277.7
\u2013
\u2013
\u2013
1,277.7
Amounts received
\u2013
\u2013
(661.6)
\u2013
(661.6)
Total cash flows
1,277.7
\u2013
(661.6)
\u2013
616.1
Closing assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
The development of insurance contract liabilities provides a\u00a0measure of the Group\u2019s ability to estimate the ultimate cost of claims.
The Group analyses actual claims development compared with previous estimates on an accident year basis.
The Group provides information on the gross and net claims development for the current reporting period and four years prior
to\u00a0it. The Group considers that there is no significant uncertainty with regard to claims that were incurred more than four years
before the reporting period.
(a) Insurance contract liability for incurred claims \u2013 net of reinsurance
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
1,616.1
1,552.8
1,528.6
1,668.7
1,803.5
8,169.7
one period later
1,522.6
1,557.2
1,485.2
1,585.6
6,150.6
two periods later
1,466.4
1,454.1
1,412.4
4,332.9
three periods later
1,439.8
1,375.4
2,815.2
four periods later
1,407.4
1,407.4
Current estimate of cumulative claims
1,407.4
1,375.4
1,412.4
1,585.6
1,803.5
7,584.3
Cumulative payments to date
(1,041.3)
(951.6)
(879.9)
(637.9)
(467.3)
(3,978.0)
Net cumulative liability for incurred claims \u2013 accident
years from 2021 to 2025
366.1
423.8
532.5
947.7
1,336.2
3,606.3
Net cumulative liability for incurred claims in respect of
accident years before 2021
1,191.4
Effect of discounting
(303.6)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 net
4,494.1
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
The table above excludes reinsurance recoveries related to the retroactive reinsurance contracts, for example legacy portfolio transfer arrangements where the
financial effect of the underlying claims is still uncertain. These are included in reinsurance contract asset for remaining coverage.
(b) Insurance contract liability for incurred claims \u2013 gross
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
2,608.2
2,581.2
2,047.9
2,328.1
2,680.5
12,245.9
one period later
2,498.7
2,566.0
1,992.3
2,152.3
9,209.3
two periods later
2,329.3
2,235.2
1,853.1
6,417.6
three periods later
2,265.4
2,154.4
4,419.8
four periods later
2,201.7
2,201.7
Current estimate of cumulative claims
2,201.7
2,154.4
1,853.1
2,152.3
2,680.5
11,042.0
Cumulative payments to date
(1,742.2)
(1,474.0)
(1,075.2)
(797.5)
(594.3)
(5,683.2)
Gross cumulative liability for incurred claims \u2013
accident years from 2021 to 2025
459.5
680.4
777.9
1,354.8
2,086.2
5,358.8
Gross cumulative liability for incurred claims in respect
of accident years before 2021
1,515.1
Effect of discounting
(413.0)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 gross
6,460.9
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReconciliationOfChangesInInsuranceContractsByRemainingCoverageAndIncurredClaimsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-512": { "value": "
20 Insurance contract liabilities and reinsurance contract assets
2025
2024
$m
$m
Insurance contract liabilities
6,877.5
6,396.3
Reinsurance contract assets
(1,824.8)
(1,976.8)
Net insurance contract liabilities
5,052.7
4,419.5
Detailed reconciliation of changes in insurance contract balances during the year is included below in note 20.1.
The analysis of changes is disclosed at a consolidated level in line with how the Group manages and monitors the statement
of\u00a0financial position. Further details related to changes in the consolidated income statement by segmental reporting are
disclosed in note 4.
20.1(a) Net insurance contract liabilities
Net insurance contracts \u2013 analysis by remaining coverage and incurred claims
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2025
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
415.9
9.4
3,701.3
292.9
4,419.5
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,647.2)
\u2013
\u2013
\u2013
(3,647.2)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(11.5)
2,185.4
160.9
2,334.8
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(353.8)
(96.5)
(450.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.7)
\u2013
(0.7)
Total net insurance service expenses
1,145.4
(7.4)
1,830.9
64.4
3,033.3
Insurance service result
(2,501.8)
(7.4)
1,830.9
64.4
(613.9)
Net finance (income)/expenses from insurance contracts
(6.8)
\u2013
171.8
\u2013
165.0
Net foreign exchange losses
37.7
0.1
110.4
8.9
157.1
Total change recognised in comprehensive income
(2,470.9)
(7.3)
2,113.1
73.3
(291.8)
Investment components
39.7
\u2013
(39.7)
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Net cash flows
Net premium received
3,757.1
\u2013
\u2013
\u2013
3,757.1
Net claims and other insurance service expenses paid
\u2013
\u2013
(935.5)
\u2013
(935.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
2,852.8
\u2013
(935.5)
\u2013
1,917.3
Closing assets
142.0*
\u2013
(1,613.7)
(353.1)
(1,824.8)
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing balance
556.5
2.1
4,127.8
366.3
5,052.7
*The net liabilities for remaining coverage, excluding loss component, includes LPT ARC gross of premium payables of $407.0 million at 31\u00a0December 2024 and
$288.4 million at 31\u00a0December 2025.
\u2020Includes allocation of LPT premium of $132.3 million.
Net liabilities for remaining coverage
Net liabilities for incurred claims
Year to 31 December 2024
Excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
118.8*
\u2013
(1,696.3)
(520.8)
(2,098.3)
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
465.7
7.5
3,731.5
301.0
4,505.7
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums\u2020
(3,463.1)
\u2013
\u2013
\u2013
(3,463.1)
Insurance service expenses, net of amounts recoverable
from reinsurers
Incurred claims and other attributable expenses
\u2013
(10.4)
2,089.9
57.6
2,137.1
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments to liabilities for incurred claims relating to past service
\u2013
\u2013
(255.4)
(59.4)
(314.8)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
(0.6)
\u2013
(0.6)
Total net insurance service expenses
1,075.6
1.9
1,833.9
(1.8)
2,909.6
Insurance service result
(2,387.5)
1.9
1,833.9
(1.8)
(553.5)
Net finance (income)/expenses from insurance contracts
(10.0)
\u2013
162.1
\u2013
152.1
Net foreign exchange gains
(24.1)
\u2013
(44.4)
(5.6)
(74.1)
Total change recognised in comprehensive income
(2,421.6)
1.9
1,951.6
(7.4)
(475.5)
Investment components
36.3
\u2013
(36.3)
\u2013
\u2013
Transfer to other items in statement of financial position
(271.8)
\u2013
(702.1)
(0.7)
(974.6)
Net cash flows
Net premium received
3,440.6
\u2013
\u2013
\u2013
3,440.6
Net claims and other insurance service expenses paid
\u2013
\u2013
(1,243.4)
\u2013
(1,243.4)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
2,607.3
\u2013
(1,243.4)
\u2013
1,363.9
Closing assets
69.7*
\u2013
(1,726.2)
(320.3)
(1,976.8)
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing balance
415.9
9.4
3,701.3
292.9
4,419.5
*Includes LPT ARC gross of premium receivable $532.3 million at 31\u00a0December 2023 and $407.0 million at 31\u00a0December 2024.
\u2020Includes allocation of LPT premium of $139.2 million.
20.1(b) Insurance contract liabilities
Insurance contracts \u2013 analysis by remaining coverage and incurred claims
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2025
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net opening balance
346.2
9.4
5,427.5
613.2
6,396.3
Changes in the consolidated income statement
Insurance revenue
(4,883.7)
\u2013
\u2013
\u2013
(4,883.7)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(11.5)
2,828.6
343.2
3,160.3
Amortisation of insurance acquisition cash flows
1,145.4
\u2013
\u2013
\u2013
1,145.4
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(352.6)
(252.7)
(605.3)
Losses and reversals of losses on onerous contracts
\u2013
4.1
\u2013
\u2013
4.1
Total insurance service expenses
1,145.4
(7.4)
2,476.0
90.5
3,704.5
Insurance service result
(3,738.3)
(7.4)
2,476.0
90.5
(1,179.2)
Net finance expense from insurance contracts
\u2013
\u2013
238.6
\u2013
238.6
Foreign exchange movements
29.2
0.1
167.9
15.6
212.8
Total change in the consolidated income statement
(3,709.1)
(7.3)
2,882.5
106.1
(727.8)
Investment components
(0.4)
\u2013
0.4
\u2013
\u2013
Transfer to other items in statement of financial position
(281.0)
\u2013
(711.4)
0.1
(992.3)
Cash flows
Premium received
4,963.1
\u2013
\u2013
\u2013
4,963.1
Claims and other insurance service expenses paid
\u2013
\u2013
(1,857.5)
\u2013
(1,857.5)
Insurance acquisition cash flows
(904.3)
\u2013
\u2013
\u2013
(904.3)
Total cash flows
4,058.8
\u2013
(1,857.5)
\u2013
2,201.3
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Net closing liabilities
414.5
2.1
5,741.5
719.4
6,877.5
Liabilities for remaining coverage
Liabilities for incurred claims
Year to 31 December 2024
LRC excluding
loss component
Loss
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
\u2013
\u2013
\u2013
\u2013
\u2013
Opening liabilities
346.9
7.5
5,427.8
821.8
6,604.0
Net opening balance
346.9
7.5
5,427.8
821.8
6,604.0
Changes in the consolidated income statement
Insurance revenue
(4,672.5)
\u2013
\u2013
\u2013
(4,672.5)
Insurance service expenses
Incurred claims and other insurance service expenses
\u2013
(10.4)
2,612.6
136.6
2,738.8
Amortisation of insurance acquisition cash flows
1,075.6
\u2013
\u2013
\u2013
1,075.6
Adjustments for liabilities for incurred claims relating to past service
\u2013
\u2013
(155.2)
(340.5)
(495.7)
Losses and reversals of losses on onerous contracts
\u2013
12.3
\u2013
\u2013
12.3
Total insurance service expenses
1,075.6
1.9
2,457.4
(203.9)
3,331.0
Insurance service result
(3,596.9)
1.9
2,457.4
(203.9)
(1,341.5)
Net finance expense from insurance contracts
\u2013
\u2013
225.5
\u2013
225.5
Foreign exchange movements
(11.1)
\u2013
(69.2)
(3.5)
(83.8)
Total change in the consolidated income statement
(3,608.0)
1.9
2,613.7
(207.4)
(1,199.8)
Investment components
(0.6)
\u2013
0.6
\u2013
\u2013
Transfer to other items in statement of financial position
(277.1)
\u2013
(709.6)
(1.2)
(987.9)
Cash flows
Premium received
4,718.3
\u2013
\u2013
\u2013
4,718.3
Claims and other insurance service expenses paid
\u2013
\u2013
(1,905.0)
\u2013
(1,905.0)
Insurance acquisition cash flows
(833.3)
\u2013
\u2013
\u2013
(833.3)
Total cash flows
3,885.0
\u2013
(1,905.0)
\u2013
1,980.0
Closing assets
\u2013
\u2013
\u2013
\u2013
\u2013
Closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
Net closing liabilities
346.2
9.4
5,427.5
613.2
6,396.3
20.1(c) Reinsurance contract assets \u2013 analysis by remaining coverage and incurred claims
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2025
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,236.5)
\u2013
\u2013
\u2013
(1,236.5)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
643.2
182.3
825.5
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
1.2
(156.2)
(155.0)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.7
\u2013
0.7
Total amounts recoverable from reinsurers
\u2013
\u2013
645.1
26.1
671.2
Net expense from reinsurance contracts held
(1,236.5)
\u2013
645.1
26.1
(565.3)
Net finance income from reinsurance contracts
6.8
\u2013
66.8
\u2013
73.6
Foreign exchange movements
(8.5)
\u2013
57.5
6.7
55.7
Total changes in the consolidated income statement
(1,238.2)
\u2013
769.4
32.8
(436.0)
Investment components
(40.1)
\u2013
40.1
\u2013
\u2013
Transfer to other items in the statement of financial position
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premium paid
1,206.0
\u2013
\u2013
\u2013
1,206.0
Amounts received
\u2013
\u2013
(922.0)
\u2013
(922.0)
Total cash flows
1,206.0
\u2013
(922.0)
\u2013
284.0
Closing assets
(142.0)
\u2013
1,613.7
353.1
1,824.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(142.0)
\u2013
1,613.7
353.1
1,824.8
Assets for remaining coverage
Assets for incurred claims
Year to 31 December 2024
ARC excluding
loss recovery
component
Loss recovery
component
Estimates of
present value of
future cash flows
Risk adjustment
for non-financial
risk
Total
$m
$m
$m
$m
$m
Opening assets
(118.8)
\u2013
1,696.3
520.8
2,098.3
Opening liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net opening balance
(118.8)
\u2013
1,696.3
520.8
2,098.3
Changes in the consolidated income statement
Allocation of reinsurance premiums
(1,209.4)
\u2013
\u2013
\u2013
(1,209.4)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other attributable expenses
\u2013
\u2013
522.7
79.0
601.7
Adjustments to assets for incurred claims relating to past service
\u2013
\u2013
100.2
(281.1)
(180.9)
Effect of changes in non-performance risk of reinsurers
\u2013
\u2013
0.6
\u2013
0.6
Total amounts recoverable from reinsurers
\u2013
\u2013
623.5
(202.1)
421.4
Net expense from reinsurance contracts held
(1,209.4)
\u2013
623.5
(202.1)
(788.0)
Net finance income from reinsurance contracts
10.0
\u2013
63.4
\u2013
73.4
Foreign exchange movements
13.0
\u2013
(24.8)
2.1
(9.7)
Total changes in the consolidated income statement
(1,186.4)
\u2013
662.1
(200.0)
(724.3)
Investment components
(36.9)
\u2013
36.9
\u2013
\u2013
Transfer to other items in the statement of financial position
(5.3)
\u2013
(7.5)
(0.5)
(13.3)
Cash flows
Premium paid
1,277.7
\u2013
\u2013
\u2013
1,277.7
Amounts received
\u2013
\u2013
(661.6)
\u2013
(661.6)
Total cash flows
1,277.7
\u2013
(661.6)
\u2013
616.1
Closing assets
(69.7)
\u2013
1,726.2
320.3
1,976.8
Closing liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
Net closing balance
(69.7)
\u2013
1,726.2
320.3
1,976.8
The development of insurance contract liabilities provides a\u00a0measure of the Group\u2019s ability to estimate the ultimate cost of claims.
The Group analyses actual claims development compared with previous estimates on an accident year basis.
The Group provides information on the gross and net claims development for the current reporting period and four years prior
to\u00a0it. The Group considers that there is no significant uncertainty with regard to claims that were incurred more than four years
before the reporting period.
(a) Insurance contract liability for incurred claims \u2013 net of reinsurance
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
1,616.1
1,552.8
1,528.6
1,668.7
1,803.5
8,169.7
one period later
1,522.6
1,557.2
1,485.2
1,585.6
6,150.6
two periods later
1,466.4
1,454.1
1,412.4
4,332.9
three periods later
1,439.8
1,375.4
2,815.2
four periods later
1,407.4
1,407.4
Current estimate of cumulative claims
1,407.4
1,375.4
1,412.4
1,585.6
1,803.5
7,584.3
Cumulative payments to date
(1,041.3)
(951.6)
(879.9)
(637.9)
(467.3)
(3,978.0)
Net cumulative liability for incurred claims \u2013 accident
years from 2021 to 2025
366.1
423.8
532.5
947.7
1,336.2
3,606.3
Net cumulative liability for incurred claims in respect of
accident years before 2021
1,191.4
Effect of discounting
(303.6)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 net
4,494.1
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
The table above excludes reinsurance recoveries related to the retroactive reinsurance contracts, for example legacy portfolio transfer arrangements where the
financial effect of the underlying claims is still uncertain. These are included in reinsurance contract asset for remaining coverage.
(b) Insurance contract liability for incurred claims \u2013 gross
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
2,608.2
2,581.2
2,047.9
2,328.1
2,680.5
12,245.9
one period later
2,498.7
2,566.0
1,992.3
2,152.3
9,209.3
two periods later
2,329.3
2,235.2
1,853.1
6,417.6
three periods later
2,265.4
2,154.4
4,419.8
four periods later
2,201.7
2,201.7
Current estimate of cumulative claims
2,201.7
2,154.4
1,853.1
2,152.3
2,680.5
11,042.0
Cumulative payments to date
(1,742.2)
(1,474.0)
(1,075.2)
(797.5)
(594.3)
(5,683.2)
Gross cumulative liability for incurred claims \u2013
accident years from 2021 to 2025
459.5
680.4
777.9
1,354.8
2,086.2
5,358.8
Gross cumulative liability for incurred claims in respect
of accident years before 2021
1,515.1
Effect of discounting
(413.0)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 gross
6,460.9
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReconciliationOfChangesInInsuranceContractsByComponentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-516": { "value": "
The development of insurance contract liabilities provides a\u00a0measure of the Group\u2019s ability to estimate the ultimate cost of claims.
The Group analyses actual claims development compared with previous estimates on an accident year basis.
The Group provides information on the gross and net claims development for the current reporting period and four years prior
to\u00a0it. The Group considers that there is no significant uncertainty with regard to claims that were incurred more than four years
before the reporting period.
(a) Insurance contract liability for incurred claims \u2013 net of reinsurance
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
1,616.1
1,552.8
1,528.6
1,668.7
1,803.5
8,169.7
one period later
1,522.6
1,557.2
1,485.2
1,585.6
6,150.6
two periods later
1,466.4
1,454.1
1,412.4
4,332.9
three periods later
1,439.8
1,375.4
2,815.2
four periods later
1,407.4
1,407.4
Current estimate of cumulative claims
1,407.4
1,375.4
1,412.4
1,585.6
1,803.5
7,584.3
Cumulative payments to date
(1,041.3)
(951.6)
(879.9)
(637.9)
(467.3)
(3,978.0)
Net cumulative liability for incurred claims \u2013 accident
years from 2021 to 2025
366.1
423.8
532.5
947.7
1,336.2
3,606.3
Net cumulative liability for incurred claims in respect of
accident years before 2021
1,191.4
Effect of discounting
(303.6)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 net
4,494.1
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
The table above excludes reinsurance recoveries related to the retroactive reinsurance contracts, for example legacy portfolio transfer arrangements where the
financial effect of the underlying claims is still uncertain. These are included in reinsurance contract asset for remaining coverage.
(b) Insurance contract liability for incurred claims \u2013 gross
Accident year
2021
2022
2023
2024
2025
Total
$m
$m
$m
$m
$m
$m
Estimate of ultimate claims costs as adjusted for
foreign exchange*
at end of accident year:
2,608.2
2,581.2
2,047.9
2,328.1
2,680.5
12,245.9
one period later
2,498.7
2,566.0
1,992.3
2,152.3
9,209.3
two periods later
2,329.3
2,235.2
1,853.1
6,417.6
three periods later
2,265.4
2,154.4
4,419.8
four periods later
2,201.7
2,201.7
Current estimate of cumulative claims
2,201.7
2,154.4
1,853.1
2,152.3
2,680.5
11,042.0
Cumulative payments to date
(1,742.2)
(1,474.0)
(1,075.2)
(797.5)
(594.3)
(5,683.2)
Gross cumulative liability for incurred claims \u2013
accident years from 2021 to 2025
459.5
680.4
777.9
1,354.8
2,086.2
5,358.8
Gross cumulative liability for incurred claims in respect
of accident years before 2021
1,515.1
Effect of discounting
(413.0)
Total Group liability for incurred claims to external parties included in balance sheet \u2013 gross
6,460.9
*The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31\u00a0December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-523": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
23 Deferred tax
2025
2024
$m
$m
Deferred tax assets
164.0
179.4
Deferred tax liabilities
(64.4)
(75.8)
Net deferred tax asset
99.6
103.6
2025
2024
$m
$m
Bermuda ETA
139.4
154.6
Trading losses in overseas entities
28.5
33.4
Employee retirement benefit assets
(12.8)
(11.4)
Goodwill and intangible assets
(21.5)
(21.2)
Property, plant and equipment
0.8
(1.0)
Financial assets
(4.4)
(1.5)
Insurance contract liabilities
(66.8)
(66.6)
Employee share options
31.0
16.5
Other
5.4
0.8
Net deferred tax asset
99.6
103.6
Deferred tax assets and deferred tax liabilities relating to the same tax authority are presented net in the consolidated statement
of financial position.
At 31 December
2024
Income
statement
(charge)
/credit
Recognised
in other
comprehensive
income/equity
Foreign
exchange
2025
$m
$m
$m
$m
$m
Bermuda ETA
154.6
(15.2)
\u2013
\u2013
139.4
Trading losses in overseas entities
33.4
(5.3)
\u2013
0.4
28.5
Employee retirement benefit assets
(11.4)
(0.2)
(0.3)
(0.9)
(12.8)
Goodwill and intangible assets
(21.2)
0.4
\u2013
(0.7)
(21.5)
Property, plant and equipment
(1.0)
1.9
\u2013
(0.1)
0.8
Financial assets
(1.5)
(2.8)
\u2013
(0.1)
(4.4)
Insurance contract liabilities
(66.6)
3.7
\u2013
(3.9)
(66.8)
Employee share options
16.5
1.7
10.8
2.0
31.0
Other
0.8
4.6
\u2013
\u2013
5.4
Net deferred tax asset
103.6
(11.2)
10.5
(3.3)
99.6
Movements in deferred and current tax relating to tax deductions arising on employee share options are recognised in the
statement of changes in equity to the extent that the movement exceeds the corresponding charge to the income statement.
Movements in deferred tax relating to the employee retirement benefit obligation are recognised in the statement of
comprehensive income to the extent that the movement corresponds to actuarial gains and losses recognised in the
statement\u00a0of\u00a0comprehensive income.
The total income recognised outside the income statement is $10.5 million (2024: income of $4.2 million), all comprising deferred
tax (2024: $1.4 million deferred tax income and $2.8 million current tax\u00a0income).
Deferred tax assets of $28.5 million (2024: $33.4 million), relating to losses arising in overseas entities, which depend on the
availability of future taxable profits, have been recognised. Business projections indicate it is probable that sufficient future
taxable\u00a0income will be available against which to offset these recognised deferred tax assets within five years. $27.7 million
(2024:\u00a0$27.7 million) of the tax losses to which these assets relate will expire within ten years; a further $0.8 million
(2024:\u00a0$5.9\u00a0million) will expire after ten years or will be available indefinitely. The Group has not provided for deferred tax
assets\u00a0totalling $82.7 million (2024: $91.6 million) in relation to losses in overseas companies and unutilised tax credits of
$408.4 million (2024: $439.8 million).
In accordance with IAS 12, all deferred tax assets and liabilities are classified as non-current. The amount of deferred tax asset
expected to be recovered after more than 12 months is $99.6 million (2024: $101.8 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-522": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-521": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-520": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-519": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-518": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-517": { "value": "
21 Other liabilities
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
The amounts expected to be settled within and after one year are estimated as follows:
2025
2024
$m
$m
Within one year
381.4
270.8
After one year
53.2
72.1
Total
434.6
342.9
The carrying amounts disclosed above are reasonably approximate to the fair value at the reporting date.
The Group acts as both lessee and lessor in relation to various offices in the UK and overseas, which are held under
non-cancellable lease agreements. The leases have varying terms, escalation clauses and renewal terms.
Extension and termination options were taken into account on recognition of the lease liability if the Group was reasonably
certain\u00a0that these options would be exercised in the future. As a general rule, the Group recognises non-lease components,
such\u00a0as services, separately to lease payments.
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
Income from subleasing
Hiscox acts as a lessor and sublets excess capacity of its office space to third parties.
The total future aggregate minimum lease rentals receivable by the Group as lessor under non-cancellable operating property
leases are as follows:
2025
2024
$m
$m
Not later than one year
0.9
2.2
Later than one year and not later than five years
0.9
1.0
1.8
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-524": { "value": "
2025
2024
(restated)
$m
$m
Social security and other taxes payable
14.8
13.5
Lease liabilities
62.2
79.5
Accruals and other creditors*
348.7
240.3
Restructuring and other provisions*
8.9
9.6
Total
434.6
342.9
*The restructuring and other provisions previously presented in accruals and other creditors have been represented separately. The comparative period has been
re-presented on a consistent basis.
Restructuring and other provisions comprise a restructuring provision of $5.2 million (2024: $nil) and other provisions of
$3.7 million (2024: $9.6 million). The restructuring provision relates to the accelerated change programme which commenced
in\u00a02025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-525": { "value": "
Maturity analysis \u2013 contractual undiscounted cash flows:
2025
2024
$m
$m
Not later than one year
17.0
12.7
Later than one year and not later than five years
48.8
44.0
Later than five years
27.5
29.9
Total undiscounted lease liabilities
93.3
86.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaturityAnalysisOfOperatingLeasePaymentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-526": { "value": "
22 Tax expense
The Company and its subsidiaries are subject to enacted tax laws in the jurisdictions in which they are incorporated and
domiciled. The principal subsidiaries of the Company and the country in which they are incorporated are listed in note 30.
The\u00a0amounts charged in the consolidated income statement comprise the following:
2025
2024
$m
$m
Current tax expense
Expense for the year
117.1
44.2
Adjustments in respect of prior years
0.3
(9.2)
Total current tax expense
117.4
35.0
Deferred tax expense
Expense for the year
10.5
33.1
Adjustments in respect of prior years
1.5
(9.9)
Effect of rate change
(0.8)
\u2013
Total deferred tax expense
11.2
23.2
Total tax expense to the income statement
128.6
58.2
The standard rate of corporation tax in Bermuda is 15% ( 2024: 0%) whereas the effective rate of tax for the Group is 17.6%
(2024: 8.5%).
A reconciliation of the difference is provided below:
2025
2024
$m
$m
Profit before tax
732.7
685.4
Tax calculated at the standard corporation tax rate applicable in Bermuda: 15% (2024: 0%)
109.9
\u2013
Effects of Group entities subject to overseas tax at different rates
17.7
54.2
Impact of overseas tax rates on:
Effect of rate change
(0.8)
\u2013
Expenses not deductible for tax purposes
5.9
5.7
Tax losses for which no deferred tax asset is recognised
(1.3)
14.1
Adjustment to tax charge in respect of prior periods
1.8
(19.1)
Foreign tax credits
(4.8)
\u2013
Other
0.2
3.3
Tax charge for the year
128.6
58.2
Included within the current tax, a provision is recognised for those matters for which the tax determination is uncertain but it
is\u00a0considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best
estimate of the amount expected to become payable.
The Group companies\u2019 tax filings include transactions which are subject to transfer pricing legislation and the taxation authorities
may challenge the tax treatment of those transactions. The Directors are proactively engaged in discussions with the tax
authorities regarding these tax positions. The Group determines, based on tax and transfer pricing advice provided by external
specialist tax advisors, that: it is probable that the tax authorities will assess additional taxes in respect of these filings, for which
provisions have been made; and the amount recognised at the end of the reporting period represents the best estimate of the
amount expected to be settled, taking into account the range of potential outcomes and the current progression of discussions
with tax authorities.
A $0.3 million charge for current tax has been made in respect of taxes assessable under legislation implementing global
minimum tax rules in line with the OECD two-Pillar reform framework (\u2018Pillar Two legislation\u2019). The Group has applied the
mandatory exception under IAS12 to recognising and disclosing information about deferred tax assets and liabilities related
to\u00a0Pillar Two income taxes.
23 Deferred tax
2025
2024
$m
$m
Deferred tax assets
164.0
179.4
Deferred tax liabilities
(64.4)
(75.8)
Net deferred tax asset
99.6
103.6
2025
2024
$m
$m
Bermuda ETA
139.4
154.6
Trading losses in overseas entities
28.5
33.4
Employee retirement benefit assets
(12.8)
(11.4)
Goodwill and intangible assets
(21.5)
(21.2)
Property, plant and equipment
0.8
(1.0)
Financial assets
(4.4)
(1.5)
Insurance contract liabilities
(66.8)
(66.6)
Employee share options
31.0
16.5
Other
5.4
0.8
Net deferred tax asset
99.6
103.6
Deferred tax assets and deferred tax liabilities relating to the same tax authority are presented net in the consolidated statement
of financial position.
At 31 December
2024
Income
statement
(charge)
/credit
Recognised
in other
comprehensive
income/equity
Foreign
exchange
2025
$m
$m
$m
$m
$m
Bermuda ETA
154.6
(15.2)
\u2013
\u2013
139.4
Trading losses in overseas entities
33.4
(5.3)
\u2013
0.4
28.5
Employee retirement benefit assets
(11.4)
(0.2)
(0.3)
(0.9)
(12.8)
Goodwill and intangible assets
(21.2)
0.4
\u2013
(0.7)
(21.5)
Property, plant and equipment
(1.0)
1.9
\u2013
(0.1)
0.8
Financial assets
(1.5)
(2.8)
\u2013
(0.1)
(4.4)
Insurance contract liabilities
(66.6)
3.7
\u2013
(3.9)
(66.8)
Employee share options
16.5
1.7
10.8
2.0
31.0
Other
0.8
4.6
\u2013
\u2013
5.4
Net deferred tax asset
103.6
(11.2)
10.5
(3.3)
99.6
Movements in deferred and current tax relating to tax deductions arising on employee share options are recognised in the
statement of changes in equity to the extent that the movement exceeds the corresponding charge to the income statement.
Movements in deferred tax relating to the employee retirement benefit obligation are recognised in the statement of
comprehensive income to the extent that the movement corresponds to actuarial gains and losses recognised in the
statement\u00a0of\u00a0comprehensive income.
The total income recognised outside the income statement is $10.5 million (2024: income of $4.2 million), all comprising deferred
tax (2024: $1.4 million deferred tax income and $2.8 million current tax\u00a0income).
Deferred tax assets of $28.5 million (2024: $33.4 million), relating to losses arising in overseas entities, which depend on the
availability of future taxable profits, have been recognised. Business projections indicate it is probable that sufficient future
taxable\u00a0income will be available against which to offset these recognised deferred tax assets within five years. $27.7 million
(2024:\u00a0$27.7 million) of the tax losses to which these assets relate will expire within ten years; a further $0.8 million
(2024:\u00a0$5.9\u00a0million) will expire after ten years or will be available indefinitely. The Group has not provided for deferred tax
assets\u00a0totalling $82.7 million (2024: $91.6 million) in relation to losses in overseas companies and unutilised tax credits of
$408.4 million (2024: $439.8 million).
In accordance with IAS 12, all deferred tax assets and liabilities are classified as non-current. The amount of deferred tax asset
expected to be recovered after more than 12 months is $99.6 million (2024: $101.8 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-527": { "value": "
A $0.3 million charge for current tax has been made in respect of taxes assessable under legislation implementing global
minimum tax rules in line with the OECD two-Pillar reform framework (\u2018Pillar Two legislation\u2019). The Group has applied the
mandatory exception under IAS12 to recognising and disclosing information about deferred tax assets and liabilities related
to\u00a0Pillar Two income taxes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfKnownOrReasonablyEstimableInformationAboutExposureToPillarTwoIncomeTaxesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-528": { "value": "
23 Deferred tax
2025
2024
$m
$m
Deferred tax assets
164.0
179.4
Deferred tax liabilities
(64.4)
(75.8)
Net deferred tax asset
99.6
103.6
2025
2024
$m
$m
Bermuda ETA
139.4
154.6
Trading losses in overseas entities
28.5
33.4
Employee retirement benefit assets
(12.8)
(11.4)
Goodwill and intangible assets
(21.5)
(21.2)
Property, plant and equipment
0.8
(1.0)
Financial assets
(4.4)
(1.5)
Insurance contract liabilities
(66.8)
(66.6)
Employee share options
31.0
16.5
Other
5.4
0.8
Net deferred tax asset
99.6
103.6
Deferred tax assets and deferred tax liabilities relating to the same tax authority are presented net in the consolidated statement
of financial position.
At 31 December
2024
Income
statement
(charge)
/credit
Recognised
in other
comprehensive
income/equity
Foreign
exchange
2025
$m
$m
$m
$m
$m
Bermuda ETA
154.6
(15.2)
\u2013
\u2013
139.4
Trading losses in overseas entities
33.4
(5.3)
\u2013
0.4
28.5
Employee retirement benefit assets
(11.4)
(0.2)
(0.3)
(0.9)
(12.8)
Goodwill and intangible assets
(21.2)
0.4
\u2013
(0.7)
(21.5)
Property, plant and equipment
(1.0)
1.9
\u2013
(0.1)
0.8
Financial assets
(1.5)
(2.8)
\u2013
(0.1)
(4.4)
Insurance contract liabilities
(66.6)
3.7
\u2013
(3.9)
(66.8)
Employee share options
16.5
1.7
10.8
2.0
31.0
Other
0.8
4.6
\u2013
\u2013
5.4
Net deferred tax asset
103.6
(11.2)
10.5
(3.3)
99.6
Movements in deferred and current tax relating to tax deductions arising on employee share options are recognised in the
statement of changes in equity to the extent that the movement exceeds the corresponding charge to the income statement.
Movements in deferred tax relating to the employee retirement benefit obligation are recognised in the statement of
comprehensive income to the extent that the movement corresponds to actuarial gains and losses recognised in the
statement\u00a0of\u00a0comprehensive income.
The total income recognised outside the income statement is $10.5 million (2024: income of $4.2 million), all comprising deferred
tax (2024: $1.4 million deferred tax income and $2.8 million current tax\u00a0income).
Deferred tax assets of $28.5 million (2024: $33.4 million), relating to losses arising in overseas entities, which depend on the
availability of future taxable profits, have been recognised. Business projections indicate it is probable that sufficient future
taxable\u00a0income will be available against which to offset these recognised deferred tax assets within five years. $27.7 million
(2024:\u00a0$27.7 million) of the tax losses to which these assets relate will expire within ten years; a further $0.8 million
(2024:\u00a0$5.9\u00a0million) will expire after ten years or will be available indefinitely. The Group has not provided for deferred tax
assets\u00a0totalling $82.7 million (2024: $91.6 million) in relation to losses in overseas companies and unutilised tax credits of
$408.4 million (2024: $439.8 million).
In accordance with IAS 12, all deferred tax assets and liabilities are classified as non-current. The amount of deferred tax asset
expected to be recovered after more than 12 months is $99.6 million (2024: $101.8 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-529": { "value": "
24 Employee retirement benefit obligations
The Company\u2019s subsidiary Hiscox plc operates a defined benefit pension scheme based on final pensionable salary. The
scheme\u00a0closed to future accruals with effect from 31\u00a0December\u00a02006 and active members were offered membership of
a\u00a0defined\u00a0contribution scheme from 1\u00a0January\u00a02007. The funds of the defined benefit scheme are controlled by the Trustees
and\u00a0are held separately from those of the Group. 61% of any scheme surplus or deficit is recharged to Syndicate 33. The full
pension obligation of the Hiscox defined benefit pension scheme is recorded and the recovery from the third-party Names for
their share of the Syndicate 33 recharge is shown as a\u00a0separate asset.
The gross amount recognised in the consolidated statement of financial position in respect of the defined benefit scheme is
determined as follows:
2025
2024
$m
$m
Present value of scheme obligations
225.0
209.1
Fair value of scheme assets
(271.1)
(249.1)
Net amount recognised as a defined benefit surplus
(46.1)
(40.0)
As the fair value of the scheme assets exceeds the present value of scheme obligations, the scheme reports a surplus
( 2024: reports a surplus).
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit actuarial cost method.
A formal full actuarial valuation is performed on a triennial basis, most recently at 31 December 2023, and updated at the end of
each intervening reporting period by the actuaries. The year-end present value of the defined benefit obligation under IAS 19 is
determined by discounting the estimated future cash flows, using interest rates of AA-rated corporate bonds that have terms to
maturity that approximate to the terms of the related pension liability, and is not impacted directly by the triennial valuation.
The scheme assets are invested in pooled investment vehicles as follows:
At 31 December
2025
2025
2024
2024
Total
Of which not
quoted on an
active market
Total
Of which not
quoted on an
active market
$m
$m
$m
$m
Invested assets
UK equity
6.5
6.5
6.6
6.6
US equity
\u2013
\u2013
\u2013
\u2013
Diversified growth
49.9
49.9
43.3
43.3
Bonds
87.5
87.5
65.8
65.8
Liability-driven investments
96.2
96.2
100.7
100.7
Assets held by insurance company
2.2
2.2
2.0
2.0
Cash
28.8
28.8
30.7
30.7
271.1
271.1
249.1
249.1
The amounts recognised in total comprehensive income are as follows:
For the year ended 31 December
2025
2024
$m
$m
Past service cost
\u2013
\u2013
Interest cost on defined benefit obligation
12.1
11.0
Interest income on plan assets
(14.4)
(13.1)
Net interest income
(2.3)
(2.1)
Administrative expenses and taxes
0.9
\u2013
Total income recognised in operational expenses in the income statement
(1.4)
(2.1)
Remeasurements
Effect of changes in actuarial assumptions
(2.9)
(26.5)
Return on plan assets (excluding interest income)
1.1
32.2
Remeasurement of third-party Names\u2019 share of defined benefit obligation
0.4
(0.9)
Total remeasurement included in other comprehensive income
(1.4)
4.8
Total defined benefit charge recognised in comprehensive income
(2.8)
2.7
The movement in the surplus recognised in the consolidated statement of financial position is as follows:
2025
2024
$m
$m
Group defined benefit surplus at beginning of year
(40.0)
(44.4)
Third-party Names' share at beginning of year
(5.6)
(5.0)
Net defined benefit surplus at beginning of year
(45.6)
(49.4)
Defined benefit income included in the income statement
(1.4)
(2.1)
Total remeasurements included in other comprehensive income
(1.4)
4.8
Other movements
(3.1)
1.1
Net defined benefit surplus at end of year
(51.5)
(45.6)
Third-party Names' share at end of year
5.4
5.6
Group defined benefit surplus at end of year
(46.1)
(40.0)
A reconciliation of the fair value of scheme assets is as follows:
2025
2024
$m
$m
Opening fair value of scheme assets
249.1
280.6
Interest income
14.4
13.1
Cash flows
Benefit payments
(8.8)
(7.8)
Administrative expenses
(0.9)
\u2013
Remeasurements
Return on plan assets (excluding interest income)
(1.1)
(32.2)
Foreign exchange movements
18.4
(4.6)
Closing fair value of scheme assets
271.1
249.1
A reconciliation of the present value of obligations of the scheme is as follows:
2025
2024
$m
$m
Opening present value of scheme obligations
209.1
236.2
Past service cost
\u2013
\u2013
Interest expense
12.1
11.0
Cash flows
Benefit payments
(8.8)
(7.8)
Remeasurements
Changes in actuarial assumptions
(2.9)
(26.5)
Foreign exchange movements
15.5
(3.8)
Closing present value of scheme obligations
225.0
209.1
Assumptions regarding future mortality experience are set based on the S4PA (2024: S4PA) light tables. Reductions in future
mortality rates are allowed for by using the CMI 2024 (2024: 2023) projections (core model) with 1.25% per annum long-term
trend for\u00a0improvements.
The average life expectancy in years of a pensioner retiring at age 60 on the end of the reporting period is as follows:
2025
2024
Male
28.1
27.9
Female
29.8
29.8
The average life expectancy in years of a pensioner retiring at 60, 15 years after the end of the reporting period, is as follows:
2025
2024
Male
28.3
28.1
Female
30.3
30.2
The weighted average duration of the defined benefit obligation at 31\u00a0December 2025 was 13.0 years (2024: 14.0 years)
Other principal actuarial assumptions are as follows:
2025
2024
%
%
Discount rate
5.67
5.57
Inflation assumption (RPI)
2.89
3.07
Inflation assumption (CPI)
2.39
2.47
Pension increases\u00a0
2.72
2.89
The scheme operates under UK Trust law and the Trust is a separate legal entity from the Group. The scheme is governed by a
board of Trustees, comprised of member-nominated and employer-appointed Trustees. The Trustees are required by law to act
in the best interests of scheme members and are responsible for setting certain policies, together with the principal employer.
The\u00a0scheme is funded by the Group when required. Funding of the scheme is based on a separate actuarial valuation for funding
purposes for which assumptions may differ from the assumptions above. Funding requirements are formally set out in the
statement of funding principles, schedule of contributions and recovery plan agreed between the Trustees and the Group.
A triennial valuation was carried out as at 31 December 2023 and resulted in a surplus position of \u00a33.7 million ($4.7 million)
on\u00a0a\u00a0technical provisions basis. The previous recovery plan has therefore now fallen away and no further deficit recovery
contributions are due.
While management believes that the actuarial assumptions are appropriate, any significant changes to those could affect
the\u00a0statement of financial position and income statement. For example, an additional one year of life expectancy for all
scheme\u00a0members would increase the scheme obligations by \u00a35.0 million ($6.7 million) at 31\u00a0December 2025 (2024: \u00a34.2 million
($5.3\u00a0million)), and would increase/reduce the recorded net deficit/surplus on the statement of financial position by the
same\u00a0amounts.
A Court of Appeal legal ruling in July 2024 (Virgin Media Limited v NTL Pension Trustees II Limited) decided that certain pension
scheme amendments were invalid if they were not accompanied by the correct actuarial confirmation. In September 2025, the
Government published draft legislation which provides for the retrospective validation of such scheme amendments where certain
conditions are met. The Group continues to believe that the pension scheme deed, including relevant amendments, remains valid
and has set the IAS19 Employee Benefits assumptions accordingly.
The most sensitive and judgemental financial assumptions are the discount rate and inflation. These are considered further below.
CPI revaluation in deferment is used for contracted-out members. Contracted-in members are linked to RPI, as well as for all
pension in payment increases.
The Group has estimated the sensitivity of the present value of unfunded obligations to isolated changes in these assumptions
at\u00a031\u00a0December 2025 as follows:
Present value
of unfunded
obligations
before change
in assumption
Present value
of unfunded
obligations
after change
(Increase)
/decrease
in obligation
recognised on
balance sheet
$m
$m
$m
Effect of change in discount rate
Use of discount rate of 5.92%
225.0
218.1
6.9
Use of discount rate of 5.42%
225.0
232.3
(7.3)
Effect of change in discount rate
Use of RPI inflation assumption of 3.14%
225.0
227.5
(2.5)
Use of RPI inflation assumption of 2.64%
225.0
222.7
2.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-531": { "value": "
25 Business combinations
Corix
On 11 August 2025, Hiscox Holdings Inc. (HHI), a fully owned subsidiary of the Company, acquired 100% of the ordinary share
capital of Corix Insurance Services LLC (Corix), a US-based managing general agent, from Vouch US Insurance Services
Holdings LLC for a total consideration of $59.0 million. The transaction includes the acquisition of US broker technology to
accelerate the ongoing digitisation of Hiscox\u2019s US broker platform. The acquisition of Corix supports Hiscox USA's expansion
into\u00a0new specialist customer segments.
Intangible assets to the value of $14.3 million were recognised upon acquisition, representing the technology, as well as the
trademark acquired. The residual goodwill on acquisition of $36.6 million represents the significant product and underwriting
synergies gained from the technology acquired.
Contingent consideration of $10.0 million was recognised at acquisition. The Group considers it highly probable that the
conditions stipulated in the contract will be met, therefore the liability for the full $10.0 million has been recognised.
Lokky
On 18 June 2025, Hiscox Europe Holdings Ltd (HEH), a fully owned subsidiary of Hiscox Ltd, acquired 100% of the
ordinary\u00a0share capital of Lokky S.r.l (Lokky), an online insurance broker in Italy, as part of its entry strategy for the Italian
market\u00a0for\u00a0$6.2 million. Net assets of $1.1 million and goodwill of $5.1 million were recognised on acquisition.
The table below summarises the consideration for the above acquisitions, the fair value of the assets acquired and liabilities
assumed and resulting allocation to goodwill.
Corix
Lokky
$m
$m
Intangible assets
14.3
1.1
Trade and other receivables
22.2
2.3
Cash and cash equivalents
9.8
0.3
Total identifiable assets
46.3
3.7
Other liabilities
23.9
2.6
Total identifiable liabilities
23.9
2.6
Net identifiable assets acquired
22.4
1.1
Goodwill arising on acquisition
36.6
5.1
Total consideration paid
59.0
6.2
Consideration satisfied by cash
49.0
6.2
Contingent consideration
10.0
\u2013
Total consideration paid
59.0
6.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfDetailedInformationAboutBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-530": { "value": "
25 Business combinations
Corix
On 11 August 2025, Hiscox Holdings Inc. (HHI), a fully owned subsidiary of the Company, acquired 100% of the ordinary share
capital of Corix Insurance Services LLC (Corix), a US-based managing general agent, from Vouch US Insurance Services
Holdings LLC for a total consideration of $59.0 million. The transaction includes the acquisition of US broker technology to
accelerate the ongoing digitisation of Hiscox\u2019s US broker platform. The acquisition of Corix supports Hiscox USA's expansion
into\u00a0new specialist customer segments.
Intangible assets to the value of $14.3 million were recognised upon acquisition, representing the technology, as well as the
trademark acquired. The residual goodwill on acquisition of $36.6 million represents the significant product and underwriting
synergies gained from the technology acquired.
Contingent consideration of $10.0 million was recognised at acquisition. The Group considers it highly probable that the
conditions stipulated in the contract will be met, therefore the liability for the full $10.0 million has been recognised.
Lokky
On 18 June 2025, Hiscox Europe Holdings Ltd (HEH), a fully owned subsidiary of Hiscox Ltd, acquired 100% of the
ordinary\u00a0share capital of Lokky S.r.l (Lokky), an online insurance broker in Italy, as part of its entry strategy for the Italian
market\u00a0for\u00a0$6.2 million. Net assets of $1.1 million and goodwill of $5.1 million were recognised on acquisition.
The table below summarises the consideration for the above acquisitions, the fair value of the assets acquired and liabilities
assumed and resulting allocation to goodwill.
Corix
Lokky
$m
$m
Intangible assets
14.3
1.1
Trade and other receivables
22.2
2.3
Cash and cash equivalents
9.8
0.3
Total identifiable assets
46.3
3.7
Other liabilities
23.9
2.6
Total identifiable liabilities
23.9
2.6
Net identifiable assets acquired
22.4
1.1
Goodwill arising on acquisition
36.6
5.1
Total consideration paid
59.0
6.2
Consideration satisfied by cash
49.0
6.2
Contingent consideration
10.0
\u2013
Total consideration paid
59.0
6.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-532": { "value": "
Contingent consideration of $10.0 million was recognised at acquisition. The Group considers it highly probable that the
conditions stipulated in the contract will be met, therefore the liability for the full $10.0 million has been recognised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesInBusinessCombinationExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-533": { "value": "
26 Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held in
treasury as own shares.
2025
2024
Profit for the period attributable to owners of the Company ($m)
604.1
627.2
Weighted average number of ordinary shares in issue (thousands)
334,304
342,273
Basic earnings per share (cents per share)
180.7
183.2
Diluted
Diluted earnings per share is calculated by adjusting the assumed conversion of all dilutive potential ordinary shares. The
Company has one category of dilutive potential ordinary shares, share options and awards. For the share options, a calculation
is\u00a0made to determine the number of shares that could have been acquired at fair value (determined as the average annual
market\u00a0share price of the Company\u2019s shares) based on the monetary value of the subscription rights attached to outstanding
share options. The number of shares calculated as above is compared with the number of shares that would have been issued
assuming the exercise of the share options.
2025
2024
Profit for the period attributable to owners of the Company ($m)
604.1
627.2
Weighted average number of ordinary shares in issue (thousands)
334,304
342,273
Adjustment for share options (thousands)
10,985
9,841
Weighted average number of ordinary shares for diluted earnings per share (thousands)
345,289
352,114
Diluted earnings per share (cents per share)
175.0
178.1
Diluted earnings per share has been calculated after taking account of 6,902,028 (2024: 6,263,301) PSP awards, 385,846
(2024:\u00a0371,118) options under SAYE schemes and 3,696,935 (2024: 3,206,786) employee share awards.", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-534": { "value": "
Basic
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held in
treasury as own shares.
2025
2024
Profit for the period attributable to owners of the Company ($m)
604.1
627.2
Weighted average number of ordinary shares in issue (thousands)
334,304
342,273
Basic earnings per share (cents per share)
180.7
183.2
Diluted
Diluted earnings per share is calculated by adjusting the assumed conversion of all dilutive potential ordinary shares. The
Company has one category of dilutive potential ordinary shares, share options and awards. For the share options, a calculation
is\u00a0made to determine the number of shares that could have been acquired at fair value (determined as the average annual
market\u00a0share price of the Company\u2019s shares) based on the monetary value of the subscription rights attached to outstanding
share options. The number of shares calculated as above is compared with the number of shares that would have been issued
assuming the exercise of the share options.
2025
2024
Profit for the period attributable to owners of the Company ($m)
604.1
627.2
Weighted average number of ordinary shares in issue (thousands)
334,304
342,273
Adjustment for share options (thousands)
10,985
9,841
Weighted average number of ordinary shares for diluted earnings per share (thousands)
345,289
352,114
Diluted earnings per share (cents per share)
175.0
178.1
Diluted earnings per share has been calculated after taking account of 6,902,028 (2024: 6,263,301) PSP awards, 385,846
(2024:\u00a0371,118) options under SAYE schemes and 3,696,935 (2024: 3,206,786) employee share awards.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-535": { "value": "
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held in
treasury as own shares.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-536": { "value": "
27 Dividends paid to owners of the Company
2025
2024
$m
$m
Final dividend for the year ended:
31\u00a0December 2024 of 29.9\u00a2 (net) per share
100.8
\u2013
31\u00a0December 2023 of 25.0\u00a2 (net) per share
\u2013
86.0
Interim dividend for the year ended:
31\u00a0December 2025 of 14.4\u00a2 (net) per share
48.6
\u2013
31\u00a0December 2024 of 13.2\u00a2 (net) per share
\u2013
44.8
149.4
130.8
The interim and final dividend for 2024 was paid either in cash or issued as a Scrip Dividend at the option of the shareholder.
The\u00a0interim dividend for the year ended 31\u00a0December 2024 was paid in cash of $42.6\u00a0million and 144,509 shares for a Scrip
Dividend. The final dividend for the year ended 31\u00a0December 2024 of 29.9\u00a2 was paid in cash of $98.4\u00a0million and 146,706
shares for the Scrip\u00a0Dividend.
The interim dividend for 2025 was paid either in cash or issued as a Scrip Dividend at the option of the shareholder. The amounts
were $47.0\u00a0million in cash and 88,711 shares for a Scrip Dividend.
The Board recommended a final dividend of 35.9\u00a2 per share to be paid, subject to shareholder approval, on 8\u00a0June 2026 to
shareholders registered on 24\u00a0April 2026. Dividends will be paid in Sterling unless shareholders elect to be paid in US Dollars.
The\u00a0foreign exchange rate to convert the dividends declared in US Dollars into Sterling will be based on the average exchange
rate between 19\u00a0May 2026 and 26\u00a0May 2026 inclusive.
When determining the level of dividend each year, the Board considers the ability of the Group to generate cash and the
availability of that cash in the Group, while considering constraints such as regulatory capital requirements and the level
required\u00a0to invest in the business. This is a progressive policy and is expected to be maintained for the foreseeable future.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-537": { "value": "0.299", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "f-538": { "value": "0.299", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "f-539": { "value": "0.359", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "f-541": { "value": "
28 Contingencies and guarantees
The Group\u2019s parent company and subsidiaries may become involved in legal proceedings, claims and litigation in the normal
course of business. The Group reviews and, in the opinion of the Directors, maintains sufficient provision, capital and reserves
in\u00a0respect of such claims.
The following guarantees have also been issued:
(a) Hiscox Dedicated Corporate Member Limited (HDCM) and Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda)
provide assets under a security and trust deed charged to Lloyd\u2019s of London, to meet any liabilities that occur from their
interest in Syndicates 33 and 3624. At 31\u00a0December 2025, HDCM held $99.7 million of investments (2024: $79.9 million),
$0.6 million of cash (2024: $12.7 million) and a $106.4 million LOC (2024: $106.4 million) in favour of Lloyd\u2019s of London
under this arrangement. At 31\u00a0December 2025, Hiscox Bermuda held $243.9 million of investments (2024: $216.1 million),
$12.4 million of cash (2024: $19.9 million) and a $159.6 million LOC (2024: $159.6 million) in favour of Lloyd\u2019s of London
under this arrangement.
(b) In 2020, HDCM entered into a $65.0 million Funds at Lloyd\u2019s agreement under which the lending bank provides assets on
HDCM\u2019s behalf under a security and trust deed charged to Lloyd\u2019s of London as part of the Company\u2019s Funds at Lloyd\u2019s
provision. This has been extended annually. At 31\u00a0December 2024 and 2025 the full $65.0 million was utilised.
(c) In June 2024, Hiscox plc renewed its LOC and revolving credit facility with Lloyds Banking Group, as agent for a syndicate
of banks. The facility may be drawn in cash up to $650.0 million (2024:\u00a0$650.0 million) under a revolving credit facility and
LOC up to $266.0 million (2024:\u00a0$266.0 million). The terms also provide that the facility may be drawn in USD, GBP or EUR,
or another currency with the agreement of the banks. At 31\u00a0December 2025, $266.0 million (2024:\u00a0$266.0 million) was
utilised by way of LOC to support the Funds at Lloyd\u2019s requirement and $nil cash drawings were outstanding (2024:\u00a0$nil).
(d) As Hiscox Bermuda is not an admitted insurer or reinsurer in the USA, the terms of certain US insurance and reinsurance
contracts require Hiscox Bermuda to provide LOCs or other terms of collateral to clients. Hiscox Bermuda has in place a
LOC reimbursement and pledge agreement for the provision of a committed LOC facility in favour of USA ceding companies
and other jurisdictions, and also committed LOC facility agreements. The agreements combined allow Hiscox Bermuda to
request the issuance of up to $295.0 million in committed LOCs ( 2024: $395.0 million). LOCs issued under these facilities
are collateralised by cash, US government and corporate securities of Hiscox Bermuda. LOCs under these facilities totalling
$124.4 million were issued with an effective date of 31\u00a0December 2025 (2024: $205.1 million) and these were collateralised
by US government and corporate securities with a fair value of $250.0 million (2024: $251.2 million). In addition, Hiscox
Bermuda maintained assets in trust accounts to collateralise obligations under various reinsurance agreements. At
31\u00a0December 2025, total cash and marketable securities with a carrying value of approximately $42.1 million (2024: $46.2
million) were held in external trusts. Cash and marketable securities with an approximate market value of $631.9 million
(2024: $521.9 million) were held in trust in respect of internal quota share arrangements.
(e) Hiscox Soci\u00e9t\u00e9 Anonyme has arranged bank guarantees with respect to its various office deposits and insurance claims
liabilities obligation for a total of \u20ac1.6 million (2024:\u00a0\u20ac0.5 million).
(f) See note 22 for tax-related contingent liabilities.
29 Capital commitments
Refer to note\u00a021 for lease commitments and income from sub-leasing and note\u00a024 for the Group\u2019s funding contributions to the
defined benefit scheme. The Group\u2019s capital commitments contracted for at the end of the reporting period but not yet incurred
for property, plant, equipment and s oftware development were $0.3 million (2024:\u00a0 $0.2 million).
The Group has given an undertaking to provide up to $652.7 million in private credit funds (2024: $296.7 million). The table below
shows the total commitment and the amount that remains undrawn as at 31\u00a0December 2025.
Undrawn
commitment
$m
Amount of commitment to invest in private credit funds
US Dollar $547 million
403.4
Sterling \u00a340 million
28.9
Euro \u20ac45 million
29.1
Total
461.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-540": { "value": "
28 Contingencies and guarantees
The Group\u2019s parent company and subsidiaries may become involved in legal proceedings, claims and litigation in the normal
course of business. The Group reviews and, in the opinion of the Directors, maintains sufficient provision, capital and reserves
in\u00a0respect of such claims.
The following guarantees have also been issued:
(a) Hiscox Dedicated Corporate Member Limited (HDCM) and Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda)
provide assets under a security and trust deed charged to Lloyd\u2019s of London, to meet any liabilities that occur from their
interest in Syndicates 33 and 3624. At 31\u00a0December 2025, HDCM held $99.7 million of investments (2024: $79.9 million),
$0.6 million of cash (2024: $12.7 million) and a $106.4 million LOC (2024: $106.4 million) in favour of Lloyd\u2019s of London
under this arrangement. At 31\u00a0December 2025, Hiscox Bermuda held $243.9 million of investments (2024: $216.1 million),
$12.4 million of cash (2024: $19.9 million) and a $159.6 million LOC (2024: $159.6 million) in favour of Lloyd\u2019s of London
under this arrangement.
(b) In 2020, HDCM entered into a $65.0 million Funds at Lloyd\u2019s agreement under which the lending bank provides assets on
HDCM\u2019s behalf under a security and trust deed charged to Lloyd\u2019s of London as part of the Company\u2019s Funds at Lloyd\u2019s
provision. This has been extended annually. At 31\u00a0December 2024 and 2025 the full $65.0 million was utilised.
(c) In June 2024, Hiscox plc renewed its LOC and revolving credit facility with Lloyds Banking Group, as agent for a syndicate
of banks. The facility may be drawn in cash up to $650.0 million (2024:\u00a0$650.0 million) under a revolving credit facility and
LOC up to $266.0 million (2024:\u00a0$266.0 million). The terms also provide that the facility may be drawn in USD, GBP or EUR,
or another currency with the agreement of the banks. At 31\u00a0December 2025, $266.0 million (2024:\u00a0$266.0 million) was
utilised by way of LOC to support the Funds at Lloyd\u2019s requirement and $nil cash drawings were outstanding (2024:\u00a0$nil).
(d) As Hiscox Bermuda is not an admitted insurer or reinsurer in the USA, the terms of certain US insurance and reinsurance
contracts require Hiscox Bermuda to provide LOCs or other terms of collateral to clients. Hiscox Bermuda has in place a
LOC reimbursement and pledge agreement for the provision of a committed LOC facility in favour of USA ceding companies
and other jurisdictions, and also committed LOC facility agreements. The agreements combined allow Hiscox Bermuda to
request the issuance of up to $295.0 million in committed LOCs ( 2024: $395.0 million). LOCs issued under these facilities
are collateralised by cash, US government and corporate securities of Hiscox Bermuda. LOCs under these facilities totalling
$124.4 million were issued with an effective date of 31\u00a0December 2025 (2024: $205.1 million) and these were collateralised
by US government and corporate securities with a fair value of $250.0 million (2024: $251.2 million). In addition, Hiscox
Bermuda maintained assets in trust accounts to collateralise obligations under various reinsurance agreements. At
31\u00a0December 2025, total cash and marketable securities with a carrying value of approximately $42.1 million (2024: $46.2
million) were held in external trusts. Cash and marketable securities with an approximate market value of $631.9 million
(2024: $521.9 million) were held in trust in respect of internal quota share arrangements.
(e) Hiscox Soci\u00e9t\u00e9 Anonyme has arranged bank guarantees with respect to its various office deposits and insurance claims
liabilities obligation for a total of \u20ac1.6 million (2024:\u00a0\u20ac0.5 million).
(f) See note 22 for tax-related contingent liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-542": { "value": "As Hiscox Bermuda is not an admitted insurer or reinsurer in the USA, the terms of certain US insurance and reinsurance
contracts require Hiscox Bermuda to provide LOCs or other terms of collateral to clients. Hiscox Bermuda has in place a
LOC reimbursement and pledge agreement for the provision of a committed LOC facility in favour of USA ceding companies
and other jurisdictions, and also committed LOC facility agreements. The agreements combined allow Hiscox Bermuda to
request the issuance of up to $295.0 million in committed LOCs ( 2024: $395.0 million). LOCs issued under these facilities
are collateralised by cash, US government and corporate securities of Hiscox Bermuda. LOCs under these facilities totalling
$124.4 million were issued with an effective date of 31\u00a0December 2025 (2024: $205.1 million) and these were collateralised
by US government and corporate securities with a fair value of $250.0 million (2024: $251.2 million). In addition, Hiscox
Bermuda maintained assets in trust accounts to collateralise obligations under various reinsurance agreements. At
31\u00a0December 2025, total cash and marketable securities with a carrying value of approximately $42.1 million (2024: $46.2
million) were held in external trusts. Cash and marketable securities with an approximate market value of $631.9 million
(2024: $521.9 million) were held in trust in respect of internal quota share arrangements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-543": { "value": "
29 Capital commitments
Refer to note\u00a021 for lease commitments and income from sub-leasing and note\u00a024 for the Group\u2019s funding contributions to the
defined benefit scheme. The Group\u2019s capital commitments contracted for at the end of the reporting period but not yet incurred
for property, plant, equipment and s oftware development were $0.3 million (2024:\u00a0 $0.2 million).
The Group has given an undertaking to provide up to $652.7 million in private credit funds (2024: $296.7 million). The table below
shows the total commitment and the amount that remains undrawn as at 31\u00a0December 2025.
Undrawn
commitment
$m
Amount of commitment to invest in private credit funds
US Dollar $547 million
403.4
Sterling \u00a340 million
28.9
Euro \u20ac45 million
29.1
Total
461.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-545": { "value": "
31 Related-party transactions
The Directors of the Company are deemed to be the Group's key personnel. Details of the remuneration of the Group\u2019s key
personnel, presented in Sterling, are shown in the Directors' remuneration report 2025 on pages 118 to 127. A\u00a0number of the
Group\u2019s key personnel hold insurance contracts with the Group, all of which are on normal commercial terms and are not
material in nature.
The following transactions were conducted with related parties during the year.
(a) Syndicate 33 at Lloyd\u2019s
Related-party balances between Group companies and Syndicate 33 reflect the 27.4% interest (2024:\u00a027.4%) that the Group
does not own, and are as follows.
Transactions in
the income statement
for the year ended
Balances
outstanding
receivable/(payable) at
31 December
2025
31 December
2024
31 December
2025
31 December
2024
$m
$m
$m
$m
Hiscox Syndicates Limited
30.0
21.5
42.9
32.4
Hiscox Group Insurance carriers
16.8
38.0
(37.2)
(55.0)
Hiscox Group Insurance intermediaries
5.5
7.1
(2.7)
(2.9)
Other Hiscox Group companies
60.0
53.8
(2.4)
(1.4)
112.3
120.4
0.6
(26.9)
(b) Transactions with associates
Certain companies within the Group conduct insurance and other business with associates. These transactions arise in the
normal course of obtaining insurance business through brokerages, and are based on arm\u2019s length arrangements.
2025
2024
$m
$m
Insurance revenue achieved through associates
9.0
8.5
Commission expense charged by associates
2.7
2.2
There were no material outstanding balances with associates.
Details of the Group\u2019s associates are given in note 13.
(c) Internal reinsurance arrangements
During the current and prior year, there were a\u00a0number of reinsurance arrangements entered into in the normal course of trade
between various Group companies. The related results of these transactions have been eliminated on consolidation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-544": { "value": "
31 Related-party transactions
The Directors of the Company are deemed to be the Group's key personnel. Details of the remuneration of the Group\u2019s key
personnel, presented in Sterling, are shown in the Directors' remuneration report 2025 on pages 118 to 127. A\u00a0number of the
Group\u2019s key personnel hold insurance contracts with the Group, all of which are on normal commercial terms and are not
material in nature.
The following transactions were conducted with related parties during the year.
(a) Syndicate 33 at Lloyd\u2019s
Related-party balances between Group companies and Syndicate 33 reflect the 27.4% interest (2024:\u00a027.4%) that the Group
does not own, and are as follows.
Transactions in
the income statement
for the year ended
Balances
outstanding
receivable/(payable) at
31 December
2025
31 December
2024
31 December
2025
31 December
2024
$m
$m
$m
$m
Hiscox Syndicates Limited
30.0
21.5
42.9
32.4
Hiscox Group Insurance carriers
16.8
38.0
(37.2)
(55.0)
Hiscox Group Insurance intermediaries
5.5
7.1
(2.7)
(2.9)
Other Hiscox Group companies
60.0
53.8
(2.4)
(1.4)
112.3
120.4
0.6
(26.9)
(b) Transactions with associates
Certain companies within the Group conduct insurance and other business with associates. These transactions arise in the
normal course of obtaining insurance business through brokerages, and are based on arm\u2019s length arrangements.
2025
2024
$m
$m
Insurance revenue achieved through associates
9.0
8.5
Commission expense charged by associates
2.7
2.2
There were no material outstanding balances with associates.
Details of the Group\u2019s associates are given in note 13.
(c) Internal reinsurance arrangements
During the current and prior year, there were a\u00a0number of reinsurance arrangements entered into in the normal course of trade
between various Group companies. The related results of these transactions have been eliminated on consolidation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-546": { "value": "
The Directors of the Company are deemed to be the Group's key personnel. Details of the remuneration of the Group\u2019s key
personnel, presented in Sterling, are shown in the Directors' remuneration report 2025 on pages 118 to 127. A\u00a0number of the
Group\u2019s key personnel hold insurance contracts with the Group, all of which are on normal commercial terms and are not
material in nature.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f-547": { "value": "
32 Events after the reporting period
There are no material events that have occurred after the reporting date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:5493007JXOLJ0QCY2D70", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fn-1": { "value": "In the year ended 31\u00a0December 2025, $275.7 million (2024: $149.1 million) of shares were purchased and shares with a nominal value of $1.4 million (2024: $0.8
million) have been cancelled as part of the share buyback programme.
", "dimensions": { "concept": "xbrl:note", "noteId": "fn-1", "language": "en" } } } }