Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• New competition from capital markets (Catastrophe Bonds) affecting reinsurance rates.

Mitigation Strategies

• Improved property and casualty insurance rates are offsetting some of the negative effects of competition.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Natural catastrophes (e.g., Hurricane Sandy)

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition in most classes and the expectation of lower investment returns.

Mitigation Strategies

• Focus on quality syndicates, judicious use of reinsurance and continuing acquisition strategy.
• 50% quota share arrangement with XL Re to shape risk/reward profile.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Catastrophe losses in 2018 (£5.2m reduced to £1.3m by reinsurance)
• Underwriting losses in 2017 and 2018 impacting sentiment of LLV owners
• Soft underwriting conditions

Mitigation Strategies

• Use of quota share and stop loss reinsurance to mitigate risk and finance underwriting capital
• Acquiring net assets of subsidiaries at below fair value
• Focus on quality syndicates and managing agents

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Diversity and Inclusion
• Responsible Investment

Social Achievements

• Commitment to diversity and inclusive workplace culture.

Governance Achievements

• Approved an environmental, social, and governance (ESG) policy statement on March 23, 2023.
• Compliance with the principles of the Quoted Companies Alliance’s Corporate Governance Code (the “QCA Code”) .

Climate Goals & Targets

Environmental Challenges

• Losses arising from the Covid-19 pandemic.
• Losses from the war in Ukraine.
• Natural catastrophe losses including Hurricane Ian.
• Volatility in investment returns generated by the rise in yields.
• Growth in the capacity portfolio resulting in a disproportionate impact on the 2022 underwriting year loss.
• Increased share of the portfolio (75% for 2022) negatively impacting the overall result for calendar year 2022.
• Negative investment returns on assets managed by syndicates due to mark-to-market accounting rules and rising interest rates.

Mitigation Strategies

• Reduced underwriting risk through quota share reinsurance (reduced to 26% of the overall portfolio).
• Reduced risk through stop loss policies.
• Actively managing capital to increase or decrease exposure.
• Increased focus on risk-adjusted rate change to keep pace with inflation.
• Checking reserves and settling claims quickly to mitigate inflation's impact.
• Leveraging higher interest rates for improved returns on assets.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Natural catastrophes

Reporting Standards

Frameworks Used: UN Principles for Responsible Investment

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Wildfire Defense Syndicate 1996 focuses on loss prevention and reducing wildfire losses, reducing carbon emissions from structure combustion and reconstruction.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Underwriting risk
• Liquidity risk (large claim payouts, breaches of loan covenants)
• Complexity of insurance market

Mitigation Strategies

• Diversified portfolio to mitigate risk (largest capacity on any one syndicate <7% of total)
• Stop loss reinsurance (£35mn indemnity)
• Short-term financing (£35mn), committed bank facility (£10mn), unsecured loan notes (£58mn)
• Aggregate exceedance probability (AEP) scenario testing
• Reinsurance programmes
• Strategic collateralised quota share arrangements with XL Re, Everest Reinsurance Bermuda, Polygon Insurance Company and other private shareholders through HIPCC Limited.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed