Liberty Managing Agency Limited

Liberty Managing Agency Limited

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Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

LIBERTY MANAGING AGENCY LIMITED

London/UK

Annual Report and Financial Statements for the year ended 31 December 2023

Registered Number: 3003606

Contents

Directors and Administration

Strategic Report

Directors' Report

Statement of Directors' Responsibilities

Independent Auditor's Report

Income Statement

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Financial Position

Notes to the Financial Statements

Directors and Administration

Directors

Company Secretary

R Tighe

Registered Office

20 Fenchurch Street

London

England

EC3M 3AW

Company Number

3003606

Registered Auditor

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London

E14 5EY

Strategic Report

The Directors present the Strategic Report for the year ended 31 December 2023.

Principal Activities

Liberty Managing Agency Limited ("LMAL" or "the Company") is a limited liability company incorporated in England. The principal activity of LMAL is acting as a Lloyd's managing agent for Liberty Syndicate 4472 ("the Syndicate"). The Company charges a fee to the Syndicate in respect of its role as managing agent.

The Company, in its capacity as a Lloyd's managing agent, incurred expenses in connection with management and administration services provided to associated entities during the year. The Company charged a managing agency fee and recharged administrative expenses to the Syndicate.

LMAL is wholly owned by Liberty Mutual Group Incorporated, a diversified global insurer. The group offers a wide range of insurance products and services to meet the needs of individuals, families and businesses through strategic business units ("SBU") and operating units. The Company is part of the Liberty Specialty Markets ("LSM") and Liberty Mutual Reinsurance ("LMRe") segments which are within the Global Risk Solutions business unit ("GRS").

Key Financial and Performance Indicators

The key financial and other performance indicators during the year were as follows:

Turnover decreased by $0.4m when compared to prior year. This was due to a decrease of $3.3m in the expenses recharged to the Syndicate via LMAL. The decrease in expenses was primarily driven by costs incurred directly within the Syndicate rather than being recharged via LMAL. This was partially offset by an increase in the managing agent fees of $2.9m due to an uplift in average Syndicate capacity.

Profit before tax has increased by $3.5m in comparison to the prior year. The increase in profits is primarily due to the increase in managing agent fees as mentioned above.

The Company continues to meet Lloyd's solvency requirements for managing agents.

Principal Risks and Uncertainties

The Company is committed to ensuring that it manages its risk profile effectively across all parts of the business, subject to the environment in which it operates in. The Risk Management Framework ("RMF") is the overarching document that outlines the Company's risk management strategy, principles and approach to managing risks, enabling a consistent mechanism in which risks, that may have an adverse impact on the achievement of business objectives, are identified, assessed, managed, monitored and reported.

The objective of the Company's risk management activities is to manage such risks in a controlled manner that is consistent with the Board's appetite while retaining the ability to implement its long-term business plans.

The Board of Directors for LMAL ("LMAL Board") has established a robust corporate governance structure that is supported by the Board Sub-Committees, including the Risk Management Committee ("RMC"), Audit Committee, Nominations Committee and Remuneration Committee. This is further supported by Executive level "Legal Entity Committees" established by the responsible executives to assist them with discharging their duties by considering specific management information for oversight and management of LMAL's operational and regulatory performance.

The principal risks and uncertainties facing the Company arise from two sources:

Credit Risk

Credit risk is the risk of financial change in value due to actual credit losses deviating from expected credit losses due to the failure of another party to meet its contractual debt obligations to the Company. The principal source of credit risk arises from the inability of Syndicate 4472 to meet its contractual obligations to the Company as they become due.

Amounts due from related party insurance carriers are monitored regularly to ensure the day-to-day operating expenses of the company can be met.

Liquidity risk

Liquidity risk is defined as the risk of the Company being unable to meet its financial obligations as they fall due, as a result of insufficient liquid resources.

Liquidity risk exposures are managed through regular settlement of intercompany recharges with the Syndicate. In addition to this there are a number of preventative, detective and directive controls. The Company manages its cash and invested assets to ensure that cash is available to pay obligations as they fall due.

Operational Risk

Operational risk is the risk of loss to the Company resulting from the inadequate or failed internal processes, people and systems, or from external events. This includes cyber and security issues, and risks arising from outsourced functions as well as legal and non-dispute risks.

In the normal course of business, the Company may receive legal claims against it in different jurisdictions and may be subject to regulatory investigations and proceedings from time to time. The Company currently considers none of the ongoing claims, investigations or proceedings to be material. However, in light of the uncertainties involved in such matters there can be no assurance that the outcome of a particular matter or matters currently not considered to be material may not ultimately be material to the Company's results in a particular reporting period depending on, among other things, the amount of the loss resulting from the matter(s) and the results otherwise reported for such a period. Where the Company can look to another party to pay some or all of the expenditure required to settle a provision, any reimbursement is recognised when, and only when, it is virtually certain that it will be received.

Operational risk is managed within the Board risk appetite and mitigated through the use of the three lines of defence model in conjunction with a system of documented, monitored and tested internal controls. The model aims to provide clarity over roles and responsibilities within the Company, ensuring that all key risk activities are managed effectively.

Group Risk

Group risk is the risk of loss to the Company arising from its membership of GRS and the Liberty Mutual Group "the Group".

Group risk is mitigated through the monitoring of the Group's financial strength and business strategy developments. In addition, the chairperson of any committee reviewing risk information ensures that due attention is given to each legal entity within the Group, even in times of stress to one entity.

Strategic Risk

Strategic risk is the risk of loss to the Company arising from key business decisions, improper implementation of decisions or lack of responsiveness to industry changes. The main matter of strategic importance to the Company is its relationship with the Syndicate which is expected to continue in line with the Group's overall underwriting strategy.

Strategic risk is managed within the Board risk appetite and mitigated through the development and implementation of the Syndicate's strategy, business plan and through controls relating to the development of new business opportunities.

Pension Scheme

The Company operates the Liberty Europe Group Pension Scheme ("the Scheme"), a defined benefit · pension scheme for certain staff members, which closed to future accrual in July 2012. Reported results may be adversely affected by changes in pension costs and funding requirements due to lower-than-expected investment returns, changes in demographics and higher life expectancy. These risks are continually monitored by the independent scheme actuaries to determine an appropriate funding approach and an asset allocation strategy designed to reduce and diversify the risk inherent in the investment portfolios. Refer to note 11 in the notes to the financial statements for more information on the defined benefit pension scheme.

Solvency Risk

The Company is required by Lloyd's to maintain set levels of solvency and report them on a quarterly basis. This is managed through regular monitoring and planning of the required solvency levels based on changing business operations and regulatory requirements. Where appropriate, the Company actively coordinates these plans with its parent entities at Group.

Climate Change Risk

Climate Change Risk

Climate change risk arises from the impacts associated with an increase in global average temperatures, measured against pre-industrial levels. The risks to LMAL are multiple and will likely occur over an extended period of time i.e. (Short-term (1-5 years), Medium-term (5-15 years) and Longterm (15+ years)). Climate change risk has the potential to manifest in three forms:

Climate change is classified as a cross-cutting risk, meaning it impacts a number of the different risk areas outlined above, as such it is being managed through the existing Risk Management Framework.

Insurers have a pivotal role in supporting a just transition to a low carbon economy through their products, asset holdings and disclosures. The Group have set thermal coal thresholds within underwriting and investments to support this shift.

Since 2020, LMAL continues to be a member of voluntary initiative ClimateWise, a global insurance industry network focused on climate-related issues. In 2023, the second ClimateWise report was published, demonstrating how we respond to the ClimateWise Principles that are aligned with the Task Force on Climate-related Financial Disclosures ("TCFD"). This provides our policyholders and counterparties with additional climate change-specific information.

The ClimateWise score improved to 82% for 2023 (2022: 71%). There was particular improvement in Principle 5 - 'Inform public policy making' from 8% (2022) to 14% (2023).

The below table provides an overview of how LMAL is responding to the 7 ClimateWise Principles.

Sustainability Risk

Sustainability Risks, which considers environmental, social and governance risks, affect the LMAL's relationship with external stakeholders. Failure to address sustainability factors may lead to reputational damage, loss of trust with customers, and regulatory and financial interventions.

Integrating sustainability across business and operations functions is an important part of Liberty's strategy. Risk management is aligned with LMAL's sustainability priorities to identify, monitor and report different types of sustainability risk. Sustainability risk is classified as a cross-cutting risk, meaning it impacts a number of risk register risks, as such it is being mitigated through the existing Risk Management Framework. Governance structures, such as internal working groups, are in place to discuss, escalate and respond to sustainability topics.

As part of that governance, a Liberty-wide underwriting led, cross-functional council was established to monitor and manage a set of topics where we perceive elevated reputational and commercial risk. Several new topic-specific underwriting guidelines were introduced in 2023 that complement an overarching sustainable underwriting risk framework of material environmental, social, and governance dimensions relevant across the portfolio.

Significant events during the reporting period and up to the date of the report

Macroeconomic and Geopolitical challenges

Throughout 2023, the macroeconomic and geopolitical environment has remained volatile. The conflict between Russia and Ukraine has continued into a second year and is expected to continue for some time. Sanctions continue to be actively monitored and applied. The more recent events between Israel and Hamas have added to the complexities and uncertainty within the geo-political landscape. The global economy continued its battle with sustained high levels of inflation throughout year, with Central banks responding to increase base rates to dampen inflationary pressures. This in turn is impacting debt servicing for governments, companies and individuals, leading to recessionary concerns and adding to the potential for civil commotion with multiple global flash points. We continue to monitor the situation with regards to these systemic risk environment factors in accordance with our Risk Management Framework.

Section 172 Statement

The below paragraphs demonstrate how directors have had regard for the matters set out in section 172(1) (a) to (f) ("S. 172") of the Companies Act 2006 ("the Act") when performing their duty to promote the success of the Company for the benefit of its shareholders, which includes having regard to the interest of other stakeholders including the employees, suppliers and customers.

The LMAL Board ("the Board") considers the Company's key stakeholders to comprise its ultimate parent company Liberty Mutual Holding Company Inc. (the "Parent") and Lloyd's of London ("Lloyd's") through which the Company participates in Syndicate 4472 (the "Syndicate") as a managing agent. It further considers customers, brokers, suppliers, employees of other Group entities who provide services to the Company, the environment, and the community in which it operates to be key stakeholders.

The Board is responsible for establishing the Company's purpose and strategy and satisfying itself that these and its culture are aligned and are consistent with those of Liberty Mutual Group (the "Group") of which it is a part. The Board determines the strategic objectives and policies of the Company, ensuring there is a sustainable business model to support the delivery of long-term value. The Board is collectively responsible for the success of the Company, with a focus on ensuring that it continues to create value for the mutual advantage of all stakeholders. The Board is collectively responsible for the performance of the managing agent and Syndicate 4472 under management.

Key strategic decisions in 2023

A key role of the Board is to approve the business strategy and to monitor progress against it. The Board considers the likely consequences of any decisions in the long term, identifies stakeholders who. may be affected, and carefully considers their interests and any potential impact as part of the decisionmaking process.

Stakeholder Engagement

(i) Shareholder Engagement

As a wholly owned subsidiary, the Board duly considers the views of its ultimate shareholder Liberty Mutual Holding Company Inc. and the interests of the Group when considering any major decisions and transactions undertaken by the Company. During 2023, the Chief Executive Officer provided the primary channel of communication between the Company, and the Group.

(ii) The Syndicate

The relationship with the Syndicate is of material strategic importance and is expected to continue in line with the Group's overall underwriting strategy. This includes responsibility for approving the key strategic decisions and the annual business plan of the Syndicate, the Board's responsibility for adequately fostering business relationships with the Syndicate and satisfying themselves that the Company and the Syndicate have maintained a reputation for high standards of business conduct, including dealing with customers, employees and applicable regulators. These actions are principally aimed at delivering a sustainable and profitable outcome for the Company's key stakeholder groups.

(iii) Clients & Brokers

The Board is responsible for ensuring appropriate customer outcomes. Directors are committed to ensuring that all customers are treated fairly, and that client interest is considered as part of decision making at all levels within the Company. It has put in policies and robust frameworks in respect of customer outcomes to ensure this.

The Directors also recognise that broker relations are also essential to our business. Executive Directors and senior management meet regularly with brokers and strategic partners recognising the importance of maintaining robust and effective communication channels with them to understand and meet their needs and those of our customers.

(iv) Employees

The Company's staff are seconded to it by other service companies within the Group and the Company considers such staff to be key stakeholders. The Directors are committed to ensuring high levels of employee engagement and communicate regularly with employees. Employee surveys are regularly conducted and results taken into account to identify and implement actions for improvement. The Directors are committed to putting people first by providing an environment of conscious inclusion, where everybody feels that they are valued and belong. A range of inclusive, family friendly policies that support our people to be their unique selves at work and promote a healthy work-life balance are in place. The Directors are also committed to their responsibility to ensure that the Company's operations comply with applicable laws and regulations, including health and safety standards and practices in the workplace.

(v) Regulators

The Directors are committed to a constructive and open relationship with all regulators, including Lloyd's of London through which the Syndicate operates. The Directors, as well as other senior managers in the business, meet regularly with UK regulators to receive feedback and to better understand and meet their needs. The operations of the Company are conducted in accordance with Lloyd's Principles which are aimed at delivering fair outcomes for customers, maintaining high standards of conduct and enhancing the reputation of the Lloyd's market, as well as Prudential Regulation Authority ("PRA") and Financial Conduct Authority ("FCA") requirements. The Board is required, annually, to formally attest to meeting the current Lloyd's Principles requirements.

(vi) Suppliers

The Board reviews the actions taken to prevent modern slavery and associated practices in any part of the supply chain and approves a Modern Slavery Statement in accordance with the Modern Slavery Act 2015 each year. Further detail on actions taken by the Company in compliance with the Modern Slavery Act 2015 is set out on the LSM website. The Company adopts a policy on responsible procurement and a Suppliers Code of Conduct as part of its commitment to being a responsible business; all suppliers are expected to comply with these.

(i) Community and Environment

The Group relies on a thoughtful and thorough approach to managing sustainability issues and the Company subscribes to this approach. Sustainability is integral to the purpose of the Group which strives to foster a sustainability mindset across its global enterprise with several new underwriting guidelines introduced in 2023 that complement an over-arching sustainable underwriting risk framework of material environmental, social, and governance dimensions relevant across the portfolio. The Group also has a long history of delivering on an agenda of Corporate Social Responsibility ("CSR"), with a strategic goal of Improving Lives and Communities' focusing on advancing security, furthering opportunity, and building community resilience through philanthropy. This CSR agenda is supported by policies and programmes including matched funding, community volunteering and strategic charity partnerships, all with the overarching aim of helping the communities in which the Company operates to prosper. Global charity partners reflect the Groups support of improved prevention and resiliency to the climate crisis. We work with two charities with different approaches to developing climate resilience. Cool Earth is working with Rainforest Communities to halt deforestation and prevent climate change whilst ShelterBox is there to provide emergency shelter and support to those who have lost their homes to disasters.

LMAL is committed to work towards achieving net zero emissions by 2050 for UK operations. This includes scope 1 and 2 and the required subset of Scope 3 emissions (category 3 fuel and energy related, category 5 waste generated in operations, category 6 business travel and category 7 employee commuting).

Business Conduct

The Group Code of Business Ethics and Conduct embodies the Company's commitment to maintaining the highest ethical conduct and professional standards. The Group Code of Business Ethics and Conduct, sets out the guiding principles of honesty, integrity and "doing the right thing", and governs interactions with key stakeholders. The Code of Business Ethics and Conduct also emphasises the importance of being a responsible business. There is a clear policy in place for whistleblowing and this ensures that employees feel empowered to raise concerns in confidence and without fear of unfair treatment.

Compliance with Code provisions

The Board confirms that the Company has complied with the provisions set out in the Wates Corporate Governance Principles for Large Private Companies (the 'Code') throughout the year ended 31 December 2023.

Principle 1 - Purpose and leadership

At Liberty, "We believe progress happens when people feel secure. We exist to help people embrace today and confidently pursue tomorrow. We promise protection for the unexpected, delivered with care." This includes how we interact with our customers, employees and our other stakeholders.

The Board ensures an effective system of governance provides for sound and prudent management of the business with transparent organisational structure, clear allocation and appropriate segregation of responsibilities and an effective system for ensuring the transmission of information and a risk framework which supports prudent and effective risk management.

The Board oversees the culture of the Company and raises any concerns during meetings and the Board is able to express its views on the culture of the organisation through mechanisms including the annual Board Effectiveness Review. The Company complies with the Senior Managers' Certification Regime which further strengthens the drive for individual accountability.

The Board is responsible for promoting the long-term success of the Company for the benefit of its members as a whole, taking into account other stakeholders as defined by Section 172 of the Companies Act 2006 and the Articles of Association and including but not limited to; setting the Company's strategic aims, monitoring performance of the Company and management against those aims, setting the Company's risk appetite and monitoring the operation of prudent and effective controls and monitoring compliance with corporate governance principles.

Principle 2 - Board composition

The Board and committee composition allows for effective independent challenge. During 2023 the Board consisted of nine directors, three of whom were Independent Non-Executive Directors.

The Company's Board has a separate Independent Non-Executive Chair and Chief Executive Officer ("CEO") to ensure that the balance of responsibilities, accountabilities and decision making across the Company is effectively maintained. The directors have equal voting rights when making decisions, except the Chair, who has a casting vote. All directors have access to the advice and services of the Company Secretary.

The Board has a skills matrix in place to ensure the composition of the Board contains the appropriate combination of skills, backgrounds, experience and knowledge to understand and guide the business.

The Board undertook a formal independent effectiveness review of its performance in 2023 which comprised of a detailed questionnaire. The results were presented to the Board at its meeting on 20 September 2023. The 2023 Board Effectiveness Review assessed that overall, the Company was operating effectively with several areas prioritised for focus during the coming year. Actions arising from the Board effectiveness review are agreed by the Board and tracked by the Company Secretary to ensure they are completed. The next assessment will take place in mid-2024.

Principle 3 - Director responsibilities

The Company operates in accordance with the corporate governance framework, as approved by the Board. The Board is responsible for the governance of the Company and has established the framework as effective means of meeting that responsibility. The framework articulates its reporting and escalation structures.

Accountability is formally delegated by the Board to the CEO and by the CEO to their direct reports. The roles and responsibilities are clearly documented in the Management Responsibility Map ("MRM") which describes the management and governance arrangements of the Company and forms part of the Governance Framework. The MRM is reviewed regularly.

The Board held four quarterly meetings during 2023, plus had a number of ad hoc meetings to discuss specific items and held a strategy session.

The Board has established an Audit Committee, a Risk Management Committee, a Nominations Committee and a Remuneration Committee. The Terms of Reference for these committees are approved annually by the Board. The committees also undertake annual effectiveness reviews. The results are discussed by the Board and an action plan is agreed, with the actions tracked by the Company Secretary.

The Audit Committee is responsible for reviewing the effectiveness of the Company's financial systems and internal controls and receive regular updates on the work of the Company's internal audit function and from its external auditors. The Board also receives regular reports from the CFO. The Company's financial reporting is currently externally audited by Ernst & Young on an annual basis.

The Risk Management Committee is responsible for the oversight of risk, reviewing the Company's risk appetite and risk profile, reviewing the effectiveness of the Company's risk management framework, reviewing the methodology and assumptions used to determine the Company's economic and regulatory capital requirements, stress testing approval of the annual Compliance plan, reviewing reporting on conduct risk and monitoring the Company's regulatory activities, as appropriate.

The Nominations Committee is responsible for assisting the Board in ensuring that the Board remains balanced in terms of skill and experience, executive and non-executive directors and diversity. It leads the process for appointments to the Board and make recommendations to the Board ensuring there is a formal, rigorous and transparent procedure and overseeing Board and senior executive succession.

The Remuneration Committee is responsible for setting the remuneration policy and practices across LMAL and the employees of other Group entities who are seconded to or underwrite on its behalf of LMAL, determining the total individual remuneration of Executive Board Members, Senior Management Function ("SMF") holders with the PRA (A person who has been approved by the UK regulators to perform a senior management function under the Senior Managers & Certification Regime) and determining the total individual remuneration package of Solvency II identified staff including basic salary and short-and long-term incentive awards.

The governance structure is further supported by Executive level committees which consider specific management information for oversight and management of LMAL's operational and regulatory performance prior to presentation at Board / Board Sub-Committees.

Principle 4 - Opportunity and Risk

The role of the Board is to promote the long-term sustainable success of the Company, generating value for its shareholder within a framework of prudent and effective controls, which enable risks to be assessed and managed.

The Company operates a risk management framework that forms an integral part of the management and Board processes and decision-making framework, aligned to the Group's risk management framework. The key elements of the risk management framework comprise risk appetite, risk governance, including risk policies, risk oversight committees and working groups and roles and responsibilities; and the processes the Company uses to identify, assess, manage, monitor and report risk, including the use of risk models and stress and scenario testing.

The Company's position against its risk appetites and tolerances is monitored and reported to the Board on a regular basis. The Company will not accept risks that materially impair the reputation of the Company and requires that customers are always treated with integrity.

More detail on the Company's principal risks and uncertainties can be found in the Strategic Report.

Principle 5 - Remuneration

The Company's staff are seconded to it by other service companies in the Group. As part of the Group, staff enjoy comprehensive flexible benefit offerings which include a wide range of Lifestyle, Financial Planning, Health & Wellbeing benefits.

The Board has delegated the review and approval of the Remuneration Policies to the Remuneration Committee. The Committee annually reviews and confirms to the Board that the Remuneration Policy is designed and operates to ensure incentives are aligned with prudent risk taking and includes all staff seconded or those who underwrite on behalf of LMAL. The LMAL Nominations Committee reviews the gender pay gap as published by Liberty Specialty Markets Limited ("LSML") which can be found at https://www.libertyspecialtymarkets.com/careers/diversity-inclusion-wellbeing/gender-pay

More detail on the Company's net operating expenses, including auditor remuneration, Directors' remuneration costs retained by the Company, Directors' pension, Directors' emolument, and staff costs can be found in the 'Notes to the Financial Statements'.

Principle 6 - Stakeholders

Details about stakeholders can be found in the Section 172 statement in the Strategic Report.

By order of the Board

Registered Number: 3003606

Directors' Report

The Directors present their Annual Report and the audited financial statements of Liberty Managing Agency Limited for the year ended 31 December 2023.

Directors and Directors' interests

Directors who held office between 1 January 2023 and the date of signing the financial statements were:

Luis Prato was appointed Chief Executive Officer of the Company on 1 January 2024, which is subject to regulatory approval.

According to the Register of Directors' Interests, no Director has any beneficial interest in the issued share capital of the Company or related companies at any time during the year.

Results and Dividends for the Year

The profit after taxation for the year amounted to $15.2m (2022: $$14.1m). No dividend was paid (2022: $26m) to its immediate parent company Liberty UK and Europe Holdings Limited ("LUEH") during 2023. This amounts to a dividend per share in 2023 of nil (2022: $65.00).

Significant events during the reporting period and up to the date of the report

These events have been disclosed on page 7 of the Annual Report within the Strategic Report.

Going Concern

The Directors are satisfied that the Company has adequate resources to continue in business for the foreseeable future. In assessing whether the going concern basis is appropriate, the Directors have considered the information contained in the financial statements, the Company's latest management information and the Company's current solvency calculations. In preparing the going concern assessment, management have considered the impact of the Russia and Ukraine conflict on worldwide economic activity and how it might impact the financial position of the Company. However, the Directors do not currently believe that this will materially impact on the performance of the Company. As LMAL's business operations are predominantly dependent on the performance of Syndicate 4472, we have reviewed the current capital strength of the Syndicate and are confident that it would be sufficient to support the operations of LMAL. In addition, given the capital strength and available liquidity within the Group, the Directors are confident that this would also be sufficient to support the operations of LMAL in the future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements for at least 12 months from the date of approval of these financial statements to 26 April 2025.

Future Developments

The Company will continue to manage Syndicate 4472 ('the Syndicate') and to provide administration services for other related entities.

As part of LSM/LMRe, the Syndicate will continue to transact general insurance and reinsurance business via the Lloyd's underwriting platform. The Syndicate will continue to adjust the levels of business written to maintain the desired return on risk; this will include adjusting levels of premium income written in different classes, while monitoring risk rigorously with a fully integrated planning, pricing and risk monitoring process and an effective reinsurance programme to protect capital in line with the Board's risk appetite.

Charitable Contributions

In 2023, there were donations of $7,000 made to various charities (2022: $9,000).

Disabled Employees

The Company gives full consideration to applications for employment from disabled persons where the candidate's particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion as outlined in the Company's Equal Opportunities Policy.

Where existing employees become disabled, it is the Company's policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training and any adjustments to working conditions to achieve this aim.

Energy Consumption and Greenhouse Gas Emissions

The Company recognises that its operations have an environmental impact and we are committed to monitoring and managing emissions.

The obligation to disclose greenhouse gas emissions, energy consumption and energy efficiency action arises from the Companies (Directors Report) and Limited Liability Partnership (Carbon Report) Partnerships (Energy and Carbon Report) Regulations 2018, which came into force on 1 April 2019, and apply to financial years starting on or after 1 April 2019.

Using an operational control approach, the Company has assessed its boundaries to identify the activities and facilities for which it is responsible.

All staff are employed by LSML, an affiliated Liberty Special Markets company and are seconded to LMAL. Seconded staff act in accordance with the direction provided by the management of the Company.

In preparing Scope 1, 2 and 3 emissions data, we have followed the 2019 HM Government Environmental Reporting Guidelines in conjunction with the GHG Reporting Protocol Corporate Accounting and Reporting Standard and the 2023 UK Government's Conversion Factors for Company Reporting.

The Scope 1 and 2 footprints, along with areas of our Scope 3 footprint associated with high levels of operational control for the current year are:

The prior year comparatives are:

The Company has selected tCO ₂ emissions per Full Time Equivalent (FTE) as its intensity measurement ratio. This is considered the most appropriate ratio given that the main driver of emissions is the number of staff performing its principal activity of acting as a Lloyd's managing agent.

It was not possible to obtain emissions data for the Bristol and Manchester offices, however, using the London offices as proxies, we have included estimated electricity consumptions for Bristol and Manchester. The consumption was calculated using estimated square footage of each of the offices and multiplied by the square meter/electricity consumption taken from the 20 and 155 Fenchurch Street offices in London".

Business travel increased during 2023 as employees continued to more fully return to international meetings and engagements. There are a number of additional factors at play in the increase between 2022 and 2023 travel emissions, including:

We encourage staff to use the most efficient routes and to use rail for shorter routes, and are currently investigating further schemes to incentivise and reward employees who choose lower-carbon travel options over the course of the working year. LMAL has also mitigated some emissions through a Lufthansa programme to purchase sustainable aviation fuel (SAF), and we pay for carbon offsets via Squake to compensate for business travel related emissions and will continue to evolve this offsetting strategy.

Liberty Mutual, the Company's ultimate parent organisation, has committed to a 50% reduction of Scope 1 and 2 emissions by 2030 from 2019 levels and the Company is a part of this reduction effort. The Company's office in London already operates with low levels of emissions, with the building achieving a BREEAM (Building Research Establishment Environmental Assessment Method) 'excellent' environmental performance rating. Gas and Electricity supplies for the office are generated from 100% renewable energy, as accredited by OFGEM. In addition, the office has ISO 14001 certification (Environmental management system). This is an environmental management system that helps organizations minimize how their operations and processes negatively affect the environment.

Property energy reduction strategies include:

Statement of Diclosure of Information to Auditors

So far as each person who was a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquires of fellow Directors and the Company's auditor, each Director has taken all the steps that they are obliged to take as a Director in order to.make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Reappointment of Auditors

Ernst & Young LLP are deemed to be reappointed in accordance with an elective resolution made under Section 485 of the Companies Act 2006. Consequently, the Company has dispensed with the requirement to hold an Annual General Meeting and re-appoint the auditors. Ernst & Young LLP have expressed their willingness to continue in the office and have been invited to do so.

By order of the Board

Registered Number: 3003606

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 "The Financial Reporting Standard applicable to the UK and Republic of Ireland". Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

By order of the Board

Registered Number: 3003606

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LIBERTY MANAGING AGENCY LIMITED

Opinion

We have audited the financial statements of Liberty Managing Agency Limited ("the Company") for the year ended 31 December 2023 which comprise Income Statement, Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position and the related notes 1 to 14, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable. law and United Kingdom Accounting Standards including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least 12 months from the date of approval of these financial statements to 26th April 2025.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 19, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

Our approach was as follows:

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Income Statement For the year ended 31 December 2023

All the amounts above are in respect of continuing operations.

The notes on pages 28 to 44 form part of these accounts.

Statement of Comprehensive Income For the year ended 31 December 2023

The notes on pages 28 to 44 form part of these accounts.

Statement of Changes in Equity For the year ended 31 December 2023

The notes on pages 28 to 44 form part of these accounts.

Statement of Financial Position As at 31 December 2023

The notes on pages 28 to 44 form part of these accounts.

These financial statements were approved by the board of directors and were signed on its behalf by:

Registered Number: 3003606

Notes to the Financial Statements For the year ended 31 December 2023

1. Accounting Policies

1.1. Statement of compliance

Liberty Managing Agency Limited is a limited liability company incorporated in England. The registered office is 20 Fenchurch Street, London, EC3M 3AW. The financial statements cover those of the individual entity and are prepared as at, and for the year ended, 31 December 2023.

The financial statements have been prepared in compliance with FRS 102, being the applicable UK GAAP accounting standards, and in accordance with the Companies Act 2006.

The financial statements have been prepared under the historical cost convention except for the defined benefit pension obligation which is measured under the projected unit credit method.

1.2. Basis of preparation

The Directors are satisfied that the Company has adequate resources to continue in business for the foreseeable future. In assessing whether the going concern basis is appropriate, the Directors have considered the information contained in the financial statements, the Company's latest management information and the Company's current solvency calculations. In preparing the going concern assessment, management have considered the impact of the Russia and Ukraine conflict on worldwide economic activity and how it might impact the financial position of the Company. However, the Directors do not currently believe that this will materially impact on the performance of the Company. As LMAL's business operations are predominantly dependent on the performance of Syndicate 4472, we have reviewed the current capital strength of the Syndicate and are confident that it would be sufficient to support the operations of LMAL. In addition, given the capital strength and available liquidity within the Group, the Directors are confident that this would also be sufficient to support the operations of LMAL in the future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements for at least 12 months from the date of approval of these financial statements to 26 April 2025.

The financial statements are prepared in US Dollars ("USD") which is the presentation and functional currency of the Company and rounded to the nearest $'000.

The Company has taken advantage of the exemption, under paragraph 1.12(b) of FRS 102, from preparing a statement of cash flows on the basis that it is a qualifying entity and its parent company, Liberty International Holdings Incorporated, includes the Company's cash flows in its consolidated financial statements.

1.3. Judgements and key sources of estimation uncertainty

1.3.1 Defined benefit pension scheme

The cost of the defined benefit pension plan is determined using an actuarial valuation. The principal . assumptions used by the independent qualified actuaries to calculate the defined benefit obligation under FRS 102 are detailed in note 11. As at 31 December 2023 the value of this obligation is $20.7m. Post-retirement mortality assumptions are based on the SAPS base tables. These assumptions are then combined with an allowance for future mortality improvements in line with the CMI 2022 projection factors allowing for a long-term rate of future improvements of 1.25% per annum. For a pensioner aged 65 at the year end, the assumptions are that they will live on average for a further 23.3 years if they are male and for a further 24.8 years if they are female.

There are no future salary increases as the Scheme closed to future accrual on 1 July 2012, with active members of the Scheme becoming deferred pensioners in the Scheme from 2 July 2012.

1.4.1 Turnover

Turnover represents the amount of expenses recharged by the Company to Syndicate as well as other group undertakings. Turnover also includes Managing Agents fees. The Managing Agents fees are based on the underwriting capacity of the Syndicate, established annually by Lloyd's, and are accrued based on 1% of allocated capacity. Turnover is recognised in the profit and loss account in the calendar year in which they are accrued.

1.4.2 Administrative expenses

Administrative expenses represent the expenses incurred by the Company.

1.4.3 Cash and Cash Equivalents

The Company has applied Part 1 General Rules and Formats of Schedule 2 to the Regulations as per FRS 102.7.20A whereby cash on the balance sheet includes only cash and balances at central banks and loans and advances to banks repayable on demand.

1.4.4 Financial Liabilities

The Company's financial liabilities consist of intercompany balances, corporation tax and other accruals. All financial liabilities are recognised initially at fair value. Intercompany balances are repayable on demand and are typically settled within one year. Intercompany balances are subsequently measured at amortised cost using the effective interest method should they remain unsettled over a year. A financial liability is derecognised when the obligation under the liability is discharged or expires.

1.4.5 Fixed assets

Expenditure on leasehold improvements, computer hardware and software, fixtures, fittings and office equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided on all fixed assets at rates calculated to write off the costs, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:

Depreciation is included within administrative expenses.

The carrying values of the tangible fixed assets are reviewed annually for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

1.4.6 Provisions and contingent liabilities

Provisions are recognised when the Company has a present obligation as a result of past events, it is more probable than not that the Company will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

The Company recognises provisions under a number of circumstances including for dilapidations arising from property lease contracts. The amount recorded as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Discounting is applied to the provision where the effect of the time value of money is material. Provisions are not recognised for future operating losses.

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.

1.4.7 Leases

Rentals under operating leases in respect of business premises are charged to the profit and loss account in equal annual instalments over the period of the lease. Costs associated with property dilapidation and the reinstatement of property to original let condition, are recognised over the period of the lease.

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in other operating income in the statement of profit or loss due to its operating nature.

Incentives for the agreement of a new or renewed operating lease are recognised as a reduction of the · rental income on a straight-line basis over the lease term.

1.4.8 Pension Benefits

FRS 102 was derived from the IFRS for SMEs (International Financial Reporting Standard for Small and Medium Sized Entities) and the provisions for pensions reporting are therefore similar to those required under the revised version of the International Accounting Standard IAS 19 ("IAS19R"), which became effective for accounting periods beginning on or after 1 January 2013.

Therefore, where FRS 102 is silent on the accounting treatment to be adopted, disclosures have been prepared on the basis of what is required under IAS19R.

Defined Benefit Pension Scheme

A defined benefit plan defines the pension benefit that the employee will receive on retirement. The Company operated a defined benefit plan for certain employees, but this scheme closed to future accrual on 1 July 2012, with active members of the Scheme becoming deferred pensioners in the Scheme from 2 July 2012.

The Scheme is administered by a separate board of Trustees which is legally separate from the Company. The Trustees are composed of representatives of both the employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.

Under the Scheme, employees are entitled to annual pensions on retirement at age 65 of one-sixtieth of final pensionable salary for each year of service. Pensionable salary is defined as basic salary less the Basic State Pension. Benefits are also payable on death and following other events such as withdrawing from active service.

The asset recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the reporting date less the fair value of the plan assets as at the reporting date.

The present value of the defined benefit obligation is calculated using the projected unit credit method. The Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that have terms approximating the estimated period of the future payments (discount rate).

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'remeasurement of net defined benefit liability (asset)'.

The cost of the defined benefit plan is recognised in profit or loss as employee costs and it comprises:

Losses are measured at the date that the employer becomes demonstrably committed to the transaction and gains when all parties whose consent is required are irrevocably committed to the transaction.

Where, at the reporting date, the present value of defined benefit obligation is less than the fair value of the plan assets, the plan has a surplus. FRS 102 allows the Company to recognise a surplus on its balance sheet, provided that it is able to recover the surplus either through reduced contributions in the future or through refunds from the Scheme. There is no requirement for these refunds to have been agreed before the balance sheet date and therefore surpluses may be recognised so long as there is a theoretical route by which an entity can recover the surplus, either through reduced contributions in the future or through refunds from the Scheme. Variations arising from actuarial surpluses are spread over the average remaining service lives of members to the extent that the resulting credit does not exceed the regular cost.

The pension scheme balance is recognised gross of any related deferred tax balance, with the related deferred tax item included in the wider deferred tax assets and liabilities.

Defined contribution pension plans

Employees joining on or after 1 January 2002 became members of the Company defined contribution pension schemes. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in the profit or loss account in the period in which they become payable. The assets of the plan are held separately from the Company in independently administered funds.

1.4.9 Foreign Currencies

The Company's functional currency and presentational currency is USD. FRS 102 requires the Company to assess its functional currency periodically in line with the guidance in the standard. The Company's relationship, with and dependency on, the Syndicate is a key factor in the determination of the functional currency of the Company. The fee charged to the Syndicate is principally in USD.

Transactions denominated in currencies other than the functional currency are initially recorded in the functional currency at the exchange rate ruling at the date of the transactions, or an appropriate average rate. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency at the exchange rate ruling on the reporting date. Non-monetary items denominated in a foreign currency, measured at fair value are translated into the functional currency using the exchange rate ruling at the date when the fair value was determined. Exchange differences are recorded in the income statement.

As permitted by FRS 102, the Company has elected to apply the recognition and measurement provisions of IAS 39 Financial Instruments: recognition and measurement as adopted by the UK Endorsement Board at 1 March 2022 to account for all of its financial instruments.

Financial assets represent cash, amounts due from group undertakings for services and prepayments and accrued income. Intercompany receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method. At the end of each reporting period the intercompany receivables are assessed for objective evidence of impairment. If impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cashflows. discounted at the asset's original effective interest. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

1.4.10 Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is recognised either in other comprehensive income or directly in equity as appropriate.

Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current tax liabilities are measured at the amount of corporate income tax expected to be paid to or recovered from taxation authorities in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is recognised on all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted at the balance sheet date and that are expected to apply to the reversal of the timing difference.

1.4.11 Dividends

Dividends are recognised as a liability and deducted from equity when they are approved by the Board. Interim dividends are deducted from equity when they are paid.

2. Turnover and other operating income

2.1. Turnover

Turnover is attributable to the Company's principal activity as a Lloyd's managing agent and arises from the UK and Germany, as follows:

2.2. Other operating income

Other operating income comprises rental income received from subletting to third parties and totalled $1,975k for the year (2022: $1,562k)

When the Company acts as a lessor, it determines at the lease commencement whether each lease is a finance lease or an operating lease. The Company recognised lease payments received .under operating leases as income on a straight-line basis over the lease term as a reduction to operating expenses.

Future minimum rentals receivable under non-cancellable leases at 31 December are as follows:

3. Net operating expenses

Administrative expenses include the following:

4. Staff costs and Directors' Remuneration

4.1. Staff costs

In 2022 and 2023, all UK staff were employed by LSML. All of the costs are onward charged to the Syndicate.

Costs relating to Directors are separately disclosed and as such have not been included in the staff costs note.

The average number of employees seconded to or employed by the Company during the year was as follows:

The Company's staff are seconded to it by LSML, a fellow LSM subsidiary. Staff act in accordance with the direction provided by the management of the Company, as part of providing managing agency services for Liberty Syndicate 4472.

4.2. Directors' remuneration

The total directors' remuneration in 2023 was $2,480k (2022: $2,992k). The cost in respect of remuneration for the highest paid Director was $672k (2022: $$586k). Included within this amount are pension contributions of $21k (2022: $$58k). The directors are employed by LSML and the Company passes the recharges of the remuneration from LSML to the Syndicate.

5. Auditors' Remuneration

6. Taxation

6.1. Tax on profit on ordinary activities

Tax (income) / expense included in other comprehensive income

The tax expense / (credit) is made up as follows:

6.2. Factors affecting the tax expense for the year

Deferred tax assets are recognised at the substantively enacted rate, at the balance sheet date.

The Finance Act 2021, enacted on 10th June 2021, included a change in the UK corporation tax rate to increase from 19% to 25% effective from 1 April 2023. Current year profits are taxed at a blended rate of 23.5%. Deferred taxes on fixed assets at the balance sheet date are measured at the enacted rate of 25%.

Deferred taxes on the defined benefit pension scheme surplus have been measured at 35%. However, per Statutory Instrument 2024 No. 335, the UK Treasury has raised the Authorised Surplus Payments Charge (Variation of Rate) Order 2024 to reduce the authorised surplus payments charge from 35% to 25% effective 6th April 2024. Deferred tax balances in respect of Pension surplus will be measured at a rate of 25% in 2024.

The impact of the future rate change on the closing pension deferred tax balance would be $559k.

6.3. Deferred Tax

The deferred tax assets included in the statement of financial position is as follows:

The deferred tax liability included in the statement of financial position is as follows:

Regarding the deferred tax asset in relation to the decelerated capital allowances and the deferred tax liability in relation to the defined benefit pension scheme surplus, it is too uncertain to predict when these will reverse and therefore the amount expected to unwind over the 12-month period following the balance sheet date is unknown.

The French branch had carried forward losses of $823k as at 31st December 2023 (2022: $945k), with no deferred tax recognised.

6.4. Pillar Two tax exposure

The Company is part of the Liberty Mutual Group which is within the scope of Pillar Two effective in 2024. The Organization for Economic Cooperation and Development (the OECD) proposed a globe minimum tax of 15% on global profits (Pillar Two) that has been agreed upon in principle by over 140 countries. During 2023, many countries including the UK took steps to incorporate Pillar Two model rule concepts into their domestic law. The Company continues to monitor Pillar Two developments and is engaged with the Liberty Mutual Group to estimate the impact on it. Based on management's ongoing assessments any Pillar Two liability is expected to be limited. Until the completion of calculations in 2024 the Company will not have a final estimate of its exposure.

7. Tangible assets

8. Debtors

8.1. Amounts falling due within one year

8.2. Amounts falling due after more than one year

9. Creditors

9.1. Amounts falling due within one year

9.2. Amounts falling due after more than one year

9.2.1 Provisions

Provisions comprise of property reinstatement and property dilapidations provisions which are obligations under a property lease.

Movements during the year in respect of provisions are as follows:

10. Called up share capital

11. Pension schemes

The Company and the Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This includes an asset-liability matching policy which aims to reduce the volatility of the funding level of the Scheme. By investing in assets such as swaps and fixed interest and indexlinked gilts, which perform in line with the liabilities of the Scheme, the Scheme is protected against both a fall in long term interest rates and inflation being higher than expected.

UK legislation requires that pension schemes are funded prudently. The last funding valuation of the Scheme was carried out by a qualified actuary as at 30 June 2022 and showed a $7.0m surplus. The next funding valuation is 30 June 2025.

No allowance has been made for administration expenses (including PPF levies). These are met directly by the Company and fellow employer subsidiaries and are allowed for elsewhere in those Company's accounts.

Assumptions

The principal assumptions used by the independent qualified actuaries to calculate the liabilities under FRS 102 are set out below:

Main financial assumptions

The post-retirement mortality assumptions are based on the SAPS base tables. This assumption is then combined with an allowance for future mortality improvements in line with the CMI 2022 projection factors allowing for a long-term rate of future improvements of 1.25% per annum.

For a pensioner aged 65 at the year end, the assumptions are that they will live on average for a further 23.3 years if they are male and for a further 24.8 years if they are female.

Asset allocation

The fair value of the assets in the Scheme were:

Reconciliation of funded status to balance sheet

Breakdown of amounts recognised in profit and loss

Breakdown of amounts recognised in other comprehensive income

Changes in the present value of the defined benefit obligation

Changes in the fair value of scheme assets

Actual return on scheme assets

12. Operating lease commitments

The Company leases various office spaces under non-cancellable operating leases. The leases are of varying length and have varying clauses, terms and rights attached to them.

The Company is committed to make the following payments in respect of non-cancellable operating leases:

13. Related party transactions

During the year, the Company recharged $3.8m of operating lease costs to associated entities and external parties (2022: $4.9m) for their use of the office space under the non-cancellable operating leases.

As a qualifying entity, the Company has elected to take advantage of the exemption from the requirements of FRS 102 Section 33 Related Party Transactions paragraph 7.

During the year the Company entered into transactions in the ordinary course of business with other related parties. Trading balances outstanding at 31 December are as follows:

Amounts

Syndicate 4472 (the Syndicate) is a Lloyd's syndicate managed by LMAL. During the year, the Company charged the Syndicate $18.7m (2022: $15.9m) in Agency fees for its services.

14. Ultimate parent company

The ultimate parent Company of LMAL is Liberty Mutual Holding Company Inc. of Boston, 175 Berkeley . Street, Boston, Massachusetts 02116, U.S.A. a Company incorporated in the United States of America. The smallest higher group of companies for which group accounts are drawn up and of which this Company is a member of is Liberty International Holdings Incorporated, a Company incorporated and registered in the U.S.A.

Copies of the group accounts of Liberty International Holdings Incorporated and Liberty Mutual Holding Company Inc. of Boston are available from the Company's office, 175 Berkeley Street, Boston, Massachusetts 02116, U.S.A.