The directors present the strategic report for the year ended 31 December 2024.

Strategic report for the year ended 31 December 2024

The Directors present their strategic report for First Underwriting Limited (the Company) for the year ended 31 December 2024.

Business Review

The Company’s principal activities as an Underwriting MGA are the provision of insurance products. The company has continued to develop its product offering and has launched a number of new products during the year.

The UK insurance market experienced high competition and regulatory changes, with the wider UK economy experiencing a cost-of-living crisis as a result of elevated inflation and increases in interest rate.

The company has seen an increase in turnover (£1.8m increase from 2023), this has been driven by the exiting of lines of business that were adversely impacting the loss ratio performance.

However, cost of sales have also decreased, mostly driven by reduced provisions due to the improved loss ratios achieved through the exit of the aforementioned lines of business.

Admin expenses have decreased mainly in cost of claims management and IT expense as the company has invested in improved systems.

As a result of the above the Company’s operating profit increased from £60,419 to £518,911 for the year to 31 December 2024.

Key performance indicators

The results for the year and the financial position of the Company are as shown in the annexed financial statements.

Financial position at the reporting date

The statement of financial position shows that the Company’s net assets at the year-end have increased from £836,712 to £3,807,894 due to the profits explained above, the capital contribution received and the issue of shares.

Future developments

The directors note that 2025 has brought both opportunities and challenges. During 2025, the business renewed its capacity agreement on enhanced terms, reinforcing its underwriting capabilities and supporting future growth. The company remains focused on underwriting discipline, expanding its product offering, and strengthening operational resilience.

Management continually monitors the key risks facing the Company together with assessing the controls used for managing these risks. The board of Directors formally reviews and documents the principal risks facing the business at least annually.

The principal risks and uncertainties facing the Company are as follows:

Competitor pressure

The market in which the Company operates is competitive and could result in the loss of sales to competitors. Fortunately, the Company’s business is broadly based with strong client relationships and the Company also manages the risk by providing quality products and excellent customer service.

Economic downturn

As with most businesses there is a risk of an economic downturn adversely affecting performance and profitability but we consider our risk to be small due to its highly specialist nature. Any risks are monitored through our close working relationships with our main partners and associations.

Liquidity risk

The Company's cash requirements are managed centrally at a Group level to maximise liquid resources to meet the operating needs of the business. The Company has no external borrowing. Client money is held with approved banks and cleared funds have to be available before payment is made.

Inflation risk

The Company closely manages costs in relation to the business, inflationary increases are mitigated through ongoing negotiations with vendors. The Company’s income pricing structures are reviewed to ensure they remain aligned to the inflation rate environment, providing further mitigation.

Interest rate risk

The Company operations are subject to the risk of interest rate fluctuations only as it affects interest earning assets.

Regulatory risk

Changes to the regulatory environment or requirements may result in intervention and financial or reputational loss. The company mitigates these risks by ensuring that its governance and culture identify changes or issues at an early stage and allow the implementation of appropriate strategies to ensure compliance. A dedicated Group compliance function maintains open communication channels with the FCA.

Credit risk

All customers who wish to trade on credit terms are subject to credit verification procedures. Debtor balances are monitored on an on-going basis and provision is made for doubtful debts where necessary.

Profit clawback/Contingent income Risk

As well as opportunity for contingent incomes the Company has risk related to clawback of commissions and, therefore, recognition of contingent income. The Company monitors loss ratio performance closely and the Company’s income pricing structures are reviewed to ensure they remain aligned to the inflation rate environment, providing further mitigation. The Company will accrue the appropriate level of contingent income or clawback based on expected loss ratio performance.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The Company's principal activities as an Underwriting MGA are the provision of insurance products.

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the following:

• an indication of the financial risk management objectives and policies;

• an indication of the exposure of the company to price risk, credit risk, and liquidity risk; and

• an indication of likely future events in the business of the company.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The auditor, Affinia (Chelmsford), is deemed to be reappointed under section 487(2) of the Companies Act 2006.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible for preparing the annual 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). 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 of the company for that period.

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

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate 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 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.

We have audited the financial statements of First Underwriting Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

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 twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 our 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 this 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 our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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 and the 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:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit;

As explained more fully in the directors' responsibilities statement, 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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, incorporated the following:

• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the insurance intermediary sector;

• We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the the regulations set out by the Financial Conduct Authority, Companies Act 2006, taxation legislation, money laundering, and employment legislation;

• We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing returns submitted to the FCA and inspecting legal correspondence; and

• Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, our work included:

• Performance of analytical procedures to identify any unusual or unexpected relationships;

• Testing journal entries to identify unusual transactions;

• Investigated the rationale behind significant or unusual transactions;

• Assessing judgements and assumptions made in determining the accounting estimates to ensure they were not indicative of potential bias; and

• Observation and identification of internal controls in place, specifically around payroll and bank transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• Agreeing financial statement disclosures to underlying supporting evidence;

• Enquiring of management as to actual and potential litigation and claims;

• Reviewing correspondence with the Financial Conduct Authority, submitted FCA returns and the company's compliance advisors;

• Reviewing correspondence with HMRC and reviewing for evidence of correspondence with legal advisors; and

• Reviewing minutes of those charged with governance.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available 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.

The income statement has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

First Underwriting Limited is a private company limited by shares incorporated in England and Wales. The registered office is Level 15, 30 St. Mary Axe, London, EC3A 8BF.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and comprehensive income of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

- Section 7 'Statement of Cash Flows': Presentation of a statement of cash flow and related notes and disclosures.

- Section 33 'Related Party Disclosures': Compensation for key management personnel.

The company is a wholly-owned subsidiary of Riser Holdings LP, a company registered in Delaware, USA, and is included in the consolidated financial statements of this company, which are publicly available. Consequently, the company has taken advantage of the exemption from preparing consolidated financial statements under the terms of section 401 of the Companies Act 2006. The accounts for Riser Holdings LP are available at; 520 Madison Avenue, New York, NY 10019.

As a wholly-owned subsidiary of Riser Holdings LP, and a qualifying entity, the Company has taken advantage of the exemption offered by FRS102 "Related Party Disclosures" not to disclose transactions with wholly owned subsidiary undertakings.

The accounting policies have been applied consistently, other than where new policies have been adopted

At the time of approving the financial statements, group support has been committed to ensure that the company is able to meet its obligations as they fall due for at least 12 months following the date of approval.true

The Directors have considered a period of 12 months from the date of signing these financial statements and concluded that the business should continue to adopt the going concern basis of preparation.

Insurance underwriting commission

Turnover represents underwriting commissions and fees received and receivable and are accounted for once the contractual right to the income is confirmed. Turnover is subject to a deferral in respect of policy administration services required to be undertaken in accordance with the contract.

The commission is recognised at the business written date of the policy, therefore recognised at a point in time. For other services offered (e.g., risk monitoring, claims support) the revenue is recognised over the policy period.

Contingent income

Contingent income refers to profit commission income arising from favourable binder performance, assessed based on management’s judgement of loss ratio outcomes relative to internal performance benchmarks and historical experience rather than fixed contractual thresholds.

Recognition of contingent income is based on Management’s estimate reflects forward-looking assumptions, probability-weighted scenarios, and relevant behavioural and market trends to capture both current and anticipated future performance. This includes assessment of the maturity of underlying claims data and the elapsed time since the end of the binder period—particularly where no adverse claims development has occurred and the binder year is considered closed.

The recognised amount reflects management’s best estimate at the reporting date, informed by updated performance data and supported by forward-looking assumptions as outlined in 1.11.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The amortisation rates chosen represent the directors' best estimate as to the useful economic lives of the underlying assets.

Amortisation is included within administrative expenses on the income statement.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Fiduciary cash for settlement of insurance transactions is held in non-statutory trust accounts operated in

accordance with FCA regulations. The cash balances are recognised as assets of the company with the

corresponding liabilities recognised within creditors.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. 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.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

Clawback provision

The company typically operates one combined underwriting binder per year which allows for either a profit commission or commission clawback, payable or receivable at a later date, based on performance of the binder, and relative to the base commission earned.

The company recognises a provision for commission clawback when a present obligation exists, and it is probable that an outflow of economic benefits will be required to settle the obligation.

At each reporting date, performance is measured for each binder period based on loss ratio calculations for each product line within the binder. These calculations incorporate contractual terms, including the loss ratio threshold, which defines the maximum clawback amount under the business producer agreement.

Management’s estimate reflects forward-looking assumptions, probability-weighted scenarios, and relevant behavioural and market trends to capture both current and anticipated future performance. This includes assessment of the maturity of underlying claims data and the elapsed time since the end of the binder period particularly where no adverse claims development has occurred and the binder year is considered closed.

The position in respect of each commission clawback or profit commission is reviewed and adjusted at each reporting date to reflect the most reliable estimate as data matures. If an outflow is no longer probable, the provision is reversed. Payments made reduce the provision accordingly.

Where clawback provisions and profit commission amounts relate to the same insurer and the company has a right of set-off with the intention to settle on a net basis, then profit commissions are presented as an offset against commission clawback. Amounts are presented net in the Statement of Financial Position, within provisions for liabilities; otherwise, they are presented gross.

Movements in the provision for commission clawback are recognised in profit or loss account within cost of sales, whilst movements in profit commission are recognised in turnover.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Insurance intermediary debtors and creditors

Insurance premium debtors and creditors

The company acts as an agent in underwriting insurance policies of its clients and generally is not liable as a principal for premiums due to insurers or for claims payable to clients. Premium debts are not recognised in relation to the insurance business where both the premiums due to and due from the entity are outstanding.

Trade debtors represent underwriting commission and fees due to the company, but not premium. Trade creditors includes premium to the extent that the related debtor position has been settled prior to the reporting date.

Insurer monies

Fiduciary cash for settlement of insurance transactions is held in non-statutory trust accounts operated in accordance with FCA regulations. The cash balances are recognised as assets of the company with the corresponding liabilities recognised within creditors.

Deferred income

The company defers a proportion of the commission income earned against any costs of administering those policies. Deferment is over a 15 month period from the effective start date of policy. This is based on the assumption that policies are 12 months in length but any claims in process can have a 3 month run off. The deferral rate used for each binder is based upon an estimate of the claims costs in proportion to the costs of administering policies.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The key judgements and sources of estimation uncertainty that have significant effect on the amounts recognised in the financial statements are described below:

Impairment of intangible assets

The company tests annually whether intangible assets have suffered any impairment in accordance with the accounting policy stated. The recoverable amounts have been determined based on value in use calculations.

Impairment of group loans

At each reporting date, the Company assesses whether there is evidence that amounts owed by and to group undertakings are impaired. This assessment requires judgement in evaluating the financial position and liquidity of the borrower, including consideration of recent trading performance, forecast cash flows, and the value of realisable assets available to the borrower.

Where indicators of impairment exist, the estimated recoverable amount is determined based on the best available information at the reporting date. The determination of these amounts involves estimation uncertainty, as actual outcomes may differ from the assumptions used, which could result in changes to the carrying value of the loans in future periods.

Deferred Income

The company defers a proportion of the commission income earned against any costs of administering those policies. Please refer to accounting policy note 1.17.

Provisions

The Company recognises a provision for commission clawbacks when a present obligation exists from previously recognised commission income, and it is probable that an outflow of economic benefits will be required to settle the obligation. Please refer to accounting policy note 1.11.

Internally generated software

Management exercises judgement in distinguishing between research and development phases and in assessing whether capitalisation criteria are met. Estimation is required in determining the useful economic life of software and in assessing indicators of impairment, both of which involve inherent uncertainty.

An analysis of the company's turnover is as follows:

All income for the current and comparative periods has been derived from UK operations.

During the prior year the company agreed to the waiver of amounts due to a fellow group company of £2,000,000. The amount is deemed material to the extent that it is disclosed separately on the face of the profit and loss account.

During the year the company wrote off intercompany loans of £24,610 (2023: £nil).

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

The applicable tax rate changed in the prior year on 1 April 2023 from 19% to 25%.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The company is carrying forward £598,786 (2023: £598,786) of trading losses, which it has also brought forward from the prior period. The losses are available to be relieved against any future taxable profits.

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The entity has undertaken an impairment review on its computer software intangible assets in the period, electing to impair the value of one item of computer software which is no longer in use. The prior period impairment loss results from impairing the value of two items of computer software which were partially superseded within the next 12 months, reducing their value.

More information on impairment movements in the year is given in note 11.

A fixed and floating charge with negative pledges is held over the company dated 31 October 2023 in favour of JP Morgan Chase Bank which covers the assets of the company.

Trade creditors include £14,145,986 (2023: £19,004,024) with respect to amounts recognised for non statutory trust accounts, of which £1,817,446 (2023: £1,817,446) relates to restricted cash collateral. Restricted cash collateral represents the value of cash received for bonds on behalf of another entity, which becomes repayable to said entity upon expiry of the underlying bond.

Cash for settlement of insurance transactions is held in Non Statutory Trust accounts, operated in accordance with FCA regulations. The cash balances are recognised as assets of the company with the corresponding insurance liabilities recognised in creditors.

The amounts recognised in cash at bank in respect of the non statutory trust accounts total £14,145,986 (2023: £19,004,024), of which £1,817,446 (2023: £1,817,446) relates to restricted cash collateral.

This note presents a reconciliation of the clawback provision and profit commission balances as of 1 January 2024 and 31 December 2024, along with the movements during the year.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The pension liability at the year end is £31,904 (2023: £20,433).

The company has Ordinary shares in issue which carry full voting and dividend rights, as well as the rights to participate in the distribution of capital in winding up of the company.

The company has Ordinary B, C, D, E, F, G, and H shares in issue which carry no voting and no dividend rights, no rights to notice and attendance at the general meetings of the company, and do not carry the rights to participate in the distribution of capital in winding up of the company.

Ordinary share capital represents the nominal value of shares that have been issued.

On 15 November 2024 2,000,000 ordinary shares of £1 each were issued at par.

The share premium reserve represents the cumulative value of share issue proceeds in excess of the nominal value of those shares. The reserve may be used to issue fully paid bonus shares.

The capital redemption reserve comprises the cumulative effect of the company's purchase of its own shares. The reserve is non-distributable.

The capital contribution reserve comprises the cumulative effect of contributions made to the entity's capital from a related party, for which there is no corresponding liability due to the related party agreeing as such.

The profit and loss reserve comprises the cumulative effect of the total profits and losses at each year end, less any distributions made to shareholders.

Hybrid legislation

During the prior year the company made a voluntary disclosure to HMRC in respect of the application of the Hybrids and Other Mismatches legislation. During 2025, the amounts owed were agreed and paid. The company are now waiting for HMRC to formally close the inquiry.

Intragroup charges

The UK entity has received intragroup charges from its U.S. parent company in respect of services and transfer pricing adjustments intended to reflect arm’s length pricing under OECD guidelines and applicable U.S. and UK tax regulations. These charges were initially recognised as management expenses, with the related intercompany liability subsequently settled by way of a capital contribution from the parent company.

There is uncertainty under UK VAT legislation (VAT Act 1994) regarding the treatment of such charges, particularly where they do not clearly relate to a supply of goods or services for consideration. HM Revenue & Customs (HMRC) has not issued any assessment as at the reporting date but may challenge the VAT position and assert that VAT is due on the original recharge. This could result in additional VAT, interest, and penalties.

The Group continues to monitor developments and is seeking advice from external advisors. Based on current legal interpretation and advice received, management considers the likelihood of a material outflow of economic benefits to be possible but not probable.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

In March 2025, the Group undertook a rationalisation of intercompany balances and arrangements. This involved the settlement and restructuring of internal transactions between group entities.

The company has taken advantage of the exemption in FRS 102 from the requirement to disclose transactions with group companies that are wholly owned.

At the reporting date immediate control of the company is held by Kingfisher UK Holdings Limited, a company registered in England & Wales. The ultimate controlling party is Carlyle Partners VIII Holdings III, L.P. (Delaware Partnership), a company incorporated in the US.

The financial statements of the company are consolidated in the financial statements of Riser Holdings LP, a company incorporated in the US with the registered office 520 Madison Avenue, New York, NY 10019. This represents the smallest group of undertakings for which consolidated financial statements are prepared. The consolidated financial statements are available from its registered office.

At the reporting date the Company's ultimate parent undertaking is Carlyle Partners VIII Holdings III, L.P. (Delaware Partnership), a company incorporated in the US with the registered office Corporation Trust Center 1209 Orange St, Wilmington, DE. This represents the largest group of undertakings for which consolidated financial statements are prepared.

In the current year, the company reassessed the presentation of clawback provisions and profit commission balances relating to the same insurer under a single binder. Where the Company has a right of set-off with the intention to settle on a net basis, these amounts are presented net in the Statement of Financial Position, whereas in the prior year they were presented gross. Therefore in the prior year long-term prepayments and accrued income have decreased by £398,846 and provisions has decreased by the same amount,

Insurer intermediary assets and liabilities

In the prior year insurer debtors and creditors were both re-stated by £2,516,774 in order to remove premium from the figures.

In the prior year insurer creditors of £19,004,024 were included in other creditors, these have now been included in trade creditors.