QUAYS PROTECT (GUERNSEY) LIMITED (“QPGL”, “the Company”)

Public Disclosure Information for the financial year ended 30 June 2024

This information has been prepared in accordance with the Insurance Business Rules and Guidance, 2021

Profile of the Insurer

Disclosures must include appropriately detailed information about the company profile; including the nature of its business, a general description of its key products, the external environment in which it operates, and information on the relevant insurer’s objectives and the strategies in place to achieve them.

QPGL is licensed for insurance business under The Insurance Business (Bailiwick of Guernsey) Law, 2002 as amended and is regulated by the Guernsey Financial Services Commission (“GFSC”) as an international insurer, currently writing the following lines of business:

• After the Events (“ATE” ) – Financial miss selling (“various products”)

There is no requirement for a reinsurance arrangement.

QPGL’s strategic objective is to provide insurance products to support the clients of Anthony Philip James and Co Limited (“APJ”) a subsidiary company regulated under the Solicitors Regulatory Authority.

Corporate Governance

Disclosures must include the key features of the relevant insurer’s corporate governance framework, management controls, and risk management framework including how these are implemented.

QPGL is led by the Board of Directors which complies with all requirements of the GFSC’s Finance Sector Code of Corporate Governance.  The Board is comprised of four directors, two of whom are independent.  Alternative Risk Management Limited (“ARM”) is the Insurance Manager and acts as Company Secretary and Compliance Officer.  ARM is regulated by the GFSC as an Insurance Manager under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002.

The Board exercises management control and is responsible for the risk management framework.

Whilst the Board retains ultimate responsibility for the business and governance of QPGL, the Insurance Manager maintains a comprehensive system of controls and procedures to ensure the effective day to day running of the company.

Technical Reserves

Detailed quantitative and qualitative information about the determination of technical provisions must be disclosed.

Technical reserves are the amounts insurance companies set aside from profits to cover claims and include the unearned premium reserve and the outstanding claims reserve.

Provision is made for the estimated cost of claims reported but not settled. The estimated cost of claims includes expenses to be incurred in settling claims.

Claims payments are made back to APJ following the outcome of a case which has not been successful.

QPGL do not engage claims handlers, APJ, through a Terms of Business Arrangement (“TOBA”) are responsible for providing notice of an instance which may give rise to a claim under the insurance policy.  QPGL receives all information electronically and makes the decision to pay the claim or requests further information in order to investigate further.   The Board regularly reviews the technical reserves to ensure they are appropriate, however claims requests are furnished within 30 days.

The Technical provisions section of the Financial Statements detail the technical reserves.

Insurance Risk

Appropriately detailed quantitative and qualitative information on all reasonably foreseeable and relevant material insurance risk exposures and their management must be disclosed; including the use of reinsurance

QPGL accepts insurance risk through its insurance policies, the classes of which are noted under ‘Profile of the Insurer’.

QPGL manages its risk via its underwriting within an overall risk management framework. Pricing is reviewed and approved by the Board. Exposures are managed by having documented underwriting limits and criteria. QPGL does not purchase reinsurance as noted in the ‘Profile of Insurer’ section.

Concentration of risk

QPGL provides ATE insurance products for the clients of APJ who are regulated by the Solicitors Regulatory Authority (“SRA”), who are located all over the UK. Further the limits of cover are relatively low, thus the concentration of risk exposure is deemed low.

Financial Performance

Disclosure must include appropriately detailed quantitative and qualitative information on financial performance; in total and by segmented financial performance.  Where relevant, disclosures must include a quantitative source of earnings analysis, claims statistics including claims development, pricing adequacy and information regarding returns on investment assets and components of such returns.

QPGL regularly tracks its loss ratios, through regular management information which is provided to the Board on a quarterly basis.  The Board can also identify, through claims graphs, if there are trends occurring.

If claims did increase on an exceptional basis,  QPGL will review its underwriting criteria and premium rates. APJ also refers to the market and separately reports back to the QPGL Board regarding market rates and conditions, this will be reflected in the premium charged to policyholders.

Capital Adequacy

Disclosure about the financial position of the relevant insurer must include appropriately detailed quantitative and qualitative information about capital adequacy.  A licensed insurer must disclose information that enables users to evaluate their objectives, policies and processes for managing capital, and to assess its capital adequacy.  This information encompasses the Prescribed Capital Requirement and the Minimum Capital Requirement of the relevant insurer.  If an internal model is used to determine capital resources and requirements, information about the model must be provided, having due regard to proprietary or confidential information.

The Insurance Business (Solvency) Rules and Guidance, 2021 set out the regulatory solvency requirements, which are the Prescribed Capital Requirement (“PCR”) and the Minimum Capital Requirement (“MCR”).

QPGL  calculates both the PCR and the MCR.  The minimum MCR will increase from £100,000 to £250,000 with effect from the 13 February 2025.  QPGL has a Capital Floor of £450,000 so it is confirmed that it already complies with the new rules.  The new minimum PCR ratio has also increased to 135% from 100%, QPGL is above the new ratio and will ensure to monitor and remain above the new minimum, the Board has set a minimum notification limit of 140%.

At the end of the financial year the PCR an MCR were as follows:

MCR 2024:        554%                   MCR 2023:        456%

PCR 2024:         183%                   PCR 2023:         153%

Financial Instruments

Disclosure about the financial position of the relevant insurer must include appropriately detailed quantitative and qualitative information about financial instruments and other investments by class.

QPGL operates a Barclays Private Clients International bank account in Guernsey which is rated A-1 by Standard and Poors.

Insurance premiums are collected in a timely manner by APJ from successful cases closed, thus ensuring adequate liquidity and cash flow for QPGL.

QPGL manages liquidity risk by maintaining banking facilities and by continuously monitoring likely forecast and actual cash flow and matching to the maturity profiles of assets and liabilities.

Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market interest rates. QPGL’s income and operating cash flows are substantially independent of changes in market interest rates and consequently these would not have a significant effect on the results or its financial position.

Enterprise Risk Management (“ERM”) and Asset-Liability Management (“ALM”)

Disclosure about the financial position of the relevant insurer must include appropriately detailed quantitative and qualitative information about enterprise risk management including asset-liability-management in total and, where appropriate, at a segmented level.

QPGL produces an Own Risk and Solvency Assessment (“ORSA”) which is reviewed quarterly with the presentation of each quarterly set of Management Accounts, the Board thoroughly reviews this at least annually and more often should there be any relevant trigger. This is a consideration by the Board of the solvency requirements independent of the MCR and PCR requirements.

A cash flow is monitored to ensure that liabilities are covered by adequate cash provisions.

Cash is placed on deposit for no longer than 6 months, ensuring sufficient liquidity if needed.

Under the risk management framework, QPGL is aware of its risks and has ensured that it has sufficient funds to meet its liabilities. The financial situation of the insurer is reviewed by the directors at regular board meetings and through the reporting of quarterly management information.

As part of its risk framework QPGL has an Asset-Liability Management policy. This ensures that QPGL  has sufficient funds and liquidity to meet the cash flow requirements of its business.

Date: 30 September 2024

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