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Registration number: 00024869
Ecclesiastical Insurance Office public limited company
2025 Annual Report and Accounts
Ecclesiastical Insurance Office public l imited c ompany
Table of Contents
Page Contents
1 Directors and Company Information
2 Strategic Report
25 Governance
62 Independent Auditors’ Report
69 Consolidated Statement of Profit or Loss
60 Consolidated and Parent Statements of Comprehensive Income
71 Consolidated and Parent Statements of Financial Position
72 Consolidated and Parent Statements of Changes in Equity
73 Consolidated and Parent Statements of Cash Flows
74 Notes to the Financial Statements
159 Annual General Meeting notice
Ecclesiastical Insurance Office public l imited c ompany
Directors and Company Information
Directors and officers of Ecclesiastical Insurance Office public limited company during the year and up to the date of signing the
financial statements were:
Directors *F.X. Boisseau MSc Chair (appointed Chair 1 January 2026)
M. C. J. Hews BSc (Hons), FIA Group Chief Executive
M. E. H. Bennett BSc (Hons), FIA Group Chief Financial Officer
S. J. Whyte MC Inst. M, ACII Deputy Group Chief Executive
*J. Coyle B Acc, CA, FCIBS
*Sir S. M. J. Lamport GCVO, DL
*The Venerable K. B. Best BA
*M.A. Murphy (appointed 3 December 2025)
*J.E. Dale (appointed 3 February 2026)
*A.C. Winther BA (resigned 26 June 2025)
*R. D. C. Henderson FCA (resigned 31 December 2025)
*M. E. Darby-Walker BA (resigned 31 December 2025)
Company Secretary R. J. Hall FCG
Independent Auditors PricewaterhouseCoopers LLP
2 Glass Wharf
Temple Quay
Bristol
BS2 0FR
United Kingdom
Registered and Head Office Benefact House
2000 Pioneer Avenue
Gloucester Business Park
Brockworth
Gloucester
GL3 4AW
United Kingdom
Company Registration Number 00024869
Registrar Computershare Investor Services plc
The Pavilions
Bristol
BS13 8AE
*Non-Executive Director
1
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
T
he directors present their strategic report for the year ended 31 December 2025 for the Ecclesiastical Insurance Office public
limited company (‘Ecclesiastical Insurance Office plc’ or ‘EIO’ or ‘the Company’), together with its subsidiaries the Ecclesiastical
Group, also the Group or EIO Group. EIO’s immediate parent company is Benefact Group plc.
Group Chief Executive’s review
O
verview
2025 was another outstanding year for the Ecclesiastical Group. Our teams delivered a strong performance and demonstrated what
a values-driven business can achieve when commercial focus and purpose-driven impact work hand in hand.
We have now surpassed £275m given to good causes since 2014 - another remarkable milestone for the EIO Group and one that
reflects the collective commitment of colleagues, customers, brokers and partners who choose to work with an organisation that uses
profit as a force for good.
What defines us is not only the results we deliver, but the lives we help change along the way. That is the heart of Benefact Group,
and it is the foundation on which we continue to build.
1
Our General Insurance business delivered an underwriting profit
of £62.2m, up 30.5% on the previous year. While the year benefited
from unusually benign weather and no major losses, our long-term outlook recognises the inherent volatility as the insurer of many
iconic and irreplaceable buildings. Over recent years we have experienced several devastating fires, flood events and storms, and
these remain a powerful reminder of the responsibility and potential for large losses given the significant nature of many of the
buildings we insure.
Gross Written Premiums rose by 2.1%, driven by growth in the UK and Ireland, supported by continued strong retention and acquisitions
of customers across both our traditional segments and newer segments such as Leisure and an expanded Care appetite. With changed
market conditions we continue to be s elective and disciplined in our growth.
At Benefact Group, our purpose continues to be the foundation of our success. As a charity owned, commercially disciplined business,
we grow so we can give. Over the past year that purpose has guided our decisions, strengthened our resilience and deepened the
impact we create for the communities we serve.
Our Chair
This year offered an important moment to say a heartfelt thank you to David Henderson, whose leadership as Chair has played a
central role in our success. We are delighted that David will continue to champion our purpose as Chair of Benefact Trust.
We are equally pleased to welcome François-Xavier Boisseau as the new Chair of Benefact Group and EIO. With deep experience, a
strong understanding of our organisation and unwavering commitment to our purpose, François-Xavier is well placed to guide the EIO
Group into its next chapter.
D
elivering for our customers
Across our Group we continued to deliver high-quality outcomes for our customers and to be recognised for the expertise, trust and
care our teams demonstrate every day.
In the UK, our General Insurance claims team earned the Outstanding Service Quality Marque from Gracechurch for the fifth year
running - a powerful endorsement of the empathy, expertise and consistency our customers experience when they need us most.
Ecclesiastical UK retained its position at the top of the Fairer Finance rankings for the 22nd time and secured Which? Best Buy
recognition for both buildings and contents insurance for the third consecutive year.
Internationally, Ecclesiastical Canada was honoured for Excellence in Philanthropy & Community Service for the fifth year running by
Imagine Canada.
These achievements matter, not because they are independent trophies or awards, but because they reflect who we are: a Group built
on empathy, integrity and genuine care, a culture where people put customers first, every single day.
Building a movement for good
Strong financial performance enabled us to give over £28m to good causes this year, including £24m to our charitable owner, Benefact
Trust Limited. In doing so, we have now surpassed giving over £275m to good causes. This is an extraordinary achievement and the
impact it has is real.
2
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
Thi
s year alone, our giving helped regenerate communities, protect heritage buildings, support families facing financial pressure,
strengthen mental health services, assist those experiencing homelessness, and fund youth programmes that give hope and
opportunity. Through our donations to Benefact Trust’s, the Trust has made a number of humanitarian grants, supporting refugees
fleeing conflict, contributing to medical relief efforts in Gaza, aiding communities recovering from climate related disasters and so much
more.
Behind every grant there is a story - -- a life made safer, brighter, and more hopeful. Lives touched because our customers, clients,
brokers, partners, reinsurers and colleagues choose to do business with us.
Our Planet, Our Part
We recognise our role in the natural world and our duty to protect it. Our response to climate change is action-led, rooted in our values
and has gone well beyond talk. We have embedded environmental, social and governance considerations across our investment
decisions and supported customers and communities to become more climate resilient.
Whilst there is always more to do, after high-quality charitable offsets, we have achieved net-negative direct emissions for two years
in a row. We do not underwrite or invest in businesses involved in fossil fuel extraction, heavy industry or commercial aviation, and we
do not invest in organisations that conflict with our values.
With focus, innovation and determination, we will strive to keep driving down our emissions and supporting our customers on the
journey to net zero.
Des
tination employer
As a charity owned organisation with a purpose unlike any other in our industry, we attract people who want their work to create a
positive impact. Our colleagues come together around a shared ambition: to grow a commercially successful, values-driven business
so that we can give even more to good causes.
That purpose shapes a culture where people feel respected, supported and inspired to do their best work. We provide life changing
careers that change lives, and I’m proud that this commitment is reflected in our employee engagement results, achieving Best
Companies ‘‘Outstanding’’ and ‘‘World Class’’ accreditations, alongside further national, international and diversity awards.
Our parent company, Benefact Group has recently been named one of the Top 4 ‘‘Best Big Companies to Work For’’ in the UK, a
testament to the strength of our culture and leadership. These results reflect who we are, and the extraordinary people who make this
organisation such a special place to work.
Looking ahead
We enter 2026 with momentum, clarity and confidence. Inspired by the impact of our giving, we remain focused on sustainable growth,
operational excellence and enhancing the products and services that set us apart. 2026 will be pivotal as we launch a new strategic
chapter and set our stretch goals for the future. Our ambition is bold: to build a stronger Group so we can create even greater impact
for the good causes and communities we exist to support.
Join our movement
Surpassing £275m in charitable giving is a proud milestone for us, yet it marks just the starting point for how far we plan to go. We
thank all our existing supporters and invite others to join us - -- as a customer, colleague, partner or investor. Every time an individual or
business chooses our Group, they help us grow our impact and improve the world in which we live.
Together, we will continue to build a business where profit is used as a force for good and where long-term value is measured by the
difference we make.
Mark Hews
Group Chief Executive
19 March 2026
1
The EIO Group uses Alternative Performance Measures (APMs) to help explain performance. More information on APMs is included
in note 36
.
3
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
R
isk Management Report
Introduction
Strong governance is fundamental to what we do and drives the ongoing embedding of our Risk Management Framework. This
provides the tools, guidance, policies, standards and defined responsibilities that enable us to achieve our business strategy and
objectives, whilst ensuring that individual and aggregated risks to our objectives are identified and managed on a consistent basis.
The Risk Management Framework is integrated into the culture of EIO and is owned by the Board. EIO has its own Risk Management
Framework that operates within the Framework set by the Benefact Group. Responsibility for facilitation of the implementation and
oversight is delegated via the Group Chief Executive to the Group Risk Function, led by the Group Chief Risk and Compliance Officer.
The Risk Management Framework and tools used to identify and manage risks have been reviewed through 2025.
The Risk Management process demands accountability and is embedded in performance measurement and reward, thus promoting
clear ownership for risk and operational efficiency at all levels. On an annual basis, the EIO Risk Committee (EIO RC) on behalf of the
Board, carries out a formal review of the Group’s key strategic risks with input from the Group Management Board (GMB). The EIO RC
allocates responsibility for assessment and monitoring each of the risks to individual members of the GMB or other Senior Managers.
Formal periodic monitoring of the key strategic risks is undertaken which includes progress of Risk Management actions.
The Company’s Risk Management Framework is part of a wider Internal Control Framework. Systems of internal control are designed
to manage rather than eliminate the risk of failure to achieve business objectives, and provide reasonable, but not absolute assurance
as to the prevention and detection of financial misstatements, errors, fraud or violation of law or regulations.
Key to the successful operation of the internal control framework is the deployment of a strong Three Lines of Defence Model
whereby:
• 1st Line (Business Management) is responsible for strategy execution, performance and identification and management of
risks and application of appropriate controls.
• 2nd Line (Reporting, Oversight and Guidance) is responsible for assisting the Board in formulating risk appetite, establishing
minimum standards, developing appropriate risk management tools, providing oversight and challenge of risk profiles and
risk management activities within each of the business units and providing risk reporting to Executive Management and the
Board.
4
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
• 3
rd Line (Assurance) provides independent and objective assurance of the effectiveness of the Group’s systems of internal
control. This activity principally comprises the Internal Audit function, which is subject to oversight and challenge by the
Benefact Group Audit & Risk Committee.
The Company’s Risk Appetite clearly defines the levels of each type of risk that the firm is willing or able to take in pursuit of its strategic
objectives. The risk appetites set by the Board pay due regard to the Benefact Group’s Risk Appetite Statements which were refined
and refreshed during 2025 to ensure these were appropriate for the Group as a whole. The Company’s statements were approved by
the Board on a staged basis throughout the year and are subject to ongoing assessment to ensure their continued appropriateness.
The Own Risk and Solvency Assessment (ORSA) process is carried out at least once a year and is a key part of the business
management and governance structure. This integrates the risk management, business planning and capital management activities
and ensures that risk, capital and solvency considerations are built into the development and monitoring of the Group’s business
strategy and plans and all key decision-making.
Risk environment
The Risk environment is monitored on an ongoing basis, and key areas of concern are escalated to the EIO Risk Committee.
Whilst there are a range of relatively consistent drivers of the risk environment for a Group of businesses operating within the
regulated financial services sector, there are four factors that are considered as being most notable in terms of their emergence and
are material to the assessment of the risk profile of the Group when looking forward into the plan-period:
Market Softening: Softening of the insurance markets throughout 2025, which is expected to deepen during 2026. Whilst we have
also seen softening in reinsurance rates, overall, it is expected that the market conditions will create downside risk as competition
increases and rates reduce.
Geopolitical Events: Volatility arising from geopolitical events and conditions is another theme from 2025 that is expected to continue
into 2026 and beyond. Significant tensions across the Globe, with the potential for flashpoints to emerge at any point, can affect the
economic and market conditions within which EIO operates as well as heightening potential operational vulnerabilities that exist, for
example, the impacts of disruption to Global supply chains.
New Technologies: Rapid development and adoption of new technologies such as AI will call for a re-evaluation of the risk profile in
terms of facilitating the activities of malevolent actors, for example in the cyber and financial crime space, in addition to causing shift s
in the competitive landscape, for example with firms adopting lower cost operations coupled with more agile business capabilities.
Climate Change: Climate Change continues to be a driver of risk across different categories. There are risks that will emerge directly
from the physical effects of climate change on our business such as changes in weather patterns and the transition to a lower-carbon
economy with firms looking to achieve Net-Zero targets. There are also indirect implications of Climate Change. Changes in the political
landscape can have material impacts on the development of risks associated with climate change, with the effects of “anti-green”
sentiment arising from different regimes around the Globe impacting on the growth of EIO’s investment portfolio given the strong
ethical positioning of our investment strategy. At the same time, other Governments and Regulators continue to drive corporate
behaviour through legislation and regulation to support the Global efforts to promote sustainable practices and prepare for c limate
change impacts.
Principal risks and uncertainties
EIO i
s an insurance company headquartered in the UK and with operations in Australia, Canada and Ireland. It is also the holding
company for the DB Pension Scheme Corporate Trustee (EIO Trustees Limited) and a Life Insurance Company (Ecclesiastical Life
Limited). EIO forms the major part of the Insurance Division within the Benefact Group, which additionally has divisions relating to Asset
Management, and Broking & Advisory.
This section sets out both the principal risks, i.e. those that are assessed as having the highest inherent rating in the context of EIO in
its capacity as described above. It is recognised that, given the importance of the Insurance Company to the overall strategic execution
and performance of the Benefact Group, those risks and uncertainties are also likely to be a feature of the Benefact Group’s overall
risk profile.
T
here is an ongoing risk assessment process which uses the Benefact Group Risk Taxonomy to establish a view on the current principal
risks to EIO, which are organised and aligned to the Level 1 Risk Categories below:
5
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
Strategic risk
Risks that threaten EIO’s ability to execute its strategies and achieve its business objectives.
Risk detail
Key mitigants
Change from last year
Strategy risk
• EIO Group Strategy is refreshed on a
The EIO Group has successfully concluded its
The risk that key strategic goals
three-to-five-year cycle. To continue to
‘Next Chapter’ strategic cycle and is planning
are not realised or that
drive the EIO Group forward this is
the launch of its revised five-year strategy in
acquisitions or divestiture
reviewed annually to ensure continued
Summer 2026.
decisions create inefficiencies,
alignment to key strategic goals.
unintended consequences or
• Integrated EIO Group and strategic
financial strain
business unit (SBU) strategy reviewed
annually to align to strategic goals
• Ongoing monitoring of external
environment and industry bodies
• Ongoing internal monitoring and
reporting of key strategic goals, including
change projects, operational stability and
financial position
• Rolling three-year business plan cycle
undertaken for all businesses annually
Brand and reputation risk
• Processes in place to respond to
Maintaining a positive reputation is critical to
There is a risk of reputational
emerging incidents or threats that could
EIO’s vision of being the most trusted and
damage or damage to the
damage the brand
ethical specialist insurance company and the
Ecclesiastical Insurance, Ansvar
• Media policy in place, reviewed and
risk remains unchanged from last year.
or Benefact Group brand owing to
embedded
activities at the holding company
• There is a dedicated marketing and PR
level or from within one or more
function responsible for the
of the divisions
implementation of the marketing and
communication strategy which is aligned
to business strategies
• Ongoing monitoring of media platforms
to ensure appropriate responses to
published materials
Climate change
• Catastrophe risk is appropriately
Awareness of the challenges that are faced
The risks arising through climate
managed through reinsurance models
globally as a result of climate change are
change. The key impacts for the
• Specific considerations of flood risk and
well reported. T here have been no material
Company are physical risks
other weather-related risk factors in
changes to this risk since last year. A
(event-driven or longer-term
insurance risk selection
programme of work continues to fully
shifts), the transition risks of
• Delivery of ESG expectations on EIO’s
analyse the impact and to develop
moving towards a lower-carbon
Investment Strategy and Policy to support
appropriate risk management responses
economy and liability risks
management of transition risks
associated with the potential for
litigation arising from an
inadequate response.
D
etailed disclosures on EIO’s
progress towards its ambitious
sustainability objectives are
contained in the Responsible
Business Section of this report
and the Benefact Group plc
Strategic Report.
Insurance risk
The Insurance risks that arise from the fluctuation in the frequency, severity and / or value and amounts of insured events differ
to the expectations set at the time of underwriting.
6
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
Risk detail
Key mitigants
Change from last year
Underwriting risk
• The underwriting licensing process has
There have not been material changes to this
The risk of failure to price
been reviewed, refreshed and
risk during the year
insurance products adequately
communicated. All underwriters have
and failure to establish
documented authority levels which must
appropriate underwriting
be adhered to. Local checking procedures
disciplines. The premium charged
ensure compliance with authority limits.
must be appropriate for the
• A documented underwriting strategy and
nature of the cover provided and
risk appetite is in place which is monitored
the risk presented.
by Strategic Business Units (SBUs)
Disciplined underwriting is vital to
• Underwriting standards and guidance
ensure that only business within
are in place, regularly reviewed and
the Company’s risk appetite and
communicated.
desired niches is written
• There are ongoing targeted underwriting
training programmes in place
• Underwriting Audits are carried out
across General Insurance Businesses
Latent claims
• Full review of Physical and Sexual Abuse
Oversight of physical and sexual abuse
The risk of financial loss arising
(PSA) claims utilising the stochastic
claims continues across all territories. Over
from the deterioration of reserves
reserving model for all territories is in
2025, the reserves were strengthened
held for causes of claim that
place
reflecting year end view of experience,
typically have long latent periods
• The Board receives a report from the
including the emergence of claims farming in
prior to reporting
Actuarial Function Holder’s review of
Canada – this has increased the assessed
Technical Provisions
exposure to risk.
• Robust management of claims including
investigation and justification is delivered
• Reserving Team training and awareness
of the risk is delivered to ensure that the
appropriate reserves are made
Catastrophe risk
• Modelling and exposure monitoring is
There have been no material changes to this
The risk of large-scale extreme
undertaken to understand the cat risk
risk during the year
events giving rise to significant
profile and inform the purchase of
insured losses. Through our
appropriate reinsurance
general insurance business, we
• Local risk appetite limits have been
are exposed to significant natural
established to manage concentrations of
catastrophes in the territories in
risks, and these are monitored by SBUs
which we do business
• There is a comprehensive reinsurance
programme in place to protect against
extreme events. All placements are
reviewed and approved by the Group
Reinsurance Board
• Processes in place to provide oversight
and sign off of reinsurance modelling and
exposure management across the
company
• The Risk Appetite specifies the
reinsurance purchase levels and retention
levels for such events
Reinsurance risk
• We take a long-term view of reinsurance
The level of this risk has remained broadly
The risk of failing to access and
relationships to deliver sustainable
similar since last year. We continue to take a
manage reinsurance capacity at a
capacity
long-term approach to our reinsurance
reasonable price. Reinsurance is a
• A well-diversified panel of reinsurers is
relationships
central component of our
maintained for each element of the
business model, enabling us to
programme
insure a portfolio of large risks in
• A General Insurance Reinsurance
proportion to our capital base
Executive Meeting approves all strategic
reinsurance decisions
7
Ecclesiastical Insurance Office public l imited c ompany
Strategic Report
Financial risks
The risks that threaten the financial stability of EIO, potentially harming the wider financial system and customer.
Risk detail
Key mitigants
Change from last year
Economic, Investment and
• An investment strategy is annually
Whilst 2025 was a relatively benign year in
Market risk
reviewed and approved which includes
terms of economic and market volatility, EIO
There is a risk of financial loss due
consideration of liabilities and capital
remains alert to the potential for economic
to changes in economic
requirements and is in line with the PRA’s
volatility arising from geopolitical tensions
conditions. This includes a fall in
Prudent Person Principle
that could be a feature of the global situation
the value of investments held, as
• There are appropriate governance
in the short to medium term
well as the impact of movements
structures in place to monitor KPIs and MI
in interest rates. There are further
• Risk quantification is assessed through
risk impacts emanating from EIO
the Internal Model and scenarios are
from the impact of movements in
conducted as part of the annual ORSA
exchange rates and discount rates
process
on insurance and pension
• Use of third-party expertise to actively
liabilities
manage investments
• Risk metrics are tracked to provide early
warning indicators of changes in the
market environment
Capital adequacy and allocation
• Governance arrangements are in place
There have been no material changes to this
risk
to oversee the use and calibration of the
risk since last year and remains a high risk to
There is a risk that EIO is unable to
Internal Model
the Company
maintain adequate capital levels
• The business plan process incorporates
or that capital is allocated
assessing return on capital metrics for
inefficiently resulting in lost
divisions and business units in comparison
opportunities
to required hurdle rates
• The Second Line of Defence delivers an
Internal Model Validation Programme
• Local regulatory capital requirement
assessments are completed to comply
with local regulation across the EIO Group
• MI and KPI reports are regularly
reviewed and acted upon
• Solvency risk appetites are set by the
EIO Group
• Within EIO there is an approved internal
model compliant with UK regulatory
solvency requirements
Conduct risk
The Risk where actions and behaviours may result in poor outcomes for customers, colleagues and / or stakeholders
Conduct risk
• All colleagues adhere to the EIO Group
The Company remains committed to placing
The risk of unfair behaviour or
Code of Conduct and complete training to
customers at the centre of its practices and
practices (including by third
outline expectations. These include
decision making, demonstrated by its wide-
parties) that adversely affect the
standards of ethics and behaviour as well
ranging industry awards and customer
Company’s customers, harm
as relevant regulatory rules.
satisfaction scores. The level of this risk is
colleagues, distort market
• Customer charters have been
unchanged from the prior year.
integrity, or damage the
implemented in all SBUs and customer
Company’s reputation. The
outcomes are included in measures of
Company maintains a diverse and
performance
inclusive company culture where
• Conduct Risk MI is delivered to relevant
high standards of personal
governing bodies for review and action
conduct are expected, and
colleagues feel confident they will
be listened to if they raise any
concerns.
Operational risk
The risk of loss arising from inadequate or failed internal processes, people and systems, or from external events.
Legal and regulatory risk
• Policy and Governance frameworks in
The markets within which we operate remain
place across the EIO Group to ensure a
unchanged, however, there continues to be a
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The risk that operating across
consistent approach to regulatory and
significant volume of regulatory change, and
several different regulatory
legal requirements
therefore the level of risk remains high.
territories and legal landscapes is
• Monitoring of regulatory developments
not managed effectively, leading
and feeding into the Company's Emerging
to inefficiencies, errors, non-
Risks process and relevant local actions to
compliance with impacting
address future exposures
regulation or laws
• There is an established methodology for
implementing regulatory change
• Regular MI and KPI reporting to
Committees and Boards
• There is an approved and embedded
three lines of defence model across the
EIO Group
Cyber risk
• C
omprehensive information security
E
IO has made significant investment in the
The risk that unauthorised access,
policies and standards are in place,
capability to prevent, detect, and respond to
loss of confidentiality,
regularly reviewed and communicated.
cyber attacks. At the same time the volume
compromise of integrity, or
• Layered security measures are deployed
and sophistication of cyber-attacks have
disruption to the availability of
to deliver defence in depth for all
increased across all industries, in part as a
information, technology assets, or
networks
consequence of technological advances and
digital services results in financial
• Active monitoring and automated
increasing geopolitical tensions. Overall the
loss, regulatory non-compliance,
response processes are in place to quickly
risk is assessed as high.
operational disruption, or adverse
identify and mitigate cyber security
impacts to customer trust and the
attacks
Company’s reputation.
• All staff receive regular and targeted
cyber security awareness training and
testing
• Independent security reviews and
assessments are performed on a regular
basis
Data governance (inc.
• A Group Technology, Data and AI
E
nhancements continue to be made to the
management and protection)
Strategic Forum meets regularly and is
governance, management, use and control of
The risk that the confidentiality,
responsible for shaping and overseeing
data, to meet the evolving requirements, and
integrity and/or availability of data
the Group Data Strategy. The Forum
remains a key focus.
is compromised, or data is
ensures that a robust data governance
misused. The Company holds
framework is in place and operating
significant amounts of customer
effectively.
and financial data and there could
• The Group Data Policy is implemented
be significant implications if this is
into EIO Group. The policy is routinely
compromised or is found to be
reviewed, updated and communicated to
inaccurate.
ensure they are up to date, meet
regulatory requirements and industry
best practice.
• Data is managed by Data Owners and
Stewards, and supported by Data teams
for technical support, assurance and
oversight
Outsourcing and Third Party
• Outsourcing and Procurement
The risk remains unchanged, with action
risk
Frameworks implemented into EIO
underway to enhance oversight of the high
Poor customer service or
• Appropriate and proportionate Initial and
risk suppliers.
disruption to the business may be
ongoing due diligence and monitoring,
caused by supplier failure
including cyber security and business
(including data or regulatory
continuity
breach) or inadequate contractual
arrangements, due diligence and
ongoing supplier management.
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Ou
r business model and strategy
EIO is part of the Benefact Group, a family of specialist financial services businesses united by a singular purpose: to donate all available
profits to charity and good causes to transform lives and communities. EIO’s ambition is to do right by its customers, business partners,
and colleagues, alongside its commitment to philanthropy sets apart EIO from other businesses in the financial services sector.
B
enefact Group’s purpose is to contribute to the greater good of society, This is achieved by managing a successful, ethically run
portfolio of businesses including EIO. Benefact Group donates all available profits generated by its businesses to support good causes.
These are delivered by considerable donations, including Movement For Good in the United Kingdom and Ireland, and through
donations made by EIO to its ultimate charitable owner, Benefact Trust Limited.
T
he Benefact Group’s overarching strategy brings alignment and strategic focus across all its businesses, including investment in
systems and people to target further growth and drive increased charitable donations. Whether in specialist insurance, asset
management, broking, or advisory, each business within the Benefact Group is a specialist in its own field, built on genuine insight and
ethics. Together, the Benefact family offers products and services designed to protect in the present, anticipate possibilities, and invest
in a healthier financial future.
E
IO is committed to continue doing the right thing for its customers, business partners, and colleagues, and to delivering growing
donations to its ultimate charitable owner, enabling Benefact Trust Limited to make independent grants and continue its work in
transforming lives.
R
esponsible business
The Ecclesiastical Group is part of the wider Benefact Group. A Responsible Business Report containing a summary of social and
environmental impact is in the Benefact Group Annual Report and Accounts which is published on benefactgroup.com. It covers social
impact including approach to diversity, equality and inclusion, colleague wellbeing and charitable giving. It also summarises climate
impact and is supported by a separate report featuring disclosures in line with the Taskforce on Climate-related Financial Disclosures
(TCFD), which is published on the Company’s website. A separate report enables the Benefact Group to explain climate-related
disclosures in much more detail for the benefit of an increasing range of interested stakeholders.
T
he following table provides details of the carbon associated with the direct operation of businesses that are part of the wider Benefact
Group, in line with the Streamlined Energy and Carbon Reporting (SECR) requirements. This table does not include the emissions
relating to the investment portfolio or any underwriting activity. The Group offsets its Scope 1 and 2 emissions through highly assured
charitable projects to achieve ‘net negative’ for its direct impact.
Emissions source
2025
2024
UK Non-
Total Scope 1 & 2
UK Non-
Total Scope 1 & 2
UK
tCO₂/
UK
tCO₂/
employee
employee
Scope 1: fuel, fluorinated gas losses and
67 31 108 116 15 131
fuel combustion in offices and company
fleet
Scope 2: electricity and cooling in
505 190 696
591 149 740
1
premises
(location based)
Scope 2: electricity and cooling in
181 189 370
109 146 97
2
premises (market based)
3
Scope 3:
business travel
, waste, water
624 177 801 538 269 807
use
Total CO2e (location based
872 397 1269 0.51 763
430
1,193
0.51*
electricity)*
tCO2e is tonnes of CO2 and equivalent gases.
1 The average emissions intensity of grids on which energy consumption occurs (using mostly grid-average emission factor data)
2 Emissions based on how an organization buys its energy
3 Air, rail, bus, taxi, ferry, car rental and vehicles owned and driven by an employee, driven for business purposes (grey fleet)
* Scopes 1, 2 (market based) and scope 3
In 2025, total energy use is 3,933,852 kWh of which 2,981,284 is UK and 952,568 kWh is non-UK based. In 2024, total energy use
was 4,570,001 kWh of which 3,841,221 kWh was UK and 728,780 kWh was non-UK based. Scope 3 emissions reported as part of SECR
mostly comprise business travel, with emissions on par with 2024.
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Methodology
The table provides details of the carbon associated with the direct operation of businesses that are part of the Benefact Group. All
other Kyoto gases are included (methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride) with the final
figures reported in tonnes of carbon dioxide equivalent gases (tCO2e). The emissions reporting year runs from 1 September 2024 to 31
August 2025. These emissions are measured and reported according to GHG protocols, SECR regulations and are in line with the ISO
14064-1:2018 Specification with guidance at the organisational level for quantification and reporting of greenhouse gas emissions and
removals standard. Calculated emissions followed the ISO 14064-1 principles of relevance, completeness, consistency, accuracy and
transparency. The Group has reported on all emissions sources required under the Companies (Directors' Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018. DEFRA's emissions factors are used to produce this calculation. Figures
have been rounded for ease.
T
he reporting comprises:
• Scope 1: emissions from office gas and oil use, company cars, refrigerant (f-gas) leaks in office air conditioning units
• Scope 2: emissions from purchased and self generated electricity; purchased heat and steam from district heating systems,
all used in offices
• Scope 3: emissions from business travel, office waste and water use in offices.
O
verall, the Group's 2025 emissions are slightly up on 2024. The tCO2e per employee remains the same because there are around
150 more employees in 2025 compared to the previous reporting period. This footprint is based on 81% data coverage, with 19%
extrapolated. As always, efforts are ongoing to increase the percentage of primary data. Scope 1 emissions continue to reduce due to
a combination of recent office relocations (to higher performing premises), an increasingly hybrid and electric company fleet an d no f-
gas leaks. Backup generator testing at the Group's HQ is now included: a correction on previous years where it had been unintentionally
omitted.
Scope 2 location electricity use is the net electricity use for the Group and is based on the carbon intensity of the local grid. Location
based electricity is down on 2024, meaning overall, the Group has used less electricity. This is due to efficiencies implemented at the
Group's HQ along with lower energy demand in other new offices. Scope 2 market rate electricity reflects the type of electricity
purchased by the Group. Compared to 2024, market based electricity is up, meaning a greater proportion of the Group's electricity was
not from renewable sources this reporting period. The Group avoided 325 tonnes of CO2e by procuring renewable electricity.
C
olleagues
Colleagues across the Benefact Group are united by our purpose to give to good causes. Each business within the Benefact Group is
specialist and expert in its field, with an engaged global team of colleagues driving growth and success.
Health and wellbeing
Employee health and wellbeing continued to be a key focus for the Group in 2025. Learning resources and communications covered
topics such as menopause, bereavement and neuroinclusion. Mental Health Awareness Week was spotlighted across the group, with
organised walks and events across our offices. The ‘Smart Health’ portal continues to bring physical, mental and financial wellbeing
support together in one easily accessible place, including a 24/7 mental health helpline for all employees and their families. A Women’s
Financial Planning event supported female colleagues with relevant financial information and signposting.
E
ngagement
Independent assessment of engagement levels was benchmarked through the b-heard survey provided by Best Companies. The
survey is a well-established way to listen and celebrate, with over 2,000 responses. The Benefact Group overall continues to sustain
a two-star ‘outstanding’ rating, with the UK businesses achieving a 3-star ‘World Class’ accreditation and ranked as one of the UK’s
Top 5 best large companies to work for.
G
roup-wide communication ‘The Link’ continued to keep colleagues connected across all three continents the business operates in. A
new easy-to-use hub for employment related questions launched, to give colleagues an enhanced experience when looking for
information on pay, wellbeing, development, rewards and more.
D
iversity, equity and inclusion
The Group continued its strong commitment to diversity, equity and inclusion. ‘Belonging at Benefact’ launched this year, the Group’s
strategy for fostering an inclusive, values-driven culture. Over 300 people leaders have participated in inclusive leadership training
and colleague led networking groups, such as the Neurodiversity, LGBTQ+ and Women’s network, continued to grow.
T
he ‘WeAllBelong’ campaign amplified authentic colleague voices, sharing personal stories that celebrate diversity and inclusion. Real
testimonials were promoted internally and across social media. A number of events brought people together, including a Women in
Leadership panel discussion which welcomed over 80 external attendees, a Male Allyship workshop and Pride month celebrations in
June.
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R
ecruitment processes have been enhanced to support inclusivity, consistency and candidate comfort. Walk-through interview videos
and ‘meet the hiring manager’ features launched to support candidates, especially those who are neurodivergent, and job adverts were
revamped to be more inclusive. The careers site now features an accessibility tool to help users better customise the website to suit
their needs.
T
he strategy is already showing positive results, with record-high b-heard scores for colleagues feeling ‘they can be themselves at
work’. The Group’s investment business EdenTree won the highly commended award for Investment Group of the Year for Diversity
and Inclusion at the Women in Investment Awards 2025 and Ecclesiastical Ireland was proudly awarded the Investors in Diversity
Silver Accreditation this year.
N
on-financial and Sustainability Information statement
The Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006 are addressed below.
Non-financial and Environmental, Social and Governance (ESG) information is integrated across the Strategic Report, in particular in
the Responsible Business Report.
Non-financial information
Disclosure
Section
Pages
Business model
EIO’s business model and
Strategic report - Our Business
9
information on how it does business
model and strategy
differently
Key performance indicators (KPIs)
EIO’s KPIs set out how it is doing
Strategic Report – Key
24
against its strategic goal
performance
indicators
Principal risks
EIO’s key risks and their
Strategic report – Principal risks
5
management
and uncertainties
Environmental, Social matters,
Statements of EIO’s policy and
Strategic Report - Primarily within
10
colleagues, human rights,
practice in these areas
the responsible business section
financial crime and corruption
and below.
E
IO’s key policies / statements of intent
EIO has a range of policies and guidance in place to support the key outcomes for its stakeholders. These also ensure consistent
governance on climate and environmental matters, its employees, social matters, human rights and anti-bribery and corruption.
Climate and environmental matters
The Ecclesiastical Group is part of the Benefact Group and as a diverse financial services business, the Benefact Group is exposed to
climate risk primarily through investments and insurance. It also has a responsibility to reduce its operational impact and can achieve
positive impact through its charitable giving. The majority of the Benefact Group’s climate and environmental matters are relevant to
the Ecclesiastical Group.
A separate TCFD report is published on the Group’s website at ecclesiastical.com, but the following provides a summary of key
considerations.
Governance
The Benefact Group Board has overarching responsibility for overseeing the response to climate change. E IO as part of the Benefact
Group has adopted the Benefact Group plc's Governance Framework. Accordingly, the EIO Risk Committee has sight of climate rel ated
risk matters on behalf of the EIO Board. Across the business various committees, management functions and a core climate strategy
function lead, develop and deliver the Group’s response.
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Str
ategy
The Benefact Group has a robust strategy review and evaluation process. In particular scenario analysis is used as a key tool for
assessing and understanding climate risk.
Testing risks through scenarios
Insurance
Investment
• Focusing on worst case scenario: the assessment of
• Property investments continue to be asse
ssed for climate impact
insurance underwriting risk has focused on the worst-
using a Real Estate Environmental Benchmark (REEB) benchmark,
case scenario of the Bank of England’s three Climate
Energy Performance Certificate (EPC) schedule priority, physical
Biennial Exploratory Scenario (CBES) scenarios (the No
and climate risk assessments and scope 1, 2 and 3 data completion,
Additional Action scenario) because this enables
it also included emissions reduction targets and a decarbonisation
identification of the most extreme outcomes, therefore the
plan.
greatest risks to the business, particularly over the
• Footprinting: tools used by EdenTree, which is part of the asset
medium to long-term. The scenarios have been used
management division of the Benefact Group, enable the Benefact
primarily in a qualitative nature to identify the types of
Group to view its investments from various perspectives. These
perils that are most likely to affect the current insured
include the portfolio emission pathway vs climate scenario budg ets
portfolio. Benefact Group have also looked at other, less
(and whether it is overshooting) and the associated temperature
harmful scenarios to understand a range of feasible
increase.
outcomes and so the difference in expected impact that
Based on current targets, equity investments are expected to be
would result from positive climate mitigation actions.
aligned with the Sustainable Development Scenario by 2050,
• Considering socioeconomic impacts: besides considering
representing a potential temperature increase of 1.5°C by 2050
the direct impact of weather events, the economic and
compared to 2.9°C for the benchmark.
social impact on key customers were also considered, in
• This figure is tracked annually to ensure continued alignment. This
this case also using the scenarios whereby Paris-aligned
temperature alignment score is based on the ISS-ESG methodology
targets are met, to identify some of the issues they likely
and shows the estimated temperature increase which the portfolio
face in the various circumstances. This analysis is being
is associated with by 2050.
used to inform customer propositions and how the
Benefact Group might work with and support customers
• The current proportion of holdings that have adopted a Science
to manage and mitigate climate risk.
Based Target (SBT) are also tracked. Increasing this is a key part of
The process has been used to assess the Benefact
our engagement work to support the decarbonisation of our
Group’s insurance footprint in various geographies, for
portfolio.
example assessing wildfires in Canada, temperature rises
in Australia and windstorm and flood in the UK. For
example, in the UK a tool for flood and storm mapping,
Mapview, is used to manage individual and accumulated
local exposures.
T
he Benefact Group is a member of voluntary climate action initiative ClimateWise which drives best practice and provides independent
assessment.
Risk management
- The Enterprise Risk Management process provides the tools, guidance, policies, standards and defined responsibilities t o
enable the Benefact Group to achieve its strategy and objectives whilst ensuring that risks to objectives are identified and
managed.
- The Benefact Group’s risk management process is a structured and iterative method for identifying, assessing, responding
and monitoring risk on an ongoing basis.
- Risk management is integrated into the way the Benefact Group works with each business unit and significant business
areas using this process, producing risk registers and feeding into reporting shared with the Group Risk function and
ultimately the Benefact Group Audit and Risk Committee.
The principal climate risks faced by the Benefact Group are:
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R
isk Nature of risk Time horizon Actions being taken to understand and mitigate impact
on business, strategy and planning
Physical Direct damage to
There are acute,
• Benefact Group have partnered with a third-party expert
assets both owned
event-driven risks
to quantify exposures on its insured portfolio across
and insured and
which can occur
territories where it operates using models based on a range
indirect impacts
over all time
of scenarios. This will be used to inform capital, pricing and
from supply chain
horizons, and
underwriting strategy.
disruption.
chronic risks, which
• Mapping technology has also been used in the UK to
are typically
identify concentration of risks in the most flood-prone
The main physical
longer-term.
areas.
risk exposures
• Benefact Group continue to work with its reinsurance
stem from its
partners to ensure that its risk mitigation remains
property
appropriate for its current risk exposures and to learn from
underwriting
their expertise.
portfolio and from
• The Benefact Group is a member of the Partnership for
its investment
Carbon Accounting Financials (PCAF) and has completed an
assets.
initial assessment of the carbon impact of its underwriting
portfolios in the UK, Ireland, Australia and Canada. This will
inform strategy for engagement and decarbonisation.
• As part of its investment process, EdenTree assesses a
company’s exposure to climate risk (including physical risk).
Where this is deemed to be material or poorly managed, a
company will not be included in the portfolio.
Transition Relates to financial
Short to medium
• Funds are invested with a responsible and sustainable
risks resulting from
term
policy which excludes fossil fuel exploration and
transitioning to a
production, thermal coal extraction and eschews
low carbon
investment in high carbon emitters (automotive, aviation
economy. They
and heavy industry).
arise from policy,
• Across EdenTree’s Funds, we also invest in companies
technology and
providing solutions that will enable the low-carbon
market disruption.
transition alongside providing a compelling investment case
Additional
• The Benefact Group’s asset manager EdenTree has
implications include
established a Climate Stewardship Plan which engages
the subsequent
investee companies and targets improvement.
changes to
• Climate change is also a permanent pillar of EdenTree’s
consumer
engagement strategy, and they have supported various
expectations,
initiatives over the years. They have contributed for seven
demand and
consecutive years to the CDP’s non-disclosure campaign.
behaviour.
They supported the Paris Pledge for Action in 2015 and are
a signatory to the TCFD Framework. EdenTree also
The main exposure
maintain memberships including the UK Sustainable
to transition risks is
Investment and Finance Association, UN Principles for
on the value of its
Responsible Investment and the Institutional Investors
investment assets
Group on Climate C hange.
through the impact
• The Benefact Group also footprints its property portfolio
of changes to a low
annually, to understand both physical and transition risks,
carbon economy on
inform investment strategies and understand energy
investee
performance.
companies.
Liability Stems from the
Short term • Each territory assesses exposure to the potential for
potential for
receiving future liability claims relating to climate related
litigation if entities
litigation arising from customers’ activities. Each territory
and boards do not
will also continue to track the potential for insured
adequately
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consider or
customers to be exposed to liability risks and the evolving
respond to the
legal environment.
impacts of climate
change.
A
full overview of actions taken to understand and mitigate impact on business, strategy and planning is included in the full TCFD
report. Actions include mapping technology to identify concentration of insurance risks and a responsible and sustainable investment
policy.
Metrics and targets
- The Benefact Group has committed to Net Zero targets over the short and long-term. Net Zero progress and ClimateWise
performance are integrated into the long-term incentive plan for senior leaders.
- A wide range of metrics and targets are used across the Benefact Group’s climate programme (fully outlined in the TCFD
report). They include fund alignment with a 1.5-degree pathway, underwriting footprint calculated to the Partnership on
Carbon Accounting Financials methodology, amount of giving to climate charities and carbon intensity per employee.
- The Benefact Group does not have a suite of key performance indicators specifically in relation to measuring climate change,
but this is monitored through investment performance.
Taskforce on Climate-related Financial Disclosures (TCFD) compliance summary
Climate reporting is included in the Strategic report (in particular in the Responsible Business section) and a separate TCFD report
published on ecclesiastical.com. The following table is produced to highlight the TCFD pillars, recommended disclosures and where
this information can be found across the Strategic report and separate TCFD report.
TCFD pillars
TCFD recommended disclosures
Section of the
Section of the TCFD
Strategic report, that
Disclosure report with
disclosures are
further details, in
included in, in
compliance with the Listing
compliance with the
Rules
Companies Act
TCFD report reference –
available at
benefactgroup.com
Governance
-
Describe the Board’s oversight of
-
Non-financial and
-
Governance structure
Disclose the
climate-related risks and
sustainability
overview (page 4).
organisation’s
opportunities
information
- Examples of climate topics
governance around
- Describe management’s role in
statement (page 12).
discussed/decisions made
climate-related issues
assessing and managing climate-
- Section 172
at various governance
and opportunities
related risks and opportunities
statement (page 17)
forums including Board
Committees and
management groups (page
5).
Strategy
- Describe the climate-related risks
- Climate strategy
- Strategy overview (page 6).
Disclose the actual and
and opportunities the organisation
overview in the
- How climate is embedded
potential impacts of
has identified over the short,
Group Chief
in how the Group operates
climate-related risks and
medium, and long-term
Executive’s Review
(page 6).
opportunities on the
- Describe the impact of climate-
(page 3).
- Climate risk and
organisation’s business,
related risks and opportunities on
- Non-financial and
opportunity consideration
strategy and financial
the organisation’s businesses,
sustainability
(page 7).
planning where such
strategy, and financial planning.
information
- Physical, transition and
information is material.
- Describe the resilience of the
statement (page 12).
liability risks outlined, time
organisation’s strategy, taking into
- Principal risks (page
horizons considered and
consideration different climate-
5).
actions being taken to
related scenarios, including a 2
understand and mitigate
degree or lower scenario.
impact outlined (page 8).
- Using scenario analysis to
understand and test
climate risk (page 9).
Risk management
- Describe the organisation’s
- Non-financial and
- Risk management
Disclose how the
processes for identifying and
sustainability
framework and process
organisation identifies,
assessing climate-related risks.
information
overview (page 10).
statement (page [12).
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assesses and manages
-
Describe the organisations
-
Overview of how the risk
climate-related risks
processes for managing climate-
management process and
related risks.
risk management tools are
- Describe how processes for
used to capture, assess and
identifying, assessing, and
respond to risk, but also to
managing climate-related risks are
monitor and report (page
integrated into the organisation’s
10).
overall risk management.
Metrics and Targets
-
Disclose the metrics used by the
-
Climate strategy
-
Overview of Net Zero
Disclose the metrics and
organisation to assess climate-
overview in the Chief
targets set over the short-
targets used to assess
related risks and opportunities in
Executive’s Review
and long-term (page 11).
and manage relevant
line with its strategy and risk
(page 3).
- Overview of approach to
climate-related risks and
management process.
- Non-financial and
key metrics against each
opportunities where such
- Disclose Scope 1, Scope 2, and, if
sustainability
pillar of climate strategy
information is material.
appropriate, Scope 3 greenhouse
information
(page 12).
gas emissions (GHG), and the
statement (page 12).
related risks.
- Direct footprint
- Describe the targets used by the
reporting in line with
organisation to manage climate-
SECR requirements
related risks and opportunities and
(page 10).
performance against targets.
C
olleagues
• The Benefact Group’s Code of Conduct policy is centred on ‘Doing the right thing’ and sets the standards of conduct and
behaviour expected from employees.
• The Board aims to ensure it is comprised of persons who are fit and proper to direct the business. The Board’s diversity policy
sets out the approach to diversity in the leadership population.
• Other information on our commitments to supporting diversity and development is included in the Responsible Business
section on page 10. Also included within the Corporate Governance report on page 33 is information about the composition
and diversity of the Board.
Social matters
• The Benefact Group was founded with a charitable purpose and this remains what motivates us today. Benefact Group
believe business has a social responsibility and should give more to support charities and communities. The Group does not
make political donations.
• The Group’s tax strategy supports its group strategy and the ethical way it does business. The Group are committed to
managing all aspects of tax transparently and in accordance with current legislation. The Group works to achieve the spirit
of legislation and not just the letter of the law in each tax jurisdiction. The Groups tax strategy is available on
ecclesiastical.com.
Human rights, anti-bribery and anti-corruption
• The Benefact Group Board is committed to operating with honesty and integrity in all of our business activities and promoting
an anti-bribery and corruption culture across the Benefact Group.
• The Benefact Group has established and upholds good practices regarding human rights, anti-corruption and anti-bribery
through a range of measures including robust risk management, employee Code of Conduct and employee training on topics
such as data protection and vulnerable customers.
• The Benefact Group complies with relevant legislation concerning supply chain – the Modern Slavery Act 2015 and the
Payment Practices and Performance regulations – to drive good practice and transparency.
• The Responsible Business section contains more information including our commitment to putting customers and partners
at the heart of everything we do, focusing on good governance, service and support.
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Se
ction 172 Statement
Ke
y stakeholders
This section explains how the Board engages with stakeholders and how their views inform the Board’s deliberations. The Board
recognises that our stakeholders have diverse interests and perspectives, all of which must be understood and taken into account as
part of effective decision-making.
As a global financial services group committed to transforming lives and communities, we strive to act responsibly and in line with our
purpose and values. The Board acknowledges that stakeholder interests may not always align. When areas of tension arise, directors
assess the impacts, risks and benefits for each stakeholder group, considering the long-term implications and the Company’s strategic
priorities. This approach enables the Board to reach decisions that balance these interests responsibly, support sustainable
performance and uphold its commitments to customers, colleagues, communities and other stakeholders.
The Board also remains mindful of the broader social context in which the Ecclesiastical group of companies operates and the
expectations placed on the Company by society, regulators and the markets in which it operates.
Further detail on how the Board engaged with stakeholders during 2025 is provided in the sections that follow. The Section 172(1)
Statement sets out how directors discharged their statutory duties over the year, while the Board Activities section within the Corporate
Governance Report offers additional insight into key decisions taken during the year and how stakeholder views were considered as
part of the Board’s decision-making.
Stakeholder Engagement
Below is an overview of the business’s approach to stakeholder engagement.
Key stakeholders
The Business engages with them by:
Customers
The business engaged with customers through a comprehensive program of research, feedback and direct
interaction. This included ongoing surveys, listening exercises and targeted follow‑up to deepen insight,
alongside close monitoring of complaints and satisfaction to drive improvements and reduce foreseeable
harm. Engagement also took place through direct meetings, industry events and wider sector insight
activities, with findings reviewed by Customer and Conduct Councils to inform enhancements to products,
processes and customer communications. The business continues to refine its communications through
root‑cause analysis and external testing to support customer understanding. Particular focus was given to
vulnerable customers through consistent training and standards, and the business’s review of Important
Business Services ensured it remained operationally resilient and able to keep customers informed during
severe‑but‑plausible scenarios.
Colleagues
C
olleague engagement was supported through regular Best Companies surveys, with insights shared
across teams and used to shape local action plans. As the designated Non‑Executive Director for colleague
engagement, Sir Stephen Lamport and the Group Chief People Officer, held direct discussions with
colleagues, including Emerging Talent groups, providing feedback to the Board.
E
ngagement was further strengthened through multi‑channel communications such as intranet updates,
newsletters, briefings and conferences. Colleagues also participated in DEI events and networks, union and
representative forums, and were supported through whistleblowing training.
Group Management Board members hosted virtual meetings across the business to encourage open
questions and feedback, while the Group continued to offer a broad range of development, mentoring and
volunteering opportunities.
Brokers
The business continued to strengthen broker relationships through regular engagement supported by
segmentation and joint account planning, enabling discussions on products, emerging trends and service
performance. Broker insight remained central to the business approach, with feedback gathered through
listening exercises, surveys and independent benchmarking. The business also reviewed products to ensure
fair value and appropriate distribution, and shared specialist knowledge across its core sectors through site
visits, tours and CPD‑accredited content to support brokers in serving customers effectively.
Shareholder and
The Company maintained open and transparent communication with its ultimate Shareholder, Benefact
investors
Trust Limited, providing regular updates on strategy, performance, leadership, risk, culture and expected
grant funding to ensure the direction of the business remained aligned with the Trust’s strategic priorities.
Communication with the Company’s preference shareholders is facilitated through its Registrar,
Computershare. The Company Secretariat maintained regular contact with Computershare throughout the
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Key stakeholders The Business engages with them by:
year to ensure that timely, accurate and up‑to‑date information was provided to preference shareholders,
supporting clear and effective communication with this stakeholder group.
Suppliers The business engaged with suppliers through senior management oversight, operating in line with the
Group’s Procurement and Outsourcing Policies to ensure risks were identified, monitored and appropriately
managed.
S
upplier relationships were actively managed through responsible procurement practices, regular
performance reviews and ongoing monitoring of service‑level standards.
T
hese activities were carried out under the Group’s Supplier Relationship Management Framework and
applied proportionately based on the nature and risk profile of each supplier arrangement.
Regulators During the year, engagement with the Company’s regulators was led by the Group Chief Risk Officer and
the Group Head of Compliance, who maintained regular and constructive dialogue with supervisory
authorities on a broad range of matters affecting the Company. In addition, several Directors met with
regulators during the year, providing opportunities for direct discussion of strategic priorities, regulatory
expectations and developments in the Group’s risk and compliance activities.
Communities and
As part of the Benefact Group, EIO has adopted the Group’s climate change strategy and recognises its
Climate
responsibility in supporting the Group’s wider ambition to achieve its climate and sustainability goals. During
the year, the Group Impact team continued to lead and coordinate social‑impact and environmental
initiatives across the organisation, advancing programmes of charitable giving that support communities and
contribute to reducing the Group’s overall environmental footprint.
T
he Group Impact team also played a central role in shaping and delivering activities aligned with the
Benefact Group’s broader sustainability and climate commitments, ensuring a coherent, responsible and
consistently applied approach across EIO and the Group as a whole.
Below is an overview of the board’s approach to stakeholder engagement.
Key stakeholders
The Board engages with them by:
Customers
The Board does not have direct engagement with our customers. It therefore primarily engaged with
customers through its oversight of the Customer Promises and regular monitoring of performance against
them. It received quarterly Consumer Duty updates, providing visibility of customer‑outcome trends,
emerging risks and actions taken to deliver good outcomes and prevent foreseeable harm. The Board also
reviewed the business strategy to ensure continued alignment with Consumer Duty requirements and
approved the firm’s Important Business Services (IBS), associated Intolerable Harm thresholds (ITOLs) and
the Operational Resilience Assessment, helping ensure key services remain robust and that customers are
protected during severe‑but‑plausible disruptions. For more information on this, please refer to the Key
Board Activities Summary in the Corporate Governance Report.
Colleagues
T
he Board engaged with colleagues through regular site visits to regional offices and operational teams,
enabling Directors to hear colleague views directly and deepen their understanding of day‑to‑day activity.
Their insight was further supported by updates on colleague‑engagement survey results, presentations
from subject‑matter experts, and detailed reports from Sir Stephen Lamport, the designated Non‑Executive
Director for colleague engagement, alongside David Smith, the Group Chief People Officer. Directors also
met leaders from across the business at Leadership Conferences, while the EIO Audit Committee maintained
oversight of speaking‑up arrangements through regular whistleblowing updates and its annual review of
the whistleblowing framework.
Brokers While the Board does not routinely engage directly with brokers, Directors received regular updates on
strategic progress and product reviews, ensuring they remained well‑informed about broker activity, market
dynamics and developments across its distribution network.
As part of the boards director appointment process, all new directors completed a comprehensive induction
programme, including an overview of the Company’s products and services, enabling them to develop a
clear understanding of its broker distribution channels. Further details on the appointment process can be
found in the Nominations Committee Report.
Shareholder and
The Board engaged with its shareholder, Benefact Trust Limited, through established information
‑
sharing
investors
protocols that provide regular updates on performance, operations and financial position.
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Key stakeholders The Board engages with them by:
Engagement was further supported by the presence of at least one Common Director, who attends every
Board meeting and relays key insights from Benefact Trust Limited’s Board discussions. The Board and
Committee Chairs, together with the Group Chief Executive Officer, also participate in ongoing dialogue with
the Trust regarding expectations for the Group, business strategy and grant funding.
These structured channels ensure the Trust’s views are consistently communicated to the Board, while
enabling Common Directors to support the Trust’s understanding of the Company’s strategic and
operational priorities. A conflict‑of‑interest policy is in place to ensure that interactions remain transparent
and well‑governed.
Suppliers
EIO works closely with a wide range of suppliers who are essential to maintaining the high standard of
service it provides to its customers, and the Board recognise the importance of sustaining strong and
effective supplier relationships.
W
hile Directors do not typically engage directly with suppliers, day‑to‑day relationship management is
delegated to senior management under the Supplier Relationship Management Framework.
T
he Board, through regular reporting from the EIO Risk Committee, remained informed about key
third‑party relationships, including material outsourcing arrangements, actual or potential supplier risks,
and the governance processes in place across the supply chain. These structured updates provided a clear
and consistent channel for Board‑level oversight of supplier‑related matters.
Regulators The Board received regular updates on regulatory strategy and on the views of both the PRA and FCA,
including key themes from supervisory communications issued to firms.
T
he Board continued to address the feedback provided during the Periodic Summary Meeting and
maintained oversight of progress against the key areas identified.
In addition, the EIO Risk Committee received routine reports on regulatory matters such as Operational
Resilience, Material Outsourcing and Operational Incident Reporting. The Board further engaged with the
Prudential Regulation Authority (PRA) and F inancial Conduct Authority (FCA) in relation to the appointment
of François Boisseau as incoming Chair, taking account of the feedback received through this process.
Communities and
The Board received updates on the Group’s climate strategy and progress against its commitment to
Climate
achieve Net Zero by 2040, ensuring continued oversight of climate‑related priorities. Board‑level
engagement was further supported by the role of Sir Stephen Lamport, the designated Non‑Executive
Director for climate matters, who led discussions and helped strengthen organisational awareness of
climate‑related responsibilities.
I
n addition, Directors undertook visits to several charities supported by the Group, providing firsthand insight
into the impact of the Group’s community and sustainability initiatives and informing Board understanding of
community needs.
B
elow is an overview of outcomes of engagement.
Key stakeholders
Methods of engagement and outcomes
Customers During the year, performance against the Customer Promises demonstrated that the business continued to
deliver good outcomes in line with Consumer Duty expectations. Insights from product and communication
testing led to tangible improvements, including refinements to product features and clearer, more
accessible customer communications. The effectiveness of this customer‑focused approach was reflected in
strong external feedback, with a 4.7‑star Trustpilot rating, multiple industry accolades, such as the 2025
Which? Best Buy and the Fairer Finance Gold Ribbon and confirmation from the Board that the firm
remained operationally resilient following its review of IBS , ITOLs and resilience controls.
Colleagues
The Board was pleased to see strong levels of colleague engagement during the year, reflected in an 86%
participation rate in the b‑Heard survey and a 3‑Star UK accreditation, indicating high advocacy and a positive
colleague experience. This was reinforced externally, with the Company ranking 4th in the Top 5 Best Big
Companies to Work For. Sustained interest in joining the Group resulted in over 206,000 visits to our careers
site, leading to 24,400 applications, 347 new hires and 18 Early Careers entrants.
T
he Board was also encouraged to note the introduction of neonatal and miscarriage leave, recognising the
meaningful support it provides to colleagues and the positive contribution it makes to strengthening its
supportive and inclusive culture. Additional wellbeing engagement included partnering with the DSM
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Key stakeholders Methods of engagement and outcomes
Foundation to deliver a workshop for parents and guardians on teenage drug and alcohol issues, further
enhancing the support available to our workforce.
Brokers The Board’s oversight of product governance resulted in clearer product fit, more robust fair‑value
assessments and more precise target‑market definitions, ensuring its products remained well aligned with
customer needs and broker expectations. The Board was both pleased and proud of its teams to see this work
recognised externally, with the business achieving first place in the Gracechurch Brokers Claims Survey,
securing the Service Quality Marque (2026), and winning the BIA Risk and Resilience Award 2025.
Shareholder and
The Board’s structured engagement with its ultimate shareholder, Benefact Trust Limited, ensured
investors
continued alignment between the Company’s strategic direction and the Trust’s charitable mission. Regular
information‑sharing protocols and active dialogue with the Trust, supported by the attendance and insights
of Common Directors, strengthened transparency and mutual understanding of performance, operations
and financial priorities. This helped sustain a constructive a nd well‑governed relationship and ensured
clarity around expectations for grant funding and long‑term value creation.
In parallel, engagement with preference shareholders was supported through the timely release of financial
information via its Registrar, Computershare, ensuring investors received clear, accurate and accessible
updates on the Company’s performance. Together, these channels reinforced shareholder confidence and
supported a well‑informed investor base across both its charitable owner and wider shareholder groups.
Suppliers The Board’s oversight of supplier‑related activity helped strengthen the resilience and reliability of its
supply chain during the year.
R
egular reporting on material outsourcing arrangements and supplier risk enabled management to address
emerging issues promptly, enhance controls and ensure that key third‑party partners continued to meet the
standards expected under the Supplier Relationship Management Framework.
A
s a result, the Company maintained strong operational continuity, reduced exposure to supplier‑related
risks and ensured critical services remained consistently delivered to customers.
Regulators The Board’s ongoing engagement with regulators supported timely and effective responses to PRA and FCA
correspondence and helped ensure that regulatory expectations continued to be reflected in the Company’s
control environment. This oversight enabled the business to advance its Operational Resilience and Model
Validation work, strengthening the robustness of key services and models. The Board and its Committees
also guided the Company’s implementation of regulatory change arising from evolving supervisory
requirements. In addition, the submission of the annual Operational Resilience self‑assessment provided
regulators with assurance over the maturity of the Company’s resilience framework and the progress being
made against its resilience objectives.
Communities and
The Board’s oversight of climate and community matters supported continued progress toward the
Climate
Benefact Group’s (of which EIO is part) commitment to achieve Net Zero by 2040, with updates during the
year demonstrating increasing maturity in the Benefact Group’s climate strategy and wider sustainability
approach. This oversight was strengthened by the leadership of Sir Stephen Lamport, the designated
Non‑Executive Director for climate matters, whose input helped deepen the Board’s understanding of
climate‑related risks, opportunities and organisational responsibilities.
D
irector visits to charities supported by EIO provided valuable firsthand insight into the positive impact of
the Company’s community programmes and reaffirmed the effectiveness of its social‑impact initiatives.
These engagements strengthened the Board’s confidence in the alignment between the Company’s
charitable giving, community partnerships and its wider purpose‑driven agenda.
I
n parallel, targeted engagement with key community groups including charity founders, fundraisers and
partner organisations enabled EIO to continue building strong relationships, deepen its understanding of
community needs and enhance the reach and effectiveness of its social and climate‑related initiatives.
More information on the Company’s approach to Climate Change, and Taskforce on Climate-related
Financial Disclosures (TCFD) please refer to the Responsible Business section of the Strategic Report.
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S
ection 172 Statement for Year End 31 December 2025
This section of the Annual Report explains how the directors have fulfilled their duties under Section 172(1) of the Companies Act 2006,
which requires directors to promote the success of the Company for the benefit of its shareholders as a whole, while having regard to
a range of wider stakeholder interests. These statutory considerations include the long‑term consequences of decisions, the interests
of employees, relationships with customers and suppliers, the impact of the Company’s activities on the community and the
environment, the maintenance of high standards of business conduct, and the need to act fairly between members.
The directors recognise that the long‑term success of the Company, and its continued ability to support people, charities and good
causes, relies on placing the interests of stakeholders at the heart of Board deliberations. The Board considers it essential that the
Company maintains its reputation for high standards of business conduct and oversees the culture, values and behaviours that
underpin this commitment. The Board monitors compliance with policies, regulatory obligations and governance expectations to
ensure that its responsibilities to stakeholders are consistently upheld. Further details can be found in the Corporate Governance
Report.
To support effective decision‑making, the Board requires that stakeholder considerations are clearly articulated in all proposals
submitted for approval. This ensures that directors have appropriate visibility of the potential impacts, risks and opportunities
associated with each decision, enabling them to exercise their duties under Section 172 in a balanced, responsible and well‑informed
manner.
This section sets out where key disclosures in respect of each section of the section 172 can be found within the Report and Accounts:
Where to Find Supporting Disclosures in
Section 172 Factor
This Report
• Our Business Model and Strategy
A. The likely consequences of any decision in the long term
• Responsible Business
Report
• Key Board Activities
• Responsible Business Report
• Stakeholder Engagement
B. The interests of the Company’s employees
• Key Board Activities
• Remuneration Report
• Our Business Model and Strategy
C. The need to foster the Company’s business relationships with suppliers,
• Stakeholder Engagement
customers and others
• Responsible Business
Report
• Responsible Business
Report
D. The impact of the Company’s operations on communities and the
• Stakeholder Engagement
environment
• Our Business Model and Strategy
• Corporate Governance Report
E. The desirability of maintaining a reputation for high standards of business
• Risk Management
conduct
• Responsible Business Report
• Key Board Activities
• Corporate Governance Report
• Key Board Activities
F. The need to act fairly between members of the Company
• Shareholder Information
• Directors’ Report
This Section 172 statement should be read alongside the wider governance‑related disclosures contained in the Corporate Governance
Report, the Committee Reports, and the Strategic Report. Together, these sections provide a comprehensive overview of how the Board
oversees strategy, risk, culture, sustainability and stakeholder engagement in accordance with the UK Corporate Governance Code
2024 and the expectations of the Financial Reporting Council.
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G
roup Chief Financial Officer’s review
I
t gives me great pleasure to be able to present another outstanding set of results for the year. The Company is reporting a profit
before tax of £84.6m (2024: £82.5m), outperforming expectations and achieving another year of profitable growth. The result
represents one of the strongest results in our 138 year history and, importantly, has enabled us to continue to give more to good
causes, having now donated over £275m in charitable giving, since 2014.
O
verall, the profit was driven by a strong net investment result of £91.0m (2024: £71.9m) and excellent trading performance with an
1
insurance service result of £104.7m (2024: £83.5m). Gross written premium
increased by 2.1% to £653.7m (2024: £640.3m) following
continued and disciplined growth, despite increasingly challenging market conditions. During the year, as part of a strategic
reassessment of programme plans for internally generated software assets, a £14.6m impairment was recognised.
E
IO Group’s strong credit ratings with both Moody’s (A2 with stable outlook) and AM Best (A with stable outlook) were reaffirmed
during the year, and our Solvency II regulatory capital position remains highly resilient, well above both regulatory requirements and
risk appetite.
G
eneral Insurance
Overall, our underwriting businesses contributed to an exceptional result in the year. Collectively, our businesses have continued to
deliver robust and profitable growth in insurance revenue during challenging market conditions, building on our strong position in core
segments and recent product launches. The increase in gross written premium of 2.1% to £653.8m (2024: £640.6m) reflected
significant new business wins and robust retention levels.
Un
derwriting experience benefited from particularly favourable claims experience, resulting in an insurance service result of £90.9m
1
(2024: £72.7m) and an exceptional Combined Operating Ratio
(COR) of 83.7% (2024: 86.9%). The result reflected benign weather
claims and limited large loss experience across most territories, alongside relatively stable prior year claims development. The
devastating impact of Storm Eowyn in Ireland and legacy claims strengthening in Canada did, however, highlight the potential for
higher cost of claims and the inherent volatility in our insurance exposures.
Our overall profit includes a net insurance financial loss of £19.0m (2024: £6.9m net loss) which is driven by the impact of discount
rate movements in the year, albeit this would be offset by returns in our well-matched investment portfolio, included in the net
investment result.
United Kingdom and Ireland
1
In the United Kingdom and Ireland, reported underwriting profits
were £49.5m (2024: £53.6m), resulting in a COR of 81.0% (2024:
77.4%). The result benefitted from another benign year for weather claims, large losses and higher associated reinsurance profit
commission. Whilst Storm Eowyn had a devastating impact on many of our customers within the Ireland branch, the rest of the UK
business remained largely unaffected due to a late change in the storm path. The business was similarly fortunate to avoid material
losses from other named storms in the year.
D
espite increasingly soft market conditions throughout the financial year, the portfolio continued its growth journey and gross written
premium increased by 5.6% to £461.2m (2024: £436.9m). The portfolio continued to be disciplined in its approach and adaptive to
market conditions, prioritising its commitment to insuring significant value locations and to managing the associated risk.
Australia
2
In Australia, the business reported an underwriting loss of £2.9m (2024: £3.4m loss)
, resulting in a COR of 109.3% (2024: 107.4%).
Overall, the gross claims experience was favourable for the year, led by positive current year Liability experience, including more
stable PSA prior year development. However, the net result was impacted by the cost of intra-group reinsurance arrangements and
increased investment in the business.
Consistent with other territories, the business experienced challenging market conditions and gross written premium fell slightly by
2
1.5% to £93.9m (2024: £95.3m)
. This was largely driven by lower than expected new business and rate on renewals, partially offset
by improved retention rates.
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Canada
2
Canada reported an underwriting profit of £11.9m
(2024: £13.8m profit) leading to a COR of 83% (2024: 81.4%). The result reflected
lower current-year loss activity and disciplined expense management, partially offset by strengthening of prior year latent claims
following adverse experience in the prior year. Within the current loss year, favourable claims experience was led by especially benign
weather claims in the period.
Levels of income remained broadly consistent with the prior year, reporting a small reduction in gross written premium to £101.0m
2
(2024: £101.6m)
. Strong new business wins, led by growth in our core segments, were offset by lower retention and rate on renewals
due to softening market conditions.
I
nvestments
The Company reported a particularly strong net investment result for the year of £91.0m (2024: £71.9m profit), as the majority of its
asset classes performed well in more positive market conditions.
T
he investment result was supported by stable investment income levels of £46.0m (2024 £50.1m) and especially strong fair value
gains of £44.7m (2024: £21.4m gains). Fair value gains benefitted from favourable returns on bonds, OEIC listed equities and property,
as well as outstanding performance in our strategic unlisted equity investment portfolio.
W
e remain committed to our long-term investment philosophy, with a well-diversified and appropriately matched portfolio. Our
investment approach is a key part of our climate strategy, and you can find out more in the Responsible Business report.
Long-term business
Ecclesiastical Life Limited, our life business, reported an improved profit before tax of £3.1m for the year (2024: £1.4m profit), driven by
growth and investment gains in the period. Assets and liabilities in relation to the life insurance business remain well matched.
Outlook
We expect increasingly soft and competitive insurance market conditions to remain a key feature of 2026. During this period, we are
committed to modest and profitable growth, maintaining our underwriting discipline and continuing to ensure we can provide m arket
leading services to its customers. With a fast-developing Technology and AI landscape, we are prepared to innovate and invest in the
business to strive for operational excellence and to continue to provide our services to customers as efficiently and effectively as
possible.
E
xternal economic and market conditions may continue to change during 2026. Recent geopolitical events have contributed to changes
in financial markets and the wider economic environment. These developments may influence inflation, interest rates and general
business activity in the UK and the territories we operate in, although the extent of any impact is not yet clear. Our investment strategy
and highly resilient capital position ensures we can take a long-term view and remain in a position of strength as we look to prioritise
supporting our customers during increasingly uncertain and challenging times.
Balance sheet and capital position
In the year, total shareholders’ equity reduced by £9.0m to £618.0m, as reported profits were offset by charitable donations and paying
a dividend of £50m to Benefact Group to support the effective use of capital across the wider Benefact Group. The Company’s capital
position remains extremely robust, with Solvency II capital ratio cover for EIO remaining at 25 2% (2024: 252%).
During the year charitable donations of £24.0m were paid to the Company’s ultimate shareholder, Benefact Trust Limited, as well as
£4.1m to other causes. The Company has now given over £275m in charitable donations since 2014, continuing the Benefact Group’s
ambition to give more to good causes.
Mark Bennett
Group Chief Financial Officer
1
The EIO Group uses Alternative Performance Measures (APMs) to help explain performance, More information on APMs is included in Note 36
2
Values here have been calculated using a constant exchange rate to ensure the effects of exchange rates have been removed. The prior year end rate
has been used in the calculation here.
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Strategic Report
K
ey performance indicators
T
he Group considers its key performance indicators to be profit or loss before tax, regulatory capital, gross written premiums, and
combined operating ratio. In addition to information included within this Strategic Report, details about the Group’s regulatory capital,
gross written premiums, and combined operating ratio can be found in notes 4 and 36 to the financial statements.
Str
ategic Report
T
his Strategic Report has been approved and authorised for issue by the Board of Directors and signed on its behalf by
Mark Hews
Group Chief Executive
19 March 2026
24
Ecclesiastical Insurance Office public l imited c ompany
Governance
B
oard of Directors
The directors of the company who were in office during the year and up to the date of signing the Annual Report and Accounts were:
François-Xavier Boisseau
Chair
Appointed: 20 March 2019
Tenure: 7 years
François-Xavier Boisseau became Chair of Ecclesiastical Insurance Office public limited company and Benefact Group plc on 1
January 2026.
He was appointed to the Board in March 2019. He is the Chair of IQUW Syndicate Managing Agency Ltd.
François-Xavier has more than 30 years’ experience working in the insurance industry, 25 years in the UK. He was CEO of Insurance
Ageas (UK) until December 2018. Prior to that he was CEO of Groupama and CEO of GUK Broking Services as well as being Non-
Executive Chairman of Lark, Bollington and Carole Nash.
Mark Hews
Group Chief Executive
Appointed: 2 June 2009
Tenure: 16 years 9 months
Mark Hews was appointed Group Chief Executive in May 2013 and was previously Group Chief Financial Officer. He was appointed to
the Board in June 2009 and appointed to the Board of MAPFRE RE in December 2013. He also became a Trustee of The Windsor
Leadership Trust in November 2017.
He was formerly a Director of HSBC Life and Chief Executive of M&S Life. Prior to this he was Finance Director at Norwich Union
Healthcare. He started his financial career at Deloitte (formerly Bacon and Woodrow) as a consultant and actuary.
Mark Bennett
Group Chief Financial Officer
Appointed: 1 January 2025
Tenure: 1 year 2 months
Mark Bennett was appointed Group Chief Financial Officer in January 2025, having progressed his career within the organisation since
2007. After working at an actuarial consultancy firm in London, Mark began his career at Benefact Group in 2007.
M
ark qualified as an Actuary in 2009 and, after working in various actuarial teams, was appointed Group Chief Actuary in 2018. Since
then, Mark has overseen the Group’s Actuarial, Reinsurance, Risk and Investment functions. Mark became Acting CFO in July 2024,
additionally leading the Finance and Premises functions, before taking on the role permanently in January 2025.
S. Jacinta Whyte
Deputy Group Chief Executive
Appointed: 16 July 2013
Tenure: 12 years 8 months
Jacinta Whyte was appointed Deputy Group Chief Executive and joined the Board in July 2013 with responsibility for the Group’s
General Insurance business globally. She was also appointed to the Ansvar Australia Board during 2013.
Jacinta joined Ecclesiastical in 2003 as the General Manager and Chief Agent of the Group’s Canadian business, a role that she
continues to hold. Having commenced her career as an underwriter for RSA in Dublin in 1974, she moved with them to Canada in 1988,
holding a number of senior executive positions in both Ireland and Canada.
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Ecclesiastical Insurance Office public l imited c ompany
Governance
James Coyle
Senior Independent Director, Audit Committee Chair
Appointed: 21 May 2024
Tenure: 1 year 9 months
James was appointed to the Board in May 2024. James is Senior Independent Director and Chair of the Audit and Risk Committee at
Pollen Street Capital. He is also a Non-Executive Director and Risk Committee Chair of HSBC Bank (Singapore) Limited and Chair o f
HSBC Global Services Limited, and Deputy Chair of Deloitte LLP’s Oversight Board.
Previously, James chaired boards and audit committees at HSBC UK Bank plc, HSBC Trust Company, Marks & Spencer Unit Trust
Management, Worldfirst UK, and Scottish Water, among others.
He retired in 2015 as Group Financial Controller/Deputy Finance Director at Lloyds Banking Group after 25 years in financial
services, following senior finance roles at Bank of Scotland and BP.
Michael Murphy
I
ndependent Non-Executive Director, Risk Committee Chair
A
ppointed 3 December 2025
T
enure: 3 months
Michael is an experienced Board Director and Chair with more than 30 years in Insurance & Financial Services, having held Executive
and Non-Executive Director roles on regulated Boards at international organisations including Great-West/Canada Life, Aviva, Willis
Towers Watson, Bank of Ireland and Flood Re. He previously held Global, EMEA and Irish leadership roles as CEO, CFO and Chief
Actuary in these organisations, successfully designing new strategies and delivering significant transformation, restructuring,
cultural change and strong, sustainable growth across different businesses, countries and cultures.
He
is currently an independent Non-Executive Director, Chair and Board Committee Chair with several regulated Insurance,
Reinsurance, Wealth and Retirement businesses in the UK. He is also an Executive Coach and Mentor to the Founders/CEOs of
several international FinTech's and Insurtech's.
Sir Stephen Lamport
I
ndependent Non-Executive Director, Joint Remuneration Committee Chair
A
ppointed: 23 March 2020
T
enure:6 years
S
ir Stephen joined the Board in March 2020. In addition, he was appointed as a Non-Executive Director and Trustee of the Company's
ultimate beneficial owner, Benefact Trust Limited.
He is Vice-President of the Community Foundation for Surrey, Chairman of Painshill Park Trust, and Trustee of the Yvonne Arnaud
Theatre. A Deputy High Bailiff of Westminster Abbey, he served as Receiver General from 2008 to 2018 and was previously Group
Director at RBS. Earlier, he was Private Secretary and Treasurer to The Prince of Wales and a member of HM Diplomatic Service with
postings in New York, Tehran, and Rome. Sir Stephen is also a Deputy Lieutenant of Surrey.
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Governance
T
he Venerable Karen Best
Independent Non-Executive Director
Appointed: 19 August 2024
Tenure: 1 year 7 months
The Venerable Karen Best was appointed to the Board in August 2024, having been a member of the Benefact Trust Board prior to
this.
The Venerable Karen Best has served as Archdeacon of Manchester since 2017. Ordained in 1994, she began her ministry in the
Diocese of London as a Prison Chaplain and later Associate Vicar, before serving in Rochester, Chelmsford, and Bolton. Karen is
passionate about supporting others on their spiritual journey through preaching, teaching, and walking alongside them. She values
her relationship with Christ above all and describes herself as a ‘work in progress.’ A pioneer by accident and design, she embraces
opportunities to model leadership as a GMH woman and Christian Mystic.
Jane Dale
Independent Non-Executive Director
Appointed 3 February 2026
Tenure: 1 month
Jane is a Chartered Accountant who spent the majority of her executive career in financial services, including 18 years at Legal &
General where she had a variety of finance and business roles, including as Managing Director of the GI business. Her last executive
role was with Ageas UK where she was Finance Director of the life assurance business.
Jane started her non-executive career in 2009 when she joined British Gas Services as Chair of the Audit & Risk Committee, where
she stayed for 9 years. Since 2016 she has held a variety of non-executive roles including Chesnara, Covea Insurance and Brown &
Brown Europe, where she has undertaken a variety of committee chair roles including audit and
risk.
Angus Winther retired from the Board at the AGM on 26 June 2025. Additionally, David Henderson and Maria Darby-W
alker resigned
from the Board on 31 December 2025
27
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Governance
Directors’ Report
The directors present their report and the audited consolidated Annual Report and Accounts for the year ending 31 December 2025.
Information incorporated by reference
In accordance with Section 415 of the Companies Act 2006 (the Act), the directors present their report for the year ended 31 December
2025. Other sections of the Annual Report and Accounts have been deemed to be incorporated into the Directors’ Report by reference and
the table below outlines where required disclosures can be found. In accordance with section 414C(11), some disclosures have been included
in the Strategic report.
Information
Reported in
Page(s)
Business model
Our business and strategy section of Strategic Report
Page 9/10
Corporate Governance Statement Corporate Governance Report Page 33
Financial instruments Note 4
Page 96
Derivative financial instruments and hedging
Page 76
accounting policy
Important events since 31 December 2025 Directors’ Report Page 31
Future developments
Directors’ Report
Page 28
Research and development
Directors’ Report
Page 29
Employee engagement and involvement Stakeholder engagement and section 172 Statement
Page 17
Corporate Governance Report
Page 33
Responsible Business section of Strategic Report
Page 10
Stakeholder engagement Stakeholder engagement and section 172 Statement Page 17
Greenhouse gas emissions and energy consumption
Responsible Business section of Strategic Report
Page 10
Going Concern and Viability Statement
Directors’ Report
Page 30
Diversity and inclusion Stakeholder engagement and section 172 Statement
Page 17
Corporate Governance Report
Page 33
Nominations Committee Report
Page 44
The Section 172 Statement
Stakeholder engagement and section 172 Statement
Page 17
Payment Practices Responsible Business section of Strategic Report Page 10
Principal risks and uncertainties Strategic Report
Page 2
Note 3
Page 92
C
ompany status and branches
EIO is incorporated and domiciled in England and Wales (registration number 00024869). The registered office of the Company is
Benefact House, 2000 Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester, GL3 4AW, United Kingdom. The Company
has branches in Canada and Ireland.
Principal activities
The Company operates principally as a provider of general insurance. Details of the subsidiary undertakings of the Company are shown
in note 34 to the financial statements.
Fu
ture Developments
Looking ahead, the Company expects to continue progressing initiatives that support the EIO Group’s strategic priorities and long‑term
objectives. More information on forthcoming developments, planned activities and areas of focus can be found in the Strategic Report
and the Corporate Governance Report
O
wnership and share capital
At the date of this report, the entire issued Ordinary share capital of the Company was owned by Benefact Group plc. In addition, 3.37%
of the issued 8.625% non-c umulative irredeemable preference shares of £1 each (‘Preference shares’) are owned by Benefact Group
plc. In turn, the entire issued ordinary share capital of Benefact Group plc was owned by Benefact Trust Limited, the ultimate parent of
the EIO Group.
Directors and their interests
The directors of the Company who served during the year and up to the date of this report were Mark Hews, Karen Best, Mark Bennett,
François-Xavier Boisseau, James Coyle, Michael Murphy, Sir Stephen Lamport, and Jacinta Whyte. David Henderson, Maria Darby-
Walker and Angus Winther stepped down from the Board during the year. Biographies of those directors who are currently serving
on the Board are set out in the Directors’ Information Page.
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Governance
As
set out in the Notice of Meeting, all current directors who have served since the last AGM will be proposed for re-election. All
directors seeking re-election were subject to a formal and rigorous performance evaluation, further details of which can be found in
the Group Nominations Committee Report. Details of directors’ service contracts are set out in the Directors’ Remuneration Report of
Benefact Group plc. Also, Michael Murphy and Jane Dale will be proposed for election following recommendation of the Group
Nominations Committee. In addition, and following the announcement on 18 February 2026, Gail Tucker will join the Board with effect
from 1 May 2026. Therefore, she will also be proposed for election at the upcoming AGM.
N
either the directors nor their connected persons held any beneficial interest in any ordinary shares of the Company during the year
ended 31 December 2025 and to the date of this report.
T
he interests of the directors and their connected persons in the preference shares in the capital of the Company as at 31 December
2025 and to the date of this report are shown below:
Director
Nature of interest
Number of Non-Cumulative
Irredeemable Preference Shares held
Mark Hews
Connected person
75,342
T
he Board has a documented process in place in respect of conflicts.
N
o contract of significance existed during or at the end of the financial year in which a director was or is materially interested.
Indemnities and insurance
In accordance with the Company’s Articles and the qualifying third-party indemnity provisions (as defined by Section 234 of the
Companies Act 2006), the Company indemnifies each of its directors and directors of any associated company against certain liabilities
that may be incurred because of their positions. These provisions were in force during the course of the financial year ended 31
December 2025 and at date of signing for the benefit of the directors of the company and that of any associated company. In addition,
the Company maintains directors’ and officers’ liability insurance. Neither our indemnity nor the insurance provides cover in the event
that a director is proven to have acted dishonestly or fraudulently.
D
irector and senior management diversity
In accordance with Listing Rule 6.6.6R(10), the required disclosure relating to Director and Senior Management Diversity is set out in
the Nominations Committee Report within this Annual Report, which is incorporated into this Directors Report by reference.
Employees
The Benefact Group is dedicated to nurturing a culture and work environment where all colleagues can reach their potential. The
Diversity, Equity and Inclusion Standard and Guidance sets its commitment to creating and sustaining an open and inclusive workplace
where everyone belongs, and the Benefact Group places the care and wellbeing of all its colleagues at the heart of its employment
policies. Throughout the colleague lifecycle, from recruitment onwards, the Benefact Group considers adjustments to its processes
and practices to remove barriers for colleagues with disabilities.
T
he Benefact Group engage s with third-party and occupational health specialists to provide expert advice and ensure it offers the best
support possible. The adjusted work approach creates an environment where colleagues with additional needs can fully participate in
all opportunities provided by the Benefact Group, including continued employment, training, job moves, and promotions. The Benefact
Group offers various support options to help colleagues maintain a healthy work-life balance, including flexible working practices, a
virtual GP service, an employee assistance program, flu vaccinations, eye tests, and a wide range of flexible benefits such as dental
care and critical illness insurance and inclusive colleague networks.
I
nformation on employee engagement and well-being is provided in the responsible business section.
R
esearch and Development
In the ordinary course of business, the Company develops new products and services across each of its business units, ensuring they
meet evolving customer needs and reflect emerging market, regulatory and technological developments. This ongoing product and
service development supports its commitment to innovation and continuous improvement.
Di
vidends
Dividends paid on the preference shares were £9,181,000 (2024: £9,181,000). The Directors do not recommend a final dividend on the
Ordinary shares (2024: £nil).
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A
n interim dividend of £50m on the Ordinary Shares of 4p each was paid to Benefact Group plc during the year.
G
oing concern
The financial performance and principal risks and uncertainties section of the Strategic Report starting on page 2 provide a review of
the EIO Group’s business activities and disclose the EIO Group’s principal risks and uncertainties, including exposures to insurance,
financial, operational and strategic risk.
T
he EIO Group has considerable financial resources: financial investments of £1,094.7 m, 76% of which are liquid (2024: financial
investments of £982.0m, 78% liquid) and cash and cash equivalents of £93.2m (2024: £105.8m) to withstand economic pressures.
Liquid financial investments consist of listed equities and open-ended investment companies, government bonds and listed debt.
T
he EIO Group has a strong risk management framework and solvency position, is well placed to withstand significant market
disruption and has proved resilient to stress testing. The EIO Group has considered its capital position, liquidity and expected
performance. The EIO Group and its businesses have sufficient levels of cash and other liquid resources and has expectations it can
meet its cash commitments over its planning horizon. The EIO Group and its businesses expect to continue to meet regulatory
requirements.
D
espite economic pressures and challenges, given The EIO Group’s operations, robust capital strength, liquidity and in conjunction
with forecast projections and stress testing, the directors have a reasonable expectation that The EIO Group has adequate resources
and is well placed to manage its risks successfully and continue in operational existence for at least 12 months from the date of this
report. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.
Lo
nger-term viability statement
The directors have assessed the prospects of the Group in accordance with Provision 31 of the 2018 UK Corporate Governance Code.
Although the prospects and business plans of the Group are considered over a longer period, the assessment by the directors covers
three years. In making its assessment the directors considered:

The Group’s current position and prospects, risk appetite, and the potential impact of the principal risks and how these are
managed;
 The Group’s long-term business plans and strategy, and the costs associated with its delivery;
 The Group’s current capital, liquidity and solvency position and projections;
 The political, economic and regulatory environment, including uncertainties on the geopolitical outlook.
W
hile the directors have no reason to believe the Group will not be viable over a longer period, a three-year outlook period has been
selected. In determining this assessment period, consideration has been given to the nature of the Group and its businesses, its stage
of development, strategy and business model. Given the rate of change in the markets in which the Group operates, three years
provides an appropriate balance between the period of outlook and degree of clarity over specific, foreseeable risk events that could
impact on the viability of the Group. The directors will continue to monitor and consider the suitability of this period.
The Group uses varying stress scenarios with reference to the principal risks, which are documented on pages 5 to 9. Scenarios are
designed to be severe, but plausible, and assess the impact of certain events on the Group’s profitability and capital strength. Reverse
stress testing is also used to assess what could make the Group’s business model unviable. The outcome of testing was discussed by
the Board during the year and consideration was given to the current environment on the Group’s viability.
Among the considerations and scenarios were further investment market volatility, claims experience and business deterioration.
T
he solvency position of the Group has been projected as part of the Own Risk and Solvency Assessment (ORSA), which is a private,
internal, forward-looking assessment of own risk, required as part of the Solvency II regime. The forward looking emphasis of the
ORSA ensures that business strategy and plans are formulated with full recognition of the risk profile and future capital needs.
A
nalysis confirms that the Group has sufficient capital resources to cover its capital requirements and is operationally resilient.
T
he directors have also considered the Group’s ability to service its preference shares, subordinated liabilities and the expectations of
its ultimate charitable owner, Benefact Trust Limited. The Group has fixed annual dividend payments in respect of its non-cumulative
irredeemable preference shares and payments in respect of its subordinated liabilities. The Group makes regular grants to its ultimate
charitable owner, Benefact Trust Limited. There is a regular cycle of discussion with Benefact Trust Limited to determine the
appropriate level of grants, in which the Group’s capital position and future business needs are taken into account.
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C
onfirmation of viability
Based on the Group’s strong capital position, the strong risk management framework in place and the Group’s resilience to the variety
of adverse circumstances as demonstrated in the results of the stress testing and potential mitigating actions, the directors confirm
that they have a reasonable expectation that the Group will continue in operation and be able to meet its liabilities over the three year
period of the viability assessment.
P
olitical donations
No political donations were made in the year (2024: £nil). The EIO Group policy is that no political donations may be made or
expenditure incurred.
I
mportant events since 31 December 2025
As mentioned above, subsequent to the year-end 31 December 2025, the Company announced on 18 February 2026 that Gail Tucker
is expected to be appointed as a Non-Executive Director and a member of the EIO Audit and Risk Committees. The appointment will
take effect on 1 May 2026 and will enhance the Board’s expertise and contribute towards improved gender diversity at Board level.
E
xternal auditor
During the year, the EIO Audit Committee reviewed the effectiveness of the External Auditor.
I
n accordance with Section 489 of the Companies Act 2006, a resolution proposing that PricewaterhouseCoopers LLP be re-
appointed as External Auditor will be presented to the forthcoming AGM for consideration.
Disclosure of information to the auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information that the
auditor is unaware, that could be needed by the auditor in order to prepare their report.
H
aving made enquiries of fellow directors and the Group’s auditor, each director has taken all the steps that they ought to have taken
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.
T
his confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 20 06.
A
nnual General Meeting
A copy of the Notice for the 2025 AGM is available on page 159.
Directors' responsibilities statement
The directors are responsible for preparing the 2025 Annual Report and the financial statements in accordance with applicable law
and regulations.
C
ompany law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared
the financial statements in accordance with UK-Adopted International Accounting Standards (UKIAS). Under company law, directors
must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the
Company and of the profit or loss of the Company for that period. In preparing the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;
 state whether applicable UKIAS have been followed, subject to any material departures disclosed and explained in the financial
statements;
 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.
T
he directors 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.
T
he 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.
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Directors’ confirmations
The directors consider that the 2025 Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the EIO Group’s and Company’s position and performance, business model and
strategy. Each of the directors, whose names and functions are listed on pages 25, 26 and 27 confirm that, to the best of their
knowledge:
 the EIO Group and Company financial statements, which have been prepared in accordance with UKIAS accounting standards,
give a true and fair view of the assets, liabilities and financial position of the EIO Group and Company, and of the profit of the EIO
Group; and
 the Strategic Report includes a fair review of the development and performance of the business and the position of the EIO Group
and Company, together with a description of the principal risks and uncertainties that it faces.
A
pproved and authorised for issue by the Board of Directors and signed on its behalf by
Fr
ançois-Xavier Boisseau Mark Hews
Chair Group Chief Executive
19 March 2026 19 March 2026
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Governance
Cor
porate Governance
I
ntroduction from the Chair
Dear Stakeholder
I am honoured to present the Corporate Governance Report, my first as Chair, following David Henderson’s resignation at the end of
2025 to take up his position as Chair of Benefact Trust. On behalf of the Board, I would like to express our sincere appreciation for
David’s leadership and contribution to the sound governance of the Company during his tenure.
This report sets out our approach to governance and provides a detailed account of how the Board and its Committees operated during
2025. Further information on our governance framework and practices is included throughout this section.
E
cclesiastical is proudly part of the Benefact Group, a financial services group ultimately owned by Benefact Trust Limited, a registered
charity. Benefact Group plc comprises three distinct divisions, each overseen by a divisional holding company. Ecclesiastical serves as
the holding company for the insurance division. Additional details on the Benefact Group plc structure can be found in the Benefact
Group plc Report and Accounts.
Areas of Board and Committee focus
The year under review was one of transition and renewal. The Board’s principal focus during 2025 was to ensure a smooth and
effective succession process for the Chair position, led by the Group Nominations Committee, and to continue strengthening the Board’s
composition in line with the UK Corporate Governance Code 2024 and the expectations of its shareholders. Further information on
these activities is provided in the Nominations Committee Report. The Board looked to continue demonstrating its resilience and
commitment to its stakeholders as detailed below. More information on the Board’s activities and key decisions can be found within
this report.
O
ur approach to governance
As a Board, we remain committed to maintaining the highest standards of corporate governance and believe that the Company’s a ffairs
should be conducted in accordance with recognised best practice. Although the Company does not have equity shares admitted to the
London Stock Exchange’s commercial companies category under the revised UK Listing Regime, it has voluntarily adopted the
Principles and, where possible, the Provisions of the UK Corporate Governance Code 2024 (the ‘Code’), issued by the Financial
Reporting Council. The Code is available on the FRC’s website at frc.org.uk.
D
uring the year, the Board and its Committees oversaw the application of the revised 2024 Code. The changes to provision 29, relating
to the effectiveness of the risk management and internal control framework will apply to the year beginning 1 January 2026.
I
am pleased to confirm that, for the year ended 31 December 2025, the Company has applied the Principles of the Code and com plied
with its Provisions in all material respects, subject to the limited exceptions set out in this report. Where we have not complied fully,
we have provided clear and transparent explanations in accordance with the “comply or explain” approach required under the Listing
Rules and the Code.
Provision
Current Status / Explanation
4:
When 20 per cent or more of votes have been cast
Given Benefact Group plc owns the entire issued Ordinary share capital
against the board recommendation for a resolution, the
of the Company, there is no need to comply with the provisions relating
Company should explain, when announcing voting results,
to outcomes from shareholder votes
what actions it intends to take to consult shareholders in
order to understand the reasons behind the result.
10.
The board should identify in the annual report each
The Board has considered the circumstances and relationships of all
Non-Executive director it considers to be independent.
Non-Executive Directors and is satisfied that a majority of the Non-
Circumstances which are likely to impair, or could appear
Executive Directors remained independent in character and judgement.
to impair, a non-executive director’s independence include,
Sir Stephen Lamport is also a Non-Executive Director of the Company’s
but are not limited to, whether a director:
ultimate parent, Benefact Trust Ltd, a registered charity, and this
− holds cross-directorships or has significant links with
common directorship is regarded as good practice with a charity that
other directors through involvement in other
owns trading subsidiaries.
companies or bodies;
Where any of these or other relevant circumstances apply,
and the board nonetheless considers that the non-
executive director is independent, a clear explanation
should be provided.
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36:
Remuneration schemes should promote long-term
Given the Company does not have listed equity shares it is unable to
shareholdings by executive directors that support
comply with the shareholding requirements for Executive Directors.
alignment with long-term shareholder interests.
AGM and re-election of directors
This ye ar’s AGM will be taking place on
25 June 2026. A c opy of the Notice for the AGM is available on page 159.
In accordance with the Code and as set out in the Notice of Meeting, all directors who have served since the last AGM will be proposed
for re‑election, with the exception of Angus Winther, who retired from the Board with effect from 26 June 2025, and Maria
Darby‑Walker and David Henderson, who both resigned with effect from 31 December 2025. I can confirm that all directors seeking
re‑election have been subject to a formal and rigorous performance evaluation.
In addition, Michael Murphy and Jane Dale, who were appointed during the year, will each seek election at the AGM. Furthermore, as
indicated in the Directors’ Report, Gail Tucker will be appointed to the Board with effect from 1 May 2026 and will therefore also
stand for election at the upcoming AGM.
François-Xavier Boisseau
Chair
19 March 2026
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Governance
Board leadership and Company Purpose
Th
e Role of the Board
The Board is accountable to the Company’s shareholders for the long-term success of the Group and for safeguarding its purpose,
values, strategy, culture, and governance framework. We place great importance on maintaining a well-informed and decisive Board,
with meetings scheduled regularly throughout the year to ensure timely and effective decision-making.
I
n addition to setting up the Group’s strategic direction, the Board establishes annual objectives and oversees their delivery through
the approval and ongoing review of the business plan and strategic initiatives. This structured approach ensures alignment between
short-term priorities and long-term goals.
Purpose, values and strategy
T
he Company’s purpose is to contribute to the greater good of society by improving the lives of our customers, beneficiaries, and the
wider community. We achieve this through the stewardship of a diverse portfolio of businesses that operate to the highest ethical
standards and are committed to delivering long-term sustainable value.
O
ur approach is underpinned by a clear expectation that all businesses within the EIO Group set a high bar placing customers at the
heart of decision-making, acting responsibly, and serving as an example of best practice across the industry. We seek to embed an
ethical dimension in all aspects of our operations, ensuring that integrity and accountability remain central to our governance
framework.
A
s a company with a distinctive purpose, we recognise that success is defined not only by what we do, but by how we do it. Ou r values
shape the way we work, underpinning our vision, ambition, and strategy. They provide the common thread that unites our fam ily of
businesses and guide our actions in delivering positive outcomes for all stakeholders.
I
n accordance with the Code, the Board ensures that the Company’s purpose, values, and strategy are aligned with its culture. This is
achieved through regular reporting and discussion on culture-related metrics, employee engagement surveys, and stakeholder input.
The Board (via its committees) also reviews the outcomes of internal audits and risk assessments to confirm that behaviours across
the Group reflect our stated values. Where areas for improvement are identified, the Board oversees the implementation of targeted
actions to strengthen cultural alignment and reinforce ethical standards.
C
ulture
T
he Board is responsible for setting the right values and culture across the Group and for ensuring the fair treatment of customers.
Our culture is deeply connected to the Group’s purpose – to give all available profits to charity and good causes. We measure our
success by how much we can give to good causes, and during the year colleagues recorded over 630 volunteering days, dedicating
thousands of hours to charities and causes close to their hearts.
I
n 2024, we launched a simplified and refreshed set of values which now guide and shape the culture across the wider Benefact Group,
as outlined below:
C
ollaborating
We’re a family of diverse businesses united by our culture of inclusion and our commitment to the
value, energy and fun of working together.
Ambitious Our growth is empowered by our ability to be confident, bold and agile. We actively listen, learn
and innovate whilst maintaining a consistent focus on delivering the highest standards for our
customers and clients.
Responsible We stake our reputation on integrity, ethical principles and commitment to building a responsible
and sustainable legacy.
Expert We nurture our colleagues with opportunities for growth, trusting each other’s specialist expertise,
knowledge and experience to deliver the best outcomes for our customers, clients and
beneficiaries.
Supporting
Our purpose is at the heart of everything we do, bringing us together to build a movement for good.
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E
very colleague, including our Directors, plays a vital role in shaping and sustaining our culture through how we interact with one
another, our business partners, clients, customers and wider communities. Our values are embedded across the entire colleague
lifecycle - from recruitment and performance management to our behaviour model, emerging talent and leadership development
programmes and internal communications.
N
ew colleagues are introduced to our values through the Global Group Induction programme, which explains how these values
influence our business. All colleagues also complete annual Code of Conduct training to reinforce the importance of our values and
culture.
Individual performance evaluations consider both delivery of objectives and the demonstration of values-based behaviours, which in
turn inform reward outcomes. Local recognition schemes further encourage colleagues to demonstrate positive cultural behaviours
and support peer-to-peer recognition.
W
e further promote an inclusive culture through training such as Inclusive Leadership and through colleague led networks including
Male Allyship, Neurodiversity, LGBTQ+ and Women’s networks, which provide safe and supportive spaces for colleagues.
T
he Board has assessed and monitored how the Group’s desired culture is embedded across the organisation and reports on its
oversight activities and outcomes in line with the 2024 UK Corporate Governance Code.
We oversee the wider Benefact Group culture through employee engagement surveys, with results reviewed by the Board to assess
and monitor how the desired culture has been embedded. The Board receives regular updates on Diversity, Equity and Inclusion plans
and progress and through the Risk Committee, it also receives regular reporting on culture from a range of business areas, including
cultural status indicators, taking corrective action where necessary. Board members undertake site visits and meet colleagues to hear
first-hand their experiences of working within the Group.
A
key outcome during the year was the Group being awarded the UK’s No.4 Best Big Company to Work For by Best Companies in
2025, retaining the 3* World Class recognition in the UK and Ireland. Wellbeing provision for colleagues was also strengthened with
the introduction of neonatal miscarriage leave.
Key areas of focus for our Board during the year
O
ur Board and Committee meetings were held both in person and remotely throughout the year, supporting agile and effective
decision‑making. The outgoing Chair and the Senior Independent Director also held regular calls with the Non‑Executive Directors to
ensure open communication. Members of the General Management Board (GMB), together with other senior colleagues, attended
Board and Committee meetings to encourage open dialogue, provide insight into business performance, review progress, and help
inform priorities for EIO and its subsidiaries.
T
he Board operates to a structured annual programme of activities agreed by the Chair in collaboration with the Company Secretary
and, where appropriate, with input from the Group Chief Executive Officer. This programme covers strategy and performance, strategic
reviews, financial results, governance matters, legal and regulatory issues, colleagues, culture and values, and risk management. This
approach ensures that the Board’s discussions and decisions are well‑informed, appropriately sequenced, and aligned with the needs
of the business, while also taking account of the interests of our stakeholders. Further information on stakeholder engagement during
the year can be found in our Section 172 Statement and Stakeholder Engagement Disclosures.
A key area of focus for the Board during the year was overseeing the Chair succession process, which concluded with the appointment
of François Boisseau as successor to David Henderson. Further detail on this process is included in the Nomination Committee Report.
T
he following table summarises selected Board decisions and areas of focus during the year, together with the stakeholder groups
considered in each case. While not exhaustive, these examples reflect the breadth and depth of matters reviewed by the Board. T he
Board undertook these activities as part of its ongoing oversight of performance, risk and organisational development, ensuring that
each matter considered supported the Company’s strategic direction and long‑term value creation.
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A
s outlined in our Stakeholder Engagement disclosure, the stakeholder groups considered for these purposes comprise:
1
customers; 2 colleagues; 3 communities; 4 shareholders and investors; 5 suppliers (including brokers); 6 regulators and
governments; and 7 the environment
Consumer Duty Annual Update.
b-heard Survey Results:
During the year, the Board
The Board reviewed and approved the annual
reviewed the outcomes of the 2024 b
‑heard
Consumer Duty Assessment during the year. In
colleague engagement survey, reported in Q1 2025.
carrying out this review, the Board considered
The Board welcomed the strong participation rate of
evidence of the outcomes being delivered for
85%, viewing this as a positive indicator of colleague
customers and the effectiveness of the Company’s
engagement and trust in the process.
arrangements in ensuring that customers receive
products and services that meet their needs and offer
The Board was pleased to note that the Group
fair value.
achieved an ‘Outstanding’ rating, with the UK
business attaining a Three‑
Star World Class
The assessment demonstrated that the Company
accreditation. The Board considered these results to
continues to deliver good outcomes for its customers
be a strong reflection of the Group’s culture,
in line with the requirements of Consumer Duty. The
leadership behaviours and ongoing focus on
Board concluded that the Company’s approach
colleague experience. The insights from the survey
remains appropriate and effective, and it will continue
were discussed in the context of sustaining a healthy
to monitor performance and customer outcomes to
culture and supporting continued improvements in
ensure that standards are maintained and
engagement, performance and organisational
strengthened where necessary.
outcomes.
Stakeholders Considered: 1,2,5,6
S
takeholders Considered: 2,4,6,7,3
Health and Safety update
The Board received and
Global ERP Platform:
As part of its oversight of the
noted its annual Health and Safety update. As a
Company’s Invest strategic priority, the Board
result, the Board gained assurance on the
received regular updates on the selection and
effectiveness of the H&
S Management system,
implementation of a new global ERP platform for
compliance with legal regulatory requirements and
Group Finance. The Board monitored progress,
any trends in incidents and near misses.
sought assurance on programme deliver
y, and
reviewed expected benefits, noting that the platform
S
takeholders Considered: 2,6,1,3,5,4,7
is designed to drive material efficiencies, strengthen
financial processes, and enhance consistency across
the Group. These updates provided the Board with
Modern Slavery Act Statement 2025-26:
As part of
assurance that the investment remained aligned to
its oversight of culture and responsible business
the Company’s long‑term operational and strategic
practices under the Energise strategic initiative, the
objectives.
Board received an update on the Modern Slavery Act
and the findings of the 2024 House of Lords Select
Stakeholders Considered: 2,4,5,6,
Committee review of the Modern Slavery Act 2015.
The Board considered the outcomes of a Group
‑wide
gap analysis, noting that no material changes were
Corporate Governance Code training:
During the
required to ensure alignment with the Government’s
year, the Board undertook training on the
updated guidance for 2025.
forthcoming changes to the 2024 Corporate
Governance Code. The session enhanced the Board’s
The Board reviewed the strengthened Group Modern
understanding of the updated governance
Slavery Statement and took assurance that its
expectations and their implications for Board
principles are embedded across the organisation,
effectiveness, reporting, and oversight practices.
particularly within Procurement, where enhanced
controls and supplier oversight are in place. The
This training strengthened the Board’s ability to
Board also noted the positive cultural outcome of
provide informed stewardship, ensured that directors
sustained colleague engagement, with all staff
remained up to date with evolving regulatory
receiving regular training on modern slavery risks
standards, and supported the Company’s
and ethical conduct.
commitment to high‑
quality governance and
transparent reporting.
T
hese updates provided the Board with confidence
that the Group continues to uphold high standards of
S
takeholders Considered: 6,4,7,1,2,5
integrity, supports a culture of ethical behaviour, and
37
Ecclesiastical Insurance Office public l imited c ompany
Governance
maintains compliance with evolving regulatory
Dividend Recommendations:
During the year, the
expectations.
Board approved dividend payments to its parent
company, supporting the wider Group’s ability to
S
takeholders Considered: 5,1,2,6,3,4,7
deliver its charitable and community
‑fo
cused
objectives under the Giving strategy. In making this
DEI Training:
During the year, the Board participated
decision, the Board considered the Company’s
in dedicated training on Diversity, Equity and
financial position, capital requirements and long‑term
Inclusion (DEI). This formed part of the Company’s
sustainability, ensuring that the distribution was
ongoing commitment to fostering an inclusive culture
consistent with prudent financial management and
that supports the long
‑
term success of the
aligned with the Company’s strategic priorities.
organisation and reflects the values embedded within
the Group’s strategic framework.
These actions reinforced the Company’s purpose‑led
culture and enabled the Group to continue its
The training provided the Board with enhanced
distinctive approach to charitable giving. They
insight into evolving regulatory, workforce and
contributed to tangible societal outcomes and
societal expectations relating to DEI, and reinforced
directly supported the objectives of the Giving
the importance of inclusive leadership behaviours in
strategy.
shaping culture and decision
‑mak
ing. The session
also supported the Board’s understanding of how DEI
Stakeholders Considered: 4,1,2,6,7
considerations influence organisational resilience,
talent attraction and retention, and stakeholder trust.
Climate change update:
In line with the Company’s
adoption of Benefact Group plc’s climate change
B
y strengthening the Board’s capability and
strategy, the Board received an update from the
awareness in this area, the training underpinned the
Group Impact Director on key developments in
Company’s commitment to maintaining a positive,
climate‑related regulation and reporting, as well as
ethical and inclusive culture, one where we all
the broader media and political landscape. The Board
belong. For more information see the Responsible
also reviewed progress on the Group’s climate
Business Section of the Strategy Report.
commitments, including its work in relation to
recognised external frameworks.
S
takeholders Considered: 2,4,6,1,3,7
Reflecting the Company’s ambition to play our part in
Group Vision and Aspirations:
The Board considered
protecting our planet, the Board considered how the
and approved the Group’s Corporate Strategic Plan
evolving climate strategy supports the Group’s wider
for 2026–2028. In reviewing the Plan, the Board
societal and environmental objectives. A dedicated
focused on its alignment with the Group’s strategic
Board training session on climate change and
priorities, including the continued delivery of growth,
s
ustainability was scheduled for early 2026 to
efficiency and investment. The Plan also supports the
further strengthen Board capability and ensure
Group’s transition to its next strategic chapter,
effective oversight of climate matters.
scheduled for launch in mid-2026.
Further information on the Company’s climate
Management reported to the Board on the
change strategy is provided in the Responsible
governance, testing and assurance work undertaken
Business Section of the Strategic Report.
in the development of the Plan, including stress and
sensitivity analysis. The Board noted that the Plan
S
takeholders Considered: 7,6,3,4,1,5,2
reflects the Group’s commitment to sustainable,
profitable growth, incorporates efficiencies arising
General Insurance Growth:
As part of its oversight of
from operational improvement initiatives, and
the Company’s growth strategy, the Board received
provides for planned distributions consistent with the
regular updates on business performance and
Group’s broader responsibilities.
market activity. The Board noted continued strong
growth, with the business successfully attracting and
Having considered these factors, the Board
retaining high
‑
profile clients despite intensifying
concluded that the Plan appropriately supports the
competition across key geographies.
Group’s long-
term strategic objectives while
maintaining a robust solvency position over the
The Board also reviewed customer and broker
planning period. The Corporate Strategic Plan for
experience indicators, noting excellent levels of
2026–2028 was accordingly approved.
satisfaction, supported by leading NPS scores and
external recognition for service quality. The business
S
takeholders Considered: 4,6,1,2,5,7,3
further advanced its growth agenda through the
launch of a range of new specialist products and the
Improved Technological Capabilities:
The Board
enhancement of its customer proposition, including
received updates on the Group’s enhanced
technological capabilities and considered the related
38
Ecclesiastical Insurance Office public l imited c ompany
Governance
tailored value‑
added initiatives such as
benefits and risks. Through this oversight, the Board
masterclasses, training and podcasts.
helped ensure that the programme continued to
strengthen operational resilience, improve data
T
hese outcomes provided the Board with assurance
quality and reduce key technology‑
related risks
that execution of the growth strategy remained on
across the Group.
track and continued to strengthen the Company’s
competitive position.
Stakeholders Considered: 1,4,6,2,5
Stakeholders Considered: 1,4,5,6,2,7
AI and Data Strategy:
At its October Away Day, the
Board undertook a deep
‑dive
review of the Group’s
technology, data and AI strategy, recognising its
critical role in strengthening analytical capability,
supporting more informed decision
‑
making and
enhancing operational effici
ency. The Board’s
scrutiny and guidance during this session enabled
the further development of key AI initiatives and
improvements to data governance, helping to ensure
the Group is well
‑posi
tioned to adopt emerging
technologies responsibly and securely.
S
takeholders Considered: 5,1,2,4,3,
I
n addition to the matters outlined above, a key area of focus for the Board and its Committees during the year was the Company’s
preparedness for Operational Resilience. Throughout the year, the Board and its Committees (particularly the Risk Committee) engaged
both directly and indirectly with a range of stakeholders to ensure a comprehensive understanding of the potential impact of
Operational Resilience on customers, colleagues, regulators and other key stakeholders, as well as their respective interests and
views.
T
his engagement included discussions with colleagues, interactions with key regulators, and insights obtained through reporting from
executive management, to whom the day‑to‑day running of the business is delegated. These activities supported the Directors in
meeting their responsibilities under Section 172 of the Companies Act 2006.
Fu
rther information on how the Board oversaw the Company’s Operational Resilience readiness is set out below.
O
perational Resilience Readiness and Self-Assessment
During the year, the Board determined to prioritise further investment in the Company’s operational resilience capabilities in order to
meet its regulatory obligations under PRA SS1/21 and FCA PS21/3, and to support the long‑term sustainability of the business. In
discharging its duties under section 172 of the Companies Act 2006, the Board considered the importance of maintaining reliable,
secure and resilient operations for the benefit of customers, employees, regulators and other key stakeholders.
Through the Risk Committee, the Board oversaw progress against the Company’s operational resilience plan. This included approving
the Operational Resilience Policy and associated standards, and reviewing and agreeing the Company’s Important Business Services,
impact tolerances and testing approach. All work was completed ahead of the 31 March 2025 regulatory deadline.
I
n March 2025, the Board reviewed and approved the annual operational resilience self‑assessment and concluded that, subject to
two identified risks relating to reliance on third‑party providers Microsoft and BT, the Company remained operationally resilient. The
Board noted that these risks had been disclosed to the Regulators and was satisfied with the robustness of the resilience tes ting
undertaken. The self‑assessment and proposed changes to impact tolerances were approved and submitted to the Regulators.
T
his decision directly supports the Company’s strategic theme of Invest through continued enhancement of critical operational
capabilities and infrastructure. These actions strengthen the Company’s long‑term resilience, underpin stakeholder confidence and
support the successful delivery of its strategic ambitions.
39
Ecclesiastical Insurance Office public l imited c ompany
Governance
Whistleblowing
T
he Company has adopted Benefact Group plc’s Whistleblowing policy, and the Committee continues to oversee whistleblowing
procedures for the Company. For more information on this, please refer to the Audit Committee Report.
C
onflicts of interest
I
n accordance with the Companies Act 2006 and the Company’s Articles of Association, the Group Company Secretary maintains a
formal Register of Directors’ Conflicts to monitor and manage any actual or potential conflicts of interest. All Directors receive training
on their statutory duties under the Companies Act 2006 and are regularly reminded of their obligations to act in the best interests of
the Company.
D
irectors are required to declare any actual or potential conflicts of interest at the earliest opportunity, typically at the first Board
meeting following identification. Such declarations are recorded in the conflicts register and reviewed by the Board i n line with the
provisions of the Companies Act 2006 and the Company’s Articles of Association. To ensure ongoing compliance, Directors review and
confirm the accuracy of their recorded interests on a biannual basis.
T
he Board also oversees procedures for managing conflicts arising in trading relationships, including those involving brokers and the
general insurance business. These procedures are designed to ensure that customer interests remain paramount and that all dealings
are conducted with integrity, transparency, and a commitment to delivering the best possible outcomes for customers.
D
ivision of responsibilities
T
he Board maintains a clear division of responsibilities between executive and non-executive roles to ensure effective oversight,
accountability, and independence. These responsibilities are formally documented, reviewed regularly by the Board, and
communicated through the Company’s governance framework.
T
he roles of the Chair and Group Chief Executive are undertaken by separate individuals, as illustrated in the governance structure
chart below, in accordance with best practice under the Code. The Chair is responsible for leadership of the Board and ensuring its
effectiveness, while the Group Chief Executive is accountable for the operational management and delivery of the Group’s strategy.
T
o strengthen governance and stakeholder engagement, the Board has designated Non-Executive Directors as champions for key
areas, including workforce engagement and climate change.
Throughout the year, the former Chair, David Henderson, held meetings with Non-Executive Directors without Executive Directors
present, providing an opportunity for open discussion and independent challenge. Separately, the Group Chief Executive, Mark Hews,
met regularly with the Group Management Board to oversee day-to-day operations. Matters of significance arising outside the
scheduled Board meetings were promptly communicated to Directors to ensure timely oversight and decision-making.
An overview of the Board composition and its governance structure as at 19 March 2026 is set out below:
Governance Structure
D
ocuments available at ecclesiastical.com
•
Articles of Association
• Matters Reserved to the Board
• Committee Terms of Reference
The Board
As a subsidiary of Benefact Group plc, the Board have adopted Benefact Group’s Governance Framework, which facilitates
transparency, accountability and effective decision making within a framework of prudent and effective controls.
T
he Board’s role is to provide entrepreneurial leadership of the Group within the approved framework of prudent and effective
controls which enables the risks which the Group faces to be assessed and managed. The Board sets the Group's high level strategic
aims, ensures that the necessary financial and human resources are in place for it to meet its objectives and reviews management
performance. The Board sets the Company’s values and standards and ensures that its obligations to its customers, its shareholders
and other stakeholders are understood and met.
40
Ecclesiastical Insurance Office public l imited c ompany
Governance
Chair, François-Xavier Boisseau
Senior Independent Director, James Coyle
Non-executive Directors, Karen Best,
The Chair is responsible for the active
The Senior Independent Director supports
James Coyle, Jane Dale, Sir Stephen
leadership of the Board, ensuring its
and acts as a sounding board for the Chair
Lamport and Michael Murphy,
effectiveness in all aspects of its role.
and is responsible for overseeing the
Non-
Executive Directors have a
The Chair is pivotal in creating the
governance practices of the Company and
responsibility to uphold high standards
conditions for overall board and
leading the directors in their appraisal of the
of integrity and probity including acting
individual director effectiveness,
Chair. Along with the Chair, the Senior
as both internal and external
setting clear expectations concerning
Independent Director is the primary contact
ambassadors of the Company. As part of
the style and tone of board
for the shareholder and they meet regularly
their role as members of a unitary board,
discussions, ensuring the Board has
with the shareholder to share and
Non-
Executive Directors should
effective decision-
making processes
understand views.
c
onstructively challenge and help
and applies sufficient challenge to
develop proposals on strateg y.
major proposals.
Committees
T
he Board has established four principal Committees, each operating under formally approved Terms of Reference, to which it
delegates specific responsibilities. These Committees play a vital role in supporting the Board’s oversight and governance, and they
collaborate closely where matters overlap. For example, the Audit Committee and Risk Committee work together on issues relating
to internal controls and risk management.
Fol
lowing each meeting, the respective Committee Chair provides a comprehensive update to the Board, ensuring transparency
and enabling informed decision-making across all areas of governance.
An outline of the Committees' roles and responsibilities is set out below. For more detail on the work of each committee please refer
to the individual committee report within these Report and Accounts.
Audit Committee
Risk Committee
Group Nominations
Group Remuneration
Committee
Committee
O
versees financial,
O
versees the Risk Management
climate, non-financial and
Framework including risk appetite
T
his is a joint committee with
T
he Group Remuneration
regulatory reporting
and tolerance; the risk and
Benefact Group plc. The
Committee is a joint
processes; internal
compliance functions; and reviews
Group Nominations
committee with Benefact
controls; whistleblowing
prudential risk (including
Committee ensures that there
Group plc. It determines
arrangements; tax
overseeing the capital model),
is an appropriate balance of
the Group’s Remuneration
strategy and policies;
conduct risk and climate change
skills, knowledge and
Policy and ensures there is
internal audit function;
risk.
experience on the Board, its
alignment between
and manages the
committees and within the
performance and reward.
relationship with the
Group’s subsidiary
external Auditor.
companies.
Group Chief Executive, Mark Hews
The Board delegates the execution of the Company’s strategy and day-to-day management of the business to the Chief Executive,
assisted by members of the Group Management Board (GMB).
Deputy Group Chief Executive, Jacinta
Group Chief Financial Officer, Mark Bennett
Group Company Secretary, Rachael Hall
Whyte
The Group Chief Financial Officer is
The Company Secretary is responsible
The Deputy Group Chief Executive is
accountable to the Group Chief Executive for
for compliance with board procedures,
accountable to the Group Chief
the financial management of the Group and
advising the Board on all governance
Executive for leading the general
for ensuring that it complies with its
matters, supporting the Chair and
insurance businesses.
statutory and regulatory reporting
helping the Board and its Committees to
requirements.
function efficiently. All Directors have
access to the advice of the Company
Secretary.
41
Ecclesiastical Insurance Office public l imited c ompany
Governance
B
oard attendance at meetings in 2025
I
n 2025, the Board held six scheduled meetings, two additional meetings, and one away day held jointly with the Benefact Group plc
board. I n addition, the Board participated in regular training sessions. Below is a record of the Directors’ attendance for Board meetings
during 2025. Details of committee attendance can be found in the individual committee reports.
W
here a Director was unable to attend a particular meeting, meeting papers were issued to them in advance and they had the
opportunity to provide comments to the Chair of the Board or to the relevant Committee Chair.
Date Venue Scheduled / Ad
D Henderson M Bennett K Best F Boisseau J
hoc
Coyle
04.02.25 Glos Scheduled





20.03.25
London
Scheduled





21.05.25 London Ad hoc



A

11.06.25 Teams Ad hoc





26.06.25
Glos
Scheduled





23.09.25
London
Scheduled





08.10.25 London Away Day





– joint with BG
26.11.25 London Scheduled





8/8 8/8 8/8 7/8 8/8
Date
Venue
Scheduled / Ad
M Darby-
M Hews
S Lamport
A Winther
J Whyte
hoc
Walker
04.02.25 Glos Scheduled





20.03.25 London Scheduled





21.05.25
London
Ad hoc





11.06.25 Teams Ad hoc





26.06.25 Glos Scheduled





23.09.25
London
Scheduled



-

08.10.25 London Away Day
A


-

– joint with BG
26.11.25 London Scheduled A


-

6/8 8/8 8/8 5/5 8/8
• A
Winther retired from the Board on 26 June 2025. He attended all applicable meetings during the year.
• M
Murphy appointed to the Board from 3 December 2025
• J Dale appointed to the Board on 3 February 2026.
Board Composition up to the date of this report
T
he table below details Board and Board Committee Composition Changes in 2025 and prior to publication of this r eport.
Board
Audit Committee
Risk Committee
Joint Nominations
Joint Remuneration
Committee
Committee
Mark Bennett
Angus Winther
Michael Murphy
David Henderson
David Henderson
Appointed 1 January 25
Stepped down 26 June
Appointed 3 December
Stepped down 31
Stepped down 31
25
25
December 25
December 25
A
ngus Winther
Retired 26 June 25
F
rançois Boisseau
M
aria Darby-Walker
A
ngus Winther
F
rançois Boisseau
Stepped down 31
Stepped down 31
Stepped down 26
Appointed 23
Michael Murphy
December 25
December 25
June 25
September 25.
Appointed 3 December
25
J
ane Dale
F
rançois Boisseau
F
rançois Boisseau
42
Ecclesiastical Insurance Office public l imited c ompany
Governance
Maria Darby-Walker
Appointed 3 February
Stepped down 31
Appointed 23
Resigned 31 December
26
December 25
September 25
25
M
ichael Murphy
J
ane Dale
David Henderson
Appointed 3 December
Appointed 3 February
Resigned 31 December
25
26
25
F
rançois Boisseau
Appointed as Chair and
stepped down as Senior
Independent Director 1
January 26
Ja
mes Coyle
Appointed as Senior
Independent Director 1
January 26
J
ane Dale
Appointed 3 February 26
Internal controls
T
he Board is ultimately responsible for the systems of risk management and internal control maintained by the Group and reviews
their appropriateness and effectiveness annually. The Board views the management of risk as a key accountability and is the
responsibility of all management and believes that, for the period in question, the Group has maintained an adequate and effective
system of risk management and internal control that complies with the Code. Further details are set out in the Risk Management
Report.
The Group embeds risk management into its strategic and business planning activities whereby major risks that could affect the
business in the short and long term are identified by the relevant management together with the assessment of the effectiveness of
the processes and controls in place to manage and mitigate these risks.
As part of the Benefact Group, EIO has adopted the Benefact Group’s internal control framework. In doing so, the Board acknowledges
its responsibility in setting the tone for the Company and creating a high degree of control consciousness in all employees.
A Code of Conduct and a Code of Ethics are embedded into the culture of our business and is accessible to all colleagues via the
intranet.
Assurance on the adequacy and effectiveness of internal control systems is obtained through management reviews, risk and control
self-assessment, second-line reviews conducted by Group Risk and Compliance and EIO’s internal audit programme.
Systems of internal control are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can
provide reasonable, but not absolute assurance as to the prevention and detection of financial misstatements, errors, fraud or violation
of law or regulations. Further information on internal controls is set out in the EIO Audit Committee Report.
EIO, along with the Group, is well advanced in its work to implement Provision 29 of the Code.
B
y order of the Board
Rachael Hall,
Group Company Secretary
19 March 2026
43
Ecclesiastical Insurance Office public l imited c ompany
Governance
No
minations Committee Report
Committee member
Member since
Meetings attended
Chris Moulder (Chair)
Chris Moulder
November 2019
3/3
François Boisseau September 2025 1/1
James Coyle
June 2025
1/1
1
David Henderson
January 2018
3/3
2
Angus Winther
May 2021
1/2
1
Stepped down 31 December 2025
2
Stepped down 26 June 2025
Dear Stakeholder
I am pleased to present the Group Nominations Committee’s Report for the year-ending 31 December 2025. This is a joint Committee
of EIO and Benefact Group plc. I am a Non-Executive Director and Senior Independent Director of Benefact Group plc and Chair the
Group Nominations Committee on behalf of both Boards.
Chris Moulder, Group Nominations Committee’s Chair
12 March 2026
C
ommittee composition and activity during 2025
The Group Nominations Committee is chaired by the Senior Independent Director of the Benefact Group plc. Given its Group remi t, the
membership of the Committee comprises a majority of independent Non-Executive Directors from either the Boards of EIO or Benefact
Group plc. Angus Winther stepped down from the Committee in June 2025. James Coyle and François Boisseau were appointed to the
Committee in June and September respectively.
The Committee’s focus in 2025 has been on the succession of the Chair for EIO and Benefact Group plc and dealing with any
subsequent changes to the composition of the Board. The Committee ensures that the Board, Board Committees and Executive Team
continue to have the right composition of skills, experience, knowledge and diversity of thought, as well as robust succession planning
to support the delivery of the Group’s strategy.
In 2025, the Board approved the appointment of François Boisseau as Chair to succeed David Henderson. In addition, Michael Murphy
was appointed to the Board as a Non-Executive Director to succeed Neil Maidment who resigned down from the Board at the end of
2024. Angus Winther retired from the Board at the AGM in June and Maria Darby-Walker stepped down from the Board in December.
The Committee also oversaw changes to the composition of the Board Committees, the Executive Team and changes to subsidiary
Boards. As reported last year, Mark Bennett was appointed as Group Chief Financial Officer with effect from 1 January 2025 to succeed
Denise Cockrem who retired during 2024.
B
oard Composition and changes during the year
The Committee keeps under review the Board’s composition and its Non-Executive Director recruitment priorities. Succession planning
is a fundamental part of the Committee’s remit.
The Corporate Governance Report includes more information on the changes to the Board and Board Committees during the year and
prior to publication of this report.
A
ppointment of New Chair
Du
ring the year, the Senior Independent Director led the process for appointing a new Chair (to serve as Chair to EIO and Benefact
Group plc). The desired qualities for the Chair along with the protocol for appointment were distributed to all the existing Non-Executive
Directors of EIO and Benefact Group plc and expressions of interest were received by three Directors who were all considered credible
candidates.
An
Appointments Panel was established which comprised the Group Nominations Committee Chair, two non-conflicted Directors on
the Board and a representative from the ultimate Shareholder. Odgers, a recruitment agency, was engaged to evaluate each of the
candidates with a series of questionnaires and an interview. Feedback from Odgers was considered by the Panel. Each candidate was
interviewed by the Appointments Panel and separately by the Group Chief Executive Officer. The views of those Directors not involved
with the process were sought. The Panel met to evaluate all the feedback and a preferred candidate was selected. The Board
subsequently approved that François-Xavier Boisseau be elected as the next Chair with effect from 1st January 2026 to succeed David
Henderson. François joined the Board in 2019 and has extensive experience in insurance which has been developed during his
executive and non-executive career extending to over 35 years in the financial services industry. He is well placed to lead the Board
as its Chair.
44
Ecclesiastical Insurance Office public l imited c ompany
Governance
T
hroughout the process, the Regulator was engaged at every stage including the desire that the new Chair serve for five years which
would take the preferred candidate over his natural term by two years. The PRA considered the appointment including the desired
tenure and, following an interview, regulatory approval was given.
David Henderson stepped down from the Board on 31 December 2025 having served as a Director for nine years and Chair for six
years. The Committee and the Board are very grateful for the significant contribution he has made to the Group.
A
ppointment of New Non-Executive Directors
An Appointments Panel comprising Chris Moulder, David Henderson, and Rachael Hall was formed for the recruitment of at least two
new Non-Executive Directors with extensive senior experience in insurance and actuarial to succeed Neil Maidment and François-
Xavier Boisseau (on assuming the Chair role). A Position Specification for the roles based on objective criteria and having regard t o the
outcome of the Board skills analysis was developed.
Fol
lowing a tender process, Odgers (who had no connection to the Group other than supporting Executive assignments) was engaged
to support the recruitment process.
H
aving due regard to the Board’s diversity and inclusion ambitions, the skills and competences outlined in the specification, and the
Company’s ethics, culture and values, Odgers drew up a list of potential candidates. This long-list was reduced to a short-list by the
Appointments Panel and interviews were held. The Board appointed Michael Murphy on 3 December 2025. As part of the search, two
additional candidates were identified from other sources and Jane Dale was appointed on 3 February 2026 and Gail Tucker will be
appointed on 1 May 2026.
S
enior Independent Director and Chair of the Risk Committee
Having been appointed to the Chair, François-Xavier Boisseau stepped down from his existing roles as Senior Independent Director
and Chair of the EIO Risk Committee at the end of the year.
With effect from 3 February 2026, and having received approval from the Regulator on 3 February 2026, Michael Murphy was
appointed as Chair of the EIO Risk Committee succeeding François-Xavier Boisseau.
With effect from 1 January 2026, and having received approval from the Regulator, James Coyle was appointed as Senior Independent
Director succeeding François-Xavier Boisseau.
Size of the Board
The Committee considers that the size of the Board contributes to its effectiveness and longer-term success. The optimal size of the
Board is considered to be 10-11. As at the date of this report, the size of the Board is nine (10 with effect from 1 May 2026) which is
considered the right size to operate in an efficient and collaborative manner and to ensure an appropriate mix of skills and diversity to
support succession planning and to accommodate the additional roles and responsibilities of some of the Directors on Board
Committees.
Diversity
The Company recognises the benefits of an inclusive and diverse Board and is committed to improving diversity on the Board. It believes
that diversity both strengthens the Board and business performance. The Board will take opportunities, as and when appropriate, to
further improve diversity in its broadest sense (including ethnicity, skills, regional and industry experience, background, age, gender
and other distinctions) as part of its recruitment practice. However, the Board believes the approach to diversity and inclusion should
not be a ‘tick box exercise’ but an opportunity to continue to build a cohesive and robust leadership. Ultimately, all appointments should
be made on merit with directors able to bring a range of thoughts and opinions to avoid ‘Groupthink’.
G
ender and ethnic diversity reporting
Disclosures in the form prescribed by the UK Listing Rules of the FCA r
elating to gender and executive management are set out in the
table below.
T
his section details disclosures in the form prescribed by the UK Listing Rules requirements relating to gender and ethnic diversity of
the Board and executive management.
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EIO plc
Number of
Percentage
Number of
Number in
Percentage of
board
of the board
senior
executive
executive
members
positions on
management
management
the board
(CEO, CFO,
SID and
Chair
Men
6 (7) 66.7% (70%) 4 (4) 7 (7) 87.5% (87.5%)
Women 3 (3) 33.3% (30%) 0 (0) 1 (1) 12.5% (13%)
Other categories
-
-
-
-
-
Not specified / Prefer not to say
-
-
-
-
-
Data relating to the gender and ethnic diversity of the Board was collected by way of a questionnaire as part of the annual year end
attestation process. This questionnaire asked Board members to disclose their gender identity and ethnic background, on a voluntary
self-reporting basis, by selecting options aligned with those in the left-hand columns of the tables (including the option not to specify
an answer). Group employees (including executive management) are asked to confirm their gender and ethnicity at the application
stage of their recruitment. Gender and diversity data of executive management was sourced from this existing data, which is held within
Group HR’s secure system.
EIO plc Number of
Percentage
Number of
Number in
Percentage
board
of the board
senior
executive
of executive
members
positions on
management
management
the board
(CEO, CFO,
SID and
Chair
White British or other White
8 (9) 88.9% (90%) 4(4) 8 (7) 100% (100%)
(including minority-white groups)
Mixed/Multiple Ethnic Groups - - - - -
Asian/Asian British
-
-
-
- -
Black/African/Caribbean/Black
1 (1) 11.1% (10%) - - -
British
Other ethnic group, including Arab
-
-
-
- -
Not specified/ prefer not to say - - - - -
Data relating to the gender and ethnic diversity of the Board was collected by way of a questionnaire as part of the annual year-end
attestation process. This questionnaire asked all individual Board members to disclose their gender identity and ethnic background, on
a voluntary self-reporting basis, by selecting options aligned with those in the left-hand columns of the tables above (including the
option not to specify an answer).
Group employees (including executive management) are asked to confirm their gender and ethnicity at the application stage of their
recruitment. Gender and diversity data of executive management was sourced from this existing data, which is held within Group HR’s
secure system.
B
oard Diversity Policy
On recommendation of the Committee, the Board adopted a revised version of the Board Diversity Policy on 26 November 2025.
T
he Board’s Diversity Policy includes objectives which align with the diversity and inclusion targets set out in the Listing Rules. The
Board’s Diversity Objectives are set out in the table below.
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T
he Committee was conscious that improvements were required in relation to the diversity of the Board and its Committees particularly
in terms of female representation which it has actively addressed during the year. In line with the expectations of the FC A, the
Committee will continue to make this a consideration when recruiting new directors in the future.
The Board is disappointed that it has been unable to achieve two of the objectives as at 31 December 2025 and will continue to focus
on them during 2026.
Board Diversity Objective
Implementation and progress
At least 40% of the Board are women. This objective has not been met during the year. The Board have concentrated
on building a diverse pipeline and two female directors have been recruited
and, as previously stated, will take up their posts in 2026. This will remain an
area of focus.
At least one of the senior positions on the Board
The Board are conscious that one of the senior positions on the Board should
(defined as Chair, Chief Executive, Senior
be female and have concentrated on recruiting new female directors to build
Independent Director and Chief Financial Officer)
the pipeline for senior positions on the Board. The Board plans to fulfil this
is held by a woman.
requirement by the end of 2026.
At least one director is from a minority ethnic
One member of the Board is from an ethnic minority background.
background.
N
umerical information, together with detail relating to the approach taken to collate this diversi ty data in accordance with UKLR 6.6.6
R(9) is set out in the Board Diversity Schedule.
G
ender and ethnic diversity within the Executive Team and its direct reports and the wider workforce
For further information on gender and ethnic diversity within the Executive Team, its direct reports, and the wider workforce, please
refer to the Strategic Report
Non-Executive Directors’ Length of Service
The Committee monitors the tenure of all Directors, as reflected in the Board diversity table, and each Director’s individual tenure is
disclosed within their biography.
N
on-Executive Director’s Independence
In line with the requirements of the Code, a majority of our Board comprises independent Non-Executive Directors.
I
ndependence is reviewed as part of each director’s annual effectiveness review, considered by the Committee and agreed by the
Board annually. The Committee has considered the circumstances and relationships of all Non-Executive Directors and, following
rigorous review, the Committee confirmed to the Board that a majority of the Non-Executive Directors remained independent in
character and judgement. No individual participated in the discussions relating to their own independence. One Non-Executive Director
(and two Executive Directors) remain directors of the Company’s immediate parent, Benefact Group plc and are not deemed to be
independent.
D
uring the year, François-Xavier Boisseau was also a director on the Board of Benefact Trust Limited and the Company (‘a common
director’); he stepped down from the Board of Benefact Trust Limited on 31 December 2025. Sir Stephen Lamport, who was previously
a common director with the Trust, was reappointed to the Board of Benefact Trust Limited with effect from 1 January 2026. The
common directorship model is regarded as good practice with a charity that owns a trading subsidiary and these common directors
enable the Trust to gain a thorough understanding of its subsidiary company’s performance and the strategic issues it faces, and for
the subsidiary to understand the expectations of its parent company. With these factors in mind, the Committee and the Board consider
it appropriate that a common director is regarded as an independent Non-Executive Director. A joint Company and Benefact Trust
Limited Nominations Committee Meeting is held annually, amongst other things to consider the appointment of common directors.
Time Commitment
Prior to their appointment to the Board, all proposed new Directors are asked to disclose their other significant commitments, which
are reviewed by the Committee and the Board when considering their appointment to ensure they can discharge their responsibilities.
Expected time commitments are agreed with each Non-Executive Director on an individual basis and include time to attend and prepare
for Board and Board Committee meetings and to undertake training. During the induction period, a new Non-Executive Director will be
expected to devote additional time to gain an understanding of the business.
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T
he Committee evaluates the time Non-Executive Directors spend on the Company’s business annually and is satisfied that, in 2025,
the Non-Executive Directors continued to be effective and fulfilled their time commitment as stated in their letters of appointment.
E
xternal directorships are considered to be valuable in terms of broadening the experience and knowledge of Executive and Non-
Executive Directors. Prior to approving any significant new external commitment for a Director, the Board will consider the nature of
the role, the existence of any actual, potential or perceived conflict of interest, and ensure the commitment required is not excessive.
The Conflicts Register maintained by the Group Company Secretary is used to monitor external interests. Any monetary payments
received by Executive Directors from outside directorships are paid over to and retained by the Company.
Director training and development
The Committee and the Group Company Secretary support the Chair in developing and monitoring effective induction, training and
development for the Board.
A
ll Directors undertake a formal, comprehensive and tailored induction upon joining the Board designed to provide them with an
understanding of the operation of the Group, its purpose, values and strategy and key business areas and functions. This includes
sessions with key SMEs across the Company. When a Director is joining a Board Committee, their induction schedule will also include
an induction to the operation of that Committee.
I
n addition, the annual training schedule of the Board is developed in consultation with the Committee, the Executives and key SMEs
around the Company before being approved by the Board. It is dynamic and can change to reflect the needs of the Board. Any Director
may request further training to support their individual or collective needs. Throughout the year, the Directors continued to deepen
their understanding of the business through Board deep dives as well as receiving training on IFRS17 (reflections and market insight),
the revised UK Corporate Governance Code and Diversity, Equality and Inclusion.
The Group Company Secretary maintains annual Continuing Professional Development (CPD) records for all directors.
Succession Planning and Talent Development
The Committee oversees succession planning to ensure that the Company strikes the right balance of skills, experience, diversity of
thought and effectiveness on the Board, its Committees and the Executive Team. Succession planning takes into account the
Company’s strategic ambitions, opportunities and challenges faced as well as considering both current and anticipated future business
needs.
I
n terms of Board and Committee Succession, the Committee regularly reviews the composition of the Board to ensure that its members
have the right balance of skills and experience to support the delivery of the Company’s Strategy. Each role is considered in terms of
an emergency, short-term and long-term successor. This is supported by a robust skills analysis which is conducted for all directors
annually. The Committee uses the results of the succession planning and skills analysis exercise to refresh the Board’s Non-Executive
Director recruitment priorities and to lead the search process for any new Board appointments.
D
uring 2025, the Committee focused on finding a successor for David Henderson as Chair and subsequently for François-Xavier
Boisseau as Senior Independent Director and Chair of the Risk Committee. The successors for the Chair and the Senior Independent
Director had been identified by the succession planning process. The successor for the Chair of the Risk Committee was an external
recruit. In 2026, the Committee will focus on strengthening the accounting and audit skills on the Board as well as continuing to focus
on diversity.
T
he composition of the Executive Team must comprise the right balance of skills, experience and diversity of thought to drive the
delivery of the strategy agreed by the Board. Consequently, the Committee regularly reviews the succession plans and approves any
changes to the Executive Team, their immediate direct reports and the Board composition of Subsidiary Boards. The Committee also
reviews the development of talent across the broader Group ensuring a diverse pipeline of talent is in place.
B
oard Effectiveness and Performance
In accordance with the UK Corporate Governance Code 2024, the Committee ensures that a formal and rigorous annual evaluation of
the performance of the Board, its Committees and each Director is undertaken. The Company operates a structured evaluation cycle
that includes internally facilitated reviews in most years, complemented by an externally facilitated review at least every three years
to ensure robust scrutiny and continuous improvement in Board effectiveness.
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T
he 2025 Board and Committee effectiveness reviews were internally facilitated and took place in January 2026, assessing
performance over the 2025 financial year. The evaluation process was overseen by the Chair, with support from the Company
Secretariat, who administered questionnaires and collated responses.
The evaluation of the Chair was led by the Senior Independent Director in line with the requirements of the Code. All Directors took
part in individual effectiveness reviews in January 2026, and the Committee concluded that each Director continued to perform
effectively and contribute positively to the Group’s long-term sustainable success. In accordance with the Code, all Directors continuing
in office intend to offer themselves for election or re-election at the 2026 AGM.
The evaluation confirmed that the Board and its Committees continued to operate effectively and that they maintained a constructive
culture of challenge, open discussion and accountability. The Board discussed the outcome of the evaluation including the significant
strengths underpinning the effectiveness of the Board and agreed some key areas of focus for 2026.
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R
isk Committee Report
Michael Murphy
EIO Risk Committee member
Member since
Meetings attended
1
(Chair)
François-Xavier Boisseau
September 2024 7/7
James Coyle
September 2024 7/7
2
Maria Darby-Walker
September 2024 5/7
3
Sir Stephen Lamport
September 2024 6/7
4
Michael Murphy
December 2025 0/0
5
Jane Dale
February 2026
0/0
1
François-Xavier Boisseau stepped down from the Committee as a member and Chair on 31 December 2025.
2
Maria Darby-Walker was unable to attend two meetings this year. She stepped down from the Committee on 31 December 2025.
3
Sir Stephen Lamport did not attend the Committee’s meeting in July due to other professional commitments.
4
Michael Murphy was appointed as a member of the Committee on 3 December 2025 and took up the role of acting Chair on 1 January 2026, subject to
regulatory approval, which was received on 3 February 2026
5
Jane Dale was appointed as a member of the Committee on 3 February 2026.
D
ear Stakeholder
I am pleased to present this report as Chair of the Risk Committee.
The Committee was established by the Board in September 2024 primarily to provide oversight and advice to the Board on current
and future risk exposures, by reference to strategic developments, including determining risk appetite, tolerances and culture.
François-X
avier Boisseau stepped down as a member and Chair of the Committee on 31 December 2025 when he took up the role of
Chair of the Board. I take this opportunity to thank François for his leadership of the Committee since its inception. I joined the Committee
on 3 December 2025 and have succeeded François as Chair. Maria Darby-Walker also stepped down from the Committee on 31
December 2025 and we thank Maria for her contribution. We also welcomed Jane Dale as a member of the Committee on 3 February
2026.
This r
eport describes the work undertaken by the Committee during 2025 to monitor the risk management framework; the Internal Model;
solvency; capital management; operational resilience and other material risks, paying close attention to impacts from the int ernal and
external environments.
The Board has voluntarily chosen to include this report in addition to the disclosures in the Risk Management Report and Principal Risks
sections. The latter sets out the principal risks and uncertainties. The Committee has reviewed these in detail and is comfortable that
the business has addressed them appropriately taking account of the ongoing operating model and strategic priorities.
Michael Murphy
Chair of the Risk Committee
19 March 2026
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Areas of focus during 2025
In 2025, the Committee continued to oversee risk and compliance monitoring and oversaw the management of key risks, taking account
of direct and indirect impacts from the external environment which included geo-political risks, cyber risk, climate change and adverse
weather events, and regulatory change. In relation to the latter, areas of focus for the Committee during the year included overseeing
the Company’s response to regulation relating to operational resilience; third party risk management; and solvent exit analysis.
During the year, the Committee received reports on risk and compliance monitoring and assurance; underwriting and insurance risk;
market and investment risk; material outsourcing and third-party risk; operational resilience and business continuity; data
management; AI and cyber risk; and the Consumer Duty.
Individual reports were also received from the Actuarial Function (on reinsurance, underwriting and pricing); the Money Laundering
Reporting Officer; and the Data Protection Officer.
Throughout the year, the Committee monitored the ongoing use, development, governance and calibration of the Internal Model;
oversaw independent validation; and recommended Model changes and management actions to the Board. The Committee also
reviewed the Operational Resilience Self-Assessment, and the Own Risk and Solvency Assessment, recommending both to the Board
for approval.
Additionally, the Committee oversaw the development and implementation of the risk management framework and recommended
a
ppropriate risk appetite changes to the Board. The Committee also considered the design and operating effectiveness of the system
of internal control and risk management including financial, operational, reporting and compliance controls.
Meetings of the Risk Committee were attended by the Group Chair, Deputy Group Chief Executive, Group Chief Risk and Compliance
Officer, Group Chief Financial Officer, Group Underwriting Director, and Group Chief Internal Auditor.
The Group Chief Risk and Compliance Officer reports to the Committee on a regular basis and has direct access to the Committee Chair
and the Non-Executive Directors. The Committee ensures that it meets with the Group Chief Risk and Compliance Officer at least
annually without other management present.
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Audit Committee Report
EIO Audit Committee member
Member since
Meetings attended
James Coyle (Chair)
James Coyle (Chair) September 2024 6/6
1
François-Xavier Boisseau
September 2024
5/6
2
Angus Winther
September 2024
4/4
3
Michael Murphy
December 2025 0/0
4
Jane Dale
February 2026 0/0
1
François-Xavier Boisseau stepped down as a member of the Committee on 31 December 2025 on his appointment
as Chair of the Board. He was unable to attend one meeting this year due to a professional commitment.
2
Angus Winther was a member of the Audit Committee until 26 June 2025, when he retired from the Board.
3
Michael Murphy was appointed a member of the EIO Audit Committee on 3 December 2025. No meetings for the
year have been held since his appointment.
4
Jane Dale was appointed as a member of the Committee on 3 February 2026.
Dear Stakeholder
I am pleased to introduce my report on the work undertaken by the Committee during the 2025 financial year.
During the year, the Committee saw several changes to its membership. Angus Winther stepped down on 26 June 2025 and François-
Xavier Boisseau stepped down on 31 December 2025 following his appointment as Chair of the Board. We were pleased to welcome
Michael Murphy in December 2025 and Jane Dale in February 2026. I would like to thank all Committee members for their continued
contribution and support throughout the year.
The Committee was established by the Board to monitor the integrity of the Group’s financial and regulatory reporting, its internal
financial control processes, and its internal and external audit arrangements. A core part of our role is to provide challenge and
oversight to ensure that the Group’s reporting is accurate, transparent and based on appropriate judgements.
Strengthening the Group’s financial control environment remained a significant focus in 2025. Work included supporting preparations
for the Group’s approach to Provision 29 of the Corporate Governance Code and the effectiveness of material controls, which will be
reported on within the 2026 Annual Report and Accounts. The Committee also continued to monitor emerging developments and
external risks to ensure that controls and reporting processes remain responsive and robust.
As outlined in the Corporate Governance Report, the Group has adopted Benefact Group plc’s Governance Framework. Within that
framework, the Committee plays a vital role in providing independent scrutiny across financial reporting and internal control activities.
We ensure the interests of shareholders are protected by overseeing the accuracy, integrity and clarity of financial reporting, and by
reviewing the effectiveness of the Group’s control environment and risk management strategies.
The Committee remains satisfied that the Group maintained a strong risk management and internal control culture throughout 2025,
underpinned by sound governance practices.
J
ames Coyle
Chair of the Audit Committee
19 March 2026
M
embers of the Committee
Committee members are Non-Executive Directors and bring a wide range of financial, risk, control and commercial expertise, with a particular
depth of experience in the insurance sector that are necessary to fulfil the Committee’s duties and enable the Committee to challenge and
scrutinise management’s work. The Board considers that the Committee has recent and relevant financial experience and accounting
competence and that the Committee as a whole is appropriately competent in the sectors in which the Group operates.
Committee meetings
In addition to the members of the Committee, regular attendees of meetings included the Chair of the Board, Group Chief Executive Officer,
Deputy Group Chief Executive, Group Chief Financial Officer, Group Chief Internal Auditor, Group Chief Risk and Compliance Officer and the
external auditors. Other subject matter experts are invited to attend certain meetings in order to provide insight into key matters and
developments.
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In 2025, the Group’s external auditors, PricewaterhouseCoopers LLP (PwC), attended all six of the Committee’s meetings. During the year,
the Committee met privately with the external auditors without management present.
T
he Committee’s key responsibilities and activities include:
•
scrutinising the financial statements and reviewing accounting policies and significant judgements and estimates;
•
reviewing the content of financial reporting and advising the Board whether, taken as a whole, they are fair, balanced and
understandable;
•
reviewing the going concern basis of preparation of the financial statements and statements on viability for recommending to the Board;
•
reviewing climate and non-financial metrics reporting;
•
reviewing whistleblowing arrangements;
•
overseeing external and internal audit arrangements; and
•
reviewing the effectiveness of systems of internal control and the management of financial risks.
A
summary of the main activities of the Committees during the year is set out below:
Auditor appointment and tenure, independence and non-audit services
The Committee continues to oversee the relationship with and performance of the external auditor including, the external audit process, the
audit fee, appointment, reappointment and removal of the external auditor, assessing their independence and effectiveness on an ongoing
basis.
PwC has acted as the Group’s external statutory auditor following appointment at the Company’s Annual General Meeting in June 2020.
The Group’s policy for auditor rotation follows regulatory requirements and PwC will be required to be rotated after no more than 20 years,
and an audit tender held after no more than 10 years. Gary Shaw of PwC was appointed as the Group’s senior statutory auditor for the
financial year 2025. His term in this role may not exceed five years. Before his appointment, the senior st atutory auditor for the financial year
2024 was Alexis Gish of PwC. Prior to this, Sue Morling of PwC served as the senior statutory auditor for four years.
The Company confirms that it complied with the provisions of the Competition and Markets Authority’s Order for the financial year under
review. Both the Board and the external auditor have safeguards in place to protect the independence and objectivity of the external auditor.
The Committee oversees the development, implementation and monitoring of the Group’s policy on the provision of non-audit services by
the external auditor. The purpose of the policy is to safeguard the independence and objectivity of the external auditor and to ensure
compliance with applicable legislation and with the Ethical Standard issued by the Financial Reporting Council (FRC).
The Committee oversees the external audit plan to ensure it is comprehensive, risk-based and cost-effective. The plan describes the
proposed scope of the work and the approach to be taken, and the proposed materiality levels to be used which are described on page 62.
In order to focus the audit work on the right areas, the auditors identify particular risk issues based on various factors, including their
knowledge of the business and operating environment and discussions with management.
For the year ended 31 December 2025, the Group was charged £1,265,900 (ex VAT) by PwC for audit services. Non-audit fees for audit-
related assurance services required by legislation and/or regulation amounted to £206,600, making total fees from PwC of £1,472,500.
There were no other non-audit services provided by PwC during the financial year.
External audit effectiveness
The Committee assesses the effectiveness of the external auditor annually against several criteria including, but not limited to,
accessibility and knowledgeability of audit team members, the efficiency of the audit process including the effectiveness of the audit
plan, and the quality of improvements recommended.
Th
e Committee reviewed a report based on input from senior management, business unit leaders and those most involved in the external
audit process, regarding the PwC 2024 statutory audit and audit-related assurance services. The Committee recognised the strengths
of the external auditor and that duties were performed independently and effectively.
Appropriateness of the Group’s external financial reporting
The primary role of the Committee in relation to financial reporting is to review, challenge and agree the appropriateness of the half-
year and annual financial statements and annual regulatory reporting under Solvency II, concentrating on, amongst other matters:
•
t
he quality and acceptability of accounting policies and practices;
•
the clarity of the disclosures and compliance with financial and regulatory reporting standards, and relevant financial and
governance reporting requirements;
•
material areas in which significant judgements have been made or there has been discussion with the external auditor;
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•
whether the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy; and
•
any correspondence from regulators in relation to financial reporting.
I
n respect of these annual financial statements the Committee paid particular attention to the significant judgements set out below,
including a review of the corporate governance disclosures, monitoring of the external audit process and statements about going
concern and viability. The Committee concluded that it remained appropriate to prepare the financial statements on a going concern
basis and recommended the viability statement to the Board for approval.
T
he Committee reviewed and challenged the annual regulatory submissions of Ecclesiastical Insurance Office plc and Ecclesiastical
Life Limited under Solvency II focussing on the reporting requirements of the publicly filed Solvency and Financial Capital Report
(SFCR) and Quantitative Reporting Templates (QRTs).
T
he significant areas of focus considered by the Committee in relation to 2025, and how these were addressed, are outlined below.
These were discussed and agreed with management during the course of the year, and also discussed with the auditors.
Area of focus Committee response
General insurance reserves
The Committee considered a detailed report provided by the Group Actuarial Director on the
adequacy of general insurance reserves at the half year.
The estimation of the ultimate
liability arising from claims under
A
t
the full year the Committee received a report and discussed and challenged management
general business insurance
across a wide range of assumptions and key judgements.
contracts is a critical accounting
estimate. There is uncertainty as
This was a major area of audit focus and the auditor also provided detailed reporting on these
to the total number of claims on
matters to the Committee.
each class of business, the
Other key areas of focus during 2025 were latent claim reserves, the impact of the softening
amounts that such claims will be
market, weather events impacting Group companies and subsidence in the UK.
settled for and the timings of any
payments.
T
he
Committee concluded at year end that the reserving process and outcomes were robust,
applied consistently, were well managed and that the overall reserves set were reasonable
as disclosed in note 27 of the financial statements.
The Committee was also satisfied that management had carried out a thorough review of the
drivers of uncertainty and had arrived at an appropriate recommendation for the level of
booked reserves including the risk adjustment.
The Committee considered management’s recommendations for life insurance reserves
Life insurance reserves
which included their basis and the methodology. The main areas of judgement reviewed by
The calculation of life insurance
the Committee were the estimated future cash flows and the discount rate applied to future
reserves requires management to
cash flows.
make significant judgements
about bond yields, discount rates,
T
he Committee reviewed the work done by the Chief Life Actuary to assess whether the
credit risk, mortality rates and
methodology remained appropriate, with a particular focus on mortality rates, surrender
current expectations of future
rates and future attributable expenses.
expense levels.
Fol
lowing its review, and after consideration of the auditor’s report, the Committee was
satisfied that the assumptions proposed were appropriate and overall the judgements made
in respect of the reserves were reasonable. The assumptions are disclosed in note 26 of the
financial statements.
During 2025, reports were received from management on the proposed approach to the
Pension scheme accounting
valuation of the pension scheme. As the pension scheme is sensitive to changes in key
The liabilities of the scheme are
assumptions, management completed an assessment as to the appropriateness of the
material in comparison to the
assumptions used, taking advice from independent actuarial experts and including, where
Group’s net asset and the
appropriate, benchmark data, and reported its findings to the Committee. Improvements in the
valuation requires many actuarial
pension actuary’s models increased the accuracy, and also dynamically captured changes in
assumptions, including
the scheme’s liability profile.
judgements in relation to long-
Following the review, management concluded the future improvements in mortality table will
term interest rates, inflation,
be updated to the CMI 2024 table. In the CMI 2024 table, the default half-life parameter of 1
longevity and investment returns.
year will be applied, meaning the pandemic-related mortality effect is assumed to reduce by
Judgement is applied in
half each year. The best estimate multipliers for the post-retirement mortality tables were
determining the extent to which a
revised following input from the Scheme Actuary.
surplus in the Group’s defined
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benefit scheme can be recognised
Following consideration, the Committee concluded that the assumptions and disclosures
as an asset.
proposed were appropriate.
The impact of updating assumptions to reflect those in force at the balance sheet date on the
valuation at 31 December 2025 is explained in note 18 to the financial statements.
The Committee reviewed management’s impairment assessment in accordance with IAS 36
Valuation of intangible assets
Impairment of Assets, including the identification of impairment indicators and the
The valuation and impairment
value‑in‑use calculations supporting recoverable amounts.
assessment of intangible assets,
The Committee scrutinised the key assumptions underpinning these calculations—future
particularly internally developed
cash flow projections, expected cost savings and operational benefits, useful economic lives,
software, is a key area of focus
discount rates, and growth assumptions—assessing whether they were consistent with
due to the scale of the Group’s
approved business plans and current market conditions.
technology investment and the
materiality of these balances.
The Committee sought evidence supporting management’s forward‑
looking estimates,
including the project plans, costs, and the effect of technological developments on expected
Technological change and
asset use. Following this detailed review and challenge, the Committee agreed that an
evolving business requirements
impairment was required for certain intangible assets. It was satisfied that the remaining
increase the risk that certain
carrying values were supportable, that useful economic lives had been considered where
assets may not deliver their
necessary, and that the impairment recognised reflected an appropriate application of IAS 36
expected future economic
Impairment of Assets.
benefits or that useful economic
lives may need to be reassessed.
The Committee reviewed management’s fair value assessment of the Group’s unlisted equity
Valuation of unlisted equity
investment, including the valuation model prepared in accordance with IFRS 13 Fair Value
This is an area of focus given the
Measurement. It focused on key areas of judgement such as the selection of comparable
materiality and the subjectivity in
companies, calibration of valuation multiples, and the illiquidity discount.
deriving fair value.
A
key area of attention was management’s first‑time use of a model adjustment. Management
The judgements and estimates
used to determine the value of the
explained that the adjustment was introduced to reflect specific characteristics and objective
Group’s interest in unlisted equity
evidence of fair value not fully captured in the base model. The Committee examined the
follow industry recognised fair
evidence supporting these qualitative factors and assessed whether they were consistent
value model techniques and the
with market participant assumptions.
principles of IFRS 13 Fair Value
Measurement. Judgements and
The Committee challenged the rationale and transparency of the model including this overlay
estimates include the selection of
adjustment and
reviewed the supporting analysis. It evaluated whether the approach
the most appropriate valuation
remained aligned with IFRS
13 requirements to maximise observable inputs while
approach, the set of comparable
appropriately incorporating relevant unobservable inputs.
companies, choice of valuation
multiples and the setting of an
F
ollowing this review, the Committee concluded that the valuation approach, including the
illiquidity discount.
model adjustment, was appropriate and that the resulting fair value was appropriate.
Fair, balanced and understandable
The Committee considered whether in its opinion, the 2025 Annual Report and Accounts were fair, balanced and understandable and
provided the information necessary for shareholders to assess the Group’s position and performance, business model and strate gy. The
Committee provided feedback on drafts of the Annual Report and Accounts, highlighting any areas where further clarity was required in
the final version.
W
hen forming its opinion, the Committee reflected on information it had received and discussions throughout the year as well as its
knowledge of the business and its performance.
The Committee was satisfied that the disclosures in the Annual Report and Accounts, taken as a whole, are fair, balanced and
understandable and represented the results and business performance for the year ended 31 December 2025.
O
versight of systems of internal control including the internal audit function
Assessment of internal controls
The approach to internal control and risk management is set out in the Corporate Governance Report section of this Annual Report
and Accounts.
55
Ecclesiastical Insurance Office public l imited c ompany
Governance
In reviewing the effectiveness of the system of internal control and risk management during 2025, the Committee has:
•
reviewed the findings arising from both external and internal audit reports issued during the year;
•
monitored management’s responsiveness to the findings and recommendations of the Group Chief Internal Auditor;
•
met with the Group Chief Internal Auditor without management being present to discuss any issues arising from internal audits
carried out; and
•
considered a report prepared by the Group Chief Internal Auditor giving his assessment of the strength of the Group’s interna l
controls based on internal audit activity during the year.
I
nternal control over financial reporting
Internal control over financial reporting is designed to provide reasonable, though not absolute, assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance with UK-adopted international accounting standards.
Controls within the Group’s financial reporting processes are intended to ensure that:
•
r
oles, responsibilities and delegated authorities are clearly defined;
•
appropriate segregation of duties exists across key financial transactions;
•
commitments and expenditure are authorised at the appropriate levels;
•
accounting records are maintained that accurately and fairly reflect transactions;
•
any unauthorised acquisition, use or disposal of assets that could materially impact the financial statements is prevented or
detected on a timely basis;
•
transactions are recorded to permit the preparation of financial statements; and
•
the financial statements comply with UK-adopted international accounting standards.
I
nternal controls have inherent limitations, and therefore can only provide reasonable assurance against material misstatement. Based
on reports from management and work performed by internal and external auditors, the Committee did not identify any material
weaknesses in internal control over financial reporting during the year. The Committee was satisfied that the financial systems
operated effectively throughout the period and noted no issues that would indicate they will not continue to operate effectively in the
forthcoming year.
Group Internal Audit (GIA)
GIA provides independent, objective assurance to the Board that the governance processes, management of risk and systems of
internal control are adequate and effective to mitigate the most significant risks to the Group. GIA operates co-sourcing arrangements
in the UK, Ireland and Canada where specialist resource is required to supplement existing resources. In addition, GIA oversees and
monitors the outsourced internal audit arrangements in Australia.
T
he Committee oversees the annual internal audit plan to ensure that it is aligned to the Group’s key risks. It also assesses the internal
audit plan and reviews the findings of internal audit with management.
T
he Committee is satisfied that GIA has appropriate resources. The Group Chief Internal Auditor is accountable to the Chair of the
Committee and reports administratively to the Group Chief Executive. The Group Chief Internal Auditor has access to the Chair of the
Committee and the Chair of the Board. The function has an extensive stakeholder management programme in place.
G
IA’s annual programme of work is risk based and designed to cover areas of higher risk or specific focus. The plan is approved
annually in advance by the Committee and is regularly reviewed throughout the year to ensure that it continues to reflect areas of
higher priority. Where necessary, changes to the agreed plan are identified as a consequence of the Group’s changing risk profile.
Throughout the year, GIA submitted quarterly reports to the Committee summarising findings from audit activity undertaken and the
responses and action plans agreed with management. The Committee monitored progress of the most significant management action
plans to ensure that these were completed in a timely manner and to a satisfactory standard.
W
histleblowing
Whistleblowing arrangements are administered by Group HR, with oversight provided by the Committee. The Committee receives
quarterly updates on cases raised through the whistleblowing channels and considers any significant matters escalated during the
year. A structured annual whistleblowing programme is in place, incorporating training, communication, and monitoring activities.
Mandatory online training for all colleagues and managers covers whistleblowing principles and the Group’s Code of Conduct. This is
reinforced through individual attestations and regular internal communications, helping to maintain awareness and support an open,
transparent and ‘speak-up’ culture across the Group. Whistleblowing policies, procedures and guidance materials are reviewed and
updated each year to ensure they remain clear, accessible and effective in encouraging individuals to raise concerns safely and with
confidence.
56
Ecclesiastical Insurance Office public l imited c ompany
Governance
Leg
al and regulatory developments
The Committee received and reviewed reports on the impact of legal and regulatory developments relevant to the Group.
The year ahead
The Committee will continue to focus on strong financial governance in the context of increasing regulatory expectations and investor
scrutiny. With the enhanced internal controls requirements under the UK Corporate Governance Code, including the forthcoming
Provision 29 declaration, the Committee will review relevant developments and ensure that the entity’s control environment remains
well designed and effective.
A
s new accounting and sustainability reporting standards emerge, the Committee will oversee management’s preparations to ensure
the Group’s reporting remains compliant, transparent and supported by high quality data. Technology continues to be central to the
Group’s strategy, and the Committee will monitor the implementation of new platforms that enhance efficiency, strengthen cont rols
and support accurate reporting. Growing digital dependence means that cybersecurity, data governance and responsible use of
artificial intelligence will remain prominent and recurring themes on the Committee’s agenda, reflecting their priority across audit
committees globally.
A
gainst a backdrop of continued economic and geopolitical uncertainty, the Committee will work closely with management to ensure
risk management processes remain forward looking, responsive to change and aligned with the Group’s objectives. Through ongoing
oversight of governance, internal controls and financial stewardship, the Committee aims to support the continued resilience, integrity
and transparency of the Group’s reporting in the year ahead.
57
Ecclesiastical Insurance Office public l imited c ompany
Governance
R
emuneration Committee Report
Remuneration Review
Group Remuneration Committee Chair’s statement
As Chair of the Group Remuneration Committee, I am pleased to introduce the Remuneration Committee Report for 2025 and to
highlight some of the key aspects of the Committee’s work during the year. The Committee’s principal aim remains to ensure that all
colleagues are rewarded fairly according to their contribution to the success of the Group and the quality of their individual
performance, keeping carefully in mind the relationship between reward, recruitment and retention.
T
his review sets out an overview of remuneration at EIO which is aligned with that at Benefact Group. The full Group Directors’
Remuneration Report is available in the Benefact Group plc Annual Report.
R
emuneration Principles
To ensure these continue to drive the Group’s strategy and to achieve long-term success, while maintaining the Group’s high standards
as an ethically and socially responsible business by the delivery of the expected level of grant to the Group’s shareholder and owner
Benefact Trust Limited, remuneration continues to be underpinned by the following principles: fair reward; simplification of the Group’s
incentive arrangements; compliance with evolving regulatory and corporate governance requirements; linking pay and performance;
alignment of incentive designs with the Group’s strategy and shareholder expectations; and consideration of the reputational impact
of any changes.
2025 performance and incentive outcomes
The financial results for EIO are set out in the Group Chief Financial Officer’s report. The Committee note with thanks the efforts of all
our colleagues across the Group in continuing to deliver what matters most to the business: supporting our customers by providing
excellent customer service, maximising our grant to our charitable shareholder, Benefact Trust Limited, and delivering on the Group’s
next chapter in our ambitious strategy for the future.
T
he annual bonus and long-term incentive plan outcomes in the year reflected the wider Group performance. The Committee
considered that the annual bonus outcomes were a fair reflection of the overall performance achieved by both the Group and the
individuals. Having considered all the relevant factors, the Committee determined that a discretionary adjustment to the Strategic
Target outcome be applied based on a material addition to the original strategic targets set at the outset of the year, which impacted a
number of key initiatives. No discretion was applied to the long-term incentive plan. Further details of performance against the targets
set for 2025 are disclosed in the Benefact Group plc 2025 Directors’ Remuneration Report.
I
n line with the Committee’s established practice, the Committee, supported by the Group Chief Risk and Compliance Officer, considered
risk management outcomes across the Group as part of its deliberations, including how these had impacted individual performance
assessments where relevant. Following this review, the Committee did not consider further risk adjustment of the awards was
necessary.
T
he Committee is of the view that the remuneration policy operated as intended during the year and that the overarching remuneration
framework continues to be appropriate taking into account both internal and external factors, therefore no changes are proposed to
the Policy for 2026.
D
irector changes in the year
As set out in the Directors’ Remuneration Report last year, in 2024 we reshaped the Boards of Benefact Group and Ecclesiastical
Insurance Office plc to increase the independence of Ecclesiastical Insurance Office plc. Following this, the Deputy Chief Executive is
no longer a Board Director of Benefact Group plc but remains a Board Director of Ecclesiastical Insurance Office plc. Whilst no longer
a director of Benefact Group plc, her remuneration details have continued to be disclosed for transparency in the full report.
A
s disclosed last year, Mark Bennett was appointed to the Boards of EIO and Benefact Group plc and as Group Chief Financial Officer
on 1 January 2025. All of his remuneration arrangements are in line with our Directors’ Remuneration Policy and were disclosed in full
last year. Details of his pay in the year and for the year ahead are included in the full report.
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Ecclesiastical Insurance Office public l imited c ompany
Governance
Implementation of Policy for 2026
Ba
se salary
The level of salary increases for UK Ecclesiastical employees is a key consideration in setting the level of any salary increase for
Executive Directors. The Committee determined, after careful consideration, that the base salary for the Group Chief Executive would
be increased by 6% (effective 1 April 2026) due to exceptional circumstances relating to his responsibilities in London. The base
salaries of the Deputy Chief Executive and Group Chief Financial Officer would be increased by 3.5% (effective 1 April 2026), which is
in line with the wider employee population.
Incentives
There are no proposed changes to the incentive opportunities. The Committee has reviewed the performance measures and weightings
and is satisfied that they continue to be aligned to the Group’s strategy. Some minor changes are proposed, further details of
which are provided in the full report.
Chair and NED fees
The Committee considered the Chair’s fees as part of the regular review of Chair and Non-Executive Director (NED) fees. The Chair
took no part in the discussions on his fees, nor the NEDs in discussion of theirs.
Gender pay gap
The gender pay report for 2025 showed our median gender pay gap slightly decreased to 18.2% (2024: 19.5%) for EIO. The wider Group
median pay gap has also slightly decreased to 23.4% (2024: 25.8%) due to year-on-year changes in the composition of the population
across the Group. The Group remains committed to promoting inclusion and diversity throughout our business and to ensuring that
all employees have a fair and equal pay opportunity appropriate to their role.
Conclusion
I value the continued support and counsel of our charitable owner and ultimate shareholder, Benefact Trust Limited, and reaffirm
our responsibility to drive sustained, improved and responsible performance over the long-term through our remuneration strategy,
policy and principles.
Sir Stephen Lamport
Chair of the Group Remuneration Committee
19 March 2026
Committee member
Member since
Meetings attended
Sir Stephen Lamport (Chair)
June 2020 4/4
David Henderson
September 2016
4/4
Rita Bajaj
September 2024
4/4
Group Remuneration Committee
Purpose and membership
The Committee is responsible for recommending to the Board the Remuneration Policy for Executive Directors and for determining
the remuneration packages for Executive Directors, members of the Group Management Board (GMB), Material Risk Takers (MRTs)
and heads of strategic business units. None of the individuals within these populations are involved in discussions relating to their own
remuneration.
The Committee also has overarching responsibility for the Group-wide Remuneration Policy. In fulfilling its responsibilities, the
Committee seeks to ensure that the Policy is fair, transparent, and avoids unnecessary complexity. It considers, among other factors,
the extent to which pay arrangements support the Benefact Group’s culture, values, and strategic objectives.
All members are independent NEDs and have the necessary experience and expertise to meet the Committee’s responsibilities. As a
joint committee of EIO and Benefact Group plc, membership comprises directors from both Boards ensuring alignment of the Group’s
Risks and Remuneration Policies and consideration of Risk management and outcomes in setting reward.
59
Ecclesiastical Insurance Office public l imited c ompany
Governance
Ad
visers to the Committee
During the year, the Committee received external independent advice from Deloitte in relation to the Committee’s activities. As a
founding member of the Remuneration Consultants Group, Deloitte voluntarily adheres to its Code of Conduct.
Fees for professional advice to the Committee paid to Deloitte were £61,600 (2024: £79,925). The Committee is satisfied that the advice
it received during 2025 from Deloitte was impartial.
T
he Committee also had access to benchmarking reports from Willis Towers Watson and McLagan, which provided additional data to
support the determination of pay and conditions throughout the Benefact Group.
I
n the course of its deliberations, the Committee also considered the views of the Group Chief Executive, Group Chief Financial Officer,
Group Chief People Officer, Group Chief Risk and Compliance Officer and Group Reward Director. Additionally, the Committee also
received updates from the CEO, Benefact Broking and Advisory, and Head of Distribution. The Company Secretariat advised on legal
and governance-related matters. Such input, however, did not relate to their own remuneration.
N
o other external advisers provided services to the Committee during the year.
R
emuneration Policy summary
The full Benefact Group Directors’ Remuneration Policy can be found in the 2024 Directors’ Remuneration Report, which sets out the
full details of the remuneration policy and how it will be implemented, as well as a full description of the principles which underpin the
Group’s reward structure.
The remuneration structure for the Executive Directors comprises of:
- Fixed annual elements including salary, pension contribution that is aligned with the wider employer population, and
benefits. These are set in order to recognise the responsibility and experience of the Executive Directors and to ensure
current market competitiveness.
- Variable incentive elements including an annual bonus, with one-third of the total bonus deferred over three years, and a
long-term incentive plan. These are set in order to incentivise and reward the Executive Directors for making the Group
successful on a sustainable basis. Both the annual bonus and long-term incentive plan are subject to a balanced scorecard
of financial and non-financial measures aligned to our strategy.
Annual Report on Remuneration
This section of the Remuneration Review sets out how the above Remuneration Policy was implemented in 2025 and the resulting
payments the highest paid director received. The financial information contained in this review has been audited where indicated.
H
ighest paid Director
The table below shows a single total figure of remuneration received in respect of qualifying services for the 2025 financial year for
the highest paid director, together with comparative figures for 2024. The remuneration disclosures for the other Board Directors are
set out in full in the Benefact Group plc 2025 Directors’ Remuneration Report. The disclosure in this review is not specific to time
allocated within EIO as remuneration relates to Group-wide accountability.
F
ixed remuneration
Variable remuneration
Total
£000
£000
remuneration
£000
1
Salary Benefits
Pension
Total Annual
Long Term
Total Total
2
3
benefit
bonus
Incentive Plan
4
(LTIP)
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
668
576
36
31
68
60
772
667
813
884
741
423
1,554
1,307
2,326
1,974
1
Benefits include car allowance and private medical insurance which are valued at the taxable value. Provision of benefits during 2025 was in line with
the Directors’ Remuneration Policy. From 2024, the highest paid director’s benefits now include taxable benefits
.
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Ecclesiastical Insurance Office public l imited c ompany
Governance
2
The highest paid director received a cash allowance in lieu of pension of 12% of salary (net of national insurance contributions) in lieu of pension, in line
with Company policy. Cash allowances can be paid to UK-based Executive Directors where pension contributions would be in excess of the HMRC annual
and/or lifetime allowance.
3
In line with the deferral policy, for annual bonus earned, one-third of the total bonus is deferred over a period of three years. The value of 2025 annual
bonus that is deferred is set out in the Benefact Group plc 2025 Directors’ Remuneration Report.
4
LTIP represents the amount payable in respect of the three-year LTIP performance period 2023-2025 for 2025 and 2022-2024 for 2024, as disclosed
in the 2024 Directors’ Remuneration Report. The Group operates a cash LTIP scheme, therefore no part of the award was attributable to share price
appreciation. The director holds unvested LTIP awards in accordance with the rules of the LTIP plan.
A
nnual bonus outcomes for 2025
The annual bonus outturns were determined taking into account both Group and individual performance and is set out in full in the
Benefact Group plc 2025 Directors’ Remuneration Report.
LTIP outcomes in 2025 (audited)
The LTIP amount included in the single total figure of remuneration is the cash award resulting from the Group LTIP grant for the
period 2023-2025. Vesting was dependent on performance over the three financial years ending on 31 December 2025 and is set out
in full in the Benefact Group plc 2025 Directors’ Remuneration Report.
Wider stakeholder engagement
The Committee is committed to considering the views of key stakeholders when making remuneration decisions. This approach ensures
that our policies and practices remain fair, transparent, and aligned with the long-term interests of the Group and its stakeholders.
T
he Group consults with its recognised Union, Unite, regarding remuneration for employees within relevant UK businesses.
Additionally, employees can provide feedback via the Group’s employee engagement survey and to their managers or HR. The Group
Chief People Officer attends the Committee meetings and advises the Committee on HR strategy, including the effectiveness of the
Group’s remuneration policies and how they are viewed by employees.
61
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
Report on the audit of the financial statements
Opinion
In our opinion, Ecclesiastical Insurance Office public limited company’s group financial statements and company financial statements
(the “financial statements”):
•
give a true and fair view of the state of the group’s and of the Company’s affairs as at 31
December
2025 and of the group’s
profit and the group’s and company’s cash flows for the year then ended;
•
have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
W
e have audited the financial statements, included within the 2025 Annual Report and Accounts (the “Annual Report”), which comprise:
•
the Consolidated Statement of Profit or Loss as at 31
December
2025;
•
the Consolidated and Parent Statements of Comprehensive Income as at 31
December
2025;
•
the Consolidated and Parent Statements of Changes in Equity as at 31
December
2025;
•
the Consolidated and Parent Statements of Financial Position as at 31
December
2025;
•
the Consolidated and Parent Statements of Cash Flows for the year then ended; and
•
the notes to the financial statements, comprising material accounting policy information and other explanatory information.
O
ur opinion is consistent with our reporting to the Ecclesiastical Insurance Office plc Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we hav e fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 12, we have provided no non-audit services to the Company or its controlled undertakings in the
period under audit.
O
ur audit approach
Overview
Audit scope
•
We have scoped the audit based on the significant components and material account balances within the group, which is
described below.
K
ey audit matters
•
Assumptions used in calculating Physical and Sexual Abuse "PSA" reserves (group and parent)
•
Valuation of unlisted equity investment (group and parent)
Ma
teriality
•
Overall group materiality: £11,500,000 (2024: £11,500,000) based on 1.9% of net assets.
•
Overall company materiality: £10,9 25,000 (2024: £10,925,000) based on 1.9% of net assets.
•
Performance materiality: £8,625,000 (2024: £8,625,000) (group) and £8,194,000 (2024: £8,194,000) (company).
T
he scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
62
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
This is not a c
omplete list of all risks identified by our audit.
Valuation of
unlisted equity investment is a new key audit matter this year. Otherwise, the key audit matters below are consistent with
last year.
Key audit matter
How our audit addressed the key audit matter
Assumptions used in calculating Physical and Sexual Abuse
We engaged our actuarial specialists and with their
"PSA" reserves (group and parent)
involvement, we have performed the following procedures
in
relation to the fulfilment cash flows:
As disclosed in the Audit Committee Report and notes 2, 3 and
• Inspected the Reserving Committee control which
26. The valuation of the general insurance liability for incurred
reviews, challenges and approves the assumptions
claims is a complex process involving inherent uncertainty and
used within the calculation of the fulfilment
is a significant area of management judgement within the
cash flows;
financial statements of the group and parent company. The
• Challenged the key assumptions used by management
uncertainty around claims frequency, claims severity, discount
including evaluation of historical claims frequency,
rate, future inflation and risk adjustment require management
claims severity, future inflation, as well as the
judgement and estimation in calculating the general insurance
specific allowance included within the risk
liability for incurred claims. We consider the area of the most
adjustment;
significant judgement to be specific to assumptions used in
• Evaluated reasonable alternative assumptions by
calculating the fulfilment cash flows for PSA exposures,
performing independent sensitivity analysis and
specifically in relation to the probability weighted best
assessing the impact on the value of fulfilment cash
estimate of the liability for incurred claims. Specifically, the
flows calculated;
assumptions requiring significant judgement and estimation
• We have assessed the appropriateness of the
are claims frequency, claims severity, future inflation and the
resulting general insurance liability for incurred
specific allowance included within the risk adjustment.
claims based on the assumptions selected.
Based on the work performed and evidence obtained,
we consider the assumptions used in the calculation of
the PSA fulfilment cash flows and the specific allowance
within the risk adjustment to be appropriate.
We engaged our specialised valuations team and with their
Valuation of unlisted equity investment (group and parent)
involvement performed the following:
As disclosed in the Audit Committee Report and notes 2, 3 and
•assessed the methodology used by management
4, Ecclesiastical Insurance Office plc (EIO) has a holding in an
in the valuation of the investment.
unlisted equity investment valued at £98.8m as at 31
•assessed the appropriateness of the comparators used
December 2025. Valuing this investment requires judgement
to derive the price to tangible book ratio assumption.
in the methodology applied as well as the significant
•Assessed the appropriateness of the illiquidity discount
assumptions used within the valuation. The most significant
applied.
assumptions that feed into the valuation of the unlisted equity
•assessed the appropriateness of the out-of-model
investment are the price to tangible book value ratio and the
adjustment.
illiquidity discount, as well as any out-of-model adjustments to
Based on the work performed and evidence obtained, we consider
the valuation.
the assumptions used in the valuation of unlisted equity
investments to be appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the group and the Company, the accounting processes and controls, and the industry
in which they operate.
63
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
Th
e group operates a general insurance business in the United Kingdom, Republic of Ireland, Canada and Australia and a life insurance
business. The group also includes certain non-insurance entities within the United Kingdom and Australia which are smaller and do
not form part of our in-scope components. We considered the United Kingdom, Australia and Canada general insurance businesses,
as each of these include PSA liabilities, to be significant components, as well as the consolidation adjustments. We performed a full
scope audit of the United Kingdom general insurance business as well as the consolidation adjustments, and an audit of specific large
balances for Australia and Canada. The general insurance business is the Republic of Ireland, Ansvar UK as well as the life insurance
business, although not considered significant components, were also noted to include specific large balances that have been brought
into the scope of our audit. We considered the remaining untested amounts across the group to ensure sufficient coverage has been
obtained.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand the process management adopted to assess the extent of the
potential impact of climate risk on the Group’s and Parent company financial statements. In addition to enquiries with management, we
also understood the governance processes in place to assess climate risk. We have performed our own risk assessment of the climate
risk faced by the Company, the commitments made by the Group, how these may affect the financial statements and the audit
procedures that we perform. We have assessed the risks of material misstatement to the financial statements as a result of climate
change and concluded that for the year end 31 December 2025, climate change does not impact our audit risk assessment. We did
however assess the consistency of disclosures included within the Annual Report and 'Other Information' including the Strategic
Report.
Ma
teriality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Bas
ed on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - group
Financial statements - company
Overall
£11,500,000 (2024: £11,500,000). £10,925,000 (2024: £10,925,000).
materiality
How we
1.9% of net assets 1.9% of net assets
determined
it
Rationale
The engagement team concluded that a net assets benchmark is the
In line with overall group materiality, the
for
most appropriate when setting an overall materiality on the 2025
engagement team concluded that a net
benchmark
audit engagement. In our view, we consider net assets to be the
assets benchmark is the most appropriate
appropriate benchmark as it best aligns with the underlying interest
applied
when setting an overall materiality. This is
of the stakeholders. The quantum of materiality was determined by
capped at 95% of overall group
considering the various benchmarks available to us as auditors, our
materiality to allow for potential
experience of auditing other insurance groups and the business
aggregation risk.
performance during 2025.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between £2.0 million and £10.9 million. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
We
use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £8,625,000 (2024: £8,625,000)
for the group financial statements and £8,194,000 (2024: £8,194,000) for the company financial statements.
64
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
I
n determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our normal range was appropriate.
W
e agreed with the Ecclesiastical Insurance Office plc Audit Committee that we would report to them misstatements identified during
our audit above £575,000 (group audit) (2024: £575,000) and £546,000 (company audit) (2024: £546,000) as well as misstatements
below those amounts that, in our view, warranted reporting for qualitative reasons.
Con
clusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the Company’s ability to continue to adopt the going concern basis of
accounting included:
•
O
btained and reviewed management’s going concern assessment which included the board approved forecasts along with
stressed and downside scenarios;
•
Considered the forward looking assumptions and assessed the reasonableness of these based on recent historic
performance;
•
Considered information obtained during the course of the audit and publicly available market information to identify any
evidence that would contradict management’s assessment; and
•
Considered our own independent alternative downside scenarios and whether these could impact the going concern
assessment.
B
ased 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 group's and 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.
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.
H
owever, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the
company's ability to continue as a going concern.
I
n relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
R
eporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
I
n connection with our audit of the financial statements, 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 audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. 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 based on these responsibilities.
W
ith respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
B
ased on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
65
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
S
trategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors'
Report for the year ended 31
December
2025 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
I
n light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors' Report.
Corporate governance statement
ISAs (UK) require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the C ompany’s compliance with the provisions of the UK Corporate Governance Code, which the
Listing Rules of the Financial Conduct Authority specify for review by the auditor. Our additional responsibilities with respect to the
corporate governance statement as other information are described in the Reporting on other information section of this report.
B
ased on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement, included within the Corporate Governance Report is materially consistent with the financial statements and our knowledge
obtained during the audit, and we have nothing material to add or draw attention to in relation to:
•
The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
•
The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
•
The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s
ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
•
The directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment covers
and why the period is appropriate; and
•
The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue i n
o
peration and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
O
ur review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and understanding of the group and company and their
environment obtained in the course of the audit.
I
n addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
•
T
he directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company's position, performance, business
model and strategy;
•
The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
•
The section of the Annual Report describing the work of the Ecclesiastical Insurance Office plc Audit Committee.
W
e have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review
by the auditors.
R
esponsibilities for the financial statements and the audit
R
esponsibilities of the directors for the financial statements
As explained more fully in the Directors' responsibilities statement, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
66
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
I
n preparing the financial statements, the directors are responsible for assessing the group’s and 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 group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ 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 auditors’ 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 statemen ts.
I
rregularities, 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 t o which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
B
ased on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to breaches of UK regulation, such as those governed by the Prudential Regulation Authority and the Financial
Conduct Authority, and we considered the extent to which non-compliance might have a material effect on the financial statements.
We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate the
financial statements, as well as management bias in accounting estimates, in particular the valuation of specific general insurance
contract liabilities including Physical and Sexual Abuse ("PSA") reserves and the valuation of unlisted equity investments. The group
engagement team shared this risk assessment with the component auditors so that they could include appropriate audit procedures
in response to such risks in their work. Audit procedures performed by the group engagement team and/or component auditors
included:
•
E
nquired of Group functions including compliance, risk and internal audit and consideration of known or suspected instances
of non-compliance with laws and regulation and fraud;
•
Reviewed key correspondence with the Prudential Regulation Authority and the Financial Conduct Authority in relation to
compliance with laws and regulations;
•
Reviewed relevant meeting minutes including those of the Board, Audit Committee and Group Audit, Risk & Compliance
Committee;
•
Procedures related to the valuation of specific general insurance contract liabilities such as PSA reserves described in the
related key audit matter;
•
Risk based target testing of journal entries, in particular any journal entries which include characteristics which were
identified as potentially being indicative of a fraudulent journal; and
•
Procedures to incorporate unpredictability around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also,
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.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
U
se of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
67
Ecclesiastical Insurance Office public l imited c ompany
Independent auditors’ report to the members of the Ecclesiastical
Insurance Office public limited company
Ot
her required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
we
have not obtained all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
the Company financial statements are not in agreement with the accounting records and returns; or
•
a corporate governance statement has not been prepared by the Company.
We
have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the Company for the financial year ended 31
December
2020. Our uninterrupted engagement covers 6
financial years.
Oth
er matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial
statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R - 4.1.18R and filed on the
National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the
structured digital format annual financial report has been prepared in accordance with those requirements.
Ga
ry Shaw (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
19
March
2026
68
Ecclesiastical Insurance Office public limited company
Consolidated statement of profit or loss
for the year ended 31 December 2025

| Notes | 2025 | 2024
|  | £000 | £000
Insurance revenue | 5, 6 | 651,416 | 629,953
Insurance service expenses | 7 | (446,234) | (461,8 17)
Insurance service result before reinsurance contracts held |  | 205,18 2 | 168,136
Net expense from reinsurance contracts |  | (100,502) | (84,590)
Insurance service result |  | 104,68 0 | 83,546
Net insurance financial result | 8 | (18,95 2) | (6,862)
Net investment result | 9 | 90,977 | 71,850
Fee and commission income | 10 | 1,973 | 544
Other operating expenses | 11 | (90,842) | (63,501)
Other finance costs |  | (3,239) | (3,102)
Profit before tax |  | 84,597 | 82,475
Tax expense | 14 | (18, 167) | (17,296)
Profit for the year | 11 | 66,430 | 65,179

69
Ecclesiastical Insurance Office public limited company
Consolidated and parent statements of comprehensive income
for the year ended 31 December 2025

| Notes | 2025 |  | 2024 |
|  | Group | Parent | Group | Parent
|  | £000 | £000 | £000 | £000
Profit for the year |  | 66,430 | 93,512 | 65,179 | 67,852
Other comprehensive income/(expense) |  |  |  |  |
Items that will not be reclassified to profit or loss: |  |  |  |  |
Actuarial gains/(losses) on retirement benefit plans | 17 | 1,376 | 1,376 | (1,630) | (1,630)
Attributable tax |  | (344) | (344) | 408 | 408
|  | 1,032 | 1,032 | (1,222) | (1,222)
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |
Losses on currency translation differences | 25 | (911) | (1,377) | (9,32 5) | (5,105)
Gains on net investment hedges | 25 | 2,302 | 2,379 | 8,807 | 4,420
Attributable tax | 25 | (704) | (595) | (1,381) | (1,105)
|  | 687 | 407 | (1,899) | (1,790)
Net other comprehensive income/(expense) |  | 1,719 | 1,439 | (3,121) | (3,012)
Total comprehensive income |  | 68,14 9 | 94,951 | 62,058 | 64,840

70
Ecclesiastical Insurance Office public limited company
Consolidated and parent statements of financial position
at 31 December 2025

| Notes | 31 December 2025 |  | 31 December 2024 |
|  | Group | Parent | Group | Parent
|  | £000 | £000 | £000 | £000
Assets |  |  |  |  |
Cash and cash equivalents | 23 | 93,174 | 68,841 | 105,761 | 80,330
Financial investments | 20 | 1,094,685 | 768,355 | 982,001 | 674,401
Other assets | 22 | 134,744 | 140,986 | 156,768 | 153,337
Current tax recoverable |  | 424 | 424 | 2,3 46 | 1,545
Reinsurance contract assets | 26 | 234,87 5 | 176,970 | 239, 453 | 178,143
Investment property | 19 | 121,701 | 121,701 | 128,5 63 | 128,563
Property, plant and equipment | 18 | 30,576 | 28,898 | 34,2 84 | 32,509
Deferred tax assets | 28 | 5,314 | 7 | 7,365 | 6
Goodwill and other intangible assets | 16 | 18,015 | 15,865 | 28,625 | 26,425
Pension assets | 17 | 18,710 | 18,710 | 17,552 | 17,552
Total assets |  | 1,752 ,218 | 1,340,757 | 1,702, 718 | 1,292,811
Equity |  |  |  |  |
Share capital | 24 | 120,4 77 | 120,477 | 120 ,477 | 120,477
Share premium account |  | 4,632 | 4,632 | 4,632 | 4,632
Retained earnings and other reserves |  | 492,902 | 453,621 | 501,934 | 435,851
Total shareholders' equity |  | 618,011 | 578,730 | 627, 043 | 560,960
Liabilities |  |  |  |  |
Other liabilities | 29 | 67,874 | 56,493 | 61,843 | 66,640
Current tax liabilities |  | 512 | 512 | 97 | 96
Provisions for other liabilities | 27 | 4,597 | 4,485 | 5,979 | 5,886
Insurance contract liabilities | 26 | 791,706 | 605,281 | 779,418 | 567,572
Lease obligations | 32 | 22,664 | 21,095 | 24,573 | 22,906
Deferred tax liabilities | 28 | 43,492 | 43,174 | 40,61 5 | 39,307
Investment contract liabilities | 31 | 172,375 | - | 133,706 | -
Subordinated liabilities | 30 | 26,835 | 26,835 | 25,112 | 25,112
Retirement benefit obligations | 17 | 4,152 | 4,152 | 4,332 | 4,332
Total liabilities |  | 1,134,2 07 | 762,027 | 1,075,675 | 731,851
Total shareholders' equity and liabilities |  | 1,752 ,218 | 1,340,757 | 1,702, 718 | 1,292,811

No statement of profit or loss is presented for Ecclesiastical Insurance Office public limited company as permitted by Section 408 of the
Companies Act 2006. The profit after tax of the parent company for the year was £93.5m (2024: profit of £67.9m).
The financial statements of Ecclesiastical Insurance Office public limited company, registered number 00024869, on pages [X] to [X] were
approved and authorised for issue by the Board of Directors on 19 March 2026 and signed on its behalf by:
Francois-Xavier Boisseau
Mark Hews
Chair
Group Chief Executive
71
Ecclesiastical Insurance Office public limited company
Consolidated and parent statements of changes in equity
for the year ended 31 December 2025

|  |  |  |  | Translation |  |
|  | Share | Share | Revaluation | and hedging | Retained |
|  | capital | premium | reserve | reserve | earnings | Total
Group | Notes | £000 | £000 | £000 | £000 | £000 | £000
At 1 January 2025 |  | 120,4 77 | 4,632 | - | 17,80 5 | 484,129 | 627,043
Profit for the year |  | - | - | - | - | 66,430 | 66,430
Other net income |  | - | - | - | 687 | 1, 032 | 1,719
Total comprehensive income |  | - | - | - | 687 | 67,462 | 68,14 9
Dividends on ordinary shares | 15 | - | - | - | - | (50,000) | (50,000)
Dividends on preference shares | 15 | - | - | - | - | (9,18 1) | (9,18 1)
Gross charitable grant | 15 | - | - | - | - | (24, 000) | (24, 000)
Tax relief on charitable grant | 15 | - | - | - | - | 6,000 | 6,000
At 31 December 2025 |  | 120,4 77 | 4,632 | - | 18,4 92 | 474,410 | 618,011
At 1 January 2024 |  | 120 ,477 | 4,632 | 857 | 19,704 | 483,2 46 | 628,91 6
Profit for the year |  | - | - | - | - | 65,179 | 65,179
Other net expense |  | - | - | - | (1,899) | (1,222) | (3,12 1)
Total comprehensive (expense)/income |  | - | - | - | (1, 899) | 63,957 | 62,058
Dividends on ordinary shares | 15 | - | - | - | - | (30,000) | (30,000)
Dividends on preference shares | 15 | - | - | - | - | (9,181) | (9,181)
Gross charitable grant | 15 | - | - | - | - | (33,000) | (33,000)
Tax relief on charitable grant | 15 | - | - | - | - | 8,250 | 8,250
Reserve transfers |  | - | - | (857) | - | 857 | -
At 31 December 2024 |  | 120 ,477 | 4,632 | - | 17,805 | 484,12 9 | 627, 043

Parent
At 1 January 2025
120,477
4,632
-
6,545
429,306
560,960
Profit for the year
-
-
-
-
93,512
93,512
Other net income
-
-
-
407
1,032
1,439
Total comprehensive income
-
-
-
407
94,544
94,951
Dividends on ordinary shares
-
-
-
-
(50,000)
(50,000)
Dividends on preference shares
-
-
-
-
(9,181)
(9,181)
Gross charitable grant
-
-
-
-
(24,000)
(24,000)
Tax relief on charitable grant
-
-
-
-
6,000
6,000
At 31 December 2025
120,477
4,632
-
6,952
446,669
578,730
At 1 January 2024
120,477
4,632
857
8,335
425,750
560,051
Profit for the year
-
-
-
-
67,852
67,852
Other net expense
-
-
-
(1,790)
(1,222)
(3,012)
Total comprehensive (expense)/income
-
-
-
(1,790)
66,630
64,840
Dividends on ordinary shares
-
-
-
-
(30,000)
(30,000)
Dividends on preference shares
-
-
-
-
(9,181)
(9,181)
Gross charitable grant
-
-
-
-
(33,000)
(33,000)
Tax relief on charitable grant
-
-
-
-
8,250
8,250
Reserve transfers
-
-
(857)
-
857
-
At 31 December 2024
120,477
4,632
-
6,545
429,306
560,960
The revaluation reserve represented cumulative net fair value gains on owner-occupied property with the movement in the year representing the
sale of a property. Details of the translation and hedging reserve are included in note 25.
72
Ecclesiastical Insurance Office public limited company
Consolidated and parent statements of cash flows
for the year ended 31 December 2025

| Notes | 2025 |  | 2024 |
|  | Group | Parent | Group | Parent
|  | £000 | £000 | £000 | £000
Profit before tax from operations |  | 84,597 | 110,732 | 82,475 | 84,749
Adjustments for: |  |  |  |  |
Depreciation of property, plant and equipment |  | 5,661 | 4,981 | 6,357 | 5,628
Loss/(profit) on disposal of property, plant and equipment |  | 42 | 42 | (178) | (178)
Amortisation and impairment of intangible assets |  | 17,758 | 17,710 | 3,369 | 3,466
Movement in expected credit loss provision |  | (133) | - | (9) | -
Net fair value gains on financial instruments and investment property |  | (44,666) | (42,064) | (21, 685) | (28,203)
Dividend and interest income |  | (37,384) | (60,869) | (39,683) | (31,311)
Finance costs |  | 3,239 | 3,173 | 3,102 | 3,102
Other adjustments for non-cash items |  | 24 | 24 | 616 | 594
Changes in operating assets and liabilities: |  |  |  |  |
Net decrease/(increase) in reinsurance contract assets |  | 468 | (3,025) | (27,129) | (26,120)
Net increase in investment contract liabilities |  | 38,669 | - | 37,82 0 | -
Net increase in insurance contract liabilities |  | 13,063 | 38,564 | 19,80 9 | 7,229
Net increase in other assets |  | (24, 705) | (34,334) | (21,990) | (22,130)
Net increase/(decrease) in other liabilities |  | 4,431 | (11,765) | 7,903 | 26,030
Cash generated by operations |  | 61,064 | 23,169 | 50,777 | 22,856
Purchases of financial instruments and investment property |  | (370,86 5) | (149,600) | (161,953) | (103,820)
Sale of financial instruments and investment property |  | 311,999 | 120,994 | 130,778 | 109,376
Dividends received |  | 12,97 9 | 28,251 | 12, 043 | 11,708
Interest received |  | 24,831 | 18,435 | 26,41 9 | 18,441
Tax paid |  | (5,951) | (6,751) | (6,41 5) | (5,579)
Net cash from operating activities |  | 34,057 | 34,498 | 51,6 49 | 52,982
Cash flows from investing activities |  |  |  |  |
Purchases of property, plant and equipment |  | (1,484) | (1,394) | (3,336) | (3,273)
Proceeds from the sale of property, plant and equipment |  | 5 | - | 1,963 | 1,961
Purchases of intangible assets |  | (7,16 0) | (7,160) | (6,191) | (6,180)
Net cash used by investing activities |  | (8,639) | (8,554) | (7,56 4) | (7,492)
Cash flows from financing activities |  |  |  |  |
Interest paid |  | (2,920) | (2,855) | (2,625) | (2,625)
Payment of lease liabilities |  | (2,445) | (1,851) | (2,116) | (1,796)
Dividends paid to Company's shareholders |  | (9,18 1) | (9,181) | (9,181) | (9,181)
Charitable grant paid to ultimate parent undertaking |  | (24, 000) | (24,000) | (33,000) | (33,000)
Net cash used by financing activities |  | (38,546) | (37,887) | (46,922) | (46,602)
Net decrease in cash and cash equivalents |  | (13,12 8) | (11,943) | (2,83 7) | (1,112)
Cash and cash equivalents at beginning of year |  | 105,761 | 80,330 | 112,082 | 83,436
Exchange gains/(losses) on cash and cash equivalents |  | 541 | 454 | (3,48 4) | (1,994)
Cash and cash equivalents at end of year | 23 | 93,174 | 68,841 | 105,761 | 80,330

73
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies
Ecclesiastical Insurance Office plc (hereafter referred to as the ‘Company’, or ‘Parent’), a public limited company incorporated and domiciled in
England and Wales, together with its subsidiaries (collectively, the ‘Group’) operates principally as a provider of general insurance, with offices
in the UK & Ireland, Australia and Canada. The Company is limited by shares. The material accounting policies adopted in preparing the
financial statements of the Group and Parent are set out below.
Basis of preparation
The Group’s consolidated and Parent's financial statements have been prepared using the following accounting policies, which are in
accordance with UK-adopted international accounting standards (UKIAS) applicable at 31 December 2025, and in accordance with
requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The policies have been applied
consistently to all years unless otherwise stated. The financial statements have been prepared on the historical cost basis, except for certain
financial assets, financial liabilities and derivatives measured at fair value through profit and loss (FVTPL), and the revaluation of properties
and certain derivatives measured at fair value through other comprehensive income (FVOCI).
As stated in the Directors' Report, the directors consider that it is appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Items included in the financial statements of each of the Group’s entities are measured in the currency of the primary economic environment
in which that entity operates (the 'functional currency'). The consolidated financial statements are stated in sterling, which is the Company's
functional currency and the Group’s presentational currency.
As permitted by Section 408 of the Companies Act 2006, a separate profit and loss account for the Company is not presented.
N
ew and revised standards
One amendment issued by the International Accounting Standards Board (IASB) and endorsed by the UK is effective for periods beginning on
or before 1 January 2025 and is therefore applicable for the 31 December 2025 financial statements in relation to IAS 21 The Effects of
Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on 15 August 2023). This amendment does not have a material impact on
the EIO Group’s Consolidated Financial Statements.
The following new UK Sustainability Reporting Standards have been issued but are not yet effective for the year ended 31 December 2025.
Sustainability reporting standard
Key requirements
Expected impact on the financial
statements
UK SRS S1 General Requirements for
Enhanced sustainability-related
The most notable changes will be:
Disclosure of Sustainability-related
financial disclosures and climate-
• Disclosures will consider a broader range
Financial Information
related disclosures.
of sustainability risks and opportunities, not
just those related to climate.
U
K SRS S2 Climate-related Disclosures
• Introduces the concept that disclosures
should address both the impact of the
Group’s activities on the environment and
society, as well as how environmental and
sustainability risks might affect the Group’s
financial position and performance.
74
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
T
he following international financial reporting standards (IFRSs) and amendments were in issue but not yet effective and have not been
applied to these financial statements:
Accounting standard
Key requirements
Expected impact on the financial
Effective date
statements
IFRS 18 Presentation and
The new standard introduces
The adoption of IFRS 18 is
Periods beginning on
Disclosure in Financial
clearer structure to financial
expected to result in
or after 1 January
Statements
statements by defining specific
presentational changes in the
2027
income statement subtotals and
consolidated financial statements
categories. It also enhances
and disclosure changes in the
disclosure requirements,
notes.
particularly around
management-defined
performance measures (MPMs),
and improves cash flow
reporting through targeted
amendments to IAS 7.
Amendments to the
These amendments improve the
The Group is currently assessing
Periods beginning on
Classification and
requirements in IFRS 9 and
the impact of adopting this
or after 1 January
Measurement Requirements
IFRS 7 related to settling
standard. Therefore, the
2026
for Financial Instruments in
financial liabilities using an
quantitative effect of this standard
IFRS 9 Financial Instruments
electronic payment system; and
is currently unknown.
and IFRS 7 Financial
assessing contractual cash flow
Instruments: Disclosures
characteristics of financial
assets, including those with
environmental, social and
governance (ESG)-linked
features. The amendments also
modify disclosure requirements
relating to investments in equity
instruments designated at fair
value through other
comprehensive income and add
disclosure requirements for
financial instruments with
contingent features that do not
relate directly to basic lending
risks and costs .
Ot
her standards and amendments in issue but not yet effective:
The following standards and amendments were in issue but not yet effective and are not expected to have a material impact on the Group’s
Consolidated Financial Statements:
- Annual Improvements to IFRS Accounting Standards - Volume 11 was published on 18 July 2024, effective periods beginning on or after 1
January 2026.
- Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature
-
dependent Electricity, was issued on 18 December 2024, effective for
annual periods beginning on or after 1 January 2026.
- IFRS 19 Subsidiaries without Public Accountability: Disclosures was issued on 9 May 2024, effective for periods beginning on or after 1
January 2027.
- Amendments to IAS 21 Translation to a Hyperinflationary Presentation Currency, was issued on 13 November 2025, effective for annual
periods beginning on or after 1 January 2027.
75
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Use of estimates
The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on
management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates. Those estimates
which have the most material impact on the financial statements are disclosed in note 2.
Basis of consolidation
Subsidiaries
Subsidiaries are those entities over which the Company, directly or indirectly, has control, with control being achieved when the Company has
power over the investee, is exposed to variable return from its involvement with the investee and has the ability to use its power to affect its
returns. The results and cash flows relating to subsidiaries acquired or disposed of in the period are included in the consolidated statement of
profit or loss, and the consolidated statement of cash flows, up to the date of disposal, and are included within discontinued operations where
appropriate. All inter-company transactions, balances and cash flows are eliminated, with the exception of those between continuing and
discontinued operations.
In the Parent statement of financial position, subsidiaries are accounted for within financial investments at cost less impairment, in accordance
with International Accounting Standard (IAS) 27 Separate Financial Statements .
The Group uses the acquisition method of accounting to account for business combinations. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the acquisition date. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Non-
controlling interests are measured either at fair value or at a proportionate share of the identifiable net assets of the acquiree. Goodwill is
measured as the excess of the aggregate of the consideration transferred, the fair value of contingent consideration, the amount of non-
controlling interests and, for an acquisition achieved in stages, the fair value of previously held equity interest over the fair value of the
identifiable net assets acquired. If the cost of acquisition is less than the fair value of the net assets acquired, the difference is recognised
directly through profit or loss.
For business combinations involving entities or businesses under common control, the cost of the acquisition equals the value of net assets
transferred, as recognised by the transferor at the date of the transaction. No goodwill arises on such transactions .
Foreign currency translation
The assets and liabilities of foreign operations are translated from their functional currencies into the Group's presentation currency using
period-end exchange rates, and their income and expenses using average exchange rates for the period. Exchange differences arising from
the translation of the net investment in foreign operations are taken to the currency translation reserve within equity. On disposal of a foreign
operation, such exchange differences are transferred out of this reserve, along with the corresponding movement on net investment hedges,
and are recognised in the statement of profit or loss as part of the gain or loss on sale.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transactions.
Exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies, are recognised through profit or loss.
Product classification
Contracts under which the Group accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the
policyholder or other beneficiary if a specified uncertain future event (the insured event) adversely affects the policyholder are classified as
insurance contracts. Contracts that do not transfer significant insurance risk are classified as investment or service contracts. All of the
Group's life business contracts written up to April 2013 are classified as insurance contracts and those written from August 2021 are classified
as investment contracts. The closed book of business (insurance contracts) relates to funeral plan business directly written by Ecclesiastical
Life Limited (ELL) backed by a Whole of Life policy, which is administered by Ecclesiastical Planning Services Limited (EPSL). This was closed
to new business in 2013. EPSL is a subsidiary undertaking of the Benefact Group. New business (investment contracts) written from August
2021 creates unit trust backed life policies to secure the pre-paid funeral plans written by EPSL and a third party provider.
Contracts may contain a discretionary participating feature, which is defined as a contractual right to receive additional benefits as a
supplement to guaranteed benefits. The Group does not have any such participating contracts (referred to as with-profit contracts). The
Group's long-term business contracts are referred to as non-profit contracts in the financial statements.
76
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Ne
t investment return
Net investment return consists of dividends, interest and rents receivable for the period, realised gains and losses, unrealised gains and losses
on financial investments and investment properties. Dividends on equity securities are recorded as revenue on the ex-dividend date. Interest
and rental income is recognised as it accrues.
Unrealised gains and losses are calculated as the difference between carrying value and original cost, and the movement during the period is
recognised through profit or loss. The value of realised gains and losses includes an adjustment for previously recognised unrealised gains or
losses on investments disposed of in the accounting period.
Fee and commission income
The life company fee and commission income consists of the coupon received on assets under management as part of the structured note
holding. Coupons are recorded as revenue on date of receipt, with the final month of the year recognised as it accrues.
The general insurance fee and commission income consists of amounts received from third-party insurers.
Insurance contract liabilities
Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Insurance risk is transferred when
the Group agrees to compensate a policyholder should an adverse specified uncertain future event occur. Contracts held by the Group under
which it transfers significant insurance risk related to underlying insurance contracts are classified as reinsurance contracts held. Insurance
and reinsurance contracts held also expose the Group to financial risk.
Insurance contracts issued and reinsurance contracts held may be initiated by the Group, or they may be acquired in a business combination
or in a transfer of contracts that do not form a business. All references in these accounting policies to ‘insurance contracts’ and ‘reinsurance
contracts’ held include contracts issued, initiated, or acquired by the Group, unless otherwise stated.
Under IFRS 17 Insurance Contracts the presentation of insurance revenue and insurance service expenses in the consolidated statement of
profit or loss is based on the concept of insurance service provided during the period.
Insurance contract liabilities are measured as the sum of the liability for incurred claims (LIC) and liability for remaining coverage (LFRC). The
LIC represents the obligation to pay valid claims for insured events that have occurred, which may also include events that have already
occurred but have not been reported to the Group. The LFRC represents the Group’s liability for insured events that have not yet occurred
under the insurance contract. Under IFRS 17, insurance revenue in each reporting period represents the change in the LFRC that relates to
services for which the Group expects to receive consideration.
(a) General insurance and reinsurance contracts
(i) Classification
The Group issues general insurance products to both individuals and businesses. The Group offers general insurance products in a number of
sectors.
The Group does not offer any product with direct participating features.
(ii) Separating components
The Group assesses its insurance and reinsurance products to determine whether they contain distinct components which must be accounted
for under another IFRS instead of under IFRS 17. After separating any distinct components, the Group applies IFRS 17 to all remaining
components of the host insurance contract. The Group’s insurance and reinsurance contracts do not include any components that require
separation.
Once the consideration of distinct components has been determined, the Group assesses whether the contract should be separated into
several insurance components that, in substance, should be treated as separate contracts. To determine whether a single legal contract does
not reflect the substance of the transaction and its insurance components should be recognised and measured separately instead, the Group
considers whether there is an interdependency between the different risks covered, whether components can lapse independently of each
other and whether the components can be priced and sold separately. The Group's insurance and reinsurance contracts do not include any
separate insurance components that should be treated as separate contracts.
77
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
(
iii) Level of aggregation
Insurance and reinsurance contracts are aggregated into portfolios and split into annual cohorts and profitability groups for measurement
and presentational purposes. The portfolios are comprised of contracts with similar risks which are managed together. Judgement is applied
when determining portfolios and includes drivers such as geography, lines of business (where these are separate components) and legal
entities within the Group.
Each annual cohort of business recognised within the portfolio is further divided into groups based on the expected profitability, determined at
initial recognition and assessed using actuarial valuation models applied to lower level sets of contracts. As a minimum the following
groupings are separated:
- Onerous contracts;
- Contracts that have no significant possibility of becoming onerous (based on the probability that changes to assumptions result in
contracts becoming onerous); and
- Any remaining contracts.
Contracts are considered onerous if the fulfilment cashflows allocated to that group of contracts in total are a net outflow. Where the
Premium Allocation Approach (see section (vi)) is applied, the Group uses an IFRS 17 permitted simplification that assumes that no contracts in
a portfolio are onerous at initial recognition unless facts and circumstances indicate otherwise. The Group has developed methodology that
identifies facts and circumstances that indicate whether a set of contracts is onerous, which is primarily based on internal management
budgeting information.
(iv) Recognition and derecognition
An insurance contract issued by the Group is recognised from the earliest of:
- The date the Group is exposed to risk which is ordinarily the beginning of the coverage period (i.e. the period during which the Group
provides services in respect of any premiums within the contract boundary of the contract);
- The date the first premium payment from the policyholder becomes due or, if there is no contractual due date, when it is received from
the policyholder; or
- The date when facts and circumstances indicate the contract is onerous.
When a contract is recognised, it is added to an existing group of contracts. However, if the contract does not qualify for inclusion in an
existing group, it forms a new group to which future similar contracts are added. Groups of contracts are established on initial recognition and
their composition is not revised once all contracts have been added to the group.
The Group derecognises insurance contracts when:
- The rights and obligations relating to the contract are extinguished (i.e. discharged, cancelled or expired); or
- The contract is modified such that the modification results in a change in the measurement model or the applicable standard for
measuring a component of the contract, substantially changes the contract boundary, or requires the modified contract to be included in
a different group. In such cases, the Group derecognises the initial contract and recognises a new contract based on the modified terms.
When a modification is not treated as a derecognition, the Group recognises amounts paid or received for the modification with the contract as
an adjustment to the relevant LRC.
(v) Contract boundaries
The Group uses the concept of contract boundary to determine what cash flows should be considered in the measurement of groups of
insurance contracts. The measurement of a group of contracts includes all the future cash flows within the boundary of each contract in the
group, determined as:
Insurance contracts
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the
reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has a substantive obligation to
provide the policyholder with services. A substantive obligation to provide services ends when:
- The Group has the practical ability to reassess the risks of the policyholder and, as a result, can set a price or level of benefits that fully
reflects those risks; or
- The Group has the practical ability to reassess the risks of the portfolio that contains the contract and can set a price or level of benefits
that fully reflects the risks of that portfolio, and the pricing of the premiums up to the reassessment date does not consider risks that
relate to periods after the reassessment date.
78
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
The contract boundary is reassessed at each reporting date to include the effect of changes in circumstances on the Group’s substantive
rights and obligations and, therefore, may change over time.
Reinsurance contracts
Cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in
which the Group is compelled to pay amounts to the reinsurer or has a substantive right to receive services from the reinsurer.
A substantive right to receive services from the reinsurer ends when the Group is no longer compelled to pay amounts to the reinsurer and if
the reinsurer:
- has the practical ability to reassess the risks transferred to it and can set a price or level of benefits that fully reflects those reassessed
risks; or
- has a substantive right to terminate the coverage.
The contract boundary is reassessed at each reporting date to include the effect of changes in circumstances on the Group’s substantive
rights and obligations and, therefore, may change over time.
(vi) Measurement model – Premium Allocation Approach (PAA)
The Group applies the PAA when measuring the liability for remaining coverage of groups of insurance and reinsurance contracts when the
following criteria are met at inception:
Insurance contracts:
- The coverage period of each contract in the group is one year or less; or
- Where the coverage period of a group of contracts is longer than one year, it is reasonably expected that the measurement of the liability
for remaining coverage for the group containing those contracts under PAA does not differ materially from the measurement that would
be recognised by applying the General Measurement Model (GMM).
Reinsurance contracts held:
- The coverage period of each contract in the group is one year or less; or
- The Group reasonably expects that the resulting measurement of the asset for remaining coverage under the PAA would not differ
materially from the result of applying the GMM.
The vast majority of the Group’s non-life business has a duration of one year or less and the PAA model is eligible automatically. Where the
PAA model is not automatically eligible, financial modelling is performed comparing the financial effects under the two models. Where the
financials are not expected to be materially different under the GMM and PAA, the relevant unit of account is treated as PAA eligible.
Initial recognition
On initial recognition of each group of contracts, the carrying amount of the LRC is measured as the premiums received less any insurance
acquisition cash flows allocated to the group at that date. For reinsurance contracts held, the measurement of the reinsurance contract held
includes all expected cash flows within the boundary of the reinsurance contract, including those cash flows related to recoveries from future
underlying insurance contracts that have not yet been issued by the Group, but are expected to be issued during the coverage period of the
reinsurance contract held.
Subsequent recognition
For insurance contracts issued, at each of the subsequent reporting dates, the LRC is:
- Increased by any premiums received and the amortisation of insurance acquisition cash flows recognised as expenses; and
- Decreased by the amount recognised as insurance revenue for services provided and any additional insurance acquisition cash flows
allocated after initial recognition.
For reinsurance contracts held, at each of the subsequent reporting dates, the Group applies the same accounting policies to measure a group
of reinsurance contracts held, adapted where necessary to reflect features that differ from those of insurance contracts.
To identify onerous contracts, the PAA facts and circumstances test uses the latest signed-off Corporate Strategic Plan, identifying sets of
contracts with a gross Combined Operating Ratio (COR) > 100% (including risk adjustment), when aligned to the relevant period being tested.
Where the Group recognises a loss on initial recognition of an onerous group of underlying insurance contracts, or when further onerous
underlying insurance contracts are added to a group, the Group establishes a loss-recovery component of the asset for remaining coverage
for a group of reinsurance contracts held representing the expected recovery of the losses.
79
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
A loss-recovery component is subsequently reduced to zero in line with reductions in the onerous group of underlying insurance contracts to
reflect that the loss-recovery component shall not exceed the portion of the carrying amount of the loss component of the onerous group of
underlying insurance contracts that the Group expects to recover from the group of reinsurance contracts held.
If at any time during the coverage period, facts and circumstances indicate that a group of contracts is onerous, then the Group recognises a
loss within insurance service expenses in the consolidated statement of profit or loss and increases the liability for remaining coverage to the
extent that the current estimates of the fulfilment cash flows that relate to remaining coverage exceed the carrying amount of the liability for
remaining coverage. Measurement of the loss component arising from the identification of onerous contracts is based on the future expected
profitability calculation attributed to the annual cohort(s) which are indicated to be loss making.
The Group recognises the LIC of a group of insurance contracts at the discounted amount of the future cash flows relating to claims incurred
but not yet settled and attributable expenses.
Discount rates are applied to reflect the time value of money and characteristics of the liability cash flows and contracts (including liquidity).
The change in the LIC due to the effects of the time value of money and financial risk is recognised within the net insurance financial result in
the consolidated statement of profit or loss.
The Group recognises the loss arising from onerous contracts as part of the insurance service expense in the statement of com prehensive
income. If there are no changes in expectations in subsequent periods, the release of the loss component is recognised as an adjustment to
insurance service expenses in the consolidated statement of profit or loss in line with the pattern of earned premium.
(vii) Measurement Model – General Measurement Model (GMM)
For information on the GMM, please see (b) (iii) below.
(viii) Risk adjustment
The risk adjustment reflects the compensation required by the Group for bearing uncertainty about the insurance cash flows that arise from
non-financial risks. The Group uses a combination of techniques to measure the risk adjustment, aligning to latest risk appetite approach.
Risk appetite is set net of reinsurance with the amount held for insurance contracts including the amount transferred to reinsurers. Under the
PAA, the risk adjustment is driven by claims reserving uncertainty, which the Group models using statistical techniques including
bootstrapping, supplemented where appropriate by scenario analysis, diversification between lines of business and back testing of actual
reserve development experience. The Group appetite targets an overall confidence level at or above the 75th percentile. General operational
risk not attributed to insurance contracts is not within the scope of risks included.
The change in the risk adjustment for earned business is recognised within insurance service expenses in the consolidated statement of profit
or loss.
(ix) Insurance acquisition cash flows
Insurance acquisition cash flows are costs considered directly attributable to selling, underwriting or starting a portfolio of insurance
contracts and are presented within the liability for remaining coverage. Insurance acquisition cash flows include direct costs and indirect
costs. The PAA provides an option to expense insurance acquisition cash flows as incurred, however the Group has chosen not to apply this
option. Insurance acquisition cash flows are amortised over the coverage period of the group of insurance contracts which they relate to.
Under IFRS 17, insurance acquisition cash flows for insurance contracts, insurance receivables and payables, and provisions for levies that are
attributable to existing insurance contracts are included in the measurement of insurance contracts issued.
(x) Insurance revenue
Under the premium allocation approach, insurance revenue for the period is the amount of expected premium receipts (excluding any
investment component and after adjustment to reflect the time value of money and the effect of financial risk, if applicable) allocated to the
period for services provided. The Group allocates the expected premium receipts to each period of insurance contract services, on the basis of
the passage of time or, if the expected pattern of release of risk during the coverage period differs significantly from the passage of time, on
the basis of the expected timing of incurred insurance service expenses. Changes to the basis of allocation are accounted for prospectively as
a change in accounting estimate .
80
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Under the GMM approach, as the Group provides services under the group of insurance contracts, it reduces the LRC and recognises
insurance revenue. The amount of insurance revenue recognised in the reporting period depicts the transfer of promised services at an
amount that reflects the portion of consideration Group expected to be entitled to in exchange for those services. Insurance revenue
comprises the following:
- Amounts relating to the changes in the LRC:
- Insurance claims and expenses incurred in the period measured at amounts expected at the beginning of the period, excluding:
- Amounts related to the loss component;
- Repayments of investment components;
- Amounts of transaction-based taxes collected in a fiduciary capacity; and
- Insurance acquisition expenses;
- Changes in the risk adjustment for non-financial risk, excluding;
- Changes included in insurance finance income or expenses;
- Changes that relate to future coverage (which adjust the CSM); and
- Amounts allocated to the loss component;
- Amounts of the CSM recognised in profit or loss for the services provided in the period; and
- Experience adjustments arising from premiums received in the period that relate to past and current service and related cash flows
such as insurance acquisition cash flows and premium-based taxes.
The amount of CSM recognised in profit or loss in each period to reflect services provided is determined by considering, for each group of
contracts, coverage units that reflect the quantity of the benefits provided in each period and the expected coverage period. Coverage units
are reviewed and updated at each reporting date. The quantity of benefits provided is based on the level of maximum benefit provided under
the insurance contract and the coverage period is set as the probability-weighted average expected duration for the group of contracts.
(xi) Insurance service expenses
Insurance service expenses include fulfilment and acquisition cash flows which are costs directly attributable to insurance contracts and
comprise both direct costs and the allocation of fixed and variable overheads. It is comprised of the following:
- Incurred claims and benefits excluding investment components;
- Other incurred discretionary attributable insurance service expenses;
- Amortisation of insurance acquisition cash flows;
- Changes that relate to past service (i.e. changes in the future cash flows relating to the LIC); and
- Changes that relate to future service (i.e. losses/reversals on onerous groups of contracts from changes in the loss components).
Amortisation of insurance acquisition cash flows is done on a straight-line basis and reflected in insurance service expenses in the same
amount as insurance acquisition cash flows recovery reflected within insurance revenue as described above. Other expenses not meeting the
above categories are included in other operating expenses in the consolidated statement of profit or loss .
(xii) Net income or expense from reinsurance contracts
Net income or expense from reinsurance contracts represents the insurance service result for groups of reinsurance contracts held and
comprises of the allocation of reinsurance premiums and other incurred directly attributable claims and expenses.
Reinsurance premium and expenses are recognised using the principles used to determine insurance revenue and expenses. The amount of
reinsurance expenses recognised in the reporting period depicts the transfer of received insurance contract services at an amount that
reflects the portion of ceding premiums that the Group expects to pay in exchange for those services.
The estimates of the present value of future cash flows of the reinsurance contracts held will reflect the risk of non-performance by the
reinsurer and the risk adjustment for reinsurance contracts held and is measured and recognised separately from insurance contracts issued.
In addition, the allocation of reinsurance premiums includes changes in the reinsurance assets arising from retroactive reinsurance contracts
held and voluntary reinstatement ceded premiums.
Reinsurance expenses reflect the allocation of reinsurance premiums paid or payable for receiving services in the period.
The Group treats reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to
be recovered under the reinsurance contract held.
81
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
(xiii) Net insurance financial result
Net insurance financial result comprises the change in the carrying amount of groups of insurance contracts issued and reinsurance contracts
held arising from the effect of the time value of money and changes in the time value of money and the effect of financial risk and changes in
financial risk.
(b) Life insurance
(i) Level of aggregation
The Group’s life insurance business comprises whole of life insurance contracts with similar risks which are managed together. These are
aggregated into a single portfolio of insurance contracts.
The portfolio of contracts is divided into groups based on the expected profitability, determined at initial recognition and assessed using
actuarial valuation models. As a minimum the following groupings are separated:
- Onerous contracts;
- Contracts that have no significant possibility of becoming onerous (based on the probability that changes to assumptions result in
contracts becoming onerous); and
- Any remaining contracts.
As the fair value approach has been applied on transition, the Group is not required to recognise separate cohorts for contracts issued more
than one year apart.
(ii) Contract boundary
The Group uses the concept of contract boundary to determine what cash flows should be considered in the measurement of insurance
contracts. The measurement of the contracts includes all the future cash flows within the boundary of each contract in the group.
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the
reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has a substantive obligation to
provide the policyholder with services. A substantive obligation to provide services ends when:
- The Group has the practical ability to reassess the risks of the policyholder and, as a result, can set a price or level of benefits that fully
reflects those risks; or
- The Group has the practical ability to reassess the risks of the portfolio that contains the contract and can set a price or level of benefits
that fully reflects the risks of that portfolio, and the pricing of the premiums up to the reassessment date does not consider risks that
relate to periods after the reassessment date.
The Group has concluded that it has no practical ability to reassess the risks of its portfolio and set a price to reflect them after inception of
the life insurance contract. Therefore no contract boundary is assumed to exist before the expiry of the insu rance contract.
(iii) Measurement Model – General Measurement Model (GMM)
The GMM is the default method used to measure insurance contracts under IFRS 17.
Initial recognition
On initial recognition, the carrying amount of the LRC is measured as the sum of discounted probability-weighted fulfilment cash flows within
the contract boundary, an explicit risk adjustment and a contractual service margin (CSM), representing the unearned profit of the contract to
be recognised as revenue over the coverage period. If the portfolio of contracts is expected to be onerous at inception, the loss is recognised
immediately within insurance service expenses in the statement of consolidated profit or loss and the CSM is set to zero.
Subsequent measurement
The carrying amount of the LRC is updated at each reporting date to reflect the re-measurement of the fulfilment cash flows to reflect
estimates based on current assumptions. The changes in fulfilment cash flows are reflected either in the insurance service result or by
adjusting the CSM, depending upon their nature. If the fulfilment cash flows exceed the CSM, the portfolio of contracts becomes onerous, and
the loss is recognised immediately within insurance service expenses in the statement of consolidated profit or loss.
The Group recognises the LIC of a group of insurance contracts at the discounted amount of the fulfilment cash flows relating to claims
incurred but not yet settled and attributable expenses.
82
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
(iv) Risk adjustment
The risk adjustment reflects the compensation required by the Group for bearing uncertainty about the cash flows that arises from non-
financial risks. The Group uses the value at risk/confidence level approach, choosing a confidence level and deriving the risk adjustment
directly from it. The confidence level percentile input used by the Group to determine the risk adjustment is the 95th percentile calculated
using a one-year Value-at-Risk (VaR) measure. The risk adjustment is calculated at the entity level.
The Group’s general and life insurance businesses are managed separately, subject to different risk profiles, and the compensation required
for bearing the associated non-financial risks is measured using different risk time horizons. The Group's view of the compensation for non-
financial risks is different for the general and life insurance contracts and therefore it is expected that the confidence levels for the risk
adjustment will be different between the two types of business.
(v) Insurance revenue
As the Group provides services under the group of insurance contracts, it reduces the LRC and recognises insurance revenue. The amount of
insurance revenue recognised in the reporting period depicts the transfer of promised services at an amount that reflects the portion of
consideration Group expected to be entitled to in exchange for those services. Insurance revenue comprises the following:
- Amounts relating to the changes in the LRC:
- Insurance claims and expenses incurred in the period measured at amounts expected at the beginning of the period, excluding:
- Amounts related to the loss component;
- Repayments of investment components;
- Amounts of transaction-based taxes collected in a fiduciary capacity; and
- Insurance acquisition expenses;
- Changes in the risk adjustment for non-financial risk, excluding;
- Changes included in insurance finance income or expenses;
- Changes that relate to future coverage (which adjust the CSM); and
- Amounts allocated to the loss component;
- Amounts of the CSM recognised in profit or loss for the services provided in the period; and
- Experience adjustments arising from premiums received in the period that relate to past and current service and related cash flows
such as insurance acquisition cash flows and premium-based taxes.
The amount of CSM recognised in profit or loss in each period to reflect services provided is determined by considering, for each group of
contracts, coverage units that reflect the quantity of the benefits provided in each period and the expected coverage period. Coverage units
are reviewed and updated at each reporting date. The quantity of benefits provided is based on the level of maximum benefit provided under
the insurance contract and the coverage period is set as the probability-weighted average expected duration for the group of contracts.
(vi) Insurance service expenses
Insurance service expenses include fulfilment and acquisition cash flows which are costs directly attributable to insurance contracts and
comprise both direct costs and the allocation of fixed and variable overheads. It is comprised of the following:
- Incurred claims and benefits excluding investment components;
- Other incurred discretionary attributable insurance service expenses;
- Amortisation of insurance acquisition cash flows;
- Changes that relate to past service (i.e. changes in the future cash flows relating to the LIC); and
- Changes that relate to future service (i.e. losses/reversals on onerous groups of contracts from changes in the loss components).
Amortisation of insurance acquisition cash flows is reflected in insurance service expenses in the same amount as insurance acquisition cash
flows recovery reflected within insurance revenue as described above. Other expenses not meeting the above categories are included in other
operating expenses in the consolidated statement of profit or loss.
(vii) Insurance acquisition cash flows
For life insurance contracts, acquisition costs comprise direct costs such as initial commission and the indirect costs of obtaining and
processing new business. As with general insurance business, those attributable are included in the measurement of insurance contracts
issued and reinsurance contracts held.
83
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Investment contract liabilities
For products that have no significant insurance risk and therefore classified as investment contracts, the Group recognises a liability
measured at fair value. The fair value of these liabilities is estimated based on an arms-length transaction between willing market participants
with consideration given to the cost of the minimum repayment guarantee to the policyholders. The cost of the guarantee is determined using
risk free rates of return, with the associated volatility assumption and allowing for the costs of administration associated with this low risk
investment strategy.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets and liabilities acquired at the date of
acquisition. Goodwill on acquisitions prior to 1 January 2004 (the date of transition to IFRS) is carried at book value (original cost less
amortisation) on that date, less any subsequent impairment. Where it is considered more relevant, the Group uses the option to measure
goodwill initially at fair value, less any subsequent impairment.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating
units for the purpose of impairment testing. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to
the entity sold .
Computer software
Computer software is carried at historical cost less accumulated amortisation and impairment, and amortised over a useful life of between
three and ten years, using the straight-line method. Amortisation and impairment charges incurred for the period are included in the
statements of profit or loss within other operating and administrative expenses.
Software costs that cannot be classified as intangible assets are charged to profit or loss during the period in which they are incurred.
Other intangible assets
Other intangible assets consist of acquired brand, customer and distribution relationships, and are carried at cost at acquisition less
accumulated amortisation and impairment after acquisition. Amortisation is on a straight-line basis over the weighted average estimated
useful life of intangible assets acquired. Amortisation and impairment charges incurred for the period are included in the statement of profit or
loss within other operating and administrative expenses.
Property, plant and equipment
Owner-occupied properties are stated at fair value and movements are taken to the revaluation reserve within equity, net of deferred tax.
When such properties are sold, the accumulated revaluation surpluses are transferred from this reserve to retained earnings.
Where the fair value of an individual property is below original cost, any revaluation movement arising during the period is recognised within
net investment return in the statement of profit or loss. Valuations are carried out at least every three years by external qualified surveyors.
All other items classed as property, plant and equipment within the statement of financial position are carried at historical cost less
accumulated depreciation and impairment.
Land is not depreciated. No depreciation is provided on owner-occupied properties since such depreciation would be immaterial. Depreciation
is calculated to write down the cost of other assets to their residual values over their estimated useful lives as follows:
Computer equipment
3 - 5 years straight line
Motor vehicles
4 years straight line
Fixtures, fittings and equipment 3 - 10 years or length of lease straight line
Right-of-use assets
The shorter of the lease term and useful life of the asset
Where the carrying amount of an item carried at historical cost less accumulated depreciation is greater than its estimated r ecoverable
amount, it is written down to its recoverable amount by way of an impairment charge to profit or loss.
Repairs and maintenance are charged to profit or loss during the financial year in which they are incurred.
84
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Investment property
Investment property comprises land and buildings which are held for long-term rental yields. It is carried at fair value with changes in fair
value recognised in the statement of profit or loss within net investment return. Investment property is valued annually by external qualified
surveyors at open market value. Investment properties are derecognised when they have been disposed of. Where the Group disposes of a
property, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in profit or loss
within net investment return.
Financial instruments
(a) Classification and measurement
All financial assets under IFRS 9 are to be initially recognised at fair value, plus or minus (in the case of a financial asset not at FVTPL)
transaction costs that are directly attributable to the acquisition of the financial instrument. Classification and subsequent measurement of
financial assets depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.
Debt instruments
There are three measurement categories into which the Group classifies its debt instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of
principal and interest (SPPI) are measured at amortised cost. Interest income from these financial assets is included in ‘net investment
result’ using the effective interest rate method.
- Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the
financial assets, where the assets’ cash flows represent SPPI, are measured at FVOCI, except where an election is made to classify as
FVTPL. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in ‘net investment result.
Interest income from these financial assets is included in ‘net investment result’ using the effective interest rate method.
- Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. In order
to eliminate or significantly reduce an accounting mismatch, an irrevocable election can be made (on an instrument-by-instrument basis)
to classify and measure debt instruments at FVTPL instead of amortised cost or FVOCI. A gain or loss on a debt investment that is
measured at FVTPL is recognised in profit or loss and presented net within ‘net investment result’.
Equity instruments
- FVTPL: By default, the group classifies and measures equity investments at FVTPL. Changes in the fair value of equity instrum ents at
FVTPL are recognised in ‘net investment result’ in the consolidated statement of profit or loss.
- FVOCI: An irrevocable election can be made (on an instrument-by-instrument basis) on the date of acquisition to classify and measure
equity instruments at FVOCI. Designation is not permitted if the equity instrument is held for trading. Where this election has been made,
there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss within ‘net investment resul t’ when the Group’s right to
receive payments is established.
(b) Impairment
The Group recognises a forward-looking loss allowance for expected credit losses (ECL) on financial assets measured at amortised cost or
FVOCI. ECL is an unbiased, probability-weighted estimate of credit losses and considers all reasonable and supportable information. The
impairment methodology applied depends on whether there has been a significant increase in credit risk or default.
The Group elects to apply the simplified approach permitted by IFRS 9 and recognises lifetime ECL for trade receivables and l ease
receivables. The ECL on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience,
adjusted for current and forecast economic conditions .
85
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial
recognition. If the credit risk on the financial instrument has not increased significantly since initial recogni tion, the Group measures the loss
allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected losses that will result from
all possible default events over the expected life of a financial instrument. 12-month ECL represents the portion of lifetime ECL that is
expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. A financial asset is
written off to the extent there is no reasonable expectation of recovery. Any subsequent recovery in excess of the financial asset’s written
down value is credited to profit or loss.
Impairment losses are presented within ‘net investment return’ in the consolidated statement of profit or loss.
Offset of financial assets and financial liabilities
Financial assets and liabilities are offset, and the net amount reported in the statement of financial position, when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability
simultaneously.
Subordinated liabilities
Subordinated liabilities are recognised initially at fair value, being the issue proceeds net of premiums, discounts and transaction costs
incurred. All borrowings are subsequently measured at amortised cost using the effective interest rate method. The amortisation is recognised
as an interest expense using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less and bank overdrafts.
Leases
Group as a lessee
Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the lease asset is available for use by
the Group. Each lease payment is deducted from the lease liability. Finance costs are charged to the profit and loss over the lease period so as
to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated
over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Lease liabilities are determined using the net present value of the payments over the lease term with the rate used to discount payments
reflecting the rate implicit in the lease or, if it not readily determinable, the Group's incremental borrowing rate, and include:
- Fixed payments less any lease incentives receivable;
- Variable lease payments that are based on an index or rate;
- Amounts expected to be payable by the lessee under residual value guarantees;
- The exercise price of an option if the lessee is reasonably certain to exercise that option; and
- Payments and penalties from terminating the lease, if the lease term reflects the lessee exercising that option.
Right-of-use assets are initially measured at cost and subsequently measured as cost less accumulated depreciation and comprises:
- The amount of the initial measurement of lease liability;
- Any lease payment made at or before the commencement date, less any lease incentives received;
- Any initial direct costs; and
- Restoration costs.
Right-of-use assets are presented within property, plant and equipment in the statement of financial position.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less.
Group as a lessor
The Group enters into lease agreements as a lessor with respect to some of its investment properties. The Group also sublets property no
longer occupied by the Group.
86
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating
leases.
When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is
classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases.
Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment
outstanding in respect of the leases.
Provisions and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past events, and it is probable that an
outflow of resources, embodying economic benefits, will be required to settle the obligation, and a reliable estimate of the amount of the
obligation can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only
when it is virtually certain that the reimbursement will be received.
The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the
unavoidable costs of meeting the obligations under the contract.
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 but either
an outflow of resources is not probable or the amount cannot be reliably estimated.
Employee benefits
Pension obligations
The Group operates defined benefit and defined contribution pension plans, the assets of which are held in separate trustee-administered
funds.
For defined benefit plans, the pension costs are assessed using the projected unit credit method. Under this method, the cost of providing
pensions is charged to profit or loss so as to spread the regular cost over the service lives of employees. The pension obligation is measured
as the present value of the estimated future cash outflows using a discount rate based on market yields for high-quality corporate bonds. The
resulting pension plan surplus or deficit appears as an asset or obligation in the statement of financial position. Any asset resulting from this
calculation is limited to the present value of economic benefits available in the form of refunds from the plan or reductions in future employer
contributions to the plan. Independent actuarial valuations are carried out at the end of each reporting period.
In accordance with IAS 19 Employee Benefits, current and past service costs, gains and losses on curtailments and settlements and net
interest expense or income (calculated by applying a discount rate to the net defined benefit liability or asset) are recognised through profit or
loss. Actuarial gains or losses are recognised in full in the period in which they occur in other comprehensive income.
Contributions in respect of defined contribution plans are recognised as a charge to profit or loss as incurred.
Other post-employment obligations
Some Group companies provide post-employment medical benefits to their retirees. The expected costs of these benefits are accrued over
the period of employment using an accounting methodology similar to that for defined benefit pension plans. Interest expense (calculated by
applying a discount rate to the net obligations) is recognised through profit or loss. Actuarial gains and losses are recognised immediately in
other comprehensive income. Independent actuarial valuations are carried out at the end of each reporting period.
Other benefits
Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the
estimated liability for annual leave and long service leave as a result of services rendered by employees up to the period-end date.
Taxation
Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except to the extent that it relates to
items recognised in other comprehensive income, in which case it is recognised in the statement of comprehensive income.
Current tax is the expected tax payable on the taxable result for the period, after any adjustment in respect of prior periods.
87
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 Accounting policies (continued)
Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for tax purposes. Deferred tax is measured using tax rates expected to apply when the related deferred tax
asset is realised, or the deferred tax liability is settled, based on tax rates and laws which have been enacted or substantively enacted at the
period-end date.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilised.
In May 2023, amendments to IAS 12 were published to address the implementation of the Organisation for Economic Co-operation and
Development (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two Model Rules. The Group became subject to these rules from 1
January 2025. In accordance with the IAS 12 amendments, the Group continues to apply the mandatory exception from recognising and
disclosing deferred tax assets and liabilities related to Pillar Two income taxes.
Appropriations
Dividends
Dividends on Ordinary shares are recognised in equity in the period in which they are declared and, for the final dividend, approved by
shareholders. Dividends on Non-Cumulative Irredeemable Preference shares are recognised in the period in which they are declared and
appropriately approved.
Charitable donation to ultimate parent undertaking
Payments are made via Gift Aid to the ultimate parent company, Benefact Trust Limited, a registered charity. The Group does not regard these
payments as being expenses of the business and, as such, recognises these net of tax in equity in the period in which they are approved.
Use of Alternative Performance Measures (APM)
As detailed in the Strategic Report, the Group uses certain key performance indicators which, although not defined under IFRS, provide useful
information and aim to enhance understanding of the Group's performance. These include gross written premiums, net written premiums, net
earned premiums, underwriting result and combined operating ratio. The key performance indicators should be considered complementary to,
rather than a substitute for, financial measures defined under IFRS. Note 36 provides details of how these key performance indicators
reconcile to the results reported under IFRS.
88
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
2 Critical accounting estimates and judgements in applying accounting
policies
The Group makes estimates and judgements that affect the reported amounts of assets and liabilities. Estimates and judgements are regularly
reviewed and based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. Management have considered the current economic environment in their estimates and judgements.
(a) Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations which are dealt with separately below, that the directors
have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in
the financial statements:
Pension and other post-employment benefits
The Group's pension and other post-employment benefit obligations are discounted at a rate set by reference to market yields at the end of
the reporting period on high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have
terms to maturity approximating the terms of the related pension liability. Judgement is required when setting the criteria for bonds to be
included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds includes
the nature and quality of the corporate bonds and the identification of outliers which are excluded.
The Group also applies judgement in determining the extent to which a surplus in the defined benefit plan can be recognised i n the statement
of financial position. In accordance with IAS 19 Employee benefits, the recognisable surplus is limited to the lower of the surplus in the plan
and the asset ceiling. The asset ceiling is the present value of future economic benefits available in the form of a refund or as a reduction in
future contributions. The Group applies judgement in determining the asset ceiling in accordance with IFRS Interpretations Committee
Interpretation 14 (IFRIC 14).
Unlisted equity securities
The value of unlisted equity securities, where there is no active market and therefore no observable market price, are classified as level 3
financial assets. This requires the Group to make judgements in respect of the most appropriate valuation technique to apply. Further details,
including the amounts recognised within the financial statements which are impacted by these judgements are shown in note 4(b).
Significant insurance risk
Whole-of-life policies issued by the Group where significant insurance risk has been accepted from a policyholder are accounted for as
insurance contracts. Whole-of-life policies where the Group has not accepted significant insurance risk from a policyholder are accounted for
as financial instruments. Contracts can have features of, or appear to have features of, an insurance contract and therefore judgement is
required on whether there is insurance risk and then whether that insurance risk is significant. Policies are considered to be insurance
contracts where future benefits are linked to inflation as there is uncertainty over the timing and amount of a resulting claim. Policies that
provide a policyholder with a guarantee to return the original premium have not transferred insurance risk and are considered financial
instruments.
Level of aggregation
The Group separates insurance contracts into portfolios of similar risks that are managed together. For the non-life business the majority of
the Group’s insurance contracts represent a combination of component risks which are sold as an overall product and this unit has not been
unbundled because the combination is not solely for administrative or customer convenience. For contracts eligible for the Premium
Allocation Approach (materially all of the non-life business), the primary indicator of the portfolios for gross business has been judged to be
the geographic territory of the risk. The Group has considered that the non-life business as a whole is the appropriate level of aggregation for
usefulness and understanding of the financial statements, thereby providing valuable insights to users.
89
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
2 Critical accounting estimates and judgements in applying accounting policies (continued)
The life business represents a separate portfolio, as a single product line. Portfolios of insurance contacts are divided into profitability groups
for measurement purposes. Under the PAA model the default assumption is made that no groups are onerous unless facts and circumstances
indicate otherwise, which is determined through review for go-forward expected losses for groupings identified in the Group Corporate
Strategic Plan.
Risk adjustment
A risk adjustment for non-financial risk is determined to reflect the compensation that the Group would require for bearing non-financial risk
and its degree of risk aversion. The risk adjustment for non-financial risk has been determined using a combinati on of confidence level
techniques and scenarios. Further details are included in the risk adjustment sections of the insurance contract liabilities accounting policy in
note 1.
(b) Key sources of estimation uncertainty
In applying the Group’s accounting policies various transactions and balances are valued using estimates or assumptions. All estimates are
based on management’s knowledge of current facts and circumstances, assumptions based on that knowledge and their predictions of future
events and actions.
The following items are considered key estimates and assumptions which, if actual results differ from those predicted, may have significant
impact on the following year’s financial statements:
The ultimate liability arising from claims incurred under general business insurance contracts
The estimation of the ultimate liability arising from claims made under general business insurance contracts is a critical accounting estimate.
There is uncertainty as to the total number of claims made on each business class, the amounts that such claims will be settled for and the
timing of any such payments. There are various sources of estimation uncertainty as to how much the Group will ultimately pay with respect
to such contracts. Such uncertainty includes:
- whether a claim event has occurred or not and how much it will ultimately settle for;
- variability in the speed with which claims are notified and in the time taken to settle them, especially complex cases resolved through the
courts;
- changes in the business portfolio affecting factors such as the number of claims and their typical settlement costs, which may differ
significantly from past patterns;
- new types of claim, including latent claims, which arise from time to time;
- changes in legislation and court attitudes to compensation, including the discount rate applied in assessing lump sums, which may apply
retrospectively;
The uncertainties surrounding the estimates of claims payments for the various classes of business are discussed further in note 3. General
business insurance liabilities include a risk adjustment in addition to the best estimates for future claims. The sensitivity of profit or loss to
changes in the ultimate settlement cost of claims reserves is presented in note 26.
Future benefit payments arising from life insurance contracts
The determination of the liabilities under life insurance contracts is dependent on estimates made by the Group. Estimates are made as to the
expected number of deaths for each of the years in which the Group is exposed to risk. The Group bases these estimates on standard industry
and national mortality tables, adjusted to reflect recent historical mortality experience of the Group's portfolio, with allowance also being
made for expected future mortality improvements. The estimated mortality rates are used to determine forecast benefit payments net of
forecast premium receipts.
A discount rate curve is calculated on a bottom up basis. The risk free curve is based on the UK government bond yield curve. A liquidity
premium based on the return on a notional index of fixed interest assets, including gilts and corporate bonds, is added to the risk free curve.
The liquidity premium is adjusted for credit risk and differences in liquidity between the notional assets and the liabilities.
In addition, a risk adjustment for non-financial risks is then added to the best estimate liability calculated on the basis set out above. Further
details are included in the life insurance risk adjustment section of the insurance contract liabilities accounting policy in note 1. The sensitivity
of profit or loss to changes in the assumptions is presented in note 26 (b)(iv).
90
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
2 Critical accounting estimates and judgements in applying accounting policies (continued)
Pension and other post-employment benefits
The cost of these benefits and the present value of the pension and other post-employment benefit liabilities depend on factors that are
determined on an actuarial basis using a number of assumptions. Any change in these assumptions may affect planned funding of the pension
plans.
The discount rate assumption is a component in determining the charge to profit or loss. The effect of movements in the actuarial assumptions
during the period, including discount rate, mortality, inflation, salary and medical expense inflation assumptions, on the pension and other
post-employment liabilities are recognised in other comprehensive income. An explanation of the actuarial gains recognised in the current
year is included in note 17.
The Group determines an appropriate discount rate at the end of each period, to be used to determine the present value of estimated future
cash outflows expected to be required to settle the pension and other post-employment benefit obligations.
The expected rate of medical expense inflation is determined by comparing the historical relationship of medical expense increases over a
portfolio of UK-based post-retirement medical plans with the rate of inflation, making an allowance for the size of the plan and actual medical
expense experience.
Other key assumptions for the pension and post-employment benefit costs and credits are based in part on current market conditions.
Additional information including the sensitivity of pension and post-employment medical benefit scheme liabilities to changes in the key
assumptions is disclosed in note 18.
Unlisted equity securities
The valuation of unlisted equity securities requires estimates to be made for the illiquidity discount and credit rating discount. The illiquidity
premium reflects the additional return required by investors for holding assets that are not readily tradeable and involves analysing previous
transactions. The credit rating discount accounts for the credit risk associated with the issuer of the unlisted equity. The creditworthiness of
the issuer is evaluated by comparing to other similar companies. Further details, including the sensitivity of the valuation to these inputs, are
shown in note 4(b).
Discount rates
IFRS 17 requires entities to determine discount rates that reflect the characteristics of the liabilities using either the ‘bottom up’ or ‘top down’
approach. The ‘top down’ approach involves using discount rate curves derived from a portfolio of reference assets adjusted to remove all
characteristics of the assets that are not present in insurance contracts, but not requiring to eliminate the illiquidity premium.
The Group selected to apply the ‘bottom up’ approach which requires the use of risk-free rate curves and adding the illiquidity premium. The
Group derives illiquidity by reference to the illiquidity estimated to apply to a suitable reference portfolio of assets with similar liquidity
characteristics. The published yields on Government bonds in each territory are used as a reference for risk-free rates. The characteristics of
the Group’s general insurance contract claims liabilities are less liquid than those of its life insurance contracts, because the life insurance
contracts have surrender options.
91
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
3 Insurance risk
Through its general and life insurance operations, the EIO Group is exposed to a number of risks. The risk under any one insurance contract is
the possibility that the insured event occurs and the uncertainty of the amount and timing of the resulting claim. Factors su ch as the business
and product mix, the external environment including market competition and reinsurance capacity all may vary from year to year, along with
the actual frequency, severity and ultimate cost of claims and benefits. This subjects the EIO Group to underwriting and pricing risk (the risk of
failing to ensure disciplined risk selection and to obtain the appropriate premium), claims reserving risk (the risk of actual claims payments
exceeding the amount we are holding in reserves) and reinsurance risk (the risk of failing to access and manage reinsurance capacity at a
reasonable price).
(a) Risk mitigation
Statistics demonstrate that the larger and more diversified the portfolio of insurance contracts, the smaller the relative variability in the
expected outcome will be. The EIO Group’s underwriting strategy is designed to ensure that the underwritten risks are well diversified in
terms of type and amount of risk and geographical spread. In all operations pricing controls are in place, underpinned by sound statistical
analysis, market expertise and appropriate external consultant advice. Gross and net underwriting exposure is protected through the use of a
comprehensive programme of reinsurance using both proportional and non-proportional reinsurance, supported by proactive claims
handling. The overall reinsurance structure is regularly reviewed and modelled to ensure that it remains optimum to the EIO Group's needs.
The optimal reinsurance structure provides the EIO Group with sustainable, long-term capacity to support its specialist business strategy, with
effective balance sheet and profit and loss protection at a reasonable cost.
Catastrophe protection is purchased following an extensive annual modelling exercise of gross and net (of proportional reinsurance)
exposures. In conjunction with reinsurance brokers the EIO Group utilises the full range of proprietary catastrophe models and continues to
develop bespoke modelling options that better reflect the specialist nature of the portfolio. Reinsurance is purchased in line with the EIO
Group's risk appetite.
(b) Concentrations of risk
The core business of the EIO Group is general insurance, with the principal classes of business written being property and liability. The
miscellaneous financial loss class of business covers personal accident, fidelity guarantee and loss of money, income and licence. The other
class of business includes cover of legal expenses and also a small portfolio of motor policies, but this has been in run-off in the United
Kingdom since November 2012. The EIO Group's whole-of-life insurance policies support funeral planning products.
The table below summarises written premiums for the financial year, before and after reinsurance, by territory and by class of business which
is an indication of the concentration of risk accepted by the EIO Group in the year. Further details on the gross and net written premiums,
which are alternative performance measures that are not defined under IFRS, are detailed in note 36.
92
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
3 Insurance risk (continued)
Written premiums
2025
General insurance
Life insurance
Miscellaneous
financial
Property
Liability
loss Other
Whole of life Total
Group
£000
£000
£000
£000
£000
£000
Territory
United Kingdom and Ireland Gross
337,336
96,932
29,185
5,486
(85)
468,854
Net
167,874
108,235
14,163
1,014
-
291,286
Australia
Gross
48,106
39,591
1,227
51
-
88,975
Net
9,917
18,811
1,207
9
-
29,944
Canada Gross
67,745
28,118
-
-
-
95,863
Net
40,078
23,891
-
-
-
63,969
Total
Gross
453,187
164,641
30,412
5,537
(85)
653,692
Net
217,869
150,937
15,370
1,023
-
385,199
Parent
Territory
United Kingdom and Ireland Gross
338,712
112,034
29,185
5,486
-
485,417
Net
167,874
108,235
14,163
1,014
-
291,286
Canada Gross 67,745
28,118
- -
- 95,863
Net
40,078
23,891
-
-
-
63,969
Total Gross 406,457
140,152
29,185 5,486
- 581,280
Net
207,952
132,126
14,163
1,014
-
355,255
2024
General insurance
Life insurance
Miscellaneous
financial
Property
Liability
loss
Other
Whole of life
Total
Group
£000
£000
£000 £000
£000 £000
Territory
United Kingdom and Ireland Gross
325,781
85,970
27,352
4,597
(271)
443,429
Net
162,268
82,332
13,413
391
(271)
258,133
Australia
Gross
53,643
40,212
1,320
170
-
95,345
Net 11,757
34,328
1,297 30
-
47,412
Canada Gross
71,070
30,486
- -
-
101,556
Net
46,570
27,021
- -
-
73,591
Total Gross
450,49 4
156,668
28,672
4,767
(271)
640,330
Net 220,595
143,681
14,710 421
(271)
379,136
Parent
Territory
United Kingdom and Ireland Gross
325,780
85,970
27,352
7,334
-
446,436
Net
162,268
82,332
13,413 3,128
-
261,141
Canada
Gross
71,070
30,486
- -
-
101,556
Net 46,570
27,021
- -
- 73,591
Total
Gross
396,850
116,456
27,352
7,334
-
547,992
Net 208,838
109,353
13,413 3,128
-
334,732
93
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
3 Insurance risk (continued)
(c) General insurance risks
Property classes
Property cover mainly compensates the policyholder for damage suffered to their property or for the value of property lost. Property
insurance may also include cover for pecuniary loss through the inability to use damaged insured commercial properties (business
interruption).
For property insurance contracts, there can be variability in the nature, number and size of claims made in each period.
The nature of claims may include those arising from the perils of fire, weather damage, escape of water, explosion, riot and malicious damage,
subsidence, accidental damage, theft and earthquake. Subsidence claims are particularly difficult to predict because the damage is often not
apparent for some time. The ultimate settlements can be small or large with a risk of a settled claim being reopened at a later date.
The number of claims made can be affected in particular by weather events, changes in climate, economic environment, and crime rates.
Climate change may give rise to more frequent and extreme weather events, such as river flooding, hurricanes and drought, and their
consequences, for example, subsidence claims. If a weather event happens near the end of the financial year, the uncertainty about ultimate
claims cost in the financial statements is much higher because there is insufficient time for adequate data to be received to assess the final
cost of claims.
Individual claims can vary in amount since the risks insured are diverse in both size and nature. The cost of repairing property varies according
to the extent of damage, cost of materials and labour charges.
Contracts are underwritten on a reinstatement basis or repair and restoration basis as appropriate. Costs of rebuilding properties, of
replacement or indemnity for contents and time taken to bring business operations back to pre-loss levels for business interruption are the
key factors that influence the cost of claims. Individual large claims are more likely to arise from fire, storm or flood dam age. The greatest
likelihood of an aggregation of claims arises from earthquake, weather or major fire spreading events.
Claims payment, on average, occurs within a year of the event that gives rise to the claim. However, there is variability around this average
with larger claims typically taking longer to settle and business interruption claims taking much longer depending on the length of the
indemnity period involved.
Liability classes
The main exposures are in respect of liability insurance contracts which protect policyholders from the liability to compensate injured
employees (employers' liability) and third parties (public liability).
Claims that may arise from the liability portfolios include damage to property, physical injury, disease and psychological trauma. The EIO
Group has a different exposure profile to most other commercial lines insurance companies as it has lower exposure to industrial risks.
Therefore, claims for industrial diseases are less common for the EIO Group than injury claims such as slips, trips and back injuries.
The frequency and severity of claims arising on liability insurance contracts can be affected by several factors. Most significant are the
increasing level of awards for damages suffered, legal costs and the potential for periodic payment awards.
The severity of bodily injury claims can be influenced particularly by the value of loss of earnings and the future cost of care. The settlement
value of claims arising under public and employers' liability is particularly difficult to predict. There is often uncertainty as to the extent and
type of injury, whether any payments will be made and, if they are, the amount and timing of the payments, including the discount rate applied
for assessing lump sums. Key factors driving the high levels of uncertainty include the late notification of possible claim events and the legal
process.
Late notification of possible claims necessitates the holding of provisions for incurred claims that may only emerge some years into the
future. In particular, the effect of inflation over such a long period can be considerable and is uncertain. A lack of comparable past experience
may make it difficult to quantify the number of claims and, for certain types of claims, the amounts for which they will ultimately settle. The
legal and legislative framework continues to evolve, which has a consequent impact on the uncertainty as to the length of the claims
settlement process and the ultimate settlement amounts.
Claims payment, on average, occurs about three to four years after the event that gives rise to the claim. However, there is significant
variability around this average.
94
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
3 Insurance risk (continued)
Provisions for latent claims
The public and employers’ liability classes can give rise to very late reported claims, which are often referred to as latent claims. These can
vary in nature and are difficult to predict. They typically emerge slowly over many years, during which time there can be particular
uncertainty as to the number of future potential claims and their cost. The EIO Group has reflected this uncertainty and believes that it holds
adequate reserves for latent claims that may result from exposure periods up to the reporting date.
Note 26 presents the development of the estimate of ultimate claim cost for public and employers' liability claims occurring in a given year.
This gives an indication of the accuracy of the estimation technique for incurred claims.
(d) Life insurance risks
The EIO Group provides whole-of-life insurance policies to support funeral planning products, for most of which the future benefits are linked
to inflation and backed by index-linked assets. None of the risks arising from this business are amongst the EIO Group's principal risks and no
new policies with insurance risk have been written in the life fund since 2013.
The primary risk on these contracts is the level of future investment returns on the assets backing the liabilities over the life of the
policyholders is insufficient to meet future claims payments, particularly if the timing of claims is different from that assumed. The interest
rate and inflation risk within this has been largely mitigated by holding index-linked assets of a similar term to the expected liabilities profile.
The main residual risk is the spread risk attached to corporate bonds held to match the liabilities.
Uncertainty in the estimation of the timing of future claims arises from the unpredictability of long-term changes in overall levels of mortality.
The EIO Group bases these estimates on standard industry and national mortality tables and its own experience. The most significant factors
that could alter the expected mortality rates profile are epidemics, widespread changes in lifestyle and continued improvement in medical
science and social conditions. This small mortality risk is retained by the EIO Group. The EIO Group holds a reserve to meet the costs of future
expenses in running the life business and administration of the policies. There is a risk that this is insufficient to meet the expenses incurred in
future periods.
95
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management
The Group is exposed to financial risk through its financial assets, financial liabilities, reinsurance assets and insurance liabilities. In particular, the key
financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance contracts. The most
important components of financial risk are interest rate risk, credit risk, equity price risk and currency risk.
There has been no change from the prior year in the nature of the financial risks to which the Group is exposed. The continued conflict in Ukraine,
Middle East and the cost of living crisis means there is continued uncertainty in relation to the economic risks to which the Group is exposed. This
includes equity price volatility, movements in exchange rates and long-term UK growth prospects. The Group's management and measurement of
financial risks is informed by either stochastic modelling or stress testing techniques.
( a) Categories of financial instruments applying IFRS 9
Financial assets
Financial liabilities
Designated
Classified
as fair value
as fair value
Fair value
through through
through
profit or profit or
Amortised
profit or
Amortised
Other assets
loss
loss
cost
loss
cost
and liabilities
Total
Group
£000
£000
£000
£000 £000
£000
£000
At 31 December 2025
Financial investments
1,092,158
2,513
14
-
-
-
1,094,685
Other assets
-
-
124,806
-
-
9,938
134,744
Cash and cash equivalents
-
-
93,174
-
-
-
93,174
Lease obligations
-
-
-
-
(22,664)
-
(22,664)
Subordinated liabilities
-
-
-
-
(26,835)
-
(26,835)
Other liabilities
-
-
-
(480)
(49,669)
(17,725)
(67,874)
Inv't contract liabilities
-
-
-
(172,375)
-
-
(172,375)
Net other
-
-
-
-
-
(414,844)
(414,844)
Total
1,092,158
2,513
217,994
(172,855)
(99,168)
(422,631)
618,011
At 31 December 2024
Financial investments 4,150
977,837
14
-
-
-
982,001
Other assets
-
-
147,583
-
-
9,185
156,768
Cash and cash equivalents
-
-
105,761
-
-
-
105,761
Leaseobligations -
- -
-
(24,573)
-
(24,573)
Subordinated liabilities
- -
-
-
(25,112)
-
(25,112)
Other liabilities
-
-
-
-
(44,909)
(16,934)
(61,843)
Inv't contract liabilities
-
-
- (133,706)
-
-
(133,706)
Net other
-
-
-
-
-
(372,253)
(372,253)
Total
977,837
4,150
253,358
(133,706)
(94,594)
(380,002)
627,043
Parent
At 31 December 2025
Financial investments
723,121
2,513
14
-
-
42,707
768,355
Other assets
-
-
132,907
-
-
8,079
140,986
Cash and cash equivalents
-
-
68,841
-
-
-
68,841
Lease obligations
-
-
-
-
(21,095)
-
(21,095)
Subordinated liabilities
-
-
-
-
(26,835)
-
(26,835)
Other liabilities
-
-
-
(480)
(40,479)
(15,534)
(56,493)
Net other
-
-
-
-
-
(295,029)
(295,029)
Total
723,121
2,513
201,762
(480)
(88,409)
(259,777)
578,730
At 31 December 2024
Financial investments
627,530
4,150
14
- -
42,707
674,401
Other assets
-
-
146,310
-
-
7,027
153,337
Cash and cash equivalents
-
-
80,330
-
-
-
80,330
Lease obligations
-
-
-
-
(22,906)
-
(22,906)
Subordinated liabilities
-
-
-
-
(25,112)
-
(25,112)
Other liabilities
-
-
-
(215)
(51,453)
(14,972)
(66,640)
Net other
-
-
-
-
-
(232,450)
(232,450)
Total
627,530
4,150
226,654
(215)
(99,471)
(197,688)
560,960
The carrying value of those financial assets and liabilities not carried at fair value in the financial statements is considered to approximate to their fair
value .
96
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
( b) Fair value hierarchy
The fair value measurement basis used to value those financial assets and financial liabilities held at fair value is categorised into a fair value
hierarchy as follows:
Level 1: fair values measured using quoted bid prices (unadjusted) in active markets for identical assets or liabilities. This category includes listed
equities in active markets, listed debt securities in active markets and exchange-traded derivatives.
Level 2: fair values measured using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices). This category includes listed debt or equity securities in a market that is not active and
derivatives that are not exchange-traded.
Level 3: fair values measured using inputs for the asset or liability that are not based on observable market data (unobservable inputs). This
category includes unlisted debt and equities, including investments in venture capital, and suspended securities. Where a look-through valuation
approach is applied, underlying net asset values are sourced from the investee, translated into the Group's functional currency and adjusted to
reflect illiquidity where appropriate, with the fair values disclosed being directly sensitive to this input.
Instruments move between fair value hierarchies primarily due to increases or decreases in market activity or changes to the significance of
unobservable inputs to valuation, and are recognised at the date of the event or change in circumstances which caused the transfer. During the
year there was a transfer from level 1 to level 2 due to a change in the observable inputs.
Analysis of fair value measurement bases
Fair value measurement at the
end of the reporting year based on
Group
Level 1
Level 2
Level 3
Total
£000
£000
£000
£000
At 31 December 2025
Financial assets at fair value through profit or loss
Financial investments
Equity securities
272,026
-
111,847
383,873
Debt securities
450,729
96,630
1,149
548,508
Structured notes
-
159,777
-
159,777
Derivatives
-
2,513
-
2,513
722,755
258,920
112,996
1,094,671
At 31 December 2024 (as restated*)
Financial assets at fair value through profit or loss
Financial investments
Equity securities
247,342
-
84,939
332,281
Debt securities
411,685
108,849
1,110
521,644
Structured notes
-
123,912
-
123,912
Derivatives
-
4,150
-
4,150
659,027
236,911
86,049
981,987
*The fair value hierarchy disclosures have been restated to reclassify debt securities of £108.2m from Level 1 to Level 2 and £1.1m from Level 1 to
Level 3. This reflects a change in approach that better evidences input observability and provides a more accurate classification .
97
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
Fair value measurement at the
end of the reporting year based on
Parent
Level 1
Level 2
Level 3
Total
£000
£000
£000
£000
At 31 December 2025
Financial assets at fair value through profit or loss
Financial investments
Equity securities
258,547
-
111,847
370,394
Debt securities
328,476
23,102
1,149
352,727
Derivatives
-
2,513
-
2,513
58 7,023 25,615
112,996
725,634
At 31 December 2024 (as restated*)
Financial assets at fair value through profit or loss
Financial investments
Equity securities
231,574
-
84,939
316,513
Debt securities
278,974
31,164
879
311,017
Derivatives
-
4,150
-
4,150
510,548
35,314
85,818
631,680
*The fair value hierarchy disclosures have been restated to reclassify debt securities of £30.5m from Level 1 to Level 2 and £0.9m from Level 1 to
Level 3. This reflects a change in approach that better evidences input observability and provides a more accurate classification.
Gains and losses on derivative liabilities of the Group and Parent were recognised through other comprehensive income if they were hedge
accounted, otherwise were recognised at fair value through profit or loss. Derivative liabilities are categorised as level 2 (see note 21).
Fair value measurements based on level 3
Fair value measurements in level 3 for both the Group and Parent consist of financial assets at fair value through profit or loss, analysed as
follows:
Equity
Debt
Group
securities
securities
Total
£000
£000
£000
For the year ended 31 December 2025
Opening balance
84,939
1,110
86,049
Total gains recognised in profit or loss
26,908
39
26,947
Closing balance
111,847
1,149
112,996
Total gains for the year included in profit or loss for assets held at the end of the reporting year
26,908
39
26,947
For the year ended 31 December 2024
Opening balance
76,898
1,161
78,059
Total gains/(losses) recognised in profit or loss
8,041
(51)
7,990
Closing balance
84,939
1,110
86,049
Total gains/(losses) for the year included in profit or loss for assets held at the end of the
reporting year
8,041
(51)
7,990
98
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
Equity
Debt
Parent
securities
securities
Total
£000
£000
£000
For the year ended 31 December 2025
Opening balance
84,939
879
85,818
Total gains recognised in profit or loss
26,908
5
26,913
Transfer
-
13
13
Purchases
-
267
267
Disposal proceeds
-
(15)
(15)
Closing balance
111,847
1,149
112,996
Total gains for the year included in profit or loss for assets held at the end of the reporting year
26,908
5
26,913
For the year ended 31 December 2024
Opening balance
76,898
909
77,807
Total gains/(losses) recognised in profit or loss
8,041
(30)
8,011
Closing balance
84,939
879
85,818
Total gains/(losses) for the year included in profit or loss for assets held at the end of the
reporting year
8,041
(30)
8,011
All the above gains or losses included in profit or loss for the year (for both the Group and Parent) are presented in the net investment result within
the statement of profit or loss.
The valuation techniques used for instruments categorised in levels 2 and 3 are described below.
Listed debt and equity securities not in active market (level 2)
These financial assets are valued using third-party pricing information that is regularly reviewed and internally calibrated based on management's
knowledge of the markets.
Non-exchange-traded derivative contracts (level 2)
The Group's derivative contracts are not traded in active markets. Foreign currency forward contracts are valued using observable forward
exchange rates corresponding to the maturity of the contract and the contract forward rate. Over-the-counter equity or index options and futures
are valued by reference to observable index prices.
Structured notes (level 2)
These financial assets are not traded on active markets. Their fair value is linked to an index that reflects the performance of an underlying basket
of observable securities, including derivatives, provided by an independent calculation agent.
Unlisted equity securities (level 3)
These financial assets are valued using observable net asset data, adjusted for unobservable inputs including comparable price-to-book ratios
based on similar listed companies, normalised for performance measures where appropriate, and management's consideration of constituents as
to what exit price might be obtainable.
The valuation is sensitive to the level of underlying net assets, the Euro exchange rate, the price-to-tangible book ratio, an illiquidity discount and a
credit rating discount applied to the valuation to account for the risks associated with holding the asset. The sensitivity of the valuation to
reasonable changes in the unobservable inputs is as follows:
Change in
Potential increase/
variable
(decrease) in the valuation
2025
2024
Variable
£000
£000
Increase in price-to-tangible book ratio
+10%
10,313
8,494
Decrease in price-to-tangible book ratio
-10%
(10,313)
(8,494)
Increase in illiquidity discount
+5%
(6,006)
(4,996)
Decrease in illiquidity discount
-5%
6,006
4,996
99
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
( c) Interest rate risk
The Group’s exposure to interest rate risk arises primarily from movements on financial investments that are measured at fair value and have fixed
interest rates, which represent a significant proportion of the Group’s assets, subordinated debt which has a fixed interest rate until 2030, and from
insurance liabilities discounted at a market interest rate. The Group's investment strategy is set in order to control the impact of interest rate risk on
anticipated cash flows and asset and liability values. The fair value of the Group's investment portfolio of fixed income securities reduces as market
interest rates rise as does the present value of discounted insurance liabilities, and vice versa.
Interest rate risk concentration is reduced by adopting asset-liability duration matching principles where appropriate. Excluding assets held to back
the life business, the average duration of the Group’s fixed income portfolio is four years (2024: four years), reflecting the relatively short-term
average duration of its general insurance liabilities.
For the Group’s life insurance business, consisting of policies to support funeral planning products, benefits payable to policyholders are
independent of the returns generated by interest-bearing assets. Therefore, the interest rate risk on the invested assets supporting these liabilities
is borne by the Group. This risk is mitigated by purchasing fixed interest investments with durations that match the profile of the liabilities. For
funeral plan insurance policies, benefits are linked to the Retail Prices Index (RPI). Assets backing these liabilities are also linked to the RPI, and
include index-linked gilts and corporate bonds. For practical purposes it is not possible to exactly match the durations due to the uncertain profile
of liabilities (for example mortality risk) and the availability of suitable assets, therefore some interest rate risk will persist. The Group monitors its
exposure by comparing projected cash flows for these assets and liabilities and making appropriate adjustments to its investment portfolio.
The table below summarises the maturities of life insurance business assets and liabilities that are exposed to interest rate risk.
Maturity
Within
Between
After
Group life business
1 year
1 and 5 years
5 years
Total
£000
£000
£000
£000
At 31 December 2025
Assets
Debt securities
2,359
18,641
45,638
66,638
Cash and cash equivalents
2,424
-
-
2,424
4,783
18,641
45,638
69,062
Liabilities (discounted)
Life insurance contract liabilities for remaining coverage
5,837
17,241
21,653
44,731
At 31 December 2024
Assets
Debt securities
23,934
15,571
48,163
87,668
Cash and cash equivalents
7,105
-
-
7,105
31,039
15,571
48,163
94,773
Liabilities (discounted)
Life insurance contract liabilities for remaining coverage
5,637
17,784
25,784
49,205
Group financial investments with variable interest rates, including cash and cash equivalents, and insurance instalment receivables are subject to
cash flow interest rate risk. This risk is not significant to the Group .
100
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
(d) Credit risk
The Group has exposure to credit risk, which is the risk of non-payment of their obligations by counterparties and financial markets borrowers. Areas
where the Group is exposed to credit risk are:
-
Counterparty default on loans and debt securities;
-
Deposits held with banks;
-
Reinsurers’ share of insurance liabilities (excluding provision for unearned premiums) and amounts due from reinsurers in respect of
claims already paid; and
-
Amounts due from insurance intermediaries and policyholders.
The Group is exposed to minimal credit risk in relation to all other financial assets.
The carrying amount of financial and reinsurance assets represents the Group's maximum exposure to credit risk. The Group structures the levels of
credit risk it accepts by placing limits on its exposure to a single counterparty. Limits on the level of credit risk are regularly reviewed. Where
available the Group also manages its exposure to credit risk in relation to credit risk ratings. Investment grade financial assets are classified within
the range of AAA to BBB ratings, where AAA is the highest possible rating. Financial assets which fall outside this range are classified as sub-
investment grade. ‘Not rated’ assets capture assets not rated by external ratings agencies.
The following table provides information regarding the credit risk exposure of financial assets with external credit ratings from Standard & Poors or
an equivalent rating from a similar agency. This includes financial assets that meet the definition of 'solely payments of principal and interest' (SPPI).
Group
SPPI
Non-SPPI
Cash
and cash
Reinsurance
Debt
equivalents¹
debtors
Total SPPI
securities
£000
£000
£000
£000
At 31 December 2025
AAA
-
-
-
198,696
AA
59,230
15,076
74,306
171,341
A
33,941
16,906
50,847
101,387
BBB
-
-
-
66,392
Below BBB
-
-
-
1,152
Not rated
3
3,698
3,701
9,540
93,174
35,680
128,854
548,508
At 31 December 2024
AAA
-
-
-
216,001
AA
73,838
11,087
84,925
149,341
A
31,921
13,242
45,163
87,153
BBB
-
-
-
52,830
Below BBB
-
-
-
5,430
Not rated
2
3,058
3,060
10,889
105,761
27,387
133,148
521,644
¹ Cash includes any amounts held on deposit classified within financial investments and disclosed in note 20. Cash balances which are not rated
relate to cash amounts in hand.
101
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
Parent
SPPI
Non-SPPI
Cash
and cash
Reinsurance
Debt
equivalents¹
debtors
Total SPPI
securities
£000
£000
£000
£000
At 31 December 2025
AAA
-
-
-
140,791
AA
35,173
6,672
41,845
61,141
A
33,665
8,635
42,300
86,076
BBB
-
-
-
55,105
Below BBB
-
-
-
1,152
Not rated
3
1,245
1,248
8,462
68,841
16,552
85,393
352,727
At 31 December 2024
AAA
-
-
-
132,309
AA
49,114
3,733
52,847
58,768
A
31,214
8,159
39,373
72,722
BBB
-
-
-
34,771
Below BBB
-
-
-
3,015
Not rated
2
3,058
3,060
9,432
80,330
14,950
95,280
311,017
¹ Cash includes any amounts held on deposit classified within financial investments and disclosed in note 20. Cash balances which are not rated
relate to cash amounts in hand.
For financial assets meeting the SPPI test that do not have low credit risk, the carrying amount disclosed above is an approximation of their fair
value.
Group cash balances are regularly reviewed to identify the quality of the counterparty bank and to monitor and limit concentrations of risk.
The debt securities portfolio consists of a range of mainly fixed interest instruments including government securities, local authority issues,
corporate loans and bonds, overseas bonds, preference shares and other interest-bearing securities. Limits are imposed on the credit ratings of the
corporate bond portfolio and exposures regularly monitored. Group investments in unlisted securities represent 0% of this category in the current
year and less than 1% prior year.
The Group’s exposure to counterparty default on debt securities is spread across a variety of geographical and economic territories, as follows:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
UK
231,694
165,057
UK
228,029
140,361
Canada
153,899
153,899
Canada
142,984
142,984
Australia
129,144
-
Australia
122,959
-
Europe
33,771
33,771
Europe
27,672
27,672
Total
548,508
352,727
Total
521,644
311,017
102
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
Reinsurance is used to manage insurance risk. This does not, however, discharge the Group's liability as primary insurer. If a reinsurer fails to pay a
claim for any reason, the Group remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on a regular
basis through the year by reviewing their financial strength. The Group Reinsurance Security Committee assesses, monitors and approves the
creditworthiness of all reinsurers, reviewing relevant credit ratings provided by the recognised credit rating agencies, as well as other publicly
available data and market information. The Group Reinsurance Security Committee also monitors the balances outstanding from reinsurers and
maintains an approved list of reinsurers.
The Group's credit risk policy details prescriptive methods for the collection of premiums and control of intermediary and policyholder debtor
balances. The level and age of debtor balances are regularly assessed via monthly credit management reports. These reports are scrutinised to
assess exposure by geographical region and counterparty of aged or outstanding balances. Any such balances are likely to be major international
brokers that are in turn monitored via credit reference agencies and considered to pose minimal risk of default. The Group has no material
concentration of credit risk in respect of amounts due from insurance intermediaries and policyholders.
The table below provides an analysis of the gross carrying amounts of groups of insurance debtors and groups of reinsurance debtors by past due
status:
2025
2024
£000
£000
Insurance debtors
Current
150,126
115,847
0 to 30 days
16,409
18,459
30 days to 90 days
2,512
19,157
More than 90 days
9,784
15,826
178,831
169,289
Reinsurance debtors
Current
29,767
19,107
0 to 30 days
120
1,560
30 days to 90 days
2,149
1,439
More than 90 days
3,644
5,281
35,680
27,387
Amounts arising from expected credit losses on financial assets are as follows:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Balance at 1 January
273
143
292
153
Movement in the year
(267)
(135)
(19)
(10)
Balance at 31 December
6
8
273
143
103
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
( e) Equity price risk
The Group is exposed to equity price risk because of financial investments held by the Group which are stated at fair value through profit or loss. The
Group mitigates this risk by holding a diversified portfolio across geographical regions and market sectors, and through the use of derivative
contracts from time to time which would limit losses in the event of a fall in equity markets.
The concentration of equity price risk by geographical listing, before the mitigating effect of derivatives, to which the Group and Parent are exposed
is as follows:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
UK
272,690
259,211
UK
231,894
216,126
Europe
98,831
98,831
Europe
84,939
84,939
US
12,352
12,352
US
15,448
15,448
383,873
370,394
Total
Total 332,281 316,513
(f) Currency risk
The Group operates internationally and its main exposures to foreign exchange risk are noted below. The Group's foreign operations generally
invest in assets and purchase reinsurance denominated in the same currencies as their insurance liabilities, which mitigates the foreign currency
exchange rate risk for these operations. As a result, foreign exchange risk arises from recognised assets and liabilities denominated in other
currencies and net investments in foreign operations. The Group mitigates this risk through the use of derivatives when considered necessary.
The Group exposure to foreign currency risk within the investment portfolios arises from purchased investments that are denominated in currencies
other than sterling.
The Group's foreign operations create two sources of foreign currency risk:
-
The operating results of the Group's foreign branches and subsidiaries in the Group financial statements are translated at the average exchange
rates prevailing during the year; and
-
The equity investment in foreign branches and subsidiaries is translated into sterling using the exchange rate at the year-end date.
The forward foreign currency risk arising on translation of these foreign operations is hedged by the derivatives which are detailed in note 21. The
Group has designated certain derivatives as a hedge of its net investments in Canada and Australia, which have Canadian and Australian dollars
respectively as their functional currency.
The largest currency exposures, before the mitigating effect of derivatives, with reference to net assets/liabilities are shown below, representing
effective diversification of resources.
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Can $
89,762
89,762
Can $
81,992
81,992
Aus $
63,401
9,797
Aus $ 57,212 4,547
Euro
69,743
69,743
Euro
56,532
56,532
USD $
9,238
9,238
USD $
13,003
13,003
HKD $
3
3
HKD $
36
36
The figures in the table above, for the current and prior years, do not include currency risk that the Group and Parent are exposed to on a ‘look
through’ basis in respect of collective investment schemes denominated in sterling. The Group and Parent enter into derivatives to hedge currency
exposure, including exposures on a ‘look through’ basis. The open derivatives held by the Group and Parent at the year end to hedge currency
exposure are detailed in note 21.
104
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
( g) Liquidity risk
Liquidity risk is the risk that funds may not be available to pay obligations when due. The Group is exposed to daily calls on its available cash
resources mainly from claims arising from insurance contracts. The Group ensures that assets held to cover insurance liabilities have maturity
profiles that align with the expected timing of claim payments. Excluding assets held to back the life business, the average duration of the Group’s
fixed income portfolio is four years (2024: four years), reflecting the relatively short-term average duration of its general insurance liabilities. An
estimate of the timing of the net cash outflows resulting from insurance contracts is provided in note 26. The Group has robust processes in place
to manage liquidity risk and has available cash balances, other readily marketable assets and access to funding in case of exceptional need. This is
not considered to be a significant risk to the Group.
Non-derivative financial liabilities consist of lease liabilities, for which a maturity analysis is included in note 32, and other liabilities for which a
maturity analysis is included in note 29, and subordinated debt for which a maturity analysis is included in note 30.
( h) Market risk sensitivity analysis
The sensitivity of profit and other equity reserves to movements on market risk variables (comprising interest rate, currency and equity price risk),
each considered in isolation and before the mitigating effect of derivatives, is shown in the table below. This table does not include the impact of
variables on retirement benefit schemes. Financial risk sensitivities for retirement benefit schemes are disclosed separately in note 17.
Potential increase/
Group
Potential increase/
(decrease) in
(decrease) in profit
other equity reserves
Variable
Change in
2025
2024
2025
2024
variable
£000
£000
£000
£000
Interest rate risk
-100 basis points
6,674
4,012
14
(129)
+100 basis points
(6,142)
(3,594)
(9)
109
Currency risk
-10%
4,475
4,155
19,827
17,649
+10%
(3,662)
(3,400)
(16,222)
(14,440)
Equity price risk
+/-10%
28,790
24,921
-
-
Potential (decrease)/
Parent
Potential increase/
increase in
(decrease) in profit
other equity reserves
Variable
Change in
2025
2024
2025
2024
variable
£000
£000
£000
£000
Interest rate risk
-100 basis points
768
(1,045)
(1)
(113)
+100 basis points
(1,440)
491
1
106
Currency risk
-10%
4,475
4,155
13,870
11,798
+10%
(3,662)
(3,400)
(11,349)
(9,653)
Equity price risk
+/-10%
27,780
23,738
-
-
The following assumptions have been made in preparing the above sensitivity analysis:
-
The value of fixed income investments will vary inversely with changes in interest rates, and all territories experience the same interest
rate movement;
-
Currency gains and losses will arise from a change in the value of sterling against all other currencies moving in parallel;
-
Equity prices will move by the same percentage across all territories; and
-
Change in profit is stated net of tax at the standard rate applicable in each of the Group's territories.
105
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
4 Financial risk and capital management (continued)
(i) Capital management
The Group's primary objectives when managing capital are to:
-
Comply with the regulators' capital requirements of the markets in which the Group operates; and
-
Safeguard the Group's ability to continue to meet stakeholders' expectations in accordance with its corporate mission, vision and
values.
The Group is subject to insurance solvency regulations in all the territories in which it issues insurance and investment contracts, and capital is
managed and evaluated on the basis of both regulatory and economic capital, at a group and parent entity level.
In the UK, the Group and its UK regulated entities are required to comply with rules issued by the Financial Conduct Authority (FCA) and the
Prudential Regulation Authority (PRA).
The PRA expects a firm, at all times, to hold Solvency II Own Funds in excess of its calculated Solvency Capital Requirement (SCR). Group solvency
is assessed at the level of Ecclesiastical Insurance Office public limited company (EIO)’s parent, Benefact Group plc. Consequently, there is no
directly comparable solvency measure for EIO group. Quantitative returns are submitted to the PRA, in addition to an annual narrative report, the
Solvency and Financial Condition Report (SFCR) which is also published on the Company's website. A further report, the Regular Supervisory
Report (RSR) is periodically submitted to the PRA.
EIO’s Solvency II Own Funds and Solvency Capital Requirement will be subject to a separate independent audit, as part of the Group's process for
Solvency II reporting to the PRA. ELL is not audited. The Group's regulated entities, EIO and ELL, expect to meet the deadline for submission to the
PRA of 13 April 2026 and their respective SFCRs will be made available on the Group's website shortly thereafter. Benefact Group is also expected
to meet its deadline for submission to the PRA of 27 May 2026, with its SFCR also being made available on the Group’s website shortly after.
2025
2024
Ecclesiastical
Ecclesiastical
Insurance
Insurance
Office plc
Ecclesiastical
Office plc
Ecclesiastical
Parent
Life Limited
Parent
Life Limited
£000
£000
£000
£000
Solvency II Own Funds
666,231
36,587
635,550 42,112
Solvency Capital Requirement
264,232
15,722
251,917
17,368
Coverage Ratio
252%
233%
252%
242%
Economic capital is the Group’s own internal view of the level of capital required, and this measure is an integral part of the Own Risk and Solvency
Assessment Report (ORSA) which is a private, internal forward-looking assessment of own risk, as required as part of the Solvency II regime.
106
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
5 Segment information
(a) Operating segments
The Group’s primary operating segments are based on geography and are engaged in providing general insurance and life insurance services. The
Group also considers investments a separate reporting segment, also based on geography. Expenses relating to Group management activities are
included within 'Corporate costs'. The Group’s life insurance business is carried out within the United Kingdom.
The Group’s chief operating decision maker is considered to be the Group Management Board whose members include the Company’s executive
directors.
The activities of each operating segment are described below.
- General business
United Kingdom and Ireland
The Group's principal general insurance business operation is in the UK, where it operates under the Ecclesiastical and Ansvar brands.
The Group also operates an Ecclesiastical branch in the Republic of Ireland underwriting general business across the whole of Ireland.
Australia
The Group has a wholly-owned subsidiary in Australia underwriting general insurance business under the Ansvar brand.
Canada
The Group operates a general insurance Ecclesiastical branch in Canada.
Other insurance operations
This includes the Group's internal reinsurance function, adverse development cover and operations that are in run-off or not reportable
due to their immateriality.
- Life business
Ecclesiastical Life Limited provides long-term policies to support funeral planning products. The business reopened to new investment
business in 2021 but it is closed to new insurance business.
Inter-segment and inter-territory transfers or transactions are entered into under normal commercial terms and conditions that would also be
available to unrelated third parties.
(b) Segment performance
The Group uses the following key measures to assess the performance of its operating segments, which are alternative performance measures
and reconciled to the consolidated statement of profit or loss in note 36:
- Gross written premium
- Underwriting result
- Combined operating ratio
- Investment return
Gross written premium is the measure used in internal reporting for turnover of the general and life insurance business segments. The
underwriting result is used as a measure of profitability of the insurance business segments. The combined operating ratio expresses the total
underwriting costs of the general insurance business as a percentage of net earned premiums. The investment return is used as a profitability
measure of the Group’s investments. Gross written premium, the underwriting result and the combined operating ratio are attributed to the
geographical region in which the customer is based.
The life business segment result comprises the profit or loss on insurance contracts (including return on assets backing liabilities in the long-term
fund), investment return comprising profit or loss on funeral plan investment business and shareholder investment return, and other expenses.
All other segment results consist of the profit or loss before tax measured in accordance with UK-adopted International Accounting Standards
(UKIAS).
107
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
5 Segment information (continued)
Segment gross written premiums
2025
2024
£000
£000
General business
United Kingdom and Ireland
461,192
436,863
Australia
88,975
95,345
Canada
95,863
101,556
Other insurance operations
7,747
6,837
Total
653,777
640,601
Life business
(85)
(271)
Group gross written premiums
653,692
640,330
Group revenues are not materially concentrated on any single external customer.
Segment results
2025
Combined
operating
Insurance
Investments
Other
Total
ratio
£000
£000
£000
£000
General business
United Kingdom and Ireland
81.0%
49,534
68,273
(2,618)
115,189
Australia
109.3%
(2,721)
3,809
126
1,214
Canada
83.0%
11,346
5,478
(1,211)
15,613
Other insurance operations
4,008
-
-
4,008
83.7%
62,167
77,560
(3,703)
136,024
Life business
320
1,110
1,350
2,780
Corporate costs
-
-
(54,207)
(54,207)
Profit/(loss) before tax
62,487
78,670
(56,560)
84,597
2024
Combined
operating
Insurance
Investments
Other
Total
ratio
£000
£000
£000
£000
General business
United Kingdom and Ireland
77.4%
53,612
59,091
(2,757)
109,946
Australia
107.4%
(3,234)
3,406
345
517
Canada
81.4%
13,671
7,626
(946)
20,351
Other insurance operations
(16,407)
(505)
4
(16,908)
86.9%
47,642
69,618
(3,354)
113,906
Life business
1,406
315
-
1,721
Corporate costs
-
-
(33,152)
(33,152)
Profit/(loss) before tax
49,048
69,933
(36,506)
82,475
108
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
5 Segment information (continued)
(c) Geographical information
Gross written premiums from external customers and non-current assets, as attributed to individual countries in which the Group operates, are as
follows:
2025
2024
Gross
Gross
written
Non-current
written
Non-current
premiums
assets
premiums assets
£000
£000
£000
£000
United Kingdom and Ireland
468,854
264,198
443,429
320,801
Australia
88,975
5,261
95,345
5,621
Canada
95,863
3,228
101,556 4,110
653,692
272,687
640,330
330,532
Gross written premiums are allocated based on the country in which the insurance contracts are issued. Non-current assets exclude rights arising
under insurance contracts, deferred tax assets, pension assets and financial instruments and are allocated based on where the assets are located.
6 Insurance revenue
General
Life
business
business
Total
£000
£000
£000
For the year ended 31 December 2025
Contracts not measured under the Premium Allocation Approach
Amounts relating to the changes in the Liability for Remaining Coverage
Expected incurred claims and other expenses after loss component allocation
-
5,373
5,373
Change in the risk adjustment for non-financial risk for the risk expired after loss component
57
31
88
CSM recognised in profit or loss for the services provided
-
684
684
57
6,088
6,145
Contracts measured under the Premium Allocation Approach
645,271
-
645,271
Total insurance revenue
645,328
6,088
651,416
For the year ended 31 December 2024
Contracts not measured under the Premium Allocation Approach
Amounts relating to the changes in the Liability for Remaining Coverage
Expected incurred claims and other expenses after loss component allocation
-
5,350
5,350
Change in the risk adjustment for non-financial risk for the risk expired after loss component
-
16
16
CSM recognised in profit or loss for the services provided
-
712
712
-
6,078
6,078
Contracts measured under the Premium Allocation Approach
623,875
-
623,875
Total insurance revenue
623,875
6,078
629,953
109
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
7 Insurance service expenses
A breakdown of Insurance service expenses is included below:
General
Life
business
business
Total
£000
£000
£000
For the year ended 31 December 2025
Incurred claims and benefits excluding investment components
310,944
-
310,944
Insurance acquisition cash flows amortisation
141,304
-
141,304
Changes that relate to past service
(10,828)
-
(10,828)
Losses on onerous contracts and reversal of those losses
(6)
-
(6)
Changes that relate to current service
-
4,820
4,820
Total insurance service expenses
441,414
4,820
446,234
For the year ended 31 December 2024
Incurred claims and benefits excluding investment components
306,938
-
306,938
Insurance acquisition cash flows amortisation
134,733
-
134,733
Changes that relate to past service
15,898
-
15,898
Losses on onerous contracts and reversal of those losses (784)
-
(784)
Changes that relate to current service
-
5,032
5,032
Total insurance service expenses
456,785
5,032
461,817
8 Net insurance financial result
General
Life
business
business
Total
£000
£000
£000
For the year ended 31 December 2025
Insurance finance (expense)/income from insurance contracts issued
Interest accreted
(23,464)
(1,883)
(25,347)
Effect of changes in interest rates and other financial assumptions
(1,689)
454
(1,235)
Effect of measuring changes in estimates at current rates and adjusting the CSM at
rates on initial recognition
-
(309)
(309)
Total
(25,153)
(1,738)
(26,891)
Insurance finance income/(expense) from reinsurance contracts held
Interest accreted
7,362
-
7,362
Effect of changes in interest rates and other financial assumptions
644
-
644
Effect of changes in non-performance risk of reinsurers
(67)
-
(67)
Total
7,939
-
7,939
Net insurance financial result
(17,214)
(1,738)
(18,952)
For the year ended 31 December 2024
Insurance finance (expense)/income from insurance contracts issued
Interest accreted
(23,657)
(2,160)
(25,817)
Effect of changes in interest rates and other financial assumptions
11,829
2,690
14,519
Effect of measuring changes in estimates at current rates and adjusting the CSM at
rates on initial recognition
-
(211)
(211)
Total
(11,828)
319
(11,509)
Insurance finance income/(expense) from reinsurance contracts held
Interest accreted
6,763
-
6,763
Effect of changes in interest rates and other financial assumptions
(2,122)
-
(2,122)
Effect of changes in non-performance risk of reinsurers
6
-
6
Total
4,647
-
4,647
Net insurance financial result
(7,181)
319
(6,862)
110
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
8 Net insurance financial result (continued)
The Group's investment return on assets detailed in note 9 includes the financial performance of the assets held to back insurance liabilities. The
Group manages financial performance by aligning its investment strategies where appropriate with the characteristics of its insurance liabilities,
mitigating the overall profit impact of net insurance financing effects .
9 Net investment result
General
Life
business
business
Total
£000
£000
£000
For the year ended 31 December 2025
Income from financial assets at fair value through profit or loss
- equity income
12,975
330
13,305
- debt income
14,329
1,902
16,231
Income from financial assets calculated using the effective interest rate method
- cash and cash equivalents income
2,287
152
2,439
- other income received
7,647
-
7,647
Other income/(expense)
- rental income
8,237
-
8,237
- exchange movements
(1,816)
-
(1,816)
Investment income
43,659
2,384
46,043
Fair value movements on financial instruments at fair value through profit or loss
38,483
1,650
40,133
Fair value movements on investment property
4,431
-
4,431
Profit on disposal of investment property
102
-
102
Movement in expected credit loss allowance
268
-
268
Net investment return
86,943
4,034
90,977
For the year ended 31 December 2024
Income from financial assets at fair value through profit or loss
- equity income
11,535
335
11,870
- debt income
13,634
2,316
15,950
- structured note income
-
1,119
1,119
Income from financial assets calculated using the effective interest rate method
- cash and cash equivalents income 2,645 236 2,881
- other income received
8,766
-
8,766
Other income
- rental income
8,730
-
8,730
- exchange movements
831
-
831
Investment income
46,141
4,006
50,147
Fair value movements on financial instruments at fair value through profit or loss
23,681
(2,287)
21,394
Fair value movements on investment property
291
-
291
Movement in expected credit loss allowance
18
-
18
Net investment return
70,131
1,719
71,850
Included within fair value movements on financial instruments at fair value through profit or loss are gains of £2.9m (2024: £6.9m gains) in respect
of derivative financial instruments.
111
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
10 Fee and commission income
During the year the Group recognised £2.0m (2024: £0.5m) in accordance with IFRS 15 Revenue from contracts with customers . Fee and
commission income from contracts with customers was recognised at a point in time as follows:
General
Life
business
business
Total
£000
£000
£000
For the year ended 31 December 2025
Income from third-party insurers
623
-
623
Structured note income
-
1,350
1,350
623
1,350
1,973
For the year ended 31 December 2024
Income from third-party insurers 544 - 544
544
-
544
11 Profit for the year
2025
2024
£000
£000
Profit for the year has been arrived at after charging/(crediting)
Net foreign exchange losses/(gains)
1,816
(831)
Depreciation of property, plant and equipment
5,661
6,357
Loss/(profit) on disposal of property, plant and equipment
42
(178)
Amortisation of intangible assets
3,177
3,340
Impairment of intangible assets
14,581
29
Increase in fair value of investment property
(4,431)
(291)
Employee benefits expense including termination benefits, net of recharges
132,035
114,855
12 Auditor's remuneration
2025
2024
£000
£000
Fees payable to the Company's auditor and its associates for the audit of the Company's annual
accounts
976
976
Fees payable to the Company’s auditor and its associates for other services:
- The audit of the Company's subsidiaries
290
294
Total audit fees
1,266
1,270
- Audit-related assurance services
207
172
Total non-audit fees
207
172
Total auditor's remuneration
1,473
1,442
Amounts disclosed are net of services taxes, where applicable. Audit-related assurance services include PRA and other regulatory audit work.
112
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
13 Employee information
The average monthly number of full-time equivalent employees of the Group and Parent, including executive directors, during the year by
geographical location was:
Group
2025
2024
General
Life
General
Life
business
business
Other
business
business
Other
No.
No.
No.
No.
No.
No.
United Kingdom and Ireland
1,106
2
155
1,025
2
156
Australia
145
-
-
149
-
-
Canada
111
-
-
88
-
-
1,362
2
155
1,262
2
156
Parent
2025
2024
General
Life
General
Life
business
business
Other
business
business
Other
No.
No.
No.
No.
No.
No.
United Kingdom and Ireland
1,106
2
155
1,025
2
156
Canada
111
-
-
88
-
-
1,217
2
155
1,113
2
156
Average numbers of full-time equivalent employees have been quoted rather than average numbers of employees to give a better reflection of the
split between business areas, as some employees' work is divided between more than one business area.
2025
2024
Group
Parent
Group Parent
£000
£000
£000
£000
Wages and salaries
127,914
114,390
112,016
98,246
Social security costs
13,432
13,432
10,580
10,580
Pension costs - defined contribution plans
9,893
8,714
9,007
7,829
Pension costs - defined benefit plans
24
24
111
111
Other post-employment benefits
228
228
209
209
Total staff costs
151,491
136,788
131,923
116,975
Staff costs recharged to related undertakings of the Group
(18,971)
(18,971)
(16,917) (16,917)
Capitalised staff costs
(1,538)
(1,538)
(1,207)
(1,207)
130,982
116,279
113,799
98,851
The above Group and Parent figures do not include termination benefits of £1.1m (2024: £1.5m) of which £0.1m (2024: £0.4m) was recharged to
related undertakings of the Group and Parent. Included within the above figures is a payment of £33,194 made in respect of a director’s loss of
office during the year .
113
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
14 Tax expense
(a) Tax charged/(credited) to the statement of profit or loss
2025
2024
£000
£000
Current tax
- current year
14,129
13,851
- prior year adjustments
41
326
Deferred tax
- temporary differences
3,878
3,261
- prior year adjustments
119
(141)
- Impact of change in deferred tax rate
-
(1)
Total tax expense
18,167
17,296
Tax on the Group’s result before tax differs from the United Kingdom standard rate of corporation tax for the reasons set out in the following
reconciliation:
2025
2024
£000
£000
Total pre-tax profit
84,597
82,475
Tax calculated at the UK standard rate of tax of 25% (2024: 25%)
21,149
20,619
Factors affecting charge for the year:
Expenses not deductible for tax purposes
397
321
Non-taxable income
(4,063)
(3,829)
Overseas taxes in excess of UK headline rate
524
1
Impact of change in deferred tax rate
-
(1)
Adjustments to tax charge in respect of prior periods
160
185
Total tax expense
18,167
17,296
Deferred tax has been provided at an average rate of 25% (2024: 25%).
(b) Tax charged/(credited) to other comprehensive income
2025
2024
£000
£000
Current tax charged on:
Fair value movements on hedge derivatives
109
276
Fair value movements on property
-
286
Deferred tax (credited)/charged on:
Fair value movements on property
-
(286)
Actuarial movements on retirement benefit plans
344
(408)
Fair value movements on hedge derivatives
595
1,105
Total tax charged to other comprehensive income
1,048
973
Tax relief on charitable grants of £6.0m (2024: £8.3m) has been taken directly to equity.
On 20 June 2023, the UK substantively enacted the Pillar Two global minimum tax rules as part of the OECD’s Base Erosion and Profit Shifting
(“BEPS”) initiative. The Group is within the scope of these rules from 1 January 2025, having exceeded the relevant thresholds for the preceding
two years.
Under Pillar Two, a top-up tax may be payable where the effective tax rate of the Group’s operations in any jurisdiction, calculated in accordance
with the Pillar Two principles, falls below 15%. For 2025 and 2026, simplified transitional safe harbour provisions based on Country-by-Country
reporting data will be applied. In January 2026, the OECD announced a one-year extension of the transitional safe harbour to include 2027.
Although this has not yet been enacted into UK law, it is expected to be implemented during 2026 .
114
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
14 Tax expense (continued)
The Group has performed an initial assessment of its exposure to Pillar Two taxes. Based on this review, no material top-up tax is expected during
the transitional period for 2025 or 2026 and a similar outcome is anticipated for 2027 once the legislative changes are enacted. Additional analysis
will be undertaken to determine the potential impact of the full rules when they take effect from 2028 onwards.
15 Appropriations
2025
2024
£000
£000
Amounts paid directly from equity in the year:
Dividends
Ordinary share dividend
50,000
30,000
Non-Cumulative Irredeemable Preference share dividend (8.625 pence per share)
9,181
9,181
Charitable grants
Gross charitable grants to the ultimate parent company, Benefact Trust Limited
24,000
33,000
Tax relief
(6,000)
(8,250)
Net appropriation for the year
18,000
24,750
16 Goodwill and other intangible assets
Group
Other
Computer
intangible
Goodwill
software
assets
Total
£000
£000
£000
£000
Cost
At 1 January 2025
2,097
54,714
182
56,993
Additions
-
7,160
-
7,160
Exchange differences
-
(133)
10
(123)
At 31 December 2025
2,097
61,741
192
64,030
Accumulated impairment losses and amortisation
At 1 January 2025
-
28,186
182
28,368
Amortisation charge for the year
-
3,177
-
3,177
Impairment loss for the year
-
14,581
-
14,581
Exchange differences
-
(121)
10
(111)
At 31 December 2025
-
45,823
192
46,015
Net book value at 31 December 2025
2,097
15,918
-
18,015
Cost
At 1 January 2024
2,097
48,898
191
51,186
Additions -
6,191
-
6,191
Exchange differences
-
(375)
(9)
(384)
At 31 December 2024
2,097
54,714
182
56,993
Accumulated impairment losses and amortisation
At 1 January 2024
-
25,132
188
25,320
Amortisation charge for the year
-
3,332
8
3,340
Impairment loss for the year
-
29
-
29
Exchange differences
-
(307)
(14)
(321)
At 31 December 2024
-
28,186
182
28,368
Net book value at 31 December 2024
2,097
26,528
-
28,625
115
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
1 6 Goodwill and other intangible assets (continued)
Parent
2025 2024
Other
Other
Computer
intangible
Computer
intangible
software
assets
Total
software
assets
Total
£000
£000
£000
£000
£000
£000
Cost
At 1 January
53,981
181
54,162
48,169
190
48,359
Additions
7,160
-
7,160
6,180
-
6,180
Disposals
(31)
-
(31)
- - -
Exchange differences
(133)
10
(123)
(368)
(9)
(377)
At 31 December
60,977
191
61,168
53,981
181
54,162
Accumulated impairment losses and
amortisation
At 1 January
27,556
181
27,737
24,407
183
24,590
Amortisation charge for the year
3,128
-
3,128
3,429
8
3,437
Impairment loss for the year
14,582
-
14,582
29
-
29
Disposals
(31)
-
(31)
-
-
-
Exchange differences
(123)
10
(113)
(309)
(10)
(319)
At 31 December
45,112
191
45,303
27,556
181
27,737
Net book value at 31 December
15,865
-
15,865
26,425
-
26,425
Computer software for the Group and Parent has been tested for impairment and is carried at cost less accumulated impairment losses and
amortisation. The calculations for all recoverable amounts use cash flow projections based on management-approved business plans, covering a
three-year period. Cash flows beyond this period are extrapolated using the UK long-term average growth rate, usually sourced from the Office
for Budget Responsibility (OBR). Where the value in use is less than the current carrying value in the statement of financial position, the computer
software is impaired in order to ensure that the carrying value is not greater than its future value. The value in use was calculated using projected
cash flows for the next seven years, a discount rate of 12.0% and a growth rate beyond initial cash flow projections of 1.5%.
116
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
17 Retirement benefit schemes
Defined contribution pension plans
The Group operates a number of defined contribution pension plans, for which contributions by the Group are disclosed in note 13.
Defined benefit pension plan
The Group's defined benefit plan is operated by the parent company in the UK. The plan closed to new entrants on 5 April 2006. The terms of the
plan for future service changed in August 2011 from a non-contributory final salary scheme to a contributory scheme in which benefits are based
on career-average revalued earnings. The scheme closed to future accrual on 30 June 2019. Active members in employment at this date retained
certain enhanced benefits after the plan closed to future accrual, including benefits in relation to death in service and ill health retirement. They
also retain the link to final salary whilst they remain employed by the parent company. From 1 July 2019, active members in employment joined
one of the Group’s defined contribution plans. The scheme previously had two separate sections: the EIO Section and the Ansvar Section. With
effect from 1 January 2021, the two separate sections of the scheme have been combined.
The assets of the defined benefit plan are held separately from those of the Group by the Trustee of the Ecclesiastical Insurance Office public
limited company Staff Retirement Benefit Fund (the 'Fund'). The Fund is subject to the Statutory Funding Objective under the Pensions Act 2004.
An independent, qualified actuary appointed by the Trustee is responsible for undertaking triennial valuations to determine whether the Statutory
Funding Objective is met. Pension costs for the plan are determined by the Trustee, having considered the advice of the actuary and having
consulted with the employer. The most recent triennial valuation was as at 31 December 2022. The next triennial actuarial valuation is as at 31
December 2025 and has until March 2027 to be completed. No contributions are expected to be paid by the Group in 2026.
Actuarial valuations were reviewed and updated by an actuary at 31 December 2025 for IAS 19 purposes. The surplus in the scheme attributable to
the former EIO Section has been assessed against the economic benefit available to the Parent as a reduction in future contributions in accordance
with IFRIC 14. This has resulted in the recognisable surplus being restricted by £81.7m. The Parent has an unconditional right to a refund of the
surplus attributable to the former Ansvar Section of the Fund, which has been recognised in full in accordance with IFRIC 14.
In the current year, actuarial gains arising from changes in financial assumptions of £4.7m (2024: gains of £26.8m) have been recognised in the
statement of other comprehensive income. This includes a £1.3m gain from a 0.05% increase in the discount rate, along with further £3.4m gains
due to a decrease in inflation. In the prior year, a £28.9m gain arising from a 0.97% increase in the discount rate, partially offset by a £2.1m loss due
to an increase in inflation.
The experience loss on the defined benefit obligation of £0.7m (2024: loss of £0.2m) was predominantly due to actual inflation exceeding the
inflation assumptions. In the prior year, the experience loss was the result of updating for actual member experience and from actual inflation
exceeding the inflation assumptions. A review and update to certain demographic assumptions resulted in an actuarial loss of £0.9m (2024: gain of
£0.5m) being recognised in the current year.
The defined benefit plan typically exposes the Group to risks such as:
-
Investment risk: The Fund holds some of its investments in asset classes, such as equities, which have volatile market values. While these assets
are expected to provide the best returns over the long term, any short-term volatility could cause funding to be required if a deficit emerges.
Derivative contracts are used from time to time, which would limit losses in the event of a fall in equity markets;
-
Interest rate risk: Scheme liabilities are assessed using market rates of interest to discount the liabilities and are therefore subject to any
volatility in the movement of the market rate of interest. The net interest income or expense recognised in profit or loss is also calculated using
the market rate of interest. The Group's defined benefit plan holds Liability Driven Investments (LDIs) to hedge part of the exposure of the
scheme's liabilities to movements in interest rates;
-
Inflation risk: A significant proportion of scheme benefits are linked to inflation. Although scheme assets are expected to provide a good hedge
against inflation over the long term, movements over the short term could lead to a deficit emerging. The Group's defined benefit plan holds LDIs
to hedge part of the exposure of the scheme's liabilities to movements in inflation expectations;
-
Mortality risk: In the event that members live longer than assumed the liabilities may be understated originally, and a deficit may emerge if
funding has not adequately provided for the increased life expectancy; and
117
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
17 Retirement benefit schemes (continued)
-
Currency risk: The Fund holds some of its investments in foreign denominated assets. As scheme liabilities are denominated in sterling, short-
term fluctuations in exchange rates could cause additional funding to be required if a deficit emerges. Currency derivative contracts are used
from time to time, which would limit losses in the event of adverse movements in exchange rates.
The Trustee sets the investment objectives and strategy for the Fund based on independent advice and in consultation with the employer. Key
factors addressed in setting strategy include the Fund’s liability profile, funding level and strength of employer covenant. Their key objectives are
to ensure the Fund can meet members’ guaranteed benefits as they fall due, reduce the risk of assets failing to meet its liabilities over the long
term and manage the volatility of returns and overall funding level.
A blend of diversified growth assets comprising equities, listed infrastructure and property and protection assets - bonds, gilts and cash - are
deployed to balance the level of risk to that required to provide, with confidence, a sufficient return and liquidity to continue to meet members'
obligations as they fall due. The Trustees have identified the key risks faced by the Fund in meeting this objective to be equity price risk, falls in
bond yields and rising inflation.
A liability-driven investment allocation is maintained as a risk management tool to provide some future protection for the Fund against falling
yields and rising inflation. Exposure of the Fund's assets to interest rates and inflation counter-balances exposure of the Fund's liabilities to these
factors and has suppressed, but not eliminated, volatility in the funding position.
The Trustee regularly monitors investment performance and strategy to ensure the structure adopted continues to meet their objectives and to
highlight opportunities to reduce investment risk and volatility where practical and affordable. Their aim is to achieve a long-term funding target in
line with guidance from the Pensions Regulator. The Trustee intends that this long-term target will be reached through investment performance
only and without requiring further contributions from the employer. During 2025, the Trustee has continued to develop the investment strategy to
strengthen the resilience of the funding position to downside interest rate and inflation risks.
The Trustee adopts a Responsible and Sustainable Investment Policy in relation to the Fund’s equities. This includes an 'absence of harm' exclusion
policy, as well as an aspiration to reduce the portfolio’s carbon intensity over time.
Group and Parent
2025
2024
£000
£000
The amounts recognised in the statement of financial position are determined as follows:
Present value of funded obligations
(207,142)
(208,987)
Fair value of plan assets
307,502
297,212
100,360
88,225
Restrictions on asset recognised
(81,650)
(70,673)
Net defined benefit pension scheme surplus in the statement of financial position
18,710
17,552
Movements in the net defined benefit pension scheme asset recognised in the statement of financial position
are as follows:
At 1 January
17,552
19,788
Expense charged to profit or loss
(24)
(111)
Amounts recognised in other comprehensive income
1,182
(2,125)
At 31 December
18,710
17,552
The amounts recognised through profit or loss are as follows:
Current service cost
(208)
(255)
Administration cost
(745)
(642)
Interest expense on liabilities
(11,167)
(10,382)
Interest income on plan assets
15,962
13,509
Past service cost
-
(79)
Effect of interest on asset ceiling
(3,866)
(2,262)
Total, included in employee benefits expense
(24)
(111)
The amounts recognised in the statement of other comprehensive income are as follows:
Return on plan assets, excluding interest income
5,146
(11,038)
Experience losses on liabilities
(653)
(227)
(Losses)/gains from changes in demographic assumptions
(905)
510
Gains from changes in financial assumptions
4,705
26,768
Change in asset ceiling
(7,111)
(18,138)
Total included in other comprehensive income
1,182
(2,125)
The actuarial losses on retirement benefit plans of £1.4m (2024: losses of £1.6m) in the statement of other comprehensive income include gains of
£0.2m (2024: gains of £0.5m) in relation to the post-employment medical benefits plan .
118
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
17 Retirement benefit schemes (continued)
The following is the analysis of the defined benefit pension balances:
Group and Parent
2025
2024
£000
£000
Pension surplus
18,710
17,552
The principal actuarial assumptions (expressed as weighted averages) were as follows*:
%
%
Discount rate
5.52
5.47
Inflation (RPI)
2.97
3.26
Inflation (CPI)
2.58
2.80
Future salary increases
3.83
4.05
Future increase in pensions in deferment
3.07
3.28
Future average pension increases (linked to RPI)
2.86
3.09
Future average pension increases (linked to CPI)
2.01
2.10
*Single-equivalent rates are disclosed for the current year.
Mortality rate
The average life expectancy in years of a pensioner retiring at age 65, at the year-end date, is as follows:
Male
22.5
22.2
Female
24.0
23.8
The average life expectancy in years of a pensioner retiring at age 65, 20 years after the year-end date, is as
follows:
Male
23.4
23.0
Female
24.9
24.8
Plan assets are weighted as follows:
£000
£000
Cash and other¹
8,615
6,390
Equity instruments
UK quoted
22,339
19,796
Overseas quoted
27,182
25,609
49,521
45,405
Liability driven investments - unquoted
88,957
86,329
Debt instruments
UK public sector quoted - fixed interest
12,919
12,784
UK non-public sector quoted - fixed interest
84,953
90,361
UK quoted - index-linked
12,970
18,638
110,842
121,783
Derivative financial instruments - unquoted
14,547
(592)
Property
35,020
37,897
307,502
297,212
¹ Includes accrued income, prepayments and other debtors and creditors.
The actual return on plan assets was a gain of £21.1m (2024: a gain of £2.5m).
The underlying assets of the LDIs are primarily UK government bonds and interest rate repurchase agreements at various rates and terms.
The fair value of unquoted securities is measured using inputs for the asset that are not based on observable market data. The fair value is
estimated and approved by the Trustee based on the advice of investment managers. Property is valued annually by independent qualified
surveyors using standard industry methodology to determine a fair market value. All other investments either have a quoted price in active markets
or are valued based on observable market data .
119
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
17 Retirement benefit schemes (continued)
The movements in the fair value of plan assets and the present value of the defined benefit obligation over the year are as follows:
2025
2024
£000
£000
Plan assets
At 1 January
297,212
305,644
Interest income
15,962
13,509
Actual return on plan assets, excluding interest income
5,146
(11,038)
Pension benefits paid and payable
(10,073)
(10,261)
Administration cost
(745)
(642)
At 31 December
307,502
297,212
Defined benefit obligation
At 1 January
208,987
235,583
Current service cost
208
255
Past service cost
-
79
Interest cost
11,167
10,382
Pension benefits paid and payable
(10,073)
(10,261)
Experience losses on liabilities
653
227
Losses/(gains) from changes in demographic assumptions
905
(510)
Gains from changes in financial assumptions
(4,705)
(26,768)
At 31 December
207,142
208,987
Asset ceiling
At 1 January
70,673
50,273
Effect of interest on the asset ceiling
3,866
2,262
Change in asset ceiling
7,111
18,138
At 31 December
81,650
70,673
History of plan assets and liabilities
2025
2024
2023
2022
2021
£000
£000
£000
£000
£000
Present value of defined benefit obligations
(207,142)
(208,987)
(235,583)
(229,343)
(377,113)
Fair value of plan assets
307,502
297,212
305,644
301,773
422,885
100,360
88,225
70,061
72,430
45,772
Restrictions on asset recognised
(81,650)
(70,673)
(50,273)
(57,092)
(17,468)
Surplus
18,710
17,552
19,788
15,338
28,304
The weighted average duration of the defined benefit obligation at the end of the reporting year is 13.1 years (2024: 13.7 years).
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, inflation, expected salary increases and
mortality. The sensitivity analysis below has been determined based on reasonably possible changes in the assumptions occurring at the end of
the reporting year assuming that all other assumptions are held constant.
(Decrease)/increase
Assumption
Change in assumption
in plan liabilities
2025
2024
£000
£000
Discount rate
Increase by 0.5%
(12,049)
(12,543)
Decrease by 0.5% 13,346 14,026
Inflation
Increase by 0.5%
7,910
8,095
Decrease by 0.5%
(7,858)
(8,056)
Salary increase
Increase by 0.5%
769
865
Decrease by 0.5%
(733)
(900)
Life expectancy
Increase by 1 year
5,631
5,836
Decrease by 1 year
(5,657)
(5,851)
Post-employment medical benefits
The Parent operates a post-employment medical benefit plan, for which it chooses to self-insure. The method of accounting, assumptions and the
frequency of valuation are similar to those used for the defined benefit pension plan.
120
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
17 Retirement benefit schemes (continued)
The provision of the plan leads to a number of risks as follows:
-
Interest rate risk: The reserves are assessed using market rates of interest to discount the liabilities and are therefore subject to volatility in the
movement of the market rates of interest. A reduction in the market rate of interest would lead to an increase in the reserves required to be held;
-
Medical expense inflation risk: Future medical costs are influenced by a number of factors including economic trends and advances in medical
technology and sciences. An increase in medical expense inflation would lead to an increase in the reserves required to be held;
-
Medical claims experience: Claims experience can be volatile, exposing the Company to the risk of being required to pay over and above the
assumed reserve. If future claims experience differs significantly from that experienced in previous years, this will increase the risk to the
Company;
-
Spouse and widow(er)s' contributions: The self-insured benefit includes a potential liability for members who pay contributions in respect of
their spouse and widow(er) contributions. There is the possibility that the contributions charged may not be sufficient to cover the medical costs
that fall due; and
-
Mortality risk: If members live longer than expected, the Company is exposed to the expense of medical claims for a longer period, with
increased likelihood of needing to pay claims.
The amounts recognised in the statement of financial position are determined as follows:
Group and Parent
2025
2024
£000
£000
Present value of unfunded obligations and net obligations in the statement of financial position
4,152
4,332
Movements in the net obligations recognised in the statement of financial position are as follows:
At 1 January
4,332
4,801
Total expense charged to profit or loss
228
209
Net actuarial gains during the year, recognised in other comprehensive income
(194)
(495)
Benefits paid
(214)
(183)
At 31 December
4,152
4,332
The amounts recognised through profit or loss are as follows:
Interest cost
228
209
Total, included in employee benefits expense
228
209
The weighted average duration of the net obligations at the end of the reporting year is 8.5 years (2024: 9.0 years).
The main actuarial assumptions for the plan are are an increase in the medical cost inflation of 7.47% (2024: 7.26%) and a discount rate of 5.52%
(2024: 5.47%). The actuarial gain recognised in the current year has been driven by a £0.3m actuarial gain caused by actual experience of the
pension scheme differing from actuarial assumptions. This has been partially offset by an actuarial loss of £0.1m arising from a 0.21% increase in
the medical cost inflation assumption. In the prior year, an actuarial gain of £0.5m was recognised as a result of a increase in the discount rate. This
was partially offset by an actuarial loss of £0.1m arising from a 0.12% increase in the medical cost inflation assumption. The sensitivity analysis
below has been determined based on reasonably possible changes in the assumptions occurring at the end of the accounting year assuming that
all other assumptions are held constant.
(Decrease)/increase
Assumption
Change in assumption
in plan liabilities
2025
2024
£000
£000
Discount rate
Increase by 0.5%
(163)
(258)
Decrease by 0.5%
174
285
Medical expense inflation
Increase by 1.0%
330
537
Decrease by 1.0%
(294)
(456)
Life expectancy
Increase by 1 year
352
325
Decrease by 1 year
(332)
(303)
121
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
18 Property, plant and equipment
Group
Furniture,
Land and
Motor
fittings and
Computer
Right-of-
buildings
vehicles
equipment
equipment
use asset
Total
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 January 2025
600
17
16,916
12,164
36,269
65,966
Additions
-
-
125
1,359
822
2,306
Disposals
-
-
(1,162)
(363)
(1,619)
(3,144)
Exchange differences
-
-
(38)
(19)
(61)
(118)
At 31 December 2025
600
17
15,841
13,141
35,411
65,010
Accumulated depreciation
At 1 January 2025
-
15
8,792
10,005
12,870
31,682
Charge for the year
-
-
1,674
1,117
2,870
5,661
Disposals
-
-
(1,162)
(363)
(1,347)
(2,872)
Exchange differences
-
-
(6)
(14)
(17)
(37)
At 31 December 2025
-
15
9,298
10,745
14,376
34,434
Net book value at 31 December 2025
600
2
6,543
2,396
21,035
30,576
Cost or valuation
At 1 January 2024
2,350
17
15,851
11,601
32,140
61,959
Additions
-
-
1,788
1,549
5,534
8,871
Disposals
(1,750)
-
(447)
(865)
(951)
(4,013)
Exchange differences
-
-
(276)
(121)
(454)
(851)
At 31 December 2024
600
17
16,916
12,164
36,269
65,966
Accumulated depreciation
At 1 January 2024
-
15
7,719
9,414
10,628
27,776
Charge for the year
-
-
1,631
1,549
3,177
6,357
Disposals
-
-
(445)
(865)
(744)
(2,054)
Exchange differences
-
-
(113)
(93)
(191)
(397)
At 31 December 2024
-
8,792
10,005
15 12,870
31,682
Net book value at 31 December 2024
600
2
8,124
2,159
23,399
34,284
122
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
18 Property, plant and equipment (continued)
Parent
Furniture,
Land and
Motor
fittings and
Computer
Right of
buildings
vehicles
equipment
equipment
use asset
Total
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 January 2025
600
14
16,025
11,416
34,306
62,361
Additions
-
-
101
1,293
327
1,721
Disposals
-
-
(1,162)
(363)
(1,365)
(2,890)
Exchange differences
-
-
(40)
(22)
(67)
(129)
At 31 December 2025
600
14
14,924
12,324
33,201
61,063
Accumulated depreciation
At 1 January 2025
-
14
8,565
9,351
11,922
29,852
Charge for the year
-
-
1,482
1,035
2,464
4,981
Disposals
-
-
(1,162)
(363)
(1,098)
(2,623)
Exchange differences
-
-
(7)
(17)
(21)
(45)
At 31 December 2025
-
14
8,878
10,006
13,267
32,165
Net book value at 31 December 2025
600
-
6,046
2,318
19,934
28,898
Cost or valuation
At 1 January 2024
2,350
14
14,949
10,791
30,014
58,118
Additions
-
-
1,724
1,549
5,534
8,807
Disposals
(1,750)
-
(443)
(865)
(951)
(4,009)
Exchange differences
-
-
(205)
(59)
(291)
(555)
At 31 December 2024
600
14
16,025
11,416
34,306
62,361
Accumulated depreciation
At 1 January 2024
-
14
7,683
8,813
10,038
26,548
Charge for the year
-
-
1,427
1,445
2,756
5,628
Disposals
-
-
(443)
(865)
(744)
(2,052)
Exchange differences
-
-
(102)
(42)
(128)
(272)
At 31 December 2024
-
14
8,565
9,351
11,922
29,852
Net book value at 31 December 2024
22,384
600 - 7,460 2,065 32,509
All properties of the Group and Parent, other than those held for sale, were last revalued at 31 December 2023. Valuations were carried out by
Cluttons LLP, an independent professional firm of chartered surveyors who have recent experience in the location and type of properties.
Valuations were carried out using standard industry methodology to determine a fair value. All properties are classified as level 3 assets.
Movements in fair values are taken to the revaluation reserve within equity, net of deferred tax. When such properties are sold, the accumulated
revaluation surpluses are transferred from this reserve to retained earnings. Where the fair value of an individual property is below original cost,
any revaluation movement arising during the year is recognised within net investment return in the statement of profit or loss.
The value of land and buildings of the Group on a historical cost basis is £0.9m (2024: £0.9m). The value of land and buildings of the Parent on a
historical cost basis is £0.9m (2024: £0.9m).
Depreciation expense has been charged in other operating expenses.
123
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
19 Investment property
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Fair value at 1 January
128,563
128,563
130,813
130,813
Disposals
(11,293)
(11,293)
(2,541)
(2,541)
Fair value gains recognised in profit or loss
4,431
4,431
291
291
Fair value at 31 December
121,701
121,701
128,563
128,563
The Group’s investment properties were last revalued at 31 December 2025 by Cluttons LLP, an independent professional firm of chartered
surveyors who have recent experience in the location and type of properties. Valuations were carried out using standard industry methodology to
determine a fair value. There has been no change in the valuation technique during the year. All properties are classified as level 3 assets. There
have been no transfers between investment categories in the current year.
Investment properties are held for long-term capital appreciation rather than short-term sale. Rental income arising from the investment
properties owned by both the Group and Parent amounted to £8.2m (2024: £8.7m) and is included in net investment return.
20 Financial investments
Financial investments summarised by measurement category are as follows:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Financial investments at fair value through profit or loss
Equity securities
- listed
285,042
271,563
247,342
231,574
- unlisted
98,831
98,831
84,939
84,939
Debt securities
- government bonds
277,880
147,680
266,434
137,438
- listed
270,628
205,047
255,210
173,579
Structured notes
159,777
-
123,912
-
Derivative financial instruments
- forwards
2,513
2,513
4,150
4,150
1,094,671
725,634
981,987
631,680
Loans and receivables
Other loans
14
14
14
14
Parent investments in subsidiary undertakings
Shares in subsidiary undertakings
-
42,707
-
42,707
Total financial investments
1,094,685
768,355
982,001
674,401
Current
577,726
378,807
538,759
349,204
Non-current
516,959
389,548
443,242
325,197
All investments in subsidiary undertakings are unlisted.
The Group’s exposure to interest rate risk is detailed in note 4(c).
124
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
21 Derivative financial instruments
The Group utilises derivatives to mitigate equity price risk arising from investments held at fair value, foreign exchange risk arising from investments
denominated in foreign currencies, and foreign exchange risk arising from investments denominated in Sterling that contain underlying foreign
currency exposure. These 'non-hedge' derivatives either do not qualify for hedge accounting or the option to hedge account has not been taken.
The Group has also formally designated certain derivatives as a hedge of its net investments in Australia and Canada. A gain of £2.3m (2024: gain
of £8.8m) in respect of these 'hedge' derivatives has been recognised in the hedging reserve within shareholders' equity, as disclosed in note 25.
The Group has formally assessed and documented the effectiveness of derivatives that qualify for hedge accounting in accordance with IFRS 9
Financial Instruments .
Group
2025
2024
Contract/
Contract/
notional
Fair value
Fair value
notional
Fair value
Fair value
amount
asset
liability
amount
asset
liability
£000
£000
£000
£000
£000
£000
Non-hedge derivatives
Foreign exchange contracts
Forwards (Euro)
168,417
1,742
-
134,525
1,098
-
Forwards (US dollar)
(9,793)
725
-
35,902
-
215
Hedge derivatives
Foreign exchange contracts
Forwards (Australian dollar)
51,554
20
177
53,551
1,993
-
Forwards (Canadian dollar)
81,488
26
303
64,573
1,059
-
291,666
2,513
480
288,551
4,150
215
All derivatives in the current and prior year expire within one year.
The derivative financial instruments of the Parent are the same as the Group, with the exception of the Australian dollar foreign exchange contract
which is classified as a non-hedge derivative.
All contracts designated as hedging instruments were fully effective in the current and prior year.
The notional amounts above reflect the aggregate of individual derivative positions on a gross basis and so give an indication of the overall scale of
the derivative transactions. They do not reflect current market values of the open positions.
Derivative fair value assets are recognised within financial investments (note 20) and derivative fair value liabilities are recognised within other
liabilities (note 29).
125
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
22 Other assets
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Accrued interest and rent
4,670
3,609
4,025
2,754
Other prepayments and accrued income
10,545
8,686
9,466
7,308
Amounts owed by related parties
109,112
120,432
137,287
139,406
Other debtors
10,417
8,259
5,990
3,869
134,744
140,986
156,768
153,337
Current
32,349
32,394
17,708
15,695
Non-current
102,395
108,592
139,060
137,642
Included within amounts owed by related parties of the Group and Parent is a loan of £96.8m (2024: £133.3m) due from Benefact Group plc. The
expected credit loss provision held on this loan is £0.1m (2024: £0.3m). Included within amounts owed by related parties of the Parent is £9.7m
(2024: £2.3m) pledged as collateral in respect of an insurance liability.
Included within other debtors of the Group and Parent is a letter of credit for £2.0m (2024: £2.0m).
Included within other debtors of the Group is £1.0m (2024: £0.9m) classified as contract assets in accordance with IFRS 15.
23 Cash and cash equivalents
2025
2024
Group
Parent
Group
Parent
£000
£000
£000 £000
Cash at bank and in hand
50,118
40,301
56,572
45,679
Short-term bank deposits
43,056
28,540
49,189
34,651
93,174
68,841
105,761
80,330
I ncluded within short-term bank deposits of the Group and Parent are cash deposits of £1.6m (2024: £3.8m) pledged as collateral by way of cash
margins on open derivative contracts to cover derivative liabilities. Included within cash at bank and in hand of the Group and Parent are amounts
of £0.9m (2024: £0.9m) held in accordance with the third country branch requirements of the European Union.
Included within Group cash at bank and in hand are amounts of £13.8m (2024: £9.2m) pledged as collateral by way of cash calls from reinsurers.
126
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
24 Share capital
Issued, allotted and
fully paid
2025
2024
£000
£000
Ordinary shares of 4p each
14,027
14,027
8.625% Non-Cumulative Irredeemable Preference shares of £1 each
106,450
106,450
120,477
120,477
2025
2024
No. '000
No. '000
The number of shares in issue are as follows:
Ordinary shares of 4p each
At 1 January and 31 December
350,678
350,678
8.625% Non-Cumulative Irredeemable Preference shares of £1 each
At 1 January and 31 December
106,450
106,450
On winding up, the assets of the Company remaining after payment of its liabilities are to be applied to holders of the Non-Cumulative
Irredeemable Preference shares in repaying the nominal capital sum paid up on the shares and an amount equal to all arrears of accrued and
unpaid dividends up to the date of the commencement of the winding up. The residual interest in the assets of the Company after deducting all
liabilities belongs to the Ordinary shareholders.
Holders of the Non-Cumulative Irredeemable Preference shares are not entitled to receive notice of, or to attend, or vote at any general meeting of
the Company unless at the time of the notice convening such meeting, the dividend on such shares which is most recently payable on such shares
shall not have been paid in full, or where a resolution is proposed varying any of the rights of such shares, or for the winding up of the Company .
127
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
25 Translation and hedging reserve
Translation
Hedging
reserve
reserve
Total
Group
£000
£000
£000
At 1 January 2025
5,489
12,316
17,805
Losses on currency translation differences
(911)
-
(911)
Gains on net investment hedges
-
2,302
2,302
Attributable tax
-
(704)
(704)
At 31 December 2025
4,578
13,914
18,492
At 1 January 2024
14,814
4,890
19,704
Losses on currency translation differences
(9,325)
-
(9,325)
Gains on net investment hedges - 8,807 8,807
Attributable tax
-
(1,381)
(1,381)
At 31 December 2024
5,489
12,316
17,805
Parent
At 1 January 2025
3,601
2,944
6,545
Losses on currency translation differences
(1,377)
-
(1,377)
Gains on net investment hedges
-
2,379
2,379
Attributable tax
-
(595)
(595)
At 31 December 2025
2,224
4,728
6,952
At 1 January 2024
8,706
(371)
8,335
Losses on currency translation differences (5,105) - (5,105)
Gains on net investment hedges
-
4,420
4,420
Attributable tax
-
(1,105)
(1,105)
At 31 December 2024
3,601
2,944
6,545
The translation reserve arises on consolidation of the Group's and Parent's foreign operations. The hedging reserve represents the cumulative
amount of gains and losses on hedging instruments in respect of net investments in foreign operations.
128
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets
The Group has not disaggregated the following disclosures by geographical segment as it is one of a combination of factors for determining
portfolios and would significantly increase the volume of disclosures without providing material additional insights to users of the financial
statements.
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Gross
General insurance contract liabilities for incurred claims
654,773
516,517
635,317
487,036
General insurance contract liabilities for remaining coverage
92,202
88,764
94,896
80,536
Life insurance contract liabilities for remaining coverage
44,731
-
49,205
-
Total gross insurance contract liabilities
791,706
605,281
779,418
567,572
Reinsurance assets
General reinsurance contract assets for incurred claims
203,929
166,522
205,518
162,256
General reinsurance contract assets for remaining coverage
30,946
10,448
33,935
15,887
Total reinsurers’ share of insurance liabilities
234,875
176,970
239,453
178,143
Net
General insurance contract liabilities for incurred claims
450,844
349,995
429,799 324,780
General insurance contract liabilities for remaining coverage
61,256
78,316
60,961
64,649
Life insurance contract liabilities for remaining coverage
44,731
-
49,205
-
Total net insurance liabilities
556,831
428,311
539,965
389,429
Gross insurance liabilities
Current
283,159
220,924
285,766
217,586
Non-current
508,547
384,357
493,652
349,986
Reinsurance assets
Current
111,619
68,573
130,213
90,249
Non-current
123,256
108,397
109,240
87,89 4
129
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Reinsurance
Insurance contract liabilities
contract assets
General
General
Life
General
General
liabilities
liabilities
liabilities
assets
assets
for
for
for
for
for
remaining
incurred
remaining
remaining
incurred
Group
coverage
claims
coverage
coverage
claims
Total
£000
£000
£000
£000
£000
£000
At 1 January 2024
90,994
634,819
56,029
(21,340)
(198,768)
561,734
Insurance revenue
(623,875)
-
(6,078)
-
-
(629,953)
Incurred claims and other insurance service expenses
-
306,938
-
-
-
306,938
Changes that relate to current service
-
-
5,032
-
-
5,032
Changes that relate to past service
-
15,898
-
-
-
15,898
Losses on onerous contracts and reversal of those losses
(784)
-
-
-
-
(784)
Insurance acquisition cash flows amortisation
134,733
-
-
-
-
134,733
Insurance service expenses
133,949
322,836
5,032
-
-
461,817
Insurance service result before reinsurance contracts held
(489,926)
322,836
(1,046)
-
-
(168,136)
Allocation of reinsurance premiums
-
-
-
150,849
-
150,849
Recoveries of incurred claims and other insurance service
expenses
-
-
-
2,643
(93,132)
(90,489)
Changes that relate to past service
-
-
-
-
23,603
23,603
Recoveries of losses on onerous contracts and reversal of
those losses
-
-
-
627
-
627
Net expense/(income) from reinsurance contracts
-
-
-
154,119
(69,529)
84,590
Finance expense/(income) from insurance contracts issued
-
11,828
(319)
-
-
11,509
Finance income from reinsurance contracts held
-
-
-
-
(4,647)
(4,647)
Net insurance financial result
-
11,828
(319)
-
(4,647)
6,862
Total amounts recognised in statement of profit or loss
(489,926)
334,664
(1,365)
154,119
(74,176)
(76,684)
Exchange differences
(2,386)
(20,357)
-
2,066
5,692
(14,985)
Premiums received
624,768
-
-
-
-
624,768
Insurance acquisition cash flows
(128,554)
-
-
-
-
(128,554)
- (313,809)
Claimsandotherdirectlyattributableexpensespaid (5,459)
- -
(319,268)
Premiums paid
- -
-
(168,780) - (168,780)
Amounts received
-
-
-
-
61,734
61,734
Total cash flows
496,214
(313,809)
(5,459)
(168,780)
61,734
69,900
At 31 December 2024
94,896
635,317
49,205
(33,935)
(205,518)
539,965
130
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Reinsurance
Insurance contract liabilities
contract assets
General
General
Life
General
General
liabilities
liabilities
liabilities
assets
assets
for
for
for
for
for
remaining
incurred
remaining
remaining
incurred
Group
coverage
claims
coverage
coverage
claims
Total
£000
£000
£000
£000
£000
£000
At 1 January 2025
94,896
635,317
49,205
(33,935)
(205,518)
539,965
Insurance revenue
(645,328)
-
(6,088)
-
-
(651,416)
Incurred claims and other insurance service expenses
-
310,944
-
-
-
310,944
Changes that relate to current service
-
-
4,820
-
-
4,820
Changes that relate to past service
-
(10,828)
-
-
-
(10,828)
Losses on onerous contracts and reversal of those losses
(6)
-
-
-
-
(6)
Insurance acquisition cash flows amortisation
141,304
-
-
-
-
141,304
Insurance service expenses
141,298
300,116
4,820
-
-
446,234
Insurance service result before reinsurance contracts held
(504,030)
300,116
(1,268)
-
-
(205,182)
Allocation of reinsurance premiums
-
-
-
148,118
-
148,118
Recoveries of incurred claims and other insurance service
expenses
-
-
-
4,273
(47,866)
(43,593)
Changes that relate to past service
-
-
-
-
(3,994)
(3,994)
Recoveries of losses on onerous contracts and reversal of
those losses
-
-
-
(29)
-
(29)
Net expense/(income) from reinsurance contracts
-
-
-
152,362
(51,860)
100,502
Finance expense from insurance contracts issued
-
25,153
1,738
-
-
26,891
Finance income from reinsurance contracts held
-
-
-
-
(7,939)
(7,939)
Net insurance financial result
-
25,153
1,738
-
(7,939)
18,952
Total amounts recognised in statement of profit or loss
(504,030)
325,269
470
152,362
(59,799)
(85,728)
Exchange differences
(59)
(752)
-
32
460
(319)
Premiums received
657,515
-
-
-
-
657,515
Insurance acquisition cash flows
(156,120)
-
-
-
-
(156,120)
Claims and other directly attributable expenses paid
-
(305,061)
(4,944)
-
-
(310,005)
Premiums paid
-
-
-
(153,138)
-
(153,138)
Amounts received
-
-
-
-
60,928
60,928
Total cash flows
501,395
(305,061)
(4,944)
(153,138)
60,928
99,180
Transfer to other items in the statement of financial position
-
-
-
3,733
-
3,733
At 31 December 2025
92,202
654,773
44,731
(30,946)
(203,929)
556,831
131
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Insurance
Reinsurance
contract liabilities
contract assets
General
General
General
General
liabilities
liabilities
assets
assets
for
for
for
for
remaining
incurred
remaining
incurred
Parent
coverage
claims
coverage
claims
Total
£000
£000
£000
£000
£000
At 1 January 2024
75,388
494,445
(1,812)
(152,958)
415,063
Insurance revenue
(530,330)
-
-
-
(530,330)
Incurred claims and other insurance service expenses
-
246,148
-
-
246,148
Changes that relate to past service
-
29,484
-
-
29,484
Insurance acquisition cash flows amortisation
110,960
-
-
-
110,960
Insurance service expenses
110,960
275,632
-
-
386,592
Insurance service result before reinsurance contracts held
(419,370)
275,632
-
-
(143,738)
Allocation of reinsurance premiums
-
-
109,571
-
109,571
Recoveries of incurred claims and other insurance service expenses - - 2,011 (41,294)
(39,283)
Changes that relate to past service
-
-
-
(7,387)
(7,387)
Net expense/(income) from reinsurance contracts
-
-
111,582
(48,681)
62,901
Finance expense from insurance contracts issued - 6,264 - - 6,264
Finance income from reinsurance contracts held - - - (2,812)
(2,812)
Net insurance financial result
-
6,264
-
(2,812)
3,452
Total amounts recognised in statement of profit or loss
(419,370)
281,896
111,582
(51,493)
(77,385)
Exchange differences
(1,196)
(8,803)
572
2,148
(7,279)
Premiums received
538,371
-
-
-
538,371
Insurance acquisition cash flows
(112,657)
-
-
-
(112,657)
Claims and other directly attributable expenses paid
-
(280,502)
-
-
(280,502)
Premiums paid
-
-
(126,229)
-
(126,229)
Amounts received
-
-
-
40,047
40,047
Total cash flows
425,714
(280,502)
(126,229)
40,047
59,030
At 31 December 2024
80,536
487,036
(15,887)
(162,256)
389,429
132
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Insurance
Reinsurance
contract liabilities
contract assets
General
General
General
General
liabilities
liabilities
assets
assets
for
for
for
for
remaining
incurred
remaining
incurred
Parent
coverage
claims
coverage
claims
Total
£000
£000
£000
£000
£000
At 1 January 2025
80,536
487,036
(15,887)
(162,256)
389,429
Insurance revenue
(565,668)
-
-
-
(565,668)
Incurred claims and other insurance service expenses
-
254,717
-
-
254,717
Changes that relate to past service
-
6,299
-
-
6,299
Losses on onerous contracts and reversal of those losses
(43)
-
-
-
(43)
Insurance acquisition cash flows amortisation
119,598
-
-
-
119,598
Insurance service expenses
119,555
261,016
-
-
380,571
Insurance service result before reinsurance contracts held
(446,113)
261,016
-
-
(185,097)
Allocation of reinsurance premiums
-
-
111,410
-
111,410
Recoveries of incurred claims and other insurance service expenses
-
-
3,818
(33,483)
(29,665)
Changes that relate to past service
-
-
-
1,143
1,143
Net expense/(income) from reinsurance contracts
-
-
115,228
(32,340)
82,888
Finance expense from insurance contracts issued
-
19,651
-
-
19,651
Finance income from reinsurance contracts held
-
-
-
(5,676)
(5,676)
Net insurance financial result
-
19,651
-
(5,676)
13,975
Total amounts recognised in statement of profit or loss
(446,113)
280,667
115,228
(38,016)
(88,234)
Exchange differences
35
(925)
102
478
(310)
Premiums received
570,238
-
-
-
570,238
Insurance acquisition cash flows
(115,932)
-
-
-
(115,932)
Claims and other directly attributable expenses paid
-
(250,261)
-
-
(250,261)
Premiums paid
-
-
(113,624)
-
(113,624)
Amounts received
-
-
-
33,272
33,272
Total cash flows
454,306
(250,261)
(113,624)
33,272
123,693
Transfer to other items in the statement of financial position
-
-
3,733
-
3,733
At 31 December 2025
88,764
516,517
(10,448)
(166,522)
428,311
133
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(a) General business insurance contracts
(i) Reconciliation of the liability for remaining coverage
Insurance contracts issued
PAA
GMM
Excluding
Liability for
loss
Loss
remaining
Group
component
component
coverage
Total
£000
£000
£000
£000
At 1 January 2024
87,602
2,692
700
90,994
Insurance revenue
(623,875) - - (623,875)
Losses on onerous contracts and reversal of those losses
-
(784)
-
(784)
Insurance acquisition cash flows amortisation
134,733
-
-
134,733
Insurance service expenses
134,733
(784)
-
133,949
Total amounts recognised in statement of profit or loss
(489,142)
(784)
-
(489,926)
Exchange differences
(2,214)
(172)
-
(2,386)
Premiums received
624,768
-
-
624,768
Insurance acquisition cash flows
(128,554)
-
-
(128,554)
Total cash flows
496,214
-
-
496,214
At 31 December 2024
92,460
1,736
700
94,896
Insurance revenue
(645,271)
-
(57)
(645,328)
Losses on onerous contracts and reversal of those losses
-
37
(43)
(6)
Insurance acquisition cash flows amortisation
141,304
-
-
141,304
Insurance service expenses
141,304
37
(43)
141,298
Total amounts recognised in statement of profit or loss
(503,967)
37
(100)
(504,030)
Exchange differences
(63)
4
-
(59)
Premiums received
657,515
-
-
657,515
Insurance acquisition cash flows
(156,120)
-
-
(156,120)
Total cash flows
501,395
-
-
501,395
At 31 December 2025
89,825
1,777
600
92,202
134
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
PAA
GMM
Excluding
Liability for
loss
Loss
remaining
Parent
component
component
coverage
Total
£000
£000
£000
£000
At 1 January 2024
74,688
-
700
75,388
Insurance revenue
(530,330)
-
-
(530,330)
Insurance acquisition cash flows amortisation
110,960
-
-
110,960
Insurance service expenses
110,960
-
-
110,960
Total amounts recognised in statement of profit or loss
(419,370)
-
-
(419,370)
Exchange differences
(1,196)
-
-
(1,196)
Premiums received
538,371
-
-
538,371
Insurance acquisition cash flows
(112,657)
-
-
(112,657)
Total cash flows
425,714
-
-
425,714
At 31 December 2024
79,836
-
700
80,536
Insurance revenue
(565,611)
-
(57)
(565,668)
Losses on onerous contracts and reversal of those losses
-
-
(43)
(43)
Insurance acquisition cash flows amortisation
119,598
-
-
119,598
Insurance service expenses
119,598
-
(43)
119,555
Total amounts recognised in statement of profit or loss
(446,013)
-
(100)
(446,113)
Exchange differences
35
-
-
35
Premiums received
570,238
-
-
570,238
Insurance acquisition cash flows
(115,932)
-
-
(115,932)
Total cash flows
454,306
-
-
454,306
At 31 December 2025
88,164
-
600
88,764
135
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(ii) Reconciliation of the liability for incurred claims
Insurance contracts issued
Estimates of
Risk
present value
adjustment
of future
for non-
Group
cash flows
financial risk
Total
£000
£000
£000
At 1 January 2024
554,979
79,840
634,819
Incurred claims and other insurance service expenses
294,320
12,618
306,938
Changes that relate to past service
28,346
(12,448)
15,898
Insurance service expenses
322,666
170
322,836
Insurance service result before reinsurance contracts held
322,666
170
322,836
Finance expense from insurance contracts issued
11,828
-
11,828
Net insurance financial result
11,828
-
11,828
Total amounts recognised in statement of profit or loss
334,494
170
334,664
Exchange differences
(17,740)
(2,617)
(20,357)
Claims and other directly attributable expenses paid
(313,809)
-
(313,809)
Total cash flows
(313,809)
-
(313,809)
At 31 December 2024
557,924
77,393
635,317
Incurred claims and other insurance service expenses
295,538
15,406
310,944
Changes that relate to past service
(773)
(10,055)
(10,828)
Insurance service expenses
294,765
5,351
300,116
Insurance service result before reinsurance contracts held
294,765
5,351
300,116
Finance expense from insurance contracts issued
25,153
-
25,153
Net insurance financial result
25,153
-
25,153
Total amounts recognised in statement of profit or loss
319,918
5,351
325,269
Exchange differences
(579)
(173)
(752)
Claims and other directly attributable expenses paid
(305,061)
-
(305,061)
Total cash flows
(305,061)
-
(305,061)
At 31 December 2025
572,202
82,571
654,773
136
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Estimates of
Risk
present value
adjustment
of future
for non-
Parent
cash flows
financial risk
Total
£000
£000
£000
At 1 January 2024
435,029
59,416
494,445
Incurred claims and other insurance service expenses
237,936
8,212
246,148
Changes that relate to past service
38,741
(9,257)
29,484
Insurance service expenses
276,677
(1,045)
275,632
Insurance service result before reinsurance contracts held
276,677
(1,045)
275,632
Finance expense from insurance contracts issued
6,264
-
6,264
Net insurance financial result
6,264
-
6,264
Total amounts recognised in statement of profit or loss
282,941
(1,045)
281,896
Exchange differences
(7,791)
(1,012)
(8,803)
Claims and other directly attributable expenses paid
(280,502)
-
(280,502)
Total cash flows
(280,502)
-
(280,502)
At 31 December 2024
429,677
57,359
487,036
Incurred claims and other insurance service expenses
245,475
9,242
254,717
Changes that relate to past service
11,711
(5,412)
6,299
Insurance service expenses
257,186
3,830
261,016
Insurance service result before reinsurance contracts held
257,186
3,830
261,016
Finance expense from insurance contracts issued
19,651
-
19,651
Net insurance financial result
19,651
-
19,651
Total amounts recognised in statement of profit or loss
276,837
3,830
280,667
Exchange differences
(899)
(26)
(925)
Claims and other directly attributable expenses paid
(250,261)
-
(250,261)
Total cash flows
(250,261)
-
(250,261)
At 31 December 2025
455,354
61,163
516,517
137
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(iii) Reconciliation of the asset for remaining coverage
Reinsurance contracts held
Excluding
loss
Loss
recovery
recovery
Group
component
component
Total
£000
£000
£000
At 1 January 2024
19,187
2,153
21,340
Allocation of reinsurance premiums
(150,849)
-
(150,849)
Recoveries of incurred claims and other insurance service expenses
(2,643)
-
(2,643)
Recoveries of losses on onerous contracts and reversal of those losses
-
(627)
(627)
Net expense from reinsurance contracts
(153,492)
(627)
(154,119)
Total amounts recognised in statement of profit or loss
(153,492)
(627)
(154,119)
Exchange differences
(1,928)
(138)
(2,066)
Premiums paid
168,780
-
168,780
Total cash flows
168,780
-
168,780
At 31 December 2024
32,547
1,388
33,935
Allocation of reinsurance premiums
(148,118)
-
(148,118)
Recoveries of incurred claims and other insurance service expenses
(4,273)
-
(4,273)
Recoveries of losses on onerous contracts and reversal of those losses
-
29
29
Net (expense)/income from reinsurance contracts
(152,391)
29
(152,362)
Total amounts recognised in statement of profit or loss
(152,391)
29
(152,362)
Exchange differences
(35)
3
(32)
Premiums paid
153,138
-
153,138
Total cash flows
153,138
-
153,138
Transfer to other items in the statement of financial position
(3,733)
-
(3,733)
At 31 December 2025
29,526
1,420
30,946
138
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Excluding
loss
Loss
recovery
recovery
Parent
component
component
Total
£000
£000
£000
At 1 January 2024
1,812
-
1,812
Allocation of reinsurance premiums
(109,571)
-
(109,571)
Recoveries of incurred claims and other insurance service expenses
(2,011)
-
(2,011)
Net expense from reinsurance contracts
(111,582)
-
(111,582)
Total amounts recognised in statement of profit or loss
(111,582)
-
(111,582)
Exchange differences
(572)
-
(572)
Premiums paid
126,229
-
126,229
Total cash flows
126,229
-
126,229
At 31 December 2024
15,887
-
15,887
Allocation of reinsurance premiums
(111,410)
-
(111,410)
Recoveries of incurred claims and other insurance service expenses
(3,818)
-
(3,818)
Net expense from reinsurance contracts
(115,228)
-
(115,228)
Total amounts recognised in statement of profit or loss
(115,228)
-
(115,228)
Exchange differences
(102)
-
(102)
Premiums paid
113,624
-
113,624
Total cash flows
113,624
-
113,624
Transfer to other items in the statement of financial position
(3,733)
-
(3,733)
At 31 December 2025
10,448
-
10,448
139
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(iv) Reconciliation of the asset for incurred claims
Reinsurance contracts held
Estimates of
Risk
present value
adjustment
of future
for non-
Group
cash flows
financial risk
Total
£000
£000
£000
At 1 January 2024
180,171
18,597
198,768
Recoveriesofincurredclaimsandotherinsuranceserviceexpenses 88,767 4,365 93,132
Changes that relate to past service
(11,797)
(11,806)
(23,603)
Net income/(expense) from reinsurance contracts
76,970
(7,441)
69,529
Finance income from reinsurance contracts held
4,647
-
4,647
Net insurance financial result
4,647
- 4,647
Total amounts recognised in statement of profit or loss
81,617
(7,441)
74,176
Exchange differences
(5,152)
(540)
(5,692)
Amounts received
(61,734)
-
(61,734)
Total cash flows
(61,734)
-
(61,734)
At 31 December 2024
194,902
10,616
205,518
Recoveries of incurred claims and other insurance service expenses
36,486
11,380
47,866
Changes that relate to past service
6,863
(2,869)
3,994
Net income from reinsurance contracts
43,349
8,511
51,860
Finance income from reinsurance contracts held
7,939
-
7,939
Net insurance financial result
7,939
-
7,939
Total amounts recognised in statement of profit or loss
51,288
8,511
59,799
Exchange differences
121
(581)
(460)
Amounts received
(60,928)
-
(60,928)
Total cash flows
(60,928)
-
(60,928)
At 31 December 2025
185,383
18,546
203,929
140
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
Reinsurance contracts held
Estimates of
Risk
present value
adjustment
of future
for non-
Parent
cash flows
financial risk
Total
£000
£000
£000
At 1 January 2024
141,333
11,625
152,958
Recoveries of incurred claims and other insurance service expenses
39,130
2,164
41,294
Changes that relate to past service
11,456
(4,069)
7,387
Net income/(expense) from reinsurance contracts
50,586
(1,905)
48,681
Finance income from reinsurance contracts held
2,812
-
2,812
Net insurance financial result
2,812
-
2,812
Total amounts recognised in statement of profit or loss
53,398
(1,905)
51,493
Exchange differences
(1,906)
(242)
(2,148)
Amounts received
(40,047)
-
(40,047)
Total cash flows
(40,047)
-
(40,047)
At 31 December 2024
152,778
9,478
162,256
Recoveries of incurred claims and other insurance service expenses
29,607
3,876
33,483
Changes that relate to past service
267
(1,410)
(1,143)
Net income from reinsurance contracts
29,874
2,466
32,340
Finance income from reinsurance contracts held
5,676
-
5,676
Net insurance financial result
5,676
-
5,676
Total amounts recognised in statement of profit or loss
35,550
2,466
38,016
Exchange differences
(305)
(173)
(478)
Amounts received
(33,272)
-
(33,272)
Total cash flows
(33,272)
-
(33,272)
At 31 December 2025
154,751
11,771
166,522
(v) Reserving methodology
Reserving for non-life insurance claims is a complex process and the Group adopts recognised actuarial methods and, where appropriate, other
calculations and statistical analysis. Actuarial methods used include the chain ladder, Bornhuetter-Ferguson and average cost methods.
Chain ladder methods extrapolate paid amounts, incurred amounts (paid claims plus case estimates) and the number of claims or average cost of
claims, to ultimate claims based on the development of previous years. This method assumes that previous patterns are a reasonable guide to
future developments. Where this assumption is felt to be unreasonable, adjustments are made or other methods such as Bornhuetter-Ferguson or
average cost are used. The Bornhuetter-Ferguson method places more credibility on expected loss ratios for the most recent loss years. For
smaller portfolios the materiality of the business and data available may also shape the methods used in reviewing reserve adequacy.
The selection of results for each accident year and for each portfolio depends on an assessment of the most appropriate method. Sometimes a
combination of techniques is used. The average weighted term to payment is calculated separately by class of business and is based on historical
settlement patterns.
141
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(vi) Risk Adjustment for non-financial risk
The Risk Adjustment for non-financial risk is the compensation the Group requires for bearing the uncertainty about the amount and timing of the
cash flows that arise from non-financial risk as it fulfils insurance contracts. Uncertainty is assessed using actuarial methods to quantify the
variability in undiscounted net outcomes on an ultimate horizon.
The Group’s risk appetite is to hold claims reserves, including a net Risk Adjustment, equating to at least a 75% probability of sufficiency. This
approach generally results in a favourable release of provisions in the current financial year, arising from the settlement of claims relating to
previous financial years.
Overall, it is estimated that the booked net Risk Adjustment provides for a confidence level of approximately 89% (2024: 90%), which is established
by comparing the uplift for the booked net Risk Adjustment to the uncertainty distribution. Percentile estimates for loss distributions are highly
uncertain as they contain a large number of judgements on possible future outcomes. This means that the percentile may see some fluctuation
year on year due to inherent volatility.
(vii) Calculation of provisions for latent claims
The Group adopts commonly used industry methods including those based on claims frequency and severity and benchmarking.
(viii) Discounting
General insurance outstanding claims provisions have been discounted by applying currency and term specific discount rates in the following
territories:
Discount rate
Geographical territory
2025
2024
UK and Ireland
3.8% to 6.1%
4.6% to 6.2%
Canada
2.7% to 4.9%
3.0% to 4.9%
Australia
4.7%
4.5%
Parent consists of UK, Ireland and Canada. Group also includes Australia.
The above rates of interest are based on government bond yields of the relevant currency and term at the reporting date. Adjustments are made,
where appropriate, to reflect the illiquidity of the liabilities.
The impact of discount rate changes on the outstanding claims liability is presented within the net insurance financial result (note 8).
The sensitivity of Group profit or loss and other equity reserves to interest rate risk, taking into account the mitigating effect on asset values, is
provided in note 4(h).
(ix) Assumptions
The Group follows a process of reviewing its reserves for outstanding claims on a regular basis. This involves an appraisal of each reserving class
with respect to ultimate claims liability for the recent exposure period as well as for earlier periods, together with a review of the factors that have
the most significant impact on the assumptions used to determine the reserving methodology. The work conducted is subject to an internal peer
review and management sign-off process.
The most significant assumptions in determining the undiscounted general insurance reserves are the anticipated number and ultimate settlement
cost of claims, and the extent to which reinsurers will share in the cost. Factors which influence decisions on assumptions include legal and judicial
changes, significant weather events, other catastrophes, subsidence events, exceptional claims or substantial changes in claims experience and
developments in older or latent claims. Significant factors influencing assumptions about reinsurance are the terms of the reinsurance treaties, the
anticipated time taken to settle a claim and the incidence of large individual and aggregated claims.
(x) Changes in assumptions
There are no significant changes in approach but we continue to evolve estimates in light of underlying experience.
142
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(xi) Sensitivity of results
The sensitivity of profit before tax to reasonably possible final settlement assumptions used to calculate the general insurance liabilities is shown
in the following table. No account has been taken of any correlation between the assumptions.
Change in
Potential (decrease)/
variable
increase in the result
2025
2024
Gross
Net
Gross
Net
Variable
£000
£000
£000
£000
Deterioration in loss ratio
+1%
(6,449)
(3,806)
(6,232)
(3,634)
Improvement in loss ratio
-1%
6,449
3,806
6,232
3,634
Increase in net liability for incurred claims excluding risk adjustment
+10%
(57,217)
(38,666)
(55,792)
(36,304)
Decrease in net liability for incurred claims excluding risk adjustment
-10%
57,217
38,666
55,792
36,304
Increase in risk adjustment*
+1%
(5,722)
(3,867)
(6,781)
(4,674)
Decrease in risk adjustment* -1%
5,722
3,867
6,781 4,674
* Calculated on undiscounted present value of future cash flows
At 31 December 2025, it is estimated that a fall of 1% in the discount rates used would increase the Group's net outstanding claims liabilities and
decrease profit before tax and equity by £14.0m (2024: £13.6m).
143
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(xii) Claims development tables
The nature of liability classes of business is that claims may take a number of years to settle and before the final liability is known. The tables
below show the development of the undiscounted estimate of ultimate net claims cost for these classes across all territories.
Estimate of ultimate net claims
2016 2017 2018 2019
2020
2021
2022
2023
2024
2025
Total
Group
£000
£000
£000
£000 £000 £000
£000
£000
£000 £000
£000
At end of year
47,402 45,920 44,053
44,230 45,459 47,289
47,599
52,252
51,781
56,174
One year later
41,631
41,706
37,456
39,842
37,509
47,102
45,575
50,629
48,113
Two years later
37,740
37,797
32,867
37,243
36,193
45,079
45,547
47,449
Three years later
36,337 34,818
31,647
39,164
37,579
46,666
46,780
Four years later
35,217 36,431 32,884 39,248
35,694
46,023
Five years later
32,993
36,550
31,722
35,836
33,812
Six years later
33,896 38,618
30,442
35,330
Seven years later
34,297
37,595
30,011
Eight years later
33,022
37,172
Nine years later
34,151
Current estimate of
ultimate claims
34,151 37,172 30,011 35,330 33,812 46,023 46,780 47,449 48,113 56,174 415,015
Cumulative payments
to date
(26,171)
(29,272) (21,754) (25,806) (20,615)
(20,496) (14,791) (10,209) (5,430) (1,619) (176,163)
Outstanding liability
7,980
7,900
8,257
9,524
13,197
25,527
31,989
37,240
42,683
54,555
238,852
Effect of discounting
(42,515)
Present value
196,337
Discounted liability in respect of earlier years
146,928
Total discounted net liability for liability classes
343,265
Total discounted net liability for non-liability classes, expenses and reinsurance debtors
107,579
Total discounted net liability included in insurance liabilities in the statement of financial position
450,844
2016 2017 2018 2019
2020
2021
2022
2023
2024 2025
Total
Parent
£000 £000 £000
£000 £000 £000 £000
£000
£000
£000
£000
At end of year
35,882
33,134
31,981
32,688
33,502
33,792
35,458
39,988
36,780
42,332
One year later
30,906
30,965
27,208
29,509 26,536
32,436
33,776
39,353
34,000
Two years later
28,199
28,854
23,787
27,615
24,261
27,999
32,262
35,031
Three years later
27,493
26,774 22,651
27,572 24,634 28,318
34,059
Four years later
26,894
27,279
21,947
27,853
23,132
28,765
Five years later
24,782
26,596
21,269
25,403
22,158
Six years later
25,440
29,261
20,935
25,131
Seven years later
25,928
29,420
20,708
Eight years later
25,792
29,324
Nine years later
27,157
Current estimate of
ultimate claims
27,157
29,324 20,708 25,131 22,158
28,765 34,059 35,031
34,000 42,332
298,665
Cumulative payments
to date
(20,863) (23,115) (14,847) (11,395)
(18,656) (13,380)
(6,748) (3,332)
(9,269) (923) (122,528)
Outstanding liability
6,294
6,209
5,861
6,475
8,778
17,370
24,790
28,283
30,668
41,409
176,137
Effect of discounting
(29,506)
Present value
146,631
Discounted liability in respect of earlier years
118,656
Total discounted net liability for liability classes
265,287
Total discounted net liability for non-liability classes, expenses and reinsurance debtors 84,708
Total discounted net liability included in insurance liabilities in the statement of financial position
349,995
144
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(b) Life business insurance contracts
(i) Reconciliation of the liability for remaining coverage
Insurance contracts issued
Estimates of
Risk
present value
adjustment
Contractual
of future
for non-
service
cash flows
financial risk
margin
Total
£000
£000
£000
£000
At 1 January 2024
48,998 6,800 56,029
231
Changes that relate to current service
CSM recognised in profit or loss for the services provided
-
-
(712)
(712)
Change in the risk adjustment for non-financial risk for the risk expired
-
(16)
-
(16)
Experience adjustments
(318)
-
-
(318)
(318) (16) (712) (1,046)
Changes that relate to future service
Changes in estimates that adjust the CSM
(440)
157
283
-
(440)
157
283
-
Insurance service result
(758) 141 (429) (1,046)
Finance income from insurance contracts issued
(366)
-
47
(319)
Net insurance financial result
(366)
-
47
(319)
Total amounts recognised in statement of profit or loss
(1,124)
141
(382)
(1,365)
Claims and other directly attributable expenses paid
(5,474)
(5)
20
(5,459)
Total cash flows
(5,474)
(5)
20
(5,459)
At 31 December 2024
42,400
367
6,438
49,205
Changes that relate to current service
CSM recognised in profit or loss for the services provided
-
-
(684)
(684)
Change in the risk adjustment for non-financial risk for the risk expired
-
(31)
-
(31)
Experience adjustments
(553)
-
-
(553)
(553)
(31)
(684)
(1,268)
Changes that relate to future service
Changes in estimates that adjust the CSM
(184)
78
106
-
(184)
78
106
-
Insurance service result
(737)
47
(578)
(1,268)
Finance expense from insurance contracts issued
1,673
-
65
1,738
Net insurance financial result
1,673
-
65
1,738
Total amounts recognised in statement of profit or loss
936
47
(513)
470
Claims and other directly attributable expenses paid
(4,949)
5
-
(4,944)
Total cash flows
(4,949)
5
-
(4,944)
At 31 December 2025
38,387
419
5,925
44,731
145
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(ii) Assumptions
The most significant assumptions in determining life reserves are as follows:
Mortality
An appropriate base table of standard mortality is chosen depending on the type of contract. Where prudent, an allowance is made for future
mortality improvements based on trends identified in population data. For both 2025 and 2024 the base tables used were ELF16F and ELT16M with
a 1% improvement applied each year.
Discounting
The nominal discount rate curve is calculated on a bottom up basis. The risk free curve is based on the UK government bond yield curve. A liquidity
premium based on the return on a notional index of fixed interest assets, including gilts and corporate bonds, is added to the risk free curve. The
liquidity premium is adjusted for credit risk and differences in liquidity between the notional assets and the liabilities.
2025
2024
Non-Profit Life Business
3.5% to 6.2%
3.7% to 6.0%
Funeral plans renewal expense level and inflation
Numbers of policies in force and both projected and actual expenses have been considered when setting the base renewal expense level. The unit
renewal expense assumption for in-force business is £21.23 per annum (2024: £19.36 per annum).
Expense and benefit inflation curves are set with reference to GBP inflation swaps of various terms, and using linear interpolation between
available swap terms.
Tax
It has been assumed that current tax legislation and rates enacted at 1 January 2026 will continue to apply. All in-force business is classed as
protection business and is expected to be taxed on a profits basis.
(iii) Changes in assumptions
Projected investment returns have been revised in line with the changes in the actual yields of the underlying assets. As a result, liabilities have
increased by £0.4m (2024: £2.8m decrease).
The assumed future expenses of running the business have been revised based on expenses that are expected to be incurred by the company. The
effect on insurance liabilities of the changes to renewal expense assumptions (described above) was a £0.1m increase (2024: £0.4m increase).
(iv) Sensitivity analysis
The sensitivity of profit before tax to changes in the key assumptions used to calculate the life insurance liabilities is shown in the following table.
No account has been taken of any correlation between the assumptions.
Change in
Potential (decrease)/
variable
increase in the result
2025
2024
Variable
£000
£000
Deterioration in mortality
+10%
(783)
(857)
Improvement in mortality
-10%
911
1,002
Increase in fixed interest/cash yields
+1% pa
(369)
(624)
Decrease in fixed interest/cash yields
-1% pa
398
771
Worsening of base renewal expense level +10%
30
30
Improvement in base renewal expense level
-10%
(30)
(30)
Increase in expense inflation
+1% pa
64
68
Decrease in expense inflation
-1% pa
(51)
(54)
146
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
26 Insurance liabilities and reinsurance assets (continued)
(v) Maturity analysis
The table below shows the maturity profile of the CSM release.
Within
Between
After
1 year
1 and 5 years
5 years
Total
£000
£000
£000
£000
At 31 December 2025
CSM release after accretion
770
2,285
2,870
5,925
At 31 December 2024
CSM release after accretion
764
2,316
3,358
6,438
27 Provisions for other liabilities and contingent liabilities
Regulatory
Other
provisions
provisions
Total
Group
£000
£000
£000
At 1 January 2025
2,200
3,779
5,979
Additional provisions
4,757
18
4,775
Used during year
(4,770)
(95)
(4,865)
Not utilised
-
(1,295)
(1,295)
Exchange differences
-
3
3
At 31 December 2025
2,187
2,410
4,597
Current
2,187
250
2,437
Non-current
-
2,160
2,160
Parent
At 1 January 2025
2,200
3,686
5,886
Additional provisions
4,757
-
4,757
Used during year
(4,769)
(95)
(4,864)
Not utilised
-
(1,297)
(1,297)
Exchange differences
-
3
3
At 31 December 2025
2,188
2,297
4,485
Current
2,188
218
2,406
Non-current
-
2,079
2,079
Regulatory provisions
The Group operates in the financial services industry and is subject to regulatory requirements in the normal course of business, including
contributing towards any levies raised on UK general and life business. The provisions reflect an assessment by the Group of its share of the total
potential levies.
Other provisions
The other provisions relate to costs in respect of dilapidations. Dilapidations provisions are based on the Group's best estimate of future expense
required to restoring a leased property to its original state on completion of the lease.
147
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
28 Deferred tax
An analysis and reconciliation of the movement of the key components of the net deferred tax liability during the current and prior reporting year is
as follows:
Net
Unrealised
retirement
IFRS 17
gains on
benefit
transition
Other
investments
assets
adjustment
differences
Total
Group
£000
£000
£000
£000
£000
At 1 January 2024
31,423
3,744
(1,068)
(4,744)
29,355
Charged/(credited) to profit or loss
1,267
(34)
(293)
2,180
3,120
Credited to profit or loss
- Impact of change in deferred tax rate
-
-
-
(1)
(1)
(Credited)/charged to other comprehensive income
-
(408)
-
819
411
Exchange differences
64
-
(8)
309
365
At 31 December 2024
32,754 3,302 (1,369)
(1,437)
33,250
Charged/(credited) to profit or loss
5,644
(10)
156
(1,793)
3,997
Charged to other comprehensive income
-
344
-
595
939
Exchange differences
3
-
-
(11)
(8)
At 31 December 2025
38,401
3,636
(1,213)
(2,646)
38,178
Parent
At 1 January 2024
31,924
3,747
-
771
36,442
Charged/(credited) to profit or loss
992
(34)
-
1,487
2,445
Credited to profit or loss
- Impact of change in deferred tax rate
-
-
-
(1)
(1)
(Credited)/charged to other comprehensive income
-
(408)
-
819
411
Exchange differences
-
-
-
4
4
At 31 December 2024
32,916
3,305
-
3,080
39,301
Charged/(credited) to profit or loss
5,152
(10)
-
(2,210)
2,932
Charged to other comprehensive income
-
344
-
595
939
Exchange differences
-
-
-
(5)
(5)
At 31 December 2025
38,068
3,639
-
1,460
43,167
Certain deferred tax assets and liabilities have been offset where the Group has a legally enforceable right to do so. The following is the analysis of
the deferred tax balances (after offset) for financial reporting purposes:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Deferred tax liabilities
43,492
43,174
40,615
39,307
Deferred tax assets
(5,314)
(7)
(7,365) (6)
38,178
43,167
33,250
39,301
Included in the above are unused tax losses of £6.5m (2024: £7.3m) arising from life business, which are available for offset against future tax
profits and can be carried forward indefinitely. Also included in the above are £1.0m (2024: £nil) of double tax relief credits carried forward for
offset against future tax liabilities.
148
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
29 Other liabilities
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Derivative liabilities
480
480
215
215
Other creditors
26,411
19,145
28,468 18,510
Amounts owed to related parties
1,460
1,413
673
18,760
Accruals
39,523
35,455
32,487
29,155
67,874
56,493
61,843
66,640
Current
67,429
56,493
61,353 66,640
Non-current
445
-
490
-
Derivative liabilities are in respect of foreign exchange contracts and are detailed in note 21.
30 Subordinated liabilities
2025
2024
Group and Parent
£000
£000
6.3144% EUR 30m subordinated debt
26,835
25,112
26,835
25,112
Subordinated debt consists of a privately-placed issue of 20-year subordinated bonds, maturing in February 2041 and callable after February
2031. The Group's subordinated debt ranks below its senior debt and ahead of its preference shares and ordinary share capital.
Subordinated debt is stated at amortised cost.
31 Investment contract liabilities
2025
2024
Group
£000
£000
Investment contract liabilities
172,375
133,706
172,375
133,706
Investment contract liabilities represents amounts due to policyholders and, if applicable, the cost of the minimum repayment guarantee.
Investment contract liabilities are repayable on demand or at short notice and therefore classified as current. These liabilities are matched with
highly liquid investments and are classified as level 2 liabilities.
149
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
32 Leases
Group as a lessee
The Group has lease contracts for various items of property, motor vehicles and other equipment used in its operations. Leases of property
generally have terms of up to 15 years, while motor vehicles and other equipment generally have lease terms between 2 and 6 years. Lease terms
are negotiated on an individual basis and contain different terms and conditions, but do not impose any covenants other than security interests. The
Group's obligations under its leases are secured by the lessor's title to the leased assets, and leased assets may not be used as security for
borrowing purposes.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year.
Land and
Motor
Other
buildings
vehicles
equipment
Total
Group
£000
£000
£000
£000
At 1 January 2025
22,699
573
127
23,399
Additions
495
327
-
822
Disposals
(5)
(267)
-
(272)
Depreciation expense
(2,740)
(96)
(34)
(2,870)
Exchange differences
(44)
-
-
(44)
At 31 December 2025
20,405
537
93
21,035
At 1 January 2024
20,630
843
39
21,512
Additions
5,283
91
160
5,534
Disposals
-
(177)
(30)
(207)
Depreciation expense
(2,951)
(184)
(42)
(3,177)
Exchange differences
(263)
-
-
(263)
At 31 December 2024
22,699
573
127
23,399
Land and
Motor
Other
buildings
vehicles
equipment
Total
Parent
£000
£000
£000
£000
At 1 January 2025
21,684
573
127
22,384
Additions
-
327
-
327
Disposals
-
(267)
-
(267)
Depreciation expense
(2,334)
(96)
(34)
(2,464)
Exchange differences
(46)
-
-
(46)
At 31 December 2025
19,304
537
93
19,934
At 1 January 2024
19,094
842
40
19,976
Additions
5,283
91
160
5,534
Disposals
-
(176)
(31)
(207)
Depreciation expense
(2,530)
(184)
(42)
(2,756)
Exchange differences
(163)
-
-
(163)
At 31 December 2024
21,684
573
127
22,384
Set out below are the carrying amounts of lease obligations:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Current
2,169
2,169
1,971
1,971
Non-current
20,495
18,926
22,602
20,935
22,664
21,095
24,573
22,906
150
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
32 Leases (continued)
Group profit for the year has been arrived at after charging the following amounts in respect of lease contracts:
2025
2024
£000
£000
Depreciation expense of right-of-use assets
2,870
3,177
Interest expense on lease liabilities
1,279
996
Expenses relating to low value leases
8
-
4,157
4,173
The Group had total cash outflows for leases, including interest paid, of £3.7m (2024: £3.1m). The Parent had total cash outflows for leases,
including interest paid, of £3.1m (2024: £2.8m). The future cash outflows relating to leases that have not yet commenced are disclosed in note 33.
The Group has several lease contracts that include extension and termination options. These options are negotiated by management to provide
flexibility in managing the leased-asset portfolio and align with the Group's business needs.
Group as a lessor
The Group has entered into operating leases on its investment property portfolio. These leases have terms of up to 50 years. All leases include a
clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also required to
provide a residual value guarantee on the properties. Rental income on these properties recognised by the Group during the year is disclosed in
note 19.
Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:
2025
2024
Group
Parent
Group
Parent
£000
£000
£000
£000
Year 1
6,496
6,496
7,586
7,586
Year 2
5,736
5,736
6,324
6,324
Year 3
4,898
4,898
5,644
5,644
Year 4
2,933
2,933
4,490
4,490
Year 5
2,080
2,080
2,617
2,617
After 5 years
10,020
10,020
9,936
9,936
Total undiscounted cashflows
32,163
32,163
36,597
36,597
151
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
33 Commitments
At the year end, the Group and Parent had capital commitments of £0.6m (2024: £0.4m) relating to development costs.
The Group and Parent had no lease contract commitments for right-of-use assets that had not commenced at 31 December 2025.
34 Related undertakings
Ultimate parent company and controlling party
The Company is a wholly-owned subsidiary of Benefact Group plc. Its ultimate parent and controlling company is Benefact Trust Limited. Both
companies are incorporated in England and Wales and copies of their financial statements are available from the registered office as shown in the
Directors and Company Information section of this Annual Report and Accounts. The parent companies of the smallest and largest groups for
which group financial statements are drawn up are Ecclesiastical Insurance Office public limited Company and Benefact Trust Limited, respectively.
Related undertakings
The Company's interest in related undertakings at 31 December 2025 is as follows:
Company
2025
2024
Registration
Share
Holding of shares by
Holding of shares by
Company
Number
Capital
Company
Group
Company
Group
Activity
Subsidiary undertakings
Incorporated in the United Kingdom
1 3
Ecclesiastical Group Healthcare Trustees Limited
10988127
Ordinary
100%
-
100%
-
Trustee company
1
Ecclesiastical Life Limited
0243111
Ordinary -
100% -
100%
Life insurance
1 4
E.I.O. Trustees Limited
0941199
Ordinary
100%
-
100%
-
Trustee company
Incorporated in Australia
2
Ansvar Insurance Limited
007216506
Ordinary
100%
-
100%
-
Insurance
2 5
Ansvar Insurance Services Pty Limited
162612286
Ordinary
-
100%
-
100%
Dormant company
1
Registered office: Benefact House, 2000 Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester, GL3 4AW, United Kingdom
2
Registered office: Level 5, 1 Southbank Boulevard, Melbourne, VIC 3006, Australia
3
Exempt from audit under s479 of the Companies Act 2006
4
Exempt from audit under s480 of the Companies Act 2006
5
Exempt from audit
152
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
35 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not included in
the Group analysis, but are included within the Parent analysis below.
Benefact Group plc is the Group and Parent's immediate parent company. Other related parties, of both Group and Parent, include subsidiary
undertakings of Benefact Group plc, the ultimate parent undertaking and the Group's pension plans.
Other
Benefact
related
Group plc
Subsidiaries
parties
£000
£000
£000
2025
Group
Trading, investment and other income, including recharges, and amounts received
6,496
-
56,634
Trading, investment and other expenditure, including recharges, and amounts paid
63,550
-
2,706
Amounts owed by related parties*
97,533
-
11,550
Amounts owed to related parties
-
-
179,978
Parent
Trading, investment and other income, including recharges, and amounts received
6,496
21,462
24,769
Trading, investment and other expenditure, including recharges, and amounts paid
63,550
6,795
2,189
Amounts owed by related parties*
97,533
11,352
11,550
Amounts owed to related parties
-
-
1,410
2024
Group
Trading, investment and other income, including recharges, and amounts received
8,707
-
56,966
Trading, investment and other expenditure, including recharges, and amounts paid
58,144 - 9,028
Amounts owed by related parties*
133,913
-
3,276
Amounts owed to related parties
-
-
156,186
Parent
Trading, investment and other income, including recharges, and amounts received 8,707 8,396
22,594
Trading, investment and other expenditure, including recharges, and amounts paid
58,144
24,792
8,525
Amounts owed by related parties*
133,913
2,365
3,276
Amounts owed to related parties
-
18,157
637
* Included within amounts owed by related parties of the Group and Parent is a loan of £97.5m (2024: £133.3m) due from Benefact Group plc.
Trading, investment and other expenditure, including recharges, and amounts paid in the current year includes loans totalling £13.6m (2024:
£28.1m), general business claims of £6.3m (2024: £23.5m), funeral plan liability movements of £4.4m (2024: £6.6m) and a dividend paid to Benefact
Group plc of £50.0m (2024: £30.0m).
Trading, investment and other income, including recharges, and amounts received in the current year includes general business premiums totalling
£19.3m (2024: £5.9m), funeral plan liability movements of £nil (2024: £nil) and deposits received for life business totalling £27.4m (2024: £27.8m) .
Amounts owed to related parties by the Group and by the Parent include insurance liabilities which are included in note 26. Amounts owed to
related parties by the Group also includes investment contract liabilities which are included in note 31.
153
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
35 Related party transactions (continued)
Transactions and services within the Group are made on commercial terms. With the exception of some insurance liabilities, amounts outstanding
between Group companies are unsecured, are not subject to guarantees, and will be settled in cash. No provisions have been made in respect of
these balances.
The total aggregate remuneration of the directors of the Company in respect of qualifying services during 2025 was £4.0m (2024: £3.6m). After
inclusion of amounts receivable under long-term incentive schemes and pension benefits, the total aggregate emoluments of the directors was
£5.4m (2024: £4.6m).
The key management personnel is defined as the Group Management Board (Ecclesiastical's leadership team), Executive and Non-executive
directors. The remuneration is shown below.
Restated*
2025
2024
Group
Parent
Group
Parent
£000
£000
£000 £000
Key management personnel
Short term employee benefits
7,278
7,278
7,671
7,671
Post employment benefits
370
370
355
355
Other long term benefits
2,119
2,119
1,263
1,263
9,767
9,767
9,289
9,289
*Key management personnel remuneration has been re-presented in accordance with IAS 24 Related party transactions . The amounts exclude
employer social security costs.
Remuneration of the directors and key management personnel represents their total remuneration and has not been attributed according to their
work across the Benefact Group.
Charitable grants paid to the Group's ultimate Parent undertaking are disclosed in note 15. Contributions paid to and amounts received from the
Group's defined benefits schemes are disclosed in note 17.
154
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
36 Reconciliation of Alternative Performance Measures
The Group uses alternative performance measures (APMs) in addition to the figures which are prepared in accordance with IFRS. The financial
measures in our key financial performance data include gross written premiums and the combined operating ratio and are used to manage the
Group's general insurance business. Similar measures are commonly used in the industries we operate in and we believe they provide useful
information and enhance the understanding of our results. No life insurance premiums were written in the year (2024: none) and the life insurance
revenue is the earning of the legacy business over its life, expected to be in excess of 10 years.
Users of the accounts should be aware that similarly titled APM reported by other companies may be calculated differently. For that reason, the
comparability of APM across companies might be limited.
The tables below provide a reconciliation of the gross written premiums, net written premiums, net earned premiums and the combined operating
ratio to their most directly reconcilable line items in the financial statements.
Group
2025
General insurance
£000
Insurance revenue
[1]
644,948
Deduct change in the gross unearned premium provision
8,886
GMM insurance revenue adjustments
(57)
Gross written premiums
653,777
Outward reinsurance premiums written
(268,578)
Net written premiums
385,199
Change in the net unearned premium provision
(4,555)
Net earned premiums
[3]
380,644
Gross written premiums refers to the total premiums written and invoiced by the Group during the reporting year before deducting any outwards
reinsurance premiums or adjustments for unearned premiums. It reflects the total premium income generated by the Group's underwriting
activities. Net written premiums are the gross written premiums after deducting any outwards reinsurance premiums. Net earned premiums are the
net written premiums after adjusting for unearned premiums based on the elapsed time of the policy period.
2025
Other
Inv'mnt
Corporate
income and
Insurance
return
costs
charges
Total
General
Life
£000
£000
£000
£000
£000
£000
Insurance revenue
[1]
644,948
6,088
442
*
-
(62)
651,416
Insurance service expenses
(453,550)
(4,820)
12,075
**
-
61
(446,234)
Insurance service result before reinsurance contracts held
191,398
1,268
12,517
-
(1)
205,182
Net expense from reinsurance contracts
(100,502)
- -
-
-
(100,502)
Insurance service result
90,896
1,26812,517
-
(1)
104,680
Net insurance financial result
-
(1,738)
(17,214)
-
-
(18,952)
Net investment result
-
2,800
88,177
-
-
90,977
Fee and commission income
-
- -
-
1,973
1,973
Other operating expenses
(28,729)
(2,010)
(4,810)
(54,207)
(1,086)
(90,842)
Other finance costs
-
- -
-
(3,239)
(3,239)
Profit/(loss) before tax
[2]
62,167
320
78,670
(54,207)
(2,353)
84,597
*
instalment handling charges
**
discounting on non-latent claims provisions
Combined operating ratio = ( [3] - [2] ) / [3]
83.7%
The underwriting profit/(loss) of the Group is defined as the profit/(loss) before tax of the general insurance business.
The Group uses the net combined operating ratio as a measure of underwriting efficiency. The combined operating ratio expresses the total
underwriting costs of the general insurance business as a percentage of net earned premiums. It is calculated as ( [3] - [2] ) / [3].
155
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
36 Reconciliation of Alternative Performance Measures (continued)
The tables below provide a breakdown of the gross written premiums, net written premiums, net earned premiums and the combined operating
ratio by segment.
2025
UK & Ireland
Australia
Canada
Other
Total
Gross written premiums by segment
£000
£000
£000
£000
£000
Insurance revenue
[1]
452,821
90,238
94,797
7,092
644,948
Deduct change in the gross unearned premium provision
8,428
(1,263)
1,066
655
8,886
GMM insurance revenue adjustments
(57)
-
- -
(57)
Gross written premiums
461,192
88,975
95,863
7,747
653,777
Outward reinsurance premiums written
(194,009)
(59,031)
(31,894)
16,356
(268,578)
Net written premiums
267,183
29,944
63,969
24,103
385,199
Change in the net unearned premium provision
(5,877)
(739)
2,716
(655)
(4,555)
Net earned premiums
[3]
261,306
29,205
66,685
23,448
380,644
2025
UK & Ireland
Australia
Canada
Other
Total
Underwriting result by segment
£000£000
£000
£000
£000
Insurance revenue
[1]
452,821
90,238
94,797
7,092
644,948
Insurance service expenses
(308,510)
(67,639)
(68,660)
(8,741)
(453,550)
Insurance service result before reinsurance contracts held
144,311
22,599
26,137
(1,649)
191,398
Net (expense)/income from reinsurance contracts
(74,992)(23,194)
(7,973)
5,657
(100,502)
Insurance service result
69,319
(595)
18,164
4,008
90,896
Other operating expenses
(19,785)
(2,126)
(6,818)
-
(28,729)
Underwriting result
[2]
49,534
(2,721)
11,346
4,008
62,167
Combined operating ratio = ( [3] - [2] ) / [3]
81.0%
109.3%
83.0%
83.7%
156
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
36 Reconciliation of Alternative Performance Measures (continued)
Group
2024
General insurance
£000
Insurance revenue
[1]623,195
Deduct change in the gross unearned premium provision
17,406
Gross written premiums
640,601
Outward reinsurance premiums written
(261,194)
Net written premiums
379,407
Change in the net unearned premium provision
(16,050)
Net earned premiums
[3] 363,357
2024
Other
Inv'mnt
Corporate
income and
Insurance
return
costs
charges
Total
General
Life
£000
£000£000
£000£000
£000
Insurance revenue
[1]623,195
6,078735
*
-
(55)
629,953
Insurance service expenses
(465,905)
(5,033)
9,066
**
-
55
(461,817)
Insurance service result before reinsurance contracts held
157,290
1,045
9,801
- -
168,136
Net expense from reinsurance contracts
(84,590)
- -
- -
(84,590)
Insurance service result
72,700
1,045
9,801
- -
83,546
Net insurance financial result
-
319(7,181)
- -
(6,862)
Net investment result
-
1,318
70,532
- -
71,850
Fee and commission income
-
- -
-
544
544
Other operating expenses (25,058) (1,276) (3,219) (33,152) (796) (63,501)
Other finance costs
-
- -
-
(3,102)
(3,102)
Profit/(loss) before tax
[2]
47,642
1,406
69,933
(33,152)(3,354)
82,475
*
instalment handling charges
**
discounting on non-latent claims provisions
Combined operating ratio = ( [3] - [2] ) / [3]
86.9%
157
Ecclesiastical Insurance Office public limited company
Notes to the financial statements
36 Reconciliation of Alternative Performance Measures (continued)
2024
UK & Ireland
Australia
Canada
Other
Total
Gross written premiums by segment
£000£000
£000£000£000
Insurance revenue
[1]
418,569
96,281
101,881
6,464
623,195
Deduct change in the gross unearned premium provision 18,294 (936) (325) 373
17,406
Gross written premiums
436,863
95,345
101,556
6,837
640,601
Outward reinsurance premiums written
(185,084)
(50,669)
(27,965)
2,524
(261,194)
Net written premiums
251,779
44,676
73,591
9,361
379,407
Change in the net unearned premium provision
(14,822)
(747)
(109)
(372)
(16,050)
Net earned premiums
[3]
236,957
43,929
73,482
8,989
363,357
2024
UK & Ireland
Australia
Canada
Other
Total
Underwriting result by segment
£000£000
£000£000£000
Insurance revenue
[1]
418,569
96,281
101,881
6,464
623,195
Insurance service expenses (294,224) (89,888) (73,308) (8,485)
(465,905)
Insurance service result before reinsurance contracts held
124,345
6,393
28,573
(2,021)
157,290
Net expense from reinsurance contracts
(53,408)
(7,333)
(9,463)
(14,386)
(84,590)
Insurance service result
70,937
(940)
19,110
(16,407)
72,700
Other operating expenses
(17,325)
(2,294)
(5,439)
-
(25,058)
Underwriting result
[2]
53,612(3,234)
13,671
(16,407)
47,642
Combined operating ratio = ( [3] - [2] ) / [3]
77.4%
107.4%
81.4%
86.9%
158
ECCLESIASTICAL INSURANCE OFFICE P UBLIC L IMITED COMPANY
NOTICE OF MEETING
NOTICE is hereby given that the Annual General Meeting of Ecclesiastical Insurance Office public limited company will be
held at Benefact House, 2000 Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester, GL3 4AW on Thursday,
th
25
June 2026 at 10.55am for the following purposes:
Ordinary business
st
1. To receive the Report of the Directors and Accounts for the year ended 31
December 202 5 and the report of
the auditors thereon.
2. To re-elect Mr M. Bennett as a director.*
3. To re-elect The Venerable K. Best as a director.*
4. To re-elect Mr F. X. Boisseau as a director.*
5. To re-elect Mr J. Coyle as a director.*
6. To re-elect Mr M. C. J. Hews as a director.*
7. To re-elect Sir S. Lamport as a director.*
8. To re-elect Mrs S. J. Whyte as a director.*
9. To elect Mrs J. Dale as a director.*
10. To elect Mr M. Murphy as a director.*
11. To elect M s G. Tucker as a director.*
12. To consider the declaration of a dividend.
13. To re-appoint PricewaterhouseCoopers LLP as auditors and authorise the directors to fix their remuneration.
By Order of the Board
Mrs R J Hall, Secretary
nd
22
May 2026
* Brief biographies of the directors seeking election or re-election are shown on pages 25 to 26 of the 2025 Annual Report.
All non-executive directors seeking re-election have been subject to formal performance evaluation by the Chair who is
satisfied that the performance of each non-executive director is effective and sufficient time has been spent on the
Company’s affairs.
Only a member holding ordinary shares, or their duly appointed representative(s), is entitled to attend, vote and speak at the
annual general meeting.
A member holding ordinary shares is entitled to appoint a proxy or proxies (who need not be a member of the Company) to
exercise all or any of their rights to attend, speak and vote on their behalf at the annual general meeting. Such a member
may appoint more than one proxy in relation to the annual general meeting provided that each proxy is appointed to exercise
the rights attached to a different share or shares held by that member.
Any corporation which is a member holding ordinary shares can appoint one or more corporate representatives who may
exercise, on its behalf, all of the same powers as that corporation could exercise if it were an individual member, provided
that they do not do so in relation to the same share or shares and that they act within the powers of their appointment.
This notice is sent purely for information to the holders of 8.625% Non-Cumulative Irredeemable Preference shares who
are not entitled to attend and vote at the annual general meeting.
159