Category: Reinsurance fundamentals · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-05
An underwriting year is the period — typically a calendar year — to which an insurance or reinsurance contract is allocated for accounting, reserving and result reporting purposes, by reference to the inception date of the underlying business. Underwriting year is the principal basis on which Lloyd’s syndicate results are reported and run-off.
Category: Reinsurance fundamentals Also known as: UY, underwriting year of account, YOA Related concepts: calendar year reinsurance, risk attaching basis, loss occurring basis, Lloyd’s syndicate
Under the underwriting year basis, all premiums and claims arising from insurance contracts incepting during a particular calendar year are allocated to that year, irrespective of when the premium is earned or the claim arises. The 2024 underwriting year, for example, comprises all policies incepting between 1 January and 31 December 2024 — including their full premium income and all claims arising under those policies until the policies have run off.
Underwriting year accounting is the historic Lloyd’s method, contrasted with the calendar year (or annual accounting) basis used by company market insurers under IFRS and FRS 103. Lloyd’s syndicates report results on an underwriting year basis with each year of account kept open for 36 months before reinsurance to close (RITC) is effected to the next year.
The underwriting year basis at Lloyd’s is set out in the Lloyd’s bylaws and in the Lloyd’s Capacity Transfer Market arrangements. Each syndicate operates under a Managing Agent and reports an annual result for each year of account at 12, 24 and 36 months development. At 36 months the year is closed by RITC into the following open year, unless the managing agent leaves the year open in run-off.
For Solvency II reporting, Lloyd’s syndicates’ underwriting year results are converted to the calendar year basis required by the Solvency II Directive [1].
In practice, a Lloyd’s syndicate’s 2024 year of account is reported at 31 December 2024 (12 months), 31 December 2025 (24 months) and 31 December 2026 (36 months). At 36 months the syndicate’s capital providers receive a distribution of the closed result, or contribute to a deficit. The 2024 year is then closed by RITC into the 2025 year, with the 2025 year’s capital providers assuming the run-off of the 2024 year’s outstanding claims.
The underwriting year basis is well suited to long-tail business (PI, casualty, marine, energy) where the development of claims may continue for many years after the policy has expired. The basis allows capital providers to choose their underwriting year of participation and to receive a defined result.
Underwriting year is also the basis on which risk attaching reinsurance is allocated: the inception date of the underlying policy determines the underwriting year of the cession, irrespective of the date of loss.
An illustrative example: a Lloyd’s syndicate writes a 12-month UK professional indemnity policy incepting 1 July 2024. The policy is allocated to the syndicate’s 2024 year of account. A claim notified in March 2026 falls under that policy and is allocated to the 2024 underwriting year. The syndicate’s 2024 result at 36 months (31 December 2026) is calculated by reference to all incurred losses on policies of that underwriting year, with provision for IBNR on long-tail exposure.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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