Gard Marine & Energy Insurance (Europe) AS (Gard M&E Europe) SFCR 31-12-2021 PDF

financial year
SOLVENCY
FINANCIAL
CONDITION REPORT
Gard group
|
20 February 2022
Solvency Financial Condition Report

Gard group
20 February 2022
Solvency and financial condition report 2022 ⚫ Gard group ⚫ Gard Norway ⚫ Gard M&E Europe ⚫ 1
Contents
EXECUTIVE SUMMARY ......................................................................................................................................5
A BUSINESS AND PERFORMANCE ..................................................................................................................8
A1 Business ..................................................................................................................................................8
A 1.1 Group structure .................................................................................................................................8
A 1.2 Legal entities .....................................................................................................................................9
A 1.3 Lines of business and geographical areas .................................................................................... 11
A 1.4 Significant events in the reporting period ...................................................................................... 12
A 1.5 Operations and transactions within the group ............................................................................... 12
A 1.6 Holders of qualifying holdings in the undertaking .......................................................................... 13
A 1.7 Consolidation of group data ........................................................................................................... 13
A2 Underwriting performance .................................................................................................................... 14
A3 Investment performance ....................................................................................................................... 16
A5 Any other material information regarding business and performance .................................................. 17
B SYSTEM OF GOVERNANCE ........................................................................................................................ 18
B1 General information on the system of governance ............................................................................... 18
B 1.1 Governance structure ........................................................................................................................ 18
B 1.2 Remuneration policy .......................................................................................................................... 19
B 1.3 Assessment of the adequacy of the system of governance .............................................................. 21
B2 Fit and proper requirements ................................................................................................................. 21
B3 Risk management system including ORSA .......................................................................................... 21
B 3.1 Strategy.............................................................................................................................................. 21
B 3.2 Key elements of Gard’s risk management system ............................................................................ 22
B 3.3 Implementation and integration of the risk management system ...................................................... 23
B 3.4 Own Risk and Solvency Assessment (ORSA) .................................................................................. 24
B 3.5 Determination of Gard’s own solvency needs ................................................................................... 24
B 3.6 Risk management system for internal model .................................................................................... 24
B.3.6.1 Roles and responsibilities .................................................................................................................. 24
B.3.6.2 Internal model validation process ...................................................................................................... 25
B 3.7 Material intra-group outsourcing arrangements................................................................................. 25
B4 Internal control system .......................................................................................................................... 25
B 4.1 Elements of internal control system ................................................................................................... 25
B 4.2 Compliance function .......................................................................................................................... 26
B5 Implementation of the internal audit function ........................................................................................ 26
B6 Implementation of the actuarial function ............................................................................................... 27
B7 Outsourcing ........................................................................................................................................... 28
B8 Any other information regarding the system of governance ................................................................. 29
C RISK PROFILE .............................................................................................................................................. 30
C1 SCR Insurance risk ...................................................................................................................................... 31
C 1.1 Risk mitigation techniques for insurance risk ....................................................................................... 31
C2 SCR Market risk ........................................................................................................................................... 32
C 2.1 Risk mitigation techniques for market risk ............................................................................................ 32
C 2.2 Prudent person principle ...................................................................................................................... 33
C3 SCR Counterparty default risk ..................................................................................................................... 33
C4 SCR Operational risk ................................................................................................................................... 34
C5 SCR Liquidity risk ......................................................................................................................................... 34
C6 SCR Other risks ........................................................................................................................................... 35
C 7 Risk concentration....................................................................................................................................... 36
C 8 Reinsurance ................................................................................................................................................ 36
C 9 Risk sensitivity ............................................................................................................................................. 37
C 10 Any other information regarding the risk profile ........................................................................................ 38
D VALUATION FOR SOLVENCY PURPOSES ................................................................................................ 39
D1 Valuation of assets................................................................................................................................ 40
D 1.1 Deferred acquisition costs ............................................................................................................. 41
D 1.2 Intangible assets ............................................................................................................................ 41
D 1.3 Deferred tax assets ........................................................................................................................ 41
D2 Valuation of technical provisions .......................................................................................................... 42
D 2.1 Valuation of technical provisions – basis (data) and methods ...................................................... 42
D 2.2 Uncertainty associated with the value of technical provisions ....................................................... 44
D 2.3 Best estimate liabilities .................................................................................................................. 44
D 2.4 Risk margin .................................................................................................................................... 44
D 2.5 Reinsurance recoverables ............................................................................................................. 45
D3 Valuation of other liabilities ................................................................................................................... 45
D 3.1 Contingent liabilities ....................................................................................................................... 45
D 3.2 Pension benefit obligations ............................................................................................................ 45
D 3.3 Any other liabilities, not elsewhere shown ..................................................................................... 46
D4 Alternative methods for valuations ........................................................................................................ 46
D5 Any other material information regarding valuation for solvency purposes .......................................... 46
E CAPITAL MANAGEMENT ............................................................................................................................. 47
E 1 Own funds ................................................................................................................................................... 47
E 1.1 Available capital ............................................................................................................................. 48
E 1.2 Non-available own funds ............................................................................................................... 49
E 1.3 Tier 2 capital (ancillary own funds) ................................................................................................ 50
E 2 Solvency Capital Requirement and Minimum Capital Requirement ........................................................... 50
E 2.1 Calculation of group solvency requirements .................................................................................. 50
E 2.2 Solvency Capital Requirements by risk category .......................................................................... 51
E 3 Use of the duration-based equity risk sub-module in the calculation of the SCR ....................................... 51
E 4 Description of the internal model ................................................................................................................. 51
E 4.1 Structure ........................................................................................................................................ 51
E 4.2 Scope ............................................................................................................................................. 51
E 4.3 Use ................................................................................................................................................. 52
E 4.4 Methods used ................................................................................................................................ 52
E 4.5 Main differences in the methodologies and underlying assumptions used in the standard formula
and the internal model.................................................................................................................................... 52
E 4.6 Integration of partial internal model into the standard formula ...................................................... 52
E 4.7 Aggregation methodologies and diversification effects ................................................................. 52
E 5 Compliance with SCR/MCR ........................................................................................................................ 52
E 6 Any other material information regarding capital management .................................................................. 53
Appendix 1 SFCR information specific to Gard Norway .................................................................................... 54
Appendix 2 SFCR information specific to Gard M&E Europe ........................................................................... 62
Appendix 3 Abbreviations Gard companies ...................................................................................................... 69
Appendix 4 Other abbreviations ........................................................................................................................ 70
Appendix 5 Quantitative reporting templates..................................................................................................... 71
EXECUTIVE SUMMARY
This report covers Gard’s business and A. Business and performance
performance, system of governance, risk profile, Gard is a Marine and Energy insurance group that is
valuation for solvency purposes and capital active in Protection and Indemnity (P&I) and Marine
management. The ultimate administrative body that and Energy (M&E) business. Gard operates in global
has the responsibility for these matters is the Board markets, offering insurance solutions to mainly
of Directors, with the help of various governance and corporate customers, often through insurance
control functions that are put in place to monitor and brokers. Its global presence and activities allow the
manage the business. company to achieve efficient risk diversification.
This report is a joint report for Gard P. & I. (Bermuda)

Ltd. on a consolidated basis (Gard group), The tear ending 20 February 2022 produced a total
Assuranceforeningen Gard – gjensidig – (Gard comprehensive profit on an estimated total call (ETC)
Norway) and Gard Marine & Energy (Europe) AS basis of USD 34 million. This is a good result
(Gard M&E Europe)1. Information specific to the legal considering that the COVID-19 pandemic has
entities is elaborated in Appendices 1 and 2. continued to negatively affect international trade,
shipping and financial markets throughout the year.
Gard has been granted approval by the Norwegian
Despite these challenges, Gard has given a five per
Financial Supervisory Authority (‘Finanstilsynet’) to
cent Owners’ General Discount (OGD) to mutual
use its internal model to calculate insurance and
entries renewed with Gard for the 2021 policy year
market risk for regulatory purposes for the Gard
amounting to USD 19 million, and five per cent for
group, Gard Norway and Gard M&E Europe. All
those renewing for the 2022 policy year. The total
figures displayed in relevant solvency tables are
comprehensive profit including OGD was USD 15
based on a partial internal model.
million for FY 2022.
In the tables, values are stated in USD million. Gross written premium on ETC basis saw strong
Values below USD 500,000 are displayed as ‘0’. An development in the year to 20 February 2022,
empty cell means that there is no value to state. reaching USD 1.036 million. This represents an
Rounding differences +/– one unit can occur. increase of USD 114 million or 12 per cent compared
to last year. The premium growth is driven by
Gard fulfils the minimum and solvency capital hardening rates across all classes of business and
requirements (hereafter referred to as MCR and volume growth for both P&I and M&E. As a result of
SCR) stipulated by the supervisory authority as of the this, the Gard group has increased its overall market
reporting date of 20 February 2022. share.
The principles used to determine the solvency ratio Claims incurred for own account totalled USD 629
are explained in this document. Chapter D describes million, a decrease of USD 3 million from last year.
the valuation principles used to determine the eligible This is a satisfactory level considering the volume
own funds, and Chapter E describes the principles growth, a high level of COVID-19 related claims and
used to determine the SCR. a higher-than-expected influx of Pool claims from the
International Group of P&I Clubs in the first half of the
FY 2022. This includes an adverse development in
claims from prior years. Gard had no claims entering
the Pool in the year to 20 February 2022.
Operating costs have been lower than expected over

the last two years due to limited activity levels as a
consequence of COVID-19. This is now expected to
normalise.
1According to Article 256 of Directive 2009/138/EC, supervisor, it may provide a single solvency and financial
where a participating insurance or reinsurance condition report comprising of the information at the level
undertaking, or an insurance holding company so of the group and the relevant subsidiaries within the
decides, and subject to the agreement of the group group.
The technical result is a profit of USD 44 million and For unquoted financial assets, the fair value has
a combined ratio net on an ETC basis of 94 per cent. been estimated using a valuation technique based
on assumptions that are supported by observable
The non-technical result is below expectation at a
market prices (mark-to-model).
negative USD 5 million. The Group’s investment
portfolio experienced a volatile year due to the Valuation methods are elaborated in section D
COVID-19 pandemic and the tension before the
Russian invasion of Ukraine. The net return of the
E. Capital management
investment portfolio for the Gard Group was 0.1 per
cent, compared with -1.2 per cent for the strategic Gard aims to hold sufficient capital and liquidity as
benchmark. The reason for ending at a small well as constrain its risk-taking to ensure that the
negative non-technical result for the year ending 20 group can continue to operate following an extreme
February 2022 is currency exchange losses. loss event with the same risk tolerance for insurance
risk. The probability that Gard would have to raise
Details on business and performance can be found additional capital from its mutual Members by way of
in section A. unbudgeted supplementary calls should be low.
B. System of governance
Gard group aims to manage its capital such that all
Gard has an effective system of governance, which
its regulated entities meet local regulatory capital
provides for sound and prudent management.
requirements at all times. This was the case
The risk management system is assessed to be throughout the financial year to 20 February 2022.
adequate considering the size and complexity of the
operations. Gard has a capital structure consisting of Tier 1
capital through equity capital, which is earned and
The individual elements of the System of available and high-quality, Tier 2 capital in the form
Governance can be found in section B. of unbudgeted supplementary calls on mutual
Members and Tier 3 capital as deferred tax assets.
C. Risk profile
In the context of its business operations Gard enters The solvency ratio as of 20 February 2022 was 283
into a broad variety of risks. These risks are per cent.
illustrated in the risk landscape overview. Individual
risk elements are described in section C. A share of 82 per cent of all available capital is
assigned to the highest quality level (Tier 1). Capital
D. Valuation for Solvency purposes management is described in section E.
The fair value of assets is mainly measured on a
mark-to-market basis, determined by references to
published price quotations in active markets.
Gard Group, key figures
USD million, as of 20.02 2022 2021
Solvency II balance sheet

Assets 3,090 3,116
Technical provisions 1,616 1,709
Other liabilities 251 234
Excess of assets over liabilities 1,222 1,173
0 0
Eligible own funds 0 0
Tier 1 Basic own funds (unrestricted) 1,145 1,155
Tier 2 Ancillary own funds 245 279
Tier 3 Other own funds 0 0
Eligible own funds 1,391 1,434
0 0
Capital Requirement 0 0
Solvency Capital Requirement (SCR) 491 558
Minimum Capital Requirement (MCR) 301 288
0 0
Solvency ratio 0 0
Eligible own funds to meet SCR 283% 257%
Eligible own funds to meet MCR 381% 400%
Tier 1 share of total eligible own funds 82% 81%
A BUSINESS AND PERFORMANCE
A 1 Business
A 1.1 Group structure The Gard group consists of four direct insurance
The parent company of the group, Gard Bermuda, is entities, two captive reinsurance companies, one
a mutual insurance association. The other insurance management company, eight insurance
companies in the group are joint-stock companies intermediary companies, one representative office
fully owned and controlled by Gard Bermuda, except and a property company. The insurance entities have
for Gard Norway, which is a mutual insurance eleven branches in six different jurisdictions.
association controlled by Gard Bermuda through an
agreement on the exercise of ownership rights. In general, there are separate direct insurance
companies for the P&I business and the Marine &
There are no external capital owners involved who Energy business. There are EEA domiciled direct
expect a return on capital invested, or who otherwise insurance companies and Bermuda based insurance
have voting rights at the general meetings of the entities. Risk and capital in the group are pooled
companies. through the captive Gard Re.
Hydra is a Bermuda registered segregated accounts

The mutual Members of Gard Bermuda obtain the
company that was established by the 13 parties to
benefit of the value creation generated by the group’s
the International Group of P&I Clubs’ Pooling
business through reduced mutual premiums.
Agreement to reinsure certain layers of risk retained
Correspondingly, the right and ability to levy
by the parties to the Pooling Agreement. The Hydra
unbudgeted supplementary calls to recapitalize the
Gard cell is wholly owned by Gard Bermuda.
group is a fundamental element of the Members’
Branches have been established where required to
mutual risk-sharing.
conduct business.
Group structure
A 1.2 Legal entities P&I Clubs and the collective purchase of market
reinsurance. The two associations are recorded as
A 1.2.1 Gard group ‘Paired Associations’ in the Pooling Agreement, with
Gard Bermuda as the principal.
‘Gard group’ is the totality of legal entities ultimately Gard Bermuda is regulated by the BMA.
controlled by Gard P. & I. (Bermuda) Ltd. The Gard
group is under group supervision by the Norwegian
Financial Supervisory Authority (FSA) A 1.2.3 Gard Norway
(Finanstilsynet), based on an agreement between Assuranceforeningen Gard - gjensidig - (‘Gard
FSA and the Bermuda Monetary Authority (BMA). Norway’) is the Norwegian P&I Club founded in
Arendal, Norway, in 1907. The company is registered
A 1.2.2 Gard Bermuda and domiciled in Norway and is licensed by the
Gard P. & I. (Bermuda) Ltd. (‘Gard Bermuda’) is the Norwegian Ministry of Finance. The head office of
parent company of the Gard group. The company is Gard Norway is in Arendal, Norway. Gard AS acts as
a mutual insurance association domiciled in an intermediary for Gard Norway.
Bermuda and registered by the Bermuda Monetary
Gard Norway provides P&I and related insurance
Authority (BMA). The manager of Gard Bermuda is
products to its Members, who are shipowners,
Lingard Limited.
operators and charterers with ships entered into the
Gard Bermuda provides Protection & Indemnity (P&I) club. As a mutual insurance association, the
and related insurance products to its Members, who company is owned by its Members. There are no
are shipowners, operators and charterers with ships external capital owners.
entered in the association. As a mutual insurance
Based on the group’s governance structure, Gard
association, the company is owned by its Members.
Bermuda has the power to govern and control the
There are no external capital owners.
business activities of Gard Norway. This includes the
Gard Bermuda carries out its direct insurance power to appoint the members of its Board of
business through branches in Norway and Directors. Based on internationally accepted
Singapore. The general agents of the branches are accounting standards, this creates the legal basis
Gard AS in Norway and Gard (Singapore) Pte. Ltd. required for the consolidation of the two companies’
in Singapore. accounts.3
The Members of Gard Bermuda are also Members of Gard Norway is primarily used as a vehicle for writing
Gard Norway and vice versa.2 However, all of the direct P&I business in certain countries where an
Members of the two associations exercise EU/EEA based insurer is required or preferred to
membership rights through the parent company in comply with local regulations.
accordance with the group structure. Gard Bermuda
Gard Norway is regulated by the Norwegian FSA.
has been given the right to exercise membership
rights on behalf of the entire membership in Gard
Norway. Thus, Gard Norway is treated as a
subsidiary of Gard Bermuda in the same way as the
other wholly-owned subsidiaries, such as Gard M&E,
Gard Re, Lingard, and Gard AS.
Gard Bermuda and Gard Norway are members of the

International Group of P&I Clubs and both are parties
to the International Group of P&I Clubs’ Pooling
Agreement. The Pooling Agreement is the
contractual basis for the sharing of claims among the
2 3
See Article 2.6 of the Byelaws of Gard P&I Bermuda Reference is made to the International Accounting
and Article 4.7 of the Statutes of Gard P&I Norway. Gard Standard 27 Consolidated and Separate Financial
P&I Bermuda and Gard P&I Norway have entered into Statements (IAS 27).
mutual reinsurance agreements whereby the two
associations reinsure each other.
A 1.2.4 Gard M&E has also been entered into between Gard Re and
Gard Marine & Energy Limited (‘Gard M&E’) is a Gard Norway.
joint-stock company and a wholly-owned subsidiary
Gard Re is regulated by the BMA.
of Gard Bermuda. The company is domiciled in
Bermuda. The manager of Gard M&E is Lingard A 1.2.7 Hydra Insurance Company Ltd
Limited. Hydra Insurance Company Ltd (‘Hydra’) is a
segregated accounts company. It is permitted to
Gard M&E offers Marine and Energy insurance
create ‘segregated accounts’ or ‘cells’ to segregate
products on a commercial basis to shipowners and
the assets and liabilities attributable to a particular
operators, and operators within the international oil
segregated account from those attributable to other
and gas industry. Gard M&E carries out its direct
segregated accounts and the company’s general
insurance business through branches in Norway,
account.
Hong Kong and Singapore. The general agents of
the branches are Gard AS in Norway, Gard (HK) Ltd. Hydra was established by the parties to the
in Hong Kong and Gard (Singapore) Pte. Ltd. in International Group of P&I Clubs’ Pooling Agreement
Singapore. as a captive insurance company to reinsure certain
layers of risk retained by the parties to the Pooling
Gard Marine & Energy Limited – Escritório de
Agreement. Each party to the Pooling Agreement
Representação no Brasil Ltda. (Gard Brazil) is a
owns a segregated account in Hydra and is
subsidiary of Gard M&E and is registered and
responsible for its own account, or cell, within the
domiciled in Brazil. Gard Brazil is authorised to carry
company. The Hydra Gard cell is wholly owned by
out insurance agency activities in Brazil on behalf of
Gard Bermuda.
Gard M&E.
Hydra Insurance Company is regulated by the BMA.
A 1.2.5 Gard M&E Europe
Gard Marine & Energy Insurance (Europe) AS (‘Gard A 1.2.8 Lingard Limited
M&E Europe’) is a wholly-owned subsidiary of Gard Lingard Limited (‘Lingard’) is a joint-stock company
M&E and is registered and domiciled in Arendal, domiciled in Bermuda. It is a wholly-owned
Norway and licensed by the Norwegian Ministry of subsidiary of Gard Bermuda and is registered as an
Finance to carry out Marine and Energy business. 4 Insurance Manager by the Bermuda Monetary
Authority.
Gard M&E Europe is primarily used as a vehicle for
writing M&E business in certain countries where an Lingard has entered into management agreements
EU/EEA based insurer is required or preferred to with each of Gard Bermuda, Gard M&E and Gard Re
comply with local regulations. Gard AS acts as an whereby it has delegated the responsibility of
intermediary for Gard M&E Europe. administering the day-to-day business and corporate
functions of these Bermuda domiciled companies.
Gard M&E Europe is regulated by the Norwegian
Certain insurance intermediary functions, such as,
FSA.
inter alia, underwriting and claims handling, are sub-
delegated under an agency agreement with Gard AS
A 1.2.6 Gard Re as insurance intermediary.
Gard Reinsurance Co Ltd (‘Gard Re’) is a joint-stock
Lingard is regulated by the BMA.
company and is a wholly-owned subsidiary of Gard
Bermuda. The company is domiciled in Bermuda and
is registered by the BMA. The manager of Gard Re
is Lingard Limited.
Reinsurance agreements have been entered into

between Gard Re, as the reinsurer, and Gard
Bermuda and Gard M&E as the reassured, covering
a certain proportion of these two direct insurers’
retained risks. A stop-loss reinsurance agreement
4Classes 6, 8, 9, 12 and 13 in the Norwegian regulations

of 18 September 1995 on insurance classes.
A 1.2.9 Gard AS Gard AS has also established a service network of
Gard AS is a Norwegian joint-stock company wholly-owned subsidiaries (random order);
domiciled in Arendal, Norway, and a wholly-owned
i. Finland – Oy Gard (Baltic) Ab
subsidiary of Gard Bermuda. Gard AS is registered
ii. United Kingdom/England – Gard (UK) Limited
with the Norwegian Financial Supervisory Authority
iii. United States – Gard (North America) Inc.
as an insurance agent.
iv. Hong Kong – Gard (HK) Limited
Gard AS has entered into separate agency v. Greece – Gard (Greece) Ltd
agreements with Gard Norway, Gard M&E Europe vi. Japan - Gard (Japan) K.K.
and Lingard pursuant to which Gard AS acts as an vii. Singapore - Gard (Singapore) Pte. Ltd.
agent and intermediary with regard to the portfolios
of direct business of Gard Bermuda, Gard Norway, These subsidiaries are the Members’ and clients’
Gard M&E and Gard M&E Europe. The agency local contact points and perform, inter alia, insurance
agreements give Gard AS, inter alia, the power to intermediary services in their respective local
conclude contracts of insurance on behalf of the markets on behalf of Gard AS’ principals.
companies and to handle claims which fall within the
Gard AS is regulated by the Norwegian FSA.
scope of each company’s insurance cover.
List of regulators and auditors
Name Function Entity

Norwegian Financial Supervisory Authority Regulator Gard group
(Finanstilsynet) Gard Norway
Revierstredet 3 Gard M&E Europe
0151 Oslo Gard AS
Norway Gard Bermuda NUF
Gard M&E NUF
Phone: +47 22 93 98 00
Main contact: Linn Therese Soltvedt
Bermuda Monetary Authority Regulator Gard Bermuda
BMA House Gard M&E
43 Victoria Street Gard RE
Hamilton Hydra Gard Cell
Bermuda Lingard
Phone: +441 295 5278
PricewaterhouseCoopers AS External auditor Gard group

Kystveien 14 Gard Norway
4841 Arendal Gard M&E Europe
Norway Gard AS
Gard Bermuda NUF
Phone: +47 95 26 00 00 Gard M&E NUF
PricewaterhouseCoopers Ltd. External auditor Gard Bermuda

Dorchester House Gard M&E
7 Church Street West Gard RE
Hamilton HM 11 Hydra Gard Cell
Bermuda Lingard
Phone: +441 295 2000
A 1.3 Lines of business and • Protection and Indemnity (P&I) is liability

geographical areas insurance for owners, charterers and operators
Gard is a mutual Marine and Energy insurance group of ships and mobile offshore units.
which principally provides two lines of insurance • Marine and Energy (M&E) which includes Marine
business: products such as Hull & Machinery and Loss of
Hire insurance for shipowners, as well as A 1.4 Significant events in the reporting
Builder’s Risk insurance for shipyards. Energy period
includes products such as property and casualty
There are no significant events in the reporting
insurance for operators and contractors in the period to be disclosed.
upstream oil and gas industry, with a focus on
offshore operations. Energy also includes
insurance for offshore wind farms. A 1.5 Operations and transactions
Gard’s mission ‘Together, we enable sustainable within the group
maritime development’ - means the Association Material intra-group operations and transactions
helps Members and clients, people and society make within the group are:
the most of opportunities at sea. This sets the
direction of our business. The core purpose of the • Reinsurance. Reinsurance of insurance risk
Association is to help Gard's Members and clients in between the insurance entities
the Marine industries to manage risk and its • Insurance intermediary services. Services
consequences. The two main components of Gard’s from the insurance intermediary companies to
value proposition are strong financial security and the insurance entities
excellent service. This is combined with effective and
efficient claims handling, strong risk selection and • Intra-group services provided by Gard AS,
good pricing skills. such as technical, financial and human resource
services
Gard operates in global markets, offering insurance
• Financial services. Loans and property leases
solutions to mainly corporate customers, often
between certain entities
through insurance brokers. Most markets where
Gard operates are highly competitive. The main Other intercompany transactions that exist between
competitors besides the other P&I clubs are the entities in the group are not listed as any such
London insurance market, large global insurance transactions are deemed non-material. Gard AS and
and reinsurance companies, and national and local its subsidiaries act as intermediary agents, and
insurance companies. Lingard acts as Manager for the insurance entities in
the Gard group. Some functions are sub-delegated
Gard Bermuda and Gard Norway are members of the from Lingard to Gard AS and subsidiaries.
International Group of P&I Clubs (IG), which covers
close to 90 per cent of the world’s ocean-going Internal reinsurance agreements between entities in
tonnage. The 13 P&I clubs in the IG share claims the group are established to achieve efficient
above a certain level and collectively purchase utilisation of the capital in the group and to contain
reinsurance programs. Gard is the largest club in the the risk profile of the direct insurance companies
IG and insures approximately 19 per cent of the within their respective risk tolerance levels. Besides,
tonnage and represents about 15 per cent of the total the reinsurance arrangements between Gard
premium written by the IG clubs. Gard is one of the Bermuda and Gard Norway facilitate the mutual
world’s leading Marine insurers with a market share membership of both associations.
of 7 per cent in the global Marine Hull market and is
a medium-sized capacity provider in Energy.
A 1.6 Holders of qualifying holdings in A 1.7 Consolidation of group data
the undertaking The consolidated financial statements comprise
Gard is established as a mutual insurance Gard P. & I. (Bermuda) Ltd. and the companies over
association, owned by its Members. There are no which the Company has a controlling interest. In as
external capital owners. The Members of Gard P&I much as the Company has the right to exercise
Bermuda are also Members of Gard Norway and vice membership rights in Gard Norway, the Company
versa. However, all the Members of the two controls all voting rights in Gard Norway, being the
associations exercise membership rights through the legal basis for consolidating the two associations’
parent company in accordance with the group accounts pursuant to the International Accounting
structure. Gard P&I Bermuda has been given the Standard 27 Consolidated and Separate Financial
right to exercise membership rights on behalf of the Statements. Transactions between consolidated
entire membership in Gard Norway. Thus, Gard companies have been eliminated in the consolidated
Norway is treated as a subsidiary of Gard P&I financial statements. The consolidated financial
Bermuda in the same way as the other wholly-owned statements have been prepared following the same
subsidiaries, such as Gard M&E and Gard Re. accounting principles for both parent and
subsidiaries. The acquisition method is applied when
accounting for business combinations.
A 2 Underwriting performance
Gross written premium on an estimated total call Gard’s consolidated technical result, on an ETC
(ETC) basis was USD 1.036 million, an increase of basis, for the year to 20 February 2022 was USD 44
USD 114 million or 12 per cent from last year and million. This is equivalent to a Combined Ratio Net
better than planned. The premium growth is driven (CRN) of 94 per cent, which is better than planned.
by hardening rates across all classes of business
and business volume growth for both P&I and M&E. The panel of reinsurers on the Gard group
reinsurance programs remains stable. There is
Claims costs net are USD 629 million, down from upward market pressure on the cost of reinsurance,
USD 632 million last year. There have been only two but the impact on Gard has been acceptable due to
own large claims during the period above USD 5 strong, long-term relationships with reinsurers,
million and several large reductions of reserves This satisfactory claims records relative to the overall
is a satisfactory level considering the volume growth, market and changes to our risk profile.
a high level of Covid 19 related claims and a higher-
The non-technical result is below expectation at a
than-expected influx of Pool claims from the
negative USD 5 million. The Group’s investment
International Group clubs in the first half of the year
portfolio experienced a volatile year due to the
ending 20 February which includes an adverse
COVID-19 pandemic and the tension before the
development on claims from prior years. The Pool
Russian invasion of Ukraine. The net return of the
claims development continued the increasing trend
investment portfolio for the Gard Group was 0.1 per
that started from the 2019 financial year.
cent, compared with -1.2 per cent for the strategic
benchmark. The return for the previous year was 5.0
per cent. The reason for ending at a small negative
non-technical result for the year ending 20 February
2022 is currency exchange losses.
Gard Group, technical result, ETC basis 2022

USD million, as of 20.02 P&I M&E Total
Gross written premium 534 502 1,036

Gross earned premium 529 455 984
Ceded reinsurance (99) (103) (202)
Earned premium for own account 430 351 782
Other insurance related income 1 0 1
Claims incurred, gross:
Incurred this year 432 265 697
Incurred previous years (19) 7 (12)
Total claims incurred, gross 413 272 685
Reinsurers' share of gross incurred claims (29) (27) (56)
Claims incurred for own account 384 245 629
Insurance related expenses for own account 43 58 101
Other insurance related expenses 6 2 8
Technical result (2) 46 44
Gard Group, technical result, ETC basis 2021
USD million, as of 20.02 P&I M&E Total
Technical result
Gross written premium 505 417 922
Gross earned premium 504 368 872
Ceded reinsurance (103) (80) (183)
Earned premium for own account 400 288 688
Other insurance related income 1 0 1
Incurred this year 466 259 724
Incurred previous years (50) 22 (28)
Total claims incurred, gross 415 281 697
Reinsurers' share of gross incurred claims (3) (62) (65)
Claims incurred for own account 413 219 632
Insurance related expenses for own account 31 45 75
Other insurance related expenses 5 3 8
Technical result (47) 20 (26)
Gard Group, premium by geographical area, ETC

EEA 523 429
Norway 127 123
Other areas 386 371
Total gross written premium 1036 922
Impact and consequences of COVID-19 for

Gard’s insurance business
COVID-19 had a profound impact on shipping COVID-19 has also caused delays in the supply
globally in 2020 and 2021 with a substantial part of chains, which has affected salvage operations, other
the world fleet being laid up while other shipping casualty responses and wreck removals, and due to
segments experienced a significant increase in travel restrictions, it has been more difficult to get
demand. In 2020, Gard experienced several COVID- experts and equipment on-site.
19 outbreaks on cruise ships leading to multiple It is expected that COVID-19 will continue to affect
illnesses and, sadly, loss of lives. After the initial the operations, but as the world is adapting through
outbreaks, there has been a high volume of claims vaccines, enhanced testing, remote working and
related to COVID-19, and while this has caused an practicable requirements, it is expected that impacts
increase in efforts within the organisation, the sizes will decrease. Terms of cover for marine insurance
of the claims have been manageable. The increase are adapting to the situation.
in workload has primarily affected people claims as
crew members have experienced symptoms and For information related to underwriting performance
illness. specific to Gard Norway, see Appendix 1, section 1.2
It was challenging to secure medical treatment For information related to underwriting performance
ashore and to repatriate crews due to lockdowns in specific to Gard M&E Europe, see Appendix 2,
many countries in 2020 and the first half of 2021, but section 2.2.
it became increasingly practicable in the second half
of 2021 as disinfection requirements and
quarantining became more lenient.
A 3 Investment performance
The return of Gard’s investment portfolio for the investment funds and will have an impact on change
financial year was USD 2 million, a reduction from in unrealised gains and losses. Expenses outside
USD 107 million in 2021. The main reason for the investment funds are mainly related to interest
drop in performance was a negative contribution of payments on swap contracts. Total expenses linked
the fixed income portfolio. As inflationary pressures to investment activities are in line with expectations.
started building in the global economy, and
subsequent increased discussions of interest rate There were no major changes to the portfolio’s
hikes from the US Federal Reserve, US interest rates strategic asset allocation between the two periods.
rose sharply over the 2nd half of the year. The yield However, Gard has implemented a more dynamic
on a US 3-year treasury bond (Gard’s overall approach to strategic asset allocation, meaning that
duration is around 3 years for assets) rose from 0.21 the target allocation to asset classes is considered
per cent (21 February 2021) to 1.67 per cent (20 as a range rather than a fixed target. This allows for
February 2022) which caused losses in the fixed greater flexibility in asset allocation that enables the
income portfolio. Increased interest rates further led Group to better adjust its overall risk profile in
to more challenging equity and credit markets response to changing conditions whilst maintaining
resulting in reduced returns from those assets, its longer-term strategic targets.
although they ended the year in positive territory with After the year-end, Gard has seen a further increase
a total gain from equities for the year a positive USD in global inflation and interest rates, ongoing supply
7 million. and COVID-19 challenges (especially China) and
The main positive contributors to performance were heightened geopolitical risk due to the Russian
Alternatives and Real Estate, both asset classes invasion of Ukraine which have all led to increased
which produced returns in excess of 10 per cent. volatility for risk assets over the first months of the
year. Global risk has appreciated but Gard remains
Most of the expenses related to investment activities highly diversified and well-positioned for a more
are accounted for within the net asset value of volatile period.
Gard Group, investment income and expenses by asset class

Equities and
20.02.2022 investment Financial Other financial
Amounts in USD million funds Bonds derivatives investments Total
Income 2 3 - - 5
Expenses - - - - -
Realised gain & loss 7 17 - - 24
Change in unrealised gain & loss 26 (53) - - (27)
Total 35 (33) - - 2
Gard Group, investment income and expenses by asset class
20.02.2021 Equities and Other

investment Financial financial
Income 1 1 - - 2
Expenses - - - - -
Realised gain & loss 8 17 - - 25
Change in unrealised gain & loss 32 48 - - 80
Total 41 66 - - 107
For information related to investment performance specific to Gard Norway, see Appendix 1, section 1.3.
For information related to investment performance specific to Gard M&E Europe, see Appendix 2, section 2.3.
A 4 Performance of other activities
Other material income and expenses loss of USD 4.2 million this year and a loss of USD
2.2 million last year.
Other comprehensive income/loss consists of
exchange differences for subsidiaries when Gard Norway and Gard M&E Europe did not have
converting from reporting currency to USD in the any other material comprehensive income/loss.
consolidation process and change in pension
commitment valuation. On a consolidated basis, Gard group, Gard Norway and Gard M&E Europe
other comprehensive income/(loss) amounted to a have no material (external) leasing arrangements.
A 5 Any other material information regarding business

and performance
There is no other material information to be disclosed.
B SYSTEM OF GOVERNANCE
B 1 General information on the system of governance
B 1.1 Governance structure
Governance Principles The Executive Committee is given the task to

Gard Bermuda is the parent company in the Gard implement strategies and decisions determined by
group. Each subsidiary is a legal entity organised the BoD and make the operational decisions that are
under the law of its country of incorporation and required for this purpose within the overall strategy,
subject to its domestic laws and regulations. The risk appetite and Comfort zone established by the
Boards of Directors (BoD) of each subsidiary give BoD. It makes recommendations on the risk appetite
due consideration to applicable laws and the and Comfort zone. The Executive Committee
constitutional documents of the relevant company. approves the risk tolerance and overall limits for
To the extent appropriate and consistent with such material risk exposures and determines how much
laws and regulations, the BoD of the individual risk each of the subsidiaries is allowed to take. It
subsidiary shall comply with directions from the BoD monitors compliance with the overall risk appetite
of Gard Bermuda as the ultimate shareholder of the and Investment Guidelines and shall make
relevant subsidiary. recommendations to the BoD following the
contingency procedures. The Executive Committee
Composition of Boards and Committees
shall be informed about any significant weaknesses
The Members of Gard Bermuda and Gard Norway
in the Risk Management System and/or the internal
are the owners of the Gard group. For this reason,
model.
the composition of the governing corporate bodies of
the various legal entities of the group should to the The Audit Committee is responsible for overseeing
extent possible and practical, mirror the composition the integrity of the financial reporting, compliance
of the membership of the two associations with monitoring, the performance of the external and
regard to, inter alia, the categories of tonnage internal auditors, internal control and treatment of
entered and geographical spread. Participation in complaints procedures. Reports from the Internal
sub-committees established by the BoD of the parent Audit function shall be addressed to the Audit
company is widely distributed. Committee.
Roles and responsibilities for governing bodies The Risk Committee shall have oversight of the
The General Meeting of Gard Bermuda is the highest group’s risks with a particular focus on reviewing the
authority in the group. It has no direct risk group’s risk strategy, risk appetite, risk tolerance, risk
governance function. profile and assessing the effectiveness of the risk
management framework. The Risk Committee shall
The BoD of Gard Bermuda is ultimately responsible
also consider the risks’ impact on both the financial
for the management of the group. It sets the overall
and non-financial goals of the group.
strategy and is involved in all significant decisions,
including the establishment of general principles for The Remuneration Committee’s role is to establish
the administration of the company’s funds. It transparent procedures for reviewing and
determines the risk appetite and Comfort zone at the determining the remuneration of the Directors and
group level through the Gard group Risk Policy as the Chief Executive Officer and to make
well as the Investment Guidelines. The BoD shall be recommendations thereon to the Executive
informed of any breach of minimum capital Committee and the BoD as the case may be. The
requirements. It has delegated authority in respect of Remuneration Committee shall also review Gard’s
overseeing the day-to-day management to the remuneration policy in general, including the
Executive Committee (ExCom). The Risk operation of any employee incentive scheme from
Management function, the Compliance function and time to time. The Remuneration Committee shall
the Internal Audit function report to the BoD in ensure that the compensation structure is in line with
matters relating to risk management and compliance. the group risk appetite statement approved by the
BoD.
The Boards of Directors of the subsidiary insurance All key functions are equipped with proper resources
companies (i.e., Gard M&E, Gard M&E Europe, Gard and skills. The reporting lines to one another and the
Norway and Gard Re) are responsible for BoD have been clearly defined.
considering and approving the financial plan and new
The following figure illustrates the roles and
business for underwriting and ensuring compliance
responsibilities of the governing bodies, key
with local regulations. They review and endorse the
decision-makers, and the second and third line of
group risk appetite statement approved by the BoD
defence functions. The figure also illustrates how the
and the Executive Committee.
risk management function is integrated into the
The President holds the office of Chief Executive decision-making process of Gard. For more
Officer (CEO) of Gard Bermuda, Gard M&E, Gard AS information regarding the Three Lines of Defence
and Gard Norway and is an ex officio member of the model and how the risk management function is
Executive Committee. The CEO is responsible for integrated into the organisational structure of Gard
implementing the Risk Management System and for see chapter B 3.3.
ensuring that risk-taking is aligned with the risk
appetite. The CEO shall monitor that all risks are
appropriately managed and shall inform the
Executive Committee and the BoD of any breaches
in accordance with the contingency procedures.
The Board’s ability to delegate its powers regarding

the day-to-day management of the company is
limited as stated in the By-Laws of Gard Bermuda.
BoD of Gard Bermuda has issued terms of reference
for the CEO, which documents the role and authority
of the CEO and Manager in line with current
practices.
The Senior Vice Presidents (SVP) in the Group

Leadership Team (GLT) report to the CEO.
The Risk and Capital Committee is an advisory forum

to the CEO on matters relating to risk and capital
management. It comprises the CEO, Chief Risk
Officer, Chief Financial Officer, Chief Investment
Officer, Chief Legal Counsel, Group Chief
Underwriting Officer, Head of Accounting and Head
of Business Control. Relevant reports to the
Executive Committee, Risk Committee, Audit
Committee and/or the BoD, shall be reviewed by the
Risk and Capital Committee before submission.
B 1.2 Remuneration policy

The remuneration enables the Gard group to attract The remuneration of all employees, including
and retain superior talent and to provide competitive members of governing or supervisory bodies of
terms to motivate people towards their highest companies within the group, is appropriate with
performance. It is in line with the group’s business regard to the individual’s function and responsibilities
strategies, objectives and long-term interests. The and the nature, scope and complexity of the relevant
remuneration shall encourage prudent risk business activities. It commensurates with industry
management, ensuring that no employee is standards and is proportional to the individual’s
encouraged to take risks exceeding the risk appetite respective duties.
as defined in the Group Risk Policy approved by the
BoD of Gard Bermuda.
The compensation structure is based on the For members of the Group Leadership Team (GLT)
philosophy that the success of Gard is the result of and defined Key Employees, there is a bonus
the joint efforts of the whole organisation. It scheme as defined in the Solvency II directive. The
underpins the value of teamwork and collective maximum bonus payable to members of GLT and
performance across the individual departments and other Key Employees under the collective scheme
offices. shall be 80 per cent of the bonus payable to
employees in general.
The remuneration governance structure is clear,
transparent and effective. The payment of a proportion of the bonus triggered
by the collective scheme shall be deferred for a
Governance period of 39 months from the expiry of the financial
The remuneration of Directors and members of year the bonus is linked. The payment after three
supervisory bodies of a legal entity of the group is years of the deferred component is subject to some
determined by the General Meeting of the relevant further terms and conditions, including defined
legal entity. The remuneration of the CEO of a legal financial performance targets for the three years.
entity is determined by the BoD of that legal entity. Certain Key Employees are not participating in the
The remuneration of staff below the CEO level is collective bonus scheme due to the Solvency II
determined by the CEO or those being delegated requirement of independence between the control
authority by the CEO to determine such matters. functions and the results achieved in the operating
units.
The members of the remuneration committee are
independent and should not be employees of the In the bonus scheme, there is an individual bonus
Gard group. They must have sufficient knowledge component based on an individual assessment
and experience in risk analysis to independently conducted by the CEO in consultation with the
assess the group’s remuneration policy and the Chairman of the Executive Committee of Gard P. &
compensation programs’ fitness. I. (Bermuda) Ltd.
Remuneration structure Gard shall conduct annual reviews with each

The remuneration that employees receive for their employee to determine a remuneration package for
professional activities with the group shall be each employee that commensurates with that
stipulated in their individual contracts of employment. employee’s contribution to the group.
It consists of a salary, supplemented by a collective
bonus scheme, pension plan and other benefits. Pension scheme
Most employees in Gard have a defined contribution
Remuneration for each role in the Gard group shall
pension plan. A contribution plan is a retirement plan
be reasonable and fair.
in which a certain amount or percentage of salary is
set aside each year by the association for the benefit
The majority of Gard’s staff is employed by Gard AS
of each of its employees.
in Norway. Their terms of employment with respect
to remuneration are governed to a certain extent by Some members of the GLT and certain key
the collective wage agreement, made between the personnel have a pension scheme that gives them
finance sector union, Finansforbundet, and the the right to retire at 60 years of age and covers
Norwegian Financial Services Association (Finans income included and above 12 times ‘G’. G is a base
Norge), which the Gard group has agreed to abide rate used as the basis for calculation benefits. G is
by. adjusted annually and is approved each year by the
Norwegian parliament. This pension scheme is
The variable component of the remuneration shall be
secured by an agreement with Norsk Tillitsmann
small relative to the overall compensation for all
Pensjon/Nordic Trustee. The obligation is secured
employees. The maximum bonus achievable for
through a pledged deposit on a bank account owned
employees shall be in accordance with applicable
by Gard AS.
regulatory requirements. The bonus shall be
calculated using several key performance indicators.
It shall not encourage any employee to take on risks
outside of Gard’s risk appetite.
B 1.3 Assessment of the adequacy of the system of governance
The system of governance is assessed as adequate requirements in respect of the governance system
considering the size, nature and complexity of the are being met.
Gard group’s operations, and sufficient to ensure that
all the risks the entities in the group are exposed to
are appropriately dealt with and that the applicable
B 2 Fit and proper requirements

The regulations in Bermuda, Norway and other enable sound and prudent management and ‘proper’
countries require insurance companies to ensure requires the person to be of good repute and
that the members of the governing corporate bodies integrity.
collectively possess the right professional
qualifications, knowledge and experience. This is As a standard procedure, each year before the
known as the ‘fit and proper’ requirement. Annual General Meeting, the Election and
Governance Committee reviews the current
All persons who effectively run the group’s business, composition of the group’s various boards and
including the members of the BoD, the Executive committees to ensure that they each meet the overall
Committee, GLT, and key functions, hereunder, the ‘fit and proper’ criteria. Members of Gard’s boards
Actuarial function, Risk Management function, and committees, and candidates to be nominated for
Compliance function, and Internal Audit function, election to boards and committees, are required to
must at all times be fit and proper for the role. ‘Fit’ complete a questionnaire and curriculum vitae
implies that their professional qualifications, prepared by the Election and Governance
knowledge and experience must be adequate to Committee.
B 3 Risk management system including ORSA

B 3.1 Strategy
The purpose of the risk management system is to pursue attractive business opportunities as and
ensure that material risks are managed in when they arise
accordance with our corporate objectives and risk
The risk profile of Gard is managed to provide
carrying capacity.
Members and customers with high security that Gard
Gard’s risk strategy establishes, through the risk can meet its liabilities, protect the capital base, and
appetite statement, the level of risk that Gard deems minimise long-term premium costs for the Members.
to be acceptable as part of its ‘business as usual’-
The risk strategy is reviewed annually as part of the
activities.
financial plan process.
The risk appetite of Gard is to hold sufficient capital
The following principles define Gard’s approach to
and liquidity as well as constrain its risk-taking to
risk management:
ensure that it can continue to operate following an
extreme loss event with the same risk tolerance for • Controlled risk-taking – We have an
insurance risk. The risk-taking must be aligned to unambiguous definition of our risk appetite. We
Gard’s risk carrying capacity. only accept risks in line with our risk appetite,
which we understand and are able to manage
Gard aims to fulfil the following key objectives:
• Clear accountability – Authority is delegated
• Have a high probability of meeting its insurance
and responsibilities are clearly defined.
liabilities and providing its services
Individuals are accountable for the risks they
• Preserve the continuity of its offering after an take on. There is no reward for taking risks that
extreme loss event are outside our risk appetite
• Have the flexibility and competence to help • Responsiveness – Efficient information flow
Members and clients manage new risks and and effective decision-making procedures
enable sufficient risk monitoring and prompt
remediation if and when the risk profile unrestricted access to the CEO, the Executive
deteriorates Committee, the Audit Committee, the Risk
Committee and the BoD, and shall report any
• Independent control – Our Risk Management
issues of concern in a timely manner
function, Compliance function and Internal Audit
function provide independent advice, challenge • Risk culture We are open and transparent
the business functions, and monitor the about losses and failures. We take corrective
effectiveness of the Risk Management System. action and learn from mistakes
The independent control functions shall have
B 3.2 Key elements of Gard’s risk management system

The risk management system consists of the the BoD of the legal entities, as well as to the
following components: Executive Committee, the Audit Committee,
the Risk Committee and the BoD of Gard
Risk appetite and limits Bermuda
Our overall risk appetite and Comfort zone (target
range for capitalization) are defined in accordance Internal model
with Gard’s risk carrying capacity and corporate Gard’s internal model is used to calculate the internal
objectives. This cascades into limits by risk type and capital requirements of the group and all insurance
legal entities. This forms the basis for all risk entities. The internal model is also used to calculate
management, monitoring and reporting. the regulatory capital of the Gard group, Gard
Norway and Gard M&E Europe. For more
Risk policies information see B 3.5 Determination of Gard’s own
These are policies describing the processes and solvency needs, B 3.6 Risk management system for
procedures for managing material risk exposures. internal model, and E 2.1 Calculation of group
The purpose of the policies is to ensure consistent solvency requirements.
and adequate risk and capital management.
Contingency procedures
Risk management cycle There are contingency procedures in place
Risks are identified, assessed, managed, monitored describing how to respond to a breach in Risk
and reported according to the following principles: Appetite or limits, ensuring that appropriate and
• Identify – Material risks are defined and proportionate remedial actions are taken when
described in the risk landscape (see chapter needed.
C)
• Assess – Material risks and emerging risks Disclosure
are assessed regularly and at least annually. There are procedures in place to ensure that
The Own Risk and Solvency Assessment information about risk and capital that is disclosed to
process is the main process for assessing the regulators, rating agencies and other external
overall risk and solvency position at a group, stakeholders, is appropriate, accurate, timely and
legal entity level and branches complete.
• Manage – Risk is managed proactively, on
an individual and aggregated level, in line
with the risk appetite and risk tolerance
• Monitor – There is regular monitoring of the
risk exposures and the alignment with the risk
appetite. The purpose of the monitoring is to
ensure that adequate remedial actions can
be taken swiftly if necessary
• Report – There is regular reporting of risk
exposures from the 2nd line to the CEO and
B 3.3 Implementation and integration of the risk management system
Risk governance is based on the three lines of
defence model, with clearly defined roles and • Support the 1st line of defence in assessing
responsibilities. Risk execution is carried out in the material risks
business functions (1st line), risk oversight is primarily • Provide value-adding challenges and support to
carried out by the Risk management, Compliance help ensure that risk has been adequately
and Actuarial functions (2nd line), and independent considered in all significant business decisions
assurance is provided by Internal Audit (3rd line).
• Assure the Executive Committee and BoD that
External audit conducts an independent and
the Risk Management System is being operated
objective assessment of the financial statements and
effectively by the 1st line
financial reporting.
• Make remedial recommendations in respect of
1st line of defence functions: Accountable for limit breaches and improvements to the Risk
implementing, embedding, and using the Risk Management System
Management System, hereunder:
• Establishing and delivering the business plan The 2nd line of defence functions shall operate
within the risk appetite and managing the risk efficiently and effectively and be independent of the
exposure 1st line of defence. The 2nd line of defence functions
is responsible for their respective tasks across the
• Identifying and evaluating all material risks
group, including all subsidiaries and associated
within their area of responsibility
companies.
• Monitoring and analysing changes in the risk
exposure regularly and assessing these 3rd line of defence function: Responsible for
against the risk appetite providing independent assurance on the adequacy
and effectiveness of the Risk Management System
2nd line of defence functions: The Risk to the Audit Committee, the Executive Committee,
Management and Compliance functions are and the BoD. The internal audit function is appointed
responsible for developing and maintaining the Risk by and reports to the Audit Committee.
Management System for the 1st line to use in its day- The three lines of defence model is illustrated in the
to-day business and for providing an independent figure below.
and forward-looking view of the risk profile to the BoD
and the Executive Committee, hereunder:
B 3.4 Own Risk and Solvency Assessment (ORSA)
The ORSA process comprises the totality of Additional risk and solvency assessments will be
processes that Gard utilises to identify, assess, conducted when required by changes in the capital
monitor, manage and report risks in the short and adequacy or risk profile. The financial plan is used for
long term, as well as determine capital requirements. projecting the future development of the risk profile
and future capital and solvency requirements and the
The ORSA report is prepared annually by the Risk
findings from the ORSA process are used in the
Management function consistently for all areas and
financial planning process and any decisions on
on behalf of all insurance companies, branches and
group contributions, and capital contributions within
management companies in the Gard group. The risk
the group and owners’ general discount.
profile, capital and solvency situation and outlook
over the planning period are reviewed throughout the The ORSA report is approved by the Executive
year for each legal entity by key executive members. Committee5 and the Boards of Directors of all legal
entities and distributed to the Norwegian FSA
The ORSA process will normally be concluded in
(Finanstilsynet), the Bermuda Monetary Authority
January following the financial planning process and
(BMA) and other relevant authorities after the internal
finalized before the end of the financial year.
approval process is finalised.
B 3.5 Determination of Gard’s own solvency needs

To determine the economic capital requirements The model provides our best estimate of risk and
given Gard’s risk profile, Gard uses an internal ensures that we have a consistent understanding of
model. our risk exposures and solvency requirements
across all legal entities. Results from the internal
The first internal model in Gard was developed in model are communicated quarterly to the Executive
2004 and has since been refined to meet business Committee/BoD, the Risk Committee, Group
needs and regulatory requirements. All insurance Leadership Team and other key decision-makers.
undertakings in Gard are included in the internal
The economic capital expresses the potential loss
model. Economic capital is used for all internal
over a one-year time horizon with a confidence level
purposes, such as capitalisation, hereunder
of 99.5 per cent. This is consistent with industry
assessment of capital against risk appetite and
practice and Solvency II.
Comfort zone, financial planning, reinsurance and
investment planning.
B 3.6 Risk management system for internal model

B.3.6.1 Roles and responsibilities
The Executive Committee ensures effective procedures in place around the internal model
governance of the internal model and decides on design, operation, and validation. The Risk
major changes to the model. The Executive Committee reviews output from the internal model
Committee approves the output of the internal model four times a year.
four times a year.
The Risk and Capital Committee reviews the
The BoD of each insurance entity ensures that the output from the model four times a year and
model design and operations are aligned with the challenges the assumptions and results. The Risk
entity’s risk profile and the use of the internal model and Capital Committee will also review the model on
output. an ad hoc basis.
The Risk Committee ensures that the model design The CEO ensures that there are sufficient resources
and operations are aligned with Gard’s risk profile to develop, monitor and maintain the model.
and that there are adequate independent review
5 The Board of Directors in Gard Bermuda has delegated

the authority to approve the ORSA report to the Executive
Committee.
The CRO ensures appropriate design development reports to the various committees and communicates
and operations of the internal model, ensures that model results of major weaknesses and limitations in
testing and validation of the model takes place, the internal model.
analyses the performance of the internal model,
B.3.6.2 Internal model validation process

The internal model is validated at least annually to The validation shall be conducted by an independent
verify that the internal model is current, uses reliable reviewer who can provide an objective challenge of
and relevant data, remains fit for the purposes the internal model design, parameterisation, and
intended under changing conditions, and is operated implementation. The independent reviewer shall not
and maintained by personnel with adequate have been directly involved in the development and
expertise and experience. operations of the internal model and should be free
from influence from those responsible for the
development and operations of the internal model.
B 3.7 Material intra-group outsourcing arrangements

See section A 1.2.8 Lingard and A 1.2.9 Gard AS
for management and agency agreements within the
Gard group.
B 4 Internal control system

B 4.1 Elements of internal control system
Gard’s internal control system is built on the three • Internal controls shall be embedded in the
lines of defence model as described in section B 3.3, business to continually improve the quality of
where preventive and detective controls shall be our operations and foster a positive risk culture
carried out in the 1st line of defence, risk oversight,
detective controls and monitoring shall be carried out • Both preventive and detective controls shall be
by the 2nd line of defence, and independent proportionate to the nature, scale and
assurance concerning the adequacy and complexity of the operations and risks involved
effectiveness of the internal control system shall be • Periodic reviews of the adequacy and
provided by the 3rd line of defence. effectiveness of internal controls shall be carried
The internal controls shall contribute to the out
prevention of financial losses or other adverse The BoD is ultimately responsible for the internal
outcomes such as loss of reputation through timely control framework. The Audit Committee is
and proactive control of relevant risks. Effective responsible for assessing the adequacy of the
prevention averts or mitigates risks before any loss internal control system. The Audit Committee
occurs. The internal control system shall also receives an annual report from the management
contribute to the detection of irregular business concerning internal control, as well as independent
conduct at an early stage, deviations from agreed reports from the internal auditors on the adequacy
standards for process execution or data errors that and effectiveness of the internal control system.
have caused or may cause losses/adverse
outcomes. Early detection enables timely and The CEO must ensure that the organisation has an
effective actions to avoid any recurrence and to adequate and effective internal control system in
implement preventive measures for similar risks. place, with suitable processes, systems and
activities to control and monitor that Gard’s business
When Gard designs and implements internal is conducted properly.
controls, the following key principles apply:
B 4.2 Compliance function
Gard’s compliance function consists of a Group registered in the specific jurisdiction remain
Compliance function and Regional Compliance compliant with governing laws, regulations and
Officers (RCO). The RCO’s are appointed in all Gard administrative provisions. They are also the local
offices outside of Norway but are supported by the point of contact with local FSAs. The RCO’s report to
Group Compliance function in identifying, assessing, the GCO on compliance matters. There was a shift
monitoring and reporting risks. The Group in RCOs in 2021 at 4 office locations (Singapore,
Compliance Officer (GCO) reports to the CRO but Hong Kong, Greece and Finland) partly also to
has a direct reporting line to the CEO and the Audit ensure independence from the Managing Director
Committee of Gard P. & I. (Bermuda) Ltd. and the role which is in line with best practice.
BoD and Managing Directors of each legal entity in
Members of the compliance function should normally
the group. The CGO is fully independent and has no
not have operational responsibility or authority over
operational responsibilities within the 1st line of
any of the activities or operations it reviews. Given
defence.
that the number of employees in the regional offices
The GCO is responsible for ensuring that Gard is limited and the nature of Gard’s business is
operates within a clearly defined compliance complex, the Regional Managing Directors may act
framework. as Regional Compliance Officers. The Regional
Managing Directors have a wide perspective of the
The regional compliance function shall provide
regional office as well as detailed knowledge about
advice to and challenge the local business functions
the Gard group and are also the local contact points
and contribute to adequate management of
for local regulatory bodies and authorities.
compliance risk. The RCO’s secure that the entities
B 5 Implementation of the internal audit function

The internal audit function forms part of the 3 rd line of d) Employees’ actions comply with policies,
defence function, assuring Gard’s management and standards, procedures, and applicable laws and
the Audit Committee that material risks are identified regulations
and managed within the group’s stated risk appetite.
e) Significant legislative or regulatory issues
The internal audit function also provides independent
impacting the organisation are recognised and
and objective assurance that the governance
addressed properly
processes and systems of internal control are
adequate and effective to identify and mitigate the f) Opportunities for improving management control,
most significant risks that could threaten the profitability, business processes and Gard’s
achievement of Gard’s objectives. reputation may be identified during audits. They will
be communicated to the appropriate level of
The scope of work of the internal audit function is to
management
determine whether Gard’s system of risk
management and internal controls and governance The internal audit function in Gard has been
processes, as designed and represented by the outsourced. To provide for independence, the
management, are adequate and functioning Internal Audit function principally reports to the Audit
effectively to ensure that: Committee of Gard Bermuda, as well as to other
governing bodies in the Gard group that the Audit
a) Material risks are appropriately identified and
Committee may determine.
managed
An annual plan is prepared based on the internal
b) Established policies, procedures and processes
audit’s risk assessment and Gard’s targets. The audit
are adequate, appropriate and implemented to
plan is prepared in dialogue with the administration
manage risks within defined risk appetite, and are
and is approved by the Audit Committee. The internal
effective to meet regulatory and legal requirements
audit function evaluates the appropriateness and
c) Significant financial, managerial, and operating effectiveness of the group’s management and control
information is accurate, reliable, and timely processes. The function also provides targeted and
structured feedback on the organisation’s
compliance with guidelines and relevant legal people and information, in respect of any relevant
requirements. The internal audit function shall department, establishment or function of the
contribute to continuous improvement in organisation, including the actions of outsourced
management and control. All critical and less critical activities.
suggestions for improvements in internal control
Internal Audit is authorised to:
established routines and control plans are
summarised in internal audit reports, which are • Have unrestricted access to all functions,
presented to the Audit Committee. records, property, and personnel, including all
The principal point of contact and administrative documents pertaining to meetings of the
reporting line is to the CGO and Quality boards and other governing bodies of the
Management. organisation
• Obtain the necessary assistance of personnel
The internal audit teams are functionally independent in the organisation, as well as other
and objective from the activities audited and the day- specialised services from within or outside the
to-day internal control processes of the organisation organisation
and shall be able to conduct an assignment on its • Have full and free access to management and
own initiative, with free and unfettered access to the Audit Committee
B 6 Implementation of the actuarial function

The actuarial function is organised within the Actuary access to the CEO, the Executive Committee and the
and Risk Capital team. The team is led by the BoD. The Actuarial function is independent of the
actuarial function holder. The actuarial function actuary in the Actuarial Reserving team.
holder reports to the CRO but has unrestricted
B 7 Outsourcing
Gard’s core purpose is delivered through three pillars governance system, the service provider must have
of excellence; knowledge and expertise, financial in place adequate risk management and internal
strength and long-term relationships. This also control system, and Gard must maintain the
governs our approach to external service providers. contractual right to issue instructions concerning the
We assess service providers thoroughly, ensuring outsourced function or activity.
that we only enter contractual relationships with
Business continuity and exit strategy
providers that support our values and ethical
The outsourcing arrangement must be established in
standards. We take a long-term perspective when
such a way that business can continue in the event
entering into agreements with external service
the contract with the licensee is terminated. Thus,
providers.
Gard shall secure title and ownership to all records,
An important element of Gard’s value proposition to documents and information and rights to use
its Members and customers is a cost-efficient computer software systems and programs for a
operation. To achieve this, our first option should be certain period after the relevant outsourcing
to use the group’s internal resources to deliver agreement has been terminated, as required to
insurance products and services to our Members and manage and operate the business without any
customers. By not outsourcing this to an external interruptions.
third-party provider, we keep the competence in-
The contractual terms and conditions with the service
house and we do not have to compensate any third
provider must have an agreed and embedded
party’s need for profit or compensate a third party for
workable exit plan placing obligations on all parties
the risks it has assumed in entering an agreement
to fully assist and co-operate to ensure the contract
with Gard. The internal outsourcing arrangement is
is terminated with the minimum disruption.
established in line with the business strategy and is
managed from a long-term perspective.
Outsourcing is a way of getting access to sufficient Monitoring and oversight

scale and adequate competence which could not The governing body or role that has entered into an
effectively be achieved by providing the service in- outsourcing contract is responsible for monitoring
house. that the contractual terms are being adhered to and
that all parties honour their obligations under the
Gard’s code of ethics and business conduct applies
contract. The monitoring of significant outsourcing
to all Gard employees at all times. All negotiations
contracts should take place as part of the annual
and dealings with service providers shall be
legal entity review.
conducted in a transparent, honest and professional
manner. Monitoring should include (but should not be limited
to) the following:
Once a decision to outsource is made, Gard shall
identify service providers, evaluate their capabilities • A review of performance (exact intervals must
and select the most suitable option. be determined per type of service provider). If
Once a provider has been selected, whether internal applicable this may include a site visit and/or
or external, an appropriately detailed legal meeting with management and key personnel of
agreement capturing the key services established the service provider when applicable
shall be put in place. Gard’s legal department shall • A review of the service provider’s continuing
be consulted in all cases, with additional external suitability is in line with the selection criteria
legal advice sought where appropriate. outlined in this policy. This should be conducted
Outsourcing contracts must comply with all of the in light of any significant change to the service
relevant regulatory requirements. provider’s business that pertains to the
outsourced functions
Internal Control
If the service provider does not carry out the
To ensure that the outsourcing of any critical or
functions or activities effectively and in compliance
essential functions or activities does not lead to
material impairment of the quality of Gard’s
with the terms of the outsourcing agreement, All Senior Vice Presidents and most senior
appropriate actions must be taken. managers have been delegated authority to enter
into contracts in their respective areas of
Reporting
responsibility, however, the CEO shall be informed of
Gard shall notify the relevant supervisory authorities
any significant engagements before their execution.
before the outsourcing of critical functions or
Contracts entered into in the ordinary course of
activities as required and of any subsequent material
business, for example, a contract with a local loss
developments for those functions or activities. This
adjustor can be signed by personnel with the relevant
may include material changes in the outsourcing
level of authority.
arrangements, a change of service provider or major
problems with the performance of the service When Gard legal entities enter into contracts
provider. between themselves, the signatory for each legal
entity may be the same person, acting in a different
Roles and responsibilities
capacity. For example, the Managing Director of
The CEO shall administer the daily business of the
Lingard may sign the contract on behalf of Gard
group on behalf of the Executive Committee. The
Bermuda as its insurance manager, and on behalf of
CEO is responsible for entering into contracts on the
Gard M&E as its insurance manager.
group’s behalf when this is required to implement its
strategy, goals and financial plan, taking into The Legal Department shall be responsible for
consideration the risk appetite and Comfort zone as reviewing significant contracts before they are
determined by the company’s Board of Directors. signed. They shall also keep a record of all contracts
made between Gard legal entities.
Major contracts which may significantly impact the
way a Gard entity operates shall be signed by that Gard outsources the internal audit function, IT
entity’s CEO or Managing Director. The Executive services and fund management. The Internal Audit
Committee shall be informed before entering into any function is based in Norway, the IT services provider
contracts that may alter the group’s operating model is based in India and the Philippines and the fund
and/or that may involve significant risk or costs. management company is based in Ireland.
B 8 Any other information regarding the system of

governance
There is no other material information to be
disclosed regarding the system of governance.
C RISK PROFILE
In the context of its operations, Gard enters into a Non-quantifiable risks are assessed through various
broad variety of risks. Gard aims to have a processes. See further descriptions in the sections
comprehensive understanding of its risk profile by below.
identifying, assessing, and measuring its risk through
multiple approaches. All financial and non-financial risks are assessed at
least annually through the ORSA process and
The material risks that Gard is facing, are believed to quarterly through the model updates. Significant
be captured in the risk landscape. The risk internal or external events may require additional
landscape, shown in the figure below, comprises assessments. To test Gard’s ability to withstand
both quantifiable risks and non-quantifiable risks that severe conditions, several stress tests are conducted
arise from doing business. regularly. For example, risks resulting from natural
To determine its internal capital requirements, Gard hazards are assessed through realistic disaster
uses an internal model for all material quantifiable scenarios. For details see C9 Risk sensitivity.
risk types. This includes insurance (underwriting)
The risk identification process ensures that material
risk, market risk, counterparty default risk and
risks are identified and assessed from a group and
operational risk. Besides, Gard uses various
legal entity perspective. It considers the industry, the
exposure measures and stress tests to quantify its
type of Members and clients and the global nature of
risk profile.
the organisation and covers existing and emerging
The Gard group, Gard Norway and Gard M&E risks.
Europe have been granted approval to use its
internal model to calculate insurance and market risk
for regulatory purposes.
Gard’s risk landscape
The material risks for the Gard group are described in sections C1-C6.
For information related to the material risks that Gard Norway is exposed to, see Appendix 1, section 1.4.
For information related to the material risks that Gard M&E Europe is exposed to, see Appendix 2, section 2.4.
C1 SCR Insurance risk
Insurance risk arises from existing claims (‘reserve increase in technical provision without risk margin.
risk’) and future claims (‘premium risk’) and Lapse risk is not calculated for P&I homogenous risk
originates from claims being different from what is groups as a P&I policy cannot be discontinued
expected. Many of the covers provided by Gard have unless the vessel is sold or has a total loss.
high exposures, and potentially, very high severity.
These claims fluctuate from year to year and the SCR for insurance risk has decreased by 2 per cent
results are volatile. from 20 February 2021 to 20 February 2022. The
insurance risk fluctuated during the year. In
Insurance risk is calculated by using Gard’s internal particular, the premium risk was reduced during the
model. year because of error correction and updates in the
Premium risk is stochastically simulated, based on reinsurance program as well as updates of new
claims expectations adjusted for changes to the risk parameters in the premium risk module. On the other
exposures on a more granular level. The basis for hand, reserve risk increased due to increases in Pool
reserve risk is a stochastic simulation of the accident claims. In addition, as part of the annual assessment,
years for the different lines of business. Catastrophe the cat risk increased because of including a new
risk is scenario-based, where each scenario scenario related to polar/climate risk as well as
represents possible catastrophic events. Lapse risk adjusting other scenarios.
represents the loss in basic own funds that would
result from the discontinuance of 40 per cent of the
policies where the discontinuance would result in an
Gard Group, insurance risk

Premium risk 328 342
Reserve risk 291 286
Cat risk 169 111
Lapse risk 7 5
Diversification (350) (291)
SCR insurance risk 446 453
For information related to insurance risk specific to Gard Norway, see Appendix 1, section 1.4
For information related to insurance risk specific to Gard M&E Europe, see Appendix 2, section 2.4
C 1.1 Risk mitigation techniques for insurance risk

Gard uses reinsurance and claims sharing programs Gard also balances the amount of insurance risk
to limit liability and manage the insurance risk profile. through risk limits. A set of limits is in place to ensure
External reinsurance is used to manage the risk that the insurance risk remains within the risk
profile of the Group in total. Internal reinsurance appetite of the Gard group and each legal entity. See
arrangements ensure that risk exposures of the legal section C7 Risk concentration.
entities are adequately managed. See section C8
Reinsurance.
C2 SCR Market risk
Market risk is defined as the risk of economic losses Note that following approval from the Norwegian
resulting from deviations in the value of assets and/or regulator, Gard is no longer subject to 15 per cent
liabilities caused by market prices or volatilities of additional SCR for market risk. This means that the
market prices differing from their expected values. numbers for 2021 as listed below are not directly
comparable with the numbers as of 20 February
Gard is mainly exposed to market risk through the 2022. Where possible, comparable numbers will be
investment portfolio. The primary functions of the used in the text.
assets are to offer security for payments of claims on
behalf of policyholders as and when they arise and The total SCR for market risk fell by 3 per cent in non-
fall due. Besides, the assets shall over time create adjusted terms (USD 248 million in 2021) primarily
value for the Members in the form of reduced Mutual driven by decreases in interest rate risk driven by
premium needs. Gard obtains diversification in its higher interest rates and higher diversification
investment portfolio through asset allocation within benefits (USD -111 million versus USD -87 million
and between different asset classes. On the liability comparable) due to the composition of the portfolio
side, Gard is exposed to market risk through and more exposure to lower correlation assets. The
changes in interest rates and exchange rates. main positive contributor to market risk was real
estate, with an increase from USD 31 million to USD
To assess market risk, Gard employs an external 41 million (based on comparable numbers) due to
Economic Scenario Generator (ESG). The ESG higher allocation as a result of positive returns.
simulates the probable future values for key
economic market risk variables such as yield curves, Concentration risk in the internal model was nil as
returns on asset classes and exchange rates. These there was no single exposure above the threshold
ESG simulations are then used in the internal model level, though for the purposes of the Solvency II
to calculate the economic value and the risk-adjusted standard formulae concentration risk primarily
capital of each market risk category over the one- relates to a single hedge fund holding. As we have
year future time horizon. enough look-through to determine that there is no
issuer concentration risk in the portfolio we do not
add concentration risk for this holding.
Gard Group, market risk
Equity risk 144 163
Interest rate risk 2 11
Credit risk 111 127
Currency risk 15 11
Property risk 41 35
Concentration risk - -
Alternatives 38 38
SCR market risk 239 286
For information related to market risk specific to Gard Norway, see Appendix 1, section 1.4
For information related to market risk specific to Gard M&E Europe, see Appendix 2, section 2.4
C 2.1 Risk mitigation techniques for market risk

Risk mitigation techniques are embedded in Gard’s techniques are applied. Allocation ranges (as per
management of market risks. A ‘neutral’ or matched cent of total assets) per asset class are applied both
portfolio is generally considered the starting point for on a group and legal entity level. There are also limits
investment portfolios in insurance companies. To on how much market risk, as measured in the
match the interest rate duration and currency internal model, can be as a share of investable
exposures on the asset and liability side, or to stay assets. These limits are also used on both a group
within allowed ranges and limits, risk mitigation and legal entity level.
C 2.2 Prudent person principle
The BoD of Gard approves the overall investment asset management at an individual security selection
policy. The investment policy contains the objectives, level but may use financial instruments such as ETFs
principles, risk appetite and constraints governing to alter the asset allocation at a strategic level.
investment related decisions.
Gard’s objective for its investment portfolio is to
The BoD has ultimate overall responsibility for maximize long-term investment returns within its risk
decision-making on investment matters and has appetite and risk tolerances. Hence, the Gard group
delegated responsibility for implementing the seeks to take on investment risks that are expected
investment strategy to the Executive Committee to be rewarded over the long-term, in the form of
(ExCom). ExCom is therefore responsible for excess returns relative to liabilities, in a diversified
determining the investment strategy and setting the manner. The combination of assets and investment
Strategic Asset Allocation at the Group level and management approaches shall be consistent with
constructing an appropriate benchmark. The the investment objectives, risk tolerances and
composite benchmark is defined to make a investment constraints detailed in the Investment
representation of the asset allocation and liability Guidelines and the Risk Management Policy.
structure of the group. The allocation is reviewed at
The currency exposure and maturity profile of the
least annually. ExCom also monitors compliance
investments should broadly reflect the Gard group’s
with the Investment Policy and sets specific limits
liability structure, liquidity and cash flow
and restrictions on deviations from the strategic
requirements and solvency position. In effect, Gard
asset allocation and is required to notify the BoD
considers its investment strategy on a holistic basis
when it deems it necessary to operate outside of the
and assesses the risks of its investment portfolio on
target ranges. ExCom takes a total market risk view
a net basis, after allowing for liabilities. Derivatives
when implementing strategies within the overall
are permitted, but shall only be used for risk
policy.
mitigation, efficient portfolio management or cost-
Investment management is responsible for efficient execution.
implementing the asset management strategy as
As a general principle, Gard relies on several
determined by the BoD and ExCom. The asset
sources of information when making its investment
management is primarily outsourced to independent
decisions. Gard uses information provided by third
fund managers and is mainly coordinated through
parties (e.g. financial institutions, asset managers
the Gard Unit Trust Fund (Gard UTF) for insurers
and rating agencies) in addition to an internal
within the group. Gard is not doing any active internal
assessment of risk and return.
C3 SCR Counterparty default risk

Counterparty default risks typically relate to the External ratings of the counterparties are monitored
default of reinsurers, banks, derivative on an ongoing basis. Assessment of all the active
counterparties and Members/clients not paying the counterparties (counterparties on risk and
premium. Following a large claim, the exposure to counterparties with open reserves) are regularly
counterparty default risk will increase due to the carried out. As for risk-reducing measures, Gard has
higher exposure to reinsurers. a security downgrade clause in place on all the
reinsurance contracts. This gives Gard the
Counterparty default risk reflects the change in the right/option to replace a counterparty if it is
value of assets and liabilities caused by unexpected downgraded.
default or deterioration in the credit standing of
independent counterparties and debtors. It applies to Derivatives are permitted as part of the investment
reinsurance arrangements, bank deposits and strategy and counterparty default risk arises when
derivatives, which are classified as ‘type 1’ unrealised positions are accrued. Normally, these
exposures and are assumed not diversified but likely unrealised positions will be very modest but as a risk
to be rated. Receivables from Members and clients mitigation tool, Gard may ask for cash collateral as
are classified as ‘type 2’ exposures, which are security for an unrealised position. The use of
assumed to be well-diversified but unlikely to be collateral is regulated through standardised
rated. International Swaps and Derivative Association
(ISDA) master agreements and the Credit Support
Annex (CSA). Besides, all derivative activities are
controlled through instructions in the Investment considered. Overdue payments are at a higher level
Manager Agreement. than normal, but Gard has established a task force
that is closely following overdue payments
For obligations related to non-covered claims, Gard
would manage its counterparty credit risk by For information related to counterparty default risk
requiring counter-security in the form of a cash specific to Gard Norway, see Appendix 1, section 1.4
deposit and signed pledge agreement, or a bank
guarantee For information related to counterparty default risk
specific to Gard M&E Europe, see Appendix 2,
Due to the financial uncertainties the last years due section 2.4
to COVID-19, counterparty risk has been particularly
Gard Group, counterparty default risk

SCR counterparty default risk 54 58
C4 SCR Operational risk

Operational risk is the risk of losses arising from and information security risks are considered in
inadequacy or failure of internal processes or particular.
because of events triggered by employee-related,
system-induced or external factors. Operational risks The standard formula assumes a standardised level
are an ‘invisible’ part of our business activities, and of risk management. The operational risk is therefore
the focus is therefore on risk avoidance and risk not risk-sensitive.
minimisation. For information related to operational risk specific to
Operational risk is reviewed annually through an Gard Norway, see Appendix 1, section 1.4
internal self-assessment and reported to the Audit For information related to operational risk specific to
Committee. The process enables Gard to identify, Gard M&E Europe, see Appendix 2, section 2.4
prioritise, and manage operational risks. Within this
operational risk review business process risks
(including data quality), compliance risks, fraud risks
Gard Group, operational risk

SCR operational risk 47 49
C5 SCR Liquidity risk

The size and timing of cash flows are to a certain • The investment portfolio is set up to match
extent unpredictable. However, the liquidity risk for the maturity of the liabilities
the Gard group is assessed to be low, given the pay- • Gard Bermuda is part of a cash pool with
out profile of liabilities and the liquidity of assets. Gard M&E, AS Assuransegården and Gard
Gard Bermuda, Gard Norway, Gard M&E Europe AS increasing available cash
and Gard M&E have branches in other countries than
they are registered in. Branch regulators can set • Gard Norway and Gard M&E Europe are not
requirements for deposits to meet liabilities when a allowed to be a part of the cash pool and will,
large claim has occurred. This can strain the liquidity therefore, hold more average cash, relative
situation for the relevant branch and Gard group. to size, than the Bermuda entities
• Money market funds have been
• External and internal reinsurance implemented for the insurance entities as
arrangements are established to mitigate buffers between operating cash and
liability and liquidity exposure for the investment portfolio. Short term excess cash
individual legal entities, their branches, and is transferred to and from the money market
the Gard group fund to gain a return above what is possible
on operating cash. Internal limits (upper and within the Gard group not being able to meet its
lower) are set for operating cash and money payment obligations.
market funds
Gard does not hold capital against liquidity risk. The
Liquidity risk is followed up frequently by the Risk and risk is managed by ensuring access to funds and by
Capital Committee. The Risk and Capital Committee limiting the type of assets held.
will take action if there is a risk of a company/branch
C6 SCR Other risks

Business risks
Business risk is the risk of losses or failure to meet by e.g. the regulators in one part of the group may
business objectives due to unexpected changes to have consequences for other parts of the group.
legal and regulatory conditions, changes in the
economic and social environment, as well as Gard does not hold capital against business risk. The
changes in business profile and the general business level of business risk is deemed acceptable given the
cycle. Gard group has companies and branches in business model and capital flexibility of the Group
several jurisdictions. Unexpected changes initiated
Compliance risks
Compliance risk is the risk of legal or regulatory economic and social environment in which the group
sanctions, material economic loss, or loss to the operates, may pose a risk to Gard.
reputation the group may suffer as a result of its non-
compliance with laws and regulations which govern Compliance risk is managed through ongoing
our business activities. monitoring of regulatory environments that we
operate in, as well as periodic regulatory reviews with
Gard group comprises companies and branches in participants from all jurisdictions where Gard
several jurisdictions, as well as captive reinsurance conducts business. Tools that are implemented to
companies, insurance intermediary companies, reduce compliance risk are supplemented by
subsidiaries, and a property company. As a natural compliance training programmes.
consequence of the group structure Gard is subject
to several regulatory regimes such as those of Gard does not hold capital against compliance risk
Norway, the UK, Bermuda, Hong Kong, Singapore directly, but indirectly through the operational risk
and Japan. Unexpected changes in legal and capital charge. The level of compliance risk is
regulatory conditions, as well as changes in the deemed acceptable given the business model.
Reputational risks
Gard’s business is built on the trust of its Members • Wrongdoing from top management, CEO or
and clients, as well as other stakeholders. The Gard board members
group must be seen to act with integrity towards all Gard does not hold capital against reputational risk
its Members and clients, regulators and other as such but holds capital against many of the risk
stakeholders. events that could damage the reputation of the
Gard’s reputation may be damaged due to e.g.: company. The level of reputational risk is deemed
acceptable.
• Data breach and privacy (GDPR)
• Misalignments (non-compliance) with regulatory
requirements
• Failing to keep up with the changing beliefs of
stakeholders, e.g., ESG issues
Climate-related risks fuel configurations of the world fleet to be more
The insurance sector is exposed to climate-related fragmented in the future. This could affect claims
risks and both sides of the balance sheet could related to machinery failure and necessitate further
potentially be affected. When approaching climate- competence in the organisation.
related risks, Gard is using the risk categorisation
Other climate-related risks: It is also possible that the
proposed by the framework of the Task Force on
investment portfolio could be facing climate-related
Climate-related Financial Disclosures (TCFD).
financial risks as repricing of certain assets could
Physical risks: Gard is mainly exposed to acute cause considerable shifts in the financial markets.
physical climate risks through increasing extreme However, considering that the majority of the
weather. The Atlantic hurricane season of 2021 investment portfolio consists of government bonds,
consisted of 21 named storms, including seven and there is an increasing focus on environmental,
hurricanes, and hurricane Ida was the fifth strongest social and governance (ESG) factors in the equity
hurricane to ever make landfall in the United States. strategies of the company, these risks could be
Gard monitored the situation, and the associated considered fairly limited for Gard. Significant declines
claims were relatively modest. Overall, Gard has not in equity markets are already reflected in the market
experienced an increase in claims due to extreme risk calculations.
weather. Chronic physical risks could potentially also
Climate-related risks related to reinsurance and
be a risk to Gard. This includes increased shipping
third-party liabilities have also been considered.
activities in polar areas due to the shrinking of the
Reinsurers could, for example, be vulnerable if their
sea ice in the Arctic.
portfolios are exposed to property or infrastructure in
Transition risks: It is expected that policies will be regions exposed to the impacts of acute physical
increasingly stringent in the upcoming years, and this climate risks. Liability risks associated with climate
will again affect legal and reporting requirements. change are considered negligible for Gard and the
IMO has proposed emission reduction targets for the LMA5570 clause introduced last year further limits
upcoming decades, and it is expected that policies, potential liabilities associated with climate change.
and uptake of alternative technologies, will cause the
C 7 Risk concentration
Risk concentration cuts through and across risk Risk concentration is mainly managed through limits,
types as well as within single risks. The most material e.g., limit on exposures held for investments per
risk concentrations are within insurance and market rating category, exposures to a single counterparty,
risk. and maximum aggregated exposure to a single
reinsurer. The limits are monitored and reported
Concentration within and between the other single
regularly.
risks is not considered material.
C 8 Reinsurance
Reinsurance is a method to ensure that insurance
liability risk is kept within the overall risk appetite and Gard Bermuda is a member of the International
Comfort zone and that rating and regulatory Group of P&I Clubs’ Pooling Agreement, which is an
requirements are met. agreement between thirteen P&I clubs to mutually
reinsure each other by sharing claims. This claim-
Reinsurance is used to ensure continuity after an sharing agreement is underpinned by an extensive
extreme loss event; providing flexibility to help market reinsurance program, which the International
Members and clients manage new risks and pursue Group of P&I clubs arranges.
business opportunities.
Gard follows the customary insurance practice of
The reinsurance program is established to protect reinsuring with other insurance and reinsurance
against high severity, low-frequency claims. companies a portion of the risks under the policies it
writes. These reinsurance arrangements are meant credit exposure on Gard’s reinsurance program is in
to protect Gard against the severity of losses on accordance with the guideline of only accepting
individual claims and unusually serious occurrences reinsurers with an A- (Stable) or higher rating. The
in which a number of claims produce an aggregate company is however faced with BBB rating
extraordinary loss. exposures through the IG Pooling Agreement.
Among the thirteen clubs, three have ratings of BBB+
Gard has different reinsurance programs for different or lower. Counterparty default risk on the pool and
classes of business. reinsurance is reduced through multiple layers of
financial security
The collectability of reinsurance retrocessions is
largely a function of the solvency of reinsurers. The
C 9 Risk sensitivity
Gard performs various sets of stress tests. The main
methods used are the following:
The stress tests are quantitative. Gard is aware of
other non-quantifiable situations which could also
Insurance risk stress tests
render the business model unviable.
A set of extreme events for insurance risk have been
identified and the realistic possible loss to Gard has There are policies and contingency plans in place
been estimated. The scenarios are calculated using describing how to take immediate action, or act as
Gard’s exposure to actual insured objects, showing precautionary measures in advance, to restore or
the expected loss, gross and net of external improve the solvency capital adequacy.
reinsurance, by line of business. Further, to calculate
the loss by each legal entity, internal reinsurance is Multi-year stress tests
applied. The most severe losses from a single To complement the one-year stress tests, multi-year
extreme event would be a scenario where Gard is stress scenarios have been developed to test the
exposed across several product areas with separate effect on the capitalisation of the group by an
reinsurance programs. The Gard group may adverse development over time. Three scenarios
experience multiple extreme events in a single year. have been assessed. The estimated total probability
for each of the scenarios is low.
Reverse stress tests
Complementary to insurance risk stress tests and 1. Increased demand for Marine transport
market risk stress tests, reverse stress testing is An increased demand in the world for Marine
carried out to identify scenarios that would be the transport, resulting in high utilisation of the available
probable cause of business failure. ‘Business failure’ ships and crew, affecting both claims frequency and
is defined as the solvency position falling below a severity.
level where the business model becomes unviable.
A consequence of this would be that counterparties 2. Financial market crisis
and other stakeholders could be unwilling to transact The scenario describes a situation where the market
with or provide capital to the Gard group and, where values are over-priced at t=0 and that the market is
relevant, existing counterparties may seek to being re-priced over three years.
terminate their contracts.
3. Combined insurance risk and market risk
The reverse stress tests identify events that will
scenario
jeopardize the Gard group’s solvency, but not
The scenario describes a situation where higher
circumstances that will cause Gard to ‘cease being a
claims concur with adverse movements in global
going concern’. The results of the reverse stress
financial markets for years.
tests answer the question of which scenarios
represent real risks to the existence of the company.
The Gard group will in all the above scenarios still be
The reverse stress tests are based on one insurance compliant with regulatory requirements - without any
scenario and one market scenario. management actions - at the end of the stress period.
Market risk stress and drawdown risk tests have been designed in line with EIOPA’s Insurance
Several stress tests using a range of scenarios for Stress Test specifications.
short-term market shocks as well as for longer, multi- The portfolio has also been stressed to model
year periods have been performed to estimate the historical events. Especially drawdown risk
potential impact on Gard’s portfolio and capital happening at the same time for multiple asset
situation. Market shocks are assumed to be one-off classes constitutes an adverse tail event and
instantaneous changes in asset prices and portfolio reduces diversification benefits.
allocations. Combined scenarios, in which several
factors experience simultaneous shifts in prices,
C 10 Any other information regarding the risk profile

Gard does not make use of any special purpose There is no other material information to be disclosed
vehicle as referred to in article 211 of the Solvency II regarding the risk profile.
Directive.
D VALUATION FOR SOLVENCY PURPOSES
This section specifies and describes the valuation of for the foreseeable future (‘going concern
assets and liabilities for solvency purposes, and the basis’)
differences between the bases, methods and main
The economic balance sheet (‘Solvency II balance
assumptions used for the valuation of assets for
sheet’) represents a risk-based view of the entire
solvency purposes and those used for financial
balance sheet at a given date, where assets and
statements.
liabilities are valuated in line with the above
The bases, methods, and assumptions are similar for concepts. The table below summarises for each
all legal entities and follow the principles outlined in material class of assets and liabilities the value
the Solvency II directive, i.e.: according to Solvency II together with the values of
the assets recognised and valued in the statutory
• Assets shall be valued at the amount for which accounts.
they could be exchanged between
knowledgeable willing parties in an arm’s length The statutory account values in the balance sheet
transaction (fair value) are classified according to Solvency II rules and are
different from the values in the balance sheet in the
• Liabilities shall be valued at the amount for Financial Statements.
which they could be transferred, or settled,
between knowledgeable willing parties in an No changes have been made to the recognition and
arm's length transaction valuation bases used or to the estimates during the
reporting period.
• The materiality principle shall be considered
when valuing assets and liabilities. There are no differences in major parts of the
Information is material if its omission or balance sheet items in the valuation for solvency
misstatement influences the decision-making or purposes and those used for the valuation in
the judgement of the users of that information, statutory accounts. The main difference is the
including the supervisory authorities discounting of reserves and risk margin that are
included in the Solvency II values.
• The valuation shall assume that the company
will continue to operate and write new business
Gard Group, economic balance sheet
Solvency II Statutory
USD million, as of 20.02.2022 value accounts value Difference
Assets
Deferred acquisition costs - 25 (25)
Intangible assets - 9 (9)
Deferred tax assets 22 22 -
Property, plant & equipment held for own use 34 34 -
Government bonds 56 56 -
Collective investments undertakings 2,171 2,171 -
Deposits other than cash equivalents 30 30 -
Investments 2,257 2,257 -
Loans and mortgages to individuals 17 17 -

Reinsurance recoverables 132 230 (99)
Insurance and intermediaries receivables 299 299 -
Reinsurance receivables 8 8 -
Receivables (trade, not insurance) 2 2 -
Cash and cash equivalents 302 302 -
Any other assets, not elsewhere shown 17 17 -
Total assets 3,090 3,222 (133)
value accounts value Difference
Liabilities
Best estimate technical provisions 1,553 1,692 (139)
Risk margin 63 - 63
Technical provisions – non-life 1,616 1,692 (75)
Pension benefit obligations 45 45 -

Deferred tax liabilities - - -
Insurance & intermediaries payables 84 84 -
Reinsurance payables 82 82 -
Payables (trade, not insurance) 14 14 -
Any other liabilities, not elsewhere shown 26 27 (1)
Total liabilities 1,868 1,944 (77)
Excess of assets over liabilities 1,222 1,278 (56)
The subsequent chapters describe assets and For information related to the value of assets and
liabilities where the valuations differ, in addition to liabilities by asset class for Gard Norway, see
balance sheet items explicitly mentioned in the Appendix 1, section 1.5.
Solvency II regulations and guidelines (i.e., deferred
taxes and pension obligations). For information related to the value of assets and
liabilities by asset class for Gard M&E Europe, see
Appendix 2, section 2.5.
D 1 Valuation of assets
Gard group has mainly investments in the following market. For unquoted financial assets, the fair value
asset classes; investment funds, bonds, equities, has been estimated using a valuation technique
other investments, and property. The investment based on assumptions that are supported by
assets are held in custody at Northern Trust. observable market prices (mark-to-model).
In the statutory accounts balance sheet, the fair

There are no significant differences between the
value of assets is mainly measured on a mark-to-
valuation of GAAP (statutory accounts) and Solvency
market basis. The fair value is determined by
II balance sheets.
reference to published price quotations in an active
D 1.1 Deferred acquisition costs
Deferred acquisition costs represent commission under deferred acquisition costs in the statutory
provision on gross premium and are related to accounts.
contracts in force at the balance sheet date. Deferred
acquisition costs are included (netted) in the
technical provisions for Solvency II but are disclosed
Gard Group, deferred acquisition costs

Statutory
Solvency II accounts
USD million, as of 20.02.2022 value value
Deferred acquisition costs - 25
For information related to the deferred acquisition For information related to the deferred acquisition
costs for Gard Norway, see Appendix 1, section 1.6. costs for Gard M&E Europe, see Appendix 2,
section 2.6.
D 1.2 Intangible assets

Intangible assets represent licences and the the balance sheet as intangible assets valued under
development of software at cost. The intangible fair value measurement are not saleable in the
assets are valued at nil for Solvency II purposes in marketplace.
Gard Group, intangible assets

Statutory
Intangible assets - 9
For information related to intangible assets for Gard For information related to intangible assets for Gard
Norway, see Appendix 1, section 1.7. M&E Europe, see Appendix 2, section 2.7.
D 1.3 Deferred tax assets

Deferred tax/tax asset of the subsidiaries is A deferred tax asset is recorded in the balance sheet
calculated on all differences between the book value when it is more likely than not that the tax asset will
and the tax value of assets and liabilities. Deferred be utilised.
tax is calculated at the nominal tax rate of temporary
differences and the tax effect of tax losses carried There are no differences between the bases,
forward at the tax rate at the end of the accounting methods and main assumptions used for the
year. Changes in tax rates are accounted for when valuation of Deferred taxes for solvency purposes
the new rate has been approved and changes are and those used for their valuation in financial
presented as part of the tax expense in the period the statements.
change has been made.
Gard Group, deferred tax assets
Specification of tax effect resulting from temporary differences
Pension obligations 43 44
Portfolio investments (16) (26)
Equipment 1 1
Tax loss carried forward 121 128
Deferred tax carried forward from earlier years - -
Equity (65) (80)
Other temporary differences 6 9
Total temporary differences 89 75
- -
Net deferred tax asset of total temporary differences 22 19
For information related to deferred taxes for Gard For information related to deferred taxes for own use
Norway, see Appendix 1, section 1.8. by Gard M&E Europe, see Appendix 2, section 2.8.
D 2 Valuation of technical provisions

This section specifies and describes the valuation of Best estimate liabilities
technical provisions and reinsurance recoverables The calculation of the best estimate liabilities is
for Solvency purposes. based on the projection of future cash inflows and
outflows like premiums, claims and expenses.
The technical provisions under Solvency II are
determined as the sum of best estimate liabilities and Risk margin
the risk margin. A risk margin is included in the technical provisions.
The risk margin is calculated in accordance with the
The best estimate liabilities are shown both on a
requirement set out for the Solvency II standard
gross basis and for the reinsurers' share. The risk
formula per legal entity. Diversification between legal
margin is shown on a net basis reflecting the risk
entities is not considered. Risk margin is not included
mitigation effect.
in the statutory accounts.
D 2.1 Valuation of technical provisions – basis (data) and methods

Basis cash flows from premium, losses and costs relating
In the calculation of the best estimate liabilities under to unearned incepted and bound but not incepted
Solvency II, the business of the Gard group is split (BBNI) business is calculated.
into homogenous risk groups, such that the nature,
The best estimate claim provision relates to claim
scale, and complexity of the business are
events occurring before the valuation date. All future
considered.
cash flows from losses and costs relating to these
losses are calculated considering the discounting
Methods
effects.
Best estimate provisions (on a net basis) represent
the discounted best estimate of all future cash flows The cash flows for premiums, claims and costs are
relating to future exposure arising from policies that modelled separately.
the insurer is obligated to at the valuation date. The
best estimate is the probability-weighted average of There is no deviation in the valuation methods
the present value of the future in- and out-flow between the different lines of business. Therefore,
cashflows. The best estimate liabilities are calculated the valuation methods described below are valid for
separately for the best estimate premium provisions all risk categories.
and the best estimate claims provisions.
The best estimate premium provisions relate to claim

events occurring after the valuation date. All future
Claim provisions IBNR
For the evaluation of claim provisions, total The development of losses for the Gard group is
outstanding liabilities due to loss and allocated loss typically analysed using standard actuarial methods
adjustment expenses, the reserves held are based such as the Chain ladder, Bornhuetter Ferguson and
on the following: Benktander methods. The method selection is based
on the quarters and the significance of large losses
• For the calculation of the incurred but not reported that may have occurred. The external reinsurer’s
claims (IBNR) Gard uses the developments of the share is based on the reinsurer’s share of the
claim incurred i.e., claim paid plus claim reserves, individual losses including development in excess of
as the basis for future expected developments. the retention. All internal reinsurance is calculated
This is primarily due to the volatility of large single net of the effect of external reinsurance.
payments that can distort any paid development
factors ULAE
• For the analysis of IBNR, Gard uses accident and To calculate ULAE, the Actuarial Reserving team
development quarters to calculate the ultimate divides the claim provisions (case reserves and
incurred claims IBNR) between reported claim provision and
unreported claim provision.
• For the definition of risk categories, the following The unreported claim provision is multiplied by a
three main criteria are used: ratio of unallocated expenses paid to total claims
paid, π. The reported future claim reserves are
• A fit with the established business
multiplied with π and (1-r), where r is the proportion
dimensions
of claims handling cost due to claim registration.
• Similar underlying drivers of risk.
Binary events
• Sufficient amount of data within each The binary event reserve is meant to satisfy the
risk category additional coverage of technical liabilities from a best
• The financial plan is used as the initial expected estimate basis to an all-possible outcomes basis.
ultimate incurred (also known as ‘Apriori’). This is a measure of the potential volatility that is
envisaged but has not been experienced to date. To
bring the best estimate to include ‘all possible
The current reinsurance program is on the same outcomes’, a binary event factor is calculated based
basis as last year’s reinsurance program and is taken on historical binary event factors, tail values from our
into account on a large claim basis. internal model and estimated volatility in our claims
data.
The claim provisions are broken down into case
reserves, IBNR, unallocated loss adjustment Best estimate premium provisions
expenses (ULAE) and binary events. The case The calculation of best estimate premium provisions
reserves and IBNR figures are the reserves that is the best estimate of all future cash flows such as
directly attribute to the claims, while the ULAE claim payments, expenses and future premiums due,
estimate is related to expenses that cannot be relating to future exposure arising from unearned
directly attributed to a specific claim or incident. incepted and BBNI business. The future expected
Binary events are the provisions held for potential cash flow calculation is based on the expected
claims that Gard does not have in the data. The combined ratio for the relevant business. This
IBNR, binary event and ULAE reserves are estimation is done on a gross basis and for the
calculated and reported by the Actuarial Reserving reinsurer’s share of the business.
team and controlled by the Actuarial function.
The difference in the method for calculating premium
The only differences between the Solvency II and the provision under Solvency II and the statutory
statutory account figures for claims provisions are accounts is that the Solvency II method calculates
that the Solvency II figures include the discounting the effect of all expected future cash flows, while the
effect. statutory accounts are depositing the unearned
premium in full.
Main assumptions The pattern and ultimates are determined on run-off
The calculation of the best estimate liabilities, triangles using traditional actuarial methods. The
development pattern and estimated ultimates are triangles are generated using reconciled data.
applied to the segments used for N-GAAP reserving.
D 2.2 Uncertainty associated with the value of technical provisions

As with all insurance businesses, there is a degree • Financial Plan: Another assumption for the
of uncertainty over the exact amount that will be claim liabilities is that the financial plan indication
needed to settle claim liabilities, and there are of the pure loss (Apriori) can be used in helping
several potential sources that contribute to this to assess the number of liabilities for less mature
uncertainty. development periods. This means that any
uncertainty in the financial plan also applies to
• Claims environment: One of the key
the best estimates. Sensitivity tests show that an
assumptions for the claim liabilities is that
increase of the Apriori estimate by 10 per cent
historical claim developments are indicators for
increases gross IBNR by 7.1 per cent. A
future developments. Uncertainty remains
decrease of Apriori by 10 per cent decreases
surrounding the ultimate outcome of long-tailed
gross IBNR by 7.1 per cent.
casualty claims. The early years are not
necessarily fully developed and incurred values
• Currency: Even though the reserves are
on these years help in forming the estimates for
reported in USD, parts of the liabilities are
the more recent years. A sensitivity test on the
exposed to exchange rate fluctuations and
loss development factors showed that with a 10
inflation rates in other currencies. This means
per cent point increase in the incremental
that fluctuations in foreign exchange rates can
development factor, the gross IBNR increases
influence ultimate claims.
by 8.0 per cent. A 10 per cent decrease reduces
the gross IBNR by 8.2 per cent
D 2.3 Best estimate liabilities

The difference between the Solvency II value and the they are reported as deferred acquisition costs for
Statutory accounts’ value of technical provisions is the statutory account values. The retained earnings
due to discounting effects and BBNI gross. Further, are included in the statutory account values of
commission provisions are deducted from the technical provisions.
Solvency II values in the technical provisions, while
Gard Group, best estimate liabilities

Statutory
Best estimate technical provisions 1,553 1,692
Risk margin 63 -
Technical provisions 1,616 1,692
For information related to the best estimate For information related to the best estimate
liabilities for Gard Norway, see Appendix 1, section liabilities for Gard M&E Europe, see Appendix 2,
1.9. section 2.9.
D 2.4 Risk margin

The risk margin is an estimated cost of capital due to percentage of 6 per cent, payment pattern, and
the unpaid claim provisions held. The cost of capital expected yield of capital.
is calculated by using a capital to provision
D 2.5 Reinsurance recoverables
The difference in valuation of reinsurance compared to statutory account values. Additionally,
recoverables is due to discounting effects, reinsurance commission provisions are deducted
reinsurers’ share of BBNI and losses occurring from reinsurance recoverables in the Solvency II
during (LOD), which are all reducing the value of values and are included in Any other liabilities, not
reinsurance recoverables for Solvency II values elsewhere shown in the statutory account values
Gard Group, reinsurance recoverables

Statutory
Reinsurance recoverables - 230
Best estimate - reinsurance recoverables 132 -
Reinsurance recoverables 132 230
For information related to reinsurance recoverables For information related to reinsurance recoverables
for Gard Norway, see Appendix 1, section 1.10. for Gard M&E Europe, see Appendix 2, section
2.10.
D 3 Valuation of other liabilities

D 3.1 Contingent liabilities
The Gard group had no contingent liabilities as of
20 February 2022.
D 3.2 Pension benefit obligations

Gard has set up pension plans for employees changes in pension obligations are charged to the
according to local law and regulations, depending on income statement and other comprehensive income.
the country in which Gard operates. For Gard AS a Pension costs and pension liabilities have been
defined contribution plan is in place, and the accounted for in accordance with IAS19.
previously closed defined benefit plan has few
There are no differences between the bases,
remaining active employees.
methods and main assumptions used for the
For the defined benefit pension plan, actuarial valuation of pension benefit obligations for Solvency
calculations are made with regards to pension purposes and those used for their valuation in
commitments and funds at year-end and resulting statutory accounts.
Gard Group, pension benefit obligations

Liabilities according to the actuarial calculations
Pension obligation gross 72 76
Pension funds at market value 27 30
Net pension obligation at the end of the year 45 46
For information related to pension benefit obligations For information related to pension benefit obligations
for Gard Norway, see Appendix 1, section 1.12. for Gard M&E Europe, see Appendix 2, section 2.12.
D 3.3 Any other liabilities, not elsewhere shown
The difference between Solvency II and statutory sheet, and provision to guarantee liabilities that are
accounts values of USD 1 million is covering included in the Solvency II balance sheet.
reinsurance commission provision, which is included
in reinsurers’ share of expected cash flows for
unexpired cover in the statutory accounts balance
D 4 Alternative methods for valuations

When determining the value of an asset it is basis and bonds are valued based on realised
necessary to assess whether the market is active or quoted prices in active markets. Alternative valuation
not. If the market is active, the value can be taken methods can occur for real estate funds, where there
directly from the market or comparable assets traded are no active markets, or the relevant markets are
in the same market. If the market cannot be deemed to be inactive.
categorised as active, the market value is
Alternative valuation methods are only used for a
determined using valuation models.
non-significant part of the investment portfolio and
Gard’s assets are mainly valued using quoted market the same principles are used both in the Solvency II
prices in active markets for the same or similar balance sheet and statutory balance sheet.
assets. Listed shares are valued on an item-by-item
D 5 Any other material information regarding valuation

for solvency purposes
• Gard has no material provisions other than structure as referred to in Article 77d of
technical provisions. Directive 2009/138/EC.
• Gard does not apply any of the below • Gard does not apply a transitional risk-free
articles as the conditions they cover are interest rate-term structure referred to in
found to be not relevant. Article 308c of Directive 2009/138/EC.
• Gard does not apply a matching adjustment • Gard does not apply a transitional
to the relevant risk-free interest rate term deduction referred to in Article 308d of
structure as referred to in Article 77b of Directive 2009/138/EC.
Directive 2009/138/EC. • There is no other material information to be
• Gard does not apply a volatility adjustment disclosed regarding the valuation for
to the relevant risk-free interest rate term solvency purposes.
E CAPITAL MANAGEMENT
Gard has a policy in place that sets out the principles Efficient use of capital: Capital is scarce and has a
and guidelines for capital management. The policy cost. The approach to capital management shall
describes the main activities and governance balance the needs and requirements of all
structure that supports capital management and is stakeholders, including mutual Members,
part of the risk management framework. policyholders, regulators and rating agencies.
The Group Risk Policy states the following: Pooling and upstreaming capital: Available capital
and liquidity, as well as risks, shall be pooled
‘Gard should hold sufficient capital and liquidity as
centrally as much as possible to minimise the risk of
well as constrain its risk-taking to ensure that the
limited capital transferability. This also allows the
group can continue to operate following an extreme
group to consider the benefits that arise from such
loss event with the same risk tolerance for insurance
pooling in those jurisdictions where these benefits
risk’
are recognised under the capital adequacy regime.
In which ‘extreme loss event’ means an annual loss
The group shall maintain sufficient capital from its
with a probability of occurring once every 100 years.
legal entities without jeopardising regulatory
The probability that Gard would have to raise requirements and the minimum financial strength
additional capital from its mutual Members by way of rating.
unbudgeted supplementary calls should be low.
Procedures are established for when a breach of
limits has occurred to ensure that appropriate and
In addition to the statement given about capital
proportionate remedial actions are duly taken,
adequacy in the Group Risk Policy, Gard bases its
including reporting requirements. The procedures
capital management on the following three general
include increased frequency of monitoring,
principles:
escalation of reporting, and procedures for proposing
and approving mitigating actions.
Simple capital structure: Gard aims to have a
simple capital structure and seeks to fund expected
growth in required capital through internal capital
generation.
E 1 Own funds
Under Solvency II a company's own funds consist of Ancillary own fund is classified as Tier 2. This is high-
basic own funds, ancillary own funds and deferred quality capital in the form of unbudgeted
tax assets: supplementary calls. Ancillary own fund items
require the prior approval of the supervisory authority
Basic own funds consist of excess assets over
to be considered when determining their own funds.
liabilities.
The classification into tiers is relevant to the
Ancillary own funds consist of items other than
determination of eligible own funds. These are the
basic own funds which can be called upon to absorb
own funds that are eligible for covering the regulatory
losses.
capital requirements – Solvency Capital
Requirement (SCR) and Minimum Capital
Basic own funds can be classified in Tiers 1, 2 or 3.
Requirement (MCR). The MCR must be covered by
Tier 1 funds are equity capital that is fully paid in and
basic own funds classified as Tier 1.
available. Tier 1 is further classified as either
‘unrestricted’ or ‘restricted’. Tier 3 is deferred tax
assets.
E 1.1 Available capital
Gard has a simple capital structure consisting of Tier The different management actions will vary with the
1 capital through equity capital, which is fully paid in company and the type of business it writes.
and available, high-quality Tier 2 capital in the form
Means to strengthen the capitalization may be:
of unbudgeted supplementary calls and deferred tax
assets included as Tier 3 capital. • Adjust premium reduction to members
Gard aims to manage the capital for the group so that • Make an unbudgeted supplementary call on
all its regulated entities always meet local regulatory members
capital requirements. Gard is subject to different • Dividend payments from subsidiaries
capital requirements depending on the country of
• Sale of assets of participations
operation, and the type of business conducted. In
each country, the local regulator specifies the • Issue subordinated debt
minimum amount and type of capital that each • Parent company guarantee
regulated entity must hold. Gard targets to hold, in • Capital injection – group contribution from
addition to the minimum capital required to comply parent company
with the solvency requirements, an adequate buffer
• De-risk assets (e.g. reduce equities
to ensure that each of its regulated subsidiaries
exposure)
meets the local capital requirements over time. If an
entity should fall below the target capital level, the • De-risk liabilities (e.g. changes to
management action will be to increase capitalisation reinsurance – reduce retention for own
or de-risk the portfolio to bring the capital ratio back share)
to an acceptable level.
Gard Group, total eligible own funds to meet SCR as under Solvency II
Tier 1 1,145 1,155
Tier 2 245 279
Tier 3 - -
Total 1,391 1,434
Change Change
Gard group, change in tier 1 capital: from 2021 to from 2020 to
USD million 2022 2021
Total comprehensive income for the year 15 84
Change in non-available own funds (55) 31
Change in discounting effect for net best estimate 38 (30)
Effect of Owners' General Discount BBNI (7) (16)
Other (1) (3)
Total (10) 66
Gard group, difference between equity and excess of assets over liabilities
Excess of assets over liabilities 1,222 1,173
Statutory accounts equity 1,278 1,263
Difference between equity and excess of assets over liabilities (56) (89)
Specification of difference:
Net technical provisions 17 (1)
Risk margin (63) (61)
Other (9) (27)
Difference between equity and excess of assets over liabilities (56) (89)
The equity of the Gard group in the statutory Eligible own funds decreased by USD 43 million,
accounts was USD 1,278 million per 20 February from USD 1,434 million to USD 1,391 million during
2022 compared to USD 1,263 million per 20 the year.
February 2021.
The reconciliation reserve was USD -78 million as of
The excess of assets over liabilities as calculated in 20 February 2022 and is attributable to Tier 1 capital.
the economic balance sheet was USD 1,222 million.
Non-available own funds of USD 55 million are Share premium account covers accumulated results
deducted to arrive at the available or eligible capital and was USD 1,278 million as of 20 February 2022.
to cover the solvency capital needed. For the entities For information related to capital management in
writing Mutual business and for the group, up to 50 Gard Norway, see Appendix 1, section 1.14.
per cent of the solvency capital requirement (SCR)
can be included as Tier 2 capital through the For information related to capital management in
possibility to call for capital from the Members Gard M&E Europe, see Appendix 2, section 2.14.
through unbudgeted supplementary calls. As Tier 2
capital, amounting to USD 245 million, is fully used,
Tier 3 capital of USD 22 million is not available and
is not included in Tier 1 capital of USD 1,145 million.
E 1.2 Non-available own funds

For most of the Gard’s branches, there are regulatory available own funds of USD 55 million as of 20
requirements to hold deposits. When the required February 2022.
deposits or the restricted equity held exceeds the
notional SCR for the operation, it represents a Net asset value for the insurance companies in the
restriction in the fungibility of the equity in the group. group is not dedicated to covering specific liabilities
This is valid to Gard’s Hydra cell which had non- and is therefore available to absorb losses over time.
No part of the net asset value is therefore defined as
ring-fenced funds.
E 1.3 Tier 2 capital (ancillary own funds)

The right and ability to levy unbudgeted per cent of the Estimated Total Call (ETC) premiums
supplementary calls for recapitalising the Gard group for the three last open policy years and is eligible to
is a fundamental element of the Members’ mutual cover up to 50 per cent of the SCR (max aggregated
risk-sharing, which Gard is prepared to use when Tier 2 and Tier 3 capital is set to 50 per cent of SCR).
required. If an unbudgeted supplementary call is being called,
a new supplementary call can immediately be called
The Norwegian FSA has given Gard Bermuda, the
again, i.e., there will be a benefit in form of Tier 2
Norwegian branch and Gard Norway permission to
capital also after an unbudgeted supplementary call
include the Gard group’s right to levy supplementary
has been made. In practice, there is no limit to the
calls as Tier 2 capital to cover the SCR under the
amount of unbudgeted supplementary calls that can
Solvency II regulations. The permission was first
be called. Gard manages its risk and capital to have
granted for four years until 20 February 2020 and is
a low probability of making an unbudgeted
renewed until 20 February 2024. The utilisation of the
supplementary call. The eligible own funds for
right and ability to levy supplementary calls as Tier 2
supplementary calls (Tier 2 capital) were USD 245
capital is restricted to an amount corresponding to 50
million per 20 February 2022.
E 2 Solvency Capital Requirement and Minimum

Capital Requirement
Solvency Capital Requirement under Solvency II The MCR is calculated by a ‘linear formula’, i.e., a
approved partial internal model was USD 491 million. factor-based combination of volume measures. The
The total eligible own funds to meet the SCR was MCR is calculated as the higher of:
USD 1,391 million. The solvency ratio was 283 per
cent. • a fixed percentage of net technical provisions,
reflecting underwriting risk for long-term
Minimum Capital Requirement under the Solvency II business, and
standard formula was USD 301 million. Eligible own
• a fixed percentage of net written premiums,
funds to meet MCR was USD 1,145 million, i.e., a
ratio of 381 per cent. The MCR represents the lowest reflecting underwriting risk for the short-term
acceptable capital level. business
E 2.1 Calculation of group solvency requirements

There are no material differences in the valuation
bases, methods and main assumptions used at the All insurance undertakings in Gard are included in
group level for the valuation for solvency purposes of the internal model, namely:
the Gard group's assets, technical provisions and • Gard Bermuda
other liabilities from those used by any of its
• Gard Norway
subsidiaries.
• Gard M&E
There was a restriction to the fungibility and • Gard M&E Europe
transferability of own funds eligible for covering the
• Gard Re
group solvency capital requirement of USD 55 million
as of 20 February 2022 when using the partial • Gard Hydra
internal model, see E 1.2 Non-available own funds. Gard group, Gard Norway and Gard M&E Europe
have been granted approval to use the internal
The main source of diversification effects is the model for regulatory purposes to calculate insurance
elimination of transactions within the group, i.e. and market risk.
internal reinsurance.
E 2.2 Solvency Capital Requirements by risk category
Insurance risk and market risk are calculated by risk and counterparty default risk. The SCR for the
using the internal model. Counterparty risk is Gard group is reduced by the amount of USD 26
calculated by using the standard formula with input million, as the loss-absorbing capacity of deferred
from the internal model, while the operational risk is taxes covers the amount calculated for the
calculated by using the standard formula. Norwegian insurance companies, under the
Diversification is calculated by using the standard justification that the Gard group is expecting positive
formula correlation between insurance risk, market results based on the five-year plan.
Gard Group, Solvency Capital Requirement

Insurance risk 446 453
Market risk 239 286
Counterparty risk 54 58
Basic Solvency Capital Requirement (BSCR) 470 533
Operational risk 47 49
Loss-absorbing capacity of deferred taxes (LACDT) (26) (24)
For information related to capital requirements in For information related to capital requirements in
Gard Norway, see Appendix 1, section 1.15. Gard M&E Europe, see Appendix 2, section 2.15.
E 3 Use of the duration-based equity risk sub-module

in the calculation of the SCR
Gard does not use a duration-based equity risk sub- or retirement benefits where the typical holding
module in the calculation of the Solvency Capital period of equity investments is assumed to be
Requirement as this only applies to life undertakings consistent with an average duration of liabilities for
providing certain occupational retirement provisions such businesses and exceeding 12 years 6.
E 4 Description of the internal model

E 4.1 Structure
‘Internal model’ refers to the entirety of the simulations of the future financial position of the Gard
methodologies, processes, data and governance group and each of its constituent legal entities. The
structure that Gard uses to determine the risk and MCK generates a large number of simulations for the
economic capital required for the Gard group and all future balance sheet of the group. By looking at the
insurance entities. The Model Calculation Kernel spread of the outcomes in those simulations, the
(MCK) is the part of the internal model that carries amount of risk that Gard is exposed to is measured.
out the actual statistical modelling. MCK creates
E 4.2 Scope
6 The underlying assumptions in the standard formula for

the Solvency Capital Requirement calculation, EIOPA-14-
322, 25 July 2014, page 19-20
All material quantifiable risk types are within the written by Gard are modelled within the internal
internal model scope. This includes premium risk, model. Any new types of business written will be
reserve risk, market risk, counterparty default risk included in the scope, subject to the internal model
and operational risk. All lines of business that are change policy.
E 4.3 Use
The output from the internal model defines the capital prepared. The internal model is also used to estimate
position of the group relative to a defined ‘Comfort the capital requirement that may result from
zone’. The internal model is used as part of the changing the investment strategy or entering into a
renewal process for the outwards reinsurance new type of investment, geographical area, etc., as
program, for calculating earnings volatility per legal well as used in the communication with stakeholders
entity and as a basis for profitability discussions such as regulators and rating agencies.
when the financial plan of the Gard group is being
E 4.4 Methods used

The internal model is a stochastic model built using horizon with a confidence level of 99.5 per cent. This
industry-standard software. The economic capital is consistent with industry practice and Solvency II.
expresses the potential loss over a one-year time
E 4.5 Main differences in the methodologies and underlying assumptions used in

the standard formula and the internal model
All risks covered by the standard formula are the SCR under Solvency II. Gard has a much larger
quantified in the internal risk capital model, apart portfolio than most insurers have in the ‘Marine,
from concentration risk in the investment portfolio. aviation, transportation’ (MAT) line of business.
Considering the actual insurance risks written, higher
The standard formula is factor-based while the object diversification from a larger and broader
internal model uses a stochastic approach. portfolio and the use of reinsurance, the risk
calculated in the internal risk capital model is
Gard’s risk profile differs from the assumptions significantly lower than the risk calculated by the
underlying the standard formula for the calculation of standard formula under Solvency II.
E 4.6 Integration of partial internal model into the standard formula

See the first section of chapter E.2.2 Solvency
Capital Requirements by risk category.
E 4.7 Aggregation methodologies and diversification effects

Gard is operating on a global basis with many geographical spread of risks. Market risk generally
products and Members, which enables Gard to has a lower degree of diversification than insurance
diversify its risks. The effects of diversification are risk, due to its higher level of correlation between the
found within the insurance, market, counterparty various market risk types. Between risk types, there
default and operational risk areas, as well as are limited degrees of correlation that result in a
between them. Insurance risk achieves diversification effect when calculating the total
diversification mainly due to the number of objects solvency capital requirement.
insured, the wide range of products offered and the
E 5 Compliance with SCR/MCR

The Gard group and each insurance company in Minimum Capital Requirement and the Solvency
the group have been compliant with both the Capital Requirement during the last financial year.
E 6 Any other material information regarding capital
management
• Gard does not have any own funds items • Gard does not have any material own funds
which are subject to the transitional that are issued by an equivalent third country
arrangements as referred to in Delegated insurance or reinsurance undertaking
regulation art 297f, Articles 308b (9) and included via the Deduction and Aggregation
308b (10) of Directive 2009/138/EC) and method as referred to in Guideline 15b of
Guideline 12h of Guidelines on reporting and Guidelines on reporting and public
public disclosure. disclosure.
• Gard does not disclose any additional • Gard does not have any own funds issued
solvency ratios as referred to in Guideline 11 by an undertaking that is not an insurance or
of Guidelines on reporting and public reinsurance undertaking as referred in
disclosure. Guideline 15cd of Guidelines on reporting
and public disclosure.
• Gard does not include any subordinated
debt in its own funds as referred to in • Gard does not make use of the possibility to
Guideline 12d of Guidelines on reporting and use any undertaking-specific parameters in
public disclosure. the calculation of underwriting risk in the
standard formula as referred to in article
• Description of principal loss absorbency
104(7) of Directive 2009/138/EC. Gard uses
mechanism used to comply with Article 71
its internal model in the calculation of
(1)(e) of the Delegated Regulation as
underwriting, see C1 Insurance risk and E4
referred to in Guideline 11 of Guidelines on
Differences between the standard formula
reporting and public disclosure is not
and internal models used.
relevant to Gard.
• There is no other material information to be
disclosed regarding capital management.
Appendix 1 SFCR information specific to Gard Norway
1.1 Summary
This section shows information specific to Gard only when it is different from what is already provided
Norway. The information in this section is provided on a group level.
Gard Norway, key figures


Assets 410 482
Technical provisions 284 341
Excess of assets over liabilities 99 109
Eligible own funds

Tier 1 Basic own funds (unrestricted) 99 109
Capital Requirement
Solvency ratio
1.2 Underwriting Performance

The statement of comprehensive income shows a The comparable figures for last year include
loss for the year of USD 16 million compared to an
income of USD 30 million last year. • a USD 47 million Direct Reinsurance
Call/Supplementary Call on Gard P. & I.
Gross written premium on ETC basis was USD 188 (Bermuda) Ltd
million, an increase of USD 21 million or 12 per cent • a 10 per cent reduction in the last instalment
from last year and above plan. The main reasons for for the 2020 policy year amounting to USD
the increase in gross written premium are an 12 million.
increase in volume, movement of clients from Gard
P. & I. (Bermuda) Ltd. and positive rate development. • a 15 per cent last the instalment for the 2019
policy year amounting to USD 19 million.
Gross earned premium on an actual call basis was Ceded reinsurance premium on earned basis was
USD 181 million, a decrease of USD 40 million or 18 USD 83 million, an increase of USD 1 million or 1 per
per cent from last year and above plan. cent from last year.
The current year's figures include a 5 per cent OGD Net earned premium was USD 98 million and close
for the 2021 policy year amounting to USD 6 million. to plan.
Claims costs net are USD 99 million. There have Net earned premium was USD 104 million, an
been no own large claims during the period. The increase of USD 18 million or 21 per cent from last
share of other Clubs’ pool claims was higher than year.
expected in the first half of the year and the entity has
faced more claims in the value bands up to USD 5 Claims costs net are USD 99 million. There has been
mill than expected in the year to 20 February 2022. only one large claim above USD 5 million during the
period. Our share of other Clubs’ pool claims was
The technical result for the year is a loss of USD 11 higher than expected in the first half of the year and
million. This is equivalent to a Combined Ratio Net the entity has faced more claims in the value bands
(CRN) of 111 per cent, which is below the target in up to USD 5 million than expected in the year to 20
the financial plan. February 2022.
On Estimated total call basis (ETC): The technical result for the year was a loss of USD 4
million. This is equivalent to a Combined Ratio Net
Gross written premium on ETC basis was USD 188 (CRN) of 104 on an ETC basis.
million, an increase of USD 19 million or 11 per cent
from last year and above plan. The non-technical result was a negative USD 6
million compared to a positive USD 12 million last
Ceded reinsurance premium on earned basis was year.
USD 83 million, an increase of USD 1 million or 1 per
cent from last year. Gard Norway has only one line of business, P&I.
Gard Norway, technical result, ETC basis 2022 2021

USD million, as of 20.02 Total P&I
Gross written premium 188 169

Gross earned premium 187 168
Ceded reinsurance (83) (82)
Earned premium for own account 104 86
Other insurance related income 0 0
Incurred this year 140 126
Incurred previous years 9 (8)
Total claims incurred, gross 149 118
Reinsurers' share of gross incurred claims (50) (21)
Claims incurred for own account 99 96
Insurance related expenses for own account 6 2
Other insurance related expenses 2 2
Technical result (4) (15)
Gross written premium by geographical area is

shown in the table below. The numbers shown are
after the reduction in the agreed estimated total call
in 2019, 2020 and 2021.
Gard Group, premium by geographical area

EEA 518 436
Norway 127 126
Other areas 372 376
1.3 Investment performance
Gard’s portfolio is constructed to obtain an There were no major changes to the portfolio’s
investment return in a diversified way between strategic asset allocation between the two periods.
different asset classes. The return from the
investment portfolio was negative USD 6 million After the year-end, a further increase in global
compared with a positive USD 12 million last year. inflation and interest rates have been seen. This,
together with ongoing supply and COVID-19
The driver of the loss is due to the contribution of the challenges (especially China) and heightened
fixed income portfolio. As inflationary pressures geopolitical risk due to the Russian invasion of
started building in the global economy, and Ukraine have all led to increased volatility for risk
subsequent increased discussions of interest rate assets over the first months of the year. Global risk
hikes from the US Federal Reserve, US interest rates has appreciated but Gard remains highly diversified
rose sharply over the 2nd half of the year. The yield and remains well-positioned for a more volatile
on a US 3-year treasury bond (Gard Norway’s overall period.
duration is around 3.5 years for assets) rose from
0.21 per cent (21 February 2021) to 1.67 per cent (20 Gard’s investments in securitised assets are part of
February 2022) which caused losses in the fixed investment funds and recognised as securitised
income portfolio. Increased interest rates further led bonds. The exposure is mainly to government-
to more challenging equity and credit markets backed mortgages, commercial mortgage-backed
resulting in reduced returns from those assets, securities, asset-backed corporate securities,
although they ended the year in positive territory with collateralised loan obligations and non-governmental
a total gain from equities for the year a positive USD collateralised mortgages. As of 20 February 2022,
1 million. the exposure towards securitised products was USD
21 million.
Gard Norway, investment income and expenses by asset class

Income - - - - -
Expenses - - - - -
Realised gain & loss - 2 - - 2
Change in unrealised gain & loss 1 (9) - - (8)
Total 1 (7) - - (6)
Gard Norway, investment income and expenses by asset class

Income - - - - -
Expenses - - - - -
Realised gain & loss - 1 - - 1
Change in unrealised gain & loss 4 7 - - 11
Total 4 8 - - 12
1.4 Risk profile

The material risks to Gard Norway and by which the
undertaking holds capital can be seen in the tables
below.
Gard Norway, insurance risk

Premium risk 95 89
Reserve risk 70 67
Cat risk - -
Lapse risk 3 1
Gard Norway, market risk
Equity risk 14 16
Interest rate risk 1 2
Credit risk 9 10
Currency risk 2 2
Property risk - -
Concentration risk - -
Alternatives - -
SCR market risk 19 24
Gard Norway, counterparty default risk

Gard Norway, operational risk

1.5 Valuation for solvency purposes

The table below summarises for each material class No changes have been made to the recognition and
of assets and liabilities the value according to valuation bases used or to estimations during the
Solvency II together with the values of the assets reporting period.
recognised and valued in the statutory accounts.
Gard Norway, economic balance sheet
Assets
Intangible assets - - -
Deferred tax assets - - -
Property, plant & equipment held for own use 2 2 -
Government bonds - - -
Collective investments undertakings 223 223 -
Investments 230 230 -
Loans and mortgages to individuals - - -

Total assets 410 439 (29)
Liabilities
Best estimate technical provisions 277 304 (27)
Risk margin 7 - 7
Technical provisions – non-life 284 304 (19)
Pension benefit obligations 2 2 -

Deferred tax liabilities 10 10 -
Any other liabilities, not elsewhere shown 1 2 (0.329)
Total liabilities 312 331 (20)
Excess of assets over liabilities 99 108 (9)
1.6 Deferred acquisition costs

Gard Norway had no deferred acquisition costs as
of 20 February 2022.
1.7 Intangible assets

Gard Norway had no intangible assets as of 20
February 2022.
1.8 Deferred taxes

Deferred tax/tax asset is calculated on all differences Changes in tax rates are accounted for when the new
between the book value and the tax value of assets rate has been approved and changes are presented
and liabilities. Deferred tax is calculated at the as part of the tax expenses in the period the change
nominal tax rate of temporary differences and the tax has been made. A deferred tax asset is recorded in
effect of tax losses carried forward at the tax rate at the balance sheet when it is more likely than not that
the end of the accounting year. the tax asset will be utilised.
Gard Norway, deferred tax assets
Pension obligations 2 2
Tax loss carried forward 33 42
Equity (62) (77)
Total temporary differences (42) (55)
Deferred tax, 25 per cent of total temporary differences (10) (14)

Total deferred tax (10) (14)
1.9 Best estimate liabilities

Gard Norway, best estimate liabilities
Statutory
Best estimate technical provisions 277 304
Risk margin 7 -
1.10 Reinsurance Recoverables

Gard Norway, reinsurance recoverables
Statutory
1.11 Contingent liabilities

Gard Norway had no contingent liabilities as of 20
February 2022.
1.12 Pension benefit obligations

Gard Norway has defined benefit plans covering two Actuarial calculations are made with regard to
retired employees. This pension scheme covers the pension commitments and funds at year-end and
required occupational pension in accordance with resulting changes in pension obligations are charged
the Norwegian Pension Act and is accounted for in to the income statement and other comprehensive
accordance with IAS 19R. income.
1.13 Any other liabilities

The difference between Solvency II and statutory share of expected cash flow for unexpired cover for
accounts values of USD 329 thousand covers the Statutory balance sheet less USD 4 thousand as
reinsurance commission provision of USD 333 guarantee liabilities in the Solvency II balance sheet.
thousand which is included (netted) in Reinsurers’
1.14 Capital management
Assets over liabilities as calculated in the economic The table below explains the difference between
balance sheet were USD 99 million. The equity of equity as in the statutory accounts and excess of
Gard Norway was USD 108 million. assets over liabilities as calculated under Solvency II
as of 20 February 2022.
Gard Norway, total eligible own funds to meet SCR as under Solvency II
Tier 1 99 109
Tier 2 57 55
Tier 3 - -
Total 156 164
Change Change
Gard Norway, change in tier 1 capital: from 2021 to from 2020 to
Total comprehensive income for the year (16) 30
Change in discounting effect for net best estimate 7 (4)
Effect of Owners' General Discount BBNI (2) -4
Other 1 (3)
Total (10) 19
Gard Norway, difference between equity and excess of assets over liabilities
Excess of assets over liabilities 99 -
Statutory accounts equity 108 -
Difference between equity and Excess of assets over liabilities (9) -
Net technical provisions (2) -
Risk margin (7) -
Difference between equity and excess of assets over liabilities (9) -
Eligible own funds decreased by USD 8 million, Share premium account includes retained earnings,
from USD 164 million to USD 156 million during the which are covering accumulated results. The share
year. premium account was USD 108 million as of 20
February 2022. Share premium account and
The reconciliation reserve comprises the excess of reconciliation reserve are attributable to Tier 1
assets over liabilities less ordinary share capital and capital. Gard Norway did not have non-available own
was USD -9 million as of 20 February 2022. funds as of 20 February 2022.
1.15 Solvency capital requirement
SCR under the approved partial internal model was The minimum capital requirement under the
USD 115 million as of 20 February 2022. The total Solvency II partial internal model was USD 33
eligible own funds to meet the SCR was USD 156 million. Eligible own funds to meet MCR was USD 99
million. The solvency ratio was 136 per cent. million, i.e., a ratio of 297 per cent.
Gard Norway, Solvency Capital Requirement

Market risk 19 24
The Basic SCR for Gard Norway has increased by deferred taxes covering the justifiable amount
USD 4 million due to increases in insurance risk and calculated for the company has decreased by USD 3
counterparty risk. Operational risk has decreased by million. The SCR has increased by USD 5 million to
USD 2 million, while the loss-absorbing capacity of USD 115 million.
Appendix 2 SFCR information specific to Gard M&E
Europe
2.1 Summary
This section shows information specific to Gard
M&E Europe. The information in this section is
provided only when it is different from what is
already provided on a group level.
Gard M&E Europe, key figures


Assets 332 253
Eligible own funds

Tier 1 Basic own funds (unrestricted) 79 56
Capital Requirement
Solvency ratio
2.2 Underwriting Performance Earned premium for own account is USD 41 million
The statement of comprehensive income shows a and above plan.
positive net result for the year of USD 7 million
Claims incurred for own account are USD 28 million.
compared to a positive USD 7 million last year.
The claim development has been better than
Gross written premium was USD 188 million, an expected and the entity has faced no large claims in
increase of USD 59 million or 46 per cent from last the period.
year.
The technical result was a profit of USD 12 million
Gross earned premium was USD 151 million, an compared to a profit of USD 5 million last year. The
increase of USD 37 million or 33 per cent from last combined ratio net is a solid 71 per cent.
year. This is due to an increase in volume or number
Gard M&E Europe has the benefit of taking part in
of clients from Marine non-fronting and positive rate
the Gard group’s external reinsurance programs.
development.
Gard M&E Europe, technical result 2022 2021
USD million, as of 20.02 Total M&E
Gross written premium 188 129

Gross earned premium 151 114
Ceded reinsurance (110) (83)
Earned premium for own account 41 31
Other insurance related income
Incurred this year 79 66
Incurred previous years 5 8
Total claims incurred, gross 84 74
Reinsurers' share of gross incurred claims (56) (48)
Claims incurred for own account 28 26
Insurance related expenses for own account 0 (1)
Other insurance related expenses 1 1
Technical result 12 5
Gard M&E Europe, premium by geographical area

EEA 144 103
Norway 0 0
Other areas 43 26
2.3 Investment performance

Gard’s portfolio is constructed to obtain an There were no major changes to the portfolio’s
investment return in a diversified way between strategic asset allocation between the two periods.
different asset classes. The return from the
investment portfolio was negative USD 2 million After the year-end, a further increase in global
compared with a positive USD 1 million last year. inflation and interest rates have been seen. This,
together with ongoing supply and COVID-19
The driver of the loss is due to the contribution of the challenges (especially China) and heightened
fixed income portfolio. As inflationary pressures geopolitical risk due to the Russian invasion of
started building in the global economy, and Ukraine have all led to increased volatility for risk
subsequent increased discussions of interest rate assets over the first months of the year. Global risk
hikes from the US Federal Reserve, US interest rates has appreciated but Gard remains highly diversified
rose sharply over the 2nd half of the year. The yield and remains well-positioned for a more volatile
on a US 3-year treasury bond (Gard M&E’s overall period.
duration is around 3.2 years for assets) rose from
0.21 per cent (21 February 2021) to 1.67 per cent (20 Gard’s investments in securitised assets are part of
February 2022) which caused losses in the fixed investment funds and recognised as securitised
income portfolio. Increased interest rates further led bonds. The exposure is mainly to government-
to more challenging equity and credit markets which backed mortgages, commercial mortgage-backed
led to reduced returns from those assets, although securities, asset-backed corporate securities,
they ended the year in positive territory with a collateralised loan obligations and non-governmental
combined gain from equities and credit for the year a collateralised mortgages. As of 20 February 2022,
positive USD 2 million. the exposure towards securitised products was USD
33 million.
Gard M&E Europe, investment income and expenses by asset class
Income - - - - -
Expenses - - - - -
Realised gain & loss - - - - -
Change in unrealised gain & loss - (2) - - (2)
Total - 1 - - (2)
Gard M&E Europe, investment income and expenses by asset class

Income - - - - -
Expenses - - - - -
Realised gain & loss - - - - -
Change in unrealised gain & loss - 1 - - 1
Total - 1 - - 1
2.4 Risk profile

The material risks to Gard M&E Europe and by which
the undertaking holds capital can be seen in the
tables below.
Gard M&E Europe, insurance risk

Premium risk 37 23
Reserve risk 12 10
Cat risk - -
Lapse risk 0 0
Gard M&E Europe, counterparty default risk

Gard M&E Europe, operational risk

2.5 Valuation for solvency purposes

The table below summarises for each material class No changes have been made to the recognition and
of assets and liabilities the value according to valuation bases used or to estimations during the
Solvency II together with the values of the assets reporting period.
recognised and valued in the statutory accounts.
Gard M&E Europe, economic balance sheet
Assets
Intangible assets - - -
Deferred tax assets - - -
Property, plant & equipment held for own use - - -
Government bonds - - -
Collective investments undertakings 78 78 -
Investments 83 83 -
Loans and mortgages to individuals - - -

Total assets 332 366 (34)
Liabilities
Best estimate technical provisions 184 208 (25)
Risk margin 3 - 3
Technical provisions – non-life 186 208 (22)
Pension benefit obligations - - -

Deferred tax liabilities 0 0 -
Any other liabilities, not elsewhere shown 0 16 (16)
Total liabilities 253 291 (38)
Excess of assets over liabilities 79 75 4
2.6 Deferred acquisition costs

Gard M&E Europe, deferred acquisition costs
Statutory
Deferred acquisition costs - 10
2.7 Intangible assets

Gard M&E Europe had no intangible assets as of 20
February 2022.
2.8 Deferred taxes

Deferred tax/tax asset is calculated on all differences the end of the accounting year. Changes in tax rates
between the book value and the tax value of assets are accounted for when the new rate has been
and liabilities. Deferred tax is calculated at the approved and changes are presented as part of the
nominal tax rate of temporary differences and the tax tax expenses in the period the change has been
effect of tax losses carried forward at the tax rate at made. A deferred tax asset is recorded in the
balance sheet when it is more likely than not that the
tax asset will be utilised.
Gard M&E Europe, deferred tax assets

Tax loss carried forward - 6
Equity (3) (3)
Total temporary differences (2) 1
Deferred tax asset, 25 per cent of total temporary differences (0) 0.3
Net deferred tax asset of total temporary differences (0) 0.3
2.9 Best estimate liabilities

Gard M&E Europe, best estimate liabilities
Statutory
Best estimate technical provisions 184 208
Risk margin 3 -
2.10 Reinsurance Recoverables

Gard M&E Europe, reinsurance recoverables
Statutory
2.11 Contingent liabilities

Gard M&E Europe had no contingent liabilities as of
20 February 2022.
2.12 Pension benefit obligations

Gard M&E Europe had no pension benefit
obligations as of 20 February 2022.
2.13 Any other liabilities

The difference between Solvency II and statutory (netted) in Reinsurers’ share of expected cash flow
accounts values of USD 16 million is covering for unexpired cover for the Solvency II balance sheet.
reinsurance commission provision, which is included
2.14 Capital management

Assets over liabilities as calculated in the economic assets over liabilities as calculated under Solvency II
balance sheet were USD 79 million. as of 20 February 2022.
The table below explains the differences between
equity as in the statutory accounts and excess of
Gard M&E Europe, total eligible own funds to meet SCR as under Solvency II
Tier 1 79 56
Tier 2 - -
Tier 3 - 0
Total 79 56
Change Change
Gard M&E Europe, change in tier 1 capital: from 2021 to from 2020 to
Increase in ordinary share capital 10 0
Total comprehensive income for the year
Change in discounting effect for net best estimate - -
Other
Gard M&E Europe, difference between equity and excess of assets over liabilities
Statutory accounts equity 75 57
Difference between equity and Excess of assets over liabilities 4 (1)
Net technical provisions 7 (2)
Risk margin (3) (2)
Other - 3
Difference between equity and Excess of assets over liabilities 4 (1)
Eligible own funds increased by USD 23 million, from capital. The reconciliation reserve was USD 4 million
USD 56 million to USD 79 million during the year. as of 20 February 2022.
The reconciliation reserve comprises the excess of No deferred tax assets are attributable to Tier 3
assets over liabilities less ordinary share capital and capital.
share premium account and is attributable to Tier 1
2.15 Solvency capital requirement
The solvency capital requirement under the Solvency The SCR for Gard M&E Europe is increased by the
II approved partial internal model was USD 48 amount of USD 13 million to USD 48 million, mainly
million. The total eligible own funds to meet the SCR due to an increase in insurance risk.
was USD 79 million. The solvency ratio was 164 per
cent.
MCR under Solvency II partial internal model was

USD 14 million. Eligible own funds to meet MCR was
USD 79 million, i.e., a ratio of 581 per cent.
Gard M&E Europe, Solvency Capital Requirement

Market risk 7 6
Appendix 3 Abbreviations Gard companies
Gard companies • Gard Marine & Energy Insurance (Europe)
Below are the full names of all Gard companies with AS, UK Branch (‘Gard M&E Europe UK’)
the short names in brackets. The short name is being • Gard Marine & Energy Insurance (Europe)
used in the report. AS, Finland Branch (‘Gard M&E Europe
Insurance Companies Finland’)
• Gard P. & I. (Bermuda) Ltd. (‘Gard Subsidiaries to Gard Marine & Energy Limited
Bermuda’)
• Assuranceforeningen Gard - gjensidig - • Gard Marine & Energy Ltd.- Escritório de
(‘Gard Norway’) Representacao no Brasil Ltda.
• Gard Marine & Energy Limited (‘Gard M&E’)

Management company
• Gard Marine & Energy Insurance (Europe)
AS (‘Gard M&E Europe’) • Lingard Limited (‘Lingard’)
• Gard Reinsurance Co Ltd (‘Gard Re’)

Insurance Intermediary company
Branches to the insurance companies • Gard AS (‘Gard AS’)
• Gard P. & I. (Bermuda) Ltd., Norwegian Subsidiaries to Gard AS

Branch (‘Gard Bermuda NUF’)
• Gard P. & I. (Bermuda) Ltd., Singapore • Gard (Singapore) Pte. Ltd.
Branch (‘Gard Bermuda Singapore’) • Gard (Japan) K.K.
• Assuranceforeningen Gard - gjensidig -, • Gard (UK) Limited
Japan Branch (‘Gard Norway Japan’)
• Gard (HK) Limited
• Assuranceforeningen Gard - gjensidig -,
Hong Kong Branch (‘Gard Norway Hong • OY Gard (Baltic) Ab
Kong’) • Gard (North America) Inc.
• Assuranceforeningen Gard - gjensidig -, UK • Gard (Greece) Ltd.
Branch (‘Gard Norway UK’)
• Assuranceforeningen Gard - gjensidig -,
Property company
Finland Branch (‘Gard Norway Finland’)
• Gard Marine & Energy Limited, Norwegian • AS Assuransegården (‘Assuransegården’)
Branch (‘Gard M&E NUF’)
• Gard Marine & Energy Limited, Singapore All the above companies and branches
Branch (‘Gard M&E Singapore’)
• Jointly referred to as ‘Gard’ or ‘Group’
• Gard Marine & Energy Limited, Hong Kong
Branch (‘Gard M&E Hong Kong’)
Appendix 4 Other abbreviations
ALAE: ALLOCATED LOSS ADJUSTMENT EXPENSES
BBNI: BOUND BUT NOT INCEPTED INCOME
BEL: BEST ESTIMATE LIABILITY
BMA: BERMUDA MONETARY AUTHORITY
BOD: THE BOARDS OF DIRECTORS
BOF: BASIC OWN FUNDS
BSCR: BASIC SOLVENCY CAPITAL REQUIREMENT
CEO: CHIEF EXECUTIVE OFFICER
CFO: CHIEF FINANCIAL OFFICER
CIO: CHIEF INVESTMENT OFFICER
CRO: CHIEF RISK OFFICER
ETC: ESTIMATED TOTAL CALL
EXCOM: THE EXECUTIVE COMMITTEE
FINANSTILSYNET: THE NORWEGIAN FINANCIAL SUPERVISORY AUTHORITY (FSA)
GLT: GROUP LEADERSHIP TEAM
IBNR: INCURRED BUT NOT REPORTED
IFRS: INTERNATIONAL FINANCIAL REPORTING STANDARDS
IG: INTERNATIONAL GROUP
INTERNAL MODEL: GARD’S INTERNAL RISK CAPITAL MODEL
LOD: LOSSES OCCURRING DURING
MCR: MINIMUM CAPITAL REQUIREMENT
OGD: OWNER’S GENERAL DISCOUNT
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
RM: RISK MANAGEMENT
SAA: STRATEGIC ASSET ALLOCATION
SCR: SOLVENCY CAPITAL REQUIREMENT
SVP: SENIOR VICE PRESIDENT
ULAE: UNALLOCATED LOSS ADJUSTMENT EXPENSES
VP: VICE PRESIDENT
QRT: QUANTITATIVE REPORTING TEMPLATE
Appendix 5 Quantitative reporting templates
Gard group quantitative reporting templates
• Balance Sheet (S.02.01.02)

• Premiums, claims and expenses by line of business (S.05.01.02)
• Premiums, claims and expenses by country (S.05.02.01)
• Own funds (S.23.01.22)
• Solvency Capital Requirement — for groups using the standard formula and partial internal model
(S.25.02.22)
• Undertakings in the scope of the group (S.32.01.22)
Gard Norway quantitative reporting templates

• Non-life Technical Provisions (S.17.01.02)
• Non-life Insurance Claims Information (S.19.01.21)
• Own funds (S.23.01.01)
• Solvency Capital Requirement — for undertakings using the standard formula and partial internal
model (S.25.02.21)
• Minimum Capital Requirement (S.28.01.01)
Gard M&E Europe quantitative reporting templates

• Non-life Technical Provisions (S.17.01.02)
• Non-life Insurance Claims Information (S.19.01.21)
• Own funds (S.23.01.01)
• Solvency Capital Requirement — for undertakings using the standard formula and partial internal
model (S.25.02.21)
• Minimum Capital Requirement (S.28.01.01)
Annex I
S.02.01.02
Balance sheet
Solvency II value
Assets C0010
Goodwill R0010
Deferred acquisition costs R0020
Intangible assets R0030
Deferred tax assets R0040 22,325
Pension benefit surplus R0050
Property, plant & equipment held for own use R0060 34,411
Investments (other than assets held for index-linked and unit-linked contracts) R0070 2,256,520
Property (other than for own use) R0080
Holdings in related undertakings, including participations R0090
Equities R0100 14
Equities - listed R0110
Equities - unlisted R0120 14
Bonds R0130 55,514
Government Bonds R0140 55,514
Corporate Bonds R0150
Structured notes R0160
Collateralised securities R0170
Collective Investments Undertakings R0180 2,171,454
Derivatives R0190
Deposits other than cash equivalents R0200 29,539
Other investments R0210
Assets held for index-linked and unit-linked contracts R0220
Loans and mortgages R0230 17,467
Loans on policies R0240
Loans and mortgages to individuals R0250 17,467
Other loans and mortgages R0260
Reinsurance recoverables from: R0270 131,533
Non-life and health similar to non-life R0280 131,533
Non-life excluding health R0290 131,533
Health similar to non-life R0300
R0310
Life and health similar to life, excluding health and index-linked and unit-linked
Health similar to life R0320
Life excluding health and index-linked and unit-linked R0330
Life index-linked and unit-linked R0340
Deposits to cedants R0350
Insurance and intermediaries receivables R0360 299,199
Reinsurance receivables R0370 8,486
Receivables (trade, not insurance) R0380 1,606
Own shares (held directly) R0390
R0400
Amounts due in respect of own fund items or initial fund called up but not yet paid in
Cash and cash equivalents R0410 301,644
Any other assets, not elsewhere shown R0420 16,665
Total assets R0500 3,089,855
Liabilities
Technical provisions – non-life R0510 1,616,204
Technical provisions – non-life (excluding health) R0520 1,616,204
Technical provisions calculated as a whole R0530
Best Estimate R0540 1,552,756
Risk margin R0550 63,448
Technical provisions - health (similar to non-life) R0560
Best Estimate R0580
Risk margin R0590
Technical provisions - life (excluding index-linked and unit-linked) R0600
Technical provisions - health (similar to life) R0610
Best Estimate R0630
Risk margin R0640
R0650
Technical provisions – life (excluding health and index-linked and unit-linked)
Best Estimate R0670
Risk margin R0680
Technical provisions – index-linked and unit-linked R0690
Best Estimate R0710
Risk margin R0720
Other technical provisions R0730
Contingent liabilities R0740
Provisions other than technical provisions R0750 25
Pension benefit obligations R0760 44,887
Deposits from reinsurers R0770
Deferred tax liabilities R0780 -
Derivatives R0790
Debts owed to credit institutions R0800
Financial liabilities other than debts owed to credit institutions R0810
Insurance & intermediaries payables R0820 83,630
Reinsurance payables R0830 82,500
Payables (trade, not insurance) R0840 14,191
Subordinated liabilities R0850
Subordinated liabilities not in Basic Own Funds R0860
Subordinated liabilities in Basic Own Funds R0870
Any other liabilities, not elsewhere shown R0880 26,092
Total liabilities R0900 1,867,529
Excess of assets over liabilities R1000 1,222,326
Annex I
S.05.01.02
Premiums, claims and expenses by line of business
Line of Business for:

Line of Business for: non-life insurance and reinsurance obligations (direct business and accepted proportional reinsurance)
accepted non-proportional
Medical Income Workers' Motor vehicle Fire and other General Credit and Legal Marine, Total
Marine, aviation and transport Miscellaneous
expense protection compensation liability Other motor insurance damage to property liability suretyship expenses Assistance Health Casualty aviation, Property
insurance financial loss
insurance insurance insurance insurance insurance insurance insurance insurance transport
C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0120 C0130 C0140 C0150 C0160 C0200
Premiums written
Gross - Direct Business R0110 931,317 931,317
Gross - Proportional reinsurance accepted R0120 85,570 85,570
Gross - Non-proportional reinsurance accepted R0130
Reinsurers' share R0140 220,663 220,663
Net R0200 796,225 796,225
Premiums earned
Net R0300 762,702 762,702
Claims incurred
Net R0400 541,116 541,116
Changes in other technical provisions
Gross - Direct Business R0410
Gross - Proportional reinsurance accepted R0420
Gross - Non- proportional reinsurance accepted R0430
Reinsurers'share R0440
Net R0500
Expenses incurred R0550 197,847 197,847
Other expenses R1200 115
Total expenses R1300 197,962
Line of Business for: life insurance obligations Life reinsurance obligations Total
Index-linked Annuities stemming from Annuities stemming from non-life
Insurance
Health and unit- Other life non-life insurance contracts insurance contracts and relating to Life
with profit Health reinsurance
insurance linked insurance and relating to health insurance obligations other than reinsurance
participation
insurance insurance obligations health insurance obligations
C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300
Premiums written
Gross R1410
Reinsurers' share R1420
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Expenses incurred R1900
Other expenses R2500
Total expenses R2600
Annex I
S.05.02.01
Premiums, claims and expenses by country
Total Top 5 and

Home Country Top 5 countries (by amount of gross premiums written) - non-life obligations
home country
C0010 C0070
R0010 DK DE GR NO US
C0080 C0140
Premiums written
Gross - Direct Business R0110 11,147 84,610 115,548 151,398 140,933 76,313 579,948
Gross - Proportional reinsurance accepted R0120 914 18,480 382 602 6,620 195 27,193
Reinsurers' share R0140 1,662 89,055 20,812 21,254 20,556 10,701 164,039
Net R0200 10,399 14,036 95,118 130,746 126,997 65,807 443,103
Premiums earned
Net R0300 9,926 15,816 91,407 125,361 121,453 63,102 427,066
Claims incurred
Reinsurers' share R0340 (147) 28,486 77 (1,519) 502 5,760 33,159
Net R0400 2,705 2,449 72,694 109,802 73,282 35,538 296,469
Net R0500
Expenses incurred R0550 2,351 19,658 22,937 30,070 28,944 15,140 119,099
Total Top 5 and

Home Country Top 5 countries (by amount of gross premiums written) - life obligations
home country
C0210
C0280
Premiums written
Gross R1410
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Annex I
S.23.01.22
Own funds
Tier 1 - Tier 1 -
Total Tier 2 Tier 3
unrestricted restricted
C0010 C0020 C0030 C0040 C0050
Basic own funds before deduction for participations in other financial sector
Ordinary share capital (gross of own shares) R0010 463 463
Non-available called but not paid in ordinary share capital at group level R0020
Share premium account related to ordinary share capital R0030 1,277,818 1,277,818
Iinitial funds, members' contributions or the equivalent basic own - fund item for mutual and mutual-type undertakings R0040
Subordinated mutual member accounts R0050
Non-available subordinated mutual member accounts at group level R0060
Surplus funds R0070
Non-available surplus funds at group level R0080
Preference shares R0090
Non-available preference shares at group level R0100
Share premium account related to preference shares R0110
Non-available share premium account related to preference shares at group level R0120
Reconciliation reserve R0130 -78,280 -78,280
Non-available subordinated liabilities at group level R0150
An amount equal to the value of net deferred tax assets R0160 22,325 22,325
The amount equal to the value of net deferred tax assets not available at the group level R0170
Other items approved by supervisory authority as basic own funds not specified above R0180
Non available own funds related to other own funds items approved by supervisory authority R0190 54,954 54,954
Minority interests (if not reported as part of a specific own fund item) R0200
Non-available minority interests at group level R0210
Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet
the criteria to be classified as Solvency II own funds
Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria
R0220
to be classified as Solvency II own funds
Deductions
Deductions for participations in other financial undertakings, including non-regulated undertakings carrying out financial
R0230
activities
whereof deducted according to art 228 of the Directive 2009/138/EC R0240
Deductions for participations where there is non-availability of information (Article 229) R0250
Deduction for participations included by using D&A when a combination of methods is used R0260
Total of non-available own fund items R0270 54,954 54,954 - - -
Total deductions R0280 54,954 54,954 - - -
Total basic own funds after deductions R0290 1,167,372 1,145,047 - - 22,325
Ancillary own funds
Unpaid and uncalled ordinary share capital callable on demand R0300
Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type
R0310
undertakings, callable on demand
Unpaid and uncalled preference shares callable on demand R0320
Letters of credit and guarantees other than under Article 96(2) of the Directive 2009/138/EC R0350
Letters of credit and guarantees under Article 96(2) of the Directive 2009/138/EC R0340
Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC R0360 608,077 608,077
Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC R0370 - -
Non available ancillary own funds at group level R0380 - -
Other ancillary own funds R0390 - -
Total ancillary own funds R0400 608,077 608,077 -
Own funds of other financial sectors
Reconciliation reserve R0410
Institutions for occupational retirement provision R0420
Non regulated entities carrying out financial activities R0430
Total own funds of other financial sectors R0440
Own funds when using the D&A, exclusively or in combination of method 1
Own funds aggregated when using the D&A and combination of method R0450
Own funds aggregated when using the D&A and a combination of method net of IGT R0460
Total available own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the
undertakings included via D&A )
R0520 1,775,449 1,145,047 - 608,077 22,325
Total available own funds to meet the minimum consolidated group SCR R0530 1,145,047 1,145,047 - -
Total eligible own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the
R0560 1,390,531 1,145,047 - 245,484 -
Total eligible own funds to meet the minimum consolidated group SCR R0570 1,145,047 1,145,047 - -
Minimum consolidated Group SCR R0610 300,527
Ratio of Eligible own funds to Minimum Consolidated Group SCR R0650 381 %
Total eligible own funds to meet the group SCR (including own funds from other financial sector and from the
R0660 1,390,531 1,145,047 - 245,484
Group SCR R0680 490,969
Ratio of Eligible own funds to group SCR including other financial sectors and the undertakings included via D&A R0690 283 %
C0060
Reconciliation reserve
Own shares (included as assets on the balance sheet) R0710
Forseeable dividends, distributions and charges R0720
Other basic own fund items R0730 1,300,606
Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds R0740
Other non available own funds R0750
Reconciliation reserve before deduction for participations in other financial sector R0760 -78,280
Expected profits
Expected profits included in future premiums (EPIFP) - Life business R0770
Expected profits included in future premiums (EPIFP) - Non- life business R0780 51,733
Total EPIFP R0790 51,733
Annex I
S.25.02.22
Solvency Capital Requirement - for groups using the standard formula and partial internal model
Unique number of component Components Description Calculation of the Solvency Amount modelled USP Simplifications
Capital Requirement
C0010 C0020 C0030 C0070 C0080 C0090

1 Market risk 238,673 238,673
2 Counterparty risk 53,517
5 Non-life underwriting risk 445,820 445,820
7 Operational risk 46,583
9 Loss absorbing capacity of deferred taxes (25,864)
Calculation of Solvency Capital Requirement

C0100
Total undiversified components R0110 758,728
Diversification R0060 (267,760)
Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC R0160
Solvency capital requirement excluding capital add-on R0200 490,969
Capital add-ons already set R0210
Solvency capital requirement for undertakings under consolidated method R0220 490,969
Other information on SCR
Amount/estimate of the overall loss-absorbing capacity of technical provisions R0300
Amount/estimate of the overall loss-absorbing capacity ot deferred taxes R0310 (25,864)
Capital requirement for duration-based equity risk sub-module R0400
Total amount of Notional Solvency Capital Requirements for remaining part R0410
Total amount of Notional Solvency Capital Requirement for ring fenced funds R0420
Total amount of Notional Solvency Capital Requirement for matching adjustment portfolios R0430
Diversification effects due to RFF nSCR aggregation for article 304 R0440
Minimum consolidated group solvency capital requirement R0470 300,527
Information on other entities
Capital requirement for other financial sectors (Non-insurance capital requirements) R0500
Capital requirement for other financial sectors (Non-insurance capital requirements) - Credit institutions, investment firms and
financial institutions, alternative investment funds managers, UCITS management companies
R0510
Capital requirement for other financial sectors (Non-insurance capital requirements) - Institutions for occupational retirement
provisions R0520
Capital requirement for other financial sectors (Non-insurance capital requirements) - Capital requirement for non- regulated
entities carrying out financial activities R0530
Capital requirement for non-controlled participation requirements R0540
Capital requirement for residual undertakings R0550
Overall SCR
SCR for undertakings included via D and A R0560
Solvency capital requirement R0570 490,969
Annex I
S.32.01.22
Undertakings in the scope of the group
Inclusion in the
Group solvency
Criteria of influence scope of group
calculation
supervision
Method used
Proportional
% used for the Date of and under
Type of code Category % Level of share used
Identification code of the Type of establishment % voting Other decision method 1,
Country of the ID of the Legal name of the undertaking Legal form (mutual/non Supervisory Authority capital influenc for group YES/NO
undertaking undertaking of consolidated rights criteria if art. 214 treatment of
undertaking mutual) share e solvency
accounts is applied the
calculation
undertaking
BR LEI/213800396JKJ1UBIBJ37 1 Gard Marine & Energy Ltd. Escritorio de Representação no Brasil Ltda. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
FI LEI/2138003GAO7REM2VXG04 1 OY Gard (Baltic) AB 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/21380084U7O1189W1Q41 1 Gard P. & I. (Bermuda) Ltd 2 Gjensidig selskap 1 Bermuda Monetary Authority 1 1
GB LEI/2138008GLX45R5P25362 1 Gard (UK) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
GR LEI/213800D8JGJCYQLS8V88 1 Gard (Greece) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
US LEI/213800FY2T23ST15RW72 1 Gard (North America) Inc. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
JP LEI/213800M7HGL8VMFH5228 1 Gard (Japan) KK 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
SG LEI/213800O24Z6CETNDYK67 1 Gard (Singapore) Pte. Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800Q2POZHFSJGV914 1 Lingard Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800T4M3EDB4CNQN80 1 Gard Marine & Energy Limited 2 Aksjeselskap 2 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
HK LEI/213800TZYP2QXFEA7U98 1 Gard (HK) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800ZIGLMXFERBEC96 1 Gard Reinsurance Co Ltd. 3 Aksjeselskap 2 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
NO LEI/5967007LIEEXZXAU8W91 1 Gard AS 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
NO LEI/5967007LIEEXZXAWK837 1 AS Assuransegaarden 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1

NO SC/913861825 2 Gard Marine & Energy Insurance (Europe) AS 2 Aksjeselskap 2 Finanstilsynet 100 % 100 % 100 % 1 100 % 1 1
NO SC/939717609 2 Assuranceforeningen Gard - gjensidig - 2 Gjensidig selskap 1 Finanstilsynet 100 % 100 % 100 % 1 100 % 1 1
BM SC/HYDRA 2 Hydra Insurance Company Ltd Gard Cell 3 Gjensidig selskap 1 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
Annex I
S.02.01.02
Balance sheet
Solvency II value
Assets C0010
Goodwill R0010
Deferred tax assets R0040 22,325
Property, plant & equipment held for own use R0060 34,411
Investments (other than assets held for index-linked and unit-linked contracts) R0070 2,256,520
Equities R0100 14
Equities - unlisted R0120 14
Bonds R0130 55,514
Government Bonds R0140 55,514
Collective Investments Undertakings R0180 2,171,454
Derivatives R0190
Loans and mortgages R0230 17,467
Loans and mortgages to individuals R0250 17,467
R0310
Receivables (trade, not insurance) R0380 1,606
R0400
Any other assets, not elsewhere shown R0420 16,665
Total assets R0500 3,089,855
Liabilities
Technical provisions – non-life R0510 1,616,204
Technical provisions – non-life (excluding health) R0520 1,616,204
Best Estimate R0540 1,552,756
Best Estimate R0580
Risk margin R0590
Best Estimate R0630
Risk margin R0640
R0650
Best Estimate R0670
Risk margin R0680
Best Estimate R0710
Risk margin R0720
Provisions other than technical provisions R0750 25
Pension benefit obligations R0760 44,887
Deferred tax liabilities R0780 -
Derivatives R0790
Any other liabilities, not elsewhere shown R0880 26,092
Total liabilities R0900 1,867,529
Annex I
S.05.01.02

Premiums written
Net R0200 796,225 796,225
Premiums earned
Net R0300 762,702 762,702
Claims incurred
Net R0400 541,116 541,116
Net R0500
Insurance
participation
C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300
Premiums written
Gross R1410
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Annex I
S.05.02.01
Total Top 5 and

Home Country Top 5 countries (by amount of gross premiums written) - non-life obligations
home country
C0010 C0070
C0080 C0140
Premiums written
Net R0200 10,399 14,036 95,118 130,746 126,997 65,807 443,103
Premiums earned
Net R0300 9,926 15,816 91,407 125,361 121,453 63,102 427,066
Claims incurred
Reinsurers' share R0340 (147) 28,486 77 (1,519) 502 5,760 33,159
Net R0400 2,705 2,449 72,694 109,802 73,282 35,538 296,469
Net R0500
Expenses incurred R0550 2,351 19,658 22,937 30,070 28,944 15,140 119,099
Total Top 5 and

Home Country Top 5 countries (by amount of gross premiums written) - life obligations
home country
C0210
C0280
Premiums written
Gross R1410
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Annex I
S.23.01.22
Own funds
Tier 1 - Tier 1 -
Total Tier 2 Tier 3
C0010 C0020 C0030 C0040 C0050
Basic own funds before deduction for participations in other financial sector
Ordinary share capital (gross of own shares) R0010 463 463
Non-available called but not paid in ordinary share capital at group level R0020
Share premium account related to ordinary share capital R0030 1,277,818 1,277,818
Iinitial funds, members' contributions or the equivalent basic own - fund item for mutual and mutual-type undertakings R0040
Non-available subordinated mutual member accounts at group level R0060
Surplus funds R0070
Non-available surplus funds at group level R0080
Non-available preference shares at group level R0100
Non-available share premium account related to preference shares at group level R0120
Reconciliation reserve R0130 -78,280 -78,280
Non-available subordinated liabilities at group level R0150
An amount equal to the value of net deferred tax assets R0160 22,325 22,325
The amount equal to the value of net deferred tax assets not available at the group level R0170
Other items approved by supervisory authority as basic own funds not specified above R0180
Non available own funds related to other own funds items approved by supervisory authority R0190 54,954 54,954
Minority interests (if not reported as part of a specific own fund item) R0200
Non-available minority interests at group level R0210
Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet
the criteria to be classified as Solvency II own funds
Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria
R0220
to be classified as Solvency II own funds
Deductions
Deductions for participations in other financial undertakings, including non-regulated undertakings carrying out financial
R0230
activities
whereof deducted according to art 228 of the Directive 2009/138/EC R0240
Deductions for participations where there is non-availability of information (Article 229) R0250
Deduction for participations included by using D&A when a combination of methods is used R0260
Total of non-available own fund items R0270 54,954 54,954 - - -
Total deductions R0280 54,954 54,954 - - -
Total basic own funds after deductions R0290 1,167,372 1,145,047 - - 22,325
Ancillary own funds
Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type
R0310
undertakings, callable on demand
Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC R0360 608,077 608,077
Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC R0370 - -
Non available ancillary own funds at group level R0380 - -
Other ancillary own funds R0390 - -
Total ancillary own funds R0400 608,077 608,077 -
Own funds of other financial sectors
Reconciliation reserve R0410
Institutions for occupational retirement provision R0420
Non regulated entities carrying out financial activities R0430
Total own funds of other financial sectors R0440
Own funds when using the D&A, exclusively or in combination of method 1
Own funds aggregated when using the D&A and combination of method R0450
Own funds aggregated when using the D&A and a combination of method net of IGT R0460
Total available own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the
R0520 1,775,449 1,145,047 - 608,077 22,325
Total available own funds to meet the minimum consolidated group SCR R0530 1,145,047 1,145,047 - -
Total eligible own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the
R0560 1,390,531 1,145,047 - 245,484 -
Total eligible own funds to meet the minimum consolidated group SCR R0570 1,145,047 1,145,047 - -
Minimum consolidated Group SCR R0610 300,527
Ratio of Eligible own funds to Minimum Consolidated Group SCR R0650 381 %
Total eligible own funds to meet the group SCR (including own funds from other financial sector and from the
R0660 1,390,531 1,145,047 - 245,484
Group SCR R0680 490,969
Ratio of Eligible own funds to group SCR including other financial sectors and the undertakings included via D&A R0690 283 %
C0060
Own shares (included as assets on the balance sheet) R0710
Forseeable dividends, distributions and charges R0720
Other basic own fund items R0730 1,300,606
Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds R0740
Other non available own funds R0750
Reconciliation reserve before deduction for participations in other financial sector R0760 -78,280
Expected profits
Expected profits included in future premiums (EPIFP) - Life business R0770
Total EPIFP R0790 51,733
Annex I
S.25.02.22
Solvency Capital Requirement - for groups using the standard formula and partial internal model
Capital Requirement
C0010 C0020 C0030 C0070 C0080 C0090

1 Market risk 238,673 238,673
Calculation of Solvency Capital Requirement

C0100
Solvency capital requirement for undertakings under consolidated method R0220 490,969
Minimum consolidated group solvency capital requirement R0470 300,527
Information on other entities
Capital requirement for other financial sectors (Non-insurance capital requirements) R0500
Capital requirement for other financial sectors (Non-insurance capital requirements) - Credit institutions, investment firms and
financial institutions, alternative investment funds managers, UCITS management companies
R0510
Capital requirement for other financial sectors (Non-insurance capital requirements) - Institutions for occupational retirement
provisions R0520
Capital requirement for other financial sectors (Non-insurance capital requirements) - Capital requirement for non- regulated
entities carrying out financial activities R0530
Capital requirement for non-controlled participation requirements R0540
Capital requirement for residual undertakings R0550
Overall SCR
SCR for undertakings included via D and A R0560
Annex I
S.32.01.22
Undertakings in the scope of the group
Inclusion in the
Group solvency
Criteria of influence scope of group
calculation
supervision
Method used
Proportional
% used for the Date of and under
Type of code Category % Level of share used
Identification code of the Type of establishment % voting Other decision method 1,
Country of the ID of the Legal name of the undertaking Legal form (mutual/non Supervisory Authority capital influenc for group YES/NO
undertaking undertaking of consolidated rights criteria if art. 214 treatment of
undertaking mutual) share e solvency
accounts is applied the
calculation
undertaking
BR LEI/213800396JKJ1UBIBJ37 1 Gard Marine & Energy Ltd. Escritorio de Representação no Brasil Ltda. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
FI LEI/2138003GAO7REM2VXG04 1 OY Gard (Baltic) AB 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/21380084U7O1189W1Q41 1 Gard P. & I. (Bermuda) Ltd 2 Gjensidig selskap 1 Bermuda Monetary Authority 1 1
GB LEI/2138008GLX45R5P25362 1 Gard (UK) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
GR LEI/213800D8JGJCYQLS8V88 1 Gard (Greece) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
US LEI/213800FY2T23ST15RW72 1 Gard (North America) Inc. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
JP LEI/213800M7HGL8VMFH5228 1 Gard (Japan) KK 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
SG LEI/213800O24Z6CETNDYK67 1 Gard (Singapore) Pte. Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800Q2POZHFSJGV914 1 Lingard Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800T4M3EDB4CNQN80 1 Gard Marine & Energy Limited 2 Aksjeselskap 2 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
HK LEI/213800TZYP2QXFEA7U98 1 Gard (HK) Ltd. 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
BM LEI/213800ZIGLMXFERBEC96 1 Gard Reinsurance Co Ltd. 3 Aksjeselskap 2 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
NO LEI/5967007LIEEXZXAU8W91 1 Gard AS 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1
NO LEI/5967007LIEEXZXAWK837 1 AS Assuransegaarden 10 Aksjeselskap 2 100 % 100 % 100 % 1 100 % 1 1

NO SC/913861825 2 Gard Marine & Energy Insurance (Europe) AS 2 Aksjeselskap 2 Finanstilsynet 100 % 100 % 100 % 1 100 % 1 1
NO SC/939717609 2 Assuranceforeningen Gard - gjensidig - 2 Gjensidig selskap 1 Finanstilsynet 100 % 100 % 100 % 1 100 % 1 1
BM SC/HYDRA 2 Hydra Insurance Company Ltd Gard Cell 3 Gjensidig selskap 1 Bermuda Monetary Authority 100 % 100 % 100 % 1 100 % 1 1
Annex I
S.02.01.02
Balance sheet
Solvency II value
Assets C0010
Goodwill R0010
Deferred tax assets R0040
Property, plant & equipment held for own use R0060
Investments (other than assets held for index-linked and unit-linked contracts) R0070 83,082
Equities R0100
Equities - unlisted R0120
Bonds R0130
Government Bonds R0140
Collective Investments Undertakings R0180 77,681
Derivatives R0190
Loans and mortgages R0230
Loans and mortgages to individuals R0250
R0310
Receivables (trade, not insurance) R0380 35
R0400
Any other assets, not elsewhere shown R0420 102
Total assets R0500 331,950
Liabilities
Technical provisions – non-life R0510 186,471
Technical provisions – non-life (excluding health) R0520 186,471
Best Estimate R0540 183,694
Best Estimate R0580
Risk margin R0590
Best Estimate R0630
Risk margin R0640
R0650
Best Estimate R0670
Risk margin R0680
Best Estimate R0710
Risk margin R0720
Provisions other than technical provisions R0750
Pension benefit obligations R0760 -
Deferred tax liabilities R0780 461
Derivatives R0790
Any other liabilities, not elsewhere shown R0880 154
Total liabilities R0900 253,171
Excess of assets over liabilities R1000 78,779
Annex I
S.05.01.02

Premiums written
Net R0200 52,006 52,006
Premiums earned
Net R0300 41,193 41,193
Claims incurred
Net R0400 23,938 23,938
Net R0500
Insurance
participation
C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300
Premiums written
Gross R1410
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Annex I
S.05.02.01
Home Top 5 countries (by amount of gross premiums written) - non-life Total Top 5 and
Country obligations home country
C0010 C0070
R0010 DK DE IT NL US
C0080 C0140
Premiums written
Gross - Direct Business R0110 7,597 73,244 4,853 15,048 19,060 119,802
Gross - Proportional reinsurance accepted R0120 14,866 (11) 4,050 276 71 19,252
Reinsurers' share R0140 16,117 53,295 6,521 11,005 13,739 100,678
Net R0200 6,346 19,937 2,382 4,319 5,392 38,376
Premiums earned
Gross - Direct Business R0210 6,553 63,183 4,187 12,981 16,442 103,347
Gross - Proportional reinsurance accepted R0220 6,817 (5) 1,857 127 32 8,828
Reinsurers' share R0240 9,593 45,978 4,427 9,413 11,832 81,243
Net R0300 3,777 17,200 1,617 3,694 4,643 30,932
Claims incurred
Gross - Direct Business R0310 537 36,692 (1,744) 9,470 4,766 49,722
Gross - Proportional reinsurance accepted R0320 264 (9) 1,180 215 - 1,650
Reinsurers' share R0340 560 26,667 (1,523) 6,810 3,352 35,867
Net R0400 241 10,016 959 2,875 1,414 15,505
Net R0500
Expenses incurred R0550 649 2,117 257 443 553 4,019
Home Total Top 5 and

Top 5 countries (by amount of gross premiums written) - life obligations
Country home country
C0210
R1400 DK DE IT NL US
C0280
Premiums written
Gross R1410
Net R1500
Premiums earned
Gross R1510
Net R1600
Claims incurred
Gross R1610
Net R1700
Gross R1710
Net R1800
Annex I
S.17.01.02
Non-life Technical Provisions
Direct business and accepted proportional reinsurance Accepted non-proportional reinsurance

Motor Non-
Medical Other Marine, Fire and other General Legal Non- Non- Non- Total Non-
Income Workers' vehicle Credit and Miscellaneo proportional
expense motor aviation and damage to liability expenses proportiona proportiona proportiona Life
protection compensation liability suretyship Assistance us financial marine, aviation
insuranc insuranc transport property insuranc insuranc l health l casualty l property obligation
insurance insurance insuranc insurance loss and transport
e e insurance insurance e e reinsurance reinsurance reinsurance
e reinsurance
Total Recoverables from reinsurance/SPV and Finite Re after the adjustment for expected
R0050
losses due to counterparty default associated to TP calculated as a whole
Technical provisions calculated as a sum of BE and RM
Best estimate
Premium provisions
Gross R0060 77,854 77,854

Total recoverable from reinsurance/SPV and Finite Re after the adjustment for expected
R0140
losses due to counterparty default 48,650 48,650
Net Best Estimate of Premium Provisions R0150 29,204 29,204
Claims provisions
Gross R0160
105,840 105,840
Total recoverable from reinsurance/SPV and Finite Re after the adjustment for expected
R0240
losses due to counterparty default 74,079 74,079
Net Best Estimate of Claims Provisions R0250
31,761 31,761
Total Best estimate - gross R0260
183,694 183,694
Total Best estimate - net R0270
60,965 60,965
Risk margin R0280
2,777 2,777
Amount of the transitional on Technical Provisions
Technical Provisions calculated as a whole R0290
Best estimate R0300
Risk margin R0310
Technical provisions - total
Technical provisions - total R0320

186,471 186,471
Recoverable from reinsurance contract/SPV and Finite Re after the adjustment for expected
R0330
losses due to counterparty default - total 122,729 122,729
Technical provisions minus recoverables from reinsurance/SPV and Finite Re - total R0340
63,741 63,741
Annex I
S.19.01.21
Non-life Insurance Claims Information
Total Non-Life Business
Accident year /
Z0010
Underwriting year
Gross Claims Paid (non-cumulative)

(absolute amount)
Development year In Current Sum of years
Year 0 1 2 3 4 5 6 7 8 9 10 & + year (cumulative)
C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0170 C0180
Prior R0100 26 R0100 26 26
N-9 R0160 3,631 6,345 3,554 770 603 238 288 6 3 (3) R0160 (3) 15,436
N-8 R0170 20,106 5,092 2,114 799 654 228 95 8 218 R0170 218 29,314
N-7 R0180 9,875 6,650 1,835 1,601 1,097 564 1,798 553 R0180 553 23,974
N-6 R0190 17,074 20,789 8,676 1,356 1,822 638 (247) R0190 (247) 50,109
N-5 R0200 25,720 21,416 8,756 2,001 (399) 1,947 R0200 1,947 59,442
N-4 R0210 22,410 22,777 6,654 4,254 1,076 R0210 1,076 57,170
N-3 R0220 29,066 38,810 12,358 6,642 R0220 6,642 86,876
N-2 R0230 37,435 29,344 20,805 R0230 20,805 87,585
N-1 R0240 27,692 21,518 R0240 21,518 49,210
N R0250 20,205 R0250 20,205 20,205
Total R0260 72,741 479,347
Gross undiscounted Best Estimate Claims Provisions
(absolute amount)
Development year Year end
Year 0 1 2 3 4 5 6 7 8 9 10 & + (discounted
C0200 C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0290 C0300 C0360
Prior R0100 140 R0100 140
N-9 R0160 8,899 6,317 2,794 2,135 1,398 1,281 342 300 301 255 R0160 254
N-8 R0170 7,143 6,122 3,097 1,828 516 (360) 472 550 375 R0170 371
N-7 R0180 12,162 4,961 3,416 8,642 7,229 6,780 718 478 R0180 471
N-6 R0190 38,171 12,062 3,191 1,104 314 (175) (805) R0190 (791)
N-5 R0200 37,578 18,423 8,191 4,906 3,738 647 R0200 636
N-4 R0210 38,860 18,543 9,502 5,240 2,993 R0210 2,941
N-3 R0220 63,351 24,414 14,985 6,731 R0220 6,616
N-2 R0230 61,234 32,929 16,868 R0230 16,602
N-1 R0240 42,007 17,400 R0240 17,139
N R0250 62,364 R0250 61,462
Total R0260 105,840
Annex I
S.23.01.01
Own funds
Tier 1 - Tier 1 -
Total Tier 2 Tier 3
C0010 C0020 C0030 C0040 C0050
Basic own funds before deduction for participations in other financial sector as foreseen in article 68 of
Delegated Regulation 2015/35
Ordinary share capital (gross of own shares) R0010 62,385 62,385
Share premium account related to ordinary share capital R0030 12,177 12,177
Initial funds, members' contributions or the equivalent basic own - fund item for mutual and mutual-type
R0040
undertakings
Surplus funds R0070
Reconciliation reserve R0130 4,217 4,217
An amount equal to the value of net deferred tax assets R0160
Other own fund items approved by the supervisory authority as basic own funds not specified above R0180
Own funds from the financial statements that should not be represented by the reconciliation reserve and do
not meet the criteria to be classified as Solvency II own funds
Own funds from the financial statements that should not be represented by the reconciliation reserve and do not
R0220
meet the criteria to be classified as Solvency II own funds
Deductions
Deductions for participations in financial and credit institutions R0230
Total basic own funds after deductions R0290 78,779 78,779
Ancillary own funds
Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and
R0310
mutual - type undertakings, callable on demand
A legally binding commitment to subscribe and pay for subordinated liabilities on demand R0330
Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC R0360
Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC
R0370
Other ancillary own funds R0390
Tier 1 - Tier 1 -
Total Tier 2 Tier 3
C0010 C0020 C0030 C0040 C0050
Total ancillary own funds R0400
Available and eligible own funds
Total available own funds to meet the SCR R0500 78,779 78,779
Total available own funds to meet the MCR R0510 78,779 78,779
Total eligible own funds to meet the SCR R0540 78,779 78,779
Total eligible own funds to meet the MCR R0550 78,779 78,779
SCR R0580 48,149
MCR R0600 13,560
Ratio of Eligible own funds to SCR R0620 164 %
Ratio of Eligible own funds to MCR R0640 581 %
C0060
Excess of assets over liabilities R0700 78,779
Own shares (held directly and indirectly) R0710 -
Foreseeable dividends, distributions and charges R0720 -
Other basic own fund items R0730 74,562
Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds R0740 -
Reconciliation reserve R0760 4,217
Expected profits
Expected profits included in future premiums (EPIFP) - Life business R0770 -
Total Expected profits included in future premiums (EPIFP) R0790 3,290
Annex I
S.25.02.21
Solvency Capital Requirement - for undertakings using the standard formula and partial internal model
Capital Requirement
C0010 C0020 C0030 C0070 C0090 C0120

1 Market risk 7,101 7,101
Calculation of Solvency Capital Requirement C0100

Annex I
S.28.01.01
Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity
Linear formula component for non-life insurance and reinsurance obligations

C0010
MCRNL Result R0010 13,560
Net (of Net (of reinsurance)
reinsurance/SPV) best written premiums in
estimate and TP the last 12 months
calculated as a whole
C0020 C0030
Medical expense insurance and proportional reinsurance R0020
Income protection insurance and proportional reinsurance R0030
Workers' compensation insurance and proportional reinsurance R0040
Motor vehicle liability insurance and proportional reinsurance R0050
Other motor insurance and proportional reinsurance R0060
Marine, aviation and transport insurance and proportional reinsurance R0070 60,965 52,006
Fire and other damage to property insurance and proportional reinsurance R0080
General liability insurance and proportional reinsurance R0090
Credit and suretyship insurance and proportional reinsurance R0100
Legal expenses insurance and proportional reinsurance R0110
Assistance and proportional reinsurance R0120
Miscellaneous financial loss insurance and proportional reinsurance R0130
Non-proportional health reinsurance R0140
Non-proportional casualty reinsurance R0150
Non-proportional marine, aviation and transport reinsurance R0160
Non-proportional property reinsurance R0170
Linear formula component for life insurance and reinsurance obligations

C0040
MCRL Result R0200
Net (of Net (of
reinsurance/SPV) best reinsurance/SPV)
estimate and TP total capital at risk
calculated as a whole
C0050 C0060
Obligations with profit participation - guaranteed benefits R0210
Obligations with profit participation - future discretionary benefits R0220
Index-linked and unit-linked insurance obligations R0230
Other life (re)insurance and health (re)insurance obligations R0240
Total capital at risk for all life (re)insurance obligations R0250
Overall MCR calculation

C0070
Linear MCR R0300 13,560
SCR R0310 48,149
MCR cap R0320 21,667
MCR floor R0330 12,037
Combined MCR R0340 13,560
Absolute floor of the MCR R0350 4,309
C0070
Minimum Capital Requirement R0400 13,560

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financial year

Solvency Financial Condition Report

This report is a joint report for Gard P. & I. (Bermuda)

Operating costs have been lower than expected over

Solvency II balance sheet

Tier 1 share of total eligible own funds 82% 81%

Hydra is a Bermuda registered segregated accounts

Gard Bermuda and Gard Norway are members of the

Reinsurance agreements have been entered into

4Classes 6, 8, 9, 12 and 13 in the Norwegian regulations

List of regulators and auditors

Name Function Entity

Phone: +441 295 5278

PricewaterhouseCoopers AS External auditor Gard group

PricewaterhouseCoopers Ltd. External auditor Gard Bermuda

Phone: +441 295 2000

A 1.3 Lines of business and • Protection and Indemnity (P&I) is liability

Gard Group, technical result, ETC basis 2022

Gross written premium 534 502 1,036

Gard Group, premium by geographical area, ETC

Impact and consequences of COVID-19 for

Gard Group, investment income and expenses by asset class

Gard Group, investment income and expenses by asset class

20.02.2021 Equities and Other

A 5 Any other material information regarding business

Governance Principles The Executive Committee is given the task to

The Board’s ability to delegate its powers regarding

The Senior Vice Presidents (SVP) in the Group

The Risk and Capital Committee is an advisory forum

B 1.2 Remuneration policy

Remuneration structure Gard shall conduct annual reviews with each

B 2 Fit and proper requirements

B 3 Risk management system including ORSA

B 3.2 Key elements of Gard’s risk management system

B 3.5 Determination of Gard’s own solvency needs

B 3.6 Risk management system for internal model

5 The Board of Directors in Gard Bermuda has delegated

B.3.6.2 Internal model validation process

B 3.7 Material intra-group outsourcing arrangements

B 4 Internal control system

B 5 Implementation of the internal audit function

B 6 Implementation of the actuarial function

Outsourcing is a way of getting access to sufficient Monitoring and oversight

B 8 Any other information regarding the system of

Gard’s risk landscape

Gard Group, insurance risk

C 1.1 Risk mitigation techniques for insurance risk

C 2.1 Risk mitigation techniques for market risk

C3 SCR Counterparty default risk

Gard Group, counterparty default risk

C4 SCR Operational risk

Gard Group, operational risk

USD million, as of 20.02 2022 2021

C5 SCR Liquidity risk

C6 SCR Other risks

C 10 Any other information regarding the risk profile

Loans and mortgages to individuals 17 17 -

Pension benefit obligations 45 45 -

Excess of assets over liabilities 1,222 1,278 (56)