Best Assigns ‘A-‘ (Excellent) Rating to Lloyd’s Syndicate 2010

June 4, 2003

A.M. Best Co. announced that it has assigned a “Best’s syndicate rating of A- (Excellent) to Lloyd’s Syndicate 2010, managed by Cathedral Underwriting Ltd.” , with a “stable” outlook.

“The rating reflects the syndicate’s excellent prospective operating performance and business profile, in addition to the financial strength of the Lloyd’s market–rated A- (Excellent)–which underpins the security of all Lloyd’s syndicates,” said the bulletin. “Offsetting these rating factors is uncertainty created by the syndicate’s significant premium growth strategy. The rating is based on A.M. Best specific syndicate criteria.”

Best said it “expects syndicate 2010 to report operating profits of between 10 to 15% on capacity when both the 2002 and 2003 underwriting years of account close. As a catastrophe specialist, its operating performance is subject to a high degree of volatility, and A.M. Best expects the syndicate’s strong future results to continue to be dependent on favourable catastrophe experience.”

“Syndicate 2010 has quickly established itself as a leading catastrophe underwriter in the Lloyd’s market through its two main business sectors of non-marine and aviation reinsurance,” the announcement continued. “This has been facilitated through recruitment of senior underwriting staff with experience in business development. A.M. Best expects syndicate 2010 to maintain its position as a market leader through strong risk retention, particularly in airline reinsurance and regional property catastrophe business written in North America. The syndicate will continue to have a specialist focus, although greater underwriting diversification will be achieved in the second half of 2003 through the introduction of the syndicate’s third core business unit, facultative property. “

Best concluded by expressing its belief that “significant premium growth of 72% in 2003 will further cement the syndicates’ position as a leading specialist catastrophe reinsurer,” but that this would “nevertheless place senior management under greater pressure.”

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