A.M. Best Co. has assigned a Best’s Syndicate Rating of A (Excellent) to Lloyd’s Syndicate 2001, which is managed by Amlin Underwriting Limited. The outlook is stable.
The rating reflects the syndicate’s excellent profile and prospective financial performance, in addition to the financial strength of the Lloyd’s market – currently rated A- (Excellent) – which underpins the security of all Lloyd’s syndicates. The rating is based on A.M. Best’s specific syndicate criteria (see A.M. Best’s rating methodology for Lloyd’s syndicates at www.ambest.com).
A partially offsetting factor is the syndicate’s reliance on retrocession cover. Excellent profile – Syndicate 2001 operates as a composite syndicate and writes a well-diversified account by class of business and territory (with a U.S. and U.K. emphasis). The syndicate is a market leader for most of the classes it writes, which include property (direct and reinsurance), aviation, marine, commercial motor and casualty. Gross premium income has grown by 82 percent since 2001 to a projected GBP 950 million (USD 1.66 billion) in 2003, driven by rate increases (40 percent of premium increase) and increased premium volume (60 percent). This rapid growth is not expected to place undue strain on internal management controls as business monitoring and control systems have been strengthened in the last year.
Excellent prospective financial performance – A.M. Best expects excellent profits when the 2002 and 2003 years of account are closed. A profit of 1 percent on capacity is projected for 2001 (Syndicate Quarterly Returns at June 2003), which A.M. Best regards as a strong performance considering this underwriting year was significantly affected by World Trade Center (WTC) losses – the syndicate’s current estimated WTC loss in 2001 is GBP 66 million (USD 116 million) net, equating to 19 percent of capacity. The syndicate has consistently performed above the Lloyd’s market average since its formation in 1997, with projected results for 2001-2003 likely to be in Lloyd’s upper quartile.
Reliance on retrocession cover – The syndicate is highly dependent on the availability of retrocession cover, and A.M. Best will closely monitor the syndicate’s maintenance of good quality retrocession cover going forward.
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