A.M. Best Co. has affirmed its Syndicate Rating of “A” (Excellent) and the issuer credit rating of “a” of Lloyd’s Syndicate 2007 (formerly known as Lloyd’s Syndicate 2147), managed by Novae Syndicates Limited (NSL). The outlook for both ratings is stable.
Best has also withdrawn its Syndicate Rating of “A” (Excellent) and the issuer credit rating of “a” of Lloyd’s Syndicate 1007, also managed by NSL, and assigned an NR-3 (Rating Procedure Inapplicable).
“The ratings for syndicate 2007 continue to reflect the financial strength of Lloyd’s, which underpins the security of all Lloyd’s syndicates,” Best noted. “The withdrawal of syndicate 1007’s rating follows the decision by Novae Group Plc to merge syndicate 1007 with syndicate 2147. The newly merged entity is to be renumbered Lloyd’s Syndicate 2007.”
The combined Syndicate’s capacity for the 2007 year of account is £360 million ($698 million), Best indicated, “which has increased by £120 million ($233 million) to accommodate business from syndicate 1007. However, the 2007 capacity remains unchanged from the aggregate capacity of the two syndicates in 2006.”
Best also noted that the “Lloyd’s economic capital assessment (ECA) on the merged syndicate has fallen £107 million ($208 million) to £179 million ($347 million) for 2007.” Best said it “believes this reduction reflects the combined syndicate’s diversified account of non-clashing business lines. Additionally, A.M. Best believes the merger has enhanced the syndicate’s business profile.”
Best concluded that in its opinion, “Syndicate 2007 is likely to report a good return on capacity for the 2007 year of account of between 12 to 15 percent (subject to catastrophe experience). Performance will be supported by the strong rating environment in regions affected by the 2005 U.S. hurricanes and the syndicate’s disciplined approach to underwriting classes of business for which rates are falling.”
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