Best Affirms Ratings of Lloyd’s Syndicate 2001 and Amlin plc

A.M. Best Co. has affirmed Best’s Syndicate Rating of ‘A+’ (Superior) and the issuer credit rating of “aa-” of Lloyd’s Syndicate 2001, which is managed by Amlin Underwriting Limited. Best also affirmed the ICR of “a-” of Amlin plc, the non-operating holding company of the Amlin group of companies, and the debt ratings of “bbb+” on Amlin’s £230 million [$371 million] 6.5 percent subordinated debt, its $50 million 7.28 percent subordinated debt and its $50 million 7.11 percent subordinated debt. The outlook for all ratings is stable.

Best also announced in a separate bulletin that it has affirmed the financial strength rating of ‘A’ (Excellent) and issuer credit rating of “a” of Amlin Bermuda Limited [See IJ web site – https://www.insurancejournal.com/news/international/2009/12/17/106048.htm].

Best said it “believes that syndicate 2001’s financial strength benefits from the support of Amlin, which maintains strong consolidated risk-adjusted capitalization. Amlin owns 100 percent of the syndicate’s capacity and provides assets in the form of bonds and equities to support the syndicate’s funds at Lloyd’s.

Additionally, the syndicate maintains a prudent level of reserves and has a history of reserve releases since 1998. Although the Amlin group has diversified with the acquisition in July 2009 of Amlin Corporate Insurance N.V. (formerly Fortis Corporate Insurance NV), syndicate 2001 remains the main underwriting platform for the Amlin group and is expected to provide approximately 70 percent of consolidated gross premiums for 2009, reducing to approximately 60 percent in 2010.”

Best also noted, that, on an annual accounting basis, “a good profit is expected in 2009, in excess of the £198 million [$319.4 million] achieved in 2008 (2007: £293 million [$472.6 million]). On a three-year funded basis, the syndicate has consistently produced superior underwriting results with a positive return on capacity every year since 2001.”

The 2006 year of account closed with a return on capacity of 32 percent, and Best said it “believes that this profitable record is likely to be maintained in 2007, 2008 (despite exposure to hurricanes Gustav and Ike) and 2009. The positive returns are likely to be supported by releases from prior years’ reserves and by investment income.”

As one of the largest syndicates in Lloyd’s, syndicate 2001 has “an excellent market profile and writes the majority of its business from a lead position,” best explained. “The syndicate continues to benefit from a strong risk management framework, which A.M. Best believes is fully embedded across the Amlin group.

Source: A.M. Best – www.ambest.com.