Best Affirms Ratings of Lloyd’s Syndicate 609 (Atrium); Outlook Stable

November 12, 2010

A.M. Best Europe – Rating Services Limited has affirmed the Best’s Syndicate Rating of ‘A’ (Excellent) and issuer credit rating of “a+” of Lloyd’s Syndicate 609, which is managed by Atrium Underwriters Limited (AUL). The outlook for both ratings remains stable.

“Syndicate 609’s financial strength is supported by the underlying strength of the Lloyd’s market,” said Best. It also noted that the “syndicate’s financial flexibility is enhanced by Ariel Holdings, Ltd. (Ariel), the ultimate holding company of AUL.

“Capacity for the syndicate’s 2009 year of account is provided by Ariel’s corporate Lloyd’s member, Atrium 5 Limited (26 percent) and third party capital providers, largely traditional Lloyd’s Names (74 percent). The syndicate’s capacity is set to remain at £275 million [$440.5 million] for the 2011 year of account, as rates continue to soften across many of syndicate 609’s lines of business. Atrium 5 Limited’s funds at Lloyd’s requirement is met by letters of credit guaranteed by Ariel and/or Ariel Reinsurance Company Ltd.”

Best added that the ratings factor the “syndicate’s track record of strong results, supported by a disciplined underwriting approach. On an annually accounted basis, the syndicate achieved an excellent combined ratio of 68 percent in 2009, reflecting a benign catastrophe season and rate increases for certain lines of business.

“A healthy, albeit higher, combined ratio of approximately 85 percent is expected in 2010. The 2008 year of account is expected to close with a return on capacity of approximately 17 percent, an improvement on the 6.5 percent achieved on the 2007 year of account. The 2007 result was affected by an increase in the severity and frequency of losses from the satellites, liability, financial risks and non-marine accounts.

“Syndicate 609 has a strong position in the Lloyd’s market as a specialist underwriter of upstream energy, non-marine property, general aviation, aviation war and marine hull war. The syndicate also writes smaller accounts of space, fine art and specie, offshore liability, marine, cargo and political violence business. The portfolio has a significant US focus with remaining business being well-diversified by territory.

Source: A.M. Best

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