AM Best has upgraded the financial strength rating to ‘A+’ (Superior) from ‘A’ (Excellent) of Lloyd’s, its platforms in China and Europe and Society of Lloyd’s.
According to AM Best, the result reflects Lloyd's market’s excellent position in the global general (re)insurance market as a leading writer of specialty property and casualty risks, together with its strengthened balance sheet fundamentals and proven risk management capabilities.
The agency also upgraded Lloyd’s long-term issuer credit ratings to “aa-” (Superior) from “a+” (Excellent). The outlooks of these ratings have been revised to ‘stable’ from ‘positive’.
The ratings reflect Lloyd’s balance sheet strength, which AM Best assesses as ‘very strong’, as well as its strong operating performance, very favourable business profile, and appropriate enterprise risk management.
AM Best notes that the growing size of the market demonstrates its ability to attract and retain investors due to its unique business proposition that offers a capital-efficient structure and the ability to write business globally.
The agency expects Lloyd’s market to produce strong underwriting performance over the underwriting cycle and Lloyd's will continue to attract capital, as reflected in the operating performance assessment.
The Lloyd’s market’s expense ratio continues to be higher than that of its peers. Actions are being taken through the ‘Future at Lloyd’s’ initiative to reduce the cost of placing business at Lloyd’s, although any benefits will likely take time to materialise.
The ratings of Lloyd’s China and Lloyd’s Europe reflect reinsurance support from Lloyd’s in the form of quota share contracts between Lloyd’s and the syndicates, which are active on its Chinese and European platforms.
The Lloyd's market ratings serve as the baseline for all policies written at Lloyd's, regardless of the Syndicates involved.
