Best Assigns ‘A’ Rating to Lloyd’s Syndicate 2001

December 12, 2003

A.M. Best Co. announced that it has assigned a Best’s Syndicate Rating of ‘A’ (Excellent) with a stable outlook to Lloyd’s Syndicate 2001, which is managed by Amlin Underwriting Limited.

“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,” said Best. It is “based on A.M. Best’s specific syndicate criteria (see A.M. Best’s rating methodology for Lloyd’s syndicates at” Best noted that “a partially offsetting factor is the syndicate’s reliance on retrocession cover,” and indicated that it would “closely monitor the syndicate’s maintenance of good quality retrocession cover going forward.”

The bulletin explained that “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.”

Best projects a profit of one percent on capacity in 2001, and said it regards this 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 rating agency also noted that Syndicate 2001 “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.”

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