Best Affirms Lloyd’s Syndicate 1084, Chaucer Holdings Ratings

August 10, 2006

A.M. Best Co. has affirmed its Syndicate Rating of “A” (Excellent) and the issuer credit rating (ICR) of “a” of Lloyd’s Syndicate 1084. At the same time Best affirmed the ICR of “bbb-” of Chaucer Holdings Plc, the ultimate parent company of the syndicate’s managing agency, Chaucer Syndicates Limited (CSL), and the debt rating of “bb+” on the £20 million ($38 million) subordinated convertible 8.5 percent 2008 loan stock of Chaucer Holdings Plc. The outlook for all ratings remains stable.

“The syndicate benefits from the financial strength of the Lloyd’s market, which underpins the security of all Lloyd’s syndicates,” Best noted. “The ratings are based on A.M. Best’s specific syndicate criteria.”

They “also reflect the syndicate’s strong prospective operating performance,” Best continued. The rating agency said it “anticipates adequate performance at near break-even when the 2005 year of account is closed, reflecting substantial losses from the U.S. hurricanes.

“However, a return to strong profitability is anticipated in 2006 (15 percent return on capacity anticipated subject to full year catastrophe experience), reflecting improvement in rates for several of the syndicate’s specialist lines of business. The syndicate is likely to particularly benefit from market firming for U.S. property, marine excess of loss and marine energy business.”

Best also indicated that it “believes that syndicate 1084 has an excellent business profile within Lloyd’s, supported by its leadership position on a substantial proportion of its business (anticipated to be 45 percent of 2006 gross premium income). CSL is the third-largest managing agent within Lloyd’s (as measured by its managed capacity of £ 919 million ($1.7 billion) in 2006) and underwrites a well diversified international account.”

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