A.M. Best Co. has affirmed the Best’s Syndicate Rating of ‘A’ (Excellent) and the issuer credit rating of “a+” of Lloyd’s Syndicate 3000, both with stable outlooks.
The ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all Lloyd’s syndicates. In addition, Best said it believes the “syndicate’s financial flexibility is enhanced by the continued support of Markel Corporation, the ultimate parent company of its managing agent, Markel Syndicate Management Ltd, and its capital provider, Markel Capital Limited.”
In examining the prospects for the syndicate’s annual results, Best indicated that it anticipates a “solid operating profit in 2010, in spite of losses from the Chilean earthquake in the first quarter and assuming normal catastrophe experience for the remainder of the year. The combined ratio is likely to deteriorate to between 95 percent and 100 percent (2009: 91 percent), although a modest hardening of rates for some lines of business in the property, professional and financial risks and specialty divisions is expected. Additionally, the Deepwater Horizon oil rig loss is showing signs of increasing rates for energy liability business. Although interest rates remain low, a good investment performance is expected.
“Syndicate 3000 has a good business profile within the Lloyd’s market and leads approximately 36 percent of its business. The syndicate’s capacity has been increased to £ 275 million [$410 million] for the 2010 year of account (2009: £170 million [$253.4 million]), demonstrating Markel’s commitment to syndicate 3000 as its main underwriting centre for marine and large U.S. property risks.
Best also noted that as of October 1, 2009, Markel “completed the acquisition of Elliot Special Risks, a leading managing general agent in Canada, which is expected to contribute over 6 percent of the syndicate’s gross written premiums in 2010. This acquisition, together with an increased contribution from the new equine division and expansion of the existing property, marine energy and marine liability books, is likely to support an increase in overall premium of approximately 10 percent in 2010.”
Source: A.M. Best
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