A.M. Best Affirms Rating of Kiln Syndicate 510

September 26, 2014

A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of Lloyd’s Syndicate 510 (United Kingdom), which is managed by RJ Kiln & Co. Limited (RJ Kiln). The outlook for both ratings remains positive.

Syndicate 510’s ratings and outlook reflect the financial strength of Lloyd’s, which underpins the security of all Lloyd’s syndicates, as well as the syndicate’s track record of strong underwriting performance and robust business profile.

In addition, the syndicate benefits from its association with Tokio Marine Holdings, Inc. (Tokio Marine), which is the ultimate parent of RJ Kiln and Tokio Marine Underwriting Limited (TMUL), the syndicate’s main corporate member. For the 2014 year of account, the syndicate’s capacity is £1.1 billion [$1.8 billion], 55 percent of which is provided by TMUL. The remaining 45 percent is provided by third parties.

The syndicate has a track record of strong underwriting profits, as demonstrated by a five-year average combined ratio of 90 percent (2009-2013).

However, technical performance has been somewhat volatile, due to the syndicate’s exposure to catastrophe risks. In 2013, on an annually accounted basis, the syndicate reported an excellent technical profit of £133.7 million [$218.1 million], equating to an 84 percent combined ratio. The result reflects the relatively benign catastrophe experience in the year, as well as favorable reserve development on prior years of £32.9 million [$53.7 million].

Syndicate 510 has a robust business profile, with a strong presence in the Lloyd’s market. The syndicate also benefits from its affiliation with the RJ Kiln and Tokio Marine brands, which were more closely aligned in January 2014 by the formation of Tokio Marine Kiln Group Limited.

The syndicate writes a diversified portfolio by territory and line of business, comprising short-tail property and marine, political, aviation, accident and health and reinsurance risks.

Lloyd’s Syndicate 807 (also managed by RJ Kiln) merged into syndicate 510, effective 1 January 2012. Syndicate 807’s 2011 year of account was closed into syndicate 510 at the end of 2013, in line with normal underwriting year of account procedures.

A factor that may lead to positive or negative rating actions for the syndicate is a change in the ratings of Lloyd’s.

Source: A.M. Best Europe – Rating Services Limited

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