A.M. Best Affirms Ratings of Beazley’s Lloyd’s Syndicates & US Insurer

A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of “a+” of Beazley’s Lloyd’s Syndicates Syndicates 2623, 623, 3623 and 3622. The outlook for all ratings remains positive.

A.M. Best also has affirmed the FSR of A (Excellent) and the ICR of “a” of Beazley Insurance Co. Inc., which is based in Farmington, Conn. The outlook for both ratings is stable. Concurrently, A.M. Best has assigned a FSR of A (Excellent) and an ICR of “a” to Beazley Re Designated Activity Co., a.k.a Beazley Re. The outlook assigned to both ratings is stable.

A.M. Best said the syndicates’ ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all syndicates.

In addition, syndicates 2623 and 623 benefit from very strong operating performance track records and strong positions in the Lloyd’s market, the ratings agency said, noting that Syndicates 2623, 623, 3623 and 3622 are managed by Beazley Furlonge Ltd.

Syndicates 2623 and 623 underwrite business at Lloyd’s in parallel, with premiums for the 2016 year of account split 82 percent for Syndicate 2623 and 18 percent for Syndicate 623, in line with each syndicate’s share of overall combined capacity. The capital of syndicates 2623, 3623 and 3622 is provided by Beazley plc via its corporate member, while Syndicate 623 is supported by third-party capital, A.M. Best explained.

“Syndicates 2623 and 623 have a record of very good and stable underwriting performance, as demonstrated by an average combined ratio of 86 percent (2010-2014),” the agency said. A.M. Best expects a very strong combined ratio in the 80s to be reported for 2015. “A well-reserved casualty account provides diversification for the syndicates’ closely managed catastrophe exposed lines.”

Syndicate 3623 writes accident and health business, and reinsures Beazley’s U.S. admitted carrier, Beazley Insurance Co. Inc.

Syndicate 3622 is a dedicated life syndicate writing life business associated with Syndicate 3623’s accident and health policies, A.M. Best noted. While the performance of these two smaller syndicates has not matched that of the larger Beazley syndicates, the ratings agency said it expects Syndicate 3623’s performance to improve in the next few years as Beazley’s admitted business in the United States attains scale and remedial actions in accident and health lines take effect.

Beazley Re reinsures 75 percent of the profit of Beazley’s Lloyd’s corporate member after a deductible and holds most of the group’s capital. It therefore shares in the strong profile and combined profitability of syndicates 2623, 3623 and 3622, A.M. Best went on to say. The company’s risk-adjusted capitalization is supportive of the rating.

Beazley Insurance Co.’s role as an expanding admitted U.S. carrier is strategically important to Beazley Re and to the group. A.M. Best expects its importance to increase over the medium term.

Source: A.M. Best