Standard & Poor’s has affirmed its single A+ insurer financial strength rating on U.K.-based Lloyd’s Insurance Market, reflecting a judgement made by the U.K. High Court in favor of Lloyd’s. The judgement relates to the Jaffray case–a case brought by 216 former individual members of Lloyd’s alleging that in the early 1980s Lloyd’s made fraudulent misrepresentations inducing them to become Names and/or to continue underwriting.
In his judgement, Justice Cresswell rejected all of the Names’ allegations. Subject to any appeal by the Names and notwithstanding several (much smaller) actions by non-U.K. Names, the judgement is likely to bring to a close the litigation issues that have been a distraction for Lloyd’s since Reconstruction and Renewal in 1996.
Lloyd’s rating is based on the market’s very strong business position and strong, but volatile, earnings over the course of insurance cycles; together with its very strong capital base, strong financial flexibility, and robust regulatory management. These positive factors are partly offset by the heavy losses expected for the 1998-2000 underwriting years, Standard & Poor’s said.
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