AM Best has assigned Chaucer Syndicate 1084 an A (excellent) financial strength rating, with a stable outlook.
In addition, the ratings agency has assigned the Syndicate with an insurer credit rating of ‘a', and issued an insurer credit rating of bbb- to Chaucer Holdings, as well as a bb+ debt rating for Chaucer's £20m 8.5% subordinated unsecured loan stock.
AM Best said the composite syndicate benefited from the financial strength of the Lloyd's market.
It said the syndicate had an excellent business profile within the Lloyd's market, operating as a well diversified insurer on both a geographical and risk basis.
The merger of the Syndicate with Chaucer Syndicates 587 and 1096 at the end of 2003 would likely enable a high degree of flexibility for the allocation of capital across lines of business, said the ratings agency.
It said: “AM Best believes the constituent syndicates (587, 1084 and 1096), which make up Syndicate 1084 for the 2004 underwriting year, will likely produce a combined operating performance in the upper half of the Lloyd's market when the 2002 and 2003 underwriting years are closed.
“Based on Quarterly Monitoring Returns (QMR) at March 2004, the combined profit on capacity is forecast at 17% for the 2002 underwriting year.”
Offsetting factors in the rating are the historic losses incurred on the casualty account.
It said the Syndicate had suffered adverse reserve development in respect of its US liability business on the last three closed years of account, written by Syndicate 1096).
AM Best would closely monitor the development of US casualty reserves, although the Syndicate exited from poorly performing US casualty binders in 2002, said AM Best.
