Ratings agency upgrades Amlin managed Syndicate
AM Best has upgraded the Best's Syndicate Rating to A+ (Superior) from A (Excellent) and the issuer credit rating (ICR) to "aa-" from "a+" of Lloyd's Syndicate 2001 which is managed by Amlin Underwriting.
At the same time, the agency said it has upgraded the ICR to "a-" from "bbb+" of Amlin and the debt ratings to "bbb+" from "bbb" on the fixed-to-floating rate subordinated notes issued by Amlin. The outlook for all ratings is stable.
AM Best said the rating upgrades reflect syndicate 2001's "consistent superior performance, its strong reserves and robust market profile derived from its well diversified account."
AM Best said it believes that these factors are "likely to continue to support the syndicate's ratings and that Amlin's strong risk management framework will benefit the syndicate as market conditions deteriorate."
The agency said it believes that the syndicate's financial flexibility is enhanced by continued support provided by its parent, Amlin, which maintains strong consolidated risk-adjusted capitalisation. AM Best believes the syndicate's financial strength is further enhanced by holding funds at Lloyd's (FAL) above the level required by Lloyd's, which is the default level of 40% of capacity. The syndicate's relatively low FAL requirement reflects the diversified nature of its composite account.
The agency also said it anticipates a continuation of the syndicate's strong performance for the 2006 and 2007 underwriting years. It said performance has been supported by a buoyant rating environment for catastrophe-exposed business, reduced reinsurance purchase and favourable catastrophe experience in 2006 and in 2007 to date. It added that it believed the impact of windstorm Kyrill and flooding in the United Kingdom and Australia in 2007 is likely to be modest.
It concluded that performance for 2005 is likely to exceed its earlier expectations, with a return of 8% on capacity now anticipated in line with the syndicate's June 2007 forecast. On an annually accounted basis, AM Best anticipates a combined ratio of 80%-85% for 2007 incorporating a significant reserve release.
It said "Syndicate 2001 has a robust market profile as one of the largest syndicates in Lloyd's, with a leadership position for most classes it writes (the syndicate leads approximately 55% of business by premium volume). The syndicate's account is well diversified both by line of business and territory.
AM Best believes the syndicate continues to maintain a strong risk management framework, which is fully embedded across Amlin's operations.
