Moody's has flagged a possible upgrade for Equity's motor syndicate.
The ratings agency is reviewing Syndicate 218's (Equity Syndicate Management Limited) B+ above average performance rating in the light of Insurance Australia Group's £570m acquisition of Equity Insurance Group, which provided 64% of the syndicate's backing in 2006.
Moody's indicated that syndicate 218's returns have been commensurate with the A- Good rating and it is considering an upgrade.
The syndicate has a track record of 37 consecutive years of profit under three-year accounting. Its 7 year average profit to 2003 is 7% of capacity and it is currently forecasting profits of 14% and 12.5% for 2004 and 2005 respectively. Under annual accounting it recorded a profit
of 8% of net premium earned on a combined ratio of 97% for 2005.
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