S&P has assigned its 'A' long-term insurer financial strength rating to Lloyd's Reinsurance Co (China) Ltd...
Standard & Poor's has assigned its 'A' long-term insurer financial strength rating to Lloyd's Reinsurance Co (China) Ltd, a newly approved underwriting subsidiary of Corporation of Lloyd's, the organisation that oversees the Lloyd's insurance market (A/Positive). The outlook is positive.
"The rating on Lloyd's China is based upon explicit support provided to it from the Market via full quota-share retrocession of all business underwritten by it exclusively to syndicates trading at Lloyd's," said credit analyst Rob Jones. "The company's cedents therefore benefit from the full scope of Lloyd's security, including the Market's Central Fund," he added.
As a supported entity, therefore, the rating on Lloyd's China reflects Lloyd's strong competitive position, strong operating performance, strong capitalisation, and strong financial flexibility.
These factors are partly offset by the London Market's legacy administrative processes, as well as Lloyd's relatively high reinsurance reliance, significant exposure to reinsurance recoverables, and continuing operating performance volatility. The consistency and effectiveness of strengthened catastrophe risk controls are also yet to be tested.
The rating on Lloyd's China is not capped by the ratings on the People's Republic of China (A/Stable/A-1) by virtue of the operation of Lloyd's Central Fund.
The positive outlook on Lloyd's China reflects that on Lloyd's.
