Lloyd's heading for 105% COR

Lloyd’s is heading for a combined ratio of 105% if there are no additional catastrophes, says rating agency Standard and Poor’s (S&P).

Following this year’s string of catastrophes, S&P said: “Taken together, these events are expected to add around 20 percent to Lloyd’s 2011 combined ratio.

“This suggests to us that a combined ratio for the full year of 105 percent is achievable if there are no additional catastrophes during the year and reserve releases continue at the same rate, but more likely it will be higher given that the third quarter is the most active quarter for hurricane formation and loss.”

S&P praised Lloyd’s capital base, diverse range of capital providers and management.

“The more recent success of the Corporation is evidence of the effectiveness of increasingly robust performance, risk-monitoring processes, tools and benchmarks against which managing agents are assessed,” the agency said.

“Part of the credit for the enhanced effectiveness of the Corporation in positively influencing market behaviour must, in our view, be attributed to the Performance Management Directorate, which established an impressive track record in enforcing market underwriting discipline……the attractiveness of Lloyd’s as an operating platform is evidenced by the continual flow of new entrants to the market in recent years, either directly, or through the acquisition of an existing operation.”