Lloyd's rated A+ by Fitch

Fitch has affirmed Lloyd's insurer financial strength rating at A+.

The ratings agency has also affirmed the Society of Lloyd's long-term issuer default rating at 'A', and affirmed Lloyd's Reinsurance Company (China) IFS rating at 'A+'.

Fitch said the affirmation reflects "Lloyd's strong operating performance during 2009," with reported results ahead of Fitch's expectations.

The agency noted that Lloyd's 2009 performance was supported by a series of beneficial factors that are unlikely to be repeated in 2010. These included a benign US windstorm season, a recovery in investment results, favourable foreign exchange movements in respect of gross written premium (GWP) growth and improved pricing conditions.

Lloyd's strong capital position and the conservative allocation of both several and mutual assets are also considered to be positive rating factors.

Fitch expects 2010 will be a more challenging year for Lloyd's.

"A series of large losses that occurred in the first quarter of 2010 have worsened underwriting performance for both primary and reinsurance participants, including Lloyd's," said Martyn Street, an associate director in Fitch's insurance group.

"When considered against other factors, including Fitch's expectation of reduced investment returns and a pricing environment that is less favourable than that experienced during 2009, the agency anticipates that Lloyd's will report a reduced level of earnings for 2010."