Moody’s Investors Service has downgraded the insurance financial strength rating of SVB’s Lloyd’s Syndicate 1007 to A2, with a stable outlook.
At the same time, the outlook for the A3 rating of Syndicate 2147 was changed from negative to stable.
It said the downgrade reflected the Syndicate’s continued reserve deterioration, which was outside Moody’s expectations. The Syndicate reported a loss at 21.7% of capacity for 2001, against Moody’s expectation of a loss of 15% of capacity. However, it said the loss compares favourably with other Syndicates with a similar business profile.
Moody’s said it believed Syndicate 1007 was prudently reserved but, in the light of the liability account written, it could not rule out further deterioration which would suppress future profits.
The downgrade also reflected the element of uncertainty associated with senior management changes at SVB and the risks associated with the company’s diversification strategy, said Moody’s, along with the expectation that Syndicate 1007 will be merged with SVB Syndicate 2147,
