The financial strength outlook of Novae Syndicates 1007 and 2147 has been changed to positive by Moody's.
The ratings agency has made its decision as a result of a number of factors, including the proposed Equitas reinsurance deal and improvement in Lloyd's overall financial position over the past five years.
Unencumbered central resources, net of losses from run-off members, are estimated at £1.5bn or 10% of GPW, compared with about 5% in late 2003.
Moody's also stated that the Novae Group's position has been affected by reserving issues on discontinued US casualty business.
The group's gross underwriting leverage (gross premiums written and gross loss reserves relative to shareholders' equity) remains material.
However, reserving adjustments on discontinued business have been declining in recent years, as confirmed in Novae's press release of 9 November 2006, and have been offset by returns from continuing business.
Novae syndicates 1007 and 2147 are respectively a leading non-marine liability specialist syndicate backed 82% by Novae Group plc and a non-marine orientated syndicate backed 100% by Novae Group plc, which operate in the Lloyd's market, which are due to merge to form syndicate 2007 for 2007.
