An XL London Market syndicate was downgraded by Moody's Investors Service yesterday.
The rating agency lowered the performance rating on XL's syndicate 990 to C (below average) from B- (below average).
Syndicate 990 recorded a loss of 20% for 1998 and 27% for 1999 and is forecasting losses of 10% and 6.5% for 2000 and 2001 respectively.
It has suffered historically from the loss of its significant reserves to Equitas, diversification into new areas and its reliance on lower margin business in subsequent years, said the rating agency.
Moody's attributed the downgrade overall to concerns over continuity for the syndicate's policyholders and said it has withdrawn the rating in anticipation of its merger with syndicate 1209 for 2003.
Moody's said: "The rating has also been withdrawn in light of the limited amount of business that is likely to be written by the syndicate prior to the year-end and its merger into syndicate 1209, currently rated B+ (above average)."
