Lloyd’s syndicate ratings affirmed
–31 May 2008
A.M. Best Co. has affirmed the Best’s Syndicate Rating of A (Excellent) and issuer credit rating (ICR) of “a+” of Lloyd’s Syndicate 958 (United Kingdom), which is managed by Omega Underwriting Agents Limited (OUAL). At the same time, A.M Best has affirmed the “bbb” ICR of Omega Insurance Holdings Limited (OIH) (Bermuda).
The outlook on the syndicate’s ratings has been revised to stable from positive, to bring the outlook in line with the outlook on the ratings of Lloyd’s of London. This action is also reflected in a revision in the outlook for the OIH rating to stable from positive.
The ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all Lloyd’s syndicates. In addition, A.M Best’s believes that syndicate 958 benefits from the financial flexibility provided by its parent company OIH and Omega group’s excellent consolidated risk-adjusted capitalisation in 2008. The syndicate has reduced its underwriting capacity to GBP 249 million in 2008 from GBP 275 million the previous year in response to deteriorating market conditions. The reduction was effected by non-renewing a 10% qualifying quota share with Omega Specialty Insurance Company Limited (OSIL). The syndicate continues to benefit from a 20% whole account quota share reinsurance arrangement with OSIL.
A.M Best believes syndicate 958’s combined ratio in 2008 will remain excellent at approximately 88% to 93% on an annually accounted basis (2007: 85%), assuming normal catastrophe activity, despite downward pressure on rates in the company’s property and professional indemnity portfolios.
Performance is likely to be supported by the syndicate’s ongoing focus on management of capacity through the underwriting cycle, its comprehensive reinsurance programme and the group’s strong risk monitoring and control infrastructure. A return on capacity for the 2006 and 2007 years of account in excess of 12.5% and 5% respectively is expected, supported by a favourable rating environment for US exposed property business.
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