Rating agency Fitch today affirmed Lloyd’s rating of A+, highlighting record profitability, strong investment income and a low combined ratio - enhanced by net releases from prior year reserves. These factors were cited as leading to an increase in Lloyd's net assets and stronger capital at the Central Fund level.
Luke Savage, Director, Finance, Risk Management & Operations at Lloyd’s, said: "We are delighted that Fitch Ratings has affirmed our rating and noted our strong performance. This is the third rating agency to affirm Lloyd's rating in recent weeks all of which mentioned the quality of Lloyd's management of the Market."
Fitch praised Lloyd's for the work of the Franchise Performance Directorate, with Lyuba Tarnopolsky, Director in Fitch’s Insurance Group, saying:
"From a rating perspective, we view positively the many initiatives undertaken by FPD, such as the issuance of underwriting guidelines, review of syndicates' business plans, development of various benchmarking tools and oversight of the new entrants process."
A benign catastrophe year in 2007 was noted as a factor in Lloyd’s recording a record result; however, Fitch did take note that these were ahead of the strong results delivered by a number of Lloyd’s peers.
Looking forward, Fitch expects Lloyd's to achieve good profitability in 2008, continue to outperform its peers and to see only a slight increase in the combined ratio.
