Hardy? Solid as mahogony

December 19, 2005 11:08 AM US Eastern Timezone

A.M. Best Affirms Ratings of Lloyd's Syndicate 382

OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 19, 2005--A.M. Best Co. has affirmed the Best's Syndicate Rating of A (Excellent) and the issuer credit rating (ICR) of "a+" of Lloyd's Syndicate 382 (United Kingdom). The outlook for both ratings is stable.


Syndicate 382's ratings reflect its strong financial performance and excellent business profile. An offsetting factor is the risk associated with underwriting new classes of business.

The ratings also reflect the financial strength of the Lloyd's market which underpins the security of all Lloyd's syndicates. The syndicate is managed by Hardy Underwriting Agencies (HUA), a wholly-owned subsidiary of Hardy Underwriting Group PLC, which is listed on the London Stock Exchange. Syndicate 382 has raised its capacity for the 2006 underwriting year (supported by a letter of credit for GBP 19 million (USD 34 million)) to GBP 110 million from GBP 100 million in 2005 (USD 194 million from USD 176 million), in anticipation of a hardening market for certain classes following the 2005 hurricane season.

A.M. Best anticipates a solid operating profit of 10% on capacity for the syndicate when the 2003 underwriting year is closed, in line with the syndicate's September 2005 Quarterly Monitoring Report. In 2004, the combination of a large number of natural catastrophes and exceptional losses from new classes written (financial institutions and political risk) will have an impact on the syndicate; nevertheless, A.M. Best forecasts a modest profit for the year. Despite estimated net exposure of between GBP 11-14 million (USD 20-25 million) due to the 2005 hurricanes, A.M. Best believes syndicate 382 is likely to remain profitable when the 2005 year of account closes.

Syndicate 382 benefits from an excellent market profile for the specialist short-tail classes it writes. The account written is well diversified in terms of classes of business and territories written, and the syndicate leads 40% of risks accepted, enabling it to determine pricing and underwriting terms. However, AM. Best believes that the syndicate continues to be exposed to risks associated with underwriting new lines of business, principally from its financial institutions and political risks accounts.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.