Ratings agency AM Best is altering the way it reports on Lloyd's financial strength.
Although the insurance market will continue to hold onto its A (excellent) rating, some syndicates may be given higher grades.
“Best believes that a select number of Lloyd's syndicates are able to offer policyholders security above that of the market rating,” said spokesman Stuart Shipperlee. “While the market rating will remain the floor of security behind all policies underwritten by Lloyd's syndicates, some syndicates have the potential of being assigned a higher rating.”
Syndicates will be assigned an A+ or A++ rating if their business profile and operating performance is better than the market overall. Shipperlee said the agency believed these were key indicators of future financial strength and “set the context for an insurer's ability to attract and retain ongoing capital backing”.
Ratings would also be raised if a syndicate was backed by a highly rated capital provider committed to supporting it beyond the member's limited liability obligations.