Fitch upgrades Lloyd's to AA-

Fitch has upgraded Lloyd’s of London’s financial strength rating to AA- from A+.

The ratings agency said it expected Lloyd’s underwriting performance would be better than in the past, both in absolute terms and compared with other markets.

Fitch said business plan reviews and syndicate benchmarking had helped Lloyd’s improve its pricing, reserving, claims management, risk-adjusted capital setting and catastrophe modelling.

The agency said the upgrade has also been prompted by Lloyd’s strong financial profile and low financial leverage.

Fitch added that the work done by the performance management directorate to reduce cross-cycle profit volatility gave it confidence that prior underwriting years would continue to develop favourably, and that the work done in preparation for Solvency II had improved risk and exposure management practices.

A Lloyd’s spokeswoman said: “Lloyd’s welcomes Fitch’s Ratings upgrade to AA- as an endorsement of our progress and performance over recent years, and a reinforcement of Lloyd’s position as a leader in the world’s specialist insurance sector.

“Despite challenging conditions faced by the sector as a whole, this upgrade is down to significant improvements in Lloyd’s underwriting discipline, financial strength and risk management.”