Standard & Poor's (S&P) has downgraded its rating on Advent Underwriting, after the Lloyd's reinsurer said...
Standard and Poor's (S&P) has downgraded its rating on Advent Underwriting, after the Lloyd's reinsurer said its losses from Hurricane Katrina would be equivalent to 40% of its total capacity.
Advent said last week that its Syndicate 780 losses were likely to be £61m, with the group taking an estimated £32m share.
S&P, which rates Lloyd's syndicates on their level of dependency on the Lloyd's Central Fund, moved Advent's rating from "average dependency" (3pi) to "high dependency" (2pi).
S&P said in a statement: "[Advent's] Capital support for 2006 is potentially uncertain following the hurricane. Advent has recently demonstrated significant underperformance relative to that of peer syndicates in the Lloyd's capacity auctions.
"Standard and Poor's is also concerned with Advent's ability to manage the liquidity strain that will result from Katrina, as well as the amount of reinsurance still available to Syndicate 780 for the remainder of 2005, it being potentially more exposed than peers to additional gross catastrophe losses," it added.
