Recent Lloyd's reforms to take action against poor
performing entities may not be enough to prevent losses, Moody's has warned.
In a report, which praised the chairman's strategy group (CSG) reforms for addressing structural deficiencies, Moody's highlighted the reforms only partly achieve a transparent financial structure.
The report concluded that policyholders' transparency was lacking unless further disclosures are made with regard to capital.
Robert Smith, vice-president and author of the report said: "In addition, one of the aims of the original CSG proposals was to achieve a more intelligible and transparent capital structure.
"In our opinion, this objective will have been only partly accomplished as a result of the revised proposals."
However, it said that the reforms should avoid similar underwriting losses to those sustained in the recent downturn.
