But managing agents express 'scepticism' over plans
The Lloyd's franchise board's first business plan, which was distributed to managing agents this week, targets a "one-notch" ratings upgrade for the corporation.
The Corporation of Lloyd's is currently rated A (strong) by Standard & Poor's and A-(excellent) by AM Best.
But some managing agents have expressed doubts about the business plan. One chief executive of a managing agent said he was "sceptical" about the proposals.
"Getting an upgrade is a good idea but maybe they have targeted a one-notch upgrade because they feel they can't get any more than that," the chief executive said.
"The big issue is the way the business plan is being driven. Broadening the mutualisation of Lloyd's by getting additional capital at a central level is not the best way to structure capital in the market."
The chief executive added that the "very strong" managing agents at Lloyd's were not keen on strengthening the central fund because they felt they were "unlikely to need to use it".
A Lloyd's spokeswoman said: "In an environment where the majority of companies have experienced a downgrade in ratings, maintaining a stable rating is an achievement. We want to go further and improve our rating."
The ratings upgrade is part of the franchise board's six-point plan, which also targets:
One managing agent chief operating officer expressed concern about a possible reduction in Lloyd's capacity in 2005. "Small managing agents may find it difficult to sustain [a decrease in capacity] without suffering an increase in expenses," he said.