Moody's has changed the outlook on the `B Average' performance rating of Lloyd's syndicate 587 to stable.
The review focused on the outlook for its business book, management controls and the agency's plans to support the business.
The ratings agency said the negative outlook was due to the downturn suffered by Chaucer in the late 1990's.
Pointing to a surge in raised expenses of £37m in July 2002, Moody's said Chaucer is now in a healthy position to extinguish solvency deficits for 2003.
However a Moody's statement warned: "This is despite some concerns over the potential for further consolidation among the Lloyd's listed vehicles and over the longer-term support of quota share reinsurers in the next downcycle, which could affect the syndicate's future performance."
