Moody's has placed the B- (below average) performance rating of Lloyd's Syndicate 727 under review for a possible upgrade. The syndicate is managed by SA Meacock & Company.
It said the review followed the completion of its forecasting exercise for Lloyd's syndicates for the 2002-04 open year, with the 2002 and 2003 accounts now substantially off-risk.
The ratings agency said the review reflects the confirmation of good open year forecasts for the syndicate, with the expectation that it should deliver profits in excess of 10% of capacity for the 2002-04 years of account.
The managing agency's current forecast for the 2002 year of account is a profit in the range of 10% to 20%, said Moody's.
With the profits for the 2002 and 2003 accounts now substantially earned, Moody's said it considered that the syndicate had a buffer of profit against which any reinsurance to close risk premium could be charged should the syndicate merge or cease to trade in the short to medium term.
Going forward, the ratings agency said it also expected that there could be a margin for a risk premium for at least the 2005 account.
Moody's said an offsetting factor in the possible ratings upgrade was the uncertainty surrounding the future of the managing agency.
The syndicate's underwriter, Michael Meacock, at 67 has not yet announced his intention to step down and there are no public plans with regard to the development of this family-owned agency over the next few years, it said.
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