Fitch has now affirmed Lloyd’s AA- rating and removed them from the Ratings Watch Negative list, saying their rating is now stable

Fitch Ratings has taken Lloyd’s off of its watchlist of companies it is concerned could be facing a downgrade of its financial ratings after the market released its half-year results.

The ratings agency has now affirmed Lloyd’s rating at AA- (very strong) and confirmed that its outlook is now stable, removing the market from the Ratings Watch Negative (RWN) list.

The announcement came after Lloyd’s completed capital collection from members in June 2020 to fully compensate for the company’s estimated £3bn of Covid-19 losses net of reinsurance, as well as improvements in Lloyd’s underlying underwriting performance, before major losses, for the first half of the year.

Fitch said that “this improvement in underlying underwriting performance will help Lloyd’s absorb possible upward revisions in its 2020 Covid-19 losses, given still material market-wide uncertainties related to possible business interruption, liability and other classes of claims”.

The ratings agency added that Lloyd’s combined ratio averaged 102% between 2015 and 2019, which is within Lloyd’s combined ratio averaged 102%.

Fitch ranks Lloyd’s business profile as ‘favourable’ compared with that of global insurance and reinsurance companies, “driven by a strong franchise, large operating scale and significant diversification within P&C (re)insurance”.