Standard & Poor's has lowered its public information-based (pi) Lloyd's Syndicate Assessment (LSA) on Wellington Underwriting Agencies - Syndicate 2020 to '3pi' (average dependency) from '4pi' (low dependency).
S&P said: "The downgrade follows the 24 November announcement of a 69% increase in Wellington's net loss (after reinsurance recoveries and reinstatement premiums) from Hurricane Katrina to $330m.
"It reflects a higher level of risk and performance volatility inherent in the syndicate's portfolio than previously considered, the exhaustion of the syndicate's reinsurance programme in relation to its Hurricane Katrina loss, and Wellington's significant reinsurer exposure resulting from the 2005 hurricane season."
"Nevertheless, the assessment continues to reflect Wellington's very strong underwriting profile and strong prospective operating performance," it added.
S&P said Wellington's 2005 year of account would close at a material deficit, but added that it expected operating performance going forward to be strong, reflecting extremely favourable market conditions.
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