S&P provides Lloyd's Market overview

Standard & Poor's has today released the latest findings of its Lloyd's Syndicate Assessment (LSA) coverage review.

The report, entitled "Standard & Poor's reviews the Lloyd's Market runners and riders for 2007” shows that in 2007 the market comprises 66 syndicates, with capacity at an all-time high of £16.1bn, up 9% from £14.8bn in 2006.

"This increase in capacity reflects the expectation that rates within key lines of insurance and reinsurance will remain hard, and that Lloyd's remains attractive to new capital," said credit analyst Matthew Day.

The main changes to the market structure this year include the introduction of three special-purpose syndicates, the cessation of one syndicate, the merger of four pairs of syndicates, and the start-up of two syndicates.

Average syndicate capacity is £244m, up 3% from 2006, with significant diversity across the market reflected in the range of individual syndicate capacities, from £1.8m for the smallest, to £1.1bn for the largest. The largest 10 syndicates (15% of the total by number) control 48% of market capacity for 2007 (47% in 2006); the bulk of this consists of integrated Lloyd's vehicle structures. Capacity growth rates for syndicates trading forward vary across the market between 140% and negative 40%.

At 23 January 2007, S&P assessed 77% of the Lloyd's Market by syndicate capacity, with 75% of assessed capacity at 'LSA 3' or higher. There are four syndicates assessed at 'LSA 1', 12 at 'LSA 2', 19 at 'LSA 3', six at 'LSA 4', and one at 'LSA 5'.