AM Best has affirmed its syndicate rating of A (Excellent) and issuer credit rating of “a” on Lloyd's Syndicate 2010, managed by Cathedral Underwriting. The credit rating of “bbb” of Cathedral has also been affirmed. The outlook for all ratings is stable.
These ratings are underpinned by the strength of Lloyd's. AM Best believes that the syndicate's relatively high reliance on third party capital providers (46% of capacity in 2006) will not restrict its development. The syndicate's capacity is likely to increase to approximately £300m, up from £250m in 2006.
The ratings also reflect AM Best's expectation that the syndicate will perform strongly in the open years 2004 to 2006. This period includes a near break-even result anticipated in 2005, despite its exposure to the major events (approximately 40% of 2005 gross premium). Syndicate 2010 continues to specialise in a restricted range of business classes, principally aviation reinsurance, non-marine property reinsurance, and direct and facultative property. It has a leadership position for approximately 45% of its core business overall and two thirds of its aviation business. Its specialist approach leads to concentration of risk but this continues to be mitigated by the syndicate's extensive reinsurance programme.
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