Best Affirms Beazley’s Lloyd’s Syndicate 2623 & 623 Ratings

A.M. Best Co. has affirmed its Syndicate Ratings of “A” (Excellent) and the issuer credit ratings (ICR) of “a+” of Lloyd’s Syndicate 2623 and Lloyd’s Syndicate 623, managed by the Beazley Group. Best also affirmed the ICR of “bbb+” of Beazley Group plc the non-operating holding company of the Beazley group of companies, and the debt ratings of “bbb-” on the £150 million ($297 million) subordinated notes due 2026 and the $180 million subordinated notes due 2034 issued by Beazley. The outlook for all ratings remains stable.

“Syndicates 2623 and 623 are managed on a combined syndicate basis by Beazley Furlonge Ltd. and underwrite business at Lloyd’s in parallel,” Best noted. “In 2006 capacity was £647.4 million ($1.281 billion) and £182.6 million ($361 million) for 2623 and 623 respectively. Syndicate 2623’s capacity is provided 100 percent by Beazley, while syndicate 623 is supported by third party capital.

“The ratings assigned to syndicates 2623 and 623 reflect the financial strength of the Lloyd’s market which underpins the security of all Lloyd’s syndicates.” Best also indicated that it considers “the syndicates’ financial flexibility is enhanced by the support of Beazley, a publicly listed company. For the 2007 underwriting year it is anticipated that capacity for the combined syndicates will increase to £860 million ($1.702 billion) from £830 million ($1.642 billion) and that all business will be split 2623 (81 percent) and 623 (19 percent), in line with each syndicate’s anticipated capacity.”

Best said it “expects strong operating results in 2006, driven by higher underwriting earnings in the absence of exceptional catastrophe activity. On an annually accounted basis, A.M. Best believes the syndicates’ combined ratio is likely to be below 90 percent, reflecting post-hurricane rate increases in key business lines and prior year reserve releases.

“In A.M. Best’s opinion, syndicates 2623 and 623 have an excellent combined business profile within the London market, leading over 60 percent of business underwritten. The syndicates also benefit from access to direct U.S. business through the group’s US-based managing agent, Beazley USA Services Inc.”

Source: A.M. Best