Lloyd’s retains ratings tick

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26 July 2010

Ratings agency Fitch has affirmed Lloyd’s credit rating ahead of forecasting its performance will suffer due to a “series of large losses”.

Lloyd’s retained its A+ rating from Fitch despite suffering heavy financial losses from a string of natural and man-made events.

Fitch says the market’s record pre-tax profit of £3.898 billion ($6.75 million) last year was “unlikely to be repeated” as storms in Europe, the Chilean earthquake and Gulf of Mexico oil spill combine to erode Lloyd’s profits

Losses from the Gulf of Mexico oil spill are estimated to cost Lloyd’s around $US600 million ($684.5 million), according to the Insurance Information Institute (III).

“A series of large losses that occurred in the first quarter of 2010 have worsened underwriting performance for both primary and reinsurance participants, including Lloyd’s,” Fitch Insurance Group Director Martyn Street said.

Earlier this month, insurance credit ratings agency AM Best affirmed the A (Excellent) financial strength of Lloyd’s and its Chinese reinsurance subsidiary, but warned of a profit squeeze amid falling rates and an unusual concentration of catastrophe events.