AM Best has affirmed the financial strength rating (FSR) of A (Excellent) of Lloyd’s Syndicate 1183 (UK), which is managed by Talbot Underwriting. However, it has also withdrawn the rating in response to the company’s request to no longer participate in AM Best’s interactive rating process.
Syndicate 1183’s ratings reflect the financial strength of Lloyd’s, which underpins the security of all Lloyd’s syndicates, as well as the syndicate’s strong operating performance and specialist business profile.
In addition, the syndicate benefits from its association with Validus Holdings, which is the ultimate parent of the syndicate’s managing agent, Talbot Underwriting, and of the syndicate’s corporate member, Talbot 2002 Underwriting Capital Ltd. All the syndicate’s capacity, amounting to £ 600 million for the 2016 year of account, is provided by the corporate member.
The syndicate has a track record of reporting strong underwriting profits, as demonstrated by a five-year (2011-2015) average combined ratio of 86 percent. In 2015, on an annually accounted basis, the syndicate reported a strong combined ratio of approximately 86 percent (2014: 88 percent), supported by a lower level of large claims.
In addition, the results were supported by a substantial prior year reserve release of $146.4 million (2014: $141.2 million).
AM Best said Syndicate 1183 has a strong business profile within the Lloyd’s market. It takes a market leading position in the war and terror, energy and marine classes of business, according to the rating firm, which enables it to maintain a balanced portfolio within targeted classes.
Whilst premiums are primarily written in the London market, Talbot has international hub offices in New York, Miami, Santiago, Dubai, Singapore, Labuan and Sydney, which together contributed 18 percent of the syndicate’s gross written premium in 2015.
Partly offsetting these positive factors, according to AM Best, is the syndicate’s exposure to large man-made and natural catastrophe losses, although the performance record shows that this exposure has been well-managed to date, it said.