Moody's has upgraded the Syndicate Performance Rating of Lloyd's syndicate 4472 - Liberty Syndicate Management Limited - to B Average from B- Below Average in light of the commitment shown by the Liberty Mutual Group (Liberty) to its Lloyd's operations and due to improved Liberty syndicates' performance in recent years. A stable outlook has been assigned to the rating.
The Liberty Lloyd's operation is backed by Liberty Mutual Insurance Company, rated A2 with a negative outlook by Moody's. Liberty syndicate 4472 was formed from the merger of Liberty syndicates 190 and 282 for 2005, with syndicate 190 being renumbered 4472. The combined syndicate has a capacity of £716m, up from £237m in 2001, and is the 4th largest syndicate trading at Lloyd's for 2005.
Syndicate 190 and syndicate 282 recorded losses of respectively 10% and 50% of capacity for the 2001 account, but recorded profits of respectively 5.3% and 34.9% for 2002, although with syndicate 190's result revised down from 13% at Q3 04 due to prior year deterioration. The combined syndicates' forecast for 2003 is for a profit of 9.9%.
Moody's has had concerns over s.190 performance and expansion during the previous downturn, reserving, limited disclosure in comparison with other syndicates, and with regard to the recent expansion.
However, with the commitment demonstrated by Liberty to its Lloyd's operations in underpinning recent growth, improved combined performance in recent years, the size and spread of the account of the combined entity and the materiality of this syndicate to Lloyd's, the rating has been upgraded to B Average with a stable outlook.
The syndicate has declined Moody's invitation to participate in the rating process, and has not communicated with Moody's on rating-related issues for at least 12 months.
Liberty syndicate 4472 is a reinsurance orientated, composite syndicate operating in the Lloyd's of London insurance market and which is backed by the Liberty Mutual Group.
