Moody's has released its latest forecasts for
the Lloyd's market which estimate record
profits of approximately £6bn for the 2002 to 2005 years of account, with Lloyd's forecast to still be able to produce a meaningful profit of 9% of capacity (c. GBP1bn) for 2005.

Moody's said that it had lowered its expectations for the 2002 account to 11% of capacity in light of reserve deterioration, additional costs attributable to run-off
syndicates and adjustments for foreign exchange since its last forecasting exercise.

Moody's is currently maintaining its forecast of 15% for the 2003 year of account, which has benefited from a relative absence of major loss activity and exceptional underwriting conditions. However, Moody's has also lowered its forecast for the 2004 year of account to 8% of capacity, in light of the hurricane activity in 2004, which is estimated to have cost the 2004 account circa 7% of capacity, also impacting the 2003 account but only by circa 1% of capacity.

For 2005, although rates have reduced, overall conditions remain in line with those experienced in 1995 according to Moody's Underwriting Index. Moody's stated that it is currently predicting a 9% return on capacity for the market for the 2005 account, assuming a "normal" loss year.