2014-03-21 20:04:04 -
A.M. Best has affirmed the financial strength ratings of A (Excellent) and issuer credit ratings of “a+” of Markel International Insurance Company Limited (MIICL) (United Kingdom) and Lloyd’s Syndicate 3000 (United Kingdom). The outlook for MIICL’s ratings remains stable, and the outlook for syndicate 3000’s ratings remains positive.
MIICL’s ultimate parent company is the Markel Corporation (Markel), which is also the ultimate parent company of syndicate 3000’s managing agent, Markel Syndicate Management Ltd, and its capital provider, Markel Capital Limited. MIICL and the syndicate account for over one-third of the Markel group’s gross premium income and provide the group with access to the UK and London markets as well as international business.
MIICL’s ratings reflect the continued support of Markel and the
company’s strategic importance to the Markel group. Markel has contributed capital of approximately USD 200 million since acquiring the company. In addition, MIICL benefits from excellent stand-alone risk-adjusted capitalisation, strong operating performance and a good business profile as a specialist underwriter of marine, professional liability and specialty insurance in the UK and London markets.
MIICL has a strong historical underwriting performance, demonstrated by a five-year (2009-2013) average combined ratio of 88%, despite the impact of exceptionally high catastrophe losses in 2011. In 2013, MIICL reported a profit before tax and equalisation reserve movement of USD 150.4 million (compared to USD 110.8 million in 2012).
MIICL underwrites a well-diversified portfolio and leads over 50% of its business. In addition to the UK and London market business, the company derives approximately 10% of gross written premiums from Europe through branch offices in Spain, Sweden and the Netherlands. Of its principal lines of business, marine represented 28% of gross written premiums in 2013, retail 19%, professional and financial risks 14%, specialty 18% and trade credit 6%.
The ratings of Lloyd’s Syndicate 3000 reflect the financial strength of Lloyd’s, which underpins the security of all Lloyd’s syndicates. In addition, A.M. Best believes the syndicate’s financial flexibility is enhanced by the continued support of Markel.
On an annually accounted basis, following two years of catastrophe-affected underwriting performance in 2010 and 2011, the syndicate has achieved excellent performances in 2012 and 2013, reflecting the more normal catastrophe experience for those years. A good level of reserve releases and a solid investment return contributed to the operating performance in each year.
Syndicate 3000 has a good business profile within the Lloyd’s market and leads over 40% of its business. The syndicate’s capacity for the 2014 year of account has been increased to GBP 500 million from GBP 340 million for 2013, demonstrating Markel’s continued commitment to syndicate 3000 as its main underwriting centre for marine and large US property risks written in the London market.
Positive rating actions in respect of MIICL are considered unlikely in the near future; however, an unexpected weak operating performance or a reduction in the level of parental support could lead to negative pressure on the company’s ratings. A factor that may lead to positive or negative rating actions for the syndicate is a change in the rating of the Lloyd’s market, which currently has an FSR of A (Excellent) and an ICR of “a+”, both with a positive outlook.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M.
Best Europe - Rating Services Limited Supplementary Disclosure : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company.
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