A.M. Best Affirms Ratings of Lloyd’s Syndicate 510 and Kiln Group Limited

LONDON--(BUSINESS WIRE)-- A.M. Best Europe – Rating Services Ltd has affirmed the Best’s Syndicate Rating of A (Excellent) and the issuer credit rating (ICR) of “a+” of Lloyd’s Syndicate 510 (United Kingdom), which is managed by R.J. Kiln & Co Ltd (R.J. Kiln). At the same time, A.M. Best has affirmed the ICR of “bbb+” of Kiln Group Limited (Kiln) (United Kingdom), the non-operating holding company of R.J. Kiln, and affirmed the debt ratings of “bbb” on the USD 30 million and USD 35 million floating rate subordinated bonds issued by Kiln. The outlook for all ratings is stable.

The syndicate’s ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all Lloyd’s syndicates. In addition, syndicate 510 benefits from financial flexibility provided by Tokio Marine Holdings, Inc. (Tokio Marine), the ultimate parent company of the syndicate’s managing agent, R.J. Kiln, and of Kiln Underwriting Limited, which provides 53% of the syndicate’s capacity. Additionally, the syndicate benefits from a comprehensive reinsurance programme, which includes two long-standing pro rata treaties. A 53% share of each of the two treaties is underwritten by Lloyd’s Syndicate 1880, a new syndicate established for the 2009 year of account by Tokio Marine.

On an annually accounted basis, after the excellent performance in 2009, a weaker performance in 2010 is expected, reflecting generally softening market conditions for the syndicate’s core lines of business and the impact of losses from the Chilean earthquake. On a traditional underwriting year of account basis, a good return on capacity for the 2008 and 2009 years of account is anticipated, in spite of the losses from hurricanes Gustav and Ike in 2008 and the impact of catastrophes in early 2010 on the 2009 result. The results are supported by the syndicate’s robust approach to enterprise risk management, prudent risk appetite and the purchase of effective reinsurance protection.

Syndicate 510 has a strong business profile within the Lloyd’s market as a specialist underwriter in its core areas: short-tail property, marine, political risks, aviation, accident and health and reinsurance. The syndicate writes a diversified account by territory and line of business and leads approximately 55% of its business by premium volume. The wide geographical spread of the account is supported by Kiln’s strategy of securing global distribution by acquiring coverholders. Kiln has also opened an office in Paris and appointed a representative in Rio de Janeiro to take advantage of Lloyd’s reinsurance licence in Brazil.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilised include: “Rating Lloyd’s Syndicates”; “Solvency II and Its Impact on A.M. Best Ratings”; “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt”. Methodologies can be found at www.ambest.com/ratings/methodology.

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.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.

A.M. Best Company
David Drummond, +(44) 20 7626 6264
Senior Financial Analyst
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or
Catherine Thomas, +(44) 20 7626 6264
Managing Senior Financial Analyst
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or
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
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or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company