A.M. Best Affirms Ratings of Lloyd’s Syndicate 2001, Amlin AG and Amlin plc
LONDON -- January 10, 2013
A.M. Best Europe – Rating Services Limited has affirmed the financial strength
rating (FSR) of A+ (Superior) and issuer credit rating (ICR) of “aa-” of
Lloyd’s Syndicate 2001, which is managed by Amlin Underwriting Limited (United
Kingdom), and the FSR of A (Excellent) and ICR of “a” of Amlin AG
(Switzerland). At the same time, A.M. Best has affirmed the ICR of “a-” of
Amlin plc (Amlin) (United Kingdom), the non-operating holding company of the
Amlin group of companies, and the debt ratings of “bbb+” on Amlin’s GBP 230
million 6.5% subordinated debt, its USD 50 million 7.28% subordinated debt and
its USD 50 million 7.11% subordinated debt. The outlook for all ratings is
The financial strength of both Amlin AG and syndicate 2001 benefits from the
support of Amlin, which owns 100% of the syndicate’s capacity and provides
assets in the form of bonds and equities to support the syndicate’s funds at
Lloyd’s. Amlin maintains strong consolidated risk-adjusted capitalisation,
supported by a generally superior operating performance. However, the series
of natural catastrophes during 2011, together with a weak operating
performance from Amlin Corporate Insurance N.V. (ACI), led to a substantial
operating loss for the group and a significant decrease in the level of
consolidated risk-adjusted capitalisation. In the light of the catastrophes
that occurred in both 2011 and 2010, the Amlin group has taken positive steps
to enhance its management of catastrophe risk, through improved catastrophe
modelling, the purchase of additional reinsurance protection and the issue in
December 2011 of a USD 150 million catastrophe bond. Whilst the decrease in
the level of consolidated risk-adjusted capitalisation is a cause for concern,
A.M. Best believes that these measures and the steps taken to improve
performance at ACI are likely to provide some protection to the consolidated
risk-adjusted capitalisation from further material reduction. In more normal
trading conditions, good operating performance is expected to restore
risk-adjusted capitalisation progressively towards the level prior to the 2011
The stand-alone risk-adjusted capitalisation of Amlin AG (formerly Amlin
Bermuda Limited) also has been reduced, firstly by its change of domicile to
Switzerland from Bermuda and the establishment of its Amlin Re Europe division
in October 2010, which gave rise to an increase in expenses and underwriting
risk, and secondly by a catastrophe-affected operating performance in 2011.
However, the company’s risk-adjusted capitalisation remains at an excellent
level and is expected to continue to do so throughout 2013.
As one of the largest syndicates in Lloyd’s, syndicate 2001 has an excellent
market profile and writes the majority of its business from a lead position.
The syndicate continues to be the main underwriting platform for the Amlin
group and is expected to have provided nearly 60% of consolidated gross
premiums in 2012. Amlin AG also has an excellent business profile. The
company’s Amlin Bermuda division, established in 2005, writes predominantly a
property reinsurance account comprising catastrophe, risk excess and
proportional business, while Amlin Re Europe underwrites property catastrophe,
property risk, marine, liability and motor business on a proportional and
non-proportional basis. Approximately 60% of Amlin Bermuda’s business in 2011
was derived from the United States. Amlin Re Europe was established to write
European non-life reinsurance and over time is expected to improve business
diversification and earnings stability. Both the syndicate and Amlin AG
continue to benefit from a strong risk management framework, which A.M. Best
believes is fully embedded.
Positive rating actions for the Amlin group are unlikely in the near future.
Factors that may lead to negative rating actions include a failure to rebuild
risk-adjusted capitalisation after the losses of 2011, a significant weakening
of operating performance or deterioration in the group’s reserves.
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. Key criteria utilised include: “Rating Lloyd’s Syndicates”; “Rating
Members of Insurance Groups”; “Risk Management and the Rating Process for
Insurance Companies”; “Insurance Holding Company and Debt Ratings”; “Gauging
the Basis Risk of Catastrophe Bonds”; “Understanding BCAR for
Property/Casualty Insurers”; and “Understanding Universal BCAR”. Best’s Credit
Rating Methodology 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
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best
Company. Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Senior Financial Analyst
+(44) 20 7397 0327
+(44) 20 7397 0281
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
Press spacebar to pause and continue. Press esc to stop.