Lloyd’s appoints new rating agency and discloses rating

New entrant introduced to provide a “fresh perspective”

World-leading insurance and reinsurance marketplace, Lloyd’s, has today announced its appointment of Kroll Bond Rating Agency (KBRA) to provide additional independent opinion on Lloyd’s financial strength and to demonstrate the market’s financial position to investors and customers.

KBRA has assigned an AA- insurance financial strength rating (IFSR) to Lloyd’s with a stable outlook. In a Press release, Lloyd’s highlighted that the new rating considers Lloyd’s capital growth at a compound annual growth rate of 6.5% since the end of 2014. This is despite elevated catastrophe and attritional losses since 2016. The market maintains strong capital and solvency positions, with net resources increasing to £33.9 billion (approx. $47.14 billion) in 2020, and central and market-wide solvency ratios of 209% and 147% respectively.

Lloyd’s stated that: “The rating reflects Lloyd’s sound risk-adjusted capitalization, unique capital structure, conservative underwriting leverage, sound technical reserves, strong liquidity profile, diversified earnings sources, broad distribution channels and comprehensive risk management programme.”

Commenting on the news, Lloyd’s CFO Burkhard Keese said the marketplace was delighted to appoint KBRA and to add this AA- stable outlook rating to sit alongside its financial strength ratings from its existing agencies.

“At Lloyd’s we highly value our ratings as they are vital indicators to our customers, our market, and our investors of our exceptional financial position,” he said. “As shown in our 2020 full-year results, our capital and solvency positions are strong and resilient, which is reflected in our current ratings.”

Keese also noted Lloyd’s belief in the importance of having a diversity of views in the ratings market and said it welcomes KBRA as a new entrant bringing a fresh perspective.

In addition to its AA- (strong) stable outlook from KBRA, Lloyd’s financial strength ratings are A+ (Strong) stable outlook with Standard & Poor’s, A (Excellent) stable outlook with A.M. Best and AA- (Very Strong) with Fitch Ratings.

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