A.M. Best Affirms Credit Ratings of Beazley’s Lloyd’s Syndicates, Beazley Re Designated Activity Company & Beazley Insura...

A.M. Best has affirmed the Financial Strength Ratings (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of Lloyd’s Syndicate 2623, Lloyd’s Syndicate 623, Lloyd’s Syndicate 3623 and Lloyd’s Syndicate 3622 (the syndicates) (United Kingdom). Concurrently, A.M. Best has affirmed the FSRs of A (Excellent) and the Long-Term ICRs of “a” of Beazley Re Designated Activity Company (Beazley Re) (Ireland) and Beazley Insurance Company, Inc. (BICI) (Farmington, CT). The outlook of these Credit Ratings (ratings) is stable.

Syndicates 2623, 623, 3623 and 3622 are managed by Beazley Furlonge Limited, and their ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all syndicates. In addition, syndicates 2623 and 623 benefit from a track record of excellent operating performance and strong positions in the Lloyd’s market. Syndicates 2623 and 623 underwrite business at Lloyd’s in parallel, with their individual shares of combined business split according to each syndicate’s portion of overall combined capacity. The capital of syndicates 2623, 3623, 3622 is provided by Beazley plc (Beazley) [LSE: BEZ] via its corporate member, whilst syndicate 623 is supported by third-party capital. The excellent performance of syndicates 2623 and 623 is demonstrated by a five-year average combined ratio of 83% (2012-2016).

Syndicate 3623 writes accident and health business, and reinsures Beazley’s U.S. admitted carrier, BICI. Syndicate 3622 is a dedicated life syndicate, writing life business associated with Syndicate 3623’s accident and health portfolio. The performance of these two smaller syndicates historically has not matched that of the larger Beazley syndicates. However, A.M. Best expects Syndicate 3623’s performance to improve over the medium term, as Beazley’s admitted business in the United States attains scale, and remedial actions in accident and health lines take effect.

Beazley Re reinsures 75% of the profit of Beazley’s Lloyd’s corporate member after a deductible. Therefore, it shares in the strong profile and combined profitability of syndicates 2623, 3623 and 3622. Beazley Re is viewed to be integrated and strategically important to Beazley, reflecting its role as the group’s internal reinsurer. In addition, Beazley Re is expected to obtain a license to write third-party insurance business during 2017, which will enable the group to offer non-Lloyd’s underwriting capacity in the European Union in the future. The company’s risk-adjusted capitalisation is supportive of the ratings.

BICI’s role as an expanding admitted U.S. carrier is strategically important to Beazley Re and to the Beazley group. A.M. Best expects BICI’s importance to increase over the medium term, as the company’s premium and earnings base become more material to the overall group.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

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A.M. BestMyles Gould, [phone]Senior Financial [e-mail] Imsirovic, [phone], ext. 5740Senior Financial [e-mail] Sharkey, [phone], ext. 5159Manager, Public [e-mail] Peavy, [phone], ext. 5644Director, Public [e-mail]