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Lloyd’s receives AA- financial strength rating

According to Lloyd’s, the new rating considers its capital growth at a compound annual growth rate of 6.5% since end-2014

Lloyd’s has announced that following the appointment of Kroll Bond Rating Agency (KBRA) to provide an additional independent opinion of its financial strength, it has been assigned an AA- insurance financial strength rating (IFSR) with a “stable outlook”. 

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

According to Lloyd’s, the new rating considers its capital growth at a compound annual growth rate of 6.5% since end-2014, despite elevated catastrophe and attritional losses since 2016. 

Lloyd’s said it maintains strong capital and solvency positions, with net resources increasing to £33.9bn in 2020 and a central and market wide solvency ratios of 209% and 147% respectively.

Burkhard Keese, CFO, Lloyd’s said: “We are delighted to appoint Kroll Bond Rating Agency and add an AA- stable outlook rating to sit alongside our financial strength ratings from our 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. As shown in our 2020 full-year results, our capital and solvency positions are strong and resilient, which is reflected in our current ratings.”

He added: “We believe it is important to have a diversity of views in the ratings market and welcome KBRA as a new entrant that will provide a fresh perspective on Lloyd’s.”

Lloyd’s financial strength ratings are A+ (Strong) stable outlook with Standard & Poor’s, A (Excellent) stable outlook with A.M. Best, AA- (Very Strong) with Fitch Ratings, AA- (stable) with Kroll Bond Rating Agency (KBRA).

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