A.M. Best Affirms Ratings of Lloyd's Syndicate 33.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the Best's Syndicate Rating of A (Excellent) and issuer credit rating (ICR) of "a+" of Lloyd's Syndicate 33, which is managed by Hiscox Syndicates Ltd (HSL). At the same time, A.M. Best has affirmed the ICR of "bbb+" of Hiscox Ltd (Bermuda), the ultimate parent holding company of the Hiscox group of companies, including HSL. The outlook for all ratings remains stable.

Syndicate 33's financial strength is supported by the excellent consolidated risk-adjusted capitalisation of Hiscox Ltd and internal group reinsurance provided by Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda). Capacity for the syndicate's 2009 year of account is provided by Hiscox Ltd's Lloyd's corporate member, Hiscox Dedicated Corporate Member (HDCM) (72.5%) and third party capital providers, including traditional Lloyd's Names. HDCM's funds at Lloyd's (FAL) requirement for the 2009 year of account is met in part by its GBP 180 million letter of credit facility. For the 2010 year of account, the syndicate's capacity will increase to GBP 1 billion (2009: GBP 750 million), reflecting the weakening of sterling against the U.S. dollar (the syndicate's principal trading currency).

A.M. Best believes rate strengthening in 2009, particularly for catastrophe-exposed business, will support an improvement in syndicate 33's combined ratio on an annually accounted basis from 102% in 2008. A solid investment result is anticipated compared to 2008, when unrealised losses of GBP 76.8 million reduced the syndicate's net investment return to -0.6%. On a year of account basis, 2006 closed with a strong return on capacity of 37%, reflecting favourable rating conditions for the syndicate's catastrophe-exposed lines of business.

Syndicate 33 writes a well-diversified portfolio and maintains an excellent business profile within the Lloyd's market. In A.M. Best's opinion, the syndicate's profile is enhanced by its importance to the Hiscox group and its close working relationship with other Hiscox group entities. The syndicate writes certain lines of business in conjunction with Hiscox Insurance Company (Guernsey) Limited and Hiscox Insurance Company Limited (United Kingdom).

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

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. For more information, visit www.ambest.com.