Fitch: Lloyd's Katrina Estimate Within Expectations.LONDON -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. , the international rating agency, has today commented that the GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.4 billion provisional estimate of net losses arising from Hurricane Katrina announced by Lloyd's is within current rating expectations. As a result, there is no immediate impact on Lloyd's ratings. The full list of ratings is detailed below. E[acute accent]As part of its ongoing rating analysis of Lloyd's, Fitch reviews various realistic disaster scenarios (RDSs) to which Lloyd's is exposed. Loss estimates resulting from the RDSs provide an aggregated stress test of Lloyd's exposure to large individual losses and exposure to aggregating catastrophes. Although Hurricane Katrina's flood-related losses meant that this type of event had not been modelled specifically by Lloyd's syndicates, the preliminary estimate of the net market loss is within Fitch's expectations for Lloyd's exposure to a Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east windstorm wind·storm n. A storm with high winds or violent gusts but little or no rain. windstorm A storm with high winds or violent gusts but little or no rain. . E[acute accent]The levee levee (lĕv`ē) [Fr.,=raised], embankment built along a river to prevent flooding by high water. Levees are the oldest and the most extensively used method of flood control. breach in New Orleans, expected widespread business interruption losses, looting losses, possible environmental claims, limited access to affected areas, and the high risk of coverage disputes make it very difficult for Lloyd's syndicates and other insurers to accurately estimate losses from Hurricane Katrina at this time. However, Fitch will maintain a close dialogue with Lloyd's over the coming weeks and months to monitor gross and net exposure to this event. E[acute accent]Although the preliminary estimate of Lloyd's aggregate loss from Hurricane Katrina is within Fitch's rating expectations, there may be some concentration of this loss among individual Lloyd's syndicates. In view of Lloyd's unique capital structure, the possible concentration of losses would be a concern to Fitch, especially if this results in substantial calls on the Central Fund. Fitch takes comfort from Lloyd's statement that, based on current information, it believes any impact of Hurricane Katrina on the Central Fund will be immaterial. Central Fund exposure to Hurricane Katrina will form a key element of Fitch's ongoing monitoring process. E[acute accent]Fitch currently believes that a net loss to Lloyd's of GBP1.4 billion from Hurricane Katrina will likely be absorbed within 2005 earnings. This was also the case in 2004 when Lloyd's reported a net profit of GBP1.4 billion despite net losses from U.S. hurricanes of GBP1.2 billion. However, the agency notes that further major catastrophe losses recorded in the remaining three months of 2005, or a significant increase in Lloyd's Hurricane Katrina loss estimate, could further affect earnings and reduce Lloyd's capital adequacy. These developments would have potential negative rating implications. E[acute accent]Fitch's Ratings on the Lloyd's Market: E[acute accent]Lloyd's Of London Not to be confused with Lloyds Bank or Lloyd's Register. Lloyd's of London is a British insurance market. It serves as a meeting place where multiple financial backers or “members”, whether individuals (traditionally known as E[acute accent]-- IFS rating 'A', Stable Outlook. E[acute accent]Society Of Lloyd's E[acute accent]-- Long-term rating 'A', Stable Outlook; E[acute accent]-- GBP 300m 6.875% subordinated debt with a final maturity in November 2025 callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. from November 2015 'BBB+'; E[acute accent]-- EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 300m 5.625% subordinated debt with a final maturity in November 2024 callable from November 2014 'BBB+'. E[acute accent]Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion