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S&P to Launch Lloyd's Syndicate Assessments Sept.

Business Editors

LONDON--(BUSINESS WIRE)--Standard & Poor's

Aug. 5, 2002--Standard & Poor's Ratings Services announced today that it will launch assessments of syndicates operating in the Lloyd's of London insurance market in September 2002.

Lloyd's Syndicate Assessments (LSA) will give an evaluation of the degree to which a Lloyd's syndicate's financial strength is dependent on Lloyd's Central Fund, brand, international licensing agreements, and infrastructure.

"As a result of the structural changes that have taken place at Lloyd's over the past few years and a greater demand for syndicate level information, Standard & Poor's has developed LSA to complement its existing rating on the market," said Rob Jones, a director at Standard & Poor's Financial Services Group in London.

Using both qualitative and quantitative analysis drawn from publicly available information, LSA will be assigned on a scale of one to five, indicating each syndicate's dependency on Lloyd's support, both financial and nonfinancial. A syndicate assigned an LSA of '5pi' will be considered to have 'very low dependency', whereas '1pi' indicates 'very high dependency'.

Standard & Poor's single-'A' (strong) rating on the Lloyd's market will remain the principal measure of financial strength applied to all Lloyd's syndicates. Meanwhile, by identifying the stand-alone characteristics of each syndicate, LSA will bring clarity to the market, indicating which syndicates contribute more positively to the rating on Lloyd's and which contribute more negatively.

"LSA will provide a clearer picture of the characteristics of syndicates operating in the Lloyd's market for those investors, intermediaries, and insureds involved," said Mr. Jones.

Previously, market participants have looked to Standard & Poor's Lloyd's Syndicate Performance Measures (LSPM) for an overview of syndicate performance. Purely quantitative in its approach, LSPM, which ranks syndicates around a statistical mean of their past operating performance, will be withdrawn concurrently with the launch of LSA.

"The launch of LSA and the criteria supporting them reflect a natural progression in the assessment of Lloyd's syndicates. By providing qualitative and prospective analysis, they will provide a broader view of market participants than LSPM," said Mr. Jones.

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Publication:Business Wire
Date:Aug 5, 2002
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