Lloyd’s of London Earns A+ Rating Upgrade

Lloyd’s of London received a significant upgrade to their Financial Strength Rating (FSR) from AM Best, one of the world’s premier credit rating agencies. The rating has been revised from A (excellent)  to a financial strength rating of A+ (superior).

The long-term issuer credit rating has also been amended, to ‘AA-’ (superior) outlook stable from ‘A+’ (excellent); outlook positive.

The rating upgrade reflects Lloyd’s balance sheet strength - which AM Best assesses as ‘very strong’ – as well as its strong operating performance, and risk management expertise.

The upgrade further cites Lloyd’s ability to attract and retain investors due to its unique value proposition which offers a capital-efficient structure, and the Lloyd’s market’s excellent position as the leading underwriter of global specialty property and casualty risks.

Looking ahead to Lloyd’s HY24 results on 5 September, AM Best shares Lloyd’s expectation that the market will continue to produce a strong underwriting performance.

“Today’s upgrade from AM Best follows that of S&P Global at the end of last year, with both agencies acknowledging the strength and resilience of Lloyd’s balance sheet, its strong operating performance and its leading position as the global specialty insurance and reinsurance market," says Burkhard Keese, Lloyd’s CFO.

“Capital management continues to be Lloyd’s focus to ensure the attractiveness of the Lloyd’s market for our customers, participants and investors. Our financial strength and solid capital platform enable us to deliver on our strategic growth ambitions and explore new and innovative solutions to enhance the fungibility of capital for our members.

"We were able to renew the central fund insurance early this year and are currently exploring a post-major market loss contingent capital solution for eligible members.”

Test Criteria: AM Best

Lloyd's of London, a prominent insurance market, is rated based on its unique capital structure known as the "chain of security," which includes the Premium Trust Funds, Funds at Lloyd’s (FAL), and the Central Fund. This structure ensures that the financial strength of Lloyd’s market as a whole backs every syndicate within it.

AM Best assesses Lloyd’s ratings by analysing both its central and member-level capital, as well as the market’s ability to manage potential drawdowns on central resources. The Lloyd’s market rating acts as a “floor” for all syndicate ratings, meaning no syndicate can be rated lower than the market itself.

Certain syndicates may receive a higher rating if they benefit from stronger operating performance or are backed by financially robust groups. Any change in the market rating triggers a review of all syndicate ratings, though this does not necessarily lead to rating changes for every syndicate. 

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