A.M. Best Affirms Ratings of Lloyd's Syndicates 2623 and 623

Business Wire, Nov 8, 2007

OLDWICK, N.J. -- A.M. Best Co. has affirmed the Best's Syndicate Ratings of A (Excellent) and the issuer credit ratings of "a " of Lloyd's Syndicate 2623 and Lloyd's Syndicate 623 (United Kingdom). At the same time, A.M. Best has affirmed the ICR of "bbb " of Beazley Group plc (Beazley) (United Kingdom), the non-operating holding company of the Beazley group of companies, and upgraded the debt ratings to "bbb" from "bbb-" on the GBP 150 million junior subordinated notes due 2026 and the USD 18 million junior subordinated notes due 2034 issued by Beazley. The outlook on all ratings remains positive.

Syndicates 2623 and 623 are managed on a combined syndicate basis by Beazley Furlonge Ltd and underwrite business at Lloyd's in parallel. Syndicate 2623's capacity is provided 100% by Beazley, while syndicate 623 is supported by third party capital. For the 2008 underwriting year, it is anticipated that capacity for the combined syndicates will decrease to GBP 810 million (USD 1,704 million) from GBP 860 million (USD 1,808 million) in 2007.

A.M. Best believes the syndicates' financial flexibility is enhanced by the support of Beazley, which is expected to maintain excellent consolidated risk-adjusted capitalisation in 2007 and 2008, despite strong premium growth in the United States. In addition, the syndicates benefit from the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates.

On an annually accounted basis, A.M. Best expects the syndicates to report a solid combined ratio between 85% and 90% in 2007, compared with 84% in 2006. Results are likely to benefit from prior year reserve releases and a strong, albeit deteriorating, rating environment. Although technical earnings are expected to decline in 2008 as rates and conditions weaken, the syndicates' strong risk management infrastructure is likely to support consistent excellent performance across the underwriting cycle.

The combined syndicates have a strong business profile in the London market, particularly within the specialty lines market (the syndicates lead approximately 70% of all business underwritten). In addition, the syndicates benefit from access to direct U.S. business through the group's managing agent, Beazley USA Services Inc, and a quota share reinsurance agreement with the group's admitted carrier, Beazley Insurance Company Inc.

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