NU Online News Service, July 20, 3:45 p.m. EDT

Fitch Ratings said it expects Lloyd's of London to report areduced level of income in 2010 compared to 2009, but affirmed thecompany's Insurer Financial Strength rating of "A-plus."

Fitch said that Lloyd's 2009 performance was supported by aseries of beneficial factors that are unlikely to be repeated in2010. These included a benign U.S. windstorm season, a recovery ininvestment results, favorable foreign exchange movements in respectto gross written premium growth and improved pricing conditions,Fitch said.

The rating affirmation reflects Lloyd's strong operatingperformance during 2009, with reported results ahead ofexpectations, Fitch said.

Fitch said the stable outlook reflects its expectation that 2010will prove to be a more challenging year for Lloyd's.

"A series of large losses that occurred in the first quarter of2010 has worsened underwriting performance for both primary andreinsurance participants, including Lloyd's," Martyn Street, anassociate director in Fitch's Insurance Group, said in astatement.

He added, "When considered against other factors, includingFitch's expectation of reduced investment returns and a pricingenvironment that is less favorable than that experienced during2009, the agency anticipates that Lloyd's will report a reducedlevel of earnings for 2010."

Despite this expectation, however, Fitch said it believesLloyd's will remain profitable and continue to strengthen itsfinancial profile going forward.

Market participants at Lloyd's collectively underwrote ?22billion ($33.34 billion) of gross written premiums in 2009, markinga year-on-year increase of 22 percent and profit before tax of ?3.9billion ($5.9 billion), a year-on-year increase of 103.7percent.

Also announced today, the Navigators Group Inc. said its whollyowned syndicate, Navigators Syndicate 1221 at Lloyd's, is thelatest to co-locate with Lloyd's in Rio de Janeiro by appointing alocal representative.

Lloyd's has Admitted Reinsurer status in Brazil and had itsofficial opening there in April 2009.

"Having a qualified local representative in Rio de Janeiro willsignificantly improve our prospects of developing reinsurancebusiness in the energy industry segment in which we specialize,"commented Stephen Coward, president of Navigators TechnicalRisk.

LoriAnn Lowery-Biggers, president of field operations forNavigators, formerly served as president of Lloyd's North America.

The Navigators Group Inc. is an international specialtyinsurance holding company with insurance company operations,underwriting management companies and operations at Lloyd's ofLondon.

Lloyd's has a global franchise and operates in more than 200countries and territories. It is a leading market for reinsuranceand specialist property, casualty, marine, energy and aviationinsurance.