Increased central assets and other factors have all enhanced the minimum security offered by Lloyd's of London for all syndicates, but a key component is underwriting discipline, Moody's Investors Service said in a new report.
The special comment--titled "Lloyd's of London: Better Positioned than in Previous Cycles; an Attractive and Effective Trading Platform"--finds that with the effective resolution of Equitas, the runoff arrangement for asbestos and environmental claims, and the introduction of enhanced controls since the last downturn, Lloyd's remains an attractive and effective trading platform.
According to the report, Lloyd's global franchise, access to diversified business, the ability to trade using letters of credit and its reduced capital requirements, based on its partial mutuality, offset disadvantages such as the potential for additional costs due to mutuality, the need to improve efficiency and applicable U.K. tax rates.
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