London (1) London New York Robert S. Smith Allerton G. Smith Director Senior Director Moody's Analytics UK - Insurance Capital Markets Research Group Moody's Analytics Moody's Analytics JOURNALISTS: 44 20 7772 5456 JOURNALISTS: 212-553-0376 SUBSCRIBERS: 44 20 7772 5454 SUBSCRIBERS: 212-553-1653 Moody’s Analytics assigns a positive outlook to the C+^ (Below Average) Continuity Opinion of Lloyd’s Syndicate 1206. LONDON, 27th February 2014 – Moody's Analytics (Moody’s) today assigned a positive outlook to the C+^ (Below Average), under review direction uncertain, Continuity Opinion of Lloyd's syndicate 1206 (Amtrust at Lloyd’s Limited) following Amtrust Financial Services (Amtrust) acquiring Sagicor Europe and underpinning the syndicate’s business with new capital for 2014. The syndicate, ultimately 100% backed by Amtrust and with a 2014 capacity of £200m, writes a Non-Marine account with an emphasis on small to medium sized business. The syndicate recorded a loss of 7% NPE on an annually accounted basis for 2012 on a combined ratio of 109%, and a loss of 16% of capacity for the 2010 3-year account at 31.12.12. Results for the 2013 calendar year have yet to be released. Moody’s stated that, in terms of reported results, on a cross-cycle basis the syndicate had recorded average losses of 2% of NPE for 2004 to 2012 under annual accounting, performing in line with B- (Below Average) continuity opinion benchmark returns in terms of indicative average annual returns on capital. The syndicate had exited various lines of business, including Property Treaty and Motor, that had contributed to the losses of recent years. Amtrust acquired Sagicor Europe in December 2013 from Sagicor Financial Corporation (Sagicor), with Sagicor retaining responsibility for the 2013 and prior years of account of the syndicate. A new CEO was appointed in January 2014, with the previous CEO and syndicate 1206 underwriter leaving the business. No announcement has yet been made with regard to the new syndicate underwriter, nor has there been any indication of Amtrust’s plans for the business. Moody’s Analytics had previously stated that, with syndicate 1206’s Continuity Opinion originally having been downgraded to C+^ (Below Average) in June 2013 due to concerns over continuing capital support from Sagicor, the sale of the business to Amtrust, once completed, would underpin syndicate 1206 with new capital and in Moody’s Analytics view likely place syndicate 1206’s continuity prospects in line with the B- peer group, subject to confirmation that no significant changes were planned to the business. However, in the current circumstances, with plans for the business under the new owners yet to be confirmed, Moody’s has therefore assigned a positive outlook to the C+^ (Below Average) Continuity Opinion of syndicate 1206, reflecting Moody’s view of relative performance and continuity prospects for the syndicate over the insurance cycle. The last action was on 6th August 2013 when the syndicate’s C+^ (Below Average), under review for possible downgrade, Continuity Opinion was amended to C+^ (Below Average), under review direction uncertain. It should be noted that the continuity opinion for syndicate 1206 (in contrast to most assigned continuity opinions) is based solely on public information or limited non-public information and that restricted access to data requested for the continuity opinion may have had a material impact on the assigned continuity opinion. 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