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 B (Average) continuity opinion to Lloyd’s syndicate 2525 LONDON, July 21st 2014 – Moody's Analytics (Moody’s) today assigned a B (Average) continuity opinion to Lloyd's syndicate 2525 (Asta Managing Agency Limited), reflecting Moody’s view of likely future returns on capital for the syndicate on a stand-alone basis and the expectation that future returns and continuity prospects have the potential to be consistent with a B (Average) continuity opinion. Lloyd’s syndicate 2525 writes a UK and International Liability book of business, with annual gross premium written £39m in 2013. The syndicate is entirely backed by third party Names and corporate vehicles for 2014. Moody's stated that syndicate 2525 had recorded an annually accounted profit of 33% of Net Premium Earned (NPE) for 2013 with a combined ratio of 68% (including forex) at 31.12.13. In terms of 3-year results, the syndicate had recorded a profit of 25% capacity for the 2011 account on closure. On a cross-cycle basis, Moody’s commented that the syndicate had recorded average profits of 39% of Net Premium Earned (NPE) for the period 2005 to 2013, with average investment returns contributing 11% of NPE, performing in line with the B+ (Above Average) benchmarks in terms of indicative average annual returns on capital. Moody’s commented that the syndicate’s results had benefited materially from some exceptional underwriting conditions in the early 2000’s, together with a significant investment returns of 19% and 21% of NPE in 2007 and 2008. However, underwriting conditions had deteriorated materially since then and it was also expected that the significant prior year releases seen in prior years would also reduce significantly. Moody's continued that its expectation for future cross-cycle returns on capital for the syndicate on a stand- alone basis were therefore in line with B (s) benchmarks, albeit currently performing at the higher end of those benchmarks. The syndicate was also viewed as being relatively small and undiversified, the syndicate additionally having significant gearing in terms of reinsurance recoverables relative to its Non-Marine Liability peer group in particular. With Moody’s expectation for future cross-cycle returns on capital on a stand-alone basis in line with B (s) continuity opinion benchmarks and the syndicate viewed as relatively small and undiversified relative to the B+ peer group, Moody's has therefore assigned a B (Average) continuity opinion to Asta syndicate 2525, reflecting Moody's Analytics view of relative performance and continuity prospects for the syndicate over the insurance cycle. The outlook for the continuity opinion is stable. Syndicate 2525 is a UK and International Liability syndicate, backed by third party Names and corporate vehicles with a 2014 capacity of GBP42m that operates within the Lloyd's of London insurance market. * * * © 2014 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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