Goshawk Lloyd’s Downgraded

Moody’s downgraded the performance rating of Lloyd’s syndicate 102—Goshawk Syndicate Management Limited—to “C+” (below average) from “B+” (above average) and kept it on review for further possible downgrade.

This follows the release of Goshawk Insurance Holdings trading statement Sept. 19 indicating further adverse development on certain lines of syndicate 102’s business and the need for additional reinsurance provisions.

Goshawk has announced that the Group’s results for the six months to June 30 are expected to be materially below market expectations. Furthermore, depending on the extent of the additional reserving required, the Group may be in breach of its banking covenants.

This announcement follows revisions to the syndicate’s forecasts for the 2001 account to negative 20 percent to negative 30 percent from negative five percent to negative 10 percent.

Moody’s expects there could be severe pressure on the funds at Lloyd’s available to syndicate 102 for underwriting in 2004. Without any obvious source of additional external funds, and with the expectation that funds, if any, diverted from Goshawk’s Bermudan operation Goshawk Re are likely to be limited, the syndicate has been downgraded to “C+” (below average) and kept under review for further possible downgrade.

Topics Excess Surplus Lloyd's