Insights
AM Best upgrades London market from ‘stable’ to ‘positive’
Posted 22/04/2024 – Quick takes
AM Best has improved its outlook on the London insurance market from ‘stable’ to ‘positive’. The major drivers of the upgraded categorisation published in the report, is excellent pricing adequacy and enhanced investment returns. The rating agency said, “Given the positive rate momentum in these lines and the resulting prospects of strong technical profitability, London market companies are expected to continue to deploy capacity in E&S lines over the near term”.
Alpha comment
The upgraded classification from AM Best, is a good indicator of where the London market and Lloyd’s are currently in the market cycle. Rating adequacy remains very high in virtually every class of business written at Lloyd’s and carriers have reported significant combined ratio improvements since 2017. As pricing in some classes approach their peak, it is encouraging to see rates continuing to improve in others. We expect underwriters to continue to require inflationary increases on top of rate, and all the signs are that pricing and terms & conditions are likely to hold firm for the foreseeable future, as evidenced by AM Best’s announcement.
