Bermuda-based re/insurer Hardy Underwriting's Lloyd's Syndicate 382 has been affirmed AM Best Co.'s syndicate rating of A (excellent) and the issuer credit rating (ICR) of "a+".

In addition, the ratings agency has affirmed the debt rating of "bbb-" on the $30 million floating rate sub-ordinated bonds issued by Hardy Group. The outlook for all ratings remains stable.

Syndicate 382's financial flexibility continues to benefit from the support of Hardy Bermuda, which owns 100 percent of its capacity and raised £40 million of new share capital to support the syndicate's underwriting in March 2009. The syndicate's capacity has increased to £300 million for the 2010 year of account - up £50 million from 2009 - in anticipation of growth from new and existing business lines.

Hardy Bermuda's funds at Lloyd's requirements for the 2010 year are met by partial utilisation of its $82 million letter of credit facility. The ratings of syndicate 382 also reflect the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates.

Rate strengthening for the syndicate's catastrophe-exposed property business and benign weather-related claims experience are likely to result in a decrease in its combined ratio for 2009 on an annually accounted basis from 93 percent in 2008. A solid investment return is anticipated, albeit lower than the four percent reported in 2008.

The syndicate's conservative strategy of holding only high quality bonds and cash supports stable investment performance. Prospective underwriting performance is expected to be more volatile due to growth of the syndicate's property treaty portfolio, following the merger with specialist property syndicate 3820 on January 1, 2009. However, the syndicate's prudent approach to pricing and management of catastrophe exposure is likely to support good technical performance.