A.M. Best has affirmed the financial strength rating of A (excellent) and the issuer credit rating (ICR) of “a” of Lloyd's. A.M. Best also affirmed the ICR of "a-" of the Society of Lloyd's and the debt rating of "bbb+" of subordinated loan notes issued in two tranches in November 2004.

In A.M. Best Co.'s opinion, Lloyd's competitive strength derives from its marketplace structure, which fosters the development of strong specialist underwriting skills. Lloyd's Franchise Board has provided a more commercial focus to management of the market and is responsible for setting minimum standards to help safeguard its future profitability. A.M. Best believes this responsibility, coupled with the activities of the Franchise Performance Directorate (FPD), continues to improve Lloyd's oversight of commercial planning by its franchisees, although this does not extend to active management of Lloyd's overall mix of business.

Overall, there was a small increase in premium of just over £300 million in 2005, reflecting some improvement in the opportunities available in the reinsurance market, particularly in the final quarter of 2005 following the major US hurricane losses. Losses had a similar, although not as marked, impact on the marine and energy markets.

Premium volume for all other major business lines declined, reflecting greater caution from underwriters as market conditions became less favorable. Apart from Lloyd's small account of life business, the largest percentage decrease was in aviation business, driven by the marked softening that has taken place for this line of business. There was also a decrease in the volume of casualty business written, with strong competition returning to most of Lloyd's main casualty lines.