Hardy Ltd.-managed Lloyd's Syndicate 382 has been affirmed the AM Best's Syndicate Rating of A (excellent) and the issuer credit rating (ICR) of "a+".

At the same time, Best has affirmed the ICR of "bbb" of Hardy Underwriting Group plc. (Hardy Group, UK), the syndicate's immediate holding company, and affirmed the debt rating of "bbb-" on the $30 million floating rate subordinated bonds issued by Hardy Group in 2006.

The outlook on all ratings has been revised to stable from positive, reflecting the stable outlook on the rating of Lloyd's of London. Additionally, Best has assigned an ICR of "bbb" to Hardy Underwriting Bermuda Ltd. (Hardy Bermuda), the newly-established ultimate holding company of the Hardy group of companies. The outlook on this rating is also stable.

The ratings reflect Best's view that syndicate 382 is likely to benefit from continued financial flexibility as a wholly aligned syndicate within Hardy Bermuda. The ratings also reflect the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates.

In 2007 and 2008, the syndicate is expected to maintain its good operating performance, despite weaker rating conditions in its main business lines. On an annually accounted basis, Best anticipates a good, albeit higher, combined ratio in 2007 (72 percent in 2006), due in part to prior year reserve releases.

On an underwriting year basis, Best expects the syndicate to return an excellent profit on capacity for the 2006 year of account of approximately 11 percent to 16 percent, in line with its September 2007 quarterly return, due in part to good rating conditions, particularly in its non-marine catastrophe excess of loss account. The 2005 year of account is likely to close with an excellent return on capacity of approximately 15 percent. In Best's opinion, this is a strong forecast given the syndicate's exposure to U.S. property catastrophe business.

Best believes that syndicate 382 has a good specialist business profile and has particular expertise in the underwriting of aviation, marine and property business. The syndicate's profile benefits from good diversification both geographically and by account type.