Talbot has announced that the capacity of its Syndicate 1183 at Lloyd's will remain unchanged at £325 million for next year.

The specialty insurance group, which is a subsidiary of Bermuda-based Validus Holdings Ltd., has funds of $316.4 million in its syndicate for the 2008 year of account, with all of next year's capital being provided by, or on behalf of, companies in the Validus group.

Meanwhile, the current year continues to be relatively loss benign, with an absence of major catastrophes and major risk losses. As a consequence, rates in most of Talbot's classes of business continue to drift lower.

At the whole account, rates on business written in 2007 show an average reduction of five percent compared with the previous year. Talbot's rating index shows rates at the whole account at 190 percent of rates in the base year, 2000.

Elsewhere, Talbot Asia received formal approval to commence underwriting from the Monetary Authority of Singapore last month.

Rupert Atkin, chief executive of Talbot, said: "I am pleased that we see opportunities in the market to support an unchanged capacity for our managed Syndicate in 2008, notwithstanding softening of rates in most of the classes in which we participate.

"The strength of the capital base of the Validus group enables us to increase our risk appetite and as a consequence to take on modest increases in exposure. In addition, we see significant opportunity to develop new business for our Syndicate and the Lloyd's market from our Singapore operation, Talbot Asia, as well as through the development of other distribution channels.

"Favourable loss development in the 2005 and 2006 years of account has enabled Talbot to improve its forecasts for these years. I am particularly pleased that we are now reporting a profit for 2005, notwithstanding the impact of Hurricanes Katrina, Rita and Wilma. This is a tribute to the spread and diversity of our book, as well as the underlying profitability of our business.

"Although rates are drifting lower in most of our classes, we still believe that we have a level of rate adequacy in our classes of business which, assuming a normal level of loss experience, should enable Talbot to achieve an attractive return on capital in 2008."