Fitch Ratings has affirmed Lloyd’s of London’s insurer financial strength rating at A+ and revised its outlook from stable to positive.

The agency upgraded the outlook because the market has reduced its earnings volatility and increased oversight, while its underwriting performance is expected to improve.

Lloyd’s has also withstood major losses from Superstorm Sandy, floods in Thailand and Australia and earthquakes in Japan and New Zealand, “all of which remain within the boundaries of originally reported estimates”.

Fitch says Lloyd’s has a strong financial profile, low debt and a significant market position in insurance and reinsurance. But it continues to face headwinds from low yields and softening pricing in some major classes – as does the wider insurance industry.

The agency has also affirmed the Society of Lloyd’s long-term issuer default rating at A and Lloyd’s China’s insurer financial strength at A+.