AM Best has affirmed Lloyd’s credit ratings, reflecting a strong balance sheet and operating performance.

The ratings agency affirmed its “A” financial strength rating and A+ long-term issuer credit ratings for Lloyd’s UK, China and Brussels.

It has also affirmed a long-term issuer credit rating of “A” for Society of Lloyd’s, and A- on £500 million ($898.18 million) 4.75% subordinated loan notes maturing on October 30 2024 and £300 million ($538.90 million) 4.875% subordinated notes maturing on February 7 2047.

The outlook remains stable.

“The ratings reflect Lloyd’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management,” AM Best says.

The assessment reflects Lloyd’s strong position in its core markets as a leading writer of reinsurance and specialty property and casualty insurance.

“Lloyd’s has an excellent brand in these markets, but an increasingly difficult operating environment poses challenges to Lloyd’s competitive position,” AM Best says.

Capital adequacy is supported by a “robust risk-based approach to setting member-level capital” and a strong central fund able to meet the policyholder obligations of all Lloyd’s members.

Lloyd’s Brussels subsidiary was set up following the UK’s Brexit decision and began writing business at the start of this year.