What’s new: In brief (May 27, 2004)

Swiss Re has seen its financial strength and long-term debt ratings cut by Moody’s to “Aa2”, although the reinsurer’s short-term rating was affirmed at “prime-1”. Among the conditions cited in the downgrade are possible further adverse development for the years 1997-2001, and the evolving risk profile associated with its growing life and financial intermediation business.

Moody’s has put a positive outlook on the “Aa3” financial strength rating of Folksamerica, based on improved results and market expectations for the new White Mountains Re brand (which includes Folksamerica, Fund American, Sirius and White Mountains Underwriting). An upgrade could be in the offing if the company is able to maintain low adverse reserve development, grow organic surplus in line with premium volume, and further market acceptance of the new brand.

A.M. Best is reporting storms affecting the central and midwest U.S. could cost insurers US$25 million. Since last Friday, several states have been hit by tornadoes, high winds and rain with at least 200 funnel clouds reported in four days. More rain and severe weather are expected into the end of this week.