A.M. Best downgrades Swiss Re group

Rating agency A.M. Best has reduced the financial strength rating of the Swiss Re group to "A+ (Superior)" from "A++ (Superior)" on grounds that the reinsurer’s forward earnings potential based on first half results for 2003 will unlikely support its existing risk-based capital level. The rating agency notes that, while Swiss Re’s combined ratio for its property and casualty business did improve to 99.8% at the end of the first six months of this year compared with the 104% ratio shown at the end of 2002, the pace of the "turnaround" has been slow relative to current market conditions.A.M. Best points out, however, that Swiss Re’s earnings on it life and health business did show significant growth for the first half of 2003. Based on the group’s leading position in these markets, as well as its "experienced management team", the rating agency believes the group will manage to enhance its business position. "As the largest life and the second-largest non-life reinsurer, Swiss Re benefits from a superior brand and outstanding underwriting capabilities worldwide. A.M. Best believes the continuous focus on financial strength by reinsurance buyers is likely to further enhance Swiss Re’s business position."