AM Best has affirmed the financial A++ strength ratings of Swiss Re and its core subsidiaries with a negative outlook.

The ratings agency said it expects the company will re-establish its position by the end of the year.

However AM Best raised concerns over the recent financial performance of its non-life business and the vulnerability of its equity portfolio to asset devaluation.

An AM Best spokesman said: "The company remains vulnerable to reductions in current investment income and both net realised and unrealised investment losses."

"The current rating level is dependent upon no further substantial erosion in Swiss Re's risk-based capital as assessed using A.M. Best's capital model."

However the agency predicted an improvment in its position with a modest profit by the end of 2002 and stronger performance in 2003 and 2004.

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