A.M. Best has downgraded the financial strength ratings from A to A- on several core subsidiaries of the Gerling Group.
It also downgraded the rating on the subordinated debt issued by Gerling Global Finance Alpha BV, and guaranteed by Gerling Global Re, to bbb from a.
A.M. Best said these rating actions reflect a "significant deterioration" in Gerling Global Re's operating performance, changes in senior management and a substantial erosion of the group's capital base despite the recent Euro 300m capital contribution.
Gerling Global Re's Euro 500m loss, announced on 13 March, also exceeded A.M. Best's expectation.
The ratings remain under review, with negative implications. This is due to A.M. Best's concern about potential negative earnings developments which would constrain the group's financial flexibility.
It also reflects uncertainty about the group's future. This follows the announcement last week that Rolf Gerling has put his majority share up for sale.
