AM Best has downgraded the financial strength ratings of two subsidiaries of Bermuda holding company Commercial Risk Partners, which is owned by SCOR.
Commercial Risk Reinsurance Company (Bermuda) and its US subsidiary Commercial Risk Re-insurance Company (Vermont) were both downgraded from B++ (very good) to B+ (very good). Both have been assigned a negative outlook.
AM Best said the ratings reflected its view of the companies' consolidated risk-adjusted capitalisation. It also considered large operating losses in 2002 and continued losses in the first half of 2003 on a consolidated basis.
Inter company balances with SCOR, which had its rating downgraded to B++ (very good), also affected the ratings, said AM Best.
SCOR announced in January that it was placing both companies in run-off and seeking to sell them during the year. AM Best said a sale does not seem imminent because of protracted negotiations.
AM Best also said the ratings recognised actions taken by SCOR to minimise the companies' reserving risks.
