Ratings agency Fitch cut The Underwriter by a notch from BBB+ to BBB with a negative rating watch.
The change follows the insurer's admission it is changing its business plan, because it is unlikely to get new capital from its shareholders in the short term.
According to Fitch, The Underwriter's capitalisation was adequate for current business.
The agency said in a statement: "The negative rating watch reflects uncertainty regarding the extent of any additional charges which may impact capital in the near term, as well as concerns regarding future business volumes and mix.
"It is anticipated that the watch placement will be resolved over the coming weeks, following further meetings with management."
The agency expected the rating to either be affirmed at its current level or lowered by no more than one notch.