Munich Re had two of its ratings downgraded by Fitch this week. The reinsurer's financial strength rating and long-term rating were both downgraded from AA+ to AA. Fitch said the outlook remained negative.

The downgrades followed the reinsurer's warning that it expected its first annual loss in nearly a century.

In its third quarter results, Munich Re announced profits of £106m, but this followed five consecutive quarterly losses. A statement said the company expected to record a post-tax loss for the year 2003. Munich Re said it had been hit by claims from Hurricane Isabel hitting the US east coast in September, Typhoon Maemi in South Korea and Hurricane Fabian.