Standard & Poor's (S&P) said it has affirmed its 'AA' counterparty credit and financial strength ratings on Swiss Re and its core operating companies.

S&P said it had removed the ratings from credit watch with negative implications but that the outlook is negative.

S&P said: "Specifically, Swiss Re is expected to perform better in its non-life operations in the future than in the past, due to the centralisation of strategy and controls, more focus on the bottom line, and an emerging ability to translate its financial strength, market presence and underwriting expertise into market-leading earnings."

S&P also said that the group's extensive diversification across non-life lines of business, and its ability to write business with little dependence on the availability of reinsurance, places it in a strong position relative to peers in the hardened market expected to exist at the time of the January 2006 treaty renewals.

In a statement, the ratings agency said: "The negative outlook reflects the risk that the actions Swiss Re has taken to improve performance in its non-life sector may not translate into market-leading published financial results over the cycle."