Standard & Poor's has cut the long-term counterparty credit and insurer financial strength (IFS) ratings of global reinsurer Swiss Re.
Citing weak earnings and poor underwriting performance, the rating agency cut the Zurich-based reinsurer's ratings to "AA" from "AA-plus." The outlook is stable, it said.
The downgrade of its credit rating reflects a fall in Swiss Re's ability to meet its debt requirements. Meanwhile the IFS downgrade reflects a lowering of the agency's opinion of Swiss Re's ability to pay claims.
S&P analyst Stephen Searby said: "This is primarily a re-evaluation by S&P of reinsurance industry risk and Swiss Re's position within that industry following the relative underperformance in its non-life underwriting profitability.
"The action also reflects the slower-than-expected recovery in Swiss Re's earnings and the impact this may have on the group's ability to fully replenish capital during the current hard phase of the cycle."
