Standard & Poor's has lowered its long-term counterparty credit and insurer financial strength ratings on Converium to 'A' from 'A+', and removed the ratings from CreditWatch.
The ratings agency said the Swiss insurer's strong operating performance was critical in the ratings move.
Strong premium rate increases and tightening terms and conditions across most lines of business point to improved performance, it said.
Standard & Poor's credit analyst Stephen Searby said: "The downgrade is based on the fact that, largely as a result of the reserve strengthening, expected earnings for 2002 are no longer consistent with an 'A+' rating."
However, S&P warned that the removal of the ratings from CreditWatch placement is dependent on the Converium using best practice actuarial techniques.
An S&P statement warned: "There is still a fair amount of volatility with respect to these reserves, however, especially for the underwriting years 1999-2000, which could lead to either favorable or adverse development."
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