A.M. Best Co. downgraded the financial strength ratings to “A+” (superior) from “A++” (superior) of Swiss Re and its core subsidiaries. At the same time, Best downgraded the ratings on all debt instruments issued by Swiss Re’s group entities, and affirmed Swiss Re’s commercial paper program at “AMB-1+.” The outlook on all ratings was changed to stable from negative.
The rating actions reflect Best’s view that Swiss Re’s prospective consolidated earnings are unlikely to be supportive of an “A++” consolidated risk-based capital level throughout the cycle. Current capital could be viewed as being at an “A++” level; however, the degree of “soft” capital mitigates this in part. This fact, combined with the earnings outlook for Swiss Re and the industry, leads Best to conclude that capital levels that are more consistent with an “A+” financial strength rating will be maintained prospectively. These ratings also factor Swiss Re’s superior business position in the worldwide reinsurance markets, as well as its very stable and experienced management team.
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