Rating agency Moody’s Investor Services has lowered the outlook on its “Aa1” financial strength rating of Swiss Reinsurance Co. and subsidiaries from “stable” to “negative”. The rating agency says the negative outlook is in response to the reinsurer’s declining profitability as well as reduction in capital during 2002. Moody’s notes that its rating of “Aa1” applies only to companies with “superior profitability”. The rating agency observes, however, that Swiss Re does have certain qualities of strength, namely its skillful management of capital and limited exposure to the current vagaries of the equity markets. Moody’s also expects Swiss Re to achieve increased profitability in the years ahead, with the company’s target of a combined ratio on non-life of 98% for 2003 to 2005 being within realistic boundaries. But, Moody’s says it will watch for troubling signs which may warrant a re-rating of Swiss Re.