Standard & Poor’s Rating Services (S&P) has lowered the financial strength rating on Swiss Reinsurance Co. and its operating subsidiaries to “AA” from “AA+”. The rating agency’s outlook on the reinsurer is stable. S&P says the rating downgrade resulted from Swiss Re’s “relative underperformance in its non-life underwriting profitability”. The rating agency has attached a higher risk rating to the non-life reinsurance sector, and in this respect, notes Swiss Re’s relatively large position in this sector. Furthermore, the rating downgrade reflects a slower-than-expected recovery in Swiss Re’s earnings and the impact this may have on the group’s ability to replenish capital during the current hard market, S&P says. The rating agency observes that Swiss Re’s business position remains strong, underpinned by a “superior management team” and strong financial flexibility. As a result, S&P expects to see an improvement in Swiss Re’s non-life combined ratio to around 100% by the end of this year.