A.M. Best Co. said Friday that it has downgraded the financial strength rating of Zurich Specialties London Ltd. to B-plus-plus, from "A," and removed it from review with negative implications.
The Oldwick, N.J., rating company also assigned an issuer credit rating of bbb. A negative outlook was assigned on all ratings.
The downgrading reflects the diminished importance of the specialties unit within the Swiss insurer Zurich Financial Services Group, according to Best, and also reflects the company's declining business profile, as shown by a 25% decline last year in gross written premium. Best said it believes the decline resulted from a decision to quit several lines of business.
The unit's weak financial performance has caused a deterioration of its risk-adjusted capitalization, the rating agency said, and Zurich Specialties' contribution to consolidated group earnings is expected to be minimal this year because it is unlikely to generate significant profit.
