Standard & Poor's (S&P) has applied a negative outlook to the ratings for Swiss Re.
At the same time the ratings agency affirmed all the ratings for the group, including its AA long-term counterparty credit and insurer financial strength ratings.
"The outlook revision mainly reflects uncertainty as to whether the improvement in profitability in 2003 and the first half of 2004 is sustainable over the next few years," said S&P credit analyst Stephen Searby.
S&P said it believes that further improvement is necessary to bring long-term across-the-cycle operating performance to a level commensurate with the ratings.
In addition, Swiss Re, in common with most of its peers, has continued to add to its prior-year reserves in response to continuing adverse development on US casualty business.
Although such development is not material in the context of the group's overall capital and reserves, it acts as a drag on prospective operating performance, said the ratings agency.
"The ratings reflect Swiss Re's very strong competitive position, very strong financial flexibility, and very strong risk-based capitalisation," said Searby.
These factors are partly offset by weaker relative long-term non-life operating profitability, and by a somewhat higher reliance (than peers) on softer forms of capital, said S&P.
