Failure to renew could spell end for crippled insurer, say analysts
Trenwick is in a "critical" position as it fights for its future financial security.
The group, which last week reported heavy losses on top of its tightening finances, has until 22 November to renew a $226m (£142m) letter of credit supporting its Lloyd's operations.
Mark Rouck, a director of Fitch Ratings and specialist property and casualty insurance analyst, said the renewal was critical.
"If they don't renew it you've really got to question the ongoing viability of the company.
"Given its ratings levels, it needs the Lloyd's business."
Fellow ratings agency AM Best downgraded the financial strength ratings of five of the Bermuda-based group's subsidiaries to B- (fair) from B+ (very good).
It said there was "significant uncertainty" about Trenwick's ability to renew the letter of credit and also to service $75m (£47m) of debt obligations due in April.
Trenwick was expected to have until 22 November to clinch the renewal
The task follows third quarter financial results that showed a $137m (£86m) net loss.
Fitch has a CCC rating on Trenwick's senior debt, CC on its trust preferred securities and CC on preferred stock.
It does not have an overall financial strength rating on the insurer, which received a major boost when Warren Buffett poured cash into the company back in September.
His Berkshire Hathaway group agreed to provide $93m (£58.5m) to increase Trenwick's Syndicate 839 capacity through additional Lloyd's funding and another $119m (£74.8m) capacity increase through qualifying quota share reinsurance.
Rouck said Buffett's action was a "vote of confidence".
He said: "Warren Buffett is a pretty astute investor and knows the reinsurance market pretty well. I think they're betting on the fact that the aviation market, which is where the capacity is going, is in a pretty good spot.
"They must be confident that the aviation underwriting being done now is good."
