S&P puts Swiss Re on negative watch

Standard & Poor's said it placed its AA long-term counterparty credit and insurer financial strength ratings on Swiss Reinsurance Co. and its core operating companies on CreditWatch with negative implications.

At the same time, the short-term A-1+ counterparty credit rating on Swiss Re also was placed on CreditWatch with negative implications.

The CreditWatch placement follows the announcement by Swiss Re that it has agreed with U.S.-based General Electric Co. (AAA/stable/A-1+) to acquire GE Insurance Solutions Corp.

The CreditWatch status reflects the execution risk associated with integrating a group of the size and complexity of General Electric, which has a lower rating than that on Swiss Re, S&P said.

The ratings partly reflect the state of flux that it has been in for a number of years caused by uncertainty over the long-term ownership of the group, S&P said. These risks are partly offset by Swiss Re's track record of successful transatlantic acquisitions and the advanced integration planning already in place, S&P said.

If the transaction is completed as currently constituted, S&P said it expects the ratings on Swiss Re and its core operating companies would be lowered to AA- with a stable outlook. If the transaction does not proceed, the ratings on Swiss Re would be affirmed, S&P said.

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