Fitch cuts Converium

Fitch Ratings said it downgraded Converium AG's insurer financial strength rating to BB+ from A- and Converium Holdings AG's long-term rating to B from BBB-. In addition, the long-term debt rating of Converium Holdings (North America) Inc and the issue rating assigned to the $200 million unsecured senior notes due in October 2023 issued by Zurich Reinsurance Centre Holdings Inc and assumed by Converium Holdings (North America) Inc were also downgraded to B from BBB-.

The Rating Watch negative assigned to the ratings on July 20 has been changed to Rating Watch evolving.

Fitch said the rating actions follow Converium's announcement that it intends to place its U.S. operations into run-off and that it will no longer underwrite business from the United States. Converium does intend to underwrite U.S. exposures from its operations in Zurich and Bermuda.

Fitch said it views the decision taken by Converium to close its U.S. operations as a deviation from its original business plan and that this action is likely to have a materially negative impact on its franchise, particularly among the group's brokers and cedants.

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