Fitch puts Swiss Re on negative watch

Fitch Ratings said it has placed Swiss Reinsurance Co. on Rating Watch negative and GE Insurance Solutions Corp. on Rating Watch positive.

The ratings placed on Rating Watch negative include Swiss Reinsurance Co.'s long-term issuer rating of AA+, 6.13% mandatory convertible securities due 2007 at AA, insurer financial strength at AA+ and Reassure America Life Insurance Co.'s insurer financial strength at AA+.

The ratings placed on Rating Watch positive include GE Insurance Solutions Corp.'s long-term issuer rating at A-, 7% senior unsecured notes due 2026 at A-, 6.45% senior unsecured notes due 2019 at A-, 7½% senior unsecured notes due 2010 at A-, 7¾% senior unsecured notes due 2030 at A- and Employers Reinsurance Corp.'s insurer financial strength at AA-.

The rating action follows an announcement that Swiss Re is planning to acquire GE Insurance from General Electric Co. for $6.8 billion.

Fitch said its decision reflects concerns surrounding the execution risk relating to the integration of this significant acquisition together with GE Insurance Solution's poor record of adverse reserve development and weak earnings.

Partially offsetting these concerns are potential synergies that the combined group may develop, an improvement in Swiss Re's overall diversification and scale as well as additional pretax reserves of about $3.4 billion being provided by GE Insurance Solutions, Fitch said.

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