Listing some positive factors, Best said it believes that Swiss Re is now in a better position to make decisions about the future business strategy and future structure of the entire group.

Voicing another negative, however, Best said it continues to evaluate the potential impact of the acquisition on Swiss Re's prospective consolidated capitalization in light of historical significant adverse reserve development at Employers Re. The announcement noted that $3.4 billion reserve strengthening, which has taken place in conjunction with the acquisition, has alleviated some concerns.

Reserve developments at Swiss Re itself won't escape Best's attention either. The rating agency said it is continuing to discuss with Swiss Re's management the potential for further adverse reserve developments in Swiss Re's liability portfolio, which in 2005 were mostly compensated by positive developments in other lines of business.

Separately, Moody's Investors Service in New York said it would continue to review its “Baa1″ senior debt rating for GE Insurance Solutions Corp. for possible upgrade, but placed the ratings of reinsurance operating companies of GE Insurance on review with direction uncertain. Currently, Employers Re's financial strength rating is “A1,” GE Frankona Reinsurance Ltd. is “A1,” and GE Reinsurance is “A3.”

Moody's has its sights on the level of implicit and explicit support which may be provided by Swiss Re to each reinsurance subsidiary. “If Swiss Re moves to closely integrate these legal entities into its ongoing business operations, they would likely be upgraded. Conversely, should Swiss Re place any of the legacy GE Insurance Solutions operating companies into run-off, that company's rating is likely to be lowered, although Moody's would expect any such rating to remain in the secure range (Baa or higher).”

Fitch, releasing a statement from its London and Chicago offices, said its ratings on Swiss Reinsurance Company, including a “double-A-plus” financial strength rating, remain on Rating Watch Negative for now. At the same time, GE Insurance's ratings, including a “double-A-minus” on Employers Re, remain on Rating Watch Positive.

Fitch said it will consider prospective capitalization, profitability and reserve adequacy relative to the current rating levels, and potential synergies that the combined group may develop.

Fitch expects to resolve the outstanding Rating Watches over the next few days.