Two ratings agencies have downgraded reinsurance firm PartnerRe after Italian investment giant Exor won control of the company.

Standard & Poor (S&P) changed its outlook on PartnerRe from stable to negative after Monday’s $6.9 billion takeover, which froze out a rival merger bid by insurance and reinsurance firm Axis.

And AM Best downgraded PartnerRe’s financial strength rating to A (excellent) from A+ (superior) and its issuer credit ratings from aa- to a+.

S&P analyst Taoufik Gharib said the move came amid uncertainty over how the firm will operate under new ownership.

He added: “In addition, there are questions surrounding PartnerRe’s potential managerial changes, prospective capital management, investment strategy, growth strategies, upstreaming of dividends, composition of the board of directors and direction of the enterprise risk management framework, including any changes to risk tolerances and aggregation processes.”

Mr Gharib said: “We believe that PartnerRe’s management has been distracted since the announcement of its initial acquisition by Axis Capital Holdings Ltd in January 2015.

“The back and forth between the two outstanding offers during the past several months in a challenging soft reinsurance market has also been a distraction.”

Mr Gharib added that a “go shop” option in the Exor deal, which allows PartnerRe to look for a better offer until mid-September would “further accentuate the future operational and execution risk”.

Former PartnerRe CEO Costas Miranthis stepped down in connection with the Axis merger proposal and was replaced by company director David Zwiener on a stopgap basis.

S&P, however, affirmed other ratings of PartnerRe, including an A- long-term counterparty credit rating.

Mr Gharib said that S&P would continue to review the ratings — and could lower them further or raise them, depending on how Exor handles its new acquisition, including allowing PartnerRe autonomy in managing its business.

AM Best said it had changed its ratings due to concern over PartnerRe’s “concentration in reinsurance and lack of a diversified product platform, in particular to provide both primary and reinsurance solutions”.

AM Best added: “The proposed merger with Axis would have begun to address these issues and with that transaction terminated these concerns are bought back to the forefront.

“Additionally, AM Best is concerned that any such diversification initiatives at PartnerRe have been delayed because of the now terminated merger agreement with Axis. These concerns are magnified given the current challenging reinsurance market conditions.”

AM Best added that the under-review status of PartnerRe would continue due to “remaining uncertainty” over senior leadership at PartnerRe, particularly the role of CEO and additional information on Exor’s plans for the firm.

The ratings agency said the under-review status would be removed after the closing of the Exor/PartnerRe deal.