Aspen Bermuda Ltd’s insurance financial strength rating has been downgraded to A3 from A2 by Moody’s.The same downgrade has been made to Aspen Insurance UK Ltd.The rating agency said the move reflected Aspen’s “diminished earnings power and difficulty in rebuilding balance sheet strength, both of which remain weaker than that of its peers and Moody’s expectations”. It added: “Aspen’s diminished earnings power, in part a result of its need to support regulatory capital levels through elevated cession of risk as balance sheet equity has fallen, allows it limited earnings flexibility to absorb unexpected events within current year earnings.“Similar to peers, Moody’s expects Aspen will incur meaningful claims related to the coronavirus in 2020.”The rating agency has also downgraded the senior unsecured debt rating of Aspen Insurance Holdings Ltd to Baa2 from Baa1, and the preferred stock ratings downgraded to Ba1(hyb) from Baa3(hyb). The outlook for the ratings has been changed to stable from negative.Regarding the rationale for its outlook, Moody’s said it reflects the view “that the steps Aspen has taken to improve its underwriting performance and operating efficiency, along with hardening prices for reinsurance, will lead to improving profitability for the business and a return to positive capital generation. The outlook also anticipates that Aspen will maintain its moderate underwriting and investment risk stance and good levels of economic and regulatory capital”.