The Financial Times reported last week that ABB Financial Services, the multi-billion dollar business incorporating insurance, structured finance and equity investments, may not be prospering from its insurance ventures, which include Bermuda-based Scandinavian Re.

Scandanavian Re announced earlier this year that it was going in to run-off.

FT reported: "The fear is that the rapid deterioration in the group's insurance operations could be mirrored in other parts of its portfolio."

Scandinavian Re's rating has been downgraded from AA- to BB because of "significantly below expectation" results for the second consecutive year.

Although Scandinavian Re has now stopped writing new business, the company could still put a further drain on ABB.

It is understood that ABB may sell off Scandanavian Re, even in run-off, but to do this may require pumping more equity in to the company.

According to the FT report, investors fear this may put a drain on other segments of ABB's business.

ABB's Financial Services unit is reported as its most successful. The unit employs less than one percent of ABB's total staff but accounts for nearly half of its $32 billion in assets.

But after 10 years of "more than respectable performance" the unit last year reported its first loss which was attributed to $433 million of insurance losses and insurance-related accounting charges.