A.M. Best Co. yesterday lowered the financial strength rating of A (Excellent) to A- (Excellent) for Trenwick Group, Bermuda, removing it from under review and assigning it a negative rating outlook.

Additionally, A.M. Best has lowered its ratings on Trenwick America Corporation's senior debt from "bbb" to "bbb-"; Trenwick America Capital Trust I's trust preferred securities from "bb+" to "bb" and LaSalle Re Holdings Ltd.'s preferred stock from "bb+" to "bb".

"These rating actions reflect a continued deterioration in the group's overall capitalisation and recent earnings trend stemming from previously reported adverse reserve development and more recently, significant losses stemming from the World Trade Center attack," A.M. Best said in a statement.

"Losses from the World Trade Center attack have only further exacerbated Trenwick's depressed earnings trend, which has been largely driven by continued adverse loss reserve development.

"The extent of this adverse reserve development has elevated A.M. Best's concern with regard to the adequacy of Trenwick's current loss reserve position and its ability to restore profitability to levels commensurate with an "A" rating over the near-term. The negative rating outlook reflects A.M. Best's ongoing concerns with regard to Trenwick's capitalisation levels and its ability to service fixed obligations."