A.M. Best Co. has placed the financial strength rating of Aspen Insurance Limited under review with negative implications. Best?s rating action follows parent company Aspen Insurance Holdings Limited?s estimate yesterday that its net Katrina loss is likely to be between $325 million and $400 million, up from $150 million advised in September.

Most of the Bermuda-based company?s exposure derives from Aspen Insurance Limited where its principal property catastrophe account is written.

At the revised level, AIL will suffer a significant diminution in its risk-adjusted capitalisation from Katrina, Best said.

The ratings firm adds that there remains a risk that the company will be unable to re-establish its capitalisation at a level commensurate with its current A- rating.

The company?s ratings will remain under review until A.M. Best has fully assessed the impact of recent catastrophes on the company, reviewed its risk management with regard to major insurance losses, as well as evaluated remedial steps the company may take with respect to its capitalisation.

Aspen closed at $23.47 a share yesterday, down $1.94 or 7.63 percent on the New York Stock Exchange.