Troubled Bermuda-based insurer Centre Solutions received another ratings hit on Friday when A.M. Best Co. downgraded its financial strength rating to B+ (Very Good) from A- (Excellent) and changed its under review status for all ratings of the group to negative from developing.

The move came less than five months after Best downgraded Centre's financial strength rating to A- (Excellent) from A (Excellent) and changed the under review implications to developing.

"At that time, A.M. Best had expressed concerns with regard to the adequacy and nature of capital support to be provided to Centre from its parent company, Zurich Financial Services Group," the agency said in a statement.

"Subsequently, ZFS did provide an additional $250 million of capital to Centre, increasing its overall shareholders' equity to approximately $900 million as of February 29, 2004.

"However, in A.M. Best's opinion, while the additional capital provided improvement to Centre's risk-adjusted capitalisation, the company may continue to be exposed to further adverse loss reserve development from discontinued classes of business. A.M. Best believes that additional capital may be necessary to insulate Centre from its historical business exposures."

Best said Friday's downgrade reflected the lack of adequate and timely capital support to maintain Centre's previous A- (Excellent) rating.

"As a result, A.M. Best believes there is increased uncertainty regarding Centre's future as a viable underwriting entity within ZFS. Furthermore, in A.M. Best's opinion, Centre's operations are now ancillary to ZFS and are essentially in run off.

"Resolution of the current under review status is predicated on the completion of further due diligence by A.M. Best on Centre's current loss reserve and liquidity positions."