Standard & Poor's said on Friday that it may downgrade the ratings of Everest Re Group Ltd. because the insurer's underwriting performance fell below the rating agency's expectations.

S&P has A- counterparty credit ratings on Everest and its US-based Everest Reinsurance Holdings Inc.

S&P's AA- counterparty credit and financial strength ratings on Everest Reinsurance (Bermuda) Ltd., Everest Reinsurance Co., and Everest National Insurance Co. are also on review for a possible downgrade.

"We placed the ratings on CreditWatch because Everest's 2008 underwriting performance is weaker than our expectation," Standard & Poor's credit analyst Taoufik Gharib said.

"In addition, the company has been unable to generate sustainable very strong underwriting and operating results over multi-year periods."

S&P noted that Everest had a "strong and diversified competitive position as one of the top ten global reinsurers based on 2007 net reinsurance premiums". However, the company had not translated its competitive advantage into stronger underwriting results, the New York-based ratings agency said.

Everest generally relies less on the purchase of reinsurance because of its strategic emphasis on underwriting on a gross basis, which could accentuate earnings volatility given its changing business mix, which is currently more weighted toward property, S&P added.

The expected implementation of a robust enterprise risk management programme, while it remained adequate, had also been slower than expected.

"We will meet with Everest's management team to address these concerns, which could lead us to lower the ratings by one notch," S&P's statement said. "We expect to resolve the CreditWatch status of the ratings within the next three months."