Partner Re’s insurer financial strength rating was yesterday downgraded by Fitch to AA- from AA.The rating agency’s move comes after PartnerRe recorded catastrophe losses of more than $1 billion in the first quarter of this year.“The ratings downgrades reflect Fitch’s view that PartnerRe’s earnings profile, while strong over an extended period of time, included moderately greater variability than previously considered within the rating rationale,” Fitch said in a statement.Fitch added that it recognises reinsurers with catastrophe exposure will periodically suffer losses of a magnitude sufficient to significantly impact earnings and reduce capital. As a result, the ratings agency acknowledged it was difficult for any reinsurer to maintain stable earnings, given that the nature of reinsurance was intended in large part to absorb earnings volatility on behalf of their clients.PartnerRe’s first-quarter catastrophe losses were primarily from earthquakes in Japan and New Zealand and resulted in a $736 million operating loss. This contributed to a 15 percent decline in shareholders equity that was among the largest observed in by reinsurers rated by Fitch.This result can be partially attributed to the fact that PartnerRe’s assumed risks are geographically dispersed and losses can arise from various large international catastrophe events, said the ratings agency.Fitch said that while PartnerRe had consistently achieved its goal of generating a 13 percent operating return on equity through the pricing cycle, it already appeared unlikely that the company would report a net profit for 2011, which would reflect the second time in the past seven years that PartnerRe has reported an operating and net loss.The stable outlook reflected Fitch’s belief that PartnerRe’s capital strength remained adequate for its rating category in the aftermath of the losses suffered in the first quarter and that the company remained well-positioned to take advantage of anticipated pricing improvement in catastrophe-exposed lines in the coming months.