Standard & Poor’s (S&P) has revised its outlook on Ace and some of its subsidiaries – including Ace Australia and Ace New Zealand – to negative from stable.

S&P has also assigned preliminary debt ratings to Ace’s $US1.5 billion shelf, but a drawdown is not expected in the near term. The counterparty credit ratings on Ace, Ace Australia, and Ace NZ have been affirmed at BBB+/A-2, A, and A respectively.

S&P says the recent developments leading to the negative outlook include the company’s execution of a growth strategy that has led Ace to compete directly with some larger companies.

“However, without the capital base or market presence of these larger competitors, it will be difficult for Ace to maintain this competitive posture. Moreover, Ace’s good combined ratio must be considered in light of a relatively modest level of accident-year reserve bookings.”

S&P says another factor in the negative outlook is the investigation of the insurance and brokerage industry in New York. Given the scope of the investigations, “Ace has the potential to attract greater scrutiny than other companies”.