AM Best has downgraded the financial strength and issuer credit ratings of AMI Insurance following the Christchurch earthquake.

The ratings agency has downgraded Christchurch-based AMI’s financial strength rating to A- (excellent) from A+ (Superior) and its issuer credit rating to a- from aa-.

Both ratings have been placed under review with negative implications and reflect the agency’s view of the negative impact on AMI’s capitalisation due to the earthquake.

“In addition, AM Best is concerned with AMI’s risk management in relation to its aggregate catastrophe exposures,” the agency says in a statement.

“AM Best understands that capital-raising initiatives are being pursued by AMI’s management. Therefore AM Best has put the ratings under review with negative implications while discussions continue with management regarding back-up plans.”