The outlook for the global reinsurance sector remains stable, according to Fitch Ratings. The globa...
The outlook for the global reinsurance sector remains stable, according to Fitch Ratings.
The global ratings agency said current ratings would be supported, despite the deterioration in the operating performances and capitalisation of individual companies, and the anticipated market conditions as long as there was no major catastrophic event.
Mark E. Rouck, senior director of the Insurance Rating Group at Fitch, said: "While underwriting margins are likely to continue to erode over the near-term, unless there is a major catastrophe, the sector will continue to generate reasonable returns on capital. Fitch does not see a 'tipping point' in the foreseeable future at which reinsurers' operating performance and market conditions no longer support a stable rating outlook."
However, the agency acknowledged that the last year had not been favourable to the sector, conceding that projected conditions over the next 12-18 months were closer to constituting a 'deep and prolonged' soft market than a year ago.
David Stephenson, director of the Insurance Rating Group at Fitch, said: "The reinsurance sector is not emerging from the last 12 months completely unscathed. Underwriting and investment conditions are clearly less favourable than they were a year ago, and capital cushions have been partially eroded. While Fitch does not expect the cyclical deterioration in market conditions to be deep or prolonged enough to change its rating outlook to negative, the deterioration is closer to such conditions than it was a year ago."
