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Member, Beacon International Group, Ltd.
NEW YORK—Fitch Ratings' outlook on the global reinsurance sector remains negative because of concern about reinsurers' ability to replenish capital if they suffer large catastrophe losses in the current environment, the rating agency said in a report issued Wednesday.
“This represents a heightened vulnerability for the reinsurance sector that historically has not existed to the same extent,” said the report. “As a result, Fitch believes there is an elevated possibility that reinsurers could be forced to operate with weaker capital bases for a prolonged period.”
The report also notes that for the first half, nonlife reinsurers included in its survey reported a 91.7% combined ratio, compared with 92.7% for the comparable period a year ago. However, net premiums written for the period declined by 9.5% to $37.7 billion.
The report, 2009-2010 Global Reinsurance Review and Outlook, is available at www.fitchratings.com.