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Stable outlook for reinsurance sector: Best

Posted On: Aug. 13, 2007 12:00 AM CST

LONDON— The outlook for the global reinsurance sector is stable, according to a report released Monday by A.M. Best Europe Ltd. in London.

The current outlook implies that A.M. Best Co. Inc., headquartered in Oldwick, New Jersey, expects that the majority of this year's rating actions will be affirmations with stable outlooks, the report stated. The view differs from A.M. Best's negative outlook of two years ago, the company said.

Best noted, however, that if "price deterioration and competition persist at a faster pace than expected, the outlook could be revised back to negative in 2008."

"It is A.M. Best's expectation that the sector is poised for a profitable 2007, given the potential for favorable underwriting margins in many lines of business and reinsurers' reporting strong operating cash flow that will likely fuel investment income generation," the report continued.