The global reinsurance industry is still recovering from the losses of September 11, according to Fitch Ratings.
In its latest report, Fitch Ratings said that despite substantial rate rises the industry is still struggling to earn reasonable returns.
A negative outlook is likely to continue on the US and global reinsurance markets, it said.
In its 2002 report Fitch said that the market has recovered significantly. Underwriting capacity has been replenished through the creation of several new companies.
Despite the market correction the agency maintained serious doubts over the adequacy of reserves. Significant rate increases were needed just to bring premiums close to the correct technical level, it said.
As a result of these factors Fitch is maintaining a negative outlook on the US and global reinsurance markets.
In the long-term Fitch said the outlook is likely to remain negative until there is a sustainable improvement in operating profitability. Although the industry is better-placed for a ratings upgrade in the future than the primary sector, it said.
