Standard & Poor's Ratings Services has slapped a negative outlook on the global reinsurance industry, according to a report published today.

The revision is from a previously stable outlook and now implies that downgrades are expected to outnumber upgrades in the remainder of 2005, although the number of downgrades is expected to be modest.

Standard & Poor's credit analyst Simon Marshall, said: "The negative outlook reflects the near-term strains on financial strength arising from the impact reported by reinsurers of the most expensive loss event in the industry's history, Hurricane Katrina.

"It also reflects the uncertainties that necessarily surround the companies' estimations of the effect of an event of Katrina's size and type. The impact of Hurricane Rita, though likely to be limited compared with Katrina, compounds our concerns," he added.

"Standard & Poor's will review its outlook when the impact of Katrina becomes clearer and when the catastrophe season has run its course."

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