Fitch Ratings expects more downgrades than upgrades within each of the property-casualty sectors over the next 12-to-18 months, as core underwriting results fail to improve in 2009 and profitability remains at unattractive levels.

In its report–"Review and Outlook 2008-2009, U.S. Property-Casualty Insurance"–Fitch said the soft market cycle, high catastrophe losses and poor investment performance combined to cause a projected 83 percent decline in statutory earnings and a 10 percent drop in statutory capital for 2008.

While the trouble in the financial markets has affected other financial services segments more than p-c insurance, insurers were impacted by the investment market volatility in the second half of the year.

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