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Global Reinsurers Face Shrinking Profits, But Capitalization To Keep Sector Stable

Key challenges facing global reinsurers will drive profits lower, but are unlikely to undermine the current strong levels of capitalization for the majority of carriers over the next 12-to-24 months.

By Caroline McDonald | Updated on September 05, 2010

Key challenges facing global reinsurers will drive profits lower, but are unlikely to undermine the current strong levels of capitalization for the majority of carriers over the next 12-to-24 months–subject to normal catastrophe experience, according to Fitch Ratings.

Fitch added that its rating outlook for the global reinsurance industry remains “stable,” based on an expectation that profitability will decline in the sector over the next couple of years–driven by lower levels of underwriting profit, investment income and prior-year reserve releases.

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