Reinsurance

The credit outlook on the reinsurance industry remains negative, Moody's Investors Service said in its recent report, "Global Reinsurance Outlook," as fundamentals are expected to weaken in the future.

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.

U.S. property and casualty reinsurers saw net premiums written drop 4 percent in the first half of 2010 compared to last year, while underwriting results deteriorated by nearly five points.

Even after a number of significant disasters so far in 2010, including the Chilean earthquake and the BP Deepwater Horizon oil spill, rate hikes are more the exception than the rule in the soft global reinsurance market.

U.S. property and casualty reinsurers saw 2010 first-half net premiums written drop 4 percent compared to last year while their combined ratio increased to 98.7 from 93.8.

For eight years United States Fidelity & Guaranty Company (USF&G), now part of Travelers Cos., had been looking to recoup from reinsurers about half of a $987 settlement with an asbestos policyholder.