Fitch Ratings says it is unlikely that it will be moving off a negative outlook on the global insurance industry anytime soon.

Throughout 2008, Fitch moved its rating outlooks for all segments and regions of the global insurance industry to negative. “Continued mounting instabilities in the economic and operating environments” led Fitch to downgrade over 40% of its rated insurance groups since the fourth quarter of last year. Additionally, more than 60% of the insurers it rates have a negative outlook or are on rating watch negative.

In a report published Wednesday, the rating agency says that the factors contributing to its negative outlook “are unlikely to improve enough in the near term to allow for a revision to a stable outlook.” It also describes the signs it will look for to signal an outlook improvement “including the strength of the economic recovery, improved capital access and financial flexibility and greater certainty regarding investment valuations.”

Fitch says it believes that the immediate economic crisis has passed with some signs of stabilization in the market. However, it also notes that continued uncertainties make it unlikely that its’ negative outlook on the sector would change before the end of 2009 or even into 2010. Fitch adds that some additional ratings on individual insurers would need to be downgraded before stabilization is appropriate.

IE