Entering 2007, the property-casualty and title insuranceindustries have received stable ratings from Fitch Ratingsservice.

But Fitch said while the p-c market appears to be finding somebright spots, title insurers may have a rough road ahead.

In today's report, "Review and Outlook 2006-2007," on the p-cindustry, Fitch said the industry would record profits for thethird consecutive year and could post its lowest combined ratio inrecorded history in 2006.

After severe losses last year from hurricanes amounting to morethan $50 billion--the worst losses the industry has suffered in itshistory in the United States--underwriters enjoyed a reprieve withno hurricanes hitting the U.S. mainland. However, 2005 revealed thepotential for losses insurers can suffer, and insurers need tomaintain underwriting discipline going forward, said the ratingfirm.

Fitch said pricing and underwriting discipline remain the keyquestions for the industry beyond 2007 as insurers look to growrevenues.

"The industry remains cyclical in nature and favorable marketenvironments have proven unsustainable over the long term," thereport said.

"While the market is experiencing the best times currently, ashift to a positive outlook is not anticipated," the report went onto say.

Fitch added it did not see a turn to a negative outlook in thenear term as underwriters' balance sheets and capital position haveimproved, and there was no evident catalyst for a sharp marketturn.

In a separate report covering title insurance, Fitch said thesix title insurers it covers, accounting for 95 percent of themarket, were well positioned to withstand a market turndown as thereal estate market slows in the face of increased mortgagerates.

The title insurance industry is also suffering an attack on itsreputation with the revelation of "dubious business practices" bymembers of the industry.

An extended market downturn producing significant operatinglosses, or "adverse movement in capital adequacy," could lead tochanges in the rating outlook. Also, market practice changes ordevelopment of products that lessen demand could also changedemand, said Fitch.