Standard and Poor's has revised its outlook on nine Japaneseinsurers due to the March 11 earthquake and tsunami, while Moody'ssays current loss estimates by two reinsurers are credit negativefor that sector.

Despite its revised outlook to negative on some domesticinsurers, S&P says it will likely not adjust ratings if currentestimates on residential losses—currently at ¥1 trillion ($12.3billion at the current exchange rate)—are not exceeded.

The New York-based rating service says “the current expectation”is that the actual loss will be below the estimated figure.

However, if losses exceed the ¥1 trillion mark, some insurerscan expect downgrades of one notch.

S&P revised its outlook on:

• Mitsui Sumitomo Insurance Co. Ltd.

• Aioi Nissay Dowa Insurance Co. Ltd.

• Mitsui Sumitomo Kirameki Life Insurance Co. Ltd.

• Mitsui Sumitomo MetLife Insurance Co. Ltd.

• Sompo Japan Insurance Inc.

• NIPPONKOA Insurance Co. Ltd.

• Sompo Japan Himawari Life Insurance Co. Ltd.

• Kyoei Fire & Marine Insurance Co.

• Secom General Insurance Co.

S&P says it made the revision believing that the quake would“negatively affect the financial bases of the aforementionedinsurers.”

S&P says it affirmed the ratings of and maintained a stableoutlook on:

• Tokio Marine & Nichido Fire Insurance Co.Ltd.

• Tokio Marine & Nichido Life Insurance Co.Ltd.

• Nisshin Fire & Marine Insurance Co. Ltd.

• ACE Insurance

• Allianz Fire and Marine Insurance Japan Ltd.

• Toa Reinsurance Co.

Meanwhile, on the reinsurance side, Moody's says early lossestimates of $1.2 billion by Swiss Re and $2.1 billion by Munich Reare credit negative for the reinsurance industry because theyindicate that reinsurers will take the largest share—perhaps evenmore than half—of insured losses for the event.

“These figures highlight the importance of Japan's insurancemarket to the global reinsurance industry, and vice versa,” Moody'ssays in last week's Weekly Credit Report. “For many years,reinsurers have sold some of the largest earthquake reinsuranceprotections in the world to Japan's insurers, with notionalliability in the tens of billions of U.S. dollars.”

Moody's says the form of reinsurance coverage and the amount oftotal insured damages will determine how losses will be distributedamong reinsurers.

Moody's says industrywide loss estimates currently stand atbetween $12 billion and $30 billion.

Modeling firm AIR Worldwide recently narrowed its loss estimateto between $20 billion and $30 billion. The firm's previousestimate was between $15 billion and $35 billion.