Moody's Investors Service said non-life insurance was among nine sectors that had large proportions of downgrades in the third quarter of 2008.

The others were airlines; real estate and construction; retail; banks and bank holding companies; and finance, securities and leasing--with the last two industries having the largest absolute number of downgrades.

Moody's said the number of rated issuers on review for downgrade doubled in the third quarter. "At the end of the second quarter of 2008, 8.9 percent of rated issuers were on review for downgrade, up from 4.2 percent at the end of the second quarter," said a statement from Moody's analyst Jennifer Tennant.

Both of these percentages were higher than the corresponding reviews for upgrade, which stood at 1.2 percent of rated issuers.

Looking at a longer timeframe, negative outlooks outnumbered positive outlooks 14.7 percent to 5.3 percent, respectively, Moody's said.

The rating service found that, continuing the trend from the previous quarter, the credit outlook for investment-grade issuers was slightly more positive than for speculative-grade issuers. Both categories, however, had more issuers on review for downgrade than for upgrade.

The United States and Canada, Moody's said, have the largest disparity, with a 10-to-1 watch for downgrade/watch for upgrade ratio, while the United States, Canada and Europe have the largest percentage of negative outlooks and watches for downgrade.

On a positive note, the firm said the Middle East and Africa have the largest percentage of positive outlooks and Latin America had the highest percentage of rated issuers on watch for upgrade.

"These rating actions and reviews highlight the recent financial crisis and continued problems in residential real estate markets," said the statement from Ms. Tennant.

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Surge in Downgrades Includes Many P-C Insurers, Moody's Notes

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