NU Online News Service, Nov. 12, 2:48 p.m.EST

Fitch Ratings said it has revised its global reinsuranceindustry outlook to stable from negative, citing relativeimprovements in the capital markets, macroeconomic conditions andreinsurance companies' strong financial performance.

The New York rating firm said improvements in capital marketconditions have sufficiently eased concerns regarding reinsurers'ability to access the capital markets on reasonable terms followinga significant catastrophic event.

Macroeconomic conditions, while still weak by many measures,said Fitch, have stabilized enough to support a stable ratingoutlook.

The company said it views the reinsurance sector's creditquality as less sensitive to macroeconomic factors than that ofmany financial services sectors.

According to Fitch, reinsurers are most directly exposed tomacroeconomic deterioration through pressures on the asset side oftheir balance sheet, and the firm noted that asset values haveimproved markedly over the last six months.

Global (re)insurers Fitch tracks generated strong resultsthrough the first nine months of 2009, "characterized bysignificant underwriting profits and solid capital growth against abackground of favorable capital market trends and ongoing weakeconomic conditions," said the firm.

Going forward, Fitch said it views the reinsurance sector'sprofitability and capital formation "as susceptible to downwardpressure on premium rates and less favorable reserve developmenttrends but views these pressures as within normal cyclicalexpectations."