NEW YORK--(BUSINESS WIRE)-- Following a review of first-half 2009 GAAP results reported by the U.S. property and casualty (P&C) insurance industry, Fitch Ratings observes that significant unrealized investment gains combined with mostly solid operating profits during the period led to a 10% aggregate increase in GAAP equity for Fitch's universe of 51 P&C (re)insurers.

In a new special report, Fitch compiles mid-year GAAP 2009 financial results for its universe of publicly traded (re)insurers. The report analyzes results for the group on the whole and various industry subsectors, comparing relative performance and considering the primary drivers of profitability and capital formation for 2009.

Despite its rebound during the first half of 2009, the group's consolidated GAAP equity remains significantly below levels reported 12 months ago. While Fitch expects these companies to achieve further growth in GAAP equity during the second half of 2009, the industry will face considerable earnings challenges along the way.

These challenges include pressure to maintain underwriting profitability as premium revenue is hindered due to the economic recession and competitive pricing conditions in most markets, accident-year loss ratios are rising, and favorable reserve cushions are diminishing.

Moreover, investment earnings will continue to be less favorable resulting from a combination of low asset yields, further anticipated investment writedowns, and an anticipated sluggish economic recovery. These factors are among the key reasons that Fitch maintains a Negative Outlook for the P&C sector.

The full 'Property/Casualty Insurers' Mid-Year 2009 Results Review' is available on the Fitch Ratings' web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.





Fitch Ratings, New York

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Source: Fitch Ratings