CHICAGO--(BUSINESS WIRE)-- Fitch Ratings expects that the ratings assigned to U.S. life insurers will continue to be under pressure for the balance of 2009 and into 2010. The credit quality of U.S. life insurers continues to be negatively affected by the difficult conditions in the credit and equity markets and their impact on the industry's capital levels, earnings performance, and liquidity position.

Fitch's Special Report, 'Mid-Year Update - U.S. Life Insurance Sector' released on July 24th, summarizes Fitch's current views on the U.S. life insurance sector, including a summary of recent rating activity, current market trends, and expectations over the near term.

Fitch expects rating downgrades to continue to outnumber upgrades in the U.S. life insurance sector for the balance of 2009 and into 2010. That said, rating actions taken in the fourth quarter of 2008 and the first half of 2009 have incorporated conservative estimates of expected future investment losses and an anemic economic recovery. Consequently, Fitch expects the heightened level of downgrades in recent quarters will moderate in the second half of 2009. However, this assessment is subject to change if the economic and capital market environment deteriorates beyond expectations.

In the fourth quarter of 2008 and the first half of 2009, Fitch downgraded 42 U.S. life insurance groups. In comparison, Fitch downgraded 13 life groups in the prior three quarters (ending Sept. 30, 2008), and three life groups in the three quarters before that (ending Dec. 31, 2007).


'The dramatic deterioration in the financial markets has been a significant stress test for U.S. life insurers,' said Douglas Meyer, a Managing Director in Fitch's Insurance Group. 'While the industry has performed reasonably well relative to many other financial services sectors, the impact on the capital, earnings, and liquidity profile of many U.S. life insurers has been significant.'

The Special Report, 'Mid-Year Update - U.S. Life Insurance Sector' is now available under Insurance then Special Reports on 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, Chicago

Douglas L. Meyer, CFA, 312-368-2061

Julie A. Burke, CFA, CPA, 312-368-3158

or

Media Relations:

Brian Bertsch, 212-908-0549, New York

Email: brian.bertsch@fitchratings.com

Source: Fitch Ratings