Ratings agency Fitch has affirmed its current ratings for QBE and its subsidiaries, including its lenders’ mortgage insurance (LMI) business, with a stable outlook.

QBE’s long-term issuer default rating remains at A, while its insurer financial strength rating is stable at A+.

“The affirmation reflects the group’s historically strong operating performance and resilient earnings despite the increased frequency of large and catastrophe losses in 2011,” Fitch said. “It also reflects the group’s prudent underwriting and reserving, and a conservative approach to investments.”

It says the trend towards lower capital ratios and higher financial leverage “somewhat offset these positives”, but capital initiatives announced by QBE earlier this year “should help alleviate these concerns”.

Fitch also maintained the insurer financial strength rating of QBE LMI at AA-.

It says the rating reflects the company’s “robust financial profile, underpinned by strong capital ratios, historically prudent underwriting and risk acceptance, and a conservative investment portfolio”.

Deterioration of the economy was noted as the greatest threat to the LMI business – a risk heightened due to the “undiversified nature of the business”.