Standard & Poor’s (S&P) has revised its ratings outlook for QBE and subsidiaries to stable from negative.

The move “reflects our expectations that the insurer’s earnings will exhibit a track record of gradual improvement that would support its ability to maintain its current AA capital adequacy position, and some further progress in the reduction of earnings volatility”, credit analyst Mark Legge said.

The ratings agency expects QBE’s underlying earnings to show gradual improvement and reasonable stability.

The A+ financial strength ratings on the insurer’s core operating companies are maintained, as is the group’s A- issuer credit rating.

QBE’s financial risk profile has been revised to “strong” from “moderately strong” amid confidence its improved capital adequacy will be maintained into 2017, S&P says.

The insurer has acted to strengthen its balance sheet recently, with about $US1.5 billion ($1.95 billion) in capital raised towards the end of last year.

Mr Legge says the ratings may be lowered if there is a “significant deterioration” in QBE’s underlying earnings profile, such as an underwriting loss.