Underwriting profitability could suffer as prices deteriorate across US property/casualty lines, says Standard & Poor’s.

The ratings agency’s latest report predicts a combined ratio for the US commercial sector of 98-99% for this year, compared with 95.6% for last year.

S&P expects to issue an even number of upgrades and downgrades this year for US commercial insurers.

Meanwhile, brokers are facing a triple threat from declining insurance rates, recession and financial market lockdown.

In a separate reinsurance report, S&P says softening market conditions across most lines of business and geographic regions are bringing into question global reinsurers’ ability to maintain earnings.

Tougher conditions will test reinsurers’ profit margins, as rates and policy terms deteriorate over the coming six to 12 months and hit profit margins.

S&P flags revising some reinsurers’ outlook to negative by the end of the year, and could possibly downgrade some companies next year if their results continue to deteriorate.

The ratings agency has maintained a stable outlook for both commercial lines and reinsurance.