The outlook for the global reinsurance sector remains stable, despite reinsurers being more exposed to potential catastrophe losses in 2012, according to ratings agency Fitch.

In a report on the sector, Fitch found that 15 out of 24 reinsurers monitored reported lower shareholders' equity at the end of last year, having taken a hit from significant insured catastrophe losses during the year, leaving them more exposed to losses this year.

But capital levels remain strong, with overall reinsurers' capitalisation increasing 3.4% at the end of last year, Fitch says.

As a result, Fitch says reinsurers have proved resilient, and has maintained its stable outlook for the sector over the next one to two years.

In addition, the ratings agency says the outlook for reinsurers is further strengthened by premium increases. Fitch anticipates a marked rise in earnings this year, assuming a benign catastrophe burden.

Fitch forecasts the global reinsurance industry’s combined operating ratio will improve from 109.1% at the end of last year to 95.8% this year.