The global insurance industry is unlikely to improve enough in the near future for a revision from its negative outlook, according to Fitch Ratings.

The ratings company says it needs to see economic recovery, improved capital access and financial flexibility, as well as greater certainty regarding investment valuations, before it will consider revising the outlook to stable.

Fitch has downgraded more than 40% of its rated insurance groups since the last quarter of last year, while more than 60% have a negative outlook or are on ratings watch.

In a separate report, Fitch says its ratings outlook for the global reinsurance sector also remains negative.

“Global reinsurers may struggle to replenish capital if they suffer large catastrophe losses in the current financial market and economic environment,” the report said.

The ratings agency is concerned insurers’ access to capital markets may be restricted, which could force reinsurers to operate with weaker capital bases for a prolonged period.