The traditional insurance cycle may soon be a thing of the past, according to Standard & Poor’s. It says the growing sophistication of the global insurance industry could lead to a more consistent level of profitability, putting behind it the highs and lows of cyclical underwriting.

S&P’s is enthusiastic about the idea because a less cyclical insurance market would provide a more stable underwriting environment. London-based credit analyst Christian Dinesen said failure to change could result in a downward trend in insurer financial strength ratings. “Almost 50% of ratings are now on negative outlook or CreditWatch negative,” he said. “If the cyclical nature of insurance markets is not addressed, then the next time the market softens, we could see these negative outlooks begin to play out.”