Market predictions for the US property and casualty insurance sector are “unlikely” to change in 2011, according to Fitch Ratings.

A Fitch outlook report says with competition in the US market continuing to promote inadequate pricing, signs of a “meaningful shift” in underwriting capacity isn’t apparent.

The report predicts that although personal and commercial lines remain stable, market conditions are unlikely to improve any time soon.

But Fitch does see some upside for insurers with no indication that the present market conditions will result in extreme underpricing similar to that experienced at the turn of the century.

The agency predicts slight premium growth of 2.1% and a reduction in net income.

“Current accident year underwriting losses, low investment yields, and below historical average asset and operating leverage will continue to hinder profitability,” the report says.

With only a small margin for error, the report says all it would take for the market to shift to a negative outlook would be a sharp deterioration in capital due to catastrophic events or other shock losses.