Fitch Ratings says non-life reinsurers have made solid underwriting profits due to lower catastrophe-related losses – but it holds a negative outlook for the sector.

The 24 companies monitored in Fitch’s Global Reinsurance Results Dashboard produced a combined operating ratio of 85.4% last year, an improvement on 89.3% in 2012.

Munich Re and Swiss Re remain the two largest operators in non-life and life reinsurance, with total reinsurance net premium written (NPW) of $US35.5 billion ($32.8 billion) and $US26.1 billion ($24.1 billion) respectively.

Swiss Re reported the largest increase in non-life reinsurance NPW last year, up 30.2% compared with 2012.

But Fitch explains its negative global reinsurance sector outlook by pointing out that “fundamentals have deteriorated, with declining premium pricing and weakening of terms and conditions across most lines, with current market conditions unlikely to improve in the near term”.

However, Fitch maintains a stable rating outlook, noting “the majority of ratings will be supported by strong capitalisation and continued, if declining, profitability”.

It says negative fundamental trends have been factored into current ratings.