European insurers enjoyed good profitability in 2005, despite bearing some of the fallout from US Hurricanes Katrina, Wilma and Rita.

An industry report by Standard & Poor’s (S&P) has found 74% of insurance companies in Europe, the Middle East and Africa enjoy a stable outlook for 2006.

London-based S&P analyst Rob Jones says the large losses of 2005 should encourage underwriters to maintain pricing discipline this year. “Most of the commercial markets in Europe have been quite competitive, and that competition may erode profitability slightly in 2006,” he said.

The US market is also looking at stable times ahead.

Fitch Ratings is predicting both stability and growth for the US insurance broking industry in 2006. But it adds that earnings from last year are likely to be down on previous years, due to the costs of litigation connected to the Spitzer investigation into financial services.