NEW YORK--(BUSINESS WIRE)-- The rating outlook for the U.S. life insurance sector will remain negative based on a combination of economic and operating pressures unlikely to abate in 2010, according to Fitch Ratings.

Specifically, the negative outlook incorporates Fitch's expectations for further deterioration in the commercial real estate (CRE) market, weaker operating fundamentals, lower coverage metrics and the fragile nature of the economic recovery. The impact of the financial crisis on the pace of future industry consolidation, the evolving and uncertain regulatory framework and the market demand for insurance products is uncertain and will play out over a longer period of time.

Rating downgrades will continue to outnumber upgrades among U.S. life insurance companies in 2010, although the pace and number of downgrades will moderate compared to actions taken in 2009. Rating actions taken by Fitch in 2009 incorporated a conservative forecast for additional investment losses and slower economic recovery.

A possible revision to a stable rating outlook as early as the second-half of 2010 would be driven by sustained improvements in the economy and confidence that losses on CRE-related assets will be contained with Fitch base case loss estimates.

Fitch's full outlook report is titled '2010 Rating Outlook Negative for U.S. Life Insurance Sector' is available on the Fitch Ratings' web site 'www.fitchratings.com.'

Additional information is available at www.fitchratings.com.

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Fitch Ratings
Brian Bertsch, +1-212-908-0549 (New York, Media Relations)
brian.bertsch@fitchratings.com
Douglas Meyer, CFA, +1-312-368-2061 (Chicago)
Julie Burke, CPA, CFA, +1-312-368-3158 (Chicago)

Source: Fitch Ratings