Fitch Ratings expects property and casualty insurers to see higher underwriting losses in 2010 and below average returns on capital.
As a result, Fitch maintains a "Negative" outlook rating, which implies that downgrade actions are likely to exceed upgrades in coming months.
The outlook reflects lingering uncertainties in the broader economy and financial markets.
Analysts have concerns about competitive pressures because premium rate levels are inadequate across nearly all segments and there is little sign of improvement.
The recession has pushed premiums lower as demand for coverage declined in many areas, a trend which has created aggressive competition as insurers fought to retain existing business.
Fitch analysts estimate that the industry will see modest underwriting losses for 2009 compared with 2008 and a significant increase in profitability.
The improvement is due to improved underwriting results from lower catastrophic losses and reduced losses from mortgage insurers and financial guarantors.
Insurers have seen lower investment losses and a positive shift in market value for bond portfolios as the stock and bond markets have improved.