Rating agency Standard & Poor’s (S&P) says the downward pressure continues on ratings for North American reinsurers, despite premium increases. Overall, S&P is continuing its “negative outlook” for the sector, for the sixth consecutive year. A negative outlook implies downgrades should outpace upgrades or even affirmations of ratings in the short-to-medium term. “Despite further price increases in the January 2003 renewal season, the market continues to suffer from diminished quality of capital, reduce financial flexibility, prior-year liabilities, the overhang of reinsurance recoverables, and the likelihood that many companies’ operating performance will fall short of expectations,” says S&P credit analyst Laline Carvahlo. Competition continues to flourish in the sector, due to the ease of entry, putting increased pressure on existing players to rebound, the report notes.