The European non-life insurance sector has enjoyed very goodresults in 2006, and 2007 is expected to be another good year forthe sector, according to a Standard & Poor's report releasedtoday.

Nonetheless, the primary and reinsurance non-life markets may bebeyond their pricing peak, S&P said.

The absence of large losses, peak-of-the-cycle underwritingprofits and solid investment performance has contributed to thegood results for the non-life sector.

"The ratings within the sector support this buoyant view, with79 percent of insurance ratings assigned a stable outlook ordeveloping CreditWatch listing, 16 percent a positive outlook orCreditWatch listing, and just 5 percent a negative outlook orCreditWatch status," said Standard & Poor's credit analystSimon Marshall in a statement.

Factors that might upset this stable environment include poorexecution of acquisitions and investment market volatility.Equally, further positive outlook revisions could occur if insurersare able to demonstrate that favorable earnings trends aresustainable through the cycle.

"While there is much to be positive about in the Europeaninsurance sector as we look forward to 2007, it should also beremembered that the quiet 2006 U.S. hurricane season leavesunanswered crucial questions that emerged in the aftermath of the2005 storm losses, as well as potentially damaging the pricingenvironment going forward," Mr. Marshall said.

The report said that with enterprise risk management (ERM)analysis firmly embedded in the S&P ratings, 82 percent ofEuropean insurers have been rated as adequate, while only 4 percenthave been seen as weak in terms of ERM numbers.