U.S. reinsurers' combined ratio improved nearly nine points forthe first three months of the year, according to an industry tradegroup.

In a survey of 22 domestic reinsurers, the ReinsuranceAssociation of America reported the group posted an aggregatecombined ratio of 89.9, compared with 98.4 for a similar group inthe first three months of last year.

The reinsurers wrote $6.7 billion of net premiums during thefirst three months of the year, compared with $6.5 billion in thefirst three months of 2006.

A report put out by Bank of America Securities also underscoredthe improving reinsurance picture.

Property-casualty analyst Kevin O'Donoghue said he is taking amore positive view of the industry following a discussion with 14reinsurance brokers.

"We believe the market remains firm enough for reinsurers towrite business at expected returns above historical levels and toproduce strong book value growth--the metric that ultimately drivessuccess--through 2007," he wrote.

In addition, the reinsurance industry's reserve positioncontinues to be strong.

"The increases in incurred but not reported reserves gives usconfidence that continued prior-period development is more likelythan adverse development at this time," Mr. O'Donoghue wrote.