Despite poor investment results and catastrophe losses last year, the U.S. property/casualty insurance market saw rate declines in the first half of 2009 and likely will remain soft during the near term, according to a forecast by Fitch Ratings.

In 2008 the property/casualty sector reported its first negative total investment return since 1974, and suffered higher-than-normal underwriting losses from catastrophes, the report said.

Financial guarantors and mortgage insurers added 3.5% to the industry’s aggregate combined ratio in 2008, though that sector only generated a small percentage of industry premiums, the report noted.

Despite 2008’s difficulties, however, the industry remains well-capitalized after the previous five consecutive years of surplus growth, the report stated.