"The U.S. property and casualty insurance industry's risk from subprime mortgage exposures is minimal based on Fitch's analysis of statutory filings for the entire industry," the rating agency said in a report.
Fitch said it did not take negative rating actions on any U.S. property/casualty insurer because of subprime-related credit issues this year.
Fitch said that property casualty insurers would report a fourth consecutive year of good returns in 2007, but it was clear that "these positive results are not sustainable."
Falling premium rates and competitive pressure would drive down rates to the point where returns on capital would be below insurers' requirements in 2008, the rating agency said.
Downward trends included commercial insurance prices, which fell an average 13.3 percent in the third quarter.
Catastrophes such as hurricanes could also be more of a threat in the future, Fitch warned. The industry is coming off a year when catastrophes cost insurers only $7.3 billion, even including the California wildfires.
By contrast, annual catastrophe losses from 1992 to 2006 have been $18.5 billion, Fitch said.