As the credit outlook is stable for 2013, reflecting strong balance sheet fundamentals and an improved liquidity profile, the U.S. life insurance industry is well positioned to withstand macroeconomic challenges in 2013, according to Fitch Ratings. Also, the improvement in asset quality since 2008/2009 has leveled off and is in line with the industry's long-term averages. However, the rating agency also says the outlook is vulnerable to severe, albeit unexpected shocks to the economy.

Of concern has been sustained low interest rates, which will limit earnings growth, but Fitch says it will not have a material negative impact on industry capital in 2013. Fitch expects that if interest rates stay low much beyond 2014, the agency's outlook would likely be revised to negative based on weakened earnings profile and anticipated negative capital impacts.

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