A new report from A.M. Best Co. finds the North American life/annuity segment is of lower credit quality relative to where it was historically and expects to see continued and accelerated rating downgrades.

“While A.M. Best will continue to review each company on a case-by-case basis noting specific strengths and weaknesses, the probability of rating downgrades–specifically, in the higher rating categories–of North American life insurers is likely in the near term. Given the expectation that weakness will continue into the foreseeable future for the entire North American life insurance segment, A.M. Best expects to take more negative rating actions (downgrades/outlook revisions) than positive rating actions upgrades/outlook revisions) for all life, annuity and health companies.”

Findings are based on A.M. Best Co.’s recently issued special report, “Life/Annuity Review & Preview 2009: U.S. Life Insurers Hunker Down As Market Turmoil Continues.”