Fitch ratings said Tuesday it expects U.S. commercial real estate insurers to stay strong entering 2012, even though the revival of the commercial mortgage-backed securities market and bank lending remains uncertain. The ratings agency cited insurance companies' low loan-to-value ratios on recently financed deals and low commercial real estate loan delinquency rates on their balance sheets as the source of the continued strength. "Insurers' cost of capital advantage, as well as reduced execution risk, should continue to favor a shift toward insurance-financed commercial real estate deals in a still-fragile market facing uncertainty over the 2012 economic outlook," Fitch reported. Commercial and multifamily delinquency rates fell in the second quarter, while the delinquency rate for loans in commercial mortgage-backed securities rose to the highest level in 14 years. But in a turn of events, last week, Fitch reported that CMBS delinquencies fell to 8.65% in August from a record 9.01% the prior months, as $3 billion worth of loans left the ratings agency's index. However, the ratings index said monthly volatility will continue. For instance, Credit Suisse Group on Tuesday shut down its New York-based commercial mortgage-backed securities group after after returning to the market last year. The bank failed to put together enough loans to sell them as bonds before the commercial mortgage market turned in the early summer and prices for bonds fell significantly. In the second quarter of 2011, commercial mortgage commitments by U.S. life insurers grew to $15.7 billion compared to $5.9 billion during the same period in 2010, according to the American Council of Life Insurance. Average LTVs on the deals were approximately 60%. While recent insurance mortgage deals have averaged about $20 million, Fitch expects insurers to participate in larger transactions involving central business district office buildings and large regional malls — especially in New York, Washington, Boston and San Francisco. Write to Justin T. Hilley Follow him on Twitter @JustinHilley