Standard & Poor's downgrade the credit ratings on five mortgage insurance companies. The credit ratings agency said continued losses on insurance claims exceeded previous expectations, as low-risk books of business are starting to experience greater losses. “The lower-risk books of business within the mortgage sector (such as those with higher FICO scores or lower loan-to-value ratios) have been and will be more adversely affected than we had anticipated and U.S. mortgage insurers' losses will continue to be greater than previously expected overall,” S&P analyst Ron Joas wrote. The ratings agency assigned a negative outlook on the sector based on the potential for additional increased losses. “If the US economy were to experience another setback, prolonging the exit from the recession, delinquencies and resulting losses could increase at an even greater rate, with lower benefits available from rescissions than what has been seen over the past year,” Joas wrote. He added, “In addition, any existing and potential benefits from modification programs might reverse, and modification attempts might be ineffectual.” The mortgage insurers downgraded are: Genworth (GNW): From triple-B plus to triple-B minus PMI Group (PMI): from double-B minus to B plus Radian Group (RDN): from double-B minus to B plus Republic Mortgage Insurance Co.: From A minus to triple-B minus United Guaranty : From triple-B plus to triple-B S&P downgraded MGIC, which is fighting a lawsuit filed against it by Bank of America’s (BAC) Countrywide subsidiary, in October. S&P is still reviewing CMG Mortgage Insurance Co. and California Housing Loan Insurance Fund and could issue new ratings on those firms. Write to Austin Kilgore. The author held no relevant investments.