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To: maceng2 who wrote (186325)	8/10/2002 5:43:07 AM
From: maceng2	Respond to of 436258

Story filed: 23:35 Friday 9th August 2002 US life insurers exposure to 10 troubled cos about $23 billion - Moody's Moody's Investors Service said the investment portfolios of the US life insurance industry have significant exposure of about $23 billion to some of the high-profile companies that have recently defaulted or are now experiencing credit problems. In an analysis of insurers' credit exposures, the ratings agency said current and potential investment losses stemming from these credits have already begun to affect many life insurance companies' creditworthiness and could lead to near-term rating or outlook changes. "Our analysis focused specifically on companies widely held by the insurance industry that have recently gone into default or that have come under significant rating and market pressure, received considerable negative press because of accounting and corporate governance issues, and whose bonds as a result are now trading at substantial discounts to their book value," said Robert Riegel, managing director for life insurance at Moody's. "Insurers holding these bonds have and will continue to experience economic losses on their portfolios which in some cases could be meaningful where the aggregate holdings are substantial," Riegel added. However, the ultimate losses incurred by the insurers holding these bonds will vary significantly depending on the specific credit as the circumstances of each credit are unique. The 10 companies included in this analysis, along with Moody's estimates of the US life insurance industry's direct exposure to the issuers' securities, are as follows - WorldCom ($5.3 billion); Qwest Communications International ($4.5 billion), Enron ($3.8 billion), Williams Companies ($3.0 billion), Tyco ($2.4 billion), Dynegy ($1.4 billion), Global Crossing ($900 million), Adelphia ($800 million), Kmart ($700 million), and Xerox ($500 million). Life insurance groups with the largest exposures to these ten companies are AIG ($1.8 billion), MetLife ($1.4 billion), AEGON USA ($1.4 billion), and Prudential Financial ($1.3 billion). Nine other groups had total exposures to these credits of between $500 million and $1 billion, 13 groups had total exposures of between $250 million and $500 million, according to Arthur Fliegelman, a VP/senior credit officer with Moody's and the report's primary author. Moody's also said it is likely that rating actions - including outlook changes, reviews for downgrade, and downgrades - will become increasingly common among the US life insurers if credit losses continue and other adverse market conditions develop. © AFX News ananova.com