Friday, February 22, 2008

U.S. life insurers’ subprime losses may hit $8B: Fitch

U.S. life insurers’ unrealized investment losses related to subprime and other mortgage investments are in the $7 billion to $8 billion range, but the exposure is manageable, Fitch Ratings Ltd. said in a report.

Chicago-based Fitch said that the expected loss range for subprime and so-called Alt-A residential mortgage collateral represents about 13% of the insurers’ holdings and 3% of aggregate industry statutory capital. Alt-A mortgages are those that fall between prime and subprime.

Furthermore, Fitch said it expects the industry to report between $2 billion and $3 billion in realized losses on a pretax basis for the fourth quarter of 2007.

Fitch said, however, that it “continues to view the U.S. life insurance industry as well-capitalized.”

Read Complete Story

No comments: