NU Online News Service, May 17, 12:24 p.m. – U.S. insurers are probably handling about $2 billion in direct life and health insurance claims as a result of the Sept. 11, 2001, terrorist attacks, according to Robert Riegel, an insurance analyst at Moody’s Investors Service, New York.

Riegel estimated Thursday, at an insurance conference organized by Moody’s, that the direct writers have handed another $2.5 billion in Sept. 11 claims over to their life reinsurers.

Sept. 11 claims have hit retrocessionaires, property-casualty reinsurers and accidental death and disability reinsurers hard, but traditional life reinsurers have suffered only modest losses, Riegel said, according to a summary of his remarks provided by Moody’s.

For most direct writers of life and health insurance, overall Sept. 11 claims costs have been insignificant compared with their capital and earnings, Riegel said.

Riegel suggested a prolonged stock market slump could hurt life insurers that have tied their fortunes to the performance of the stock market.

But Riegel said life insurers have not had much of a problem with credit losses on their bond portfolios, despite the fact that default rates for low-rated bonds have hovered around 10% since 2001.

So far, insurers have had only modest exposure to troubled, high-profile credits, Riegel said.

“Insurance companies’ investment portfolios are generally well-diversified by industry and issuer,” Riegel said.