The big automobile manufacturers’ financial problems could have some effect on U.S. life insurers’ investment results.[@@]

A team of analysts at UBS Investment Research, New York, has come to that conclusion in an assessment of bond portfolios at 17 life insurers.

The team, led by Andrew Kligerman, looked at the insurers’ holdings of bonds issued by General Motors Corp., Detroit, and Ford Motor Company, Dearborn, Mich.

The ratings of Ford and GM bonds recently fell below investment grade.

At the 17 life insurers that the UBS team reviewed, Ford and GM bonds comprised an average of 0.4% of all cash and invested assets and 2.9% of equity during the first quarter.

Aflac Inc., Columbus, Ga., seemed to have more exposure to the recent downgrades of Ford and GM bonds than the other insurers included in the review had, the analysts write in a research note.

“Aflac’s exposure is the largest at $442 million or 8.7% of equity, but it does not appear that Aflac is inclined to write down the bonds at this time,” the analysts write.

A spokeswoman for Aflac says the company does not comment on analyst reports.

Despite the downgrades at Ford and GM, Standard & Poor’s Ratings Services, New York, has stated that neither Ford nor GM should have difficulty accommodating near-term cash requirements, given the companies’ large liquidity positions, the analysts write.

Given the pressures that Ford and GM have been facing for some time, and the fact that the downgrades were largely anticipated, it is likely that insurers are carrying the bonds at a deep discount to par or may have already written down the exposures, the UBS analysts write.