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Life Health > Life Insurance

Analysts See Manageable Industry Subprime Risk

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Life insurers in general have negligible exposure to subprime loans and low-rated securities, an industry analyst says.

On average, life insurance carriers have only around 1% to 2% of equity exposed to subprime and Alt-A securities, where potential losses are likely to be concentrated, comments Andrew Kligerman, an analyst with UBS Investment Research, New York.

Alt-A loans are those considered riskier than prime loans but not quite as chancy as subprime loans.

Meanwhile, analysts at the Fitch Ratings, New York, said the industry’s subprime mortgage exposure is manageable, emphasizing that below AA-rated subprime and Alt-A securities account for just 1.9% of statutory capital.


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