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Life Health > Health Insurance

More Insurers Report On Turmoil Exposure

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Life and health insurers are continuing to report potential exposure to losses stemming from the recent turmoil at American International Group Inc. and Lehman Brothers Holdings Inc.

Hartford Financial Services Group Inc., Hartford, says it has a total of $252 million in exposure to the debt and preferred stock of Lehman, New York; $15 million in exposure to the debt of AIG, New York; exposure to a $35 million private placement investment in an AIG affiliate, in which the company has a priority claim on a diversified pool of assets; and exposure to $97 million in senior debt issued by operating subsidiaries of AIG.

Hartford has about $50 million in unsecured counterparty exposure to Lehman in connection with derivatives transactions.

Hartford is exposed to senior debt issued by Lehman and AIG through credit default swaps. The company’s total exposure to Lehman and AIG under the swaps is about $100 million.

- Torchmark Corp., McKinney, Texas, says its exposure to investments in AIG, Lehman and other troubled financial services companies is about $209 million, or 2% of total invested assets.

Torchmark “has no derivatives or any other off-balance sheet arrangements with these or any other entities, the company says.

AEGON N.V., The Hague, Netherlands, says it has about 189 million euros in exposure to AIG parent company investments and 311 million euros in exposure to investments in AIG operating companies.

“AEGON has limited counterparty exposure to AIG through general insurance contracts,” AEGON says. “The potential effect of non-performance on these insurance contracts is not expected to have a material impact on the group’s earnings or capital position.”

Earlier this week, AEGON said it had about 265 million euros in fixed-income exposure to Lehman and some exposure to Lehman through derivatives contracts and securities lending transactions.

“This exposure is either collateralized or on bankruptcy remote entities,” AEGON said Tuesday. “The effect of unwinding these transactions is not expected to have a material impact on the group’s earnings or capital position.”


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