The U.S. government may be having financial discipline problems, but big, publicly traded U.S. life insurers look good.

Suneet Kamath and other analysts at Sanford C. Bernstein & Co. L.L.C., New York, come to that conclusion in a recent comment on the market volatility associated with the turmoil in Europe and the decision by Standard & Poor’s Ratings Services, New York, to cut the U.S. government’s AAA rating to AA plus.

“Clearly, we acknowledge that the operating environment remains uncertain,” Kamath and the other analysts write in the note.

A challenging economic environment could certainly hurt life insurers, the analysts say.

But the analysts contend that life insurers’ finances – and understanding of their finances – have improved greatly since the beginning of the financial crisis.

Holding companies have much more access to cash, have pushed back the dates when debt payments will come due, and have done a much better job of analyzing the risks they face, the analysts say.

Meanwhile, in spite of the effects of the recession, the retail retirement opportunity is still there and is still growing, the analysts say.

- Allison Bell

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