A LIMIT TO INVESTORS’ APPETITE

Standard & Poor’s said that investors’ appetite for insurance debt is likely to be limited to high-quality issuers over the short term, as many insurers and reinsurers consider new capital issues following the combined impact of the Sept. 11 terrorist attacks and continued industrywide asset depreciation. Many insurers are looking to issue debt to shore up their solvency capital levels as their assets continue to depreciate and their claims activity rises in the wake of the terrorist attacks. A resurgence is expected on two fronts, however. First, to increase capacity for new business in line with the hardening market; and second, in due course, as an option to counter the negative effects of the terrorist actions and the subsequent slide in the already subdued investment market.