The property-casualty insurance sector's investment position is such that it can easily ride out events like Tuesday's stock market dive, economic and equities analysts said.

A continuing stock slump might impact merger activity, one said, but otherwise they doubted there would be much of an effect.

Robert P. Hartwig, Insurance Information Institute president and chief economist, said p-c companies have only 17 percent of their assets in stocks, so a drop in the price of shares would have only "a muted impact on the industry investment portfolio."

He added that insurers as long-term investors tend to ride out the dips and dives in the market. Because of conservative accounting, he said that if stocks were to stay low there could be some impact on policyholder surplus at the end of the quarter.

However, Mr. Hartwig said this is unlikely given recent insurer reports of good underwriting results and strong profits.

At Moody's Investors Service, Vice President and Senior Analyst Paul Bauer put the insurers' stock investments as "on average 15 percent of their portfolio"--a reduction from 25 percent five years ago.

Most, he said, are well diversified so Tuesday's 3.2 percent fall in the Dow Jones average would represent only a 0.5 percent drop of their entire portfolio. Additionally, he said that a rally in bonds helped balance any poor performance in insurers' equity investments.

Jim Auden, managing director of Fitch Ratings insurance group in Chicago, also noted that insurers have reduced stock investments in recent years, although he said there are a few that have fairly large stock holdings.

Generally, he said, they are fixed income investors.

Mr. Auden noted if the insurers' own stock issues were to drop significantly, "it could affect merger and acquisition activity."

In terms of other near-term impacts, he said that for "companies looking to do financing, it could be disrupting to that or alter their plans a bit."

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Stock Drop No Sweat For P-C Insurers, Analysts Say

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