The investment exposure of US insurers to bonds of Dubai World and its subsidiaries is very limited, totaling approximately $590 million (or less than 0.02 percent of cash and invested assets), Moody's Investors Service said in a new report. Consequently, any losses from these direct investment holdings will be quite modest, the agency concludes, and will not result in rating actions. In the report titled “Dubai World: Low Exposure for US Insurance Companies,” Moody's said although the life industry has more exposure - $458 million - relative to the P&C industry ($132 million), most of the US life insurance groups that Moody's rates have no exposure to Dubai World and its subsidiaries at all. The report provides a table listing all US insurance groups that do; most of these hold less than 10 basis points of cash and invested assets based on book value. For life insurers, the group with the largest absolute and percentage exposure (by a significant amount) was Old Mutual US Life, at $84 million and 50 basis points of invested assets. In terms of property & casualty insurers, the rated group with the most involvement was CNA Insurance Group, at $58 million (or 17 basis points). US insurance firms have exposure to Dubai World primarily through investments in bonds issued by Dubai Ports World (DP World, senior debt at Baa2, rating under review for downgrade) and Peninsular and Oriental Steam Company Inc, which are wholly owned subsidiaries of Dubai World. “There is no exposure to equity or preferred stock of Dubai World or its subsidiaries.”
