Standard & Poor’s today said it is likely to put many insurers and reinsurers with exposures to the tragic loss at the World Trade Center on credit watch with negative implications.

Fifty-five leading insurers and reinsurers have accumulated net aggregate insured losses of US$14 billion, based both on confidential information provided to Standard & Poor’s and publicly available information. This figure is likely to rise significantly once better estimates become available.

In its first comment, Standard & Poor’s said that once losses exceed US$15 billion, it would expect to see a significant impact on balance sheets of individual insurers. “Totals would have to exceed US$50 billion before Standard & Poor’s would begin to worry about the insurance system”, said Rob Jones, director at Standard & Poor’s Financial Services group in London.

In the next few days, Standard & Poor’s will further investigate the available claims estimates from these leading insurers. Many of these companies have substantial financial flexibility and capital strength and are expected to have their ratings affirmed.

Given some initial estimates of loss, however, Standard & Poor’s believes a significant number of these companies are not as well positioned to absorb these exposures and are likely to receive ratings downgrades.

Jones said that Standard & Poor’s is likely to follow these investigations by placing on CreditWatch with negative implications those insurers whose financial strength is likely to be weakened following the momentous events of last week.

Having reviewed the initial loss estimates of these companies, Standard & Poor’s does not believe that any of the leading insurers and reinsurers that it rates face solvency threatening levels of claims from this catastrophe. In fact, the overwhelming majority of these insurers are expected to maintain secure insurer financial strength ratings.