November 17th, 2008

Book Value Update, Nov 17, 2008

Posted at 1:00 AM ET

As publicly traded (re)insurers continue to report their third quarter results, the impact of the ongoing financial catastrophe is becoming more noticeable. All three indices lost value over the past week. The S&P 500 Insurance Index, S&P Banks Index, and Dow Jones Euro Stoxx Insurance Index all saw declines in their weighted average book values, according to data from Bloomberg.

(Re)insurers continue to show considerable resilience in terms of weighted average book value. The S&P 500 Insurance Index has lost 22 percent of its weighted average book value since the beginning of the year. This is a fairly steep drop from last week’s 15 percent, yet carriers remain strong according to other measures, such as premium-to-surplus ratio and total surplus. The Dow Jones Euro Stoxx Insurance Index is off close to 19 percent, reflecting a slightly slower rate of decline.

Nonetheless, (re)insurers are still faring better than the banks. The S&P Banks Index edged lower over the past week. Currently, 37 percent of the index’s weighted average book value has been lost, a slight change from last week’s 35 percent.

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