September 16, 2008 / 2:29 PM / 10 years ago

UPDATE 1-Several insurers to gain from AIG's struggle-Citigroup

(Recasts; adds details)

Sept 16 (Reuters) - Several insurers could gain from the financial crisis rocking AIG (AIG.N), once the world’s largest insurer, according to Citigroup analyst Joshua Shanker, who upgraded property insurer Travelers Cos Inc (TRV.N) and U.S. business insurer Chubb Corp (CB.N) to “buy” from “hold.”

Many of AIG’s chief competitors would likely highlight their own credit ratings and financial stability as a major selling point in an effort to bind business flocking to them from AIG, Shanker said in a note to clients.

AIG, thrown a $20 billion lifeline by the state of New York as the company scrambles to secure desperately needed capital, came under renewed pressure on Tuesday as ratings agencies downgraded the insurer’s debt and the financial sector meltdown spread.

Travelers and Chubb will benefit mainly in the commercial insurance business, a line in which almost 80 percent of AIG’s $37 billion in premiums written can be traced to, analyst Shanker said.

Ace Ltd ACE.N could also benefit as its global platform is only rivaled by AIG, Shanker said. He rates Ace’s stock “buy.”

With AIG units Lexington and American International Specialty Lines expected to struggle, reinsurer Arch Capital Group Ltd (ACGL.O) and U.S. insurer W.R. Berkley Corp (WRB.N) will also benefit, the analyst said. (Reporting by Sweta Singh in Bangalore; Editing by Pratish Narayanan)

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