Lloyd’s, Zurich Insurance Ratings Cut

Credit ratings of Lloyd’s of London and Zurich Insurance Co. were cut Thursday by Standard & Poor’s as losses mount from last week’s World Trade Center attack.

The credit rating agency also said it may cut the ratings of 15 other insurers because of losses from the attack, which is expected to be the costliest disaster borne by insurers.

Insurers are expected to raise their estimates for losses to more than $35 billion, analysts said Thursday. Munich Re and Swiss Re, the world’s biggest reinsurers, doubled their estimates to a combined $3.25 billion.

Analysts said companies that released the earliest loss estimates, which didn’t include a comprehensive analysis of all their exposures, probably will have to raise their estimates the most. These include Chubb Corp. (ticker symbol: CB), CNA Financial Corp. (CNA) and American International Group Inc. (AIG).

In its rating action, S&P; cut Lloyd’s financial strength rating one notch to A, and lowered Zurich’s one step to AA, from AA+.

Insurers added to S&P;’s CreditWatch list are: Alea Europe Ltd., a unit of Kohlberg Kravis & Roberts; Alm. Brand; ARIG Reinsurance Co. BSC; Chubb; Hartford Financial Services Group Inc. (HIG); Hannover Reinsurance Co.; Liberty Mutual Insurance Co.; Markel Corp. (MKL); PartnerRe; PMA Capital Insurance Co., a unit of PMA Capital Corp. (PMACA); PXRE Group (PXT); Royal & Sun Alliance Insurance (RSANF); Scor Group; St. Paul Cos. (SPC); XL Capital Ltd. (XL). CNA Financial and Trenwick Group Ltd. (TWK) already are on the list.

S&P;’s index of 20 insurers fell 1.9% on Thursday to a 52-week low, and has lost 9.1% this week.