B OF A ANALYST EXPRESSES CONCERN RE AXIS

Bank of America sector analyst Jay Cohen has downgraded Bermuda-based Axis Capital Holdings to Neutral from Buy, citing reinsurance pricing pressures as a concern. He wrote that Bank of America was lowering its recommendation "due to valuation and a more challenging environment in its reinsurance operation". The Bank said that "although we expect a growing earnings contribution from the company’s (accident and health) unit, pricing pressure in catastrophe reinsurance should present a headwind for the earnings". This long-term shift would be credit-positive for life assurers, but economic turmoil in Europe today is creating a short-term constraint, while competition from banks and asset managers is likely to be a longer-term constraint. Moody's said that the main challenges for assurers were getting consumers to realize that they had to act, and defending against the challenge of asset managers and banks, "particularly in those markets where tax incentives for pension products have been removed or reduced".