But British firms insist their capital position is strong and they don’t want help.
British insurers will not be bailed out by the US Treasury as funds are exclusively dedicated to prop up US banks.
The American government rescued AIG at a cost of £53bn but it is understood that Henry Paulson, the US Treasury secretary, is keen to emphasise that this was a one-off.
But Paulson is coming under pressure to expand the rescue plan so US and international insurers can apply for aid.
This could mean extending a monetary lifeline to insurers such as Prudential, Standard Life, Friends Provident and Aviva. Share prices for many insurers have plummeted this month even though they have made assurances of their capital strength.
British insurers said they would not need US aid, however.
Vanessa Rhodes, spokeswoman for Aviva, said the group had not sought support from the US Treasury or the British government. “Our third-quarter results have come out today and our capital position is very strong,” she said.
Nick Boakes, director of group communications at Friends Provident, also denied that his company and others in the UK would need to apply for aid.
“Our business focus is in the Far East, UK and Europe. There is no logic in us getting any support. If you look at third-quarter results, they all say quite clearly that companies are strong. Insurers are completely different to banks with a completely different business model.”
The ABI said: “Insurers won’t be looking for aid. What we are experiencing now is a volatile stock market. The actual fundamentals of businesses are still strong. The capitalisation and the products they are selling are strong, all the basics are there and they have the money.”
Philip Gregory, chief executive of HSBC Insurance Brokers, added: “I expect the US government rescue of AIG to be a
one-off event that will not be repeated if other insurers have solvency problems. At present, that is not an issue because most insurers have surplus capital, even allowing for the events of the last couple of months.”
The Financial Services Roundtable, an influential Washington lobbying group, has urged the US Treasury to help international insurers, however.
It wrote to Neel Kashkari, the interim US Treasury secretary for financial stability, calling for the government to consider helping out “broker-dealers, insurance companies and automobile companies” and “institutions controlled by a foreign bank or company”.
The letter warned that if non-US companies and insurers were excluded, it would impede market recovery. It urged the Treasury to permit institutions to participate in the programme and extend the deadline so those excluded could evaluate the opportunities.
Scott Talbot, chief lobbyist of the Financial Services Roundtable, refused to speculate on which insurers might want to appeal for aid but said: “This is a blanket request. An injection of liquidity to insurance companies, particularly the life insurance companies, will help restore liquidity.
