The fallout from the subprime mortgage implosion is not expected to drag down the US insurance industry, with ratings agencies confirming insurers have limited direct exposure.

According to an analysis of the 20 largest US insurers by Fitch Ratings, property and casualty insurers were largely safe from sub-prime mortgage defaults.

Some insurers have invested in mortgage-backed securities, asset-backed securities, collateralised debt obligations and alternative instruments including subprime investments. However, Fitch says these assets account for only about $US44 billion ($53.92 billion), or 3% of total investments.

“Exposure to all mortgage-backed securities is very manageable when it is considered that it accounted for less than 14% of all fixed-income investments or approximately one-quarter of industry surplus,” Fitch said.

Of the 20 insurers examined, 14 had exposure amounting to less than 10% of policyholders’ surplus.

Standard & Poor’s has also cleared insurers with regard to subprime mortgages, stating the industry has sufficient liquidity to meet its obligations. It will monitor the sector for any unexpected exposure, but the outlook for personal, property, life and reinsurance is stable.