Life Insurance Companies face "Unprecedented Stress"

From Bloomberg:

North American insurers posted more than $190 billion of writedowns and unrealized losses tied to the collapse of the housing market since the beginning of 2007. The industry lost $32 billion in surplus last year, according to Moody’s Investors Service. This year, carriers including New York-based MetLife, Prudential and Hartford Financial Services Group Inc. have been buffeted by ratings downgrades.

MetLife’s unrealized losses on corporate debt surged 71 percent to $14 billion in the last three months of 2008 as the recession hurt firms’ ability to repay or refinance their bonds. Corporate defaults are poised for a “significant” increase this year and may end up costing life insurers more than losses on securities linked to subprime, Alt-A and commercial mortgages, according to Barclays Plc.