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SYDNEY, Australia -- Some international reinsurance companies "may be in serious financial trouble," according to a study by two U.S. insurance academics.

Mark Cross, professor of insurance at Miami University, and Robert A. Hershbarger, chair of insurance at Mississippi State University, presented the findings of their study of 94 reinsurers' financial situations at the International Insurance Society seminar in Sydney, Australia, July 12-14.

The study did not identify which reinsurers were at risk, but noted smaller reinsurance companies appeared to be "in poorer financial condition than larger companies."

That contrasts with the results of a 1997 survey the academics conducted on the financial status of U.S. reinsurers, which found that the smaller U.S.-based companies had stronger results. They also found all reinsurers' financial conditions had improved in 1994 and 1995 and that there was "no significant difference" in the financial status of international and U.S. reinsurers.

Messrs. Cross and Hershbarger said reinsurers are finding it increasingly difficult to assess potential risks inherent in major disasters. Also, they found that large, multinational corporations prefer to deal with a smaller number of direct writers that, in turn, deal with fewer reinsurers. Those factors mean the amount of risk each reinsurer deals with is increasing.

"Reinsurers are attempting to write more business across product lines and to diversify their business geographically," the study found.

The authors said their analysis found 40% of international reinsurers in the sample were "in good financial shape," and about 50% "have some financial deficiencies." Ten percent were in "poor financial condition, with capital less than the risk-based amount required."