Shares of major insurance companies mostly rose Tuesday morning, even as American International Group Inc., the world's largest insurer, tumbled for a second straight day.
Shares of AIG fell $2.81, or 59 percent, to $1.95 shortly after the opening bell, a day after shares dived 61 percent. Three credit ratings agencies slashed their ratings on the insurer late Monday, which could lead to AIG needing to post billions of dollars in new collateral to cover complex derivative contracts.
AIG is under intense pressure to raise new capital to shore up its books amid the recent downturn on Wall Street that led to Lehman Brothers Holdings Inc. filing for bankruptcy protection and Bank of America Corp. purchasing Merrill Lynch & Co.
Meanwhile, a Citi Investment Research analyst upgraded AIG rivals Chubb Corp. and Travelers Cos., saying they stand to gain from the troubles at AIG.
Joshua Shanker raised his ratings on Chubb and Travelers to "Buy" from "Hold."
Shares of Chubb gained $4.57, or 9.4 percent, to $53.09, while Travelers rose $3.81, or 8.7 percent, to $47.51.
Shanker also said Ace Ltd. could gain from AIG's troubles, along with Arch Capital Group Ltd. and W.R. Berkley Corp.
Ace rose $3.98, or 7.5 percent, to $56.75, Arch Capital gained $1.53, or 2.2 percent, to $70.32, W.R. Berkley gained $1.36, or 6.1 percent, to $23.63.
Elsewhere, MetLife Inc. slid 84 cents to $52.87. Prudential Financial Inc. added $2.26, or 3.1 percent, to $74.80.
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