INSURANCE: Spreading The Risk

Spreading The Risk

In the quick-buck '80s, even staid mutual life insurance companies were lured by high-yield, high-risk investments. Now many are looking for sources of cash to buy their way out of trouble.

Last week, in a bid to raise capital, Equitable Life Assurance Society, the third largest U.S. insurer, announced it will convert to a stock-owned company. The $500 million in additional capital that chairman Richard Jenrette expects to raise through the stock sale will help offset large losses from risky ventures: junk bonds, real estate and high-interest guaranteed- investment contracts. It will also make it easier for the company to diversify.

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