Some Bermuda insurance company stocks took a pounding in the US yesterday in the wake of an insurance litigation settlement.

St. Paul Companies shares fell more than four percent yesterday after announcing a $975 million settlement which should close its largest asbestos exposure.

"I think the St. Paul news just puts some more negative news on the group," Brian Meredith, an analyst with Banc of America Securities, told .the Associated Press. "You can see that the stocks that are getting hit the most have the most asbestos exposure."

New York Stock Exchange-listed St. Paul shares traded yesterday afternoon at $40.55, down $1.07, or 2.6 percent.

Bermuda-registered Everest Re Group Ltd. traded at $60.51, down $1.16. ACE Ltd. traded down 98 cents at $32.95, Renaissance Re fell $1.05 to $35.05 and XL Capital traded down 27 cents to $86.74

Partner Re gained 45 cents to close at $50.10 and Trenwick dropped 13 cents to $7.66. White Mountains was down $2.75 at $339.75. For the time being, investors should worry too much about the effects of asbestos lawsuits on insurance companies, Banc of America's Meredith said.

"I don't think that the asbestos issue right now is a near-term threat to this group," he said. "We're not going to see any major insolvencies from it, especially from better-capitalized companies."

Longer-term repercussions from insuring asbestos makers remain hazy because of the uncertainty of future court reform and lawsuit rulings. The St. Paul settlement surprised investors because of its size, not just because it brought asbestos issues back to the forefront.

"This unexpectedly large settlement raises the question whether another one will come shortly," said Lehman Brothers analyst J. Paul Newsome in a note on Tuesday.