ABU DHABI, Nov 3 (Reuters) - Nothing catastrophic will happen to Lloyd's of London as a result of the credit crunch because its investment policy is extremely conservative, the insurance market's chairman said on Monday.
The Bank of England flagged up possible risks to the insurance sector in its recent Financial Stability report as the credit crisis spreads beyond hard-hit banks.
"What I do know is that I can say that nothing disastrous is going to happen," Lloyd's chairman, Peter Levene, said while taking part in a British trade delegation visit to the Gulf States.
"Our investment policy now is unbelievably conservative. Almost all our capital is either in cash, or AAA-rated government bonds."
"As far as we are concerned the credit crunch itself has had no significant effect except in the longer term and the wider sense that it may affect the economy generally."

(Reporting by Matt Falloon; Editing by Greg Mahlich) Keywords: BRITAIN INSURANCE/LLOYDS (matt.falloon@reuters.com; Tel: +44 207 542 5109)

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