A flood of insurer reserve releases may be in store for thesecond half of this year, according to an investment bankanalysis.

Morgan Stanley analyst William Wilt said one thing he gleanedfrom this week's earnings reports was that "different reservingphilosophies are beginning to emerge."

For Chubb and St. Paul Travelers, reserve releases helpedmargins by 2.5 percent and 1.9 percent, respectively.

Business mix and legacy issues may frustrate comparisons, butMr. Wilt feels that ACE is holding back in this area.

"Regardless, the floodgates have not yet opened, suggesting tous the dam may burst in the second half of this year or next," hewrote.

Share buybacks, he thought, may also predominate this year asevidenced by St. Paul Travelers' announced $3.9 billion plan,"which was double our previous estimate."

Mr. Wilt found that of the seven companies reporting this week,five reported higher buybacks than previously planned. "We takethis as a sign of slowing growth prospects, but the alternative ofhoarding capital is none too appealing."

The Florida legislative deliberations will also play a strongrole in insurers' financial prospects. "We view the Floridalegislation as some of the most acrimonious pieces of legislationof the past 20 years. And interpretation and implementation of thebill lies ahead!" he wrote.

Everest Re estimated that up to 20 percent of theproperty-catastrophe reinsurance market was disintermediated, Mr.Wilt noted.

"This is bad for reinsurers to be sure, but we are equallyconcerned about myriad other provisions that restrict the freetrade of insurance," Mr. Wilt wrote.

With that in mind, he said, a sell-off in Allstate shares wasnot irrational.