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(Bloomberg)—Hartford Financial Services Group Inc. and Aflac Inc. led U.S. insurers lower on concern that operations will be hobbled in Japan after Prime Minister Naoto Kan said the danger of radiation leaks increased at a nuclear facility.
Hartford, based in the Connecticut city of the same name, dropped $1.88, or 7%, to $24.94. Aflac, which gets most of its revenue in Japan, plunged $4.96, or 9.2%, to $48.94 at 10:07 a.m. in New York Stock Exchange composite trading, the biggest fall for the Columbus, Ga.-based insurer since May.
“It's the nuclear worry today,” said Steven Schwartz, an analyst covering the life insurance industry at Raymond James Associates Inc. “You're dealing with something that's so far out” on the range of standard disaster expectations, he said.
Japan's Topix stock index had its biggest two-day drop since 1987 as concern increased over the government's ability to contain a crisis that began with an earthquake and tsunami last week. The building that houses the No. 4 reactor at Tokyo Electric's Dai-Ichi nuclear plant has two holes in it, Hidehiko Nishiyama, deputy director-general of Japan's Nuclear and Industrial Safety Agency, said in Tokyo.
Prudential, MetLife
Insurers including Prudential Financial Inc. and MetLife Inc. have been expanding in Japan to increase business in the world’s second-largest life insurance market. MetLife and Newark, N.J.-based Prudential have acquired non-U.S. life units from bailed-out American International Group Inc. in the past year. The companies back liabilities in that nation with Japanese securities.
Prudential slipped 7.2% and New York-based MetLife dropped 7.1%. AIG, which maintains property/casualty operations in Japan, fell 3.6%.
Japan generated about 75% of Aflac’s 2010 sales, the most among U.S.-based companies with a market value of at least $100 million, according to data compiled by Bloomberg. The company’s products include cancer insurance.
Copyright 2011 Bloomberg
SENDAI, Japan—Insured losses from the devastating earthquake and tsunami that hit Japan on Friday could be market-changing, according to a major global reinsurer.