Aflac Inc. and Hartford Financial Services Group 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.
Aflac, which gets most of its revenue in Japan, plunged $4.96, or 9.2 percent, to $48.94 at 10:07 a.m. in New York Stock Exchange composite trading, the biggest fall for the Columbus, Georgia-based insurer since May. Hartford, based in the Connecticut city of the same name, dropped $1.88, or 7 percent, to $24.94.
“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, New Jersey-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 percent and New York-based MetLife dropped 7.1 percent. AIG, which maintains property-casualty operations in Japan, fell 3.6 percent.
Japan generated about 75 percent 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.
--Editors: Dan Kraut, William Ahearn
To contact the reporters on this story: Justin Doom in New York at jdoom1@bloomberg.net; Andrew Frye in New York at afrye@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
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