Nov. 10 (Bloomberg) -- MBIA Inc., world’s largest bond insurer, fell the most in nine months after posting a bigger- than-expected third-quarter loss.

The company reported a net loss of $727.8 million, or $3.50 a share, after the end of regular trading yesterday. Analysts had anticipated a loss of $1.09 a share, based on the average of three estimates compiled by Bloomberg.

“This quarter is another one in which the continued weakness in the U.S. housing market and the economy has negatively impacted our financial results,” Chief Financial Officer Chuck Chaplin said today during a conference call about the third quarter.

MBIA fell 99 cents, or 21 percent, to $3.81 at 12:41 p.m. in New York Stock Exchange Composite trading, the biggest decline since Jan. 20. The shares are down 6.1 percent this year and 95 percent since December 2006.

Ambac Financial Group Inc., the world’s second-largest bond insurer, fell 15 cents, or 13 percent, to $1.35. Its shares dropped 21 percent this year.

MBIA was stripped of its top financial-guarantee credit ratings last year as claims on securities backed by mortgages and home-equity loans surged. The company says it expects to meet all of its existing claims, though its projections include recoveries from mortgage originators for loans improperly included as collateral for MBIA insured bonds, Chaplin said.

To contact the reporter on this story: Christine Richard in New York at Crichard5@bloomberg.net

Last Updated: November 10, 2009 12:47 EST