Aflac Declines After Loss on Sale of Irish Life, Tunisia Stakes
Aflac Inc. (AFL), the world’s largest seller of supplemental health insurance, fell the most since March in New York trading after taking $77 million in losses on the sale of securities.
Aflac fell $1.71 to $52.14 as of 9:34 a.m. on the New York Stock Exchange and dropped as much as 3.8 percent during the session. The insurer recorded a $72 million loss on its stake in Irish Life & Permanent Plc and $5 million on the partial sale of holdings in the Republic of Tunisia, the Columbus, Georgia-based company said yesterday in a regulatory filing.
The insurer also sold its Tier 1 perpetual securities issued by Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc (RBS) for a gain, according to the filing.
Aflac is trying to reduce the risk in its investment portfolio by scaling back holdings in Euro-area securities, stakes in banks and financial institutions and issuers that are rated below investment grade, according to the statement. Chief Executive Officer Daniel Amos is trying to balance that reduction in risk with profit growth, Wells Fargo & Co. analysts said in a note today.
“As we consider the factors suppressing earnings per share growth identified by Mr. Amos, to us only de-risking is temporary,” the analysts said.
Shares in Irish Life & Permanent, Ireland’s largest life insurer, have tumbled 88 percent so far this year. Irish regulators told the bank in March to raise 4 billion euros to shore up its banking arm. The lender, based in Dublin, faces the prospect of being majority-owned by Irish taxpayers.
To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
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