Insurers and banks are leading a market plunge today with insurers Aflac and MetLife, which have direct risk exposure in Japan, each dropping more than 7% in early trading. The drop comes on the heels of Japan’s Prime Minister, Naoto Kan, issuing a statement on the danger of radiation leaks having increased at a nuclear facility damaged by last week’s earthquake and resultant tsunami.
Three-quarters of Aflac’s insurance premiums derived from Japan in 2010, although most of its exposure is in medical insurance, notes analysts. When MetLife purchased Alico from financially strapped American International Group (AIG) last year, Alico depended on Japan for $7 billion in revenue. Prudential also acquired non-U.S. life units from bailed-out AIG in the past year. The companies back liabilities in that nation with Japanese securities, note analysts.
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