Japanese Non-Life Insurer to See Sub-Prime Losses Triple
Losses related to sub-prime at Japan's Aioi Insurance Co are expected to more than triple to more than 80 billion yen ($743 million) in the year to March, according to the Yomiuri newspaper.
Japan's fourth-largest non-life insurer said in November its paper losses as of the end of September stood at 25.2 billion yen and that its total exposure to sub-prime-related investments came to 115.4 billion yen. However, accordng to the Yomiuri newspaper, Aioi's losses have grown due to the declining market value of its holdings of securitized financial products linked to sub-prime mortgages.
Aioi will likely book appraisal losses in excess of 60 billion yen when it reports earnings for the nine months to December on Feb. 22, the paper said.
The losses will likely grow to more than 80 billion yen, or about 70 percent of its total exposure, for the full year to March, and Aioi will likely be unable to avoid a large downward revision to its profit forecats, the Yomiuri said.
Published on February 18, 2008
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