Insurance stocks are reeling during Wednesday's trading session. The sector-wide weakness comes after dismal quarterly financial results were released by Ambac Financial Group (ABK), MBIA Inc. (MBI) and Marsh & McLennan Companies Inc. (MMC).
Ambac shares have taken one of the biggest hits within the sector, plummeting over 30%. Meanwhile, MBIA stock has tumbled about 20%. Shares of Marsh & McLennan have fallen nearly 13% and American International Group, Inc. (AIG) stock has dropped about 10%.
By 1:45 pm Eastern Time, shares of Ambac were down $1.02 at $2.37 a share, while MBIA stock was down $2.03 at $8.43. Marsh & McLennan shares were down $3.82 at $25.88 and AIG stock was down 23 cents at $2.18.
Other stocks posting substantial losses within the insurance sector include eHealth, Inc. (EHTH), Miaden Holdings Ltd. (MHLD) and AXA (AXA).
Before the opening bell on Wednesday, Ambac reported a third quarter net loss of $2.43 billion or $8.45 per share, compared to a net loss of $360.6 million or $3.53 per share in the same period last year.
The company attributed the wide net loss to recording net mark-to-market losses on credit derivatives, an increased loss provisioning primarily related to second-lien residential mortgage-backed securities insurance transactions and market losses on RMBS within the financial services investment portfolio.
Operating loss per share for the quarter was $7.81 versus operating earnings per share of $1.89 in the year-ago quarter. Core loss per share for the quarter was $8.11 versus core earnings per share of $1.79 per share in the prior year period.
Analysts polled by First Call/Thomson Financial expected the company to report a loss for the quarter of $0.50 per share.
Net premiums earned for the quarter were $282.3 million, up 45% from $194.8 million earned in the last year quarter.
Also before Wednesday's opening bell, MBIA posted a third quarter net loss of $806.5 million, or $3.48 per share, wider than a loss of $36.6 million or $0.30 per share in the prior year quarter.
After-tax operating loss for the quarter was $514.8 million or $2.22 per share, compared to after-tax operating income of $192.6 million or $1.56 per share in the same period a year-ago. Excluding the extraordinary addition to case loss reserves, after-tax operating income was $109.9 million.
On average, four analysts polled by First Call/Thomson Financial expected the company to report a loss of $0.14 per share.
The wider loss in the current quarter was attributed to increases to loss reserves on the company's second lien residential mortgage-backed securities exposures and net realized and unrealized losses attributable to the company's ALM business.
Net premiums written for the period were $928 million, compared to $229 million in the comparable period last year. Total revenues fell to $319.7 million from $431.2 million last year.
Meanwhile, Marsh & McLennan reported a third quarter net loss of $8 million or $0.02 per share compared to net income of $1.95 billion or $3.60 per share in the year-ago quarter.
Income from continuing operations for the quarter, net of tax, was $18 million or $0.03 per share, compared to $80 million or $0.15 per share in the same period last year.
On an adjusted basis, earnings per share were $0.21, flat with last year. Adjusted income net of tax for the quarter was $111 million versus $113 million last year.
Revenue for the quarter increased 5% to $2.84 billion from $2.72 billion in the previous year period.
Analysts polled by First Call/Thomson Financial expected the company to report earnings for the quarter of $0.32 per share on $2.88 billion revenue.
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