Aflac Inc., the largest seller of supplemental insurance, said it had at least $500 million in excess capital as of Dec. 31 and doesn't need to raise more, a day after the shares plunged on concern of investment losses. The stock gained as much as 24 percent, Bloomberg reported.
"We remain very confident in our overall business model and our operations," Chief Executive Officer Daniel Amos said today in a statement. "We are equally confident with the quality of our balance sheet and our capital position." Excess capital may be as high as $1 billion, the statement said.
Investments in failed Icelandic banks will reduce fourth- quarter earnings by about $110 million, the insurer said Oct. 23, and Aflac could face further writedowns on holdings in U.K. lenders, said Nigel Dally, an analyst at Morgan Stanley, in a note yesterday. North American insurers have posted more than $125 billion of writedowns and losses tied to the collapse of the mortgage market in the past two years.
The insurer expects to maintain its dividend this year, and fourth-quarter operating earnings will be "consistent" with forecasts of 15 percent growth, according to the statement.
Aflac gained $2.04 to $24.94 at 3:30 p.m. in New York Stock Exchange composite trading, and earlier rose to $28.44. The Columbus, Georgia-based insurer declined 37 percent yesterday. Complete results for the three months ended Dec. 31 are scheduled to be announced Feb. 2.