Japan NKSJ: no impact from possible Ambac failure

TOKYO, Nov 2 (BestGrowthStock) – Japan’s third-largest
property-casualty insurer, NKSJ (8630.T: ), said on Tuesday the
potential bankruptcy of Ambac Financial Group (ABK.N: ) would not
have any impact on its earnings, after its shares fell nearly 7
percent amid uncertainty.

Ambac, the second-largest U.S. bond insurer before suffering
huge losses on risky mortgages, said on Monday it may file for
bankruptcy protection as soon as this year after skipping a bond
interest payment. [ID:nN01129385]

Makoto Kasai, an analyst at Citigroup Global Markets Japan,
said the plight of Ambac raises uncertainty over the earnings of
Sompo Japan, a core unit of NKSJ, given its reinsurance exposure
to the U.S. firm.

“Accurately assessing the impact of Ambac’s possible
bankruptcy is difficult owing to the lack of clarity on the
handling of unincurred claims,” he said in a report.

“Extreme caution regarding these issues will be necessary for
some time,” he said.

Yuzuru Tsukui, an NKSJ spokesman, said the potential
bankruptcy of Ambac Financial would not have any impact on the
firm’s earnings.

He said its Sompo Japan unit reinsurers some insurance of the
U.S. company’s Ambac Assurance Corp unit, not Ambac Financial
itself. Sompo Japan’s exposure to Ambac Assurance stood at around
200 billion yen ($2.5 billion), he said.

NKSJ Holdings fell 6.9 percent to 515 yen in the morning
session in Tokyo, underperforming an almost flat market. (.N225.: )
($1=80.53 Yen)
(Reporting by Taiga Uranaka; Editing by Michael Watson)

Japan NKSJ: no impact from possible Ambac failure