Aflac, Genworth Among Insurers Exposed To CIT

By Alistair Barr

Aflac Inc. and Genworth Financial are among life insurers with exposure to troubled lender CIT Group Inc. (CIT), analysts at Credit Suisse said Thursday.

Late Wednesday, CIT said that it probably won't get a government bailout anytime soon, increasing the likelihood that the lender may collapse in what could be the fourth-largest bankruptcy in U.S. history.

"We are highlighting life insurance exposures to CIT pending a likely debt restructuring or other action that could trigger impairments for life insurance companies," Thomas Gallagher and his analyst colleagues at Credit Suisse wrote in a note to investors. "There are expectations of about a 50- or 60-cent recovery rate on the securities."

Aflac (AFL) has CIT securities with a conditional fair value of more than $218 million, according to the Credit Suisse analysts. That's 3.3% of the insurer's equity, excluding accumulated other comprehensive income, or AOCI, they noted.

Genworth (GNW) has CIT securities with a conditional fair value of nearly $140 million, according to the analysts. That's 1.5% of the insurer's equity, excluding AOCI.

In addition, Lincoln Financial Corp. (LNC) has CIT securities with a conditional fair value of $76 million, according to Credit Suisse. That's 1% of the insurer's equity, excluding AOCI, the analysts said.

Protective Life Corp. (PL) has CIT securities with a conditional fair value of $32 million, according to the Credit Suisse analysts. That's 1.7% of the insurer's equity, excluding AOCI, they noted.

Conseco Inc. (CNO) has CIT securities with a conditional fair value of more than $20 million, which is 0.9% of the insurer's equity, excluding AOCI, the analysts said.

-Alistair Barr; 415-439-6400; [e-mail]