Insurance Losses Lead To 3Q Loss At MBIA

SARA LEPRO

NEW YORK (AP) — MBIA Inc. said Monday that it incurred heavier losses in its insurance business than expected, saddling the bond insurer with a third-quarter loss after two straight quarters of profits.

Higher losses on MBIA's coverage of mortgage-related securities and complex investments known as derivatives overwhelmed investment income and premiums collected on its insurance policies. That led to a loss of $727.8 million, or $3.50 per share, for the period ended Sept. 30.

A year earlier, the company had a wider loss of $806.5 million, or $3.42 per share. The loss per share was narrower in the 2008 third quarter due to more shares outstanding in that period.

Investors sent shares of the Armonk, N.Y., company down 15.6 percent in after-hours trading. Shares fell 74 cents to $4.07 after having risen 45 cents, or 10.3 percent, to close regular trading at $4.80 prior to the release. The stock is down 44 percent since hitting a 52-week high of $8.54 in late September.

"The third quarter's loss is a reminder that the impact of this recession continues to be felt throughout the economy," said President and Chief Financial Officer Chuck Chaplin in a statement.