NU Online News Service, May 18, 2:57 p.m.EDT

The insurance industry held more than $1.1 billion of JPMorganstock when the bank announced a trading loss of $2 billion on May10, but most companies should escape any long-term fallout on theirportfolios, reports SNL Financial.

JPMorgan's hard hit on one of its hedges surprised shareholders,who had long viewed the company as one of the best-managed entitieson Wall Street. Almost $14.4 billion was eliminated from its marketvalue, and shares slid again on May 14.

“In hindsight, the new strategy was flawed, complex, poorlyreviewed, poorly executed and poorly monitored,” said JPMorganChase Chairman, President and CEO Jamie Dimon during a conferencecall last week. “The portfolio has proven to be riskier, morevolatile and less effective an economic hedge than we thought.”

Insurance companies FM Global, American Life & AccidentInsurance Co. ofKentucky, and Blue Cross & Blue Shield ofFlorida Inc. held the most JPMorgan shares in the insuranceindustry, according to SNL data.

However, JPMorgan stock held within insurer portfolios iscomparatively small against policyholder surplus. SNL relays thatAIG, the second-greatest P&C carrier, owned $59.9 million ofJPMorgan stock at the end of 2011, which represented just 0.21percent of its total surplus.

State Farm Multi Automobile Insurance held $42.7 million in thebank's stock at the end of last year, which was compacted into a0.07 stock-to-surplus ratio.

A spotlight is currently on American Life & AccidentInsurance Co. of Kentucky, which held $36.5 million of the bank'sshares, equaling 48 percent of its $76.1 million in policyholdersurplus. SNL says the company may not weather the damage as easilyas the rest of the insurance landscape.

SNL states that the most-exposed insurers may regain theirinvestments if the bank's shares regain strength in the second halfof the second.