MetLife, the largest U.S. life insurer, dropped 96 cents, or 2.6 percent, to $35.95 at 4:01 p.m. in New York trading. Radnor, Pennsylvania-based Lincoln slipped 4 percent.

The Federal Open Market Committee today extended an earlier pledge to keep rates low until at least the middle of 2013. U.S. life insurers hold more than $2 trillion in bonds including corporate debt, municipal securities and mortgage-linked assets. The companies use the holdings to cover policyholder obligations and generate profits.

Results at life insurers will “be pressured in 2012 due to low interest rates, increased hedging costs and ongoing market volatility,” Fitch Ratings said in a statement on the industry last month.

To contact the reporter on this story: Andrea Ludtke in New York at aludtke@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

http://www.bloomberg.com/news/2012-01-25/lincoln-metlife-lead-insurer-slump-on-fed-s-rate-pledge-new-york-mover.html

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