Insurer Aflac Inc. said it will incur a loss of about $31 million before taxes in the second quarter as it sells off some investments that had been flagged as problematic by analysts and investors.

The largest loss, of $72 million, is tied to the sale of holdings in Irish Life and Permanent Group Holdings PLC (IL0.DB), according to a regulatory filing Tuesday. The company also sold off sovereign debt from Tunisia at a pre-tax loss of $5 million.

Those losses were offset by gains of $18 million from the sale of perpetual securities issued by Lloyds Banking Group PLC (LLOY.LN) and $28 million of perpetual securities from Royal Bank of Scotland Group PLC (RBS.LN).

The asset sales are part of Aflac's ongoing effort to unload some of its sovereign and bank debt from financially stressed regions, and reduce the size of the largest positions in its investment portfolio. The company sold off Greek debt in the first quarter.

Such investments have made some investors and analysts nervous in recent years, first amid the 2008 financial crisis and later when the European Union grappled with the mounting debts of Greece and other member nations last year.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

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