New York, NY - Indianapolis-based health insurer Wellpoint Inc (NYSE: WLP) is expected to report loss of as much as $349 million in the fourth quarter results, the company said in an investors conference on Monday.

The health insurance market has weakened with the increasing investment risks and declining number of members as the residents of the country lowered their spending.

American International Group, Inc. (NYSE: AIG) is one of the leading insurance companies that received billions of dollars from the U.S. government in the form of emergency funds made available to it after the troubled insurer was rescued from collapsing last month.

The insurers have also been affected by rising unemployment rate in the U.S.

The Labor Department released its December jobs report on Friday showing the unemployment rate surged at the fastest pace in 16 years to 7.2 percent from 6.7 percent in November as more number of companies fired more employees last month.

The report added that as many as 524,000 individuals lost their jobs last month for a twelveth-straight month, which is at the fastest pace since World War II ended in 1945.

The market analysts are speculating higher credit-related losses from the financial companies in the U.S. in the latest quarter as the overall economic condition worsens.

The health benefits provider said in a regulatory filing to the US Securities and Exchange Commission today that the net realized investment losses after taxes included $212 million for equity securities and $137 million for fixed maturity securities.

In its preliminary estimate, the U.S. largest health insurance firm by membership, said the current losses are in addition to the already posted $562.6 million reported for the third quarter, arising primarily from the investments in Lehman Brothers Holdings Inc, Fannie Mae and Freddie Mac.

The company reported in the third quarter that its net income was $820.7 million, or $1.60 a share, down from $868 million, or $1.45 a share, a year ago in the same period. During the same quarter, total revenue of the operator of Blue Cross health plans dropped by 1.8 percent to $14.96 billion.

WellPoint’s officials said aggregate statutory capital levels of the firm as of Dec. 31 are estimated to exceed Blue Cross and Blue Shield Association requirements by approximately $1.6 billion and state regulatory levels by approximately $4.6 billion.

The estimated losses reported today is likely to affect its fourth-quarter profit, which is expected to be released on Jan. 28, but company officials cannot disclose details before the report.

Meanwhile the company, which maintains extensive reserves and investments, has tapped in to medical tourism segment as it recently teamed with Boston-based medical tourism facilitator, Healthbase Online Inc., to provide global health care coverage to members of WellPoint's affiliated health plan in Wisconsin. The company is taking similar steps to enhance its financial reserves.

Shares of the company were trading down by $1.49 or 3.50 percent to $41.07 during morning trading session on Monday on the New York Stock Exchange composite trading. The stock has lost market value of as much as 52 percent through last week, when it closed at $42.56.