NEW YORK (AP) — Another earthquake that shook the northern section of Japan rattled the stocks of insurance and reinsurance companies on Thursday.
The magnitude-7.4 aftershock knocked out power across a large portion of the area that was devastated by the March 11 earthquake and tsunami, which killed about 25,000 people, tore apart entire communities and triggered an ongoing crisis at a nuclear power plant.
A new tsunami warning was issued following the aftershock, but cancelled about 90 minutes later.
In the minutes after word of the latest quake spread, insurance and reinsurance companies with exposure to the area saw stocks dive. As it became clear that there was no heavy damage, shares mainly recovered.
Still, the first three months of this year “will go down in the record books as among the worst in global underwriting history,” analysts at Keefe, Bruyette & Woods said in a note to clients issued earlier Thursday.
The Japan quake and tsunami, coming on top of the Feb. 21 earthquake in New Zealand and earlier flooding in Australia, has resulted in tens of millions of dollars of losses for the industry. The Japan quake alone is likely to be one of the costliest catastrophes in history — industry loss estimates climb as high as $25 billion to $30 billion.
KBW warned that another major event could pressure capital reserves for some companies. It noted that the industry has been unable to pin down loss estimates, and the nuclear crisis makes assessment even harder than usual after a disaster.
However, it is widely expected prices will rise as companies reassess their coverage. That belief sent the sector's stocks up earlier in the week, with many companies reaching new highs.
Among the hardest-hit stocks in the group Thursday was American Safety Insurance Holdings Ltd. The Hamilton, Bermuda-based reinsurance company, which estimated it would record up to $7 million in losses for the first quarter without counting Japan, saw shares fall $1.09, or 5.1 percent, to $20.38 in afternoon trading.
Also down was ACE Limited, a reinsurance company based in Zurich. Shares fell 63 cents to $65.85 in afternoon trading.
Everest Re Group Ltd., another Bermuda reinsurer, also dipped. The company said its initial estimate saw losses in New Zealand at around $180 million and in Australia, around $45 million. It expects “significant” losses in Japan but has not yet released an estimate. Shares gave up 31 cents to $93.45.
PartnerRe Ltd. has said it expects to pay out up to $240 million for the New Zealand quake but has not yet offered estimates for Japan. Shares of the Pembroke, Bermuda-based reinsurer slipped 28 cents, to $82.24.
Shares of RenaissanceRe Holdings Ltd., also based in Bermuda, slipped 26 cents, to $71.46. It has put its total losses for Australia and New Zealand at about $220 million, and said Japan losses are likely to be “material.”
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