Insurers Fall for Third Day on Japan Earthquake, Reactor Blast
Auto Insurance Quotes Compare: Insurers Fall for Third Day on Japan Earthquake, Reactor Blast
European insurers and reinsurers fell for a third day on concern they may face claims related to the earthquake in Japan and amid fears that parts of the country may suffer radioactive contamination.
Ageas (AGS), the insurer formerly known as Fortis, ING Group NV and Hannover Re led declines as the Stoxx Europe 600 Insurance Index dropped 4 percent at 2:30 p.m. central European time. That followed a 4.2 percent loss in the previous two days as the global insurance industry may face claims of as much as 2.8 trillion yen ($35 billion) tied to the earthquake, according to AIR Worldwide.
“This comes on top of what has already been a difficult start to the year with losses in Australia and New Zealand,” Citigroup Global Markets analyst James Quin wrote in a research note. “Results were already likely to have missed budget, and company targets are now in effect meaningless for 2011.”
Munich Re and Swiss Reinsurance Co., the world’s biggest reinsurers, both fell more than 4 percent, bringing their losses since the quake to more than 10 percent. Reinsurers help protect primary carriers such as Allianz SE (ALV) and Axa SA (CS) against the cost of major claims from hurricanes and earthquakes.
Losses at the top end of AIR’s March 13 estimate would make the disaster the second worst for insurers and reinsurers after Hurricane Katrina devastated New Orleans in 2005 and cost the industry $62.2 billion, according to estimates from Munich Re.
Profit Target
Munich Re, based in Munich in southern Germany, last week said its full-year profit target of about 2.4 billion euros ($3.3 billion) “will only remain achievable, if random losses in the further course of the year remain below expectations.”
After the earthquake and tsunami, Tokyo Electric Power Co. is battling a potential meltdown at three reactors at its Fukushima Dai-Ichi plant, 220 kilometers (135 miles) north of Tokyo, heightening concern over radiation leaks. Japanese Prime Minister Naoto Kan appealed for calm as he said the danger of further radiation leaks was rising.
“The nuclear angle should not be viewed as a major concern for the European insurers,” Citigroup’s Quin wrote. “The nuclear facilities are reinsured by a government-sponsored pool and nuclear risks are excluded from commercial cover.”
Similar to other countries, the Japan Atomic Energy Insurance Pool covers risks related to nuclear accidents. Such pools, which also help cover acts of terrorism, are mandatory in some countries for risks not covered by private insurers.
“Generally, coverage for nuclear facilities in Japan excludes earthquake shock, fire following earthquake and tsunami, both in terms of physical damage and liability,” Zurich-based Swiss Re said in a statement yesterday. As “coverage for property policies excludes nuclear contamination,” it would be “unlikely” that blasts at atomic power plants would “be a significant impact on the property and casualty insurance industry,” the company said.
To contact the reporters on this story: Oliver Suess in Munich Bureau at osuess@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net
source: Auto insurance quotes, Get auto insurance quotes, Compare auto insurance, Auto insurance comparisons, Auto insurance quote, Instant auto insurance, Affordable auto insurance, Auto insurance companies, Auto insurance rates, Auto insurance discounts, Auto car insurance, Student auto insurance, Auto insurance brokers, General auto insurance, American auto insurance, Auto insurance UK, Auto insurance claims, Fake auto insurance, Auto insurance complaints
