Insurance stocks stabilise after tsunami worries |
A growing perception that leading insurers will not be hit hard by claims related to the tsunami catastrophe in south Asia provided a floor under European insurance shares yesterday.
"There is a chorus of insurers saying that, for them financially, the damage will not be immense," said a Duesseldorf-based analyst. "That enables the market to calm down somewhat."
Insurance shares fell on Monday in a knee-jerk reaction to the giant tsunami waves that devastated Indian Ocean coastlines, but leading reinsurer Munich Re on Tuesday added its weight to assertions that, while this was an unprecedented human disaster, the toll on insurers would be small.
"It is a human disaster, not an economic one," said analyst Michael Huttner at JP Morgan in London. "I cannot see a huge black hole."
Any damage claims "will not be material to these (insurance) groups and will not affect their earnings," he added.
Shares in No. 2 reinsurer Swiss Re firmed 0.4 percent at 80.35 Swiss francs, outpacing a slightly weaker DJ Stoxx insurance index and weaker European blue chips.
Munich Re eased 0.25 percent to 90.21 euros, paring gains late on Tuesday after the firm said the insurance industry was likely to pick up only a small portion of the more than 10 billion euros ($13.6 billion) in economic damage from the tsunami.
Munich Re said its own claims from the catastrophic undersea earthquake off the Indonesian island of Sumatra would be less than 100 million euros.
Shares in Swiss-based Zurich Financial Services shed 0.3 percent at 189.20 francs.