This morning’s earthquake and subsequent tsunami in Japan is crushing shares of global reinsurers exposed to the destruction.Many of these companies have exposures to Japan, futher, they may have already been hit by disasterous weather in Australia and the earthquake in New Zealand.
Big insurers hit today:
- Swiss Re – down 5.28%
- Munich Re – down 4.83%
- Hannover Re – down 4.33%
- Scor – down 7.41%
A little more on Scor, from Societe Generale:
On the basis of data given at the 2009 Investor Day we understand that Scor’s exposure to a 1 in 250 year earthquake in Japan is €280m.
This theoretical €280m exposure – €224m net of tax – represents c.5.1% of 2010 shareholders’ equity (which appears to us in line with industry practices of managing peak exposure at 5% of shareholders equity) or 60% of 2011e net earnings.
Recent Australian/New Zealand natural events have already consumed the group’s 2011 normalized annual nat cat budget. Any substantial additional natural catastrophe losses in the course of 2011 would therefore imply a material impact on the combined ratio t – we currently have a 100% comb. ratio in our estimates; a 1pp change in our CR has a 5% impact on our 2011 EPS.