New Zealand Quake May Be Costliest Insured Disaster Since 2008
New Zealand’s deadliest earthquake in eight decades may be the costliest natural disaster for insurers since 2008, according to estimates from JPMorgan Chase & Co.
Insured losses from the temblor may be $12 billion, Michael Huttner, an analyst at JPMorgan, said in a note to clients. That would be the most expensive calamity since the $19.9 billion loss from Hurricane Ike, which struck the U.S. in 2008, according to the Insurance Information Institute, a New York- based trade group.
The 6.3-magnitude earthquake struck this week, killing at least 65 people, toppling buildings and trapping office workers in Christchurch, New Zealand’s second-largest city. Sidewalks and roads were destroyed. A 7.0-magnitude temblor shook the city on Sept. 4, costing insurers an estimated $6 billion, according to Huttner.
“Even buildings which are still standing may have hidden structural damage and could then need to be rebuilt,” he said in the note. “This is a very conservative assumption on our part and in support of this we note that all reinsurers revised” cost estimates for the previous earthquake.
Flagstone Reinsurance Holdings SA, the Luxembourg-based company founded in response to the 2005 hurricane season, increased its estimated costs tied to the September quake to $75.5 million from $52.5 million on Dec. 30. Bermuda-based reinsurer PartnerRe Ltd. more than doubled its projection to between $140 million and $160 million on Dec. 15 from $64 million it had estimated on Nov. 3. Munich Re, the world’s largest reinsurer, said the costs from the September quake were 340 million euros ($464 million) on Feb. 3.
Shares Decline
PartnerRe fell $3.44, or 4.2 percent, to $78.66 at 2:10 p.m. in New York Stock Exchange composite trading. That’s the biggest drop since April 2009. Flagstone declined 41 cents, or 3.3 percent, to $12.13.
A $12 billion loss from this week’s earthquake would make it the seventh-most costly natural disaster for insurers since 1970, according to the Insurance Information Institute’s ranking, which is based on data from Swiss Reinsurance Co. and reflects losses in 2009 U.S. dollars. The industry’s most expensive catastrophe was 2005’s Hurricane Katrina, which cost $71.2 billion.
The Chilean earthquake, last year’s most costly disaster, may cost the industry $8.5 billion according to Aon Corp. and wasn’t included in the ranking, which ran through 2009.
To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net
To contact the editor responsible for this story: Dan Kraut in New York at dkraut2@bloomberg.net
N.Z. Quake May Be Costliest Disaster Since 2008
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Rescue workers search through debris for survivors following an earthquake in Christchurch.
Rescue workers search through debris for survivors following an earthquake in Christchurch. Photographer: Martin Hunter/Getty Images
Feb. 22 (Bloomberg) -- New Zealand Prime Minister John Key talks about the death toll from the deadliest earthquake to hit the country in 80 years. The South Island city of Christchurch was rocked by a magnitude 6.3 earthquake, the strongest since September when the city was shaken by a 7.0 magnitude temblor. Francine Lacqua also speaks on Bloomberg Television's "On The Move." (Source: Bloomberg)
N.Z. Quake May Be Costliest Disaster Since 2008
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Parked cars are crushed by a collapsed building in Christchurch.
Parked cars are crushed by a collapsed building in Christchurch. Photographer: Logan McMillan/AFP/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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Police tape surrounds damaged retail shops in Merivale, a suburb of Christchurch.
Police tape surrounds damaged retail shops in Merivale, a suburb of Christchurch. Photographer: Hagen Hopkins/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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Large cracks appear on roads around the Avon River in Christchurch.
Large cracks appear on roads around the Avon River in Christchurch. Photographer: Martin Hunter/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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People stand outside their damaged house in Sumner, a suburb of Christchurch.
People stand outside their damaged house in Sumner, a suburb of Christchurch. Photographer: Hannah Johnston/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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Search and rescue teams work at Canterbury Television in Christchurch.
Search and rescue teams work at Canterbury Television in Christchurch. Photographer: Martin Hunter/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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Rescue workers walk up Manchester Street in Christchurch.
Rescue workers walk up Manchester Street in Christchurch. Photographer: Hagen Hopkins/Getty Images
N.Z. Quake May Be Costliest Disaster Since 2008
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Members of the St. Johns Medical staff arrive at Auckland airport, ready to depart for Christchurch to aid in rescue operations.
Members of the St. Johns Medical staff arrive at Auckland airport, ready to depart for Christchurch to aid in rescue operations. Photographer: Hannah Johnston/Getty Images
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