Investors Bail Out of Insurance Stocks Before Hurricane Sandy Hits

Monday, 29 Oct 2012 08:41 AM

 

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Insurers came under pressure on Monday with investors nervous about prospects for claims as Hurricane Sandy headed for the United States' most densely populated area.

Forecasters say the storm could be the largest ever to hit the U.S. mainland, with about 50 million people from the Mid-Atlantic to Canada in its path.

It is expected to topple trees, damage buildings and cause widespread power outages over the next few days.

Lloyd's of London insurers such as Amlin, Hiscox, Catlin, Beazley and Lancashire fell between 2.6 and 4.1 percent.

"I think it's fairly natural that the market's fretting a wee bit in terms of potential exposure," Eamonn Flanagan, analyst at Shore Capital, says.

"It's going to hit the eastern seaboard at some point in the next 24 hours. How hard it does and the potential losses are just too difficult at this stage to gauge. The market doesn't like that uncertainty and I think that's what's moving the prices.

Aside from those Lloyd's underwriters directly exposed to the Hurricane Sandy risk, the major Europe reinsurers such as Swiss Re and Munich Re also suffer, down 2.6 percent and 1.9 percent respectively.
Read More: Following 'Frankenstorm' Sandy's Path

European airlines were weak as well, with flights to the United States eastern seaboard seen delayed and cancelled by the path of the Hurricane.

Air France, German carrier Lufthansa and British Airways owner International Consolidated Airlines shed 0.9 to 1.5 percent.

© 2014 Thomson/Reuters. All rights reserved.

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