European insurers braced for storm damage after RSA warning
By Chris Vellacott and Jonathan Gould
LONDON/FRANKFURT (Reuters) - Britain's largest general insurer RSA (RSA.L: Quote) warned on Tuesday that last week's wind storms in northern Europe would hit profits, the first major insurer to say so, sending its shares tumbling over 8 percent.
Broker Willis Re has estimated insurers will have to pay out up to $1.75 billion in claims after the storm dubbed "Christian" sent hurricane strength winds through Europe, killing more than a dozen people.
The world's No. 1 reinsurer, Munich Re (MUVGn.DE: Quote), and Europe's No. 1 insurer, Allianz (ALVG.DE: Quote), have declined to estimate damage claims from "Christian". They report third quarter results on Thursday and Friday, respectively.
RSA said that "Christian" costs as well as those from floods in Canada this year, deemed that country's costliest natural disaster, would mean "full year weather losses...materially above planning assumptions".
It had said in August that it remained on track to meet full year targets after absorbing the cost of claims from Canadian floods, though it conceded the impact would continue into the second half of 2013.
"We now expect 2013 return on equity to be below 10 percent," RSA said in a statement.
That sent RSA shares skidding. By 1150 GMT, its stock was 6.4 percent down at 120.9 pence - by far the biggest faller on the European insurance index .
Germany's Hannover Re (HNRGn.DE: Quote) said "Christian" would make it on to the reinsurer's list of major claims, which it defines as damage over 10 million euros ($13.5 million), but its own exposure was limited. Continued...