New Zealand's deadliest earthquake in eight decades may turn out to be the costliest natural disaster for insurers since 2008, according to JPMorgan Chase.
Insured losses from the disaster could be US$12 billion ($16.07 billion) JPMorgan analyst Michael Huttner said in a note to clients.
That would be the most expensive calamity since the US$19.9 billion loss from Hurricane Ike, which struck the United States in 2008, according to the Insurance Information Institute, a New York-based trade group.
"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," Huttner wrote.
Flagstone Reinsurance Holdings, the Luxembourg-based company founded in response to the 2005 hurricane season, increased its estimated costs tied to the September quake to US$75.5 million from US$52.5 million on December 30.
Bermuda-based reinsurer PartnerRe more than doubled its projection to between US$140 million and US$160 million on December 15, from the US$64 million it had estimated on November 3.
Munich Re, the world's largest reinsurer, said the costs from the September quake were €340 million ($623.42 million) on February 3.
Tuesday's disaster might lower Munich Re's 2011 operating profit by 16 per cent, based on a doubling of industry losses from the September quake, Huttner wrote.
Hannover Re, the world's third-largest reinsurer, might have operating profit cut by 18 per cent, and world number two Swiss Reinsurance by 13 per cent, he said.
PartnerRe fell US$3.38, or 4.1 per cent, to US$78.72 yesterday in New York Stock Exchange composite trading, which is the biggest drop since May 2009.
Flagstone dropped 58c, or 4.6 per cent, to US$11.96.
Insurance Australia Group yesterday cut its margin forecast in the wake of the Christchurch quake although its reinsurance arrangements will cap its costs at A$40 million ($53.64 million).
Australian lender and insurer Suncorp Group said first-half profit fell 39 per cent after a jump in claims from flooding in Queensland and the September Christchurch quake.
A US$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 Re and reflects losses in 2009 US dollars.
Hurricane Katrina: US$71.2b
Hurricane Ike: US$19.9b
Christchurch quake: US$12b (est)
Chilean earthquake: US$8.5b