Insurance Stocks Drop on Possible Cost of Storm

Hurricane Sandy could cost industry up to $6.3 bln, vs. $4.3 bln for Irene.

Insurers including Travelers Cos., Swiss Re AG and Munich Re fell as the U.S. east coast prepared for Hurricane Sandy, which may cost the industry as much as $6.3 billion, according to Kinetic Analysis Corp.

Insurance was the worst-performing industry in the STOXX Europe 600 Index, down 1.6 percent compared with the index’s 0.7 percent decline at 11:32 a.m. in London. Munich Re traded 2.1 percent lower at 121.75 euros, Swiss Re fell 2.6 percent and New York-based Travelers dropped 0.9 percent in European trading.

Weak Winds

Claims may be about $3 billion should the winds remain a relatively weak Category 1 storm, Croce said. At that level the losses are unlikely to reach reinsurance limits, meaning claims will be borne by primary insurers, he said.

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