Shares of property insurers fall as storm looms
BOSTON (AP) — Shares of property insurers fell more sharply than the broader market on Friday as investors weighed the potential for heavy damages from Hurricane Sandy, which was heading north from Haiti and Cuba toward the East Coast.
The hurricane, now in the Caribbean, is expected merge with a winter storm and a blast of artic air by the time it hits the East Coast, creating what forecasters are branding "Frankenstorm."
If the weather fronts collide Tuesday near New York or New Jersey, as forecasters predict, they could create a big, wet mess that settles over the nation's most heavily populated corridor and reach as far west as Ohio. Government forecasters said Friday that there is a 90 percent chance — up from 60 percent two days earlier — that the East will get pounded.
Sandy is a very late hurricane in what has so far been a quiet hurricane season. But property insurers could be hit with substantial damages resulting from this system. Experts predicted at least $1 billion in damage.
The outlook pressured shares of property insurers, and the financial sector was the biggest loser in the Standard & Poor's 500 index in midday trading. Several insurers fell more sharply than the 0.6 percent decline for the stock index.
Hartford Financial Services Group Inc. fell the most sharply among major property insurers, dropping 88 cents, or 3.9 percent, to $21.60.
Elsewhere in the sector, shares of Allstate Corp. lost 63 cents, or 1.6 percent, to $39.98; Chubb Corp. fell 96 cents, or 1.2 percent, to $78.43; Travelers Cos. was down 68 cents, or 0.9 percent, to $71.44; and American International Group Inc. lost 22 cents, or 0.6 percent, to $34.76.
Class B shares of Berkshire Hathaway, whose insurance businesses include auto and home insurer Geico, fell 69 cents, or 0.8 percent, to $86.46.