Insurers and reinsurers around the globe are looking to raise rates after what looks set to be their most costly quarter on record.
Hurricanes Irma and Maria alone caused as much as $135 billion in insured losses, according to modelling firm AIR Worldwide. Earthquakes in Mexico could cost billions more.
As insurers report the full extent of the damage in their third-quarter results in coming weeks, investors will be looking for signs they can claw back some of those losses by raising premiums for customers.
"Having the chance of rate increases is quite attractive," said Mark Stoeckle, senior portfolio manager of Baltimore-based Adams Funds, which owns shares of Chubb Ltd
Over the next two weeks, other leading insurers and reinsurers are scheduled to report, including American International Group Inc
"The largest focus is on the pricing outlook," said Wells Fargo Securities analyst Elyse Greenspan.
Investors already appear to be banking on higher premium rates halting a gradual slide over the past few years.
The S&P 500 property and casualty insurance index <.splrcinpc> fell about 10 percent between mid-August and the end of the first week of September, as the scale of damage from Hurricane Harvey in Texas became apparent.
Since then, the index has recovered those losses and is now up about 5.5 percent since Aug. 17, on a par with the S&P 500. European insurance stocks followed a similar path: the STOXX Europe 600 Insurance index <.sxip> is up 4 percent since Aug. 17.
In the United States, Travelers Cos Inc
In Europe, Hannover Re
A turnaround in prices would be the first major reversal since Hurricane Katrina in 2005, the costliest natural disaster in U.S. history.
Aberdeen Standard Investments is looking to benefit from possible rate hikes, said Russell Barlow, head of hedge fund investments at the Scottish firm.
Reinsurers which take on risk from other reinsurers, known as retrocessionaires, are "one of the most attractive routes to access the uplift in premiums," Barlow said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)