Record Breaking Earthquake In Japan Causes Insurance Shares To Drop

An earthquake measuring 8.9 on the Richter scale struck Japan this morning causing insurance stocks to fall.

There are considerable fears that large insurance companies will have to make bumper payouts to cover the costs of the disaster. Shares in Munich Re fell by 5.0%, Swiss Re and Hannover Re were both down by more than 5.0%.

Munich Re has already been hit by another natural disaster. The Christchurch earthquake in New Zealand caused the insurance firm to pay out more than $1 billion in damages.

There are fears that aftershocks will continue to cause damage for the next day or two. Throughout the day images of the tsunami sweeping through parts of Japan have been broadcast on international news. It is difficult to assess the extent of the damage until rescue workers have got on the ground but this can only start when the area is deemed to be relatively safe.

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