Hawaii Insurance

Insurance company stocks rose yesterday in the hope that the high losses of Hurricanes Andrew and Iniki, finally, the force would be a shame and accident insurers to raise their prices on a business trip insurance .

The demonstration in a large number of stocks highly prestigious insurance came to a publication of the Continental-Versicherungs-Gesellschaft, the losses incurred by him up to $ 200 million. Continental, which also said it was a reduction in the dividend for the first time since 1853, is not part of the rally and its share prices collapsed to $ 6125, $ 24

Just days earlier, Prudential Insurance quadrupled the gross amount of the loss estimates at more than $ 1 billion, an indication higher losses in the insurance sector than in the past Andrew. To industry experts, still uncertain, as many toll east of Florida, say they can be top $ 10 billion. Bad News is Good News

What strange, as it consults as a bad news, good news for damage and accidents. A clash seriously enough, experts say, cutting prices aggressively, including insurance premiums up 40 percent over the past five years. Wall Street was a turning point in the cycle of price fixing.

The shares of leading insurance rose sharply stocks, including American International Group, an increase of $ 7125, $ 101625, and Marsh & McLennan Companies, to $ 5.50, $ 89.

Others, also General Reinsurance, which jumped $ 8125 to $ 102.50; Chubb to $ 4.50, $ 79.25, St. Paul Companies, to $ 3375, $ 72, and CNA Financial, 3875 to $ 91, like Cigna, $ 3.25 to $ 50.75; Aetna, $ 1.50, $ 40875, and travellers , 75 cents, according to $ 22125th “This is a phenomenal rally,” said Orin Kramer, an economist and adviser an insurance company in Fort Lee, NJ

John H. Snyder, Senior Vice President of the Property Casualty division by AM Best, an insurance rating agency in Oldwick, New Jersey, said it would take months to be sure that the long-awaited turning point in the cycle pricing is going to take place. But he said it was clear that Wall Street thought, it has always been close.

“The message of Prudential Continental indicates that the damage is greater than all imagine,” said Snyder. “If it is a turning point in the cycle of price fixing, people only want to buy such stocks. The end of reinsurance –

John P. Mascotte, Chairman and Chief Executive of Continental, said yesterday that the company pretax loss of Hurricane Iniki in Hawaii, a total of $ 55 million. The company had previously estimated its losses from Hurricane Andrew would come to $ 55 million and in collaboration with the cost to purchase more catastrophe reinsurance coverage, costs related to the storm at $ 200 million for the third quarter.

The company also announced that it was out of reinsurance operations and its modest international operations to focus capital on the core activity. This leads to a further move of $ 120 million for the quarter. Mr. Mascotte, said the company was reducing the quarterly dividend on common shares by 25 cents to 65 cents per share.

Continental, a New York company $ 1.8 billion in wholesale or so-called surplus, writing commercial insurance and personal and has about $ 5 billion annual turnover .

“This measure is necessary for our company healthy,” said Mascotte. “We remain confident in the soundness of our strategy, the quality of our employees and our prospects for future success.”

The company also announced that its President and Chief Operating Officer, William E. Thiele, the company on December 31. Mr. Mascotte is capable of these positions.

A reduction in the dividend has been particularly hard to move Continental. The stock has been generally high because of its high level of dividends and since it is one of a handful of companies, it could not boast its dividends had declined during this century.