NEW YORK, Sept 11 (Reuters) - Shares of U.S. and European insurers jumped on Monday, with companies particularly exposed to Florida posting sharp gains, as the losses from powerful storm Irma were seen as being less severe than feared.
Insurance stocks have been jostled since late last month as investors anticipated significant losses after Hurricane Harvey hit Texas and the southern United States and Irma approached.
Shares of Florida insurers Heritage Insurance Holdings Inc , HCI Group Inc and Universal Insurance Holdings Inc all rose about 15 percent, while property and casualty insurer United Insurance Holdings Corp gained 10 percent.
Those stocks were hit hard last week as investors braced for Irma, but with Monday’s gains have largely retraced their losses.
Shares of larger insurers Travelers Companies Inc and Chubb Ltd rose about 3 percent.
The Dow Jones U.S. Insurance index gained 1.5 percent ahead of the 0.8 percent gain for the overall S&P 500 .
Downgraded from a hurricane to a tropical storm, Irma flooded several northern Florida cities with heavy rain and a high storm surge on Monday as it headed out of the state after cutting power to millions and ripping roofs off homes.
“We expect (property and casualty) stocks to trade up on Monday, as Hurricane Irma’s landfall on Florida’s west coast suggests industry losses below the ‘worst-case’ of a direct hit to Miami,” analysts at Keefe, Bruyette & Woods said in a research note.
In Europe, shares of reinsurers Swiss Re AG and Scor SE rose more than 3 percent and insurers helped drive stock indexes in the region.
Among other reinsurers, Aspen Insurance Holdings shares rose 9.8 percent while Everest Re and XL Group were up more than 5 percent.
Also exposed to Florida, Axis Capital gained 6 percent while Alleghany Corp rose 3.7 percent and Arch Capital was up 2.8 pct.
“Irma’s devastation is still unfolding, but it looks like the monetary losses may be less than originally feared,” Morgan Stanley analysts said in a research note. They said preliminary industry losses were estimated at $15 billion to $50 billion in the United States, and $5 billion to $15 billion in the Caribbean. (Reporting by Lewis Krauskopf and Sinead Carew; Editing by Meredith Mazzilli)