The business of "reinsurance" involves insurance that is purchased by insurance companies to limit the total loss an insurer would experience in case of an oversized disaster like Super-Storm Sandy. In past years reinsurance was not hard to obtain.
In recent years that has changed. Massive earthquakes like the one in Japan, increasingly severe outbreaks of violent weather and floods, and other recent natural disasters have made it difficult for insurers to secure reinsurance.
The result has been that insurers have abandoned certain markets and states, or, the premiums for specific kinds of insurance have risen to all-time highs. Let's look at a chart to see how reinsurance companies like RGA have fared the past five years. The potential upside is plain to see.
Chubb took a hit from Sandy to the tune of about $880 million, which is part of the reason the stock has dropped below its 52-week high of $81.80. Like most of the other companies impacted by the October Super-Storm it had the reserves and reinsurance in place to cover the financial blow.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV