Britain's largest general insurer RSA warned on Tuesday that last week's wind storms in northern Europe would hit profits, the first major insurer to say so, sending its shares tumbling over 8 percent.
Broker Willis Re has estimated insurers will have to pay out up to $1.75 billion in claims after the storm dubbed "Christian" sent hurricane strength winds through Europe, killing more than a dozen people.
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The world's No. 1 reinsurer, Munich Re , and Europe's No. 1 insurer, Allianz , have declined to estimate damage claims from "Christian". They report third quarter results on Thursday and Friday, respectively.
RSA said that "Christian" costs as well as those from floods in Canada this year, deemed that country's costliest natural disaster, would mean "full year weather losses...materially above planning assumptions".
It had said in August that it remained on track to meet full year targets after absorbing the cost of claims from Canadian floods, though it conceded the impact would continue into the second half of 2013.
"We now expect 2013 return on equity to be below 10 percent," RSA said in a statement.
That sent RSA shares skidding. By 1150 GMT, its stock was 6.4 percent down at 120.9 pence - by far the biggest faller on the European insurance index .
Germany's Hannover Re said "Christian" would make it on to the reinsurer's list of major claims, which it defines as damage over 10 million euros ($13.5 million), but its own exposure was limited.
"We assume it will be clearly below 50 million euros...and only marginally affect our claims budget for the fourth quarter," Chief Financial Officer Roland Vogel told a conference call with journalists.
The world's No. 3 reinsurer on Tuesday unveiled a net profit target for 2014 of 850 million euros, close to its record of 858 million posted in 2012, and above analyst expectations for 826 million net profit for next year.
Hannover said it expects premiums to grow in a low single-digit percentage range next year and would concentrate on underwriting despite tough competition. An expected increase in assets under management should offset the low interest rate environment, it said.
Hannover stock rose nearly 1 percent, one of only four gainers in the European insurance index, which was dragged down over 1 percent by RSA and by sector heavyweight Sampo reporting weaker-than-expected quarterly profits.
The Finnish insurance and investment group attributed the disappointing third quarter to lower investment returns which cast a shadow over higher operational earnings.
Sampo, which owns about 21 percent of Nordic bank Nordea , said third-quarter pretax profit rose 9 percent from last year to 403 million euros ($544 million), compared with an average analyst forecast of 433 million in a Reuters poll.
Meanwhile, British insurer Legal & General posted higher-than-expected sales on the back of recent acquisitions, although its shares fell more than 3 percent as its figures were not as strong as some had hoped.
(Additional reporting by Jussi Rosendahl; Editing by Louise Ireland and Carmel Crimmins)