Gaining from Loss: Property-Liability Insurer Stock Values in the Aftermath of the 1989 California Earthquake

On the Stock Market's Reaction to Major Railroad Accidents

“…See Lamb (1995) who investigates the abnormal returns for insurance firms following Hurricane Andrew and Shelor et al (1992) who study the reaction to the California Earthquake of 1989.…”

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

“…Shelor et al (1992) and Aiuppa et al (1993), for example, both concluded that insurer stock values increased after California's Loma Prieta earthquake (insured loss US$2.5 billion) in part because high earthquake insurance rates and low perceived risk meant many property owners were uncovered at the time. Conversely, Lamb (1995) and Angbazo and Narayanan (1996) found that the large negative effect of Florida and Louisiana's Hurricane Andrew (insured loss US$16.5 billion) was only slightly offset by the subsequent premium increases, and furthermore that the event even showed evidence of a contagion effect to insurers with no claims exposure in the hurricane affected states.…”

“…While this simplifies the analysis, it is problematic, in that single events may be susceptible to contamination by macroeconomic events independent of the disaster or catastrophe itself. For example, West (2003) argues that the Shelor et al (1992) analysis of the 1989 Loma Prieta earthquake was compromised because it failed to take account of the lowering of official US interest rates two days later. Even so, the distinction (usually on the basis of insured cost) between natural 'catastrophes', 'disasters' and 'events' is arbitrarily made and often ignores the fact that even relatively 'small' episodes can have important financial impacts.…”

The Effect of the Great East Japan Earthquake on the Stock Prices of Non-life Insurance Companies

“…The aim is to keep the public, as well as nuclear authorities, accurately informed on the occurrence and potential consequences of reported events. 6 Shelor et al (1992).…”