Impact of natural disasters on the value of (re)insurance companies

Natural catastrophes represent a significant financial burden for the (re)insurance industry, which can affect both the profitability and the financial stability of companies. This paper analyzes the impact of five significant natural events on the share prices of 36 (re)insurance companies listed in the MSCI World Index. The analysis is conducted using the event study methodology and examines the extent to which insured losses from natural catastrophes lead to abnormal returns on share prices. The results show a significant short-term impact of catastrophes on share prices and confirm the tendency for investors to overreact.