CHRISTCHURCH, New Zealand (Bloomberg)—New Zealand's deadliest earthquake in eight decades may be the costliest natural disaster for insurers since 2008, according to estimates from JPMorgan Chase & Co.

Insured losses from the temblor may be $12 billion, Michael Huttner, an analyst at JPMorgan, said in a note to clients. That would be the most expensive calamity since the $19.9 billion loss from Hurricane Ike, which struck the U.S. in 2008, according to the Insurance Information Institute, a New York- based trade group.

The 6.3-magnitude earthquake struck this week, killing at least 65 people, toppling buildings and trapping office workers in Christchurch, New Zealand's, second-largest city. Sidewalks and roads were destroyed. A 7.0-magnitude temblor shook the city on Sept. 4, costing insurers an estimated $6 billion, according to Mr. Huttner.

“Even buildings which are still standing may have hidden structural damage and could then need to be rebuilt,” he said in the note. “This is a very conservative assumption on our part and in support of this we note that all reinsurers revised” cost estimates for the previous earthquake.

Flagstone Reinsurance Holdings S.A., the Luxembourg-based company founded in response to the 2005 hurricane season, increased its estimated costs tied to the September quake to $75.5 million from $52.5 million on Dec. 30. Bermuda-based reinsurer PartnerRe Ltd. more than doubled its projection to between $140 million and $160 million on Dec. 15 from $64 million it had estimated on Nov. 3. Munich Re, the world's largest reinsurer, said the costs from the September quake were €340 million ($464 million) on Feb. 3.

Shares decline

PartnerRe fell $3.44, or 4.2%, to $78.66 at 2:10 p.m. in New York Stock Exchange composite trading. That’s the biggest drop since April 2009. Flagstone declined 41 cents, or 3.3%, to $12.13.

A $12 billion loss from this week’s earthquake would make it the seventh-most-costly natural disaster for insurers since 1970, according to the Insurance Information Institute’s ranking, which is based on data from Swiss Reinsurance Co. and reflects losses in 2009 U.S. dollars. The industry’s most expensive catastrophe was 2005’s Hurricane Katrina, which cost $71.2 billion.

The Chilean earthquake, last year’s most costly disaster, may cost the industry $8.5 billion, according to Aon Corp., and wasn’t included in the ranking, which ran through 2009.

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