Credit Suisse said the 6.3 magnitude earthquake that hit Christchurch, New Zealand on Monday appears to have caused more physical damage than the larger (7.1 magnitude) quake that hit the South Island city on September 4.

Whilst too early to estimate the ultimate losses, insured losses are likely to be materially higher than the estimated $3 billion to $4 billion of losses for September’s quake due to the city’s proximity to the epicenter to the earthquake and the shallow nature of the earthquake, said Richard Burden, an analyst at Credit Suisse.

Burden said the higher level of damage from the latest earthquake will likely result in higher overall claims for property damage than September’s quake which saw relatively less damage to buildings.

With more damage to the main city of Christchurch commercial claims are likely to be higher particularly from business interruption. Further, Burden believes the New Zealand Earthquake Commission’s reinsurance cover has a lower retention limit than for the first claim ($1 billion versus $1.5 billion).

For reinsurers the ultimate losses could also prove higher if the latest earthquake is deemed to be an aftershock from September’s initial earthquake rather than a separate event – however here there is little visibility and the ultimate determination will depend on precise policy wordings.

As with the September earthquake, Burden expects the reinsurers to take the brunt of the losses. Based on an estimated industry insured loss of $3 billion reported claims for September’s quake show Munich Re with 15.3 percent share of losses, Swiss Re 7.7 percent, Hannover Re 3.8 percent and Amlin 5.3 percent.

However, Burden would stress that these numbers should serve as more a frame of reference than firm guidance for losses in the most recent earthquake given the likely different mix of losses.

Burden said a difficult first quarter, but losses still not enough to change pricing. Coming in the wake of the Australian flooding losses are building in the reinsurance industry in the first quarter. However, with continued high levels of excess capital in the global reinsurance industry the losses suffered to date are unlikely to be sufficient to cause a turn in global pricing, although Burden would expect pricing in the Asia-Pacific region to increase.

We remain cautious towards reinsurance: With European personal lines pricing showing increasing signs of a turn we see better earnings momentum within the larger European primary insurers, whilst we also see the larger composite European primary companies as more attractively valued at current levels, with Allianz our preferred European non-life play, said Burden.