Nothing makes a financial journalist feel worse about his or her career choices than a disaster.
The shock of the event is routinely followed by the grim realization that our place in the scheme of things is to talk about the impact on insurance stocks.
The catastrophic fire that ravaged Notre Dame cathedral in Paris is a case in point. The staggering scale of loss is immediately evident, so it would be natural to suspect that AXA (PA: AXAF), France’s biggest insurer, may be seriously on the hook for the reconstruction.
So you’d be surprised to hear that its stock hit a 13-month high on Tuesday, especially after it confirmed that it was the insurer to two contractors on restoration works whose activity may have been linked to the fire. It’s up another 0.4% at the time of writing on Wednesday.
That isn’t just down to the fact that France’s business elite has already promised 700 million euros to cover reconstruction costs, a figure that will probably be augmented by public donations.
This key part of a statement released by Axa late on Tuesday explains why it’s shielded from the worst:
“The Notre Dame cathedral is classified as a historical monument since 1862, and like all properties belonging to the state, it is self-insured by the state (therefore AXA is not the insurer for the monument itself).”
But the insurance giant isn’t out of the woods yet, as the rest of the statement shows:
“Among the many companies working on the on-going construction projects of the cathedral, AXA France provides civil-liability coverage to two companies: Europe Echafaudage and Le Bras Frères.”
Additionally, AXA Art is involved in the insurance of certain artefacts and ceremonial objects in the Notre-Dame.
The cause of the fire is still unknown and being investigated. AXA said all its teams are “fully cooperating” with the authorities.
AXA’s shares are still over 10% below where they started 2018, having spent most of last year trying to convince investors of the merits of its $15.3 billion acquisition of XL, a deal that made it the world’s biggest property and casualty insurer.
However, they have risen 26% since the start of the year, according to data compiled by Investing.com, and still offer what by local standards is an attractive yield of 5.69%.
Elsewhere, it’s another strong morning for Europe’s bourses, with major indexes rising between 0.1% and 0.4% in response to stronger-than-expected Chinese growth data for the first quarter. The U.K. FTSE 100 is down 0.2%, however, as is the Euro STOXX 600.