Munich Re, the world's biggest reinsurer, abandoned its profit target on Tuesday as a result of Japan's devastating earthquake and tsunami.
"The profit target for 2011 of around €2.4-billion ($3.41-billion U.S.) is no longer achievable," it said.
First-quarter claims from the earthquake and tsunami come on top of February's earthquake in New Zealand and a cyclone and floods in Australia earlier this year.
The natural catastrophes have already racked up a claims bill of more than €2.5-billion so far in the quarter, Munich Re said in a statement.
Its biggest rival, Swiss Re, said on Monday it expected to face claims of $1.2-billion from the earthquake and tsunami.
"The losses for Munich Re result mainly from covers in commercial business," the reinsurer said, adding that this initial loss estimate is based solely on modelling.
"Owing to the extent of the destruction, further possible aftershocks and difficult clearing-up operations, it will be many weeks before the losses are assessed and all the claims notifications from Japanese primary insurers have come in," the group said.
"After Swiss Re's announcement on Monday investors were expecting Munich Re to announce an impact of a similar scale, but this does deal a blow. Especially the abandoned profit goals," a Frankfurt-based trader who declined to be named said.
Munich Re also added that further uncertainties over the ultimate cost result from the impact on international flows of goods and supply chains, and from business interruptions suffered by Japanese industrial producers.
The disaster in Japan is one of the costliest natural disasters in the history of global insurers, having caused insured losses of $12-billion to $25-billion, according to risk modeling firm Eqecat.
Insurance shares have been under pressure since the disaster, which also led to the world's worst nuclear power plant crisis in 25 years, as investors sell on the possibility that some could cut share buybacks or raise capital to offset losses.