FRANKFURT (Reuters) – The insurance industry faces damage claims of between $3.5 billion and $8 billion from Tuesday's devastating earthquake around Christchurch, New Zealand, catastrophe modeling firm Air Worldwide said.

Those estimates are preliminary, and the quake could still end up being the costliest disaster for the global insurance industry in nearly three years. It is not expected to be enough, however, to arrest a sharp multiyear decline in insurance and reinsurance pricing.

"The quake caused extensive damage in the city center and was the second major quake to strike the city in six months," Air Worldwide said in a statement on Wednesday.

"Damage assessments are only just beginning after the initial focus on search and rescue," said the firm, which uses computer models to generate fast loss estimates for insurers on events like earthquakes or hurricanes.

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