The quake off Japan’s northeastern coast, measuring 8.9 on the Richter scale, triggered a 10-meter tsunami that swept away ships, houses, and farm buildings locally, and led to warnings around the Pacific basin.

Reinsurers, which help insurance companies absorb large damage claims in exchange for a share of the premiums, and typically have the greatest individual exposure to major natural catastrophes, took the brunt of the share price falls.

The top three global players — Munich Re, Swiss Re and Hannover Re — were all down, though off their early lows.

Listed insurers operating in the Lloyd’s of London market were also mostly lower, with Amlin and Catlin down by 5.3 percent and 4.1 percent respectively.

The industry said it was too early to estimate how much the earthquake would cost it.

“It is absolutely impossible to give you any clue of what that would mean to us,” Munich Re Chief Executive Nikolaus von Bomhard told an analyst conference. A one-in-200 year Japanese earthquake would inflict a maximum loss on the company of about 2 billion euros, he said.

Analysts said reinsurers, who have already had to pick up the bill this year for flooding and cyclones in Australia as well last month’s earthquake in New Zealand, were in danger of missing profit forecasts for the year.

“It is now a near-certainty that assuming normalized developments for the rest of the year, this will be another year of above-average nat-cat losses for reinsurers, and earnings downgrades would be likely for 2011,” Credit Suisse said in a research note.

A major insured loss from the Japanese earthquake would eat into the industry’s capital, potentially forcing it to raise prices. That would reverse a three-year decline in premium rates for most types of insurance, reflecting stiff competition between well-capitalized insurers.

Analysts at stockbroker Jefferies International estimated losses from the quake would be “significant but manageable” at about $10 billion, not enough to buck the downward pricing trend.

“We expect some rate momentum in the upcoming Japanese/CAT renewals, but not enough for the industry cycle to turn,” they wrote in a note.

Last year, analysts polled by Reuters said a natural catastrophe would need to cause an insured loss of over $40 billion to lift prices across the market.

Munich Re, the world’s biggest reinsurer, had said on Thursday it might not reach its 2011 target of earning 2.4 billion euros net profit if big damage claims did not decline to below average in the remainder of the year.

“Japan earthquake risk is significant for Munich Re,” board member Torsten Jeworrek said, hours before the quake struck.

Bermuda-based reinsurers such as ACE, XL Group, PartnerRe and Everest Re Group, whose shares fell sharply in the wake of the New Zealand quake, could also be affected.

Financial investors could lose millions in investments through seven catastrophe bond transactions totalling over a $1 billion in exposure to Japanese earthquake.

Cat bonds are issued by reinsurers, such as Munich Re and Scor, seeking collateralized protection from investors, as opposed to traditional reinsurance market.