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Japan’s earthquake may cost insurers up to $US35bn

14 March 2011 08:21 (UTC +04:00)

Baku - APA-Economics. Japanese insurers and global reinsurance companies that backstop their policies may face claims of as much as 2.8 trillion yen ($34 billion) tied to last weekâ€™s earthquake, AIR Worldwide said.

The top-of-range preliminary estimate, which AIR disclosed yesterday in a statement, doesnâ€™t include damage caused by the tsunami that followed the March 11 temblor. AIR is working to quantify insured losses related to the surge of water that swept into northeast prefectures including Miyagi, Fukushima, Ibaraki and Iwate, said Jayanta Guin, senior vice president of research and modeling.

â€œWe estimate that there is about $24 billion of insured property from the coast to three kilometers inland, just in those four prefectures,â€ Guin said in a telephone interview. â€œWe would like to complete our analysis of the tsunami piece because thatâ€™s going to be a very significant part.â€

Munich Re, Swiss Reinsurance Co. and smaller reinsurers face what may be record catastrophe losses worldwide in the first quarter, according to Standard & Poorâ€™s. The carriers will add their shares of the losses in Japan to costs from U.S. winter storms, Middle East unrest and last monthâ€™s earthquake in Christchurch, New Zealand.

â€œNear-term profitability is likely to remain under pressure, as claims for this event are likely to set new records,â€ Cathy Seifert, an equity analyst at S&P, said in a March 11 research note. â€œS&P remains concerned that some smaller reinsurers may suffer outsized losses relative to their capital positions.â€