Kathmandu. The powerful earthquake that struck Japan on July 28 is expected to put insurance claims in excess of the $1.1 billion recorded average for the country’s six previous major earthquakes.
This is according to estimates by Bloomberg Intelligence (BI). According to analyst Steven Lam, industry-wide insurance claims are expected to reach hundreds of billions of yen. Most of the risks are related to commercial property and residential policies covered under Japan’s earthquake insurance system.
Japan’s three largest private insurers — Tokyo Marine Holdings, Sompo Holdings and M&AD Insurance Group Holdings — have set aside 365 billion yen for domestic natural disaster claims in the current fiscal year. That’s more than double the total claims recorded last year.
Despite the expected increase in claims, Bloomberg Intelligence estimates that insurers’ share of new earthquake damage after reinsurance recovery and tax will be less than 1% of adjusted profits. Earlier this week, a 7.1-magnitude earthquake struck Kumamoto. About 30 people were killed and there was significant damage. Some of the deaths are still being linked to the quake.
However, the quake is expected to generate higher-than-average claims for major earthquakes in Japan, Bloomberg Intelligence reported. Japan’s major insurance companies have already strengthened their catastrophe reserves. –Agency
