Earthquake in Japan can lead to insured losses of $US35 billion

PanARMENIAN.Net - Last week's earthquake in Japan can lead to insured losses of nearly $US35 billion, risk modeling company AIR Worldwide said, making it one of the most expensive catastrophes in history – even without expected additional tsunami losses that are not yet counted.

According to Business Spectator, that figure is nearly as much as the entire worldwide catastrophe loss for the global insurance industry in 2010, and could be the triggering event that forces higher prices in the insurance market after years of declines.

It remains unclear who will take the biggest hit, though insurers like Chaucer and AIG and reinsurers like Munich Re and Swiss Re are expected to be exposed to some degree.

AIR said its loss estimate range was $US14.5 billion to $US34.6 billion. That was based on a range of ¥1.2 trillion to ¥2.8 trillion, converted at ¥81.85 to the dollar.

The company cautioned that the estimate was preliminary, and its models do not factor in the effects of the tsunami that followed the earthquake, or any potential losses from nuclear damage.

AIR said that in many cases buildings will have been damaged by the 8.9-magnitude earthquake and then swept away by the flooding thereafter, making precise counting difficult.

The firm intends to issue updated estimates in future combining the quake and the floods.