Japan earthquake insured losses could top $35bn

Japan earthquake insured losses could top $35bn

 

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The insured property losses caused by the devastating earthquake which struck Japan could reach $35bn (£21.7bn), catastrophe modelling firm Air Worldwide has warned.

According to Air Worldwide, the lower limit of the cost to insurers is likely to reach $15bn but could become larger if the rupture caused by the quake reaches the Tokyo and Chiba prefectures where there are more insured properties.

Dr Jayanta Guin, senior vice president of research and modeling at AIR Worldwide, said: "Given the enormity of the 9.1 magnitude earthquake that struck Japan two it is still in the very early aftermath of the event.

"Search and rescue efforts are still underway and damage assessment has only just begun, while considerable uncertainty still remains in the seismic parameters that define the event."

The estimates provided by Air are considered preliminary and the model used to map the earthquake does not account for the effects of tsunami, with the losses from the tidal wave to be assessed independently.

According to Air, earthquake insurance penetration in Japan is relatively low (ranging between 14 to 17% nationwide). About 70% of all residential construction is estimated to be of wood and about 25% of concrete. Commercial construction consists of more than 50% concrete, about one-third light metal or steel, and less than 10% wood.

Of major concern is the Fukushima Daiichi Nuclear Power Station. An explosion in one of the buildings prompted officials to expand the evacuation area around the plant to a 12-mile radius, affecting as many as 170 000 people. Reports had indicated that leaks of radioactive materials, which had begun immediately after the explosion, had diminished.

Read more: http://www.postonline.co.uk/post/news/2033724/japan-earthquake-insured-losses-usd35bn

Posted by Nikkei 225 at 10:38
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