Losses $35BLN....FROM (AFL) UPDATE 2-Insured losses from Japan quake could hit $35 bln
Fri, Mar 11 2011Related NewsSnapshot: Developments after major Japan earthquake
11:06am EDT
UPDATE 3-Insurance industry likely spared Japan nuclear threat
Sat, Mar 12 2011
By Ben Berkowitz and Rhys Jones
NEW YORK/LONDON, March 13 (Reuters) - This week's earthquake in Japan could lead to insured losses of nearly $35 billion, risk modelling company AIR Worldwide said, making it one of the most expensive catastrophes in history.
That figure is nearly as much as the entire worldwide catastrophe loss to the global insurance industry in 2010, and could be the triggering event that forces higher prices in the insurance market after years of declines.
AIR said its loss estimate range was $14.5 billion to $34.6 billion. That was based on a range of 1.2 trillion yen to 2.8 trillion yen, converted at 81.85 yen to the dollar.
The firm cautioned the estimate was preliminary, and it has said its models do not factor in the effects of the tsunami that followed the earthquake, or any potential losses from nuclear damage.
AIR cautioned that in some cases, buildings will have been damaged by the 8.9-magnitude earthquake and then swept away by the flooding thereafter, making precise counting difficult.
There are also lingering questions about the cost of the clean-up and long-term monitoring following explosions and radiation leaks at the Fukushima nuclear reactors. Such reactors generally have insurance that excludes earthquake damage, and many Japanese homeowners have nuclear exclusions in their own policies.
That is likely to limit liability to the operator and the government and minimize impacts to the insurance industry itself.
For a factbox on some other huge insurance losses, according to insurance company Swiss Re, click on [ID:nLDE72C0B2]
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