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Japan M6.8 quake seen as limited loss event for ILS market
Euler ILS Partners estimates insurance industry losses for the Kumamoto quake could reach $3.0 billion to $4.5 billion, but says it does not expect direct impact to its fund positions.
Specialist insurance-linked securities (ILS) investment managers said a magnitude 6.8 earthquake in Japan’s Kumamoto prefecture is currently viewed as unlikely to become a major loss event for the catastrophe bond and ILS market, as early analysis evolved with more damage information.
Artemis reported that Japanese authorities have said the quake has caused 13 deaths, with emergency rescue efforts continuing at the collapsed Aeon shopping mall where four people remain missing, and at a Nippon Paper factory in Yatsushiro.
The quake has also prompted industrial factories and chip manufacturers in the region to pause operations while impacts are assessed, and property damage is described as widespread, meaning insurance claims are expected.
Euler ILS Partners, Zurich-based, estimated insurance industry losses from the Kumamoto event could fall between $3.0 billion and $4.5 billion. The firm said it does not expect any impact to positions held by its fund, though it noted there could be implications for certain aggregate reinsurance and retro structures, including ILS positions structured in that way.