Home›Insurance›Reinsurance›Japan quake near Kumamoto may cost insurers $1.4bn to…

Japan quake near Kumamoto may cost insurers $1.4bn to $2.1bn

Verisk estimates the quake could produce about JPY 220 billion to JPY 340 billion in insured property damage before recoveries under Japan’s earthquake insurance program.

Reported · Written up by our desk · Reinsurance

Verisk estimates that last week’s magnitude 6.8 earthquake near Kumamoto City on Japan’s Kyushu island, on July 28, could lead to insurance industry losses in the range of US $1.4 billion to US $2.1 billion.

In Verisk’s modeling, the loss totals are based on insured property damage driven mainly by ground shaking and some contribution from liquefaction, using the quake’s shallow depth of around 10 kilometers south of Kumamoto. The estimate covers insured physical damage to residential, commercial, industrial and mutual property risks, including both structures and contents, and is calculated before any recoveries under Japan’s earthquake insurance program.

The quake caused widespread damage across the region, with power outages reported for 48,000 households and manufacturing facilities pausing production, raising supply chain concerns. Verisk also said its insured loss estimate excludes other potential insured loss effects such as business interruption, workers’ compensation, infrastructure, auto damage, marine and aviation risks, demand surge and loss adjustment expenses.

Verisk added that early indications point to limited implications for catastrophe bonds and other insurance-linked securities, suggesting losses are likely to be largely absorbed by primary insurers, with relatively low exposure for the global reinsurance market.

More like this

Sources