Japan earthquake costliest natural disaster for insurance industry

[phantom power]

According to a report by Risk Management Solutions, the Japan earthquake and tsunami of March 11 is the most expensive in the history of natural disasters. The insured property loss is being estimated at around $18 billion to $26 billion while health and life insurance claims will add in another $3 billion to $8 billion. Before March 11, the costliest disaster was Hurricane Katrina of 2005 which cost the insurance industry more than $40 billion.

According to RMS, the total economic loss for Japan because of the earthquake will be $200 billion to $300 billion which includes the disaster at the Fukushima nuclear power plant.

“Insured exposure in Japan is a complex landscape of coverage, varying considerably by class of exposure and line of business,” chief research officer for RMS, Robert Muir-Wood said in a statement. “The biggest challenge to loss modeling of the Tohoku event is not the details of the property damage itself, but rather sampling and modeling the underlying pattern of insurance take-up rates and restricted terms of coverage. Residential and commercial earthquake insurance was purchased in areas where people perceived the threat, but the Tohoku earthquake was not an event they were led to expect.”

As per the Japanese real estate market, most of the home insurance claims will be paid by Japanese companies or cooperatives. According to RMS, the commercial and industrial payouts will be 30 per cent to 35 per cent of the property loss.

http://www.seraphus.com/japan-earthquake-costliest-natural-disaster-for-insurance-industry/747162/

[dixiegrrrrl]

1. If insurance companies there follow the model used here

they will deny claims for years, tie claims up in court, threaten bankruptcy, then raise rates for everyone in the country.
Maybe Japan insurance works in a more humane manner???

[AndyTiedye]

2. Probably Does Not Include Losses Due to Fukushima

Some people are not only losing their homes and their belongings, their land is permanently uninhabitable too.
Millions of acres. With the summer winds blowing radiation inland, even more land could be contaminated.

The radiation is also likely to cause thousands of additional cancer cases over the next few decades.
Cancer is a horribly way to die, and the treatment is also very expensive.

[bananas]

3. It has partial losses from Fukushima - and they dwarf the other losses

"The insured property loss is being estimated at around $18 billion to $26 billion while health and life insurance claims will add in another $3 billion to $8 billion."
"According to RMS, the total economic loss for Japan because of the earthquake will be $200 billion to $300 billion which includes the disaster at the Fukushima nuclear power plant."

I've seen other estimates in that range of a quarter trillion dollars just for Fukushima, and those are probably don't include everything either.

But just with these estimates, Fukushima caused 10 times as much damage as the tsunami itself.

[Art_from_Ark]

4. "Millions of acres" might be a bit of an exaggeration

since one million acres is 1560 square miles, or little less than 30% of the land area of Fukushima Prefecture. The amount of land in the 20km exclusion zone is about 225 square miles, with another 275 square miles or so outside of that zone that has been evacuated or is scheduled for evacuation. The winds blowing inland are a concern, no doubt, but it remains to be seen just how much land will be uninhabitable over the long term.

Here are radiation readings taken about an hour ago (that is, at 14:00 on June 7 local time) at various points around Fukushima Prefecture.

http://www.pref.fukushima.jp/j/sokuteichi2013.pdf