Kumamoto, Japan earthquake insured losses seen in ~US $1.4bn to $2.1bn range by Verisk
This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.
Last week’s magnitude 6.8 earthquake that struck near Kumamoto City on Japan’s Kyushu Island on July 28th is estimated likely to cause insurance industry losses of between US $1.4 billion to US $2.1 billion by data and analytics specialist Verisk.
Verisk sees the earthquake as costing around JPY 220 Billion to as much as JPY 340 Billion, with its estimate based on insured property losses caused by ground shaking and liquefaction, before any recoveries under Japan’s earthquake insurance program.
July 28th’s earthquake struck south of Kumamoto at a relatively shallow depth of around 10 kilometers, resulting from shallow strike-slip faulting within the Eurasian Plate, Verisk explained.
Widespread damage was caused across the region, with homes, businesses and infrastructure damaged, significant transportation disruption, power outages to 48,000 households in the aftermath of the quake and manufacturing facilities pausing production which raised concerns of potential supply chain disruption.
Verisk said that its insured loss estimate is dominated by ground shaking, with a small contribution from other modelled earthquake perils.
The risk modeller said, “The loss range reflects uncertainty related to fault slip distribution, ground-motion intensity, damage estimation and earthquake insurance take-up rates in Japan.”
Verisk’s estimate includes insured physical damage to residential, commercial, industrial and mutual property risks, including both structures and contents, but excludes other potential insured loss effects from business interruption, workers’ compensation, infrastructure, auto damage, marine and aviation risks, demand surge and loss adjustment expenses.
With the first insurance industry loss estimate from a risk modeller suggesting property insured loss will be in the low billions of US dollars, it confirms that the implications for catastrophe bonds and other insurance-linked securities exposure are very minimal, while at the level Verisk suggests losses are likely to be largely absorbed by primary insurers, with relatively low exposure for the global reinsurance market as well.
Also read:
– Kumamoto, Japan earthquake loss expected to be lower than 2016 events’ US $7.7bn: Aon.
– Japan quake impact on cat bonds, private ILS not expected to be material: Twelve Securis.
– Japan quake: ILS managers see minimal loss potential. Euler estimates $3bn-4.5bn insured.
Kumamoto, Japan earthquake insured losses seen in ~US $1.4bn to $2.1bn range by Verisk was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.