2011 Q1 brought record earthquake losses

The first quarter of 2011 has brought the highest earthquake losses in the property/casualty re/insurance industry’s history, said Christian Mumenthaler, Swiss Re’s chief marketing officer, reinsurance.
Mumenthaler offered an overview of the global re/insurance market at Swiss Re’s Canadian Insurance Market Outlook Breakfast on Mar. 31 in Toronto.
Mumenthaler offered a retrospective of catastrophic events from 1970 to the present day. Referring to a graph in his presentation, he said it was clear weather-related events were “growing quite significantly, even in low years,” he said.
But estimated earthquake losses hit a new record in 2011 Q1, with devastating events in Japan and New Zealand pushing estimated insured losses to more than $30 billion.
“And it’s only Q1,” he said. For the most part, only commercial risks are covered by the private market in Japan, and only 3% of businesses take up the coverage, he explained.
While the insurance losses of the Japan quake are manageable, the hardening of rates in Japan is very certain, he continued.
When asked if the events of 2011 Q1 will be enough to spur a hard market in a separate interview after the presentation, he said the impact on global rates is still uncertain, but “historically these types of events have spurred hard markets.”