May 10, 2011 by Canadian Underwriter
EQECAT significantly increased its estimate of insured losses arising from the Mar. 11 Tohoku, Japan earthquake and tsunami, now saying the natural catastrophe could cost insurers between $22 billion and $39 billion.
The catastrophe modeler initially estimated insured damages of between $12 billion and $25 billion.
“The main factors contributing to this change in loss estimate are damage caused by the onshore water depth (initially reported to be eight meters), insight on damage from liquefaction, landslides, widespread disruption of electricity and transportation and loss amplification caused by the disruption at the nuclear plant in Fukushima,” EQECAT says in a statement posted online.
EQECAT’s updated estimate includes allowances for “demand surge,” post-catastrophe inflation of damage often seen in large catastrophes, and does not include potential losses from contingent business interruption.
The primary driver of the loss would be losses to property insurers (Japanese and international companies), with an estimated range of between $15 billion and $25 billion. Other components included in EQECAT’s estimate include losses to marine insurers, auto, life and personal accident.
Specific loss breakdowns in each of these insurance sectors are as follows:
•Property insurance: $15 billion to $25 billion
•Auto insurance: $1 billion to $ 2 billion
•Marine insurance: $2 billion to $4 billion
•Life insurance: $3 billion to $5 billion
•Personal accident insurance: $1 billion to $3 billion