Swiss Re estimates it will pay out $1.2 billion in claims losses from Japanese earthquake, tsunami

Swiss Re estimates pre-tax claims costs of $1.2 billion as a result of damage caused by the March 2011 earthquake and tsunami in Japan.
The reinsurer noted its estimate is subject to a “high degree of uncertainty” since the event is still unfolding, making loss assessment particularly challenging.
On Mar. 11, 2011, a 9.0-magnitude earthquake struck off the coast of Honshu, Japan. The event caused strong ground motions in the northeastern prefectures of Japan and triggered a tsunami, the combination of which has killed more than 8,500 people as of press time. More than 13,000 are still missing.
The earthquake and tsunami also caused damage to reactors at the Fukushima nuclear facility located in northeastern Japan.
“We extend our sympathies to the Japanese nation as they cope with the human tragedy and the destruction caused by this event,” says Swiss Re CEO Stefan Lippe. “We remain committed to using our expertise and experience to support clients in Japan as they manage the risks related to such devastating events. It is the purpose of our industry to aid communities in their recovery and redevelopment efforts.”
Insurance cover for commercial and industrial risks is sold in the private market for earthquake, fire following earthquake and tsunami, and is commonly reinsured.
“Coverage for property policies excludes nuclear contamination,” Swiss Re notes. “Coverage for nuclear facilities in Japan excludes earthquake shock, fire following earthquake and tsunami, for both physical damage and liability.
“Swiss Re believes that the incident at the Fukushima nuclear power plant is unlikely to result in a significant direct loss for the property and casualty insurance industry.”