Tianjin explosions could cost PartnerRe $70 million
October 14, 2015 by Canadian Underwriter
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Bermuda insurance carrier PartnerRe Ltd. announced Tuesday it is estimating its losses from the Aug. 12 explosions in Tianjin, China will be up to US$70 million.
The Associated Press reported in August that the explosions originated at a warehouse where 700 tons of sodium cyanide – which can form a flammable gas on contact with water – was stored.
As of Sept. 11, 173 were reported dead and eight persons were still unaccounted for, AP reported at the time.
PartnerRe said Tuesday it estimated its losses relating to the tragedy will be between US$50 million and US$70 million pre-tax and net of retrocession and reinstatement premiums. Pembroke, Bermuda-based PartnerRe was ranked as the ninth largest reinsurer, by A.M. Best Company Inc., when measured by reinsurance premiums written in 2014.
“Business interruption forms a large part of the uncertainty surrounding the ultimate loss for the insurance industry in this incident,” reported A.M. Best, an Oldwick, N.J.-based financial ratings firm, in a report released Aug. 21 on the Tianjin explosions.
Related: Explosion in China shows how Cats can have regional, even global, impact: Munich Re
“On the marine cargo side, it will take time for claims arising from damaged shipping containers to be reported and inspected by insurance companies,” A.M. Best stated in the report, titled Tianjin Losses Still Being Calculated; Risk Management Tools Come Into Play. “Besides property, motor and marine cargo losses, to a lesser extent, some liability, personal accident and life claims will arise from the incident.”
Guy Carpenter & Company LLC said the fireball and shock wave from the explosion “blasted shipping containers; incinerated vehicles in the port and on an adjacent highway overpass; destroyed warehouses, production facilities and dormitories.”
In a press release Sept. 3, Guy Carpenter added the explosions affected the nearby Donghai Road Railway Station “and blew out windows within residential structures for several kilometers.”
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