Reinsurer Munich Re has announced its initial estimate of their claims burden from the earthquake event in Japan on March 11th. They provisionally estimate that their losses from the devastating earthquake and tsunami could total as much as €1.5 billion after retrocession and before tax.
As a result of this loss, and on top of their announcement earlier this month about their losses in Australia and New Zealand during Q1, Munich Re says that they can no longer hope to achieve its profit target for 2011.
Munich Re point out that there is a lot of uncertainty in the loss estimate for Japan and it is based on modelling alone. Final insured loss totals won’t be known for some time and the figure could rise.
“The earthquake was not only the strongest ever recorded in Japan: it was also the fourth most severe ever measured anywhere in the world”, said Torsten Jeworrek, Munich Re’s Reinsurance CEO. “That makes clear the extent of the losses and the suffering. Our full sympathies are with the Japanese people and our clients there.”
With over 8 months of 2011 left to run and the U.S. hurricane season to negotiate we could see some of the large reinsurers like Munich Re having one of their worst years claims ever. Executives at the global reinsurers will be hoping for a rate upturn to give them a way of eating back into their vanishing profits this year.