The Magnitude 7.0 earthquake that struck off the coast of the Fukushima region of Japan on February 13th 2021 looks set to drive a billion dollar loss for the insurance and reinsurance industry, with claims paid already nearing US $900 million.
The Fukushima earthquake was an event which seemed to fall slightly under the radar, in terms of potential costs, given the majority of any loss was anticipated to sit with insurers, rather than being likely to fall to the reinsurance sector.
This earthquake left one person dead and injured more than 186, while causing significant structural damage across the Tōhoku and Kanto regions of Japan.
Japan’s Fire and Disaster Management Agency said that more than 9,137 buildings were damaged in the earthquake, many severely, which has driven an escalating insured loss total.
Back in March, Japan’s insurance association said that 141,166 claims had been counted from the quake, with around 6,583 paid out as of the middle of the month, amounting to roughly US $36 million at the time.
Then, in early April, the CRESTA organisation revealed that it believed the M7.0 earthquake in Japan could end up having billion dollar industry loss potential.
Now, new figures from the General Insurance Association of Japan show that CRESTA is likely correct, as the total amount of claims paid is fast approaching US $900 million, or almost JPY 95 billion.
As of the end of March 2021, the number of claims filed from the earthquake had reached over 202,000, with over 120,000 settled and 95,258 claims payments made by Japans insurance market.
Roughly US $445 million of the losses came from Fukushima prefecture, with another roughly US $388 million from Miyagi prefecture.
With a significant number of claims inquiries still to settle there will likely be more payments and so it seems reasonable to assume that the industry loss surpasses the US $1 billion mark.
Most of this is likely to be retained by the major Japanese domestic market property insurers, but a small portion will likely find itself with international players, or reinsurance providers, particularly through reinsurance quota shares.