Insurance claims paid from the Magnitude 7.0 earthquake that struck off the coast of the Fukushima region of Japan on February 13th 2021 have risen by another almost 16%, with the confirmed loss to the insurance and reinsurance industry now reaching above US $1.87 billion, according to the latest data from the General Insurance Association of Japan.
February’s earthquake claims have taken their time to come in and be settled, with the confirmed industry loss counted by the Japanese insurance association rising steadily.
The figure will likely have further to rise, as a recent industry loss estimate from the Cresta organisation now pegs the overall insurance and reinsurance market loss at US $2.63 billion.
There will always be a gap between the two sources, as Cresta’s industry loss estimate will include any international company losses, where as the claims paid figure from the General Insurance Association of Japan (GIAJ) is based on data reported by member companies of the General Insurance Association of Japan and the Foreign Non-Life Insurance Association of Japan.
Initial reports after the event had suggested this earthquake in Japan may have driven a few hundred million dollars of claims.
But that proved not to be the case and claims paid figures from the GIAJ have risen steadily, as we’ve been reporting.
The claims paid were reported as: Just $36 million in March 2021; rising to almost $900 million by the end of that month; then to US $1.26 billion as of April 16th; and most recently at US $1.62 billion as of May 14th.
Back in April, the CRESTA organisation said it believed the M7.0 earthquake in Japan could end up having billion dollar industry loss potential, the highest forecast at the time for this event.
Then, on July 1st this year Cresta pegged the overall industry loss as around US $2.63 billion, demonstrating just how far this loss has crept and how long it can take to gain enough clarity to provide a meaningful and more accurate figure.
The damage from this offshore earthquake was relatively widespread across the Japanese prefectures of Myagi, Iwate and Fukushima, making it a slower event for the industry to get a handle on, it seems.
Claims filing appears to have been slow, exacerbating the ability of the industry to see the extent of losses earlier on.
It shows once again that earthquake losses can flow relatively slowly across the insurance and reinsurance market and it can take time for industry loss estimates to be published.
The latest data from the GIAJ reports that claims inquiries rose 9% from May 14th to the latest reporting date of June 14th, while claims with payments in the same period rose by 21%.
The value of claims payments made rose by just under 16% to just over JPY 205.9 billion, which works out at approximately US $1.87 billion today.
It’s important to note that this does not include the full international insurance and reinsurance market exposure to this Japanese earthquake event.
Some international carriers are not counted, while other forms of protection that are backed by the insurance and reinsurance industry also may not be counted in the GIAJ’s figures, particularly on the commercial side.
Which shows that there can be more limit at risk from the international insurance and reinsurance market than that counted in typical Japanese property policies.