Japan earthquake updates (17th March)

For our latest updates read our article from the 18th March.

We’ve decided to continue to have a single page dedicated to reporting relevant items related to the Japan earthquake and tsunami disaster and aftermath. We expect updates to slow to this page but feedback from readers has been so positive we’ll keep it up for the moment. You can find some of the important updates from late yesterday at the bottom of this article. We’ll keep this page updated with items we feel of interest to our readers. Links to our other articles related to this disaster can be found below.

Other posts on this disaster:

• A.M. Best suggests reinsurers could look to catastrophe bonds after Japan quake
• Taiwan considering catastrophe bonds in response to Japan quake
• NZ Super Fund not expecting losses on catastrophe bond investments
• Catastrophe bond indices dip after Friday’s earthquake in Japan
• UPDATED: The catastrophe bonds which are exposed to Japan quake, including details on the structure and triggers used (where we have it)
• Updates from 16th March
• Updates from 15th March
• Updates from 14th March
• Updates from 13th March
• Updates from 12th March
• S&P leaves Japan quake exposed cat bond ratings unchanged
• Reinsurance stock prices hit by Japan quake
• Updates from 11th March

Latest updates (most recently added at the top):

– Standard & Poor’s say’s that the ‘credit quality of Japanese corporations could deteriorate if earthquake related challenges are prolonged’.

– The BBC has a useful review of the financial impacts of the disaster on other Asian countries.

– Bermuda’s Royal Gazette reports that the island’s Japanese owned reinsurers have no direct exposure to the earthquake.

– Business Insurance reports that the European Insurance and Occupational Pensions Authority see’s no problem for European re/insurers after the Japanese earthquake disaster.

– Taiwan is said to be evaluating the use of catastrophe bonds to hedge its earthquake risks as a result of the Japanese quake.

– Insurance Times reports that analysts Jefferies have suggested that Munich Re could see as much as €1 billion in losses from the events in Japan.

– Renaissance Re have said they expect a material loss from the Japan earthquake:

As a global provider of property catastrophe reinsurance, the Company provides meaningful reinsurance and retrocessional excess of loss reinsurance coverage for earthquake and tsunami risk in Japan, and is currently assessing its exposures to the Tohoku earthquake. At this time, the Company believes it is too early to provide an accurate estimate of its net negative impact from this tragic event. However, based upon the current publicly available industry insured loss estimates, market share analysis, the application of the Company’s modeling techniques and a review of its in-force contracts, the Company’s current initial assessment is that the net negative impact of the Tohoku earthquake on the Company’s results will be significant and is likely to be material.

– Bloomberg reports that shareholders in reinsurers are betting on a share price rebound similar to the one after Hurricane Katrina.

– Taiping Re has estimated its claims from the disaster at HK$100m.

– Australian re/insurer QBE has estimated its claims from the Japanese earthquake at $125m.

– An A.M. Best executive said yesterday that the disaster in Japan was not expected to harden the captive insurance market or lead to captive insurer ratings downgrades. In the same Business Insurance article an A.M. Best spokesman puts insured losses for the disaster at between $10 billion and $40 billion.

– The number of partially or completely destroyed buildings due to the disaster has reached more than 100,000, according to Japan’s fire and disaster management agency.

– TEPCO who run the Fukushima nuclear plant saw their shares dive a further 13.35% today.

– The latest casualty figures show 5,178 dead and 8,606 missing.

– Helicopters and water cannon have been used to get water onto the reactors at the Fukushima nuclear plant. It’s not yet known how effective that has been. Kyodo news reported that radiation levels remained unchanged after these attempts. Reports suggest that the electric power supply to the plant may be partially restored tomorrow which would help them cool the reactors through the use of the integral pumps.

– Japanese stock exchange, the Nikkei, fell 1.44%. Nikkei futures at one point traded down 6.3% today suggesting further downward pressure was likely. It’s expected that European markets will continue to struggle when they open today. Nikkei futures at one point traded down 6.3% today suggesting further downward pressure was likely.

– A fourth injection of funds into the financial markets by the Bank of Japan today totalled $63 billion. It has to be asked how long they can keep up pushing so much liquidity into the markets. It’s expected that their next move may be to intervene in the currency markets to attempt to stabilise the Yen.

– The Japanese Yen has hit its highest level against the dollar since the Second World War.

Important updates from late yesterday:
Read all of yesterdays updates here.

– The UK’s Guardian newspaper has an article discussing the possibility that Japanese investors will seek to repatriate their funds by offloading investments made abroad.

– EQECAT has issued its first insured loss estimate for this event. The report says:

EQECAT estimates the total insured loss from this event to be $12-25 Billion USD. The largest component of insured loss will be covered by the property insurance market, which provides earthquake insurance to individuals and businesses in Japan. The following is a breakdown of the amount of estimated market losses by line of business. These estimates do not account for losses associated with the current nuclear emergency at power plants in the region.

Coverage	$Billions in USD
EQ Shake	8-15 (Estimated 25% ceded to JERP)
Auto	0-1
Marine	1-3
Life	2-3
Personal Accident	1-2

You can access this update from EQECAT here.

– This amazing interactive Japan quake map really shows the amount of quakes and the intensity of them over the last few days.

– EQECAT are holding an online briefing about this earthquake event tomorrow, 17th March at 11am EST (3pm GMT):

Online Briefing: Understanding the M9 Tohoku Pacific Offshore Earthquake http://bit.ly/gUmuqY

– ACE Limited has announced a preliminary loss estimate for the earthquake event in Japan. They put their insurance and reinsurance losses at somewhere in the range of $200m to $250m.

– Insurance Insider reports that Guy Carpenter was the reinsurance broker for the East Japan Railway Co. East Japan Railway Co. also has the Midori Ltd. catastrophe bond as additional cover.

Location of the Japanese earthquake event:

Location of the Japanese earthquake