Insurance firms that underwrite earthquake insurance in Japan are facing almost $1 billion of claims from this years Osaka and Hokkaido earthquakes, according to the latest data from the local insurance association.
Insurance claims paid following the shallow magnitude 5.3 earthquake that hit the Osaka prefecture region of Japan in June 2018 had reached almost $844 million (just under JPY 95 billion) as of October 11th, according to the General Insurance Association of Japan (GIAJ).
That’s an increase of roughly 10% over the last month and with a few thousand claims still open the figure is likely to rise even further.
The total is based on 127,364 claims payments made, out of 165,448 claims inquiries received since the earthquake struck.
This earthquake is just one of the events that have served to pass on some Japanese losses to reinsurance and ILS interests in recent weeks, as despite it not being a particularly large loss on its own, when aggregated together with other catastrophe activity hitting the country in the last quarter some reinsurance layers have been triggered.
Also adding to the aggregation of catastrophe losses in Japan in recent months was another earthquake that struck the northern island of Hokkaido on September 6th at magnitude 6.7.
This quake hit a much more rural part of Japan, but still it has now resulted in insured claims paid reaching $134 million, from almost 22,000 claims payments made against 35,841 claims inquiries filed.
So this Hokkaido earthquake loss has some way to go, with over 7,500 claims still open. Hence the total impact of these two events to insurance firms offering earthquake coverage in Japan will surpass $1 billion.
It’s unlikely the data collected by the GIAJ includes all commercial policies from international insurance and reinsurance firms either, hence the final industry loss for these two events will likely be higher still.
Along with typhoon Jebi, typhoon Trami, the extreme rainfall and associated flooding, these two earthquakes have served to deliver billions of dollars of losses to global insurance and reinsurance firms, with a share falling to ILS funds and other collateralised reinsurance structures.