Having previously explained that the Magnitude 7.0 earthquake that struck off the coast of the Fukushima region of Japan on February 13th 2021 was likely to be a billion dollar event, CRESTA has now estimated the industry loss from the quake at US $2.63 billion.
That’s significantly higher than the latest figure from the General Insurance Association of Japan, which recently said that claims paid by member companies of the GIAJ and the Foreign Non-Life Insurance Association of Japan, as of May 14th, had reached just above US $1.62 billion.
Back in early April, the CRESTA organisation warned that it expected the M7.0 earthquake in Japan could end up having billion dollar industry loss potential, the highest forecast of losses at the time for this event.
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.
As we also explained recently, this February earthquake off the Fukushima coast of Japan actually trigged a parametric insurance product for a manufacturing company.
CRESTA’s latest figure comes via its CLIX, CRESTA Industry Loss Index, product.
Interestingly, the Fukushima, Japan earthquake remains the only catastrophe loss event ex-US of greater than US $1 billion in 2021 to-date, according to this data.
CRESTA said that it is investigation two more from Q1 though, the heavy snowfall event in Japan in January and the floods along the Australian East Coast in March.
As well as from Q2, cyclones Seroja in Western Australia in April and Yaas in India in May.
Of course, when you being to look ex-US you often find that the impacts are largely economic, with insurance and reinsurance penetration low.
In addition the impacts to lives and livelihoods are often significant, even for low industry loss events, which is not captured by industry data.
On the Japanese earthquake, CRESTA said that, “While the event did not generate a tsunami, damaging ground shaking affected a wide area across the prefectures of Myagi, Iwate and Fukushima. In its latest CLIX update, CRESTA estimates the resulting industry loss at USD 2.63bn, making it the largest international industry loss to date in 2021.”
Matthias Saenger, Technical Manager of CRESTA’s CLIX, said, “With only one event so far having exceeded our loss capturing trigger of USD 1bn, 2021 continues the benign trend in international Cat industry losses observed in 2020, during which no international Cat events exceeded this loss marker. This is quite remarkable, given that in the past 21 years an industry event loss of USD 1bn was reached or exceeded on average 4.5 times per year.”
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