Swiss Re sees rates rocket after Japan
RECORD losses incurred by reinsurance firms from Japan’s earthquake in March are causing the cost of reinsuring such disasters in the country to soar, Swiss Re said yesterday.
Rates on coverage of earthquake exposure in Japan – where quakes are felt on average once every five minutes – have risen up to 60 per cent since the dual catastrophe in March.
“Typical rate increases we have seen on 1 April are between 20 and 50, or 20 and 60 per cent,” Matthias Weber, head of property and specialty reinsurance at Swiss Re, told a conference in New York.
Reinsurance rates on other types of disaster in Japan had also risen about five to 10 per cent, he added.
Japan’s reinsurance policies are renewed in April so have been highly responsive to the disaster.
Swiss Re, the world’s second-biggest reinsurer of other insurance companies’ coverage, abandoned its full-year profit target for 2011 after incurring $2.3bn (£1.4bn) in pre-tax catastrophe losses in the first quarter of the year.
The Japan crisis alone caused it $1.2bn of losses, while the world’s biggest reinsurer, Munich Re, estimated the catastrophe would cost it €1.5bn.
The magnitude 9.0 earthquake on 11 March struck the northeast coast of Japan’s main island, causing an estimated $30bn of insured losses and a meltdown at the Fukushima Daiichi nuclear plant.