LLOYD’S insurer Hiscox expects up to $150m (£94m) in estimated losses from Japan’s devastating earthquake and tsunami, it said yesterday.
Hiscox said it could expect losses of between $60m and $150m based on its exposure to an event that caused a $24bn loss to the global insurance industry. Its average loss within that range would be $100m.
“Any estimate of the insured loss from the very tragic and severe earthquake in Japan is still at an early stage so considerable uncertainties exist,” it said in a trading update on catastrophes in the first quarter of the year.
Risk modelling agency AIR last week revised its estimate of the industry loss from Japan’s disasters to $20bn-$30bn from $15bn-$35bn.
Hiscox said the losses from Japan would be through its underwriting of other reinsurance, rather than direct insurance or reinsurance.
It added that it estimates it will bear a £60m loss from the floods that devastated Queensland and Brisbane in Australia in January this year, while the February earthquake that destroyed large areas of Christchurch in New Zealand would cost it £15m.
Critically, chief underwriting officer Robert Childs said the losses would not affect Hiscox’s own reinsurance cover – other companies’ insurance of its risk exposure – leaving its protection against large losses intact.
“These events will only minimally impair our own reinsurance programme,” he said, adding that it has seen “significant increases in rates for the affected regions and expects this pressure to become widespread.”