Insurance industry losses from Japan’s dual catastrophes are likely to be between $20bn (£12.3bn) and $30bn, risk modelling consultancy AIR Worldwide has said, revising down its original $35bn upper limit estimate.
In an update to its flash estimate published straight after the quake and tsunami devastated Japan’s north-eastern coastal region, AIR has used ground motion data and satellite pictures of the earthquake to better determine the extent of the damage.
The estimate is clear that the earthquake and not the tsunami will have caused most damage to the affected area.
Damage from ground-shaking and fires started after the earthquake are estimated to cost insurers between $11bn and $21bn, AIR said, while the insured losses from the tsunami are estimated at $8-9.7bn.
“Never in history has a magnitude 9.0 earthquake been so well recorded instrumentally,” said Jayanta Guin, AIR senior vice president of research and modelling, adding that the revised estimate incorporates “an unprecedented quantity of data”.
The update narrows AIR’s original estimate range, of $15-35bn, but it has raised its minimum forecast cost to $20bn.
The loss estimate includes payouts from the government’s Japan Earthquake Reinsurance organisation that insures household damages. It is also net of government recoveries.
But the data gathering for the modelling was hampered because Japan’s national seismic network website, K-NET, was itself offline for nearly a week after the quake.
Two weeks after one of the largest earthquakes in history, insurers are still struggling to assess precisely how much has been lost, a process that is likely to drag on for months.
AIR competitor Eqecat has estimated all-in losses at $12-25bn, while the industry's third player, RMS, has not released a figure.