Following a recent earthquake in Japan, insurance payouts could exceed the average of 175 billion yen (1.1 billion dollars) from the last six major earthquakes, according to Bloomberg Intelligence.
“Our estimates suggest that total payouts from insurance companies in the sector could reach several hundred billion yen,” stated Stephen Lem, an analyst at Bloomberg Intelligence, in the report.
He noted that the primary insurance risks following the recent earthquake in Kumamoto Prefecture are related to commercial real estate, as well as residential properties insured by Japan's state earthquake insurance system.
According to Bloomberg, Japan's three largest private insurance companies — Tokio Marine Holdings, Sompo Holdings, and MS&AD Insurance Group Holdings — have reserved a total of 365 billion yen for payouts related to domestic natural disasters for the current financial year. This is more than double the total payouts from the previous year. Bloomberg Intelligence estimates that after accounting for reinsurance payments and taxes, the final claims could be less than 1% of the companies' adjusted profits.
