The CRESTA organisation believes that the Magnitude 7 earthquake that struck the Fukushima region of Japan on February 13th 2021 has the potential to cause more than US $1 billion of insurance and reinsurance market losses.
CRESTA said this morning that it has seen two catastrophe events outside of the United States so far in 2021 that it believes to have billion dollar industry loss potential.
The Fukushima earthquake is one of them, an event which has perhaps gone slightly under the radar in terms of potential costs given the majority of any loss is anticipated to sit with insurers, rather than being likely to fall to the reinsurance sector.
This earthquake left one person dead and more than 186 injured, causing significant structural damage across the Tōhoku and Kanto regions.
In fact, Japan’s Fire and Disaster Management Agency said that 9,137 buildings were damaged in the earthquake.
Japan’s insurance association said that 141,166 claims were counted from this quake, with around 6,583 paid out as of the middle of March amounting to roughly US $36 million so far.
Which suggests there is a way to go for the claims paid figure to reach US $1 billion, but CRESTA has classified this quake event as “having the potential to exceed a USD 1bn industry loss.”
The other non-US catastrophe in 2021 to have the potential to pass the billion dollar insurance and reinsurance industry loss threshold is the Australian flooding.
As of this morning, the Australian flooding and severe weather catastrophe is estimated to have resulted in almost US $410 million of claims so far, by the Insurance Council of Australia.
Last year, CRESTA tracked seven catastrophe events which it says generated a combined industry loss of US $9.4 billion, a figure CRESTA says is well below the long-term annual average.
However, as CRESTA only tracks events of over a billion dollars for its CLIX service, it misses the frequent impacts of severe weather and multiple smaller catastrophe losses on the insurance industry, which is becoming an increasing driver of industry costs.
Looking at its data, CRESTA says that the annual average loss from major international catastrophe events (US $1bn+) was US $16.2 billion (US $13.7bn excluding the Tohoku Earthquake of 2011).