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AXIS Capital Estimates Net Financial Impact from Japan Quake at $285M

Source: AXIS Capital

Posted on 19 Apr 2011

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AXIS Capital Holdings Limited on Monday estimated that the total net financial impact of the Japan earthquake and tsunami is expected to be $285 million, net of tax, reinsurance recoveries and reinstatement premiums.

Losses related to the Japan earthquake and tsunami are expected to primarily impact the reinsurance segment of the Company. The Company has assumed a total loss to a significant local reinsurance program that provides coverage to a cooperative mutual with significant market share in the regions affected by the earthquake and tsunami. The net loss from the Japan earthquake to the Company’s insurance segment is not expected to exceed $25 million due to reinsurance coverage limiting net retentions in the segment.

The Company’s loss estimate for the Japan earthquake and tsunami is primarily based on its ground-up assessment of individual contracts and treaties in the affected regions, with consideration for uncertainties related to business interruption coverages, contingent business interruption coverages, and the ultimate size of losses to be assumed by Japan’s cooperative mutuals, and is consistent with the Company’s market position in the respective regions impacted by these catastrophe events. Other information considered in developing net loss estimates includes current industry insured loss estimates, market share analysis, catastrophe modeling analysis and limited information from clients, brokers and loss adjusters. AXIS Capital currently estimates that total insured losses, excluding losses assumed by the Japanese government, will be in the range of $30-$35 billion.

The Company’s loss estimate is subject to significant uncertainty as there is very limited actual loss data at this time.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders’ equity at December 31, 2010 of $5.6 billion and locations in Bermuda, the United States, Europe, Singapore, Canada and Australia. Its operating subsidiaries have been assigned a rating of “A+” (“Strong”) by Standard & Poor’s and “A” (“Excellent”) by A.M. Best. AXIS Capital and AXIS Specialty Finance LLC have been assigned senior unsecured debt ratings of A- (stable) by Standard & Poor’s and Baa1 (stable) by Moody’s Investors Service. For more information about AXIS Capital, visit our website at