Posted on 10 May 2011
EQECAT on Monday dramatically updated its estimate for the losses related to the Japan quake to between $22 and $39 billion.
"The toll of this earthquake is extreme, with 28,000 people dead or missing and more than 50,000 structures totally or severely damaged," wrote the catastrophe modeling company.
The main factors contributing to this change in loss estimate are damage caused by the onshore water depth (initially reported to be 8 meters), insight on damage from liquefaction, landslides, widespread disruption of electricity and transportation and loss amplification caused by the disruption at the nuclear plant in Fukushima.
The primary driver of this loss will be losses to property insurers (Japanese and international companies) with an estimated range of $15 to $25 Billion. Other components included in EQECAT’s estimate include losses to marine insurers, auto, life, and personal accident. EQECAT's estimate includes allowances for "Demand Surge", post-catastrophe inflation of damage often seen in large catastrophes, and does not include potential losses from Contingent Business Interruption (CBI). This coverage, which is difficult to quantify without company records, provides larger Fortune 1000 firms with coverage for loss of profits and reimbursement for extra expense due to disruption in the manufacturing and distribution process of suppliers affected by the earthquake.