Posted on 21 Mar 2011
Swiss Re estimates claims costs of $1.2 billion, net of retrocession and before tax, from the earthquake and the tsunami in Japan. These estimates are subject to a high degree of uncertainty as the event continues to unfold, making loss assessment particularly challenging.
The reinsurer's claims estimate is subject to a higher than usual degree of uncertainty, and may need to be subsequently adjusted, for various reasons. First, Swiss Re expects that determining precise claims information will take several months. The company's current estimate is driven primarily by modeled estimates for its portfolio. Calibrating this to ceding clients' estimates, and to original policyholder losses, will take an extended period of time, because of the current situation in Japan. Second, the high proportion of commercial and industrial claims in the reinsured share of this event will extend the evaluation process.
Swiss Re has made a donation towards instant relief measures and also pledged to support the rebuilding efforts. Swiss Re employees are being encouraged to make charitable contributions through the Swiss Red Cross and the Save the Children Fund, which will be matched by Swiss Re.
"We extend our sympathies to the Japanese nation as they cope with the human tragedy and the destruction caused by this event," says Stefan Lippe, Chief Executive Officer of Swiss Re. "We remain committed to using our expertise and experience to support clients in Japan as they manage the risks related to such devastating events. It is the purpose of our industry to aid communities in their recovery and redevelopment efforts."