The earthquake and tsunamis that rocked Japan will costs insurance companies big time. While the total cost to insurers remains unknown, the area directly affected is home to about $300 billion of insured properties, according to disaster-modeling company AIR Worldwide.
On top of that, $400 billion of insured property lies in areas that were less affected but likely still suffered some degree of damage, AIR adds, according to The Wall Street Journal.
"The actual insured losses from the quake and subsequent tsunami will undoubtedly be significantly smaller, because many properties in those zones will report little or no damage. But the figures from AIR are an important step in the process of estimating the cost of the disaster," The Journal reports.
|A man salvagers items after Japanese quake.
AIR adds that $24 billion of insured property sits within three kilometers of the shore in those areas, and of that, $5 billion was within one kilometer of the coast.
Insurance-sector analysts have been estimating that claims could run from $10 billion to $25 billion or even as high as $50 billion since the quake rocked the island nation.
On top of the quake, insurance claims could arise from those affected by the nuclear power plant that exploded.
AIG, the largest foreign property insurer in Japan, is believed to have a blanket nuclear exclusion in all its Japanese policies, Reuters reports, although Tokyo Electric's insurance policies could also play a role
"The scrambling of the reactor is a huge event that's really difficult to model," Tom Larsen, senior vice president Eqecat, a risk modeler, tells Reuters.
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