Insurers and reinsurers worldwide have the financial strength to pay the claims that will emerge after today’s 8.9-magnitude earthquake and the resulting tsunami in Japan but these events, coupled with the severe quakes that recently struck New Zealand and Chile, have placed extraordinary demands on the industry, according to the Insurance Information Institute (I.I.I.).
“The insurance industry will fulfill its traditional role as an economic first-responder, helping Japan recover from today’s devastating quake, just as it has done in New Zealand and Chile,” said Dr. Robert Hartwig, an economist and president of the I.I.I. “What makes today’s natural disaster so extraordinary is that four of the five costliest earthquakes and tsunamis in the past 30 years have occurred within the past 13 months, once you include what happened on March 11 in Japan.” Prior to today’s earthquake, insured earthquake losses worldwide dating back to February 2010 totaled an estimated $23 billon.
The earthquake that struck Northridge, California, in January 1994 remains at the top of the list, which goes back to 1980, having caused $15.3 billion in insured losses at the time, or $22.5 billion in 2010 dollars. The February 2011 quake in New Zealand (up to $10 billion in insured losses), the February 2010 earthquake and tsunami in Chile ($8 billion), and the September 2010 quake in New Zealand ($5 billion), rank second, third, and fourth, respectively, on the list of costliest earthquakes, according to loss estimates compiled by Munich Re and released earlier today. The fifth-costliest earthquake worldwide since 1980 also occurred in Japan, in January 1995, causing $3 billion in insured losses at the time ($4.3 billion in 2010 dollars).
According to the U.S. Geological Survey, today’s 8.9-magnitude quake was centered approximately 230 miles northeast of Tokyo at a depth of approximately 17 miles. The quake is being reported as one of the largest in a century, with the broadcaster NHK describing it as the worst ever recorded in Japan.