I just returned to South Carolina after a business trip, time to blog on current events (I now have it so that I can blog from my phone without having to make international calls): The insurance industry was rocked by last Friday’s earthquake in Japan. Insurers will be challenged to estimate damages caused by the tsunami, and the fires that followed the monster 8.9 quake, as well as the earthquake, itself. All in all obviously this should not have much of an effect on South Carolina health insurance but time will tell about the world insurance industry.
Japan is famously prepared for such events, but insurance against earthquakes is extremely expensive, and the compensation is expected to be well below adequate. The government, businesses, and citizens will be forced to step into the breach.
Jayanta Guin of Air Worldwide, a disaster-projections company, was quoted in the media as estimating that there are about $24 billion insured properties in the three-kilometer swath nearest the coast in the four prefectures that were the most impacted. There is $300 billion worth of insured property in the four prefectures most impacted by the quake itself. I wonder if they can make international calls from there. I understand many such international Long distance service as well as internet service has been disrupted in some areas to a certain extent. I hope here in Utah we do not have to deal with that kind of thing, it would be bad for business.
The BBC Business news posted a story March 14, 2011, under the headline, “Japan quake: Insurers hit by claim fears.”
The story says that initial estimates indicate the damage could hit the insurance industry with about $35 billion worth in claims.
Insurance company stocks fell round the world. Reinsurance agency, Swiss Re, was reported as saying,