Bermuda Insurers Count Cost Of Quake

by Mike Godfrey, Tax-News.com, Washington

16 March 2011

Insurance companies are beginning to contemplate the cost of the earthquake and tsunami that hit Japan on March 11, with estimates running into the billions.

Catastrophe modellers have begun to release their estimated figures for the crisis: Eqecat predicts that the total economic losses are likely to be in excess of USD$100bn, and AIR believes that insured property losses will range from USD$15bn to USD$35bn. Countries with a large reinsurance industry, such as Bermuda, could be particularly hard hit in the financial aftermath of the earthquake and tsunami. When news reached Bermuda on March 11, various Bermuda market companies saw their shares fall quickly: for example, Aspen Insurance Holdings dropped 4.2%, Platinum Underwriters fell 4.6%, and Montpelier Re was also down 4.2%. Experts have predicted that Lloyd's insurers will be at more risk than reinsurers, with Catlin and Hardy having the highest exposure in terms of net asset value, closely followed by Lancashire and Hiscox.

However, many of the leading companies in Bermuda have stated that it is premature to comment on possible losses, and Brad Kading, president of the Association of Bermuda Insurers and Reinsurers said "it is way too early" to calculate how the impact will be felt in Bermuda.

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