The situation in Japan is still unfolding, but that hasn't stopped some insurers from releasing tangible figures that they expect in losses from the event.
Swiss Re said yesterday that it expects its cost to be $1.2 billion. Coupled with its losses from the Christchurch, New Zealand quake earlier this year, this brings its cat losses to a total of $2 billion — twice as much as it had budgeted for the entire year.
And even then, the Japan number remains subject to flux, the company said:
Our 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.
Meanwhile, AIG's Chartis division released an insurance loss estimate for the first quarter of $1 billion, $700 million of which it attributes to the quake.
AIG has yet to disclose losses from its participation in the Japan Earthquake Reinsurance Company (JERC), a government-backed program. It doesn't, however, expect more than $508 million to be charged to the company through Fuji Fire and Marine Insurance Co., in which it holds a nearly 55% stake and participates in the JERC.
(For more information on how the JERC works, check out this very helpful CBO outline from 2002, which is oddly prescient in its joint evaluations of New Zealand and Japan.)
“As a result, our preliminary loss estimate will change as the industry losses from JERC for earthquake damage to personal dwellings become known and other information becomes available as the situation in the quarter evolves," AIG chairman Bob Benmosche said in a statement. "Our preliminary estimate is based on our current assessment of what our policies cover and the provisions of reinsurance purchased by AIG and its affiliates."
Axis Capital expects its loss not to exceed 1.3% of total industry loss, it says. These estimates range from a low of about $12 billion (EQECAT) to a high of $35 billion (AIR Worldwide).
The III has a table of insured losses from the 10 costliest earthquakes, going back to 1989. At best, Japan would be second on the list — but it's likely to take over the top spot from the 1994 Northridge, Calif. quake.
This article has been amended from its original version. Earlier, it attributed Chartis' $700 million loss to its participation in the JERC. Chartis doesn't participate in the JERC; AIG's major subsidiary with exposure to that governement program is Fuji Fire and Marine Insurance Co.