Japan disaster insurance claims tipped to hit $10 billion

The devastating Japanese earthquake and tsunami is believed to have caused $10 billion of damage — but experts said today it is still too early to determine the impact on Bermuda insurers.

Yesterday’s quake is the fifth largest ever recorded in the world, measuring 8.9 on the Richter scale, which saw 30-metre waves flood inland.

Analysts at Jefferies International, a global securities and investment banking group, have predicted damage claims to be about $10 billion.

But Brad Kading, president of the Association of Bermuda Insurers & Reinsurers, said any initial estimates are “sketchy” as “it is way too early”.

He added: “If something comes out in 24 or 48 hours it would be very sketchy.

“It’s always really difficult to estimate earthquake damage. You could get start getting some information within a week but 30 days would be the first [figures] coming in that are in the ballpark.”

Estimates in the first two days would be from catastrophe modeling firms.

Mr. Kading said: “Some of those model firms tend to do things very quickly but the first estimates you see will usually change quite dramatically as time moves forward.”

The $10 billion figure for damage “is just a guess”.

Mr. Kading added: “There is a joke going around in business that all these [disaster] events cost at least $10 billion — that is the going number these days. That is just a seat-of-the-pants guess.”