The circumstances in Japan are particularly complex since damage to property was not only caused by the earthquake itself but also by fire following the earthquake and the ensuing tsunami, the reinsurer giant Swiss Re announced on Monday.
In a press release issued today, the company said the coverage for earthquake shock and tsunami are provided by a government-run scheme.
“This cover is typically not re/insured in the private market. Cover for fire following earthquake is provided by primary insurers and is typically protected by their reinsurance coverage,” it said. “For commercial and industrial insurance policies, cover is sold in the private market and is widely purchased for earthquake, fire following earthquake and tsunami”.
The reinsurance giant noted that the coverage for nuclear facilities in Japan excludes earthquake shock, fire following earthquake and tsunami, both in terms of physical damage and liability. Coverage for property policies excludes nuclear contamination. Overall, there is unlikely to be a significant impact on the Property Casualty insurance industry as a result of this nuclear incident, explained Swiss Re.
According to the press release Swiss Re is currently evaluating its exposure to the event.
Given the nature of the destruction, combined with the ongoing recovery efforts and evacuation areas, it will take some time to estimate the damage.
The Company is committed to the Japanese insurance market and to supporting the country’s recovery from the devastating earthquake and tsunami which claimed many lives last week.
“We are deeply sympathetic to all those who suffered from the disastrous earthquake and tsunami in Japan,” says Swiss Re Chief Executive Stefan Lippe in the press release.
“Our role is to support the Japanese people in quickly recovering from this unprecedented and tragic event. Swiss Re Group remains wholly committed to continuing to provide capacity to the Japanese market and maintaining our strong relationships with clients,” he added.
Swiss Re is a leading and highly diversified global reinsurer. The company operates through offices in more than 20 countries. Founded in Zurich, Switzerland, in 1863, it offers financial services products that enable risk-taking essential to enterprise and progress. The company’s traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated “A+” by Standard Poor’s, “A1” by Moody’s and “A” by A.M. Best.