2011-03-21
By Editor
Early indications are that UK insurers should not be “unduly stretched” by the tragic events in Japan, according to the Association of British Insurers (ABI).
The ABI’s acting director-general, Maggie Craig said that UK insurers will want to do all they can to assist the people and businesses of Japan as they seek to recover from this terrible tragedy.
“Events in Japan are first and foremost a human tragedy on a scale which is unimaginable. The absolute priority is to focus on the urgency of the humanitarian response, assessing the business impact is not the first priority until people have got the help they need.
“But some facts are becoming clearer. Early indications are that this event will not be a major issue for the UK insurance industry. Inevitably there will be differences in exposure from insurer to insurer but UK insurance companies are well capitalised and therefore claims from the Japan disaster should not be expected to stretch balance sheets unduly.
“For insurers the main exposure will be commercial losses. A government backed earthquake insurance scheme means that only 7% of homeowners take out earthquake cover in Japan. This will have an impact in the overall picture, as it did following the 1995 earthquake in Kobe when despite total damage costs in the region of US$102bn, the insured losses were US$3.4bn.
“The tragic events in Japan again bring into focus how crucial insurance can be in helping countries withstand crises without complete collapse. Insurers and reinsurers, with their long term spread of risk and capital can absorb some of the financial shock on behalf of a country struggling to respond to its immediate human and economic situation and I know UK insurers will want to do all they can to assist."
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