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Hurricanes & quakes drive costly year for Japanese insurers

24th October 2017 - Author: Luke Gallin

Japanese insurers Tokio Marine Holdings, MS&AD Insurance Group Holdings, Inc, and Sompo Holdings are estimating a combined payout of almost $2.5 billion in claims related to hurricanes Harvey, Irma and Maria, and the Mexico earthquakes.

View of Mt Fuji, JapanThe events make it one of the costliest year’s for Japanese insurers since the Thai floods in 2011, which saw the three insurance firms payout a combined 500 billion yen (roughly US$4.4 billion), driving a combined fiscal year underwriting loss of 260 billion yen (roughly US$2.3 billion).

For Tokio Marine, its previously announced combined $580 million loss for the three hurricanes and two Mexico earthquakes, is its highest payout for overseas disasters since the Thai floods, when it paid roughly US$1.2 billion.

According to reports in the Nikkei Asian Review, Tokio Marine is expecting profits of about 280 billion yen (roughly US$2.5 billion) for the fiscal year ending March, 2018, based on natural catastrophe losses of 47 billion yen (US$414 million), which is below the 65 billion yen (US$580 million) announced for the recent events.

This suggests pressure to the company’s earnings for the fiscal year, something that is likely relevant for a number of insurers and reinsurers both in Japan and internationally, after one of the costliest quarters of catastrophe experience adds to the pressures of an already stressed market.

MS&AD Insurance Group Holdings, Inc. announced recently that its losses from third-quarter hurricanes and earthquakes could reach as much as $975 million. While Sompo Holdings announced Q3 losses from the events of an estimated $617 million.

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