The economic toll of the earthquake that struck off the coast of Tokyo this week is likely to be in the billions, says Aon.
Harkening back to a $2bn+ industry loss from 2021, Aon said that recent historical performances of similar earthquakes had resulted in billion-dollar economic losses.
Back then, the magnitude 7.0 quake that struck off the coast of the Fukushima region of Japan was a relatively similar event, and, according to the General Insurance Association of Japan, resulted in insured losses of more than $1.8bn.
Aon said: “In February 2021, a magnitude-7.1 earthquake with an epicentre also off the coast of Fukushima resulted in more than USD2 billion insured losses. The March 16 earthquake carried approximately two times more energy than its predecessor. While it was 20 km (12.4 mi) deeper than the previous earthquake, it was also 15 km (9.3 mi) closer to shore. While the exact damage assessments are still ongoing by the authorities, it is highly likely that economic losses from this destructive force will reach into the billions (USD).”
It added: “Since 1980, Japan has recorded $66bn in earthquake-related insured losses. This accounts for 37% of all global earthquake losses for the industry.”
This week’s earthquake struck off the coast of Japan’s Fukushima prefecture. The United States Geological Survey said that the earthquake struck some 57 km east north-east of Namie, Japan at a depth of just over 60km. Some reports say that over 2 million people were left without power.
The news comes as Bank of America said reinsurers and London Market insurers are facing an accumulation of losses in Q1 2022 that are increasing the likelihood that large losses exceed budget for this period.
