NU Online News Service, March 14, 3:05 p.m.EST

The private insurance market is likely not heavily exposed todamage at nuclear reactors in Japan resulting from the 9.0 magnitude earthquake and subsequenttsunami.

Reports say that three nuclear reactors at the Fukushima Daiichiplant have failed and may have partially melted down. The coolingsystem for the nuclear reactor has failed, along with the back-upsystem. There have been two reports of the outer building explodingfrom hydrogen gasses that built up in them, but officials aresaying that radiation has not reached critical levels.

More News & Analysis on the Japanese Earthquake andTsunami

Michael Cass, general counsel for American Nuclear Insurers,based in Glastonbury, Conn., a joint underwriting companyconsisting of 21 insurance companies, said under the reinsurancetreaties with the Japanese electric companies, damage resultingfrom earthquake, tidal wave or volcanic activity is excluded underthe policy.

He said any claims would be handled by the government. Hecautioned that the situation is still developing, but he believesthe carrier has limited exposure.

A spokesman for nuclear power plants reinsurer Nuclear ElectricInsurance Ltd., headquartered in Wilmington, Del., said the companybelieves it has no exposure to the power plant failure becauseearthquake and tsunami’s are excluded from its policies.

Chaucer Holdings PLC, a Lloyd’s insurance group, said itsspecialist Nuclear Syndicate 1176 that provides coverage for TokyoElectric Power Co.—the owner of the Fukushima Daiichi and FukushimaDaini power plants—has no coverage for property damage or businessinterruption in place.

At the Onagawas plant, owned by Tohuku Electric Power Co., thereis property damage coverage, but earthquake and tsunami areexcluded perils.

RelatedSlideshows:

• Initial Tsunami Devastation In Japan
• Aftermath of Destruction

Meanwhile, two of the world’s leading reinsurers said they arestill in the process of assessing their insurance exposure to theevents in Japan.

Munich Re and Swiss Re issued statements today saying that theirthoughts and sympathies lie with the Japanese people as they dealwith the aftermath of quake that has resulted in the death ofpossibly as many as 10,000 people and economic losses thataccording to one estimate could run into $100 billion.

“It is far too early at this stage to issue an estimate ofeconomic and insured losses,” Munich Re said.

Swiss Re said it is currently “evaluating its exposure to theevent.”

However both companies pointed out that much of the risk isretained domestically, some through public and privatepartnership.

A spokesperson from Munich Re reiterated the company’s earlierstatement, noting that the current situation remains “not entirelyclear” and it is “continually changing” as rescue operations remainongoing.

The spokesperson for Munich Re noted in an e-mail that thecompany retains between 10 to 15 percent of the Japanesereinsurance market, with €666 million (U.S. $930 million at thecurrent exchange rate) gross written premium.

A Swiss Re spokesperson said it will be some time before thecompany understands the full extent of its exposure.

Both companies affirmed their commitment to the marketplace inJapan.

“Munich Re has enjoyed business relations with Japaneseinsurance companies since 1912,” said Nikolaus von Bomhard, MunichRe’s chief executive officer in a statement. “We are very closelycommitted to our Japanese clients and the country as a whole andwill play our part in dealing with the losses. Munich Re can berelied on, especially in times like these.”

“Our role is to support the Japanese people in quicklyrecovering from this unprecedented and tragic event,” said StefanLippe, Swiss Re chief executive in a separate statement. “Swiss ReGroup remains wholly committed to continuing to provide capacity tothe Japanese market and maintaining our strong relationships withclients.”

Both companies said that employees were all safe and accountedfor. Swiss Re sent its employees home due to the risk ofaftershocks, the spokesperson said.