(Bloomberg Gadfly) – Tuesday's magnitude-7.4 earthquake off the coast of Japan's Fukushima prefecture could hardly have come at a worse time for the nation's insurers.
April's Kumamoto tremor is already the country's second-most costly on record. Some 329 billion yen ($3 billion) in claims had been paid by late June, a figure likely to rise further as more cases are resolved. Such disasters have a long tail of costs: Five years after the country's most expensive temblor, Japan Earthquake Reinsurance Co. paid some 5.25 billion yen of claims last fiscal year related to the 2011 Tohoku earthquake.
|Affected households limited
Along with the natural worry about loss of life and property, that's led to aftershocks in the market. Sompo Holdings Inc. fell as much as 2.2 percent in Tokyo morning trading, while Tokio Marine Holdings Inc. dropped 0.6 percent. MS&AD Insurance Group Holdings Inc., which gets about a quarter of its revenue from life insurance, was the only gainer, with a 0.2 percent advance as of 10:30 a.m. local time.
Investors shouldn't worry overly about the impact. For one thing, the quake struck so close to the Fukushima Daiichi nuclear reactor that the number of affected households is seriously limited. The main city exposed, according to the U.S. Geological Survey, is likely to be Namie, a town lying within the Fukushima exclusion zone that has been evacuated since the 2011 disaster.
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