Markets

A change to a catastrophe model can influence the level of reinsurance purchased by companies and impinge on the rating process, but the extent to which the latest revision announced by one modeler affects either is not specifically clear.

Two insurance and reinsurance companies have provided loss estimates for the February 2011 New Zealand earthquake, with both companies basing their individual losses on expected industry losses upward of $12 billion.

Two insurance and reinsurance companies have provided loss estimates for the February 2011 New Zealand earthquake, with both companies basing their individual losses on expected industry losses upward of $12 billion.

The private insurance market is likely not heavily exposed to damage at nuclear reactors in Japan resulting from the 9.0 magnitude earthquake and subsequent tsunami.

Net premiums among 19 U.S. property and casualty reinsurers fell about $600 million in 2010, according to the Reinsurance Association of America.

The insurance industry is just beginning to grasp the consequences following the massive earthquake and tsunami in Japan late last week, with one catastrophe modeler estimating insured property losses at $35 billion.

Although Bermuda insurers and reinsurers were hit with more than $3.5 billion in catastrophe losses from worldwide disasters in 2010, roughly $2.7 billion in favorable prior-year loss development helped cushion the blow, according to NU tallies.

Aftermath images of the Japan earthquake and tsunami demonstrate why insurance companies are looking at billions in losses, with one early estimate placing the figure as high as $35 billion.