, ZURICH, Mar 14 – Reinsurance giant Swiss Re said Monday that damage to Japan\’s nuclear facilities in last week\’s devastating earthquake is unlikely have a significant impact on the property and casualty insurers.
However, the impact arising from residential and commercial property claims is mixed.
"Generally, coverage for nuclear facilities in Japan excludes earthquake shock, fire following earthquake and tsunami, both in terms of physical damage and liability. Coverage for property policies excludes nuclear contamination," Swiss Re said.
"Overall, there is unlikely to be a significant impact on the property and casualty insurance industry as a result of this nuclear incident," it said.
For residential property, coverage for earthquake shock and tsunami are also provided by a government-run scheme and therefore "typically not reinsured in the private market."
However, fire coverage is provided by the private insurance industry and would therefore cost reinsurers.
In addition, coverage for commercial and industrial properties are provided by private insurers and take up rates are high, it added.
"Swiss Re is currently evaluating its exposure to the event. Given the nature of the destruction, combined with the ongoing recovery efforts and evacuation areas, it will take some time to estimate the damage," it said.
Ratings agency Moody\’s forecast that Swiss Re will count among reinsurers that will "report the highest losses on a nominal basis."
A 8.9-magnitude earthquake on Friday and a massive tsunami killed at least 1,647 and thousands more are feared dead.
The quake also damaged nuclear plants, with engineers struggling Monday to cool reactors after two blasts at the Fukushima complex.