Quake impact on insurers ranges from $10B to $50B

[March 12, 2011]  NEW YORK (AP) -- Japan's massive earthquake has led to untold damages to life and property. Early estimates for the losses for insurers and reinsurers around the globe are ranging from $10 billion to $50 billion.

Aflac Inc., which sells health and life insurance to one out of every four people in Japan, says it is monitoring the situation closely.

"The sheer devastation is a shock," said Aflac CEO Dan Amos in an interview. "This will probably impact 3 to 4 million out of the 100 million people in Japan."

Amos says the number of deaths is small compared to the size of the earthquake, but says he expects a lot of people to be treated for injuries. Though he expects the number of claims to be high, Amos says the company is well prepared to cover them. Amos is flying into Japan on Sunday. Aflac stock was down only 0.3 percent on Friday.

The losses to property and casualty will likely be higher as entire homes and buildings were washed by the tsunami and many business locations were flooded. A Credit Suisse report says the initial reports estimate a range from $10 billion to $50 billion. In Europe, the stocks of some of the world's biggest reinsurance companies fell sharply Friday on fears that the earthquake in Japan and the subsequent tsunami will cost them dearly.

Reinsurers led many of Europe's major stock indexes lower. Swiss Re and Munich Re both fell about 4 percent. Hannover Re was down around 5 percent.

The companies issue backup insurance to primary insurers so that the system can cover large losses from disasters. Hannover Re already said last week it expected to pay out euro150 million ($207 million) for the earthquake that hit New Zealand.

[Associated Press; By PALLAVI GOGOI]

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