GIC Re covered for Japan risks: Chairman

March 15th, 2011 - 9:41 pm ICT by IANS  

Chennai, March 15 (IANS) Indian national reinsurer General Insurance Corporation of India (GIC Re) Tuesday said it is awaiting data from business associates to estimate its risk exposure in Japan but it may not be majorly impacted due to Friday’s earthquake and tsunami as it has reinsured the risks for catastrophic events.

“We are still awaiting inputs from our business associates. As the situation is still fluid, it may take time,” GIC Re chairman and managing director Yogesh Lohiya told IANS.

“We write around $12 million premium in Japan. There are various types of risks we write in Japan. The exposures are being evaluated,” he said.

He declined to reveal whether GIC Re has in turn re-insured the Japanese risks with other reinsurers. “We are covered for catastrophe events but are not in a position to disclose details.”

GIC Re is also waiting inputs about its exposure to loss due to the recent floods in Australia.

Lohiya also said the reinsurance rates are expected to harden because of the losses in Japan.

Meanwhile, German reinsurance group Munich Re has said that it would use its experience and financial strength as well as familiarity with local conditions to help Japan recover from this catastrophe.

Due to the complexity and severity of the disaster, it will take some considerable time to determine even approximately the overall economic loss as well as the loss amounts payable by individual reinsurers, according to a statement by its CEO Nikolaus von Bomhard on the company’s website.

According to Munich Re, in Japanese business, only a small portion of the risk is transferred to other countries.

It said the impact due to major accidents in Japanese nuclear power plants will not significantly affect the private insurance industry.

Swiss Re said the circumstances in Japan are particularly complex since damage to property was not only caused by the earthquake itself but also by fire following the earthquake and the ensuing tsunami.

“In terms of residential insurance policies, the cover for earthquake shock and tsunami are provided by a government-run scheme. This cover is typically not reinsured in the private market. Cover for fire following earthquake is provided by primary insurers and is typically protected by their reinsurance coverage. For commercial and industrial insurance policies, cover is sold in the private market and is widely purchased for earthquake, fire following earthquake and tsunami,” it said.

The reinsurer also said coverage for nuclear facilities in Japan generally excludes earthquake shock, fire following earthquake and tsunami, both in terms of physical damage and liability.

According to Swiss Re, the insurance coverage for property policies excludes nuclear contamination.

The reinsurer does not expect any significant impact on property and casualty insurance industry as result of the nuclear incident.

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