Risk modeling company AIR Worldwide tightened its estimate for insured losses from the Japan earthquake and tsunami, forecasting the insurance industry will have to pay out $20 billion to $30 billion in claims.
That estimate, issued late Thursday night, compares with AIR’s original forecast of $15 billion to $35 billion, which did not include the effects of the tsunami.
Two weeks after the March 11 disaster, insurers are still struggling to assess precisely how much has been lost, a process that is likely to drag on for months.
AIR competitor EQECAT has estimated all-in losses at $12 billion to $25 billion, while the industry’s third player, RMS, has not released a figure.
European reinsurance analysts at Barclays Capital, based on the warnings already issued by some underwriters, estimated this week the loss could range as high as $42 billion.
The broad range of estimates has started a heated debate about whether insurers and reinsurers will have to halt share buybacks, raise fresh capital or potentially even raise prices for the first time in years to cover their losses.
(Reporting by Ben Berkowitz; Editing by Lisa Von Ahn and John Wallace)
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