Japan's magnitude 9.0 earthquake could lead to insured-property losses of nearly $35 billion, making it one of the most expensive catastrophes in history, according to a risk-modeling analysis released Sunday by a U.S. consulting group.
The insurance cost of the quake is nearly as much as the entire worldwide catastrophe loss for the global insurance industry in 2010 and could result in higher prices in the insurance market after years of declines, according to the analysis released by Boston-based AIR Worldwide.
Total losses from the quake could range from $14.5 billion to $34.6 billion, according to the AIR analysis.
By contrast, the 1994 Northridge earthquake caused $15 billion in losses. If the AIR analysis proves accurate, the Japanese earthquake would rank as the second-costliest catastrophe in modern times, adjusted for inflation, right behind Hurricane Katrina. AIR officials cautioned that the quake cost estimate issued Sunday was preliminary and did not include costs associated with the tsunami that followed the earthquake or potential nuclear damage.
"It is still in the very early aftermath of the event," said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. "Search-and-rescue efforts are still underway, and damage assessment has only just begun, while considerable uncertainty still remains in the seismic parameters that define the event."