¥1 trillion insurance cost seen

[AsahinaKimi]

Source: The Japan Times/Kyodo News

Earthquake insurance payments resulting from the massive quake that struck the Tohoku area could top ¥1 trillion, far higher than the previous record of ¥78.3 billion following the 1995 Great Hanshin Earthquake, according to some industry estimates as of Tuesday.

"Payments will not fall into arrears" because the government is required to cover part of the insurance payments under the quake insurance system, which is jointly run by the government and nonlife insurers, a General Insurance Association of Japan official said.

Eqecat Inc., a risk assessment agency based in the U.S., projected that upcoming insurance payments at between ¥650 billion and ¥1.2 trillion, while Goldman Sachs estimated they could reach up to ¥861 billion.



Read more: http://search.japantimes.co.jp/cgi-bin/nb20110323a4.html

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*one trillion yen = 12,359,658,431.51 USD

[Poll_Blind]

1. A week and some change ago the Yen started surging against the dollar directly after..

..the quake on rumors that without enough Yen, insurers and the Japanese government might have to start selling off U.S. securities to get the cash they needed. What I recall reading initially (probably 4-5 days ago) is that Japan's insurers had about ¥1 trillion in reserve and that the costs were not expected to go over ¥600 billion. So, currency disaster (for both the U.S. and Japan, at least insofar as Japan can use an undervalued currency to export more easily) averted. Then yen started going down after that rumor was quashed.

However, now that the levels are getting closer to what Japanese interests can possibly cover, it's interesting to wonder exactly how both nations are going to get around Japan selling U.S. debt to get more cash if they need it.

?

PB

[Sam1]

2. Japan can never run out of yen. As for Japan selling US Debt

that might not be a bad deal when they spend the cash in the United States.

[daleo]

3. I can't believe it wouldbe that low

The nuclear plants and nuclear contamination alone must be worth billions.