Insuer: Losses from blasts could reach $1.5b
The insured losses from a series of explosions at a chemical warehouse in Tianjin last week are likely to range from $1 billion to $1.5 billion, Fitch Ratings said in a report.
The high insurance penetration rate in this area could make the blasts one of the most costly catastrophe claims for the Chinese insurance sector in the past few years, the report said.
According to the China Insurance Regulatory Commission, non-life-insurance premiums from Tianjin amounted to 11 billion yuan ($1.7 billion) last year. As such, should insured losses come in at the high end of the initial estimate of $1 billion to $1.5 billion, they would represent about 88 percent of total direct premiums written in Tianjin, or roughly 5.4 percent of aggregated shareholder capital for the six most active issuers at the end of last year.
Motor insurance is expected to be a major sector of all claims, since more than 8,000 vehicles were destroyed in the blast on Aug 12.
“The blasts will not put too big a burden on the major insurance companies in China, since the industry is large enough to handle claims up to $1.5 billion, and reinsurers will help share the claims as well,” said Wang Guojun, a professor at the University of International Business and Economics in Beijing.