In­suer: Losses from blasts could reach $1.5b

China Daily (Canada) - - NEWS IN REVIEW -

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.

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