Insurers face $1.5bn loss from China blasts

TWO EXPLOSIONS in the Chinese port of Tianjin that killed more than 100 people last week could generate total insurance losses of $1 billion (R12.8bn) to $1.5bn, Credit Suisse analysts said, citing initial estimates from Chinese media.

Tianjin, the world’s thirdlargest port in terms of total cargo volume, was hit last week by blasts that damaged a large industrial area and sent shockwaves across several kilometres.

Insurance companies including Zurich Insurance Group and Allianz said on Friday that they had received claims from clients that had been affected by the disaster, but could not provide any estimate of the potential losses.

Chinese insurers are also expected to be affected.

“It is still very early to determine the level of insured losses, but the event is likely to be large, with initial insured loss estimates of $1 to $1.5bn and a large number of insurance companies affected,” analyst Arjan van Veen said yesterday.

Credit Suisse said those affected would be mostly Chinese insurance companies as well as international groups that either insure multi-nationals or provide re-insurance coverage.

Hyundai, one of several car makers operating facilities in Tianjin, has already said there were 4 000 of its cars that were parked in the area and damaged by the blast, a damage the note said was equivalent to $136 million.

Renault said yesterday the explosion would affect its deliveries in August and next month.

“Transport insurers are looking at the damage to containers, warehouses and new cars, but also to the port’s infrastructure of trains, cranes and rail tracks,” Dieter Berg, a marine expert at the world’s largest reinsurer, Munich Re, said.