OLDWICK, N.J., April 26 (Bernama-BUSINESS WIRE) -- A.M. Best expects that the rated non-life insurers affected by the recent earthquakes in Japan will be able to withstand losses, with a moderate impact on earnings but little effect on financial strength, according to a new Best's Briefing. While the series of earthquakes, which occurred in Kumamoto Prefecture in mid-April, are expected to lead to sizeable losses, the impact could be mostly mitigated by the release of catastrophe reserves. Although Japan is prone to earthquake risk, the penetration of earthquake insurance remains relatively low, which indicates insured losses would be a small portion of the economic losses caused by the series of earthquakes.
The briefing, titled, "Earthquakes in Kyushu – Moderate Impact on Insurers' Earnings With Little Effect on Financial Strength," states that the affected insurers have reported robust growth in capital over the past five years, largely due to an increase in unrealized gains under J-GAAP, recent improvement in profitability driven by premium rate hikes in major insurance lines and benign catastrophe loss experiences.
The briefing, titled, "Earthquakes in Kyushu – Moderate Impact on Insurers' Earnings With Little Effect on Financial Strength," states that the affected insurers have reported robust growth in capital over the past five years, largely due to an increase in unrealized gains under J-GAAP, recent improvement in profitability driven by premium rate hikes in major insurance lines and benign catastrophe loss experiences.
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