German reinsurer may lower 2011 forecast after Japan quake

10th April 2011, Comments 0 comments

The earthquake and tsunami in Japan will likely force the world's third largest reinsurance group, Hannover Re, to revise downwards its yearly forecasts, the German group's chief financial officer said Sunday.

Asked by the Frankfurter Allgemeine Sonntagszeitung whether such a revision was necessary, Roland Vogel replied: "That is likely. But we first want to wait for our first-quarter results."

"We will have to bear costs of around 250 million euros ($362 million). With Hurricane Katrina and the attacks of September 11, 2001, we had higher costs," he told the paper.

"With the earthquake in New Zealand and the floods in Australia, we had costs of 500 million euros. That is our entire annual budget for large-scale losses," he added.

The total cost from the damage caused by the devastating earthquake and tsunami in Japan is estimated at 16-25 trillion yen ($187-292 billion) over the next three fiscal years, according to the Cabinet Office in Tokyo.

The upper estimate would put the disaster's financial impact at more than double the 9.6 trillion yen of the 1995 Kobe earthquake, which killed more than 6,400 people.

The estimate does not account for wider issues such as how radiation from the stricken Fukushima Daiichi nuclear plant will affect food and water supply, amid an ongoing food scare.

© 2011 AFP

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