Low penetration rate for earthquake insurance

The penetration rate of earthquake insurance in Japan remains relatively low in spite of the frequency of such events. The economic losses sustained during the two recent earthquakes of April 2016 are estimated at over 10 billion USD. Nearly 70 000 claims have been reported setting the insured losses at 2 billion USD. Therefore, roughly 8 billion USD remain uninsured.

According to Impact Forecasting, the insured loss ratio/economic loss ratio has dwindled down since the Kobe earthquake in 1995 and that of Tohoku in 2011. This ratio was of 3% during the Kobe earthquake. It reached 17% six years later during the Tohoku earthquake.

The penetration rate of this kind of insurance remains nonetheless poor as all the damaged properties are not insurable.

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