Insured losses from earthquake in Japan pegged at $6.4 billion
- October 23, 2025
- Posted by: Web workers
- Category: Finance
Karen Clark & Co. said Friday that total insured losses from a Jan. 1 magnitude 7.5 earthquake that struck off the west coast of the island of Honshu in Japan will reach $6.4 billion.
At least 94 people were killed in the earthquake, and hundreds of others were reported injured or missing, according to news reports.
Residential losses will account for more than two-thirds of total insured losses, Boston-based KCC said.
The earthquake struck near Suzu on the Noto peninsula. Several cities and towns experienced high ground motion, including Shika, Nanao, Wajima, Suzu, Anamizu and Noto, KCC said.
KCC scientists estimate over half a trillion dollars of exposure in the ground motion footprint, including residential, commercial and industrial properties.
While the region around the earthquake is less seismically active than the east coast of Japan, over the past century 30 earthquakes of magnitude 6 or higher have occurred within 250 kilometers (155 miles) of the event, with three affecting the Noto peninsula.
In a report issued late Thursday, rating agency A.M. Best Co. Inc. said it expects the negative impacts on its credit ratings of Japan’s major domestic nonlife insurers to be limited given their strong capital buffers.
A government-backed reinsurance scheme for earthquake insurance exposures should mitigate residential losses, Best said.
A low take-up rate for commercial and industrial risks, limited business interruption coverage, and earthquake sub-limits designed to control aggregate exposures are likely to keep insured losses at a “manageable level,” Best said.
Japan’s four major domestic nonlife insurers – Tokio Marine & Nichido Fire Insurance Co. Ltd., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co. Ltd. and Aioi Nissay Dowa Insurance Co. Ltd. – all have well-diversified business profiles and strong capital positions, Best said.
The event will likely generate significant payouts for local insurers, Aon PLC said in a report Friday.
