Reinsurers, taking record first-quarter losses on the Tohoku earthquake and other disasters, are raising prices for coverage of temblors in Japan by as much as 60 percent, Swiss Reinsurance Co. said.
"On the reinsurance side, typical rate increases we have seen on April 1 are between 20 and 50, or 20 and 60 percent," said Matthias Weber, head of property and specialty at Swiss Re, the world's second-biggest reinsurer. "Other perils increased as well, but it's significantly less. There it's more of the order of 5 to 10 percent in Japan," Weber said Wednesday at a conference in New York.
Reinsurers had their most costly start to a year in the first quarter because of natural disasters, including floods and a cyclone in Australia and a quake in New Zealand. The first-quarter insured losses may exceed $52.6 billion, according to Aon Benfield, the reinsurance broker of U.S.-based Aon Corp.
That compares with $40.6 billion in losses for all of 2010.
Damage from Japan's catastrophe, which Prime Minister Naoto Kan calls the country's worst crisis since World War II, has been estimated at ¥25 trillion. Kan said he plans a second extra budget for reconstruction after the Diet approved a ¥4 trillion package in May.
Munich Re, the world's biggest reinsurer, said last month it had a quarterly loss of ?947 million ($1.39 billion) on claims related to the disasters.
Berkshire Hathaway Inc., run by billionaire Warren Buffett, said the Japan disaster alone may lead to costs of about $1.1 billion for its insurance segment. American International Group Inc.'s first-quarter profit slumped 85 percent in part on costs tied to earthquakes.