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Tianjin insured losses could top $3bn

Burnt out: Smoke billows from the site of the explosions that reduced a parking lot filled with new cars to charred remains at a warehouse in northeastern China’s Tianjin municipality on August 12. Insured losses from the event could reach $3.3 billion, according to estimates by Guy Carpenter & Co

Insured losses from the explosions at Tianjin Port, in China, could be as high as $3.3 billion, making it one of the Asia’s biggest insured man-made loss events.

A report by Guy Carpenter & Co estimates the potential insured losses to be between $1.6 billion and $3.3 billion, more than double the estimates made by Credit Suisse analysts a week after the double explosions on August 12.

It is believed a variety of Chinese insurance companies active in the Tianjin region will face the majority of the resulting insurance claims, however Zurich Insurance and Allianz were among the international insurers to receive claims in the immediate aftermath of the explosions, and others, such as Munich Re and Swiss Re, are expected to face related losses.

“The explosions that occurred in Tianjin are likely to constitute one of the largest insured man-made losses to date in Asia and will certainly be considered one of the most complex insurance and reinsurance losses in recent history,” said James Nash, CEO of Asia Pacific operations for Guy Carpenter.

More than 135 people died when hazardous materials at a chemical warehouse at the port exploded. A massive fireball and shock waves blasted shipping containers, incinerated about 10,000 new vehicles stored at the port, and destroyed warehouses, production facilities and dormitories. Residential properties within a radius of several kilometres were also damaged.

In its report on the explosions, Guy Carpenter & Co said that, while the access to the site is limited, it was able to make assessments using Cat-View — its satellite-based catastrophe evaluation service.

“Cat-View was able to utilise high resolution pre- and post-event satellite imagery to understand what exposures were present at the time of the blast and therefore could contribute to the loss,” said Guy Carpenter & Co in a statement.

The company said its report “outlines the complexity of the event from an insurance and reinsurance perspective and provides a preliminary estimate of insured losses from many classes including: containers; cargo in containers; property; automobiles; and general aviation.”