Insurance claims filed after Tianjin blasts

The blasts in China’s port city of Tianjin could generate total insurance losses of $1bn or more, say Credit Suisse analysts.

Hong Kong - Two explosions in the Chinese port of Tianjin that killed more than 100 people last week could generate total insurance losses of between $1 billion and $1.5 billion, Credit Suisse analysts said, citing initial estimates from Chinese media.

Tianjin, the world's third-largest port in terms of total cargo volume, was hit on August 12 by blasts that damaged a large industrial area and sent shockwaves across several kilometres.

Insurance companies including Zurich Insurance Group AG and Allianz SE said on Friday they had received claims from clients that had been affected by the disaster but could not provide any estimate of the potential losses.

Chinese insurers are also expected to be affected.

“It is still very early to determine the level of insured losses, but the event is likely to be large with initial insured loss estimates of $1-$1.5 billion and a large number of insurance companies affected,” analyst Arjan van Veen said on Monday in a note, in which he compiled estimates from a range of Chinese media reports.

Credit Suisse said those affected would be mostly Chinese insurance companies as well as international groups that either insure multi-nationals or provide re-insurance coverage.

Hyundai Motor Company, one of several carmakers operating facilities in Tianjin, has already said there were 4 000 of its cars that were parked in the area and damaged by the blast, a damage the note said was equivalent to $136 million.

Renault said on Monday the explosion would affect its deliveries in August and September.

Chinese media said several insurance companies received claims from companies hit by the Tianjin explosions.

“Transport insurers are looking at the damage to containers, warehouses and new cars but also to the port's infrastructure of trains, cranes and rail tracks,” Dieter Berg, a marine expert at the world's largest reinsurer, Munich Re, told Reuters.

“In ports, we have a massive concentration of high value (goods) which makes it hard for insurers to make exact risk assessments.”

The 1995 earthquake in Kobe, Japan caused heavy infrastructure damage that put the port out of action for two years with losses estimated at $40 billion.

Super Storm Sandy, which hit the US eastern coast in 2012, destroyed 16 000 cars and 3 000 trucks at the port of New York and New Jersey, at a cost of $650 million for the vehicle damage alone.

REUTERS