Insurance Rates May Rise Due to Japanese Disaster

Who would think that Japan’s disaster could affect our commercial insurance rates…but it can and probably will.  The same “reinsurers” that provide reinsurance to the US insurance marketplace provide reinsurance all over the world…Chile, Japan and yes even Haiti.  While the Chile and Haiti earthquakes did little to upset the reinsurance marketplace, the Japanese disaster will. 

The insurance industry estimates of the $300+ billion in damages suffered as a result of the earthquake and tsunami, some $30 to $40 billion will be paid by reinsurers.  Reinsurers will need to raise their rates to cover these losses… and yes, that means rates will increase in the US.