Japan earthquake to cost insurers between $2 billion and $4 billion: Report

The powerful earthquake that jolted Japan’s northeast coast last week is expected to cause insured property losses between $2 billion and $4 billion, modeling firm Verisk said on Thursday.

About $400 million to $820 million of the losses will stem from damage to commercial and industrial properties, Verisk said, citing reports that more than a 1,000 buildings were impacted in the Fukushima and Miyagi prefectures.

Other losses include power and water outages, damage to highways, rail lines and other infrastructure, as well as short-term cancellation of some train service and supply chain and production disruptions, the modeling firm said.

Located in the “Ring of Fire” arc of volcanoes and oceanic trenches encircling the Pacific Basin, Japan accounts for about 20 percent of the world’s earthquakes of magnitude 6.0 or greater. The country also contends with tsunamis, typhoons, floods and erupting volcanoes.

Despite its sophisticated tsunami warning systems, Japan was caught largely by surprise by the 8.9 magnitude earthquake and subsequent tsunami in 2011 that killed nearly 20,000 people and destroyed a nuclear power plant.