It was only natural that shortly after the disaster in Japan, peoples' thoughts turned to global insurance markets. Insurers and reinsurers took a beating after events like Hurricane Andrew, 9/11, and Katrina, so why not this?
The company's estimates will never include a multitude of losses that are not insured: cars swept away, damaged property, buckled roads and weakened bridges, and something called "demand surge" -- the spike in materials prices and labor costs that often comes with large-scale rebuilding after a catastrophe.The uninsured losses may turn out to be the greatest losses of all.
Given the Japanese government's debt burden, there are limits to how much of all this they'll be able to backstop. Meanwhile, the reinsurers aren't getting off too easy, either; as Robert Hartwig told the Times, "What makes today's natural disaster so extraordinary is that four of the five costliest earthquakes and tsunamis in the past 30 years have occurred within the past 13 months".
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