Japan Quake Data Points—Who's Liable?

Data points on the Japan quake:

1) Barclays noted that global insurance and reinsurance companies are facing serious losses in the last 12 months — and the Japan quake is just the icing on the cake. Using estimates from Air Worldwide and Eqecat, here is what they come up with for loss estimates:

Catastrophe Event Insured Losses:

Japan Quake $15 bn - $35 bn

Chile Quake $3 bn - $8 bn

New Zealand Quake $2 bn - $4.5 bn

2nd New Zealand Quake $3.5 bn - $8 bn

Australia Floods $3 bn - $6 bn

Cyclone Yasi $354 mn - $1.5 bn

US Winter Storms $790 mn - $1.4 bn


TOTAL: $28 to $64 billion. That is serious coin.

2) Standard and Poor's notes retail exposure to Japan. Only a few have really large exposure.

Retail Exposure to Japan:
(% of sales)

Coach 20%

Tiffany 20%

Polo RL 6%

Under Armour 6%

3) Who's liable for the nuclear accident in Japan?

General Electric, one of the designers of the plants that are having trouble, is down 3 percent midday.

Citigroup has an interesting note out on this under the title, "GE Liability in Japanese Nuclear Crisis Expected to be Minimal Due to Channeling Laws," where they explain that under long-standing channeling laws in effect in many countries "liability for nuclear accidents and damage to third parties is channeled exclusively to the plant operators and the government."

Regardless of fault, Japanese law says power plant operators must provide 120 billion yen ($1.2 billion) of coverage and the government provides coverage beyond this level, according to the note.

Interestingly, Citi believes GE could be a beneficiary of this: "There will likely be demand in Japan for power gen capacity to replace the damaged nuclear reactors. GE is one of the leading manufacturers of gas turbines..."

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