PICC Property & Casualty Co. (PICC, 02328.HK) and other mainland insurers, along with some international players in the sector, are expected to take a big hit due to insurance claims arising out of the devastating explosions at the Chinese port city of Tianjin last week.
The insurers could face losses of up to 10 billion yuan due to the disaster that has destroyed several assets and claimed more than 100 lives, the Hong Kong Economic Journal reported.
Total insurance losses are estimated in the US$1 billion to US$1.5 billion range due to claims arising from destruction of industrial premises, automobiles and cargo, according to Credit Suisse Group.
PICC may face claims totaling 2 billion yuan for damage to cars and other direct losses in the incident, apart from some indirect claims on health insurance due to leakage of toxic gas, said Daiwa Capital Markets analysts.
PICC has the largest share of the property and casualty insurance market in Tianjin. According to a Deutsche Bank’s estimate, the firm’s market share stood at 28 percent last year.
The German bank says PICC’s net profit could fall by 1.6 percent due to the Tianjin blast and that of Ping An Insurance (Group) Co. of China (02318.HK) by 1.2 percent.
PICC posted about 2.5 billion yuan of insurance losses in 2008 following the Sichuan earthquake and snowstorms during the year.
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