The insurance damages at Tianjin Port are anticipated to cost as much as US$1.6 billion as a result of the catastrophic explosions that blew apart a logistics area at the port on August 12, 2015, according to World Maritime News.
The explosion has now killed 116 people and the cause of the explosion is still unknown, but sources speculate that the blasts could have been caused by a shipment of explosives that had been detonated after hazardous materials ignited.
The insurance valuation has been based on the idea that if there were up to 12,000 cars situated at the scene of the event, and each car coast around U$30,000 to build, the total insurance cost for these assets alone would be approximately $300-360 million.
Reinsurance intermediary, Aon Benfield, said: “Given the complexity of the loss, which is expected to involve multiple risks across marine and non-marine lines, and the situation on the ground for the affected area, it will be some time before provisional loss advice will be released by many cedents.”
Fitch Ratings said: “While insurers could recover a portion of their property claims from their reinsurers, their exposure, the amount of retention and the number of reinstatements under the catastrophe reinsurance program are likely to determine the degree of severity to which they are affected. Fitch estimates that the overall risk cession ratios of major non-life players active in the Tianjin region range from 10% to 15%.”
The risk of damage to the port was arguably increased by the fact that the logistics company handling the hazardous materials did not have a license between October, 2014 to June, 2015.
Currently, the explosion is being seen as caused as a result of improper safety regulations.
Several executive figures from Ruihai International Logistics are being questioned by Chinese authorities in relation to the event.