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Taiwan quake’s distance from tech park to curb claims 

Losses from the Taiwan earthquake earlier this month are not expected to exceed those from the 2016 Meinong quake, which was centred closer to a key location for technology companies, AM Best says. 

“In Taiwan, residential earthquake losses are all ceded to the Taiwan Residential Earthquake Insurance Fund, so commercial insurers mainly bear commercial and industrial losses,” the ratings agency says in a report 

“Unlike the Meinong earthquake, where the epicentre was on the western coast close to the Southern Taiwan Science Park, this latest earthquake’s epicentre was on the east coast.” 

Commercial fire losses from the Meinong quake were estimated at $US500 million ($774 million). 

The US Geological Survey says the 7.4-magnitude quake on April 3 occurred 18 kilometres from Hualien City in eastern Taiwan at 7.58am local time. It was followed by strong aftershocks. 

AM Best says large semiconductor companies temporarily halted operations and evacuated some plants, and the event could trigger significant business interruption losses. 

But business interruption claims will probably not reach Meinong quake levels given the greater distance from the science parks. 

Most of the exposures are ultimately ceded to the international reinsurance market. 

“After a benign natural catastrophe year in 2023 contributed to fewer catastrophe losses, this earthquake is not expected to add significant claims and lead to a capital event for the Taiwan non-life industry,” AM Best says. 

CoreLogic is now estimating insurable losses to be between $US500 million ($744 million) and $US1 billion ($1.5 billion). Initially, it had released an estimate of $US5-8 billion ($8-12 billion).