Goldman Forecasts Tianjin Total Direct Insurance Payment May Equate To ~$560M USD

In the wake of Tianjin's port explosion investors and market participants are seeking a better understanding into just what will be done regarding the insurance payments on lost assets. Goldman Sachs' China Team led by Mancy Sun decided to revisit the Hynix fire of 2013 as a proxy to understand potential losses to insurers. The Hynix fire from 2013, according to Goldman, involved the single largest insurance claim in Chinese history, equaling to roughly $900 million USD. Following the People's Insurance Company of China's (PICC) cessation of a portion of the commercial property insurance market, Goldman is assuming reinsurers account for 40 percent of the market share. Given the possible exposure for the reinsurers Goldman forecasts Tianjin direct insurance companies losses may be around 3.6 billion Renminbi or roughly $562 million USD. Goldman warns that these assumptions and estimates differ as PICC had "ceded out 80 percent to 90 percent of the premiums to reinsurers." Benzinga on Monday afternoon reached out to Volkswagen seeking clarification on market share in China of potential insurance loss amounts, but calls went unanswered.