While the U.S. will "almost certainly" continue to be the prime destination for "Supercat" events--events that cause insured losses of at least $10 billion--Aon Benfield is warning insurers that Asian countries could also see such events.

Reinsurance intermediary and capital advisor Aon Benfield said increasing property values and insurance penetration in Asian countries such as Japan, South Korea and China could lead to huge losses for insurers if the major catastrophe events that hit the region in the past were to reoccur.

For Japan, Aon Benfield pointed to the risk of typhoons. "Repeats of typhoons Mireille (1991), Vera (1959) and Nancy (1961) could all produce Supercat insured losses, as could a direct hit of a strong typhoon on Tokyo," Aon Benfield said.

For China, Aon Benfield pointed to the countries continuing economic growth. "A repeat of the 1976 Tangshan magnitude 7.6 earthquake could today cause insured losses ranging up to about $3 billion," Aon Benfield explained. "However with 10 percent growth in both underlying values and insurance penetration per annum, this figure could reach $10 billion if such an event occurred from 2016 onwards."

In South Korea, Aon Benfield said any major earthquake around magnitude 7 affecting the capital of Seoul today would cause "a major, perhaps Supercat-sized, insured loss."

Nigel Winspear, senior director at Aon Benfield Analytics, said, "Natural perils in Asia do not appear to be increasing in frequency or severity, however market conditions are changing with increasing insurance penetration and higher property values reflecting ongoing economic growth. Property insurance penetration in Asia is generally low and weakest in residential lines but often high in commercial and industrial lines." Speaking to insurers' preparedness, he warned, "Some insurers opt to purchase as little catastrophe reinsurance protection as possible to maximize their retained premium."

Will Gardner, head of Aon Benfield Analytics Asia Pacific, urged insurers to prepare for Asian Supercat events. "The first step is for insurers and regulators, particularly in China and South Korea, to recognize the possibility of Supercat-sized earthquake losses and take action to ensure adequate catastrophe reinsurance protection," he said.

Aon Benfield noted that the U.S. "will almost certainly continue to rank number one in terms of Supercat losses for the foreseeable future due to the frequency of major hurricanes alone--such as hurricanes Katrina, Rita, Wilma in 2005--without even considering earthquake and terrorism-related losses."