Insurance claims from last week's chemical fire and explosions in Tianjin, China, could exceed $1.5 billion, Fitch Ratings said Tuesday in one of the first overall assessments of financial losses from the incident.
The blasts blew a massive crater in the earth and damaged scores of apartment buildings, offices, shops and other businesses. Some 8,000 new cars awaiting delivery to dealerships were incinerated.
Because many residents and businesses in the well-to-do, newly developed area had insurance, Fitch said the Tianjin blasts could be one of the "most costly catastrophe claims for the Chinese insurance sector in the last few years." Claims, the agency said, would likely surge in the next few weeks.
Chinese officials say 114 people are confirmed dead, and 57 people — 52 firefighters and five police officers — remain unaccounted for after the massive detonations in Tianjin's Binhai New Area late Wednesday. More than 690 people remain hospitalized.
Tianjin residents and officials held a memorial service for the victims on Tuesday, the seventh day since the blasts, as rain dampened the city. Strange white soap-like bubbles appeared on numerous streets in the city in the wake of the precipitation, adding to concerns about potentially hazardous residue spread by the detonation at the Ruihai International Logistics warehouse.
The Chinese publication Caijing reported that 10 senior managers, shareholders and others with connections to Ruihai have been taken into police custody, including directors Yu Xuewei and Dong Shexuan.
In addition, the director of China's State Administration of Work Safety, Yang Dongliang, has been placed under investigation by the Communist Party's Central Commission for Discipline Inspection, authorities said Tuesday, though the direct connection to the Tianjin incident, if any, remained unclear.
Meanwhile, China's State Council, a body roughly on par with the Cabinet in the U.S. political system, said it was starting an investigation into the cause of the disaster.
Fitch said that while motor, cargo, liability and property damage claims are likely to make up the bulk of losses for insurers, medical and life insurance claims are also likely to be "substantial."
The agency said wounded people who are covered by a government-backed accident insurance plan could receive between $3,100 and $5,470 each, while the families of people killed in the incident may be eligible for about $7,800 in death benefits.
A number of toxic substances, including sodium cyanide, were reportedly stored at the site, in apparent violation of safety and licensing regulations.
He Shushan, the deputy major of Tianjin, told the state-run Global Times newspaper on Tuesday that all toxic chemicals scattered outside of the main blast area should have been collected and properly secured as of Monday evening.