Despite the thousands of deaths and huge global financial impact resulting from the March 11 magnitude 9.0 Japanese earthquake - the fifth largest ever recorded worldwide – and subsequent tsunami, the disaster will not have a devastating effect on either the capital of the Japanese insurance industry or the international reinsurance market, according to global professional services company Towers Watson.

However, the cumulative impact of worldwide catastrophe losses in 2010 and 2011, combined with Risk Management Solutions' (RMS) recent version 11.0 model revisions, will likely result in some firming of catastrophe rates that will vary on a regional basis, although not at the same levels seen after Hurricane Katrina in 2005, according to the company.

"While some similar factors are present in 2011, other significant factors are not," said William Eyre, Jr., managing director of Towers Watson's reinsurance brokerage business. "Absent another event, we do not foresee the same level of price increases that we saw at the beginning of 2006. The 2010-2011 losses are widely believed to be more of a significant 'earnings' event rather than an impairment to capital. Additionally, though rating agencies may adjust their views of risk because of the international catastrophe experience, we do not expect the same type of downgrades seen in 2005 and 2006."