The Japanese insurance industry has so far paid out more than ¥1 trillion ($11.5 billion) in settling claims from the earthquake and tsunami that occurred on March 11.

The worst-hit region was the Tohoku area, where ¥668.3 billion ($7.7 billion) of claims have been settled, according to the latest figures from the General Insurance Association of Japan.

The total number of claims lodged by late June was 686,299, with 634,966 settled.

Association Chairman Hisahito Suzuki says the disaster was “a major test” for the Japanese insurance industry.

“The general insurance industry has been given considerable attention by society, which has called into the question the raison d’être of insurance,” he said.

“Under these circumstances, the general insurance industry, the association and all its member companies, have co-operated with each other and have implemented unprecedented measures one after another.

“We have implemented prompt and appropriate payments.”

Mr Suzuki has warned the earthquake will have a significant impact on the financial results of Japanese insurers.

This event has compounded the woes of Japanese insurers, who were finding the market tough prior to the earthquake and tsunami, with rate rises for car insurance achieving only 2%.

The Japanese general insurance sector reported a 38.4% drop in net income to ¥127.5 billion ($1.47 billion) for the financial year to March.

Total net written premium remained stagnant at ¥6.971 trillion ($80.7 billion) while total assets of the sector dropped 5.8% to ¥29.67 trillion ($343 billion).

Despite the problems facing the Japanese general insurance industry, Mr Suzuki believes it has performed well in light of the recent disaster.

“The proportion of settled claims in response to inquiries is 91.5% and we accomplished these achievements primarily by concentrating on the task,” he said.

“We have been reminded of the true meaning and purpose of insurance through experiencing this unprecedented disaster.”