Japanese life insurers could be facing between ¥300 to ¥400 billion ($3.6 billion to $4.8 billon) of claims stemming from the March 11 earthquake and tsunami, according to ratings agency Moody’s.

But it believes the major Japanese insurers will be able to cover these claims from their capital requirements without having to sell investments at depressed prices. Moody’s says Japanese life insurers have a capital base of ¥10 trillion ($121 billion).

It also believes the international insurers with Japanese exposure will be better placed than the domestic companies due to their diversified portfolios.

Moody’s has estimated there are about 5.7 million people in the three prefectures most affected by the earthquake and tsunami.

It estimates about 5% of the population in those prefectures had some form of life insurance and the losses for insurers with be reflected by their market share.

Three local life insurers have about 35% of the market in Japan. The largest non-Japanese insurer is Prudential, with a local market share of 6%.

In total there are 46 life insurers operating in Japan and the average policy size is about ¥7.5 million ($91,400), but this rises to ¥15 million ($182,836) if accidental death benefit cover is included.

Moody’s says most policies would exclude earthquakes, but it believes insurers will still pay any claims based on traditional precedents and its concerns for the insured family.

However, claims from any nuclear fallout would have a significant impact on life insurers, Moody’s says.

“This scenario would result in ratings downgrades as life, medical and cancer claims would escalate significantly for the life insurers and the Japanese economy would likely worsen materially as well,” the ratings agency said a special report on the earthquake and tsunami.

“Under the scenario of severe radioactive release… companies with significant in-force policies would incur meaningful losses right away with life claims occurring more gradually and escalating over the coming years.”