The natural disasters in Japan, which come on top of rising oil prices due to the turmoil in the Middle East, will affect consumers all over the globe, including here.

In addition, rising food and commodity prices, partly due to natural disasters and exceptional weather in Australia, Russia, New Zealand and elsewhere, are putting further stress on the global economy.

The industry likely to be hit the hardest is insurance, and expectations are that premiums will rise significantly. Actuaries for insurance companies and reinsurers will be completely rethinking the basic assumptions they have been using for their risk models. Rates are expected to increase at least 15% to 20% on catastrophic insurance, which covers natural disasters.

"Such losses wipe out years of profits for reinsurers," said Gideon Hamburger, the chairman of the Israel Insurance Association and president of Harel Insurance. "We still do not know, but there may be companies that have a problem, especially the low-rated ones," he added.

Even insurance companies that survive the present catastrophe may find themselves limited financially in terms of how much coverage they can offer in the future, and this will raise insurance rates even further. Also, deductibles will also almost certainly rise in order to reduce the companies' risk. Hamburger says the reinsurance industry faces great uncertainty, and it is not clear where the market is heading after the Japanese disasters.

Only today will the major reinsurers begin to understand what their exposure and liability is.

All this applies to the Israeli insurance market as well. Clal Insurance said yesterday that it is losing money on its reinsurance business due to recent disasters, and that it has NIS 40 million in exposure just to Japan. The company provided preliminary information yesterday. (More coverage, Page 8. )

Japanese owe Israeli exporters $220m

Japanese customers owe Israeli exporters some $220 million, reports the Israeli Credit Insurance Company. The insurer estimates that about half this amount is insured against nonpayment due to damage from the tsunami and earthquake. The rest is not covered and the exporters would have to foot the bill themselves in case of nonpayment for whatever reason.

Most of Israel's exports to Japan are medical equipment, high-tech, chemicals and metals.

ICCC insures more than $12 billion in credit risk in 115 countries, both in Israel and abroad.

Credit insurance guarantees the supplier that if it does not receive payment for reasons including bankruptcy, natural disasters and political problems, it will still receive the money.

Another Japanese industry quite familiar and important to Israelis is automobiles. No one knows yet what will happen to deliveries or prices. Japan is Israel's largest supplier of cars, with 30.7% of the total market in the first two months of 2011. The Japanese share was even greater - 36.6% - for 2010 as a whole. Mazda is the biggest seller.

Toyota has completely shut down production in Japan, as have several factories for Honda, Subaru and Nissan in northern Japan. Israeli importers of Japanese cars have received very little information from their suppliers, probably because they do not have answers yet, either.

"For now, the Japanese are taking care of their workers and trying to help them. We still have not spoken about production and delivery dates," said Toyota's Israeli importer. (More coverage, see Page 8. )