The two explosions that that rocked the Chinese port city of Tianjin last week are expected to cost insurance firms $1.5bn, stemming from direct damage as well as the halting of manufacturing operations. The disaster resulted in over 100 confirmed deaths so far, with many still missing and hundreds hospitalised.

While both international and domestic insurers are set to take heavy losses, domestic firms are expected to take the brunt of it

According to the BBC, based on “official Chinese media reports, bank Credit Suisse estimates the losses could amount to $1-1.5bn,” while the ratings agency Fitch warned that actual costs could be higher. “Claims from the blasts are likely to undermine the financial performance of some regional players and those property and casualty insurers with high risk accumulation in the affected areas,” the BBC reports Fitch as saying.

While both international and domestic insurers are set to take heavy losses, domestic firms are expected to take the brunt of it. Car insurers are also to be particularly financially hurt, with damage being reported for 80 percent of the 10,000 newly built cars that were located in a nearby logistics port. Many car manufacturers have had to halt operations, with the ensuing loses liable to be paid by insurers. Toyota, which has three production lines in the area, has ceased its operations, which can produce over half a million cars a year. With the prospect of lingering harmful chemicals in the atmosphere and environment, how long these shut downs will continue is uncertain. Further, as Chinese response teams and volunteers sift through a clear up the debris, the death toll is expected to rise, further adding to compensation costs for life and injury insurance.

The cause of the explosions, which took place in a warehouse storing hazardous and flammable chemicals such as calcium carbide, sodium cyanide, potassium nitrate, ammonium nitrate and sodium nitrate, are yet to be determined. According to the FT, “The Central Commission for Discipline Inspection, China’s anti-corruption agency, said on Tuesday that Yang Dongliang, head of the country’s workplace safety regulator, had been detained on suspicion of “severe disciplinary violations”.”