Israeli Insurers and Diamantaires Feel Japanese Fallout
Economic reverberations of the Japanese earthquake, tsunami and nuclear catastrophes have been felt on global markets and have depressed share prices. As part of the global economy, Israel is affected in general, but is expected to sustain specific losses in two major areas: insurance and diamonds.
Insurance companies, as a matter of sound policy, tend to disperse risks so that one company will not be left holding the entire bag in the event of a disaster. Therefore, Israeli insurers such as Clal Insurance, assumed part of the Japanese risk via their foreign subsidiaries. Clal has already reported its exposure to the Tel Aviv Stock Exchange.
One of Israel's major exports to Japan is diamonds, where it ranks 3rd behind India and Belgium. Japanese imports of polished diamonds had been staging a recovery, as demonstrated by a 44% increase in January 2011 as compared with January 2010. Now this recovery will be stunted and aborted.
The World Federation of Diamond Bourses believes that no members of the Japanese diamond industry were hurt in the tsunami, but the WFDB pledged its support to the Tokyo Diamond Exchange. Avi Paz, the organization's president, expressed his condolences to the Japanese people and his colleagues in the Japanese diamond community, and noted: "The WFDB is a global family and we all come together at times like these. On behalf of the WFDB, I would like to send my heartfelt best wishes for a speedy recovery, and to offer any help and support to our colleagues in Japan, particularly to our friends and colleagues at the Tokyo Diamond Exchange."