Catastrophe modeling firm EQECAT has updated its market loss estimate of $12-$25 billion, issued on March 16, for the March 11 M9 Tohoku Earthquake. EQECAT said that, based on the latest information available, it is “updating its estimate to $22-$39 Billion.”
The bulletin described the catastrophe as “extreme,” with “28,000 people dead or missing and more than 50,000 structures totally or severely damaged. Severe ground motions affected much of northern Honshu island, with strong ground motions persisting for 3 minutes or more in places, and a tsunami producing onshore water depths in excess of 25 meters [nearly 80 feet] and extending inland up to 10 kilometers [over 6 miles].
“Damage to buildings and critical infrastructure such as transportation and electricity extend over a very broad region. Damage was caused by the tsunami, direct shaking, and indirectly through soil failure triggered by liquefaction and landslides.”
The bulletin noted that the “main factors contributing to this change in loss estimate are damage caused by the onshore water depth (initially reported to be 8 meters [25 feet]), insight on damage from liquefaction, landslides, widespread disruption of electricity and transportation and loss amplification caused by the disruption at the nuclear plant in Fukushima.”
Property insurers are expected to bear the major impact of the losses, both Japanese and international companies. The estimates range between $15 and $25 billion. Other components included in EQECAT’s estimate include “losses to marine insurers, auto, life, and personal accident.”
EQECAT added that its estimate includes “allowances for “Demand Surge”, post-catastrophe inflation of damage often seen in large catastrophes, and does not include potential losses from Contingent Business Interruption (CBI). This coverage, which is difficult to quantify without company records, provides larger Fortune 1000 firms with coverage for loss of profits and reimbursement for extra expense due to disruption in the manufacturing and distribution process of suppliers affected by the earthquake.”
The complete report, including an analysis of the mechanics and stresses produced by the earthquake, as well as the aftershocks and the damages caused by the resulting tsunami, may be obtained on the company’s web site.
Source: EQECAT
Topics Catastrophe Natural Disasters Profit Loss Funding Japan
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