Tohoku Earthquake

Update 2 | Summary
Posting Date: March 12, 2011, 6:30:00 PM

Given the enormity of the Mw9.1 earthquake that struck Japan less than two days ago, it is still in the very early aftermath of the event. Search and rescue efforts are still underway and damage assessment has only just begun, while considerable uncertainty still remains in the parameters that define the event.

Based on currently available information, AIR estimates that insured property losses from Friday’s earthquake will range between 1.2 trillion JPY to 2.8 trillion JPY. Using today’s exchange rate of 81.85 JPY to the dollar, this translates to a range of between 15 billion USD and 35 billion USD. To obtain this preliminary range, AIR simulated dozens of scenarios with varying magnitude (8.9 to 9.1), focal depth (15 km to 30 km) and rupture width (100 km to 150 km). The losses are most sensitive to rupture dimensions, and become extremely large if the modeled rupture is extended southward towards the Tokyo and Chiba prefectures, which contain a higher concentration of insured properties.

Of significance, the website of Japan’s national seismic network, K-NET, remains offline, so ground motion observations are still unavailable. Since considerable uncertainty still exists with respect to the parameters of this earthquake, AIR considers this a preliminary loss estimate and plans to refine it when additional information such as ground motion recordings becomes available.

AIR’s loss estimates reflect insured shake and fire-following damage to onshore residential and commercial buildings and contents, and to properties in AIR’s agricultural line of business. They are net of government recoveries. They do not include demand surge. There exists considerable uncertainty with respect to demand surge in Japan, and no quantifiable evidence exists of demand surge in the aftermath of the Kobe Earthquake of 1995.

The AIR Earthquake Model for Japan does not account for the effects of tsunami. It should be emphasized, however, that any external estimates of tsunami losses should not be added to the loss estimates provided here, as that would result in significant double counting. Many of the properties destroyed by the tsunami first sustained damage from ground shaking and fire, as witnessed by videos of tsunami waves sweeping along entire buildings ablaze. As more detailed information becomes available—including satellite photos from NASA of the flood extent—AIR plans to independently estimate the loss due to tsunami and provide a combined loss estimate that avoids double-counting in the affected areas.

The map below illustrates the latest estimate of the slip distribution along the rupture plane as published by the United States Geological Survey (USGS) today. The current solution indicates that the largest slip—and thus the largest amount of energy released—occurred well offshore and over the northern portion of the rupture plane, away from Tokyo. In light of this non-uniform slip distribution, AIR has used a rupture length of 350 km and a rupture width of between 100km and 150 km to generate the loss scenarios provided above. Note, however, that there is significant uncertainty associated with these estimates of slip distribution, which can typically change multiple times during the days and even weeks after a major event.

Figure 1. Slip distribution as estimated by the USGS on March 12. (Source: USGS and AIR)

The high end of AIR’s preliminary range for the current event is just below AIR’s insured loss estimate for a repeat of the Great Kanto Earthquake of 1923, which is 35 billion USD (without demand surge). On a considerably smaller scale, AIR estimates that a repeat of the 1995 Great Hanshin (Kobe) Earthquake would cost the industry 7 billion USD.

Reports from Italy's National Institute of Geophysics and Volcanology estimate that the earth's axis shifted nearly 4 inches as a result of the “Great Tohoku Earthquake”, as the event has come to be known in Japan (Tohoku means "northeast"). On the ground, one GPS station on Honshu moved 8 feet according to the USGS. The event is the largest in Japan’s lengthy earthquake history, with the rupture extending across four segments of the subduction zone that parallels the Japan coast to the east. Seismologists both inside and outside Japan have said that such a scenario had not been contemplated and it was therefore not included in the official national seismic hazard maps of Japan as published by the Headquarters for Earthquake Research Promotion (HERP).

Strong shaking was felt over most of northern Honshu. Roads across the region buckled and several landslides have been reported. While the effects of the tsunami are garnering the lion’s share of media attention, shake damage was considerable, with many reports of collapsed buildings and streets strewn with rubble. High-rise office and apartment buildings in Tokyo—some 370 km from the epicenter—shook visibly, sending people into the streets. Trains and subways in the capital were halted and elevators shut down. Shaking was felt as far south as Kyoto and Osaka.

It is estimated that about 70% of all residential construction is of wood and about 25% of concrete. Commercial construction consists of more than 50% ductile reinforced concrete, about one-third light metal or steel, and less than 10% wood. Residential structures in the region of Japan impacted by today's quake are generally resistant to earthquake shaking. Some vulnerable structures do exist; these are comprised primarily of non-ductile reinforced concrete frame and heavy wood-frame construction.

There have been relatively few reports of major structural damage in Tokyo and Chiba prefectures, though several serious fires broke out. However, in light of JMA intensities of 5- to 5+ throughout the Tokyo area (see map below), there are likely to be many instances of non-structural damage and damage to contents. Given the high concentration of insured properties in these regions, even relatively small individual claims will likely add up to significant numbers.

Figure 2. Reported JMA intensities. For a description, see table below. (Source: JMA)

Table 1. Descriptions of JMA Intensities 5- and above (considered damaging)

Power outages continue across northern Honshu. More than a million homes were still without power on Saturday and at least half a million had no running water. Gas for cooking has been cut off to 360,000 dwellings in Sendai where military units have been working at evacuation shelters or helping search-and-rescue teams. Long lines are forming outside the shops that remain open.

Estimates of the number of fatalities vary widely by source. Japan's public broadcaster NHK has reported 900 deaths and 700 missing. Japan's Kyodo News Agency has reported, citing local officials, that 9,500 people are missing in the coastal town of Minami-sanriku in Miyagi prefecture. Japan’s Fire and Disaster Management Agency (FDMA) is being considerably more cautious, with an estimate of fatalities of 391, though this number is certainly expected to rise.

The FDMA also reports a total of 193 fires spawned by the earthquake, 56 of which have been extinguished. More than 50 fires were reported in Miyagi prefecture alone, among them a fire in an oil refinery. In Tokyo prefecture, 20 fires were reported. In Chiba, fires were reported at an oil refinery and a chemical facility.

The table below provides numbers from the latest report of Japan’s Fire and Disaster Management Agency (FDMA). It should be noted that these numbers represent verified reports; they do not represent estimates or projections. Numbers published by the FDMA have grown considerably—and will continue to grow considerably—with each update. Updates, initially made every 2 to 3 hours, have slowed to 2 to 3 a day.

Table 2. Current Estimates of Human Impacts and Building Damage As Reported by Japan’s FDMA as of the 7:00 a.m. Local Time, March 13, 2011

A major concern now is the crippled Fukushima Daiichi Nuclear Power Station. An explosion in one of the buildings prompted officials to expand the evacuation area around the plant to a 12-mile radius, affecting as many as 170,000 people. Reports had indicated that leaks of radioactive materials, which had begun immediately after the explosion, had diminished. Most recently, however, it has emerged that officials flooded the reactor with seawater in an effort to avoid a reactor core meltdown, but that a partial meltdown may have already occurred. On Sunday morning, local time, a second reactor at the same plant was also experiencing critical failures of its cooling system. Several insurance experts have said that the plant operator, Tokyo Eclectic Power Co., will be responsible for any clean-up costs associated with radiation contamination, but that insurance is likely to have been purchased by the company directly from the Japanese government.

The tsunami remains the main story of this event as it will be responsible for most of the fatalities. The Japan Meteorological Agency (JMA) has reported maximum tsunami heights of three meters or more for the northeast coast of Japan, with the prefectures of Fukushima, Ibaraki, Iwate and Miyagi being the most severely affected. In the town of Soma (est. pop. 40,000), in Fukushima prefecture, a maximum height of 7 was recorded. There are reports of “devastating damage” in the town, though few details are available. In Miyagi prefecture, some waves reached 10 km inland. Tsunami observations for towns along the length of Japan can be found both in tabular and map format on the JMA website at this link: http://www.jma.go.jp/en/tsunami/joho.html. High resolution satellite images of the coast near Sendai before and after the tsunami are available from NASA’s Earth Observatory website: http://earthobservatory.nasa.gov/NaturalHazards/view.php?id=49630. Again, AIR plans to use this and other information as it becomes available to estimate the loss resulting from the tsunami and to issue a combined shake, fire-following and tsunami loss estimate.

The AIR earthquake team, supported by our offices in Tokyo, London and Hyderabad, continue to closely monitor events in Japan. Of particular importance will be the availability of ground motion recordings from K-NET (Kyoshin Net), the official seismic network for Japan with more than 1,000 monitoring stations. Information on recorded ground motion will be a critical element in further refining AIR’s preliminary loss estimates. AIR will continue to provide information on events as they unfold and will update clients with a revised communications plan on Monday, March 14.

Update 2 | Downloads
Posting Date: March 12, 2011, 6:30:00 PM