First on the scene: Remembering Tohoku

Five years on from the Tohoku earthquake and tsunami, on the frontline speaks to those who witnessed the aftermath of this devastating natural catastrophe.

On Friday March11, 2011 at 2:46pm local time, the seabed 45 miles east of the Japanese city of Tohoku started to shake. The cause of the shaking was two tectonic plates, located 15 miles below the surface, sliding 164 feet one under the other, releasing massive energy built up over centuries.

The result, a magnitude-9 earthquake that lasted for around six minutes, unleashed a biblical set of tsunami waves that roared into Japan’s northeastern coast less than an hour later. With run-up heights of 128 feet (measured at Miyako City) the surge travelled six miles into Sendai province, eventually flooding an area of around 217 square miles.

Waves overtopped sea walls and destroyed infrastructure in their path, including the Fukushima nuclear power station. It’s hard to imagine
the force of the Great Tohoku Earthquake, but it’s known that the tsunami crossed the Pacific and broke off vast bergs of ice from Antarctica, 8077 miles away, the largest of which was the size of Manhattan.

The earthquake was even heard in space, with a ripple of sound sent through the atmosphere that was picked up by the Goce satellite 158 miles above earth. Down on the ground, the aftermath was appalling, even for a country well used to destructive earthquakes. The number of confirmed deaths stands at around 16,000 – most from drowning. Hundreds of people are still reported missing today.
Total destruction

Dr. Kazuya Fujimura, vice president and managing director in the Tokyo office of catastrophe modeler AIR Worldwide, was quick to the scene. “I visited Kobe after the earthquake in 1995, but simply could not believe that the damage resulting from the Tohoku earthquake was done by a natural disaster; there was no comparison with Kobe,” he says.

“It looked like the photos I’ve seen of areas bombed in World War Two in the sense that so many of the buildings were completely destroyed. The level of destruction was significantly greater and the extent of the damaged area was so much bigger than anything I had seen before. Also, the amount of building debris and piles of wrecked cars was huge.”

Dr. Fujimura remembers simply getting to the area was challenging. “We had problems with transportation because a lot of roads were still blocked by debris and closed, and there were many areas—other than around the Fukushima nuclear power plant—where people were not allowed to enter.”

“When we finally got there, the immediate concern was aftershocks and the risk of another tsunami occurring. A relatively minor issue was finding accommodation, because many hotels were closed due to the lack of power and water,” he adds.

Crawford vice president, Global Markets Mike Patton, also a veteran of the 1995 Kobe earthquake, happened to be speaking at an industry conference in Bangkok on March 11 2011 when he was taken aside and told of the unfolding catastrophe – and then told he was now in charge of Crawford’s operation in the stricken area.

Initially based in Tokyo because of the access problems, Patton recalls the eerie atmosphere that had fallen: “It was unusually quiet because so many people had fled south from Tokyo in fear of the fallout from Fukushima. Meanwhile there were no trains up country and the roads were impassable,” he recalls.

With nearly half a million people rendered homeless, Japan’s Reconstruction Agency worked tirelessly to restore services, industry and residential property. Putting the scale of the humanitarian disaster in context, 180,000 people are still waiting to be re-homed today. Following the Level Seven meltdown of Fukushima Daiichi Nuclear Power Plant, four out of 11 municipalities have been decontaminated.
Broad economic impact

The total economic damages from the earthquake and tsunami are now estimated at ¥25trn (about $300bn), according to the Japanese government. Not surprisingly, insurance played an important part in the recovery and rehabilitation process from the beginning. Insurers are believed to have paid out in the region of $40bn to date.

The insurance classes affected by the quake and tsunami include personal accident and life, residential and commercial property, marine and motor policies as well as business and contingent business interruption covers. To get an idea of the scale of the claims handling effort required, the insurer Tokio Marine alone has paid 200,000 domestic P&C claims, totaling ¥484.6bn ($4.26bn).

Crawford’s experienced team, assembled from experts around the firm’s global network as well as Japan, and led by Mike Patton, soon realized they were in for the long haul, crisscrossing the country to help clients manage their claims. “The core team had handled jobs in the West Indies, Chile and in New Zealand, for example, and so they were used to the challenges posed,” Patton says. “Getting to the sites was difficult and head offices were often on the other side of the country. We frequently needed interpreters on site.”

The most complex claims issues revolved around business interruption. “Property claims were relatively straightforward but explaining to clients what costs could be claimed under BI was often immensely difficult,” Patton explains. “It could take months of negotiation and we had to be very patient often.”

Crawford Asia Pacific CEO Andrew Bart says that many BI and supply chain claims were often slow to materialize and located outside Japan – in Europe, the U.S. and elsewhere. “Motor vehicle parts distributors in places like Australia, for example, suffered big losses,” he says. “But Crawford has a global network and we can seamlessly handle claims across borders with consistent processes and interchange of information, which really helps the market.”

As with the Thai floods, Tohoku highlighted the global interdependencies in the automotive, computer and pharmaceutical sectors especially, Bart explains. “From an insurance perspective it showed how insurance policy wordings need to be redrafted for insureds and how insurers must ensure that coverage meets the needs of a rapidly changing economy.”

Crawford is often asked by insurers to contribute to discussions on reviewing wordings, Bart reveals. “Frequently, we’re involved in post event reviews of claims responses for particular clients. We work post event with broker, insurer and insured to find out what worked and what didn’t work so well.”

Many of the risk professionals that lived and worked through the aftermath of the Great Tohoku Earthquake, found the experience cathartic but came away with a sense of enlightenment, according to Tokio Marine spokesman Shirou Sasaki.

“Unfettered by rules and manuals, everyone gave serious consideration to the best and necessary options, prioritized them and acted upon their own initiatives, demonstrating outstanding teamwork and a fast response,” he explains.

“After witnessing the unprecedented tragedy, each and every employee as well as our agencies thought about what they themselves could do to help provide safety and security to customers in immediate need. It was an event that enabled our employees to fully realize once again the responsibilities an insurance company must fulfill for society.”




April 2016