BOSTON, March 25, 2011 – Since the issuance of preliminary lost estimates just 24 hours after the Tohoku Earthquake, catastrophe modeling firm AIR Worldwide assessed newly available ground motion data and analyzed high-resolution satellite imagery to estimate the footprint of the tsunami that followed the earthquake. Based on these detailed analyses, AIR has revised its insured loss estimate for the Mw 9.0 Tohoku Earthquake at between 1.5 trillion JPY and 2.5 trillion JPY. Using today’s exchange rate of 80.9 JPY to the dollar, this translates to a range of between 20 billion USD and 30 billion USD.
“This is an unprecedented event in the history of seismology and earthquake engineering—never in history has a magnitude 9.0 earthquake been so well recorded instrumentally,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “With this update AIR has taken real-time loss estimation to the next level by incorporating an unprecedented quantity of data. By independently estimating the loss due to the tsunami, the combined loss estimate avoids double-counting in the affected areas.”
The combined insured loss estimate is comprised of insured losses from ground-shaking and fire-following of between 910 billion JPY (11 billion USD) and 1.7 trillion JPY (21 billion USD), and insured losses from tsunami of between 650 billion JPY (8.0 billion USD) and 780 billion JPY (9.7 billion USD).
AIR’s loss estimate includes payouts from the Japan Earthquake Reinsurance Co., Ltd. (JER) and is net of government recoveries.
Using high-resolution elevation data and wave height data from the Japan Meteorological Agency (JMA), AIR created a footprint of the tsunami. Three inundation regions—which span the prefectures of Fukushima, Ibaraki, Miyagi, Iwate, Aomori, and Hokkaido—were generated based on topography and observed wave height and elevation data. The modeled footprint was compared to known flooded regions that had been collected from high-resolution maps, aerial photography, and satellite imagery made available from a number of government agencies and private organizations. The areas of greatest inland penetration were identified and validated with overland inundation reaching as far as five to six kilometers inland. Thus far, the modeled footprint compares very well with the known flooded regions throughout the entire impacted area.
Further validation was undertaken using the Princeton Ocean Model (POM)—a numerical grid point model that is used for many oceanographic applications worldwide. The model has been successfully used to simulate the main features of the tsunami from the Tohoku earthquake. POM output is providing necessary information for areas where higher resolution data from other sources is unavailable.
“The website of Japan's national seismic network, the Kyoshin Network, or K-NET, remained offline for nearly a week following the earthquake; ground motion observations were unavailable for that entire period,” continued Dr. Guin. “Since that time, however, ground motion recordings have become available and AIR seismologists have constructed a large number of stochastic ground motion scenarios consistent with the recorded ground motion data at the K-NET and KIK-NET stations.”
Nearly two weeks after the March 11 Tohoku earthquake and tsunami, efforts to avert a nuclear reactor meltdown at the six-reactor Fukushima power plant in Fukushima prefecture remain at the forefront of recovery efforts. Concerns about radiation extend outside of Fukushima prefecture into the capital, where residents worry about hazardous substances in water, vegetables and milk.
AIR is continuing to analyze the available data for this event and will provide updates as warranted.
*Note to editors:
AIR's industry insured loss estimates reflect:
• Insured physical damage to property (residential; commercial/industrial; mutuals and cooperatives [kyosai]), both structures and their contents resulting from shake, fire following and tsunami.
The loss estimates do not reflect:
• Losses from other non-modeled perils, including landslide; radiation from nuclear facilities
• Losses to automobiles;
• Business interruption losses;
• Losses to uninsured properties;
• Losses to land;
• Losses to casualty and life lines;
• Losses to infrastructure;
• Loss adjustment expenses;
• Demand surge—the increase in costs of materials, services, and labor due to increased demand following a catastrophic event.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement-cost valuation. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.