Earthquake, Tsunami Reshape Japan’s Coastline

In the wake of the devastating earthquake and tsunami that ravaged Japan, the world’s attention has rightfully turned to to ongoing nuclear crisis at Fukushima. Three reactors are at risk of meltdown while spent fuel rods at a fourth reactor are at risk of catching fire, which would spew radioactive gas into the atmosphere. More than 200,000 people have either been evacuated or told by authorities to shelter-in-place and all but 50 workers at the nuclear plant have been sent home as radiation levels continue to “soar.” By all accounts this is now a full-scale international crisis as Japan’s neighbors are at risk and with the nation’s prime minister reporting asking energy “what the hell is going on?” the incident is becoming more harrowing by the minute.

All we can do now is monitor the information being reported and hope for the best in an incident that may already have caused insured losses of up to $35 billion, according to risk modeling firm AIR Worldwide, and has triggered the biggest two-day stock market decline in Japan since 1987, according to comments by CNBC’s Erin Burnett today on Morning Joe.

Looking back at the initial disaster, however, more and more is becoming known about the gravity of the catastrophe. The video below from ABC shows how the quake and tsunami drastically reshaped parts of Japan’s coastline. The awesome power of nature will never cease to amaze. Truly heart-breaking imagery. (More images of destruction can be seen here and here.)

For more breaking news coming out of Japan, stay tuned to our Twitter feed, @RiskMgmt.

How Japan’s Building Codes Prevented Casualties

The tragic juxtaposition between the death toll from the 7.0 magnitude earthquake that devastated Haiti in January 2010 and the 8.8 quake that hit Chile less than two months later was glaring. The former killed an estimated 250,000 while the later left less than 600 dead.

It is still far too early to have even a close guess on the number of casualties from this morning’s 8.9 magnitude quake and the resulting tsunami in Japan. But while even one life lost makes this a tragedy, it seems as though the final total could be far below the horrific worst-case scenario that I envisioned when first hearing of the disaster’s size.

And much like was the case in Chile, Japan’s building codes had a lot to do with it.

From seawalls that line stretches of Japan’s coastline, to skyscrapers that sway to absorb earthquakes, to building codes that are among the world’s most rigorous, no country may be better prepared to withstand earthquakes than Japan.

The Times’ piece goes into more detail about tsunami protection.

Over the years, Japan has spent billions of dollars developing the most advanced technology against earthquakes and tsunamis. The Japanese, who regularly experience smaller earthquakes and have lived through major ones, know how to react to quakes and tsunamis because of regular drills — unlike Southeast Asians, many of whom died in the 2004 Indian Ocean tsunami because they lingered near the coast.

Communities along Japan’s coastline, especially in areas that have been hit by tsunamis in the past, tend to be the best prepared. Local authorities can usually contact residents directly through warning systems set up in each home; footpaths and other escape routes leading to higher ground tend to be clearly marked.

In the country that gave the world the word tsunami, Japan, especially in the 1980’s and 1990’s, built concrete seawalls in many communities, some as high as 40 feet. In addition, some coastal towns have set up networks of sensors that can sound alarms in every residence and automatically closed floodgates when an earthquake strikes to prevent waves from surging up rivers. Ports are sometimes equipped with raised platforms.

Resiliency in action.

Recently, I profiled the Institute of Business and Home Safety Research Center, an organization that is striving to improve building standards and the resiliency of building materials by testing them. Hopefully, in tragedy, we can also get a lesson that shows the critical importance of enforcing building codes based upon good science.

UPDATE: Here’s an image that further shows the need for good science. The projected path of the tsunami resulting from the quake. (via Business Insider)

Business Interruption in Japan

Thousands are dead after the worst earthquake in generations struck off the northeast coast of Japan on Friday. The 8.9-magnitude quake rocked the country, sending cars off bridges and causing numerous buildings in the area to collapse while causing several tsunamis that essentially washed away entire parts of the island nation. The following aftershocks, which were only slightly weaker than the earthquake itself, were felt throughout the country, causing even more damage and death.

Companies there have evacuated and closed plants in the aftermath of the world’s fifth-largest earthquake since 1900. Because Japan is the destination of so many global businesses, the economic effect of the earthquake will be felt throughout the world. From the Wall Street Journal:

  • Volvo
    The automobile company was among the worst hit. Its main facility in Japan that produces heavy-duty trucks was forced to halt production. Volvo employs 10,000 people in Japan.
  • Daimler
    One of the company’s facilities in Kawasaki was slightly damaged. Production is continuing with all employees accounted for.
  • Nestle
    The Swiss food giant has reported damage to two of its buildings, one of which was closed and production halted. The company says all employees are safe and accounted for.
  • GlaxoSmithKline
    Operations at one of its manufacturing plants is suspended for several days as damage is assessed.
  • Procter & Gamble
    A company spokesperson has reported that the majority of the consumer product company’s employees have been accounted for. It has suspended operations at its fabric care products plant.
  • Autoliv
    The world’s biggest producer of car safety products reported that it was forced to halt operations at one of its plants due to infrastructure damage.

Some telecom companies are also reporting damage to underseas cables.

An official from Chunghwa Telecom, who asked not to be named, said the affected cable belongs to the Asia Pacific Cable Network 2, which is owned by a consortium of 14 telecom operators led by AT&T Inc.

Though the emotional effects of such a devastating natural catastrophe will be felt for years to come, it is hoped that the economic effects won’t be so long-lasting. It’s hard to be optimistic when you see the damage, however. Below is a frightening video of the earthquake and tsunami as it unfolds.

Insuring the Wild and Famous

From Charlie Sheen’s recent, eccentric behavior to Lindsay Lohan’s run-ins with the law to Tiger Woods’ reputation damage, insuring the rich and famous (and sometimes out of control) has never been easy. PropertyCasualty360.com takes us on a wild ride to look at specific insurance issues that affect those with a lot of money and, sometimes, a lot of risky behavior.