“The insurance industry will fulfill its traditional role as an economic first-responder, helping Japan recover from today’s devastating quake, just as it has done in New Zealand and Chile,” said Dr. Robert Hartwig
, an economist and president of the I.I.I. “What makes today’s natural disaster so extraordinary is that four of the five costliest earthquakes and tsunamis in the past 30 years have occurred within the past 13 months, once you include what happened on March 11 in Japan.” Prior to today’s earthquake, insured earthquake losses worldwide dating back to February 2010, totaled an estimated $23 billon.
“The Japanese nonlife insurance industry is very large—third only to the United States and Germany—with $107 billion in premiums written in 2009,” said Dr. Hartwig. “The implication is that a larger share of losses are likely to be retained by domestic Japanese insurers and reinsurers than was the case with recent earthquakes in Chile and New Zealand.” Hartwig also noted that some Japanese seismic risk has been securitized through the catastrophe bond market, though it is too soon to tell if payouts under any of those bonds will be triggered.
The earthquake that struck Northridge, California, in January 1994 remains at the top of the list, which goes back to 1980, having caused $15.3 billion in insured losses at the time, or $22.5 billion in 2010 dollars. The February 2011 quake in New Zealand (up to $10 billion in insured losses), the February 2010 earthquake and tsunami in Chile ($8 billion), and the September 2010 quake in New Zealand ($5 billion), rank second, third, and fourth, respectively, on the list of costliest earthquakes, according to loss estimates compiled by Munich Re and released earlier today. The fifth-costliest earthquake worldwide since 1980 also occurred in Japan, in January 1995, causing $3 billion in insured losses at the time ($4.3 billion in 2010 dollars).
SIGNIFICANT EARTHQUAKES/TSUNAMIS WORLDWIDE: 1980 Ã¢â¬" FEBRUARY 2011; 10 COSTLIEST EVENTS ORDERED BY INSURED LOSSES
Source: © Munich Re, Geo Risks Research, NatCatSERVICE – As at 11 March 2011.
According to the U.S. Geological Survey, today’s 9.0 magnitude quake was centered approximately 230 miles northeast of Tokyo at a depth of approximately 17 miles. The quake is being reported as one of the largest in a century, with the broadcaster NHK describing it as the worst ever recorded in Japan. In Northern Japan the tsunami that followed the earthquake washed away houses and cars and pushed ships aground. The Pacific Tsunami Warning Center issued a tsunami warning for most of the region, saying that the tsunami could reach the coastal areas of Russia, Taiwan, Hawaii, Indonesian, the Marshall Islands, Papua New Guinea and Australia. The center also extended the tsunami alert to the U.S. West Coast, Mexico, Central America and South America. The tsunami warning was later expanded to include much of Alaska, and all of California coast north from Santa Barbara and into Oregon.
“The U.S. has expanded significantly its ability to detect, and respond, to tsunamis since December 2004, when a devastating earthquake caused a tsunami in Indonesia, which killed more than a quarter million people, causing $10 billion in damage—$1 billion of that insured,” Dr. Hartwig stated. “The National Oceanic and Atmospheric Administration (NOAA) and the National Weather Service have in the past six-plus years made great strides in protecting and preparing Americans for the possibility of tsunamis striking the U.S.”
NOAA, for instance, increased to 39 from six the number of tsunami detection stations NOAA has installed as part of its worldwide Tsunami Warning System
. Moreover, the number of U.S. communities NOAA recognizes through the National Weather Service’s Tsunami Ready
program has grown to include 83 communities in 10 states as well as U.S. territories.
Additional I.I.I. resources include:
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