Japan earthquake could reach $1.8b insured losses – Verisk

The estimate focuses on insured property losses.

The magnitude 7.5 earthquake near the Noto peninsula in Ishikawa prefecture, Japan, last 1 January is estimated by Verisk's Extreme Event Solutions business unit to result in insured property losses between $1.8b and $3.3b. This estimate is significant given the strength and location of the earthquake.

The earthquake caused extensive damage around and south of the epicenter, especially in Ishikawa prefecture, including Wajima city, where there was a large fire. Damage from ground shaking and liquefaction was observed in other prefectures such as Niigata and Toyama.

Tsunami waves over one meter inundated many buildings along the shore, particularly in Wajima, Suzu, and Noto. Japan's building codes, some of the most advanced in the world, have been strictly implemented since 1981. The areas impacted by this earthquake had higher seismic code requirements.

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Verisk’s insured loss estimate does not include:

• Losses to uninsured properties, land, infrastructure, and automobiles.
• Business interruption losses (both direct and indirect).
• Workers’ compensation losses.
• Losses to specific risk categories like civil engineering, marine cargo and hull, aviation risks, transit warehouse risks, movable all risk, and personal accident risks.
• Loss adjustment expenses.
• Losses from non-modelled perils, such as landslides.
• Demand surge impacts, refer to increased costs of materials, services, and labour following a catastrophic event.

The estimate thus focuses on insured property losses, providing a crucial but partial view of the total economic impact of the earthquake. The limitations highlight the broader scope of economic and social repercussions that extend beyond insured losses.