21 April 2016 Insurance

Insured losses from Japan earthquake could hit $2.9bn: AIR

Insured losses from the M7.0 earthquake that struck Kumamoto Prefecture on Japan’s Kyushu Island on April 16, 2016, could be as high as $2.9 billion.

This is the finding of catastrophe modelling firm AIR Worldwide which explained that losses would be in the range of between $1.7 billion and $2.9 billion.

“Kyushu Island continues to take stock of the casualties and widespread losses from two shallow and major earthquakes that struck southwestern Japan last week,” said AIR.

More than 900 people have been injured, with 58 people reported to have been killed.

The Japan Fire and Disaster Management Agency (FDMA) estimates that more than 3,900 residences and 120 non-residential buildings were damaged or destroyed, a number of mudslides resulted, and 14 fires were attributed to the temblors.

Dr Tao Lai, senior principal engineer at AIR Worldwide, said: “Kyushu Island lies on the overriding plate above the Philippine subducting plate to the west of the Nankai subduction zone. The region is exposed to subduction interface, intraslab, and shallow crustal earthquakes.

“During the last 50 years, the region within 150 km (93 miles) of the April 16 earthquake experienced about 55 M5.0 and larger earthquakes, with a few M7.0 or larger interface earthquakes. However, historically there has not been any record of large M8.0 subduction interface earthquakes in this area.”

AIR explained that the range in loss estimates reflects uncertainty in the slip distribution on the fault plane, modelled ground motion, and damage estimation.

“The range of uncertainty captured by the simulated scenarios is expected to capture the marginal impact on losses from the foreshocks, including the M6.2 event that occurred on April 14,” said the catastrophe modelling firm.

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