8.9 Quake Causes Massive Damage and Tsunamis

Early this morning a large tsunami hit the coast of northeast Japan, killing an estimated hundreds of people and injuring many others. The tsunami was generated by an 8.9 magnitude earthquake approximately 80 miles offshore that caused the widespread disruption of power.

Nations throughout the Pacific area, from Russia to South America and including Hawaii and the U.S. West Coast are on alert for a possible tsunami. The Associated Press reported that Japan’s Prime Minister Naoto Kan said that the disaster caused major damage in wide areas of the nation but that no radiation or radioactive material had been released from nuclear facilities.

According to the U.S. Geological Survey, an earthquake with a magnitude of 8.9 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 washed away houses and cars and pushed ships aground.

The Pacific Tsunami Warning Center issued a tsunami warning for most of the Pacific region, saying that the tsunami could reach the coastal areas of Russia, Taiwan, Hawaii, Indonesian, the Marshall Islands, Papua New Guinea and Australia. The agency 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, all of the California coast north from Santa Barbara and Oregon.

The National Weather Service is expecting tsunami wawes along the Southern California coast. Areas north of Point Conception will experience waves between 3.5 to 7 feet.  The surges are expected to continue throughout the day. 

Insurance Implications

The Insurance Information Institute says this could be one of the costilest quaks in world history.  Insurers and reinsurers worldwide have the financial strength to pay the claims that will emerge after today’s 8.9-magnitude earthquake and the resulting tsunami in Japan but these events, coupled with the severe quakes that recently struck New Zealand and Chile, have placed extraordinary demands on the industry, according to the Insurance Information Institute (I.I.I.).

“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 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).