Catastrophe risk modeller CoreLogic’s modelled insured loss estimate for the devastating, shallow magnitude 7.5 earthquake, which hit western Japan on New Year’s Day, includes damage from ground shaking, fires following, tsunamis, and liquefaction.
CoreLogic estimates that insured losses in the country from the quake could be between $1 billion and $5 billion.
The estimated range includes damage to buildings and their contents, business interruption or the costs associated with additional living expenses, and damage to residential, commercial, industrial, and Kyosai structures are included.
The range excludes damage to government property; infrastructure such as road and rail networks; water and electric power systems; and oil and gas pipelines.
Initial Japanese reports indicate material damage in the smaller towns and cities nearby the Noto Peninsula, such as Wajima and Suzu. The Mayor of Suzu said that over 90% of the 5,000 homes in the city may have been damaged or destroyed. However, the earthquake spared major economic centers like Tokyo, reducing the loss potential from this event, says CoreLogic.
Karen Clark & Company said that total insured losses from the earthquake will reach $6.4 bn.
According to Karen Clark, the total insured losses from the earthquake which struck off the west coast of the island of Honshu in Japan will reach $6.4 billion, with residential losses accounting for over two-thirds of the total.
Outlining the particulars of the event, the risk modelling firm said that this 2024 Noto Peninsula Earthquake impacted the four prefectures of Ishikawa, Niigata, Toyama, and Fukui.
According to Verisk’s “Extreme Event Solutions” business unit, insured losses from the earthquake that struck near the Noto peninsula in Ishikawa prefecture, Japan, will be between approximately US $1.8 billion and $3.3 billion (JPY 260-480 billion).
The United States Geological Survey (USGS) reported on January 1st, 2024, the M7.5 earthquake on the west coast of Japan occurred due to shallow reverse faulting in the Earth’s crust, causing extensive damage around and south of the epicentre.
Verisk reported the Noto Peninsula earthquake also generated a tsunami of over one meter inundating many buildings along the shore, especially in Wajima, Suzu, and Noto.
The analytics company noted that most of the heavy damage occurred in Ishikawa prefecture and particularly in Wajima city. The event particulars included a large fire, damage from ground shaking and liquefaction observed in other prefectures such as Niigata and Toyama.
The earthquake was a result of shallow reverse faulting, which KCC explained as geological strata on one side of a fault plane being pushed up over the strata on the other side.
Catastrophe risk modeller Moody’s RMS estimates that the total insurance industry loss from the magnitude 7.5 earthquake that struck Japan on New Year’s Day will likely fall between $3 billion and $6 billion.
This estimate from Moody’s RMS is based on analysis of the devastating quake using the risk modellers Japan Earthquake and Tsunami high-definition (HD) Model.
The range reflects property damage, contents, and business interruption across residential, commercial, and industrial lines, and also includes both private and mutual markets.
Moody’s RMS explains that the up to $6 billion range includes losses from strong ground shaking, earthquake-induced fires, tsunami inundation, land sliding, and liquefaction-induced ground deformation, as well as taking into account sources of post-event loss amplification, and inflation.
However, the total insured loss estimate does not include losses to non-modeled exposures such as transport and utility infrastructure, government, or automobile lines, says the firm.
Several cities and towns experienced very high ground motion, including Shika, Nanao, Wajima, Suzu, Anamizu, and Noto.
It was the largest earthquake since 2015, and the deadliest in the country since 2016.
Machiya homes make up more than a third of the residential inventory in Ishikawa Prefecture, and they can be especially vulnerable during earthquakes because their heavy earthen walls, traditional timber construction, and tiled roofs are more prone to collapse than modern materials like steel and reinforced concrete.
KCC also observed that the long narrow layout of Machiya homes can make the structures more susceptible to lateral forces during strong shaking.
Most of the remaining residential buildings are 1‐ and 2‐story wooden buildings. These buildings possess better earthquake resistance than Machiya buildings because they have wooden frames partially reinforced by light metal and are anticipated to have suffered lower levels of damage.
However, in the areas of significant ground motion, these wood buildings can be severely damaged.
Across Ishikawa, a third of all residential buildings date from before 1981. Commercial and industrial buildings in the affected cities are predominantly steel construction, which has significantly higher earthquake resistance.
Residential property losses are expected to exceed those of commercial and industrial properties.
Shortly after 4pm local time on January 1st, 2024, the earthquake occurred at a shallow depth of 6.2 miles (10 km) beneath the Earth’s surface. Shallow earthquakes tend to cause more damage than deeper ones owing to the proximity of the released energy to the Earth’s surface.
A powerful earthquake with a magnitude of 7.6 struck central Japan, specifically in Ishikawa Prefecture, causing significant destruction and prompting emergency evacuations.
The earthquake led to several fatalities, destroyed buildings, and resulted in power outages for tens of thousands of homes. Tsunami warnings were issued for coastal areas, with residents being advised to evacuate to higher ground. This quake is notable for being one of the deadliest in Japan in recent years, with the death toll surpassing 100 and over 200 people reported missing.
The Japanese government ordered evacuations for more than 97,000 people across nine prefectures on Japan’s western coast. Many of these evacuees spent the night in sports halls and school gymnasiums. Prime Minister Fumio Kishida has instructed search and rescue teams to expedite efforts to save lives, despite difficulties in accessing quake-hit areas due to damaged infrastructure.
In addition to the immediate impact, concerns about the possibility of heavy snowfall in the region were raised, which could potentially trigger secondary disasters like landslides.
The ongoing seismic activity in the area poses a continuous risk, with more quakes potentially occurring in the coming days.
The earthquake comes at a sensitive time for Japan’s nuclear industry. No irregularities have been confirmed at nuclear plants along the Sea of Japan, including those in Fukui Prefecture. The Shika plant in Ishikawa, the closest nuclear power station to the epicenter, had already halted its reactors for inspections and reported no impact from the quake.
The situation continues to evolve, with rescue and relief efforts underway amidst challenging conditions. The Japanese government and aid organizations, including the Self-Defence Forces, are coordinating a comprehensive response to manage the aftermath and assist affected communities.