Japan earthquake insured losses could surpass US$3 billion

Latest estimates from Verisk also reveal that the earthquake's impact accounted for stringent building codes

Japan earthquake insured losses could surpass US$3 billion


By Kenneth Araullo

Verisk’s Extreme Event Solutions business unit has released its estimates for insured property losses resulting from the M7.5 earthquake that struck near Japan’s Noto peninsula on January 1, revealing that the losses are projected to range between JPY260 billion (US$1.8 billion) and JPY480 billion (US$3.3 billion).

The United States Geological Survey (USGS) identified the earthquake’s epicenter on the west coast of Japan, attributing its cause to shallow reverse faulting in the Earth’s crust. Japan, known for its seismic activity, usually experiences most earthquakes off its east coast due to the Pacific plate’s subduction beneath the country. However, this earthquake occurred on the west coast, a result of crustal deformation from broader plate movements.

The Noto Peninsula earthquake led to significant damage in areas surrounding and south of the epicenter. Ishikawa Prefecture, particularly Wajima city, was heavily impacted, including a large fire. Ground shaking and liquefaction-related damages were also observed in other prefectures such as Niigata and Toyama. Additionally, tsunami waves exceeding one meter caused inundation of buildings along the coast, notably in Wajima, Suzu, and Noto.

It is noteworthy that Japan’s building codes are among the most stringent globally, with rigorous implementation since 1981. The seismic code requirements in the regions affected by the 2024 Noto Peninsula earthquake are particularly stringent, even by Japanese standards, especially compared to the southern parts of Japan.

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