Tōhoku earthquake and tsunami (2011)
A magnitude 9 earthquake followed by a tsunami in Japan in 2011, which revealed the scale of contingent business interruption losses in global supply chains.
The Tōhoku earthquake was one of the most powerful ever recorded, and the tsunami that followed overtopped seawalls designed for far smaller waves, leading to the Fukushima nuclear accident. In Japanese insurance, residential property falls under a public reinsurance scheme that absorbed much of the household burden, while businesses and foreign reinsurers carried the rest. But the most lasting lesson lay elsewhere: undamaged plants around the world shut down for lack of components made in the stricken region, notably automotive chips, and contingent business interruption losses caught insurers that had neither modeled nor capped them. Thailand's floods repeated the experience the same year, and the market then tightened cover for unnamed suppliers. The event also showed that seismic models can underestimate the maximum magnitude of a fault.
On March 11, 2011, a magnitude 9.0 earthquake off Tōhoku set off a tsunami that left more than 18,000 people dead or missing; insured losses were put at about 35 billion dollars, and the shutdown of chipmaker Renesas's Naka plant halted production at automakers worldwide.
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