EQECAT seismic and engineering experts discuss the recent M9 Tohoku Pacific Offshore earthquake that has impacted northern Honshu island. Occurring Friday March 11 (local time), this massive earthquake occurred on the Japan Trench megathrust fault, triggering ground motions felt through most of Honshu Island and up to Hokkaido and a tsunami with waves up to 23 feet high in places along the Japanese coast, and tsunami damages that extended to Hawaii and the US mainland Pacific coast.

1. Understanding the M9.0 Tohoku Pacific Offshore Earthquake EQECAT Web Briefings17 March 2011 www.eqecat.com

2. The M9 Tohoku Pacific Offshore Earthquake - An appreciation for uncertainty Unprecedented event in recent human history Unanticipated magnitude in this system A human tragedy is unfolding When events occur they are either within our expectations, or outside them. We learn from events that are outside of our expectations. This is an unprecedented learning experience

3. The M9 Tohoku Pacific Offshore EQ The Earthquake Paul Thenhaus, Senior Geologist Effects of the Earthquake Kent David, Manager Consulting Services Estimating losses to Insurers Omar Khemici, VP Model Development Questions and Answers Responding to Live and emailed questions

4. The 11March 2011, M9.0 Tohoku Pacific Offshore Earthquake: Seismological and Tsunami Aspects Paul C. Thenhaus Senior Geologist

5. Agenda Geo-Facts At a Glance Geo Background What Happened? Ground Motion Tsunami Conclusions

6. Geo – Facts at a Glance Magnitude 9.0 (initially 8.7-8.9 raised within days by JMA & USGS) Depth 32 km (19.9 miles) Slip Type Megathrust rupture on the Japan Trench Subduction Zone Estimated RA 90,000 km2 Rup Duration 2.0 - 2.5 minutes main rupture, up to 4 minutes extended rupture Shake Duration 90 - 120+ sec Peak PGA  2.9 g, more generally 0.20 g to 0.60 g along coastal Honshu Strong MotionRecords 388; This will be the best ever recorded great earthquake Ground Failure Locally – landslide, settlement Tsunami 2 – 7+ m; Devastating in estuaries alluvial plains

7. Megathrustfault Geo – Background

8. Geo – Background An M9.0 wasnot thoughtpossible: Seismological Black Swan! From Heaton and Kanamori (1984)

9. Geo – Background This probability wasfulfilled by the 9 Mar M 7.2Miyagi earthquake. But the M 7.2 was only a foreshock to the 11 MarM 9.0 earthquake! Probability of M 8.2 was given as 20% (from HERP)

10. What Happened? An unprecedented multi-segment megathrust rupture resulting in an M 9.0 earthquake – the largest to ever occur in Japan.

11. What Happened? Finite Fault Rupture Model Rupture duration: Main  2.0 minutes Extended  4 minutes Rupture length: Main  200 km Extended  500 km Rupture area: Main  34,000 km2 Extended  90,000 km2 Maximum Displacement:  17 m (from USGS)

12. What Happened? GPS station vectors show parts of NE Honshu moving up to 4 m east during the earthquake. Coastal areas moved down up to 0.75 m during the earthquake.

13. Ground Motion (from USGS)

14. Ground Motion (from NIED)

15. Ground Motion 2.9 g 2.0 g 1.8 g 1.8 g 1.8 g 1.3 g 1.3 g 1.3 g 1.2 g 1.1 g PGA is a measure of short-period (high frequency) motion 1 gal = 1 cm/s/s (from NIED) The 10 Largest Recorded Ground Motions

16. Ground Motion  2.3 minutes (from NIED)

17. Ground Motion (from NIED)

18. Ground Motion 1 1 2 2 3 4 3 4 (from NIED)

19. Ground Motion (from NIED)

20. Tsunami (from NOAA) Inundation Propagation Generation Shoaling & Focusing

22. Located immediately in epicentral area

23. Coastal tectonic subsidence was 0.4 to 0.75 m

24. Wave heights of 2 – 7+ m

25. More damaging than shaking

26. 10,000+ may have perished in tsunami inundationGPS coastal tectonic subsidence

27. Conclusions The M 9.0 Tohoku Offshore Pacific earthquake was unanticipated - muchlarger than over 30 years of research had indicated possible. A multi-segment megathrust rupture on the Japan Trench subduction zone. Tectonic vertical subsidence likely intensified tsunami. Unusually high ground accelerations at some locations: larger areas had high,but more normal accelerations associated with an earthquake of this size. The co-seismic, vertical motion of the seafloor induced a devastating tsunamiresulting in more damage than the shaking itself and likely extreme loss of life. Lesson learned: Earthquake hazard cat-models in megathrust regions need to account for the possibility of rare multi-segment ruptures resulting in unprecedented high magnitudes; seismological “Black Swans”.

28. The 11March 2011, M9.0 Tohoku Pacific Offshore Earthquake: Damage and Loss Drivers Mr. Kent David Manager, Consulting Services

29. Agenda Tsunami Ground Shaking Fire Secondary Loss Drivers Infrastructure Damage Nuclear

30. Tsunami Factors impacting extent of damage Wave height Prevailing direction Bathymetry Two fold impact Dynamic impact of large waves Effective increase in sea level

31. Tsunami effects 0:21 0:49 1:35 3:07 4:05 5:47 http://www.facebook.com/video/video.php?v=1605260179420

32. Tsunami effects

33. Shake damage Shake damage typically seen at PGV’s ≥ 28 cm/s Damage exacerbated by duration Large area of borderline damage causing motion

34. Shake Damage Estimation For a large geographic area, ground motions from the Tohoku event were such that mean damage ratios are expected to be low

35. Shake Damage Estimation At any one “mean” value, observations show there is a large spread in the damage observed

36. Shake Damage/Loss Estimation The uncertainty in damage extends into a potential for loss, even if the deductible is far greater than the mean damage

37. Shake Damage

38. Shake Damage

39. Fire Following Earthquake Fires observed, no widespread conflagration Significant fire following earthquake losses tend to occur in areas where significant structural damage and infrastructure damage has occurred Areas most likely to have suffered widespread fires also subject to tsunami flooding

40. Secondary Loss Drivers Significant losses to infrastructure in Northeastern Honshu Ports and inland marine Railroads Roadways Power and energy production and distribution systems impacted

41. Secondary Loss Drivers Shortage of gasoline, medical supplies, food Gaps in industrial production pipeline Auto Semiconductor Resulting Contingent Business Interruption losses NOT modeled

43. 20 km evacuation zone adds to magnitude of crisis

44. BI / Contingent losses likely to be affected

45. Loss of power capacity

46. Workforce displacement

47. Transportation disruption

49. Agenda Economic setting of affected region Insurance policies in Japan Insurance market exposure Losses

50. Economy of Affected Area Population 9.6% (or 12,265,033) Number Households 8.7% (or 4,288,947)

51. Economy of Affected Area

52. Property Earthquake Insurance in Japan Non-life Dwelling Risks Business Risks (Commercial & Industrial) Kyosai

53. Earthquake Exposure inAffected Area $161 BN (3.5%) $303 BN (6.1%) $682 BN (5.8%)

54. Payout RulesEarthquake Endorsement for Dwelling Risks Insured Amount is 50% of Replacement Value

55. Payout Rules Kyosai Risks (Zenkyoren Policy)

56. Payout RulesBusiness Risks First Loss Policy Reduced Indemnity Policy Insured Amt. Insured Amt. Earthquake Liability Earthquake Liability

57. Payout RulesEarthquake Fire Expense Insurance (EFEI) Earthquake fire expense insurance (EFEI) pays 5% of the insured amount under FFE and Tsunami in the following situation: For a building, when half or more of the insured building was damaged. For contents, when half or more of the insured building that has the contents was damaged or contents itself was totally lost. The limits are 3M JPY for dwelling and commercial properties and of 20M JPY for factory risks. The limit is per event and per site.

58. Tsunami Coverage

59. Losses Loss estimates exclude Contingent BI and nuclear accident consequences

60. Breakdown of Property Losses

61. Auto Standard auto policy coverages exclude earthquake coverage About 300,000 people in tsunami areas (1 per household) – Assume 20% of cars have earthquake cover 115,000 private vehicles impacted and about 23,000 have earthquake coverage Loss: 23,000 x $10,000 = $230M Freight Vehicles (Fleets) About 15% of total premium, 80M vehicles in Japan (128M population) 80M x 15% x 300k/128m * 50% = 14,000 vehicles Loss: 14,000 x $20,000 = $210M Dealerships – 10,000 x $15,000 = $150M Loss: $0 – 1 B

62. Marine Fishing Ships Total insured value of Japan $13B Miyagi + Aomori + Iwate : 13.5% of Japan Loss: $0.65 – 1.30B Piers, Wharves and equipment attached In Northeast Japan, 4 mid-sized ports severely damaged (containers, fuel products and dry bulk goods) Loss: $0.5 – 2.0B Total Loss: $1 – 3 B

63. Life Insurance High penetration Average indemnity: $360,000 (JILI) Confirmed dead & missing as of 3/16: 4,277 + 8,194, expected to rise. Assume 60-80% are insured Loss: $2.5 – 3.5 B

66. All questions will be assembled intoan FAQ available within 1 week