Reuters Investigates

Japanese quake cost bad, but far from the worst

By Ben Berkowitz

The March 11 Great Tohoku Earthquake in Japan was a tragic disaster of historic proportions — but from a purely financial standpoint it pales in comparison. (For a special report on insurers, click here.)

Estimates are still coming in but it seems likely the quake will end up ranking as the costliest of the last generation in insured losses, surpassing even the Northridge earthquake that struck southern California in 1994. (The one that collapsed a number of major freeways, by way of reference).

But looking back historically, it is dwarfed by two temblors in particular — the New Madrid quake of 1812 and the San Francisco quake of 1906. If those events happened today, they would each cause nearly $100 billion in *insured* losses, to say nothing of their total economic impact.

Great Tohoku comes in fourth on that all-time list, assuming the higher end of AIR Worldwide’s loss estimate.

Read the special report “Japan quake reveals cracks in insurance system” in multimedia PDF format here.

Is a 10 percent chance of disaster too high for a nuclear power station?

Kevin Krolicki has another alarming special report from Japan today challenging the assertion that the disaster facing Fukushima Daiichi nuclear plant was beyond expections.

The report quotes Tokyo Electric’s own researchers who did a study in 2007 on the risk of tsunamis: 

The research paper concluded that there was a roughly 10 percent chance that a tsunami could test or overrun the defenses of the Fukushima Daiichi nuclear power plant within a 50-year span based on the most conservative assumptions.

But Tokyo Electric did nothing to change its safety planning based on that study, which was presented at a nuclear engineering conference in Miami in July 2007.

Read the full special report in PDF format here.

All Japan, all the time

Two more special reports from Japan today: first up, a look at how globalization has made companies around the world vulnerable to a shock like the earthquake. ”Disasters show flaws in just-in-time production.”

The PDF version, here, has a nice graphic showing the location of Japan’s ports, some of which have been hard hit by the disaster.

The second report takes another look at the Fukushima Daiichi nuclear plant. It makes worrying reading:

TOKYO (Reuters)- When the massive tsunami smacked into Fukushima Daiichi, the nuclear power plant was stacked high with more uranium than it was originally designed to hold and had repeatedly missed mandatory safety checks over the past decade.

 The Fukushima plant that has spun into partial meltdown and spewed out plumes of radiation had become a growing depot for spent fuel in a way the American engineers who designed the reactors 50 years earlier had never envisioned, according to company documents and outside experts.

The full story is here: “Fuel storage, safety issues vexed Japan plant.”

Battling meltdowns, nuclear and fiscal, in Japan

Check out two special reports out of Tokyo today.

The first examines what has happened at the Fukushima Daiichi nuclear plant since Friday’s massive quake: “Mistakes, misfortune, meltdown: Japan’s quake” (PDF version here)

 Here’s how one expert sums up the situation:

“They might have been prepared for an earthquake. They might have been prepared for a tsunami. They might have been prepared for a nuclear emergency, but it was unlikely that they were prepared for all three,” said Ellen Vancko, an electric power expert with the Union of Concerned Scientists.

Global Economics correspondent Alan Wheatley looks at the outlook for Japanese debt as the nation rebuilds in his special report: ”Why Japan will avert a fiscal meltdown”

Masaru Hamasaki, a senior strategist at Toyota Asset Management in Tokyo, said the severity of the challenge facing Japan should not be underestimated.

The numbers killed in last Friday’s quake centred on Sendai in northeastern Japan will far exceed the 6,400 toll from the 1995 temblor in Kobe.