Kumamoto and other southwestern prefectures on the Japanese island of Kyushu were devastated by a pair of powerful earthquakes and hundreds of aftershocks in April, leaving 48 dead and hundreds injured, according to government figures.
The economic and property damage from the earthquakes – the gravest to hit Japan since the 2011 disaster that triggered a violent tsunami – has been equally crippling. More than 80,000 residential and commercial buildings are estimated to have been damaged or destroyed, according to local press. An entire stone wall of the 400-year-old samurai-era Kumatomo Castle collapsed to rubble. Major retailers such as Aeon and Izumi as well as factories of global automobile manufacturers temporarily closed up shop.
RMS, the Newark, California-based catastrophe risk management firm, has told PERE the total economic property damage, including insured and uninsured residential, commercial and industrial buildings, is estimated to be between $5.5 billion and $7.5 billion. The firm said it had to revise its initial damage estimate of around $3.5 billion, which was published in a report in late April, after further analyzing the data emerging from the affected areas.
The Kumatomo earthquake has led to the second-highest property insurance payout of any Japanese calamity so far, with around 68,913 damage claims received by the General Association of Japan, according to the Nikkei Asian Review.
As one of the most seismically active areas on Earth, Japan has imposed stringent earthquake-resistant building codes to limit the impact of such catastrophes. According to amendments made to the seismic building regulations in the Building Standard Act in 1981, a building should only suffer cracks after a mid-sized earthquake of 5 to 7 magnitude, and should not collapse if a higher magnitude earthquake strikes. Buildings built to these regulations are called ‘shin-taishin’ while the ones using dated building codes are called ‘kyu-taishin’.
According to Nicholas Wilson, associate director for JLL Capital Markets in Japan, banks are generally reluctant to lend on kyu-taishin buildings and even tenants have started to prefer shin-taishin buildings following the 2011 earthquake. Indeed, most of the buildings that collapsed in the Kumamoto region – including mixed-use buildings and older, traditional residential dwellings – were built using old standards. However, there have also been cases of newer properties collapsing because they were unable to withstand multiple earthquakes of such high intensity