Japan’s massive earthquake has caused disruptions and damage to the infrastructure of the North-Eastern region of Japan. This region is an area with a high earthquake risk and most infrastructure such as buildings, roads, railways, have been designed to be earthquake resilient. However, because the earthquake exceeded all expectations, in size and length, thousands of buildings, mainly in the area of Sendai in Miyagi Prefecture, have been destroyed or damaged by the incident. According to Japanese officials about 1,450 roads, eight railways and 22 bridges have been damaged or washed away. Restoring this will require huge investment.

The whole transport system was closed down in the aftermath of the earthquake; airports, ports and major telephone networks were closed but are gradually opening up again and no major damages to the telecommunication network have been reported, because as a result of the Kobe earthquake in 1995, Japan highly invested in its telecom’s infrastructure.

The nuclear power crisis remains the highest risk, health risk as a result of exposure to radiation and also major power shortages due to the shutting down of nuclear plants. About a third of Japan's energy supply comes from nuclear power.

Risk and Insurance Implications

A key priority for the institutions and other owners of Japanese infrastructure assets will be their ability to ensure rapid implementation of business continuity plans, as actions taken in the immediate days following the earthquake will dictate the speed at which recovery of infrastructure operations can be restored, mitigating social and economic losses. These actions will vary depending on the type of infrastructure asset concerned and will require industry-specific expertise. The longer term implications of such actions may also be reflected in the level of future insurance cover and deductible levels available for natural catastrophe risks.