Response tothe Great East Japan earthquake

At 2:46 p.m. on March 11, 2011, the largest earthquake in recorded Japanese history, with amagnitude of 9.0 on the Richter scale, struck off the coast of Sanriku, causing unprecedented
damage to the Tohoku and Kanto regions, with violent tremors and a massive tsunami. The
Japan Meteorological Agency named this earthquake, “The 2011 off the Pacific coast ofTohoku Earthquake,” while the Japanese government decided to collectively call the disaster“The Great East Japan Earthquake,” which referred to the damage caused by the earthquake,the subsequent tsunami, and aftershocks.
Responding to this devastating disaster, the non-life insurance industry and the Japanese
government were united to take initiatives to promptly and steadily make insurance payouts
to support the reconstruction of the lives of policyholders.
Summary of the Great East Japan Earthquake
Outlook of the Earthquake(i) Date and Time: Friday, March 11, 2011, 14:46 JST (05:46 UTC)(ii) Hypocenter:
Sanriku-oki (N38.1, E142.5)
Distribution of seismic intensity: Estimated distribution of seismic intensity(iii) Depth:
24 km(iv) Magnitude:
9.0(v) JMA Seismic Intensity:
The intensity of 7 was recorded in Kurihara
City, Miyagi Prefecture, and the intensity of a6-upper was recorded in 34 cities and towns
in four prefectures of Miyagi, Fukushima,
Ibaraki and Tochigi, in addition to a wide areaof Japan from Hokkaido to Kyushu, mainly inthe eastern part of Japan, where the intensityof between a 6-lower and 1 was recorded.
(vi) Number of aftershocks:
Seismic intensity
The number of aftershocks so far (as at noon,76-upper
March 8, 2012) is as follows.
6-lower24

Maximum seismic intensity

No. ofaftershocks

6-upper

26-lower

25-upper105-lower

33

4

184

5-upper
5-lower
43
21Sources: “Monthly Report on Earthquakes and Volcanoes in Japan, March 2011” of the Japan
Meteorological Agency

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2013

Summary of damage (as of March 11, 2013)(i) Casualties:
Death:
18,493 people
Missing:
2,683 people
Injured:6,217 people(ii) Residential damage:
Total collapse:
128,801 houses
Half collapse:
269,675 houses
Partially collapse: 756,814 houses* Prepared by JER based on “Monthly Report on Earthquakes and Volcanoes in Japan, March 2011” of theJapan Meteorological Agency and “The 2011 off the Pacific coast of Tohoku Earthquake (the Great EastJapan Earthquake) (No. 147)” of the Fire and Disaster Management Agency

Initiatives taken in the wake of the Great East JapanEarthquake
1. Initiatives taken by the non-life insurance industry
To carry out the social mission of earthquake insurance, “Contribute to establishing a stableliving for the victims,” the General Insurance Association of Japan (the “GIAJ”) establishedan “Earthquake Insurance Central Command,” and the non-life insurance industry unitedacross all member companies to take the initiatives described below. As a result, as of May
31, 2012, the overall non-life insurance industry paid earthquake insurance of approximately
1,234.5 billion yen.
(1) Enhancement of information provision to customers
The GIAJ prepared posters (approximately 80,000 sheets) and leaflets (approximately 546,000copies) that presented inquiry addresses and telephone numbers of non-life insurancecompanies, and presented and distributed them mainly to municipal government offices andevacuation centers. It also published a list of inquiry addresses of member companies in 18
newspapers, while it broadcast 500 radio commercial messages about the inquiry addressesof the GIAJ, and released advertising (on 12 regional television stations in affected areas)
to encourage policyholders to make earthquake insurance claims. Moreover, it introduced
special measures to the no-entry zone and other areas in the wake of the accident at theFukushima Daiichi Nuclear Power Plant, and published payments of earthquake insurance in
two newspapers in Fukushima Prefecture.
(2) Strengthening support for customers who are unsure about their insurance companies
The GIAJ established an “the Center for Searching Earthquake Insurance Contracts” forcustomers who were unsure about which insurers their earthquake insurance and other nonlife insurance contracts were concluded with because they had lost their insurance policies,
due to the disaster and other reasons. It helped confirm customers’ non-life insurancecompanies through the specially designated free telephone services and the web page. In
the same manner, each member company also dealt with inquiries from customers who wereunsure about their insurance companies.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201325

(3) Prompt insurance payouts by streamlining loss confirmation procedures and survey ofearthquake insurance
Because the tsunami and fires caused losses across large areas of the coastal regions inIwate, Miyagi and Fukushima prefectures, non-life insurance companies carried out a joint
loss survey, in what was an industry’s first. Non-life insurance companies identified areas
with the same level of losses through the joint survey, and identified areas that had sustained
devastating damage from the disaster as “total loss areas” using aerial and satellite
photography as well as tours of the areas themselves. As a result, by waiving the need for
onsite inspections, member companies promptly paid total earthquake insurance claims forearthquake insurance contracts in total loss areas. To facilitate claims by customers, the GIAJ
also published the total loss area on its website.
(4) Simpler procedures for earthquake insurance claims
In conducting an earthquake loss survey on wooden buildings and on furniture in suchbuildings, in addition to onsite inspections, non-life insurance companies adopted a loss
inspection in which, provided certain requirements are met, onsite inspections are waived andthe loss is inspected based on photos taken by customers and other self-reported documents.
They also conducted inspections based on self-reported documents for claims in the no-entry
zone and other areas where entries were limited in the wake of the accident at the Fukushima
Daiichi Nuclear Power Plant.
(5) Donation of the relief moneyTo help support people in the areas affected by the Great East Japan Earthquake, the GIAJ
received donations from 26 member companies and donated relief money of 1 billion yen to
the Japanese Red Cross Society.
2. Initiatives taken by JER
JER’s mission and role in the face of major disasters
Our mission in the face of major disasters is to financially facilitate prompt insurance
payouts by non-life insurance companies through “reinsurance payouts” to support the earlyreconstruction of the lives of policyholders in the afflicted areas.

JER

Reinsurance
payoutNon-life
insurancecompanies

Insurance
payoutFinancial backup

26

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2013

Early

Policyholders, reconstruction
etc.

of a steady living

Prompt reinsurance payment
To promptly make reinsurance payouts to non-life insurance companies, we established an
Earthquake Disaster Countermeasures Headquarters on the day the Great East Japan Earthquake
took place, and took steps to promptly secure funds and make reinsurance payouts based on
approximate projections, in cooperation with non-life insurance companies and the government.
As a result, we made reinsurance payouts of approximately 1,243.9 billion yen for approximately
760,000 policies(Note) by the end of March 2013.
(Note) The figures do not include reinsurance payouts related to aftershocks and other earthquakes.

Securing funds promptly
Preparation of approximately 322.4 billion yen in cash by selling assets within 20
days of the occurrence of the earthquake (March 31, 2011).
Receipt of reinsurance payouts of approximately 426.8 billion yen (based on
approximate projections) from the government within 73 days of the occurrenceof the earthquake (May 23, 2011).
Because the earthquake insurance system is a system whose income and expenditures aredesigned to be balanced out after a long period of time, all premiums received, after deducting
necessary expenses, are individually set aside as reserves by non-life insurance companies and thegovernment.
Insurance claims paid to policyholders affected by the earthquake were funded from these reserves.
To promptly secure funds for reinsurance payouts to non-life insurance companies, we quickly
started to sell our reserve assets from the first business day after the occurrence of the earthquake.
At the same time, cooperating with the government, we flexibly requested the government’sreinsurance payouts and implemented procedures for receiving the payments.

Sales ofprivate assets

Receipt of thegovernment’s
reinsurance
payouts

Funds forinsurance
payouts

Reinsurance payouts based on approximate projections
Provision of funds of approximately 968.6 billion yen to non-life insurancecompanies within 75 days of the earthquake (May 25, 2011).
To facilitate prompt insurance payouts by non-life insurance companies to policyholders, we madereinsurance payouts based on approximate projections for the first time since the establishment ofJapan’s earthquake insurance system.
Payments based on approximate projections is a system in which estimated reinsurance payouts
based on rough projections on the amount of damage incurred by the relevant earthquake. The
system is designed to make it possible to provide in advance the funds necessary for insurance
payouts to non-life insurance companies before they actually pay insurance claims to policyholders
who are afflicted by an earthquake.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201327

Status of the burden of liabilities associated with theGreat East Japan Earthquake
The reinsurance scheme for the Great East Japan Earthquake and the share of liabilities forthe damage from the earthquake between non-life insurance companies and the government
are as follows:
Reinsurance scheme at the time when the Great East Japan Earthquake took place(from April 1, 2009 to May 1, 2011)
Payable reinsurance claim(excluding those of aftershocks)(as at the end of March 2013)
Approximately 1,243.9 billion yen(Payable insurance claims)
Up to1,925 billion yen

Up to115 billion yen

905 billion

5.5 trillion yen

50%

115billion

95%

3,396.25 billion
905 billion

50%
178.75 billion(Liability)

Non-life insurance companies Approximately 679.4 billion yen
The government

Approximately 564.4 billion yen

Liability limit

28

Non-life insurance companies (including JER)
The government

1,198.75 billion yen
4,301.25 billion yen

Total

5,500.00 billion yen

Japan Earthquake Reinsurance Co., Ltd. Annual Report 20135%

Modification of the reinsurance scheme after theGreat East Japan Earthquake
Reserves of non-life insurance companies noticeably decreased with the burden of liabilities
after the Great East Japan Earthquake. As a result, to reinforce the continuity and the stabilityof the scheme to deal with large-scale earthquakes in the future, the reinsurance scheme wasrevised on May 2, 2011, as shown below.
Reinsurance scheme after the Great East Japan Earthquake took place(from May 2, 2011 to April 5, 2012)(Payable insurance claims)
Up to115 billion yen

Up to871 billion yen

378 billion

50%

115billion
378 billion

5.5 trillion yen

4,397.55 billion

95%

231.45 billion

5%50%Liability limit
Non-life insurance companies (including JER)
The government

724.45 billion yen
4,775.55 billion yen

Total

5,500.00 billion yen

Note: Please refer to page 22 for information on the mechanism of reinsurance and the latest reinsurance scheme.

Status of reinsurance payments associated with theGreat East Japan Earthquake(As of March 31, 2013)
By prefectures
RegionTohokuHokkaido
Aomori
Iwate
Miyagi
Akita
Yamagata
Fukushima
Subtotal

No. of policies

Reinsurance claims (million yen)

1,204
7,912
26,254
243,724
2,109
3,662
74,977
358,638

1,354
5,072
57,389555,569
1,190
2,933
158,063780,219

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201329

Region
IbarakiTochigi
Gunma
Saitama
Chiba
Kanto,Tokyo
Koshinetsu,
Kanagawa
Shizuoka
Niigata
Yamanashi
NaganoShizuoka
Subtotal
Other prefectures
Total

No. of policies

Reinsurance claims (million yen)

105,129
37,601
8,519
35,89392,542
96,531
21,881
1,460
3,686
354
976
404,572378
764,792

155,145
43,8397,489
27,945
112,632
91,047
18,942
1,300
2,422
487
735
461,987343
1,243,904

Note 1: The number of policies represents the number of insurance policies of earthquake insurance contracts, underwhich insurance claims were paid.
2: The figures do not include reinsurance payouts related to aftershocks.

By properties and loss categories
Tohoku region
Buildings

Total loss
Half loss
Partial loss
Total

Personal property

Total

No. ofproperties

Reinsurance
claims(million yen)

No. ofproperties

Reinsurance
claims(million yen)

No. ofproperties

Reinsurance
claims(million yen)

22,82264,465191,258
278,545

206,120
301,433
101,019608,572

13,13575,48046,112
134,727

43,283
120,715
7,647
171,646

35,957
139,945
237,370
413,272

249,404
422,148
108,666
780,219

Non-Tohoku region
Buildings

Total loss
Half loss
Partial loss
Total

Personal property

No. ofproperties

Reinsurance
claims(million yen)

No. ofproperties

4,981
33,112297,895
335,988

46,549158,324
177,966
382,839

683
34,312
95,911130,906

Reinsurance
claims(million yen)
2,218
60,83917,78780,845Total
No. ofproperties

Reinsurance
claims(million yen)

5,664
67,424
393,806
466,894

48,768219,163
195,753
463,685

Note 1: The number of properties represents the number of properties (by building and personal property) under theearthquake insurance contracts, whose insurance claims were paid.
2: The figures do not include reinsurance payouts related to aftershocks.

30

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2013