Customer case study Fukushima Offshore earthquake in March 2022

We are able to make a prompt claim payment on our parametric insurance (Business Continuity Expense Insurance) for Fukushima Offshore earthquake occurred in March 2022.

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The event

On March 16, 2022, a 7.3 magnitude earthquake occurred with an epicenter off the coast of Fukushima prefecture. A maximum seismic intensity of 6 upper* was observed in Miyagi and Fukushima prefectures.

Impact on the customer

As a result of the earthquake, the customer, which is in the manufacturing sector, suffered a fire that broke out in an area within the factory. Consequently, a shutdown was forced upon the affected production line.

The policy

The customer had a parametric insurance. Given the index-based nature of parametric insurance, a customer would receive payout based on the identified trigger, or seismic intensity of the earthquake in this instance.

With the parametric insurance cover, the customer could receive a fixed payout amount according to the seismic intensity class of the earthquake and insurance claims would be paid for earthquakes with a seismic intensity of 6-lower or higher.

The payout

On the next business day following the earthquake, we worked with Marsh Japan Co., Ltd., an insurance broker, to contact the customer's head office and its affected factory. We issued an insurance payout to the customer about two months after the earthquake occurrence.

Quick restoration activities which were undertaken enabled the customer to resume their operations in the shortest possible time. On the other hand, not only repair costs for buildings and production facilities, but also various extra costs for restoration were incurred.

The feedback

The feedback

"We purchased this (parametric) insurance because we valued the speed of payout following an earthquake. This experience has enhanced our appreciation of parametric insurance and the value it brings – quick payout and an assured coverage. Additionally, it enabled the swift resumption and recovery of our business and operations. We believe that parametric insurance can enhance our preparedness for the anticipated, major Nankai Trough earthquake that is expected to occur in the near future."

Marsh Japan's comment

The benefit of parametric insurance has truly been recognized. The customer's positive claims experience offered them the agility they needed following the earthquake. Now, they are confident and assured that parametric insurance can enhance the resilience of their business in the event of the major Nankai Trough earthquake, which is of significant concern to the customer.

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