"The insured loss total reflects losses across multiple lines, including local market residential, cooperative insurers, domestic and international commercial and industrial lines, international facultative placements, marine and aviation lines," the modeler explained. "The losses for commercial and industrial risks are modeled to include the impacts of both direct and contingent business interruption. Also included is the expected impact of post-event loss amplification, particularly to the commercial and industrial lines."

Robert Muir-Wood, RMS's chief research officer, says estimating losses is complicated not by the property damage itself, but rather determining insurance take-up rates and restricted terms of coverage. "Residential and commercial earthquake insurance was purchased in areas where people perceived the threat, but the Tohoku earthquake was not an event they were led to expect."  "Insured exposure in Japan is a complex landscape of coverage, varying considerably by class of exposure and line of business," he added.

RMS notes, "The highest uncertainty in loss estimates for the Tohoku earthquake relates to the degree to which corporations are successful in claiming under contingent business-interruption protection. The disruption in the global supply chain of critical parts for just-in-time manufacturing is already leading to downstream interruption in manufacturers operations in key battery, flash memory, mircrochip and automotive production, both in Japan as well as in the U.S. and Europe."