Japan floods cause extensive destruction, business interruption

Historic rainfall that hit Japan between June 29 and July 8 has damaged or destroyed nearly 12,000 homes and public structures while washing away portions of roadways and bridges and disrupting industrial production, according to the Aon Cat Alert report.

The extreme rainfall led to a rapid rise of several rivers and streams, and many locations reported floodwaters reaching up to 5.0 meters (16.4 feet) in height.

Total economic losses were anticipated to be well into the hundreds of millions dollars, likely higher, according to the report.
At the peak of the event, 6.3 million people were advised to evacuate or were under flood advisories across 23 prefectures.
Some of the worst-hit areas included Hiroshima, Ehime, Okayama, Kyoto, Yamaguchi, Gifu, Kochi, and Fukuoka.

Rainfall prompted significant flash flooding and mudslides and resulted in business disruption for several automobile and electronic manufacturing facilities. Reports from some automobile, electronics and other manufacturers cited that the combination of facility water inundation, employee safety issues, and damaged nearby infrastructure prompted the temporary suspension of many facilities.

Several facilities were closed simply out of caution or due to supply chain disruption, but did not incur any direct physical damage. Among the impacted companies are Daihatsu (Toyota), which suspended operations at two factories in Kyushu and three in Kansai, including the main factory in Osaka. Mazda suspended two main operations in Hiroshima; Mitsubishi Motors suspended operations in Okayama; Panasonic closed operations in Okayama due to ground floor water inundation and power outage. Mitsubishi Electric suspended operations at four facilities; Kubota has seen one facility in Osaka partially inundated; Amazon Japan faced temporary suspension of operations in Okayama; Asahi Breweries had to temporarily suspend operations in Okayama.

The flood event additionally left substantial impacts to local infrastructure. Government officials cited that landslides and flash floods had washed away portions of roadways, bridges, and other vital transportation channels across southern and western sections of the country.

In terms of flood insurance, the peril is often bundled with homeowner or commercial property insurance policies. There is likely to be some insured business interruption losses as well given the multi-day shutdowns for some manufacturing facilities, the report added.

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