Aftershocked

On March 11, 2011, a 9.0 magnitude earthquake occurred in the ocean 43 miles (70 kilometers) east of Sendai, Honshu, Japan, at a depth of 20 miles (32 kilometers) below the seabed. The earthquake was immediately followed by a tsunami 133 feet (40.5 meters) high that destroyed everything in its path for a distance of as much as 6 miles (10 kilometers) from the shoreline. Initial recovery efforts focused on locating and rescuing survivors of this disaster, an effort that was complicated by the damage to several nuclear reactors located in the region.

What follows is FM Global’s response to the earthquake and tsunami; how, in the face of an unprecedented catastrophe and vast uncertainty, the company managed to keep track of its own people and provide quality service to its imperiled clients. Assembled from the catastrophe response reports and accounts of the staffers with firsthand experience of the event, both on the ground and at various offices around the world, this story highlights the importance of global teamwork, corporate synergy and the immense value of FM Global’s emphasis on being prepared for virtually anything.

The Day the Earth Moved, Friday, March 11, 2011 
Jeff Elizeus We were just shutting down the CAT team in New Zealand for the Christchurch earthquake, and others were busy with the aftermath of floods in Australia, when we got the news from Japan. We immediately ran a list of insured locations and saw that many of them were in the area of the tsunami. We stayed glued to the TV to try to glean as much information as possible; we paid attention to reports indicating which cities had experienced shaking, so we could start to gauge where the damage was likely to be most severe, and we began the process of scheduling inspections.

Gary Cross I had relocated to Japan from Australia. I was a loss prevention engineer and a loss adjuster in Australia. With my large claims experience and my engineering experience, FM Global asked me to come here as the catastrophe coordinator. It sounded like a good thing and a real challenge. One of the first things I did when I took the job was review the Catastrophe Addendum for Japan. That day, I finished my review at 11 a.m. The quake hit at 2:46 p.m.

Lee Song I was having a discussion with Gary Cross when the earthquake hit. Ironically, we had scheduled a review of our Japan earthquake response plan for 4 p.m. that day. The building shook slightly, then with more intensity. When I took over the office, I lived in Japan with my family from 2007 to 2010. Over the three years we learned to deal with the sensations of the earth trembling and understood that buildings will shake once in a while. Japan, situated in a seismically active region, is hit by earthquakes more than a hundred times a year, and perhaps 15 to 20 of them are of high intensity. My two young children used to tell me that in Japan we are supposed to hide under a desk when an earthquake happens. I never thought of seeing adults do so, then I saw a few colleagues actually go under tables; I started to realize that this one was different. I then saw my office wall crack and split apart as the building swayed. Ceiling tiles were popping out, and filing cabinets were rolling left and right. I found out later that the first earthquake went for a record long of about two minutes, but at the time it felt like forever.

As manager of the office, I am concerned first with the safety of our employees on the ground. Just when I was typing a memo informing the management team about the well being of our employees, a strong aftershock hit. This time, instead of swaying left and right, I felt the floor tremble up and down. Fearing that the building structure may be damaged, I thought I should get out of the building but was being advised to stay indoors. It was explained that our Yokohama office is a modern high-rise with some level of quake resistance. It was safer to stay inside a modern building than risk being hit by falling objects. In fact, there were very few building collapses due to shaking, but the devastation occurred due to waves from the tsunami hitting the northeastern part of Japan.


A Unified Effort 
Gary Cross We called an employee meeting and, thankfully, everyone was accounted for. Then they all looked at me as if to say, “OK, you’re the CAT coordinator. What do we do now?” So, I got the white board out, tested the pen in the corner, and took a few moments to collect myself. We established communications with Singapore and sent an email out to all Asia operations telling them we were all OK. An important part of my job was to set up a timeline to keep everyone outside of Japan informed about what was happening, and give us time to do the work.

Jeff Elizeus Simultaneously, we were in the process of determining how many adjusters would be needed. There were no claims adjusters in Yokohama, so we knew we would need to bring them in from Hong Kong, Singapore and elsewhere. If we needed more, we could also mobilize adjustors in the United States. With those additional resources, though, there was a requirement to provide language support, which meant locating additional bilingual personnel. All of those many people were placed on “standby” with their bags packed, ready to fly to Japan on short notice.

Steve Abbott Even with those measures, the news reports seemed to show that the nuclear situation could quickly turn negative, so we wanted a backup plan. KarenMarie Razee, FM Global’s corporate travel manager, engaged a company called Global Rescue. They had many assets on the ground in Japan, including many former U.S. Special Forces people who knew the area and were well-equipped to reach out to our people and get them to safety. On a daily basis they maintained a plan for extracting our people from wherever they were located at the time.

Dennis Bessant When we finally went into the field, we went in together. It was a true international effort, engaging operations from around the company. Radiation consultants came in and all staff were prepped and given guidelines. Each field team member had his or her own radiation detectors, and by that time everyone knew where the danger zones were.


Keeping Priorities Straight 
Dennis Bessant When you’re living it in real time, you have some real tough decisions to make. That is the purpose of all the planning, to prepare for something like this. You have to act fairly quickly during a cataclysmic event, and in the end we got it right. Over the years I’ve been engaged in dealing with various crises (riots, terrorist attacks and bombs). In Asia, the biggest concerns have not been from a business continuity standpoint, but from an employee welfare standpoint. What we found is that our company business continuity plans needed to be all-encompassing, not just in keeping the business running, but, first and foremost, keeping our employees safe. It is so important to have plans in place for each geographic region. Dry runs are done to test each of the plans. We go off-site and organize a scenario that unfolds over a few hours, and the risk manager basically throws curve balls at the business continuity team to see how they handle them. These help you prepare. But the true stress tests have been real events.

KarenMarie Razee We needed to put another level of safety on the ground in Japan before we could send our claims people over there. Our employees wanted to get over there and do their job, but we needed to ensure their safety. Every day our employees who went over there had to call in to the Global Rescue representative who would provide whatever they would need, such as weather updates, reactor updates, etc. This gave our employees comfort and peace of mind so they could do their job. They knew that FM Global had their back.

Dennis Bessant Our view was that we had employees who were personally caught up in the situation and we didn’t expect them to work. It was best for them to go back home and take care of their families. We told all staff in Japan that they could take temporary leave; don’t worry about work. They had to deal with their own situations in light of such an unprecedented event. For me, without question, that was a defining moment. I think it reinforced all of those great things about our commitment to both our clients and our employees.

Lee Song Once we confirmed the well-being of all our employees and their families, we collected ourselves and sat in our conference room to brainstorm the next course of action. Our Yokohama office is familiar with loss-canvassing activities from frequent typhoons and earthquakes. But those were usually localized events with only a handful of clients to contact. This time almost all of Japan was being shaken and we did not know how many clients were affected by the tsunami in the northeast.

We have about 350 client locations with significant values across Japan. Our goal was to contact all of them. With a good client location database with GPS coordinates and the use of mapping services, we were able to quickly generate several location maps. I was then able to visualize and prioritize a client calling list based on distance from the epicenter. Another group of our engineers was evaluating transportation and logistic options so we could move quickly when engineers and adjusters were ready to roll in the field. In the meantime, employees working from home had already given us updates of several large locations. It was a team effort.

It was almost 2 a.m. when I left for my hotel nearby. Everyone was exhausted but could not leave the office as the majority of transportation systems were severely affected. More than 60,000 people were stranded in Yokohama alone. All of our male employees spent a sleepless night in the office; sleepless not only because there were no beds, but also because there were frequent aftershocks throughout the night.

The promise to pay is our contract with the client. What hoops we have to jump through, the hairs we have to pull out, the sleepless nights we endure—none of that should be a concern for our clients. If you’re service-oriented, all you should be concerned about is delivering on that promise.

On March 13, we announced the temporary closure of the Yokohama office. Everyone was silent, but I could sense sighs of relief. Since the March 11 quake, employees were impacted by power rationing, fuel and water shortages, aftershocks, and saddened by the loss of so many lives. Most of our worrying surrounded the ill-fated Fukushima No. 1 power plant that was badly damaged by giant tsunami waves. Local news reported the incident rather calmly, but the international news seemed to over-sensationalize it. There was a lot of confusion. I don’t think the government knew how it would turn out either. But as a virtue of Japan society, nearly everyone reacted calmly and was still very considerate of each other. There was no panic, grabbing food or other essentials, despite short supplies. Everyone waited patiently. They knew they would get through it.

Kimi Nakaya My daughter goes to nursery school, which was evacuated to a nearby elementary school. But with no communication, we had no clue where she was. So for a little while we did not know if my daughter was safe. We finally got a text message saying she was OK. It was very scary for us.

Dennis Bessant We phoned everybody in Japan every day. Even if they were at home, we reached out to make sure everyone was OK and to understand what was going on. We had engineers who wanted to go out in the field and get to work. But we had no idea about the radiation leaks. We know now what happened, but in real time there was a lot of uncertainty, so we had to hold them back.


Looking After Clients, Tuesday, March 15
Already, FM Global catastrophe response was well under way. Engineers working out of FM Global’s Yokohama office were contacting insureds by telephone when possible to assess damage and to issue area-wide impairment notices and manage impairments. When there is an area-wide event such as an earthquake, hurricane or flood, FM Global is concerned that the damage from the event may have impaired client protection systems, such as automatic sprinklers, fire pumps and associated water supplies. Notices are issued to let people know within FM Global that, due to the nature of the event, such impairments may exist.

Plans were made to visit accessible loss locations close to Yokohama and Tokyo until the adjustment team could arrive. Engineers were prepped to function as adjusters per the catastrophe guide, while everyone kept an eye on the imperiled nuclear reactors, some of which had already experienced explosions and fires.

Because of the loss of nuclear power generation, blackouts rolled across most of Japan, further complicating operations. FM Global’s local engineers were also advising that fuel and food shortages were imminent, even in locations far removed from the most significantly stricken areas.

Jeff Elizeus Phone canvassing involved asking insureds about the extent of damage, whether their sprinkler systems were serviceable, whether they had access to electricity or functioning backup generators, and so on.

Lee Song News reported that many multinationals shut down their offices in Japan and some started to relocate to other countries. But we needed to keep communicating with our clients in Japan; this would be the time they needed our insurance and engineering advice most. Shutting down the office entirely would be seen as abandonment. I contacted a selected team of Japanese employees, asking if they were willing to help set up a call center in our Hong Kong office, because a majority of our Japanese clients did not speak English. With their help, our external communications were handled seamlessly for the next 12 days.

Over this period, the team remained in Japan, continuing to work relentlessly on canvassing, updating loss information and attending to client inquiries. Emails were flowing through late nights and weekends despite the office being closed. Everyone was so dedicated and wanted to do their part. We spoke frequently over the phone, made good use of instant messaging to keep in touch, and also implemented a roll-call system to check on everyone’s well-being. Installation of IP (Internet Protocol) phones onto our laptops was a practical move; landlines were unstable, but Internet traffic was nearly uninterrupted.

While in Hong Kong, I was also able to work with our claims CAT coordinators Benjamin Lin and Jeff Elizeus. In most natural catastrophe losses, CAT coordinators are able to meet rather quickly at ground zero to discuss and plan for the next course of action. But with the uncertainty of the nuclear situation, it was a very difficult decision to send our employees into the affected area.

Kimi Nakaya The first thing we did when I got to the office was sort the insured locations and see who might have been hit by the earthquake. We collected all the contact information and sat down in a meeting room to distribute the accounts. We each took 10 to 15 clients and started canvassing. It was difficult with communications down. First of all, there were no mobile phones, and the landlines were doing funny things. Email was working, but we weren’t sure if the messages were getting through. It was only later we learned that they were getting through, but there was no one on the other end to read them. I may have dialed clients more than 70 times and if I did get through, there usually wasn’t anyone at the client location to pick up the phone. On Saturday, maybe one in 10 clients picked up the phone. It was a few days later before I reached all 15 on my list. Eventually we were able to complete the listing of damaged properties from our initial list and pass it on to the claims division.

Dennis Bessant In the first 72 hours, a lot of big companies began moving people out of Japan. That created a very negative attitude in Japan. For business continuity purposes, we temporarily moved to Hong Kong. We transferred the switchboard in Yokohama over to Hong Kong. We had two Japanese-speaking associates move to Hong Kong to field calls. The switch was seamless. If someone called the Japan office, they were patched through to Hong Kong and didn’t even notice. We did temporarily close the office in Yokohama, but we were still available for business. A lot of companies did quite the opposite.


The Nuclear Reaction, Wednesday, March 16
The situation involving the damaged nuclear reactors appeared to be worsening. A 12-mile (20-kilometer) evacuation zone was being enforced around the Fukushima No. 1 plant, and people living in the belt 19 miles (30 kilometers) from the Fukushima No. 1 plant were ordered to stay indoors. Rolling blackouts continued for large areas of Japan, including Tokyo, and there were indications of wider outages. Local FM Global engineers were also advising that fuel and food shortages were occurring, even in locations far removed from the most significantly damaged areas.

Due to the need for local staff to address personal issues arising out of this catastrophe, the Yokohama office temporarily closed. Engineers would continue to work from home if possible while other catastrophe response activities were seamlessly transitioned to the Hong Kong office.

Soon, Japan raised the alert level at Fukushima No. 1 nuclear power plant from four to five on a seven-point international scale for atomic incidents. Military fire trucks sprayed water on the reactors for a second day.

Lee Song Our Yokohama office reopened on March 29, but there was still this lingering uncertainty of the nuclear situation at Fukushima No. 1 power station. A team of adjusters flew into Japan, and a team of nuclear radiation specialists from BHI Energy came along. Many of us have an engineering background, but by no means are we familiar enough to deal with nuclear radiation. BHI Energy gave us classroom training on basic knowledge of radiation. Everyone was given a dosimeter and we were told to leave the area when it started beeping. The radiation specialists also accompanied a team of adjusters and engineers visiting each region, moving from south to north.

Nobuhiko Naito, senior consultant engineer, voluntarily took one of the BHI Energy specialists into Fukushima City, about 100 miles (60 kilometers) northwest of the nuclear power station. We have a few major clients in the area. On their way back to Tokyo, an aftershock stopped the bullet train and they had to seek refuge at a nearby hotel. Still, it was a fruitful trip for BHI Energy as they collected some useful readings. Not long after that, they were able to confirm that it was safe for our people to travel farther north. Nobuhiko’s trip sped things up for everyone to complete our loss visits.

Steve Abbott The biggest issue for much of our work wasn’t the earthquake or the tsunami; it was the nuclear event. The information coming from Japan sources, especially the power company, seemed unreliable. The first thing we did was to try to identify any authoritative sources of information so we could be comfortable having our people in the area. We also wanted to make sure we had a more active way of monitoring them other than just exposure badges. John Kandler, our corporate safety manager, ordered necessary equipment. But before the order could be filled, the U.S. Government interceded and took all the available supplies. So, it took time for the manufacturer to catch up. We were also trying to find out where people could travel relative to the exclusion zones. We ended up using BHI Energy to help with monitoring. They were able to put two people on the ground quickly to help us with monitoring and also did safety training.

Bill Englund This nuclear event was a first for FM Global. It seemed most of the losses were directly due to the flood or tsunami, but it sometimes took a major effort just to get in touch with the insured locations. Sometimes we had to work through the insured’s locations in the United States for information.

John Kandler We had a major problem with radiation release. There were only a handful of these events in the last 30 or 40 years. Chernobyl was one, but very little data from that was available. We would need to manage and monitor. How close could our employees get? Was it safe? No answers were readily available. Within a day, we realized we needed personal dosimeters. Dosimeters tell you how much radiation you are exposed to at that moment and how much cumulative exposure since the device was set. We immediately scrambled to purchase these from the supplier. We were told that we were behind military and other first responders.

We had to explain our purpose of helping to rebuild our clients’ businesses. We needed 40 of them. They recognized what we were doing and we were lucky to get our hands on them.

We also had to deal with changing weather patterns. First the radiation headed out to sea, then it turned inland. There was a lot of confusion about the fallout. Radioactive iodine has a short half-life. Within a month, you can assume it’s gone. A substance that has a longer fallout has a longer half-life—maybe 30 years—so we need to continue monitoring for a much longer time.

Gerry Alonso For every client facility we visited, we brought along a nuclear engineer. Every time we checked, the reactor situation was getting worse. There were more and more aftershocks. So we got concerned. Once everyone landed in Japan, how would we get them out if something bad happened? That’s when KarenMarie Razee and Steve Abbott found Global Rescue, an organization that often hires ex-U.S. Navy Seals. They assured us that if something happened, they would get us out. They wouldn’t tell us how they’d do it, but they guaranteed they’d get us out!

We had even procured fuel reserves; that is, propane-fueled taxicabs we could charter if necessary, because we heard there’d be problems with obtaining gasoline.

Three weeks after the event, I visited Japan to get a view from the ground. If I’m going to ask you to dig a ditch, I’m going to be there alongside you with a shovel of my own. We started from the farthest radius and worked our way in, and began adjusting losses. At each visit, there was an engineer, an adjuster and a nuclear engineer. Occasionally our WorldReach partners in Japan—Sampo and Hyundai—accompanied us.

Bill Englund I was the claims catastrophe coordinator, but I also had a previous background as a nuclear inspector at FM Global. Knowing that we might have issues with radiation exposure for our people on the ground, I contacted some people I knew who had worked on this kind of issue before and had provided us training. On March 22, we made arrangements to fly them to Japan so they could work with our people there. FM Global always was very conservative regarding exposure risks, and we followed the guidelines issued by the U.S. Nuclear Regulatory Commission.

Dennis Bessant I remember we were all sitting around a table at a client meeting, two months after the nuclear event. At this point, the risk was pretty low, and we were all well-protected, but my dosimeter went, “Beep!” It was just one little “beep,” but everyone just stared at me. No one else’s dosimeter sounded, just mine. A second or two later, one of the engineers said it must have been just a hiccup, a glitch. But it was now months after the earthquake and it was still very much on our minds.


In the End
Janine Pitocco Working at FM Global as a safety professional presents diverse and challenging opportunities, and that makes it interesting. As we were dealing with the radiation exposure issues, we couldn’t help but wonder what the next crisis may involve. And we all felt this experience helped us be that much more prepared for either a natural or man-made radiation-related emergency.

Gerry Alonso I was very confident approaching this disaster. We’ve been adjusting catastrophe losses for a long time. We are recognized as the best in the business at doing this. We have a catastrophe procedures manual. All we had to do was consider a new wrinkle—radiation.

We were the first foreign insurer to visit the disaster site. I even heard from a claims manager working for one of our competitors. He wanted to know what we were seeing over there because they hadn’t figured out yet what they were going to do. That just about tells the story.