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Aon Situation Room®

Updated 3 February 2017

TRIA Update: President Obama signs TRIA Bill

President Barack Obama signed into law, on Monday, Jan. 12, the Terrorism Risk Insurance Act, which was created in response to the Sept. 11, 2001, terrorist attacks. TRIA, which first became a law on Nov. 26, 2002, created a federal reinsurance backstop for losses stemming from acts of terrorism.

Key elements of TRIA:

Visit TRIA Resource Site for more information.

Ebola Response Room

Please visit AonÓł Ebola Response Room for information and guidance on risk, human capital and duty of care exposures.

Post-Tropical Cyclone Sandy

Post-Tropical Cyclone Sandy — Resources and Insight

Hurricane Sandy, which became a post-tropical cyclone just before it made landfall on the U.S. East Coast on October 29, caused significant flooding in New York and New Jersey, cut off power to an estimated 7.4 million homes and businesses, and resulted in damage and fatalities across several states.

Aon is committed to helping organizations respond quickly and appropriately to rapidly changing situations that may impact their business. Aon's Rapid Response team is ready to support clients in preparing for hurricanes, mitigating hurricane losses and quantifying and presenting property and business interruption claims.

If you have questions concerning your policy or claims process, please contact your account executive for immediate guidance.

Learn more about Aon Flood Secure, which reinstates exhausted or eroded flood limits of liability to help ensure organizations have replacement coverage for subsequent events.

Access Archive Edition of Post-Tropical Cyclone Sandy Webinar

In the video below, James Tortorella of Aon Global Risk Consulting outlines key steps to help businesses recover from Sandy:

Read the Sandy: Claim Steps video transcript.

In the video below, John Murbach of Aon Broking examines business interruption issues arising from Sandy:

Read the Sandy: Business Interruption video transcript.

For timely updates on hurricane tracking, watches/warning and reports, please access the Cat Alerts and other reports prepared by meteorologists from Aon Benfield's Impact Forecasting unit:

October 2012 Global Catastrophe Recap

Access Post-tropical Cyclone Sandy Cat Alert, Oct. 30, 2012, 12:30 p.m. Eastern time

Access Hurricane Sandy Cat Alert, Oct. 29, 2012, 5 p.m. Eastern time

Please check back periodically for Impact Forecasting updates.

Register to receive Aon Benfield's Catastrophe Alerts in your inbox. Subscribe to Cat Alerts by sending an email to and visit the Impact Forecasting site for reports and thought leadership.

If you are an Aon Rapid Response client, activate your service 24/7/365 via Aon Risk Solutions' Crisis Operations Center by calling +1.855.218.8167 (U.S.), +1.312.470.3055 (international) or by sending an email to

Visit Aon Risk Solutions' Be Prepared resource site to better prepare your operations in the event of a natural disaster, whether you need a Hurricane Preparedness Checklist or a Claims Preparedness Manual.

Stay on top of Hurricane Sandy's path and expected impact via the National Weather Service — National Hurricane Center.

How prepared is the Northeast for hurricane risks? Aon Risk Solutions' Al Tobin shares his views in this Business Insurance webinar.

Hurricane Sandy is expected to cause major disruptions to the global supply chain. Similar to the affect of the Japanese earthquake, possible reputational risks to organizations may occur. Access the 2012 Oxford Metrica Reputation Review.

Thailand and Southeast Asia Flooding

Thailand and Southeast Asia Flooding — Resources and Insight

Severe flooding continues in Thailand and Southeast Asia. Aon is monitoring the situation and its potential effect on clients. Please visit for the latest in disaster preparation and mitigation thought leadership and to sign up for Cat Alerts from Aon Benfield's Impact Forecasting unit, which provides up-to-date details and commentary on developing catastrophe and meteorology news around the world.

Aon Rapid Response clients can activate their service 24/7/365 via the Aon Crisis Operation Center in the U.S. by calling +1-855-218-8167 and, internationally at +1-312-470-3055 or by sending an email to

Hurricane Irene

Hurricane Irene — Resources and Insight

If you have questions concerning your policy or claims process, please contact your account executive for immediate guidance.

Register to receive Aon Benfield's Catastrophe Alerts in your inbox. Click here, then expand the Request Info box on the top right.

If you are an Aon Rapid Response client, activate your service 24/7/365 via Aon Risk Solutions' Crisis Operations Center by calling 855-218-8167 (U.S.), 312-470-3055 (international) or by sending an email to

Visit Aon Risk Solutions' Be Prepared resource site to better prepare your operations in the event of a natural disaster, whether you need a Hurricane Preparedness Checklist or a Claims Preparedness Manual.

Stay on top of Hurricane Irene's path and expected impact via the National Weather Service — National Hurricane Center.

How prepared is the Northeast for hurricane risks? Aon Risk Solutions' Al Tobin shares his views in this Business Insurance webinar.

Watch Aon Benfield's Paul Schultz Discuss the Catastrophe Bond Market on Bloomberg.

U.S. Food Safety Modernization Act

WEBINAR REPLAY: 4/29/11 - U.S. Food Safety Modernization Act

The Food Safety Modernization Act represents the most sweeping expansion of food safety and security since the inception of the 1938 Federal Food, Drug & Cosmetic Act. While the Act will be implemented in stages, those in the food industry cannot delay preparations for many of its key provisions.

Listen to thought leaders from Aon, the National Center for Food Protection and Defense and Stoel Rives as they discuss the highlights and implications of FSMA for your organization:

  • Ramifications of the FSMA on agribusiness
  • Update on the impact of events in Japan on regional and global food supply
  • Solutions available to identify, quantify, mitigate and manage risks


  • Rick Shanks — National Managing Director, Aon Risk Solutions Food System, Agribusiness and Beverage Practice
  • Ken Odza — Partner and Leader of Food Liability Practice, Stoel Rives
  • Shaun Kennedy — Director, National Center for Food Protection and Defense
  • Luke Harrison — Director, Aon Global Risk Consulting

To access the replay, please click here. All attendees will receive a copy of Aon Risk Solutions' recent Food Safety Modernization Act White Paper.

Japan Earthquake and Pacific Tsunami

Aon Risk Solutions Webinar

Aon Risk Solutions Webinar on the Impact of the Japan Earthquake and Pacific Tsunami — Archive Available

Download the webinar transcript

As the devastating impact of the Japan Earthquake and Pacific Tsunami continue to unfold, we are again reminded of the evolving nature of risk and the impact a single event can have on our globe. In the wake of these events, please join Aon's network of risk experts and relationship managers as we discuss topics surrounding this situation.

The discussion will help business leaders:

  • Assess their organization's direct and indirect exposures as quickly as possible (e.g., contingent business interruption, business interruption, supply chain, customer chain, etc.)
  • Understand the potential impact of Q1 2011 catastrophes on insurance marketplace dynamics and how that may affect their organization's risk profile
  • Develop a concise Situation Analysis for C-suite leadership that outlines potential impact to enable more informed decision-making

Moderated by former Business Insurance Editor Regis Coccia, the discussion includes:

  • Steve McGill — Chairman and Chief Executive Officer — Aon Risk Solutions
  • Stephen Cross — Chief Executive Officer — Aon Global Risk Consulting
  • Bharat Kannan — Director and Chief Strategy Officer — Aon Japan Limited
  • Laurie Champion — Former Fortune 100 Global Risk Manager and Head of ERM Practice for Aon Global Risk Consulting
  • Henry Daar — Executive Vice President with Aon Risk Solutions' Property Practice
  • Regional broking leaders

Original Airdate: Wednesday, March 23, 2011

Global and Local Impact: Japan

Japan's local earthquake market landscape had been softening prior to this catastrophe. This soft market was mainly driven by the sharp competition in the Japanese market. Japanese insurers have tended to be reluctant to underwrite earthquake coverage for business interruption, particularly for industrial risks.

The primary areas affected by the earthquake and tsunami at this stage are the prefectures of Fukushima, Miyagai, Iwate and parts of Ibaraki and Nagano.

As the relative accumulation of industrial and commercial risk in these areas is not as large as zone 5, 6 or 8 (see map above), the insured losses will likely be far less than the large economic losses.

Japan's local earthquake market landscape had been softening prior to this catastrophe. This soft market was mainly driven by the sharp competition in the Japanese market. Japanese insurers have tended to be reluctant to underwrite earthquake coverage for business interruption, particularly for industrial risks.

Local Offerings — Global Implications
There are two types of earthquake insurance in Japan — residential and industrial/commercial (business). Most policies carry a per occurrence deductible, and some can be quite low as Japan is a gross premium market.

Dwelling Earthquake Insurance covers dwellings and household goods and was developed after the Niigata Earthquake to protect the public against unforeseen earthquake damage. Insurance companies can reinsure these risks through the Japanese Government to provide stable capacity to their clients.

Industrial and Commercial (Business) Earthquake Insurance began in November 1956 and is written as an extended coverage endorsement to an ordinary fire policy.

Types of coverage that may be available:

  • Earthquake coverage endorsement covers loss or damage caused by an earthquake, including destruction, burying and fire following an earthquake, and destruction or burying caused by an earthquake. Typically, a deductible is applied per occurrence, per building.
  • Earthquake bursting and explosion coverage endorsement covers loss or damage caused by a sudden explosion of gas, or vapor caused by an earthquake.
  • Earthquake water damage coverage endorsement covers loss or damage caused by water perils such as a tidal wave/tsunami or flood following earthquake.

Japanese carriers, for the most part, choose to carefully manage their aggregate exposures to earthquake risk. This is achieved through a mixture of catastrophe reserves established on their balance sheets, treaty (QS and XL) and facultative reinsurance. Earthquake insurance for industrial and commercial (business) risks in Japan does not follow or participate in the government capacity scheme. Therefore, private insurers must secure their own capacity and, where needed, rely on reinsurance via international markets. Reinsurers demand that insurers record and control accumulation of risks by zone (see map above). Zones 5, 6 and 8 are highly concentrated areas, resulting in higher rates for earthquake insurance.

How can Aon help?
Organizations may have a local policy in Japan, a master or non-admitted policy via a program or standalone non-admitted placement, or a combination of both. All policies are not created equal. It is essential for risk managers to understand the clear delineation between local standard market terms and conditions and the general terms and conditions of a Western/global policy and review each for determination of any possible coverage.

For more information, contact:
Bharat Kannan, Director/Chief Strategy Officer, Aon Japan Limited
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+81-3-3237-6446 / +81-9-0484-24821 mobile

Clyde Ebanks, COO, Aon Risk Solutions Global Client Network

Business Travelers in Japan

If your organization has colleagues working in Japan and needs assistance to locate their whereabouts and/or help them reach another location, Aon WorldAware Solutions can help. Our Operations Centers are standing by to aid via incident management and coordination.

For more information, contact Aon's WorldAware Operations Centers 24 hours a day, seven days a week at +00.27119.447.007 or

Property Market Impact

Though it is too early to be certain of the long-term impact, we expect the Japan earthquake and Pacific Tsunami to cause considerable angst in the global property market. While the events may not have a significant impact on the U.S. market, we expect many global corporations with Japanese exposures, direct and contingent, will be impacted along with their global insurers and reinsurers. Japanese and global insurers doing business in Japan are expected to be impacted significantly. Full assessment of damages will take time, as access to the damaged areas has been seriously impaired. A tightening of the Japanese and global insurance markets is probable. Some global insurers suspended underwriting immediately following the earthquake to assess their loss potential. A continued caution among underwriters could remove short term supply of insurance from the marketplace.

How can Aon help?
Even if businesses are not directly impacted by this tragedy, all organizations should understand how such an event could affect their company and their business. This includes an understanding of the potential risks that could impact your organization, whether natural or man-made, as well as supply chain risks, risk retention or transfer strategies and insurance coverage adequacy. It is also important to understand how physical facility(ies) will endure the forces of a natural disaster and the ensuing risk of fire, explosion and possible theft. Physical hardening of assets, increased security and a pre-event business continuity planning can mitigate impact and help organizations get back to normal much more quickly.

For more information, contact:
Rick Miller, Aon Risk Solutions' Property Practice

Earthquake Disaster Recovery and Loss Mitigation

Aon Risk Solutions' Rapid Response team has been deployed and is working alongside clients to determine which organizations have/may have exposures in the impacted areas.

With a global team including loss mitigation consultants, remediation experts, risk engineers, forensic accountants, construction estimators, former risk managers and attorneys, Aon Rapid Response is on the ground to help with this complex process by combining mitigation best practices with a practical claims approach.

To assist with the major structural damage in Japan, Aon Rapid Response has engaged its structural engineering partner, Arup.

Earthquake Claims Preparation and Presentation

With potential large earthquake claims forthcoming, risk managers need to review their policies immediately to understand potential coverage application such as occurrence definitions, territorial limitations, high earthquake areas, multiple deductibles, percentage deductibles, contingent business income and additional unanticipated exposures.

Getting a business back up and running post-event will be a difficult process, and recovering financial loss under an insurance policy can be just as complex.

Risk managers must begin to quantify all aspects of the loss to necessarily document the claim. In addition, unexpected business continuity exposures are creating financial and operational pressures on policyholders, as critical supplier and vendor relationships have been disrupted.

How can Aon help?
If your operations are affected and you have a potential claim, ask your Aon advisor to put you in contact with Aon Global Risk Consulting. With professionals located throughout the world, Aon experts can provide the necessary assistance to help with loss mitigation and insurance recovery, thereby allowing organizations to focus on maintaining business operations.

In addition, Aon's specialized experts capture and quantify the loss and damage to help organizations effectively navigate the challenges of the claim process.

For more information, contact:

Russ Opferkuch, Aon Global Risk Consulting, Claims Preparation & Valuations

Rob Cusack, Aon Global Risk Consulting, Claims Preparation & Valuations
+61 2 9253 7403

Andrew King, Aon Global Risk Consulting, Claims and Risk Accounting
+44 (0) 7736 599 780

Supply Chain Disruption

Significant supply chain disruption is expected for organizations in Japan, which will have logistics problems receiving materials for their own factories. In addition, supply chain issues for organizations all over the world that rely on materials and components from Japan will be impacted. These disruptions will become more and more evident over the weeks and months as materials and components are depleted from stock.

The challenge that exists in this disaster's early stages is that there are usually several tiers of supply chain (e.g., one supplier manufactures a material or component fed to another supplier who assembles with additional parts, etc., and this component eventually ends up at the manufacturing location). It will be difficult for organizations to immediately assess the impact on their suppliers as well as how their enterprise will ultimately be affected.

How can Aon help?
Organizations must take a close look at their supply chain and make immediate contact with these partners. If an organization is single-sourced, they must start looking at alternate suppliers.

While a supplier may not be physically impacted, it is likely there will be challenges to transport the product in the short term. As it is likely there will be tremendous competition for air freight and marine cargo services (along with significant cost increases), organizations should be considering alternate logistic options as well.

For more information, contact:
Jim Pinzari, CBCP
Director of Business Continuity Management for Aon Global Risk Consulting

Marine / Cargo / Shipping Impact

The extent to which our marine clients will suffer losses is unclear, but we believe marine coverages claims will likely arise from clients transporting cargo by ship or air, in ports or in storage facilities impacted by the events. At this time, we know of at least one client with cargo in distress on a vessel hit by the tsunami during unloading.

Clients insured by stock throughput policies, which insure cargo while in transit or inventory, may have large inventory exposures in Japan. Some stock throughput policies in Japan may contain inventory limits which are aggregated for damages related to earthquakes; however, it is more common for aggregate limits to apply only to California earthquakes. It is likely that supply chain and transportation interruptions will cause delays in delivery of cargo. Cargo policies frequently exclude loss due to delay, unless specifically addressed in the policy. This is particularly important for perishable cargo unless coverage was extended for loss due to deterioration arising from interruption of refrigeration machinery. However, additional expenses such as those related to forwarding and expediting expenses from frustration of the voyages, or interruption of transit beyond the control of the insured, are often covered by the cargo policy.

Another potential coverage issue is damage to cargo caused by exposure to radiation. Most cargo policies will contain a radioactive contamination exclusion clause which will not include damage caused directly or indirectly from such exposure.

How can Aon help?
Destruction of records and files is a common complication encountered in documenting inventory losses for cargo. If data was not backed up, surveyors can assist as soon as they can gain safe access to the impacted areas. Clients who believe they may have marine cargo or stock throughput losses are encouraged to contact Aon for further advice and support.

For more information, contact:
Bob DeMotta, Aon Risk Solutions' Marine Practice Leader

Technology Industry Disruption

Over 40 percent of the NAND flash memory chips and roughly 15 percent of the global DRAM supplies are manufactured in Japan, often supporting the chips found within smart phones, tablets and PCs, according to research firm Objective Analysis. Japan ranked third last year in semiconductor production with about 25 percent of the world's silicon chips.

The impact of the recent earthquake will be felt not only by semiconductor producers, but also by electronics manufacturers. The slightest amount of downtime in the global semiconductor manufacturing segment in Japan could have a significant impact on chip supply and prices. We anticipate difficulty in accessing raw materials and shipping products out of the country, subsequently impacting the supply chain for weeks following the quake. This could have significant revenue and supply chain implications for semiconductor and electronics manufacturing companies.

For more information, contact:
Shawn Ram, Aon Risk Solutions' Technology Practice Leader

Automotive Industry Disruption

The automotive industry operates on a very tight and sensitive supply chain schedule, typically within a one to three day window. Any interruption experienced by suppliers and in shipments can quickly derail the system. We expect the catastrophic events in Japan will cause delays in manufacturing and export shipments and may result in some production shifting to the U.S. on a temporary basis if models are manufactured in both countries. In Japan, it is likely that the disruption of parts delivery could compound the effect of the tsunami on vehicle manufacturers.

Some original equipment manufacturer plants not directly affected may experience slow-downs from parts suppliers that suffered direct damage. Transportation risks such as damage to public roadways, rail lines and port facilities will also play a big factor in the rate of Japan?s recovery. At this point, organizations are still trying to determine whether they were impacted, as well as to what extent. Contingent business interruption insurance, often sub-limited, will be a big factor in offsetting the financial impact for organizations indirectly impacted by the crisis.

U.S. dealerships that rely on imports from Japan will experience an immediate slow down of available inventory.

How can Aon help?
As soon as organizations identify property loss or interruption, Aon is standing by to mobilize our team and begin presenting claims.

For more information, contact:
Mike Stankard, Aon Risk Solutions' Automotive Practice

Local Impact: Hawaii

Consistent with the proactive civil response taken by the county, state and private entities in preparation for the potential impact of a tsunami in the aftermath of Japan's devastating earthquake, civil defense measures for evacuation and preservation of life for the local and tourist population were implemented the night of March 10, five hours prior to the anticipated arrival of the tsunami in Hawaii. While certain low lying areas, harbors and piers were inundated with the ocean surge, there was no loss of life, and damage to property was nominal in comparison to what could have occurred, had the full force of the tsunami impacted the islands.

Normal business was temporarily disrupted as a result of the vertical evacuation of the tourist population (moving them to the higher floors of hotels) as well as the shutting down of restaurants and bars and the closing of Waikiki Beach.

How can Aon help?
In anticipation of tsunamis, hurricanes and earthquakes that have impacted Hawaii in the past, Aon works closely with our clients on business continuity and disaster planning. Coverages are carefully crafted in anticipation of addressing these potential exposures, and claims handling resources are made available from a local, national and global perspective as appropriate.

For more information, contact:
Chad Karasaki, Aon Risk Solutions' Resident Managing Director of Hawaii

Links to Sites for More Information

U.S. Geological Survey — Latest Earthquakes in the World
NOAA's National Weather Service — Pacific Tsunami Warning Center

For updates on the status of Japan's nuclear stations as well as additional insight on radiation issues, visit the Nuclear Energy Institute's dedicated Web page, to which the Centers for Disease Control and U.S. Environmental Protection Agency have contributed.

"Information on this site and the information on linked sites are provided solely for clients' information and do not necessarily reflect the views of Aon Corporation and/or its affiliated and subsidiary companies ("Aon"). Aon does not take responsibility for the accuracy of information on linked websites or from media sources cited herein."