On March 11, 2011, the Tohoku region of Japan was struck by a massive earthquake and tsunami that not only devastated a nuclear power plant and wreaked havoc on the island, but caused massive worldwide supply chain disruptions, pointing up the fragility of our interconnected world. The disaster caused an estimated $35 to $40 billion in insured losses and many businesses were not adequately protected, both in terms of insurance and risk management, according to the Insurance Information Institute (I.I.I.).
Our global economy puts more businesses at risk of supply chain disruptions. These don't begin and end with natural disasters but can include industrial accidents; labor issues (strikes, shortages); production process problems; political upheaval, including war and civil strife; trade disputes; health and safety concerns; credit/cash flow problems; and supplier finances or solvency. It can take two years or more for companies to recover from a supply chain failure, according to the III.
We asked risk management experts from around the industry what they believed were the lessons learned from the Japan quake and what weaknesses still remain.
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