"My relations with CSR" delivers messages of experiences and perspectives from people involved in Tokio Marine Groupe's CSR activities.
Response to the Great East Japan Earthquake - Providing Early Disaster Recovery Support Service
Manager, Commercial Lines, Marketing Department,
Tokio Marine & Nichido Fire Insurance Co., Ltd., and
Project Coordinator, BELFOR (Japan) Co., Ltd.
The Tokio Marine Group has formed a partnership with BELFOR (Japan) Co., Ltd., a company having specialized skills in the field of disaster recovery support, and has been providing Early Disaster Recovery Support Service for corporate customers. The service supports the early recovery of business operations in case of a disaster or accident by restoring damaged equipment and facilities.
The Great East Japan Earthquake that occurred on March 11, 2011 caused substantial damage to numerous companies mainly in the Tohoku region. Through the said recovery support service, the Tokio Marine Group has been helping these companies quickly restore their business operations, while striving to make swift payments of insurance claims. We asked Yoshihiko Sonoda, Manager of Commercial Lines of the Marketing Department of Tokio Marine & Nichido and Project Coordinator (and Business Promotion General Manager) of BELFOR (Japan), to tell us how this support service has been provided to customers, their reactions and how we will proceed in the future.
Q. Please tell us about how the recovery support service has been provided to our customers after the disaster.
In order to provide support for recovery, we must first identify the degree of damage sustained by each customer. For this purpose, we started visiting disaster-stricken areas immediately after the disaster and conducted on-site inspections of the damage at customers' plants and facilities in close collaboration with the local staff of Tokio Marine & Nichido.
Before the disaster, Tokio Marine & Nichido had already added a new rider to its fire insurance products for corporate customers to cover the expenses for emergency stabilization measures and established a system to utilize the disaster recovery support service of BELFOR. But customers who were affected by the disaster were too busy with other matters and did not even recognize the availability of the service. We visited every customer who was entitled to the service and explained there were ways to clean and restore tsunami-damaged, mud-covered equipment. As of the end of June 2011, we have received about 60 requests for assessments, including those from large plants operated by major manufacturing companies. Most of these requests have come from the areas devastated by the tsunami, but some were from Hokkaido and inland areas in the Kanto region. In many cases, repair has been extremely difficult as the tsunami caused severe damage to or washed away portions of equipment and facilities. To date, we have completed the cleaning and recovery of contaminated equipment and facilities in 15 cases.
Q. Can you give more details on the flow of your recovery support?
We first visit a customer's site to check the degree of damage and then prepare a report describing whether facilities and equipment are repairable, and if they are, how long it will take to repair them. According to the contents of the report, the customer will make a specific request for repair, and we will launch full-scale recovery support efforts based on the request.
Our recovery support operations start with the dismantling of facilities and equipment. Then, we conduct precision cleaning by using dry ice particles or chemicals, cleaning with pure water, drying, verification by a microscope, reassembling and a final operational check. We keep more than 50 types of cleaning agents readily available in order to perform the processing best matched to the degree of damage and particular characteristics of each product or component.
Following the disaster, we have repaired a variety of items, ranging from production facilities and equipment to incoming panels, power switchboards, electronic microscopes and metal molds. We have also recovered documents damaged by seawater by using a freeze-drying technique that is less harmful to paper.
We usually conduct recovery support operations on site, for example, at a damaged plant. This was not always possible in areas where power supply had not yet been restored or in plants covered with sludge. In such cases, we sent damaged equipment to our workshop in Tokyo and conducted recovery support work away from the disaster areas. We also set up a workshop in Fukuoka Prefecture and formed a structure to quickly provide recovery support services because we were receiving a significantly higher number of requests for repair than usual and there were concerns about power shortages in Tokyo following the disaster.
BELFOR runs about 170 operational bases across the world, having a structure of mutual support and collaboration in case of a large-scale disaster. After the disaster in March, we have received a number of specialists from our overseas bases to help us facilitate our recovery operations.
We need more hands when we conduct cleaning on site or recovery support work that requires wiring. In such cases, we have asked our customers' employees for assistance or consigned a part of the work to those who have lost their jobs because of the disaster. We have been working to accelerate our recovery operations through this collaborative structure.
Q. How did customers regard your recovery support service?
We have received favorable feedback from customers who have used our equipment and facility repair service. They were particularly grateful for having access to early recovery support service in addition to receiving insurance claims and for not having to give up their businesses. One customer even encouraged other companies located in the same region to use our service to promote the early recovery of the entire regional industry.
Our recovery support service offers a significant financial advantage in terms of cost because the cost for repairing is far less than that of replacement. But more than anything else, our customers value our ability to achieve a considerable reduction in the business interruption period.
Replacement of facilities or equipment usually takes several months, or as long as one year in an extreme case. Even generally available products become difficult to obtain due to a rush of orders following a disaster of this scale. Repair, on the other hand, only needs several days, weeks at the longest, to resume operations. After the March disaster, we were able to restore business operations within one week in several cases. I have come to recognize that this early recovery capability offers higher value for customers than payments of insurance claims. With only one machine being out of order, it is impossible to resume operations. Also, a prolonged disruption of business operations may cause some companies to go out of business. Our customers said that they were grateful and really relieved to have their business operations restored. Hearing their words, I have renewed my determination to spread our recovery support service throughout society.
Q. How are you going to promote your service, and what points will you emphasize?
Disaster recovery is a time-sensitive operation. The longer it takes, the more difficult it will become to repair facilities because of the rust and corrosion, which get worse every minute. But as we had a prolonged period of low-humidity days after the disaster and maybe because the mud served as some sort of coating, we had several lucky cases in which repair was still possible as late as in June. We will continue our efforts to identify the degree of damage and detailed needs of customers in order to repair as many facilities as possible.
I believe that the early recovery of business operations is important both in terms of maintaining the business continuity of individual companies and attaining the quick restoration of the entire supply chain, and ultimately, the rebuilding of society as a whole.
Early revitalization of affected companies is crucial in facilitating regional recovery. We hope to contribute to regional society and the economy through our Early Disaster Recovery Support Service.