A Case Study on Estimation of Business Interruption Losses to Industrial Sectors Due to Flood Disasters
Lijiao Yang*, Hirokazu Tatano**, Yoshio Kajitani***, and Xinyu Jiang**
*Graduate School of Informatics, Kyoto University
Gokasho, Uji, Kyoto 611-0011, Japan
**Disaster Prevention Research Institute, Kyoto University
Gokasho, Uji, Kyoto 611-0011, Japan
***Central Research Institute of Electric Power Industry
Abiko, Abiko-shi, Chiba 270-1194, Japan
The case study we present on estimating business interruption (BI) loss to industrial sectors due to floods in Aichi Prefecture, Japan, involves four steps – estimating the business interruption loss rate (BILR), estimating the spatial distribution of hazard information, identifying the spatial distribution of exposure such as firms and employees, and calculating BI loss based on the BILR, hazards, and exposure information as input. Validation was conducted by comparing estimated BI loss to economic loss calculated by an index of industrial production (IIP). We found that the proposed methodology quickly and feasibly estimates BI loss once water depth is obtained. Estimated BILR and BI loss in the industrial sector provides information enabling individual firms to formulate business continuity plans and design risk management strategies.
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