In today's increasingly interconnected global economy, the economic fallout from a natural disaster is rarely confined to the geographic area where the event has occurred.
Through the popularity of Exchange Traded Funds and other forms of international investment diversification, natural disasters that take place thousands of kilometres away can shake up investment portfolios everywhere.
Shortly after the disaster struck Japan, Hong Kong's immigration authorities issued nearly 300 long-term visas to foreign residents in Japan, mainly executives of foreign financial institutions.
According to the Hong Kong Immigration Department, the majority of work visas were issued to employees working for international banks and financial institutions. Their titles include CEO, vice-president, senior investment manager, analyst, and strategist. Most of the financiers who applied for work visas were foreigners who had been working in Japan.
In an act of loyalty, the International Bankers Association, which is made up of about 60 foreign commercial banks and securities firms operating in Japan, issued a statement playing down any mass exodus of employees and reaffirming they were continuing to operate "business as usual".
Focusing on the human aspect of unforeseen events and natural disasters, Andrew Cohen, CEO of JP Morgan Private Bank in Asia, says: "The first concern is always for people who have been affected by a disaster wherever it occurs."
When unforeseen events occur, Cohen says it is an integral part of the JP Morgan culture for relationship managers to keep in close contact with their clients.
"We are not talking necessarily about the financial markets, but more of what is happening in the broader context, which is an important part of providing a customer-focused service," Cohen says.
According to a World Bank report, the direct economic impact of the Japanese earthquake and tsunami disaster on global growth will be small. Japan's contribution to global growth in recent years has averaged less than 0.5 per cent, which is disproportionately small compared with its 7 per cent share of global output. However, the World Bank says the cost could be as much as US$235 billion.
Burkhard Varnholt, chief investment officer at Bank Sarasin, says as the world becomes ever more interconnected, "black swan" events - which are beyond the realm of normal expectations - are likely to have an even more pronounced impact on economic markets and finance professionals.
"Within the private banking world, analysts and fund managers need the skill sets and risk management discipline to focus on events when they occur and process the possible effects," Varnholt says.
He says 24-hour news and instant news feeds sent via mobile devices mean an occurrence in one part of the world soon becomes a global event.
Varnholt believes because of global media coverage of the Japanese earthquake and tsunami, which damaged the Fukushima nuclear power plant and resulted in radiation leaks, the focus would now be on sustainability and socially conscious investing.
He says sustainable and green banking initiatives open the way for non-financial professionals to join the industry.
Rainbow Pan, CEO at ipac financial planning Hong Kong, says natural disasters are an opportunity for finance professionals, including certified financial planners, to put their expertise to good use.
"It is important for financial planners to help their clients understand what is going on and how they can help them keep their long-term objectives in place," Pan says.
Eric Chia, Greater China Risk leader at Ernst & Young, says while nothing can prevent disasters, having a risk and crisis response team can mitigate some damage.
The insurance sector faces large payouts but its rapid growth could lead to the creation of more jobs
Terrifying and heartrending images of the earthquake and tsunami that brought death and destruction to Japan on March 11 this year could cost insurance companies worldwide as much as US$60 billion, according to AIR Worldwide, a Boston-based specialist in catastrophe modelling. However, AIR says the Japanese insurance industry is largely financed within the country where the losses will be absorbed.
Outside Japan, two of the world's largest reinsurance firms, Munich Re and Swiss Re, still face large payouts amounting to several billion dollars. Reinsurance is offered by firms such as Munich Re and Swiss Re to share liabilities that would be too great for any one company to assume.
Torsten Jeworrek, chairman of the reinsurance committee at Munich Re, says the firm's business relations with Japanese insurance companies date back to 1912. "We will naturally continue to make our capacity available to our clients in Japan and support them in dealing with the losses. We can be counted on, particularly in moments like this, and are in close contact with our clients," Jeworrek says.
Echoing similar sentiments, Stefan Lippe, CEO at Swiss Re, says the firm remains committed to using its expertise and experience to support clients in Japan as they manage the risks related to such devastating events. "It is the purpose of our industry to aid communities in their recovery and redevelopment efforts," Lippe says.
In other parts of Asia, rapid growth of the insurance industry and new regulations could lead to the creation of more jobs. According to the latest Ernst & Young 2011 Asia Insurance Report, new and emerging regulations will pressure insurers in developing markets, and relatively new insurers in mature markets, to employ more staff and upgrade their IT technical expertise.
Jeff Malatskey, Asia insurance leader at Ernst & Young, says improvements may be necessary in insurers' data management, IT platforms, advanced technology solutions and actuarial and accounting skills.
"Asia-Pacific insurers further need to consider upgrading employee skill sets, recruiting and developing key talent to process the volume of data created by rapid business growth," Malatskey says.