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Tokyo 2021: The risks facing the Olympics

Climate Quantified|Cyber Risk Management|Environmental|Property|Reinsurance|Willis Research Network
Climate Risk and Resilience|COVID 19 Coronavirus|Geopolitical Risk

August 10, 2020

With one year to go, the Willis Research Network team provides an overview of different risks that may influence the Tokyo Olympics.

Since the revival of the modern Games in 1896, the Olympics have had to cope with a range of risks, from financial, security, sporting, and reputational to diplomatic incidents and war. In 2020 that list is expanded with the Tokyo Games postponed due to COVID-19.

The Japanese are familiar with health disruption, having experienced a winter flu outbreak at the 1998 Winter Olympics in Nagano1where several athletes were too ill to take part and schools in the region were closed2. Some human health experts have warned that the Games will only be viable if a COVID-19 vaccine is available and widespread. However, a vaccine alone won’t eliminate the virus, and is unlikely to allow the Games as we know them to go ahead. Organisers have already confirmed there is no Plan B if they don’t reach a decision in April3 2021.

Any catastrophic event impacting the Olympic Games has the potential to result in high-impact, long-term consequences for the cities that host them. People, infrastructure and entire supply chains are at stake. It isn’t just the athletes that gather but support staff, media, fans, and volunteers; new infrastructure is built and specialist equipment are commissioned and shipped, merchandise and sponsorships are secured and printed. Risk assessments and planning happen years in advance. The organisation of Olympic Games is a complex, relentless marathon that starts in the bidding process, with the closing ceremony the fixed finish line that the organising committee must cross – normally at a sprint.

Forcing the Tokyo Olympics to be postponed by a year, the COVID-19 pandemic has stolen the risk limelight, but it is important to remember the wider risk landscape. This will be increasingly important as risk assessments and planning were carried out in a pre-COVID-19 world and may no longer be fit for purpose. On the other hand, an over-focus on COVID-19 may result in other risks being more likely or the impacts not managed as well.

With a year on to the Tokyo Olympics, the Willis Research Network team provides a roundup of different risks that should not be overlooked.

People risks

Olympic Games typically involve a large population influx from various countries to a city, in this case, Tokyo, already one of the largest cities in the world. How will this work in a COVID-19 world, where physical distancing is set to be recommended for a long time?

While multiple vaccines are currently undergoing development and trials, it remains unclear whether they will be viable by the postposed games date, and how COVID-19 might be circulating within the region and across the globe. By design, the games bring together participants and spectators from around the world, so considering the local and global landscapes will be key. A recent government survey showed only 0.1% of Tokyo residents have coronavirus antibodies. That is much lower than 14% in the state of New York in April, and 7% in Stockholm4 - the citizens of Tokyo may not want to accept the risk on an influx of people on top of managing their own national situation. The pandemic has reduced the enthusiasm of residents to host the event: a recent poll5 showed that only 24% in Japan look to the Olympics.

Questions around the safety of the public and athletes remain, and with this uncertainty in mind, organisers have set a self-imposed deadline of April 2021 on the viability of the event. If the games go ahead, expect measures such as reduced spectator capacity, temperature checks, long lines and masks, as well as changes to athlete schedules to ensure they can quarantine and prepare for the events. This may require entire new risk assessments and large-scale re-planning to take place as existing plans were designed in a pre-COVID world.

There are other people risks to consider. Ever since the 1972 Munich Olympics, where terrorists kidnapped and killed Israeli athletes, crowded spaces like sporting and entertainment venues have become attractive targets for international and domestic terrorists alike. In the latest Cambridge Centre for Risk Studies City Risk index, Tokyo comes top by risk exposure, with Interstate Conflict listed as the top potential loss driver. Japanese authorities have made substantial anti-terrorism preparations for the event. While Japan isn’t involved in the international fight against terrorism, the Olympics are a symbolic global event and opportune target for malicious actors.

Insurers are also supporting resilience efforts, and in March 2020, Tokio Marine & Nichido Fire started selling terrorism and political violence insurance6, the first such product covering property damage from terrorism and violent demonstration.

Whether the threat arises from domestic or imported vectors, the multiple layers of security (including police, military and private security) will rely heavily on technology, not least to coordinate their activities. Alongside anti-terrorism drills at major venues, technology is also being used to fight back; these will be the first Olympics to make use of facial recognition technology to assist with risk management and identification.

Technology risks

With a well-developed reputation for innovation and embracing new technology, Japan looks set to provide one of the most technologically advanced sporting events in history..7 Athletes, media and officials will be transported in autonomous vehicles to smart stadiums that will provide a seamless user experience for fans and visitors include digital signages, online refreshment services, real-time match and athlete information and access to real-time data on transport congestion. Spectators will interact with human support robots and complete streamlined security checks using the latest facial recognition technology.

With such a high-profile event though, security must be ultra-tight, and cybersecurity in particular is a major concern. Due to their operational requirements, scale and scope, Olympics events have potential to trigger complex second order effects, and cyber-attackers have grown increasingly ambitious as organisers have embraced digitalisation. At the 2018 Pyeongchang Winter Olympics8, suspected state-sponsored hackers carried out extensive campaigns with TV signals disrupted, the games website crashing, and ticket sales disrupted. Russia, whose athletes are facing a continued ban from competing for doping allegations, were thought to be involved in those attacks and earlier this year Japan’s National Intelligence Agency issued a stark warning9 on the possibilities of state-sponsored attack at the Summer Games.

Japan has been developing and strengthening its strategy around cyber security for a long time. It has been crafting a specific plan for Tokyo 2020 since just after those 2018 Games. Emergency cybersecurity measures10, focussing on local-level government training and transparency on reporting attacks to help support coordinated responses, were launched. The Rugby World Cup in 2019 provided in many ways the perfect test environment to vet some of those plans. Further time will allow more identification of vulnerabilities across the cyber landscape.

Earth risks

Think of Tokyo and for many earthquake risk is top of the list of concerns. The region sits at the intersection of the Pacific and Philippine Sea tectonic plates being pushed under Eurasia and forming the Itoigawa-Shizuoka Tectonic Line (ISTL). Given the structural dynamics, megathrust earthquakes along these boundaries are a common driver of risk discussions for the region. Recent in the Tokyo area, as highlighted by WRN partners at Temblor, can be interpreted in two ways. A simple view is that an increase in smaller earthquake activity leads to higher chances of a big one. However, a seismic creep could also be an indication that fault stress is being reduced in the region. Whatever the impact, the immediate response strategy remains the same.

The unpredictability of earthquakes means that an extra year is perhaps less influential to developing preparation plans against seismic activity during Tokyo 2020 than it could be for other risks, but interconnectivity between hazards raises interesting secondary impacts. Japan already has strict building codes governing construction and engineering and many Olympic venues will sport ‘earthquake-ready’ designs11 aimed at decreasing damage by spreading the shock to a building across ‘seismic isolation bearings’. Drills and evacuation exercises aimed at supporting fast and efficient emergency plans12 have been held and extra time should allow organisers to identify further improvements in response strategies.

But an ultimate, more conclusive response, should a big quake hit Tokyo is also a consideration. Specific event / venue based plans13 concentrating on the intensity of quakes may mitigate some risk by allowing events in other areas to continue. These plans will also need to be updated with COVID-19 in mind, as social distancing brings a new element to consider during the response phase.

Weather and climate risks

The combination of competitive sports, mass gatherings of tourists and potential for deadly heatwaves could lead to a very public realisation of the threats associated with chronic impacts of climate change.

The first Olympics to experience heat stress issues were the 1912 Stockholm Games in, where temperatures reached 32 degree Celsius in the shade and resulted in half the marathon runners failing to complete the race14. It was only two years ago that the record-breaking summer heatwaves in 2018 led to the deaths of over 1,000 people15. Similar heatwaves from that year have been studied in the UK and research suggests that record-breaking temperatures that are now increasingly likely, due to human-induced global warming16. While the average temperature increase sits at around 1 degree Celsius above the pre-industrial level (1850-1900) at the global level, land areas are warming quicker, and in particular many Northern Hemisphere regions.

Japan’s average temperatures are virtually certain to be rising at a rate of 1.21 degrees Celsius per century, compared to the global rate of 0.73 degrees Celsius per century (calculated by the Japan Meteorological Agency17). While fine and sunny weather will help the Games run smoothly, this increased risk of serious and deadly heatwaves, similar to those of 2018, are important considerations to add to other weather and climate risks such as typhoons and extreme rainfall. Whether contingency plans must be enacted due to heatwaves, or extreme weather leads damage to infrastructure or venues, there could be a substantial financial impact, and risk transfer options will have been considered. Scenario modelling, one of the services offered via the Climate Quantified18 suite, can help quantify those financial consequences.

Flood risks

Big gatherings in already crowded cities can put extra strain on infrastructure. In particular, the preparation work to deal with inflated population requires updating existing transportation and water supply/collection systems; and floods can push the limits of these engineering designs to breaking point.

During the 2012 London Olympics, the tube link to Stratford in east London was closed after a water main flooded the tracks of the Central line, which connects the West End and City to the Olympic Park, raising concerns about the resilience of London's transport network19. Flooding issues were also seen in Russia in the run up to the Sochi Winter Olympics, when flash floods caused massive disruption to the preparations. An estimated 2,000 workers were required to clean up the mess20.

Japan has committed to large scale infrastructure projects, hoping that the Tokyo Olympic Games leave a long-lasting legacy. The first time Japan hosted the Olympics in 196421 prompted the operations of the first Japanese ‘bullet trains’22. In the area of flood resilience, the government has built several state-of-the art flood control structures in Greater Tokyo Metropolitan area, which is home to more than 37 million people, making it the most populated megacity in the world. Super levees23 around the Arakawa River provide protection against major floods, and the massive underground storm water storage24 facility that forms part of the Metropolitan Area Outer Underground Discharge Channel, is the biggest in the world. The cathedral-like structure was built to mitigate the city's overflowing waterways and rivers during rain and typhoon events.

While these projects will bring resilience against any flooding events that might impact the games, the drainage network within the city is designed only to cope with 15-year return period storms. According to the city officials, the roads get flooded more than a few hundred times a year, making them dangerous for their residents and guests25 and a potential disruptor to watch out for in 2021.

Emerging risks

Prior to 2020, the threat of an airliner crashing into the opening ceremony has been the worst-case scenario anticipated in pre-Game planning, and a key part of security discussions since the massacre of Israeli athletes at the 1972 Games in Munich, Germany26. Like the events of 1972, the COVID-19 pandemic is going to redraw the risk map, which isn’t a bad thing, as considering emerging risks should be an ongoing process and not a one and done.

The delay to 2021 offers a unique opportunity to enhance risk management processes, and stress test existing plans with old and new unknowns. Beyond COVID-19, on the geopolitical side the situation in the surrounding region is rapidly changing already with growing tensions between China and the U.S.27, and on the people risk side, training and qualifications for staff and volunteers are going to need to be refreshed as existing plans expire. The risk register is going to need to be challenged, starting with the risk appetite, and entirely new scenarios created for permeations ranging from full spectators to empty stands.

Stakeholders across the board are going to need to challenge their thinking and decision-making styles as these Games break from the regulated cycle of audits and check-ins. The reputation risks for all involved have never been higher, and while organisers are already looking at options to simplify the Games there may come a point where the risks exceed their appetite.

Conclusion

It is still unclear whether the Tokyo Olympics will indeed happen in 2021. The current climate has reminded us that we should always expect the unexpected.

Taking extreme events and stress-testing them, whether through quantitative modelling or qualitative scenarios is one way to build resilience to global, complex risks and decide what to do next. The Willis Research Network, with its multi-disciplinary approach, looks to consider challenges from multiple angles – any one of the issues outlined by the team could pose a serious disruption, and potential clashes between threats could stress the carrying capacity of the city.

As COVID-19 has demonstrated, society has developed in such a way that the impacts of past events are no longer a certain guide for the future, and this event presents an opportunity for all to make change beyond the organisation of these games, and leverage insights from science to increase their resilience.

For more information contact us at Willis Research Network Team.

Footnotes

1 https://www.washingtonpost.com/archive/sports/1998/02/19/the-flu-plagues-olympics/2a2f2015-3951-4277-9061-381e95f56d45/

2 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7204610/

3 https://www.telegraph.co.uk/olympics/0/tokyo-olympics-2020-2021-date-when-postponed-next-year/

4 https://sportstar.thehindu.com/other-sports/tokyo-olympics-2021-covid-19-pandemic-coronavirus-cases-japan-organising-committee-news/article32042825.ece

5 https://english.kyodonews.net/news/2020/07/342812540942-urgent-59-discontent-with-japan-govt-response-to-pandemic-poll.html

6 https://asia.nikkei.com/Business/Insurance/Tokio-Marine-to-sell-terrorism-insurance-ahead-of-Tokyo-Olympics

7 https://medium.com/@shotarohondamoore/technology-at-tokyo-2020-d1d861bdd73

8 https://www.theguardian.com/sport/2018/feb/11/winter-olympics-was-hit-by-cyber-attack-officials-confirm

9 https://www.cybersecurity-insiders.com/japan-issues-cyber-threat-warning-to-tokyo-2020-olympics-and-paralympics

10 https://www.infosecurity-magazine.com/news/japan-considers-emergency

11 https://www.newcivilengineer.com/latest/tokyo-olympic-stadiums-made-earthquake-ready-27-06-2019

12 https://www.straitstimes.com/sport/fast-response-how-the-tokyo-olympics-will-cope-if-earthquake-strikes

13 https://www.reuters.com/article/us-olympics-2020-contingency/olympics-tokyo-plans-to-cancel-events-if-big-quake-other-disaster-strikes-media-idUSKBN20S0DD

14 https://www.nippon.com/en/japan-topics/c06401/tokyo%E2%80%99s-sizzling-summers-have-olympic-planners-preparing-for-the-worst.html

15 https://www.jstage.jst.go.jp/article/sola/15A/0/15A_15A-002/_pdf/-char/en

16 https://www.nature.com/articles/s41467-020-16834-0

17 https://www.jma.go.jp/jma/en/NMHS/indexe_ccmr.html

18 Climate Quantified

19 https://www.theguardian.com/sport/2012/jun/07/olympics-2012-tube-flood-london

20 https://edition.cnn.com/2013/09/25/sport/sochi-floods-olympic-games/index.html

21 https://en.wikipedia.org/wiki/2020_Summer_Olympics

22 https://en.wikipedia.org/wiki/1964_Summer_Olympics

23 https://nextcity.org/daily/entry/tokyo-is-building-enormous-super-levees-to-hold-back-its-river

24 https://www.bbc.com/future/article/20181129-the-underground-cathedral-protecting-tokyo-from-floods

25 https://www.youtube.com/watch?v=Rp2l6nFIsZA

26 https://www.telegraph.co.uk/expat/4179641/Olympic-Games-IOC-review-security-plans.html

27 https://www.chathamhouse.org/sites/default/files/Meeting%20Summary%20-%20network%20power%20conference%20Feb%202020.pdf

28 https://time.com/5869955/tokyo-2021-olympics-not-possible-coronavirus/

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