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AXIS announces Typhoon Hagibis loss of up to $110mn

26th November 2019 - Author: Luke Gallin

Bermudian insurer and reinsurer AXIS Capital Holdings Limited has announced a pre-tax loss estimate for Typhoon Hagibis of between $90 million and $110 million, net of recoveries from reinsurance and retrocession, and including the impact of reinstatement premiums.

axis-capital-logoAXIS Capital states that its loss estimate is in line with industry insured losses of approximately $11 billion for the event, and the firm’s expected market share of below 1%.

The insurance and reinsurance industry loss estimates from catastrophe risk modellers for Typhoon Hagibis have varied. On October 22nd, AIR Worldwide provided an industry insured loss estimate of between $8 billion and $16 billion for the event, which was followed by RMS’ estimate on the 1st of November, of between $7 billion and $11 billion.

A recent global catastrophe recap report from insurance and reinsurance broker Aon, said that economic losses from Hagibis would likely exceed $10 billion, while insured losses would be minimally in the billions.

The storm arrived as an equivalent category 1 hurricane, bringing record rainfall and winds gusting up to 100 mph across a broad swath of Japan, resulting in severe flooding after dozens of rivers burst their banks in the hardest-hit prefectures of Tokyo, Fukushima, Miyagi, Shizuoka, Kanawanga, Nagano, Saitama, Gunma, Ibaraki, and Tochigi.

Fitch Ratings recently said that Hagibis would likely be an earnings event for Japan’s three main non-life insurers, adding that overall, reinsurers are expected to cover more than half of the total insured loss.

AXIS says that its loss estimate is based on its ground-up assessment of losses from individual contracts and treaties exposed to the affected regions, which includes preliminary information from clients, brokers, and loss adjusters.

“Due to the nature of this event, including the complexity of loss assessment and factors contributing to the losses, and the preliminary nature of the information available to prepare this estimate, the actual net ultimate loss for this event may differ materially from this current estimate,” says AXIS.

AXIS, like other global insurers and reinsurers, will likely be mindful of Typhoon Jebi in 2018 and the loss creep that followed and continued well into this year.

The re/insurer warns that the additional complexity caused by numerous events hitting the country in recent months, combined with an expectation of a high proportion of flood losses attributable to Hagibis, are both likely to lead to greater uncertainty surrounding the total loss for this event.

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