Typhoon Faxai, which struck Japan on September 9th, will cost Japanese insurers MS&AD Insurance Group Holdings, Inc. and Sompo Japan Nipponkoa Insurance Inc. a combined USD 2 billion, at least.
Typhoon Faxai hit Japan on September 9th, impacting the Tokyo area with some of the most severe damage seen in the Chiba, Kanagawa and Shizuoka prefectures.
In a statement, MS&AD has said that after taking into account reported losses received as of September 17th, 2019, the gross loss based on past natural disaster is roughly 100 billion yen (roughly USD 1 billion) for the group as a whole.
The insurer adds that this could increase in the days and weeks ahead in light of the potential for additional reports of losses and the progress in claims assessment.
At the same time, the Japan Times has reported that Sompo Japan Nipponkoa Insurance said yesterday that its total insurance claim payments from Typhoon Faxai are expected to exceed 110 billion yen (roughly USD 1.1 billion).
So far, the General Insurance Association of Japan (GIAJ) has reported nearly 185,000 claims as having been filed following the storm, based on data gathered from domestic and foreign insurers.
It’s likely that both MS&AD and Sompo will call on their reinsurance protection to assume some of the losses. Both companies also have catastrophe bonds in-force, Sompo’s Aozora Re Ltd. (Series 2017-1) and MS&AD’s Akibare Re Ltd. (Series 2018-1) deal, both of which provide reinsurance protection against Japan typhoon risks. However, and as shown by our sister publication Artemis’ Deal Directory, the attachment points for these layers are far higher than the expected hit from the storm.
Catastrophe risk modeller AIR Worldwide said recently that it estimates that Typhoon Faxai will result in an insurance and reinsurance industry loss of between USD 3 billion and USD 7 billion, following damaging winds, significant storm surge and heavy precipitation to coastal regions.