Reinsurance News

Economic losses from Hagibis to exceed $10bn: Aon

8th November 2019 - Author: Matt Sheehan

Economic losses caused by Typhoon Hagibis in Japan are likely to exceed US $10 billion, with insured losses minimally in the billions, according to the latest Global Catastrophe Recap report from re/insurance broker Aon.

Typhoon Hagibis image

Aftermath of Typhoon Hagibis in Nagano, Japan on October 15th. Source: AP Photo/Jae C. Hong

Aon estimates that more than 93,250 structures were damaged or destroyed by Hagibis, which made landfall along Japan’s east coast on October 12, before sweeping through the greater Tokyo metro region.

The storm arrived as an equivalent category 1 hurricane, bringing record rainfall and winds gusting up to 100 mph across a broad swath of the country.

This results in widespread 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. At least 95 people were killed, and 470 were injured.

Catastrophe risk modeller RMS recently estimated that industry losses resulting from Typhoon Hagibis would amount to between $7 billion and $11 billion.

Notably, this figure was much narrower and towards the lower end of the range previously released by AIR Worldwide, who pegged industry losses at between $8 billion and $16 billion.

However, the estimate still seems to be in line with expectations that Hagibis will result in a larger insured loss than September’s Typhoon Faxai, which RMS previously put at between $5 billion and $9 billion.

Analysts at Fitch Ratings have also said that Hagibis is likely to be an earnings event for Japan’s three main non-life insurers, and that, overall, more than half of the insured loss total will be covered by reinsurers.

Aon’s Global Catastrophe Recap Report also looked at the various California wildfires that broker out over October.

It estimated that total economic damages from the October 10th to 17th fires would exceed $100 million, with most of the losses to be covered by insurance.

Additionally, the series of fires that ignited around October 23rd and continued through into November would cause total economic and insured losses well into the hundreds of millions.

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