A new note from AM Best says that the impact on insurance industry losses from Super Typhoon Nanmadol will be manageable for Japanese insurers.
The typhoon, which hit the Japanese island of Kyushu on September 18th with reported wind gusts as high as 150mph, led to more than 350,000 homes being without power and with over nine million people told to evacuate. But AM Best says that the insured losses will be less than those caused by Typhoon Jebi, which hit the country in 2018.
The firm said that Nanmadol is unlikely to have a severe impact on the global or domestic insurance industry.
AM Best wrote: “The extent of Nanmadol’s impact depends on geography and the severity of the storm. Nanmadol, which at one point was classified as a ‘violent typhoon’, made landfall as a Category 2 storm, and is one of the strongest typhoons to reach Japan in decades.”
It added: “For comparison, in 2018, claims payments related to Typhoon Jebi came to JPY 1,068bn, according to the General Insurance Association of Japan (GIAJ). Jebi started off as a Category 5 storm and eventually made landfall as a Category 3 storm on September 4, 2018, over Japan’s Kansai (western) region. Claims payments related to Typhoon Hagibis, which hit the Kanto (eastern) region on October 22, 2019, were JPY 583bn, according to GIAJ.”
AM Best said the four largest private insurers in Japan – Tokio Marine, Sompo Japan, Mitsui Sumitomo, and Aioi Nissay Dawa – account for around 85% of the market, and are well capitalised with comprehensive reinsurance programs that will protect them from a significant impact on capital.
Reports on our sister site Artemis in recent weeks have spoken about how the typhoon could be more damaging than typhoons Jebi and Hagibis.
At a news conference, a Japanese Meteorological Agency official likened the damage potential of typhoon Nanmadol to the two most recent impactful typhoons to strike Japan, Jebi and Hagibis. 2018’s Jebi and 2019’s Hagibis both caused significant insurance and reinsurance market losses, in the $10bn+ ranges.
For Kyushu, Nanmadol could have even worse impacts than those two storms, the official warned. At its current expected landfall intensity, typhoon Nanmadol could easily be in the top-ten strongest storms to impact Japan on record.
