Japan’s top three insurers look set to pay out over ¥1 trillion ($8.7 billion) in combined claims in fiscal 2018 through March 2019 after a series of powerful weather events including Typhoons Jebi and Trami hit the country, according to reports from Asia-focused publication Nikkei.
Kansai International Airport was flooded following Typhoon Jebi. Hiroko Harima/Kyodo News via AP
MS&AD Insurance Group is likely to pay ¥400 billion ($3.5 billion), while both Tokio Marine Holdings and SOMPO Holding Group’s payouts could each exceed ¥300 billion ($2.6 billion).
S&P Global Ratings stated last month that the run of large natural disasters to hit Japan had likely put downward pressure on the creditworthiness of these insurance groups.
S&P previously held the view that the country’s heavy rains in July would have a limited impact on the groups’ creditworthiness, based on an assumption that losses from natural disasters that occur in the rest of fiscal 2018 would be at about the level that each group estimated in their full-year forecasts.
However, S&P said the series of large natural disasters that have unfolded since it published that report may weaken each groups’ creditworthiness through downward pressure on its assessment of their capital and earnings.
Nikkei states that, according to the General Insurance Association of Japan, the previous highest insurance claim paid by Japan’s insurers for damage suffered from wind and water disasters, including typhoons and torrential rains, was ¥744.9 billion yen in fiscal 2004, when three large typhoons struck the country.
The publication says payments in the current fiscal year by the three top insurers are expected to exceed this figure.
In a wider context, preliminary figures show 2018’s devastating catastrophes’ impact on factories and domestic spending have played a sizeable role in the contraction of Japan’s economy by an annualised 1.2% between July and September.
