Property Claim Services (PCS), a Verisk business, has estimated that insured losses resulting from Typhoon Jebi in Japan have now reached $10 billion, with the potential for further loss creep to push costs even higher, according to Tom Johansmeyer, Co-Head of PCS.
PCS recently expanded its re/insurance market data aggregation and index reporting services to include non-marine catastrophe loss in Japan, after seeing demand from its client base for the service.
“In our debut estimate for Jebi under PCS Japan, we posted an estimate of US$10 billion,” Johansmeyer told our sister publication, Artemis.
“While we don’t have any prior estimates to show development before our launch of the only independent industry loss index for Japan, I can tell you that we saw various estimates come into the team throughout the development of PCS Japan – and thus we did get a look at some of the early loss development of the event,” he continued.
“Early estimates came in at around US$8.5 billion, and we did see that move to US$9 billion fairly quickly. However, that may have had as much to do with the product development process as it did with any underlying loss activity.”
Sirius International also recently announced it was anticipating upwards of a $10 billion market loss from Jebi, which is more than double the early estimates released by risk modelling agencies.
Johansmeyer explained that PCS would be “leaving the catastrophe open” to account for the complexity of Jebi and to factor in any further accumulation of losses.
“We understand that the loss could continue to creep, particularly because of demand surge and further erosion due to business interruption,” he told Artemis.
It comes as no surprise that PCS saw an opportunity to develop a catastrophe loss estimate product for the Japanese market, given that initial industry loss estimates for Jebi were as low as $3 billion.
“When our clients reached out to PCS to solve this problem for them – i.e., to create an independent industry loss index for Japan – we could sense the urgency,” said Johansmeyer. “And it seems that the need was significant.”