Global risk modelling and analytics firm RMS has estimated that insured losses stemming from Typhoon Hagibis in Japan will be between US $7 billion and $11 billion.
Image from Kyodo agency (via Japan Today)
The estimate includes property damage and business interruption caused by wind and flood to residential, commercial, industrial, marine, and automobile lines, and accounts for both the private and kyosai/mutual markets.
Notably, the figure from RMS is much narrower and towards the lower end of the range recently 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.
While Faxai was largely a wind-driven event in terms of the damage it caused, RMS estimates that flooding contributed almost 60% of the overall losses from Hagibis.
“The combined losses from the two recent storms, Typhoon Hagibis and Typhoon Faxai, could rival insured losses from Typhoon Jebi that struck Japan last year,” noted Margaret Joseph, Senior Product Manager of the RMS Japan Typhoon Model.
Typhoon Hagibis made landfall along Japan’s east coast as an equivalent category 1 hurricane on the evening of Saturday the 12th of October, with 1-minute sustained wind speeds of around 145 km/h (90mp/h).
The storm carried high winds and delivered record-breaking precipitation to a large portion of Honshu from Mie Prefecture in the west to Iwate in the north. Storm surge is reported to have elevated sea levels by more than 1 meter above mean sea level along parts of the Japanese coastline.
RMS identified several factors contributing to post-event loss amplification and non-modelled losses for Hagibis, including demand surge and claims inflation due to overlapping damage from Faxai, as well as widespread damage to infrastructure.
The loss estimate was informed based on analysis of the RMS reconstructed wind field and flood footprint using the RMS Japan Typhoon HD model
In addition, the estimate includes additional factors based on data and insights from field reconnaissance by RMS modelers.
RMS noted that Hagibis was a particularly complex event to model given how soon after Faxai it made impact, as well as the major element of ensuing flood damage.
