Global risk modelling and analytics firm RMS has estimated that insured losses resulting from Typhoon Faxai will be between $5.0 billion and $9.0 billion (¥ 500 billion to ¥950 billion).
The estimate includes property damage and business interruption caused by typhoon and coastal flooding to residential, commercial, industrial, marine, and automobile lines – and includes both the private and mutual/kyosai markets.
RMS also accounted for additional post-event loss amplification factors, such as the increase in materials and labour costs due to the upcoming Summer Olympics, as well as contents and business interruption from power outages and vehicle losses.
The estimate is significantly higher than the one released earlier this month by catastrophe modeller AIR Worldwide, who put re/insurance industry losses at between $3 billion and $7 billion (¥ 340 billion and ¥ 740 billion).
The General Insurance Association of Japan (GIAJ) also said recently that it is anticipating a loss of $2.8 billion (¥ 300 billion) for the Japanese insurance market alone.
Two of Japan’s largest domestic insurers – MS&AD Insurance Group Holdings and Sompo Japan Nipponkoa Insurance – said last week that they anticipate losses of almost $1 billion each.
Additionally, Property Claims Services (PCS), a Verisk Analytics business, has confirmed that Typhoon Faxai passed the $2 billion loss threshold to be designated under the firm’s new PCS Japan service, meaning a full insured loss estimate will be produced shortly.
Typhoon Faxai hit Japan on September 9th, impacting the Tokyo area with some of the most severe damage seen in the Chiba, Kanagawa and Shizuoka prefectures.
In these areas, more than 900,000 were left without power after high winds downed two electrical towers and multiple utility poles.
As well as damaging winds, the storm resulted in significant storm surge and heavy precipitation to coastal regions.
Margaret Joseph, Senior Manager, RMS, commented: “The equivalent of a category 2 on the Saffir-Simpson Hurricane Wind Scale (SSHWS) at landfall, Typhoon Faxai was one of the strongest landfalling typhoons on record in the Kanto region, and the strongest landfalling typhoon in this region to impact the Greater Tokyo area since Typhoon Ma-on in 2004.”
She continued: “Faxai underwent an eyewall replacement cycle immediately prior to landfall, which weakened wind speeds; however, a wider area experienced the system’s strongest winds as a result of a broadening of the wind field.”
RMS explained that its estimate was based on analysis of the reconstructed wind field and coastal flood footprint through its Japan Typhoon HD model.
Furthermore, it utilised data and insights from analysis of aerial imagery and field reconnaissance by modellers from the RMS Tokyo office.